Exhibit 10.13


 


MASTER LEASE


 


Between


 


NATIONWIDE HEALTH PROPERTIES, INC.,


 


a Maryland corporation,


 


as “Landlord”


 


and


 


21ST CENTURY ONCOLOGY, INC., a Florida corporation;
MARYLAND


RADIATION THERAPY MANAGEMENT SERVICES, INC., a Maryland


corporation; AMERICAN CONSOLIDATED TECHNOLOGIES, L.L.C., a


Michigan limited liability company; and PHOENIX MANAGEMENT
COMPANY,


LLC, a Michigan limited liability company


 


as “Tenant”


 


Dated: September 30, 2008


 

















 


TABLE OF CONTENTS


(continued)


 


	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  
	
  1.

  	
  Term

  	
  2

  
	
  2.

  	
  Rent

  	
  2

  
	
   

  	
  2.1

  	
  Initial Term Rent

  	
  2

  
	
   

  	
  2.2

  	
  Renewal Term Rent

  	
  2

  
	
   

  	
  2.3

  	
  Payment Terms

  	
  3

  
	
   

  	
  2.4

  	
  Absolute Net Lease

  	
  3

  
	
  3.

  	
  Late Charges

  	
  3

  
	
  4.

  	
  Security Deposit

  	
  3

  
	
  5.

  	
  Taxes and Other Charges

  	
  4

  
	
   

  	
  5.1

  	
  Protests

  	
  4

  
	
   

  	
  5.2

  	
  Impound

  	
  5

  
	
  6.

  	
  Insurance

  	
  6

  
	
  7.

  	
  Use, Regulatory Compliance
  and Preservation of Business

  	
  8

  
	
   

  	
  7.1

  	
  Permitted Use

  	
  8

  
	
   

  	
  7.2

  	
  Regulatory Compliance

  	
  9

  
	
   

  	
  7.3

  	
  Quiet Enjoyment

  	
  9

  
	
   

  	
  7.4

  	
  Right of First Opportunity

  	
  9

  
	
  8.

  	
  Acceptance, Maintenance,
  Upgrade, Alteration and Environmental

  	
  10

  
	
   

  	
  8.1

  	
  Acceptance “AS IS”; No
  Liens

  	
  10

  
	
   

  	
  8.2

  	
  Tenant’s Maintenance
  Obligations

  	
  10

  
	
   

  	
  8.3

  	
  Upgrade Expenditures

  	
  10

  
	
   

  	
  8.4

  	
  Alterations by Tenant

  	
  11

  
	
   

  	
  8.5

  	
  Hazardous Materials

  	
  11

  
	
   

  	
  8.6

  	
  Medical Waste

  	
  12

  
	
   

  	
  8.7

  	
  Immediate Repairs

  	
  12

  
	
  9.

  	
  Tenant Property

  	
  12

  
	
   

  	
  9.1

  	
  Tenant Property

  	
  12

  
	
   

  	
  9.2

  	
  Schedule of Tenant Property

  	
  13

  
	
   

  	
  9.3

  	
  Waiver of Landlord’s Lien

  	
  13

  
	
  10.

  	
  Financial, Management and
  Regulatory Reports

  	
  13

  



 


i

















 


TABLE OF CONTENTS

(continued)


 


	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  
	
  11.

  	
  Representations and
  Warranties

  	
  14

  
	
  12.

  	
  Events of Default

  	
  14

  
	
  13.

  	
  Remedies

  	
  15

  
	
   

  	
  13.1

  	
  General

  	
  16

  
	
   

  	
  13.2

  	
  Remedies Cumulative; No
  Waiver

  	
  16

  
	
   

  	
  13.3

  	
  Performance of Tenant’s
  Obligations

  	
  16

  
	
   

  	
  13.4

  	
  Limited Remedy Events of
  Default

  	
  16

  
	
  14.

  	
  Provisions on Termination

  	
  17

  
	
   

  	
  14.1

  	
  Surrender of Possession

  	
  17

  
	
   

  	
  14.2

  	
  Removal of Tenant Personal
  Property

  	
  17

  
	
   

  	
  14.3

  	
  Holding Over

  	
  17

  
	
   

  	
  14.4

  	
  Survival

  	
  18

  
	
  15.

  	
  Certain Landlord Rights

  	
  18

  
	
   

  	
  15.1

  	
  Entry and Examination of
  Records

  	
  18

  
	
   

  	
  15.2

  	
  Grant Liens

  	
  18

  
	
   

  	
  15.3

  	
  Estoppel Certificates

  	
  18

  
	
   

  	
  15.4

  	
  Conveyance Release

  	
  19

  
	
  16.

  	
  Assignment and Subletting

  	
  19

  
	
   

  	
  16.1

  	
  No Assignment or
  Subletting

  	
  19

  
	
   

  	
  16.2

  	
  Permitted Assignments and
  Sublets

  	
  19

  
	
  17.

  	
  Damage by Fire or Other
  Casualty

  	
  21

  
	
  18.

  	
  Condemnation

  	
  22

  
	
  19.

  	
  Indemnification

  	
  23

  
	
  20.

  	
  Disputes

  	
  23

  
	
  21.

  	
  Notices

  	
  23

  
	
  22.

  	
  Miscellaneous

  	
  24

  
	
  23.

  	
  Right of First Refusal

  	
  25

  
	
  24.

  	
  Economic Substitution

  	
  27

  
	
  25.

  	
  Tax Treatment; Reporting

  	
  30

  



 


ii

















 


TABLE OF CONTENTS 

(continued)


 


	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  EXHIBITS:

  	
   

  	
   

  
	
  EXHIBIT A

  	
  LEGAL DESCRIPTIONS

  	
   

  
	
  EXHIBIT B

  	
  INTENTIONALLY OMITTED

  	
   

  
	
  EXHIBIT C

  	
  FAIR MARKET VALUE

  	
   

  
	
  EXHIBIT D

  	
  PERMITTED EXCEPTIONS

  	
   

  
	
  EXHIBIT E

  	
  CERTAIN DEFINITIONS

  	
   

  
	
  EXHIBIT F

  	
  FINANCIAL, MANAGEMENT AND
  REGULATORY REPORTS

  	
   

  
	
  EXHIBIT G

  	
  FORM OF LETTER OF
  CREDIT AGREEMENT

  	
   

  
	
  EXHIBIT H

  	
  INTENTIONALLY OMITTED

  	
   

  
	
  EXHIBIT I

  	
  IMMEDIATE REPAIRS

  	
   

  
	
  SCHEDULE 1

  	
  FACILITY INFORMATION:
  FACILITY NAME, ADDRESS, RENTABLE SQUARE FOOTAGE, ETC.

  	
   

  



 


iii

















 


An extra section break has
been inserted above this paragraph. Do not delete this section break if you
plan to add text after the Table of Contents/Authorities. Deleting this break
will cause Table of Contents/Authorities headers and footers to appear on any pages following
the Table of Contents/Authorities.


 

















 


MASTER LEASE


 


This “Master Lease” is entered into as of September 30,
2008 (the “Effective Date”)
between NATIONWIDE HEALTH PROPERTIES, INC.,
a Maryland corporation (“Landlord”),
and 21ST CENTURY ONCOLOGY, INC.,
a Florida corporation; MARYLAND RADIATION
THERAPY MANAGEMENT SERVICES, INC., a Maryland corporation; PHOENIX MANAGEMENT COMPANY, LLC, a Michigan
limited liability company, and AMERICAN
CONSOLIDATED TECHNOLOGIES, L.L.C., a Michigan limited liability
company (successor by conversion from American Consolidated Technologies, a
Michigan co-partnership) (collectively, “Tenant”),
for the real properties and improvements thereon (collectively, the “Facilities”) set forth on Schedule 1,
as legally described on Exhibit A, (the “Premises”), each used as a radiation or oncology related
medical office building (individually as so utilized, as such utilization may
be changed pursuant to Section 7.1(a), and collectively, the “Business”). Pursuant to its concurrent Guaranty, Radiation Therapy Services, Inc.,
a Florida corporation (“Guarantor”)
has guaranteed Tenant’s obligations hereunder. In consideration of the mutual
covenants, conditions and agreements set forth herein, Landlord hereby leases
the Premises to Tenant for the Term upon the terms and conditions provided
below. Certain capitalized terms used in this Master Lease are defined on Exhibit E.


 


RECOGNITION OF MASTER LEASE;


IRREVOCABLE WAIVER OF CERTAIN RIGHTS


 


Tenant and Landlord each
acknowledge and agree that this Master Lease constitutes a single, indivisible
lease of the entire Premises, and the Premises constitutes a single economic
unit. The Minimum Rent, Additional Rent, other amounts payable hereunder and
all other provisions contained herein have been negotiated and agreed upon
based on the intent to lease the entirety of the Premises as a single and
inseparable transaction, and such Minimum Rent, Additional Rent, other amounts
and other provisions would have been materially different had the parties
intended to enter into separate leases or a divisible lease. Any Event of
Default under this Master Lease shall constitute an Event of Default as to the
entire Premises.


 


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


 


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


 


B.                                    Agrees, acknowledges and is
forever estopped from asserting to the contrary that this Master Lease is a new
and de novo lease, separate and distinct from any other lease between any of
the entities comprising Tenant and any of the entities comprising Landlord that
may have existed prior to the date hereof;


 


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


 


1

















 


D.                                    Agrees, acknowledges and is
forever estopped from asserting to the contrary that if, notwithstanding the
provisions of this Section, this Master Lease were to be determined or found to
be in any proceeding, action or arbitration under state or federal bankruptcy,
insolvency, debtor-relief or other applicable laws to constitute multiple
leases demising multiple properties, such multiple leases could not, by the
debtor, trustee, or any other party, be selectively or individually assumed,
rejected or assigned; and


 


E.                                      Forever knowingly waives and
relinquishes any and all rights under or benefits of the provisions of the
Federal Bankruptcy Code Section 365 (11 U.S.C. § 365), or any successor or
replacement thereof or any analogous state law, to selectively or individually
assume, reject or assign the multiple leases comprising this Master Lease
following a determination or finding in the nature of that described in the
foregoing Section D.


 


1.                                      Term. The “Term”
of this Master Lease is the Initial Term plus
all Renewal Terms, and a “Lease
Year” is the twelve (12) month period
commencing on October 1 of each year of the Term; provided, however,
that the first Lease Year shall commence on September 30, 2008 and end on September 30,
2009. The “Initial Term” commences
on September 30, 2008 and ends on September 30, 2028, and may be
extended for four (4) separate “Renewal
Terms” of five (5) years each
if: (a) at least twelve (12), but not more than fifteen (15) months prior to the end of
the then current Term, Tenant delivers to Landlord a “Renewal Notice” that it desires to exercise its right to
extend this Master Lease for one (1) Renewal Term; and (b) there is no Event of Default on
the date Landlord receives the Renewal Notice (the “Exercise Date”) or on the last day of the then current Term.


 


2.                                      Rent. During the Term, Tenant shall pay Landlord “Rent” consisting of “Minimum Rent”  plus “Additional Rent”
determined as provided in this Section 2; provided, the Rent for
any Lease Year shall not be less than one
hundred percent (100%) of the Rent for the previous Lease Year. The
Rent for any month that begins or ends on other than the first or last day of a
calendar month shall be prorated based on actual days elapsed.


 


2.1                               Initial
Term Rent. During the Initial Term, “Minimum Rent” is $3,318,476.49 annually, payable in advance
in twelve (12) equal monthly installments. Commencing with the second (2nd) Lease Year and continuing
thereafter during the Term (excluding the first Lease Year of any Renewal
Term), Tenant agrees to pay “Additional Rent”
to Landlord monthly in advance together with the payment of Minimum Rent. Such
Additional Rent (which shall be expressed as an annual amount but shall be
payable in equal monthly installments) shall be equal to the sum of (a) the Additional Rent for the
immediately preceding Lease Year, and (b) the
product of (i) the Minimum
Rent and Additional Rent (if any) due for the immediately preceding Lease Year
and (ii) three percent (3.0%).


 


2.2                               Renewal
Term Rent. To establish a fair market Minimum Rent for the
Premises during the Renewal Terms, the Minimum Rent for the first three (3) Renewal
Terms shall be reset and expressed as an annual amount equal to the greater of:
(i) one hundred three percent
(103%) of the Minimum Rent and Additional Rent due for the immediately
preceding Lease Year, or (ii) the
Fair Market Rent of the Premises on the Exercise Date as established pursuant
to Exhibit C, provided, however, in no event shall the Minimum Rent
for the Premises during the first Lease Year of such Renewal Term(s) be
greater than one hundred ten percent


 


2

















 


(110%) of the Minimum Rent
and Additional Rent for the immediately preceding Lease Year. The Minimum Rent
for the Premises during the fourth Renewal Term, if any, shall be reset and
expressed as an annual amount equal to the Fair Market Rent of the Premises on
the Exercise Date. Commencing with the second (2nd) Lease Year of a Renewal Term and continuing each
Lease Year of such Renewal Term thereafter, “Additional
Rent” shall be calculated as provided in Section 2.1 and
as so calculated shall be payable in monthly installments throughout the
remainder of such Renewal Term.


 


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


 


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


 


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


 


4.                                      Security Deposit. Except as set forth
herein, Tenant shall not be required to deposit a security deposit with
Landlord. Notwithstanding the foregoing, if, at any time, Guarantor’s Debt to
Equity Ratio (as defined in Exhibit E) exceeds 1.50 to 1.00 then
within ten (10) Business Days of receipt of Landlord’s written request
Tenant and Landlord shall enter into a Letter of Credit Agreement substantially
in the form attached hereto as Exhibit G (the “Letter of Credit Agreement”), pursuant to which
Tenant shall deposit with Landlord one (1) or more letters of credit in an
undrawn face amount equal to two (2) months of the then Rent as a “Security Deposit” against the faithful
performance by Tenant of this Master Lease. The Security Deposit may again be
reduced to zero upon Guarantor’s Debt to Equity Ratio for any two (2) consecutive
calendar quarters being less than 1.50 to 1.00 as evidenced by (a) Guarantor providing Landlord with
financial statements conforming to the requirements set forth in Exhibit F
demonstrating that Guarantor’s Debt to Equity Ratio for any two (2) consecutive
quarters is less than 1.50 to 1.00 and (b) Guarantor
delivering to Landlord an officer’s certificate executed by Guarantor’s chief
financial officer (or similar financial officer) certifying that such financial


 


3

















 


statements have been
prepared in accordance with generally accepted accounting principles and
accurately present the financial position of Guarantor. Upon the satisfaction
of the foregoing requirements, then the Security Deposit shall be reduced to
zero (subject to Guarantor’s Debt to Equity Ratio at any time again exceeding
1.50 to 1.00 in which case Tenant and Guarantor shall once again be required to
comply with the provisions of this Section 4, including, without
limitation, entering into a new Letter of Credit Agreement with Landlord) and (i) Landlord and Tenant shall have no further liability
to each other under the then existing Letter of Credit Agreement and (ii) within ten (10) Business Days after Guarantor
provides Landlord with the financial statements and officer’s certificate
evidencing Guarantor’s Debt to Equity Ratio for any two (2) consecutive
quarters being less than 1.50 to 1.00, Landlord shall rescind in writing and
return the then existing letter(s) of credit to the issuer.


 


5.                                      Taxes and Other Charges.  At the end of the Term, all Taxes and Other Charges shall be
prorated. If Tenant has prepaid any Taxes or Other Charges for periods
extending beyond the end of the Term, Landlord shall, within forty-five (45)
days of the expiration of the Term, reimburse Tenant for such Taxes and Other
Charges, which obligation shall survive the expiration or earlier termination
of this Lease. Landlord shall promptly forward to Tenant copies of all bills
and payment receipts for Taxes or Other Charges received by it. Subject to Section 5.1
and Landlord’s obligations to make payments from the Tax Impound pursuant to Section 5.2
below, Tenant shall pay and discharge (including the filing of all required
returns), prior to delinquency or imposition of any fine, penalty, interest or
other cost (“Penalty”) the
following: (i) “Taxes”, consisting
of any property (real and personal) and other taxes and assessments levied or
assessed with respect to this Master Lease or any portion of the Premises,
including, without limitation, any state or county occupation tax, transaction
privilege, franchise taxes, business privilege, rental tax or other excise
taxes, and other assessments levied or assessed against the Premises, Tenant’s
interest therein or Landlord (with respect to this Master Lease and/or the
Premises, but excluding any local, state or federal income tax based upon the
net income or excess profits of Landlord, any capital gains tax imposed on
Landlord in connection with the sale of all or any portion of the Premises to
any Person and any transfer tax or stamps for Landlord’s transfer of any
interest in any portion of the Premises to any Person other than Tenant or any
of its Affiliates), which shall be borne by Landlord, and (ii) “Other Charges”, consisting of
any utilities and other costs and expenses of the Business and operation,
possession or use of any portion of the Premises and all other charges,
obligations or deposits assessed against any portion of the Premises during the
Term. Tenant may pay all of any portion of the Taxes or the Other Charges in
permitted installments (whether or not interest accrues on the unpaid balance)
when due and before any Penalty. Tenant will furnish to Landlord, promptly
after demand therefor, proof of payment of Taxes and Other Charges which are
paid by Tenant.


 


5.1                               Protests.  Each party has the right, but not the
obligation, in good faith to protest or contest (a “Protest”) in whole or in part (i) the
amount or payment of any Taxes or Other Charges and (ii) the
existence, amount or validity of any Lien (as defined in Section 8.1)
by appropriate proceedings sufficient to prevent its collection or other
realization and the sale, forfeiture or loss of any portion of the Premises or
Rent to satisfy it (so long as, in the case of any Protest or contest by
Tenant, Tenant provides Landlord with reasonable security to assure the
foregoing, which security may take the form of a title indemnity (in a form
reasonably acceptable to Landlord and from a national title company reasonably
acceptable to Landlord) or payment of the amount due the lien claimant),
provided that if as a result of any Protest initiated by


 


4

















 


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


 


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


 


5














 


6.                                      Insurance.  All
insurance provided for in this Master Lease shall (i) be maintained under valid and enforceable policies
issued by insurers licensed and approved to do business in the state(s) where
the applicable Facility or portion of the Premises is located and having
general policyholders and financial ratings of not less than “A-” and “X”,
respectively, in the then current Best’s Insurance Report, (ii) name Landlord as an additional
insured and, for the casualty policy referenced in Section 6(a), as
the owner and loss payable beneficiary, (iii) be
on an “occurrence” basis, (iv) cover
all of Tenant’s operations at the applicable Facility or portion of the
Premises, (v) provide that
the policy may not be canceled except upon not less than thirty (30) days prior written notice to
Landlord and (vi) be primary
and provide that any insurance with respect to any portion of the Premises
maintained by Landlord is excess and noncontributing with Tenant’s insurance.
The parties hereby waive as to each other all rights of subrogation (other than
with respect to Worker’s Compensation Coverage described below) which any
insurance carrier, or either of them, may have by reason of any provision in
any policy issued to them, provided such waiver does not thereby invalidate
such policy. Original policies or satisfactory insurer certificates evidencing
the existence of the insurance required by this Master Lease and showing the
interest of Landlord shall be provided to it prior to the commencement of the
Term or, for a renewal policy, not less than five
(5) days prior to the
expiration date of the policy being renewed. If Landlord is provided with a
certificate, it may demand that Tenant provide a complete copy of the related
policy within fifteen (15) days. Tenant
may satisfy the insurance requirements hereunder through coverage under a
so-called blanket policy or policies of insurance carried and maintained by
Tenant; provided, however, that the coverage afforded Landlord will not be
reduced or diminished or otherwise be different from that which would exist
under a separate policy meeting all other requirements of this Master Lease by
reason of the use of such blanket policy of insurance. During the Term, Tenant
shall maintain the following insurance and any claims thereunder shall be
adjudicated by and at the expense of it or its insurance carrier:


 


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


 


6

















 


portion of the Premises
located in Key West, Florida, the insurance coverage for flood shall not be
less than the maximum limit allowable under the National Flood Insurance
Program. Further, the flood insurance coverage stated herein concerning actual
replacement value of such Facility and all Tenant Personal Property shall only
apply to the Facilities located in Englewood, Florida, Venice, Florida, Fort
Myers, Florida, and Naples, Florida, and that flood coverage associated with
Tenant Personal Property for these Florida locations shall be limited to One
Million Dollars ($1,000,000) each location in excess of the limit provided
under the National Flood Insurance Program for these Florida locations.


 


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


 


(c) Professional
Liability Coverage with respect to each Facility for damages for
injury, death, loss of service or otherwise on account of professional services
rendered or which should have been rendered, in a minimum amount of One Million
Dollars ($1,000,000) per
occurrence and Three Million Dollars ($3,000,000)
in the aggregate;


 


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


 


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


 


(f) Deductibles/Self-Insured
Retentions for the above policies shall not be greater than One
Hundred Twenty Five Thousand Dollars ($125,000).  At such times and only so long as policies
of insurance with deductibles or self-insured retentions not greater than One
Hundred Twenty Five Thousand Dollars ($125,000) are generally not available to
operators of businesses similar to that then being conducted at the Premises at
commercially reasonable rates, as determined by Landlord in its reasonable
judgment, the deductibles or self-insured retentions on the policies of
insurance required hereunder may be in such greater amount, as determined by
Landlord in its reasonable judgment, that would result in the applicable
policies being available at commercially reasonable rates, not to exceed Two
Hundred Fifty Thousand Dollars ($250,000). Notwithstanding the foregoing, with
respect to windstorm/hail coverage, the deductibles/self-insured retentions for
a Facility shall be equal to the greater of (i) such
amounts permitted under the preceding two sentences, (ii) with respect to only those Facilities located in


 


7

















 


the State of Florida,
$250,000, and (iii) five
percent (5%) of the total insurable value of the applicable Facility.


 


7.                                      Use, Regulatory Compliance and Preservation of Business.


 


7.1                               Permitted
Use.


 


(a)                                  Tenant shall use, operate
and occupy each Facility as a radiation or oncology related medical office
building and treatment center, and for ancillary services relating thereto, but
for no other purpose; provided, however, that Tenant may, with the written
approval of Landlord (subject to the succeeding sentence, to be granted or
withheld in the exercise of its sole and absolute discretion) change the use of
a Facility to a different use so long as Tenant shall continue to use, operate and
occupy such Facility for a use in the medical services industry. Landlord, upon
the written request of Tenant, shall approve a change in the use of a Facility
if the following conditions are met: (i) the
proposed change in use is for a use in the medical services industry, (ii) Tenant has obtained and provided
to Landlord appraisals (prepared by an appraiser reasonably acceptable to
Landlord) that take into account the proposed change in use and that
demonstrate to Landlord’s reasonable satisfaction that the fair market value of
such Facility after the change in use will equal or exceed the portion of
Landlord’s Investment allocable to such Facility, and (iii) Tenant has obtained or agrees to
obtain prior to such change in use all licenses, certificates, permits and all
other approvals required by law in connection with operating the Facility for
the proposed new use. Tenant shall operate each Facility and the Business
conducted thereon in a manner consistent with all applicable laws.


 


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


 


(c)                                  Notwithstanding
Tenant’s continuous use obligation contained in Section 7.1(b),
Tenant may elect to discontinue operations at up to two (2) Facilities at
any one time during the Term provided that, except as expressly stated herein,
there shall be no abatement or reduction of Rent and provided further that: (i) effective on the date two hundred
and seventy (270) days after such closure, with respect to each Facility that
Tenant elects to so close, the amount of annual Minimum Rent then payable by
Tenant under this Master Lease shall be increased by an amount equal to the
Facility Closure Rent Increase (as defined below), (ii) on the date that is twelve (12) months from the date
after such initial Facility Closure Rent Increase and provided such Facility
remains closed, the amount of annual Minimum Rent then payable by Tenant under
this Master Lease shall again be increased by an amount equal to the Facility
Closure Rent Increase, (iii) Tenant
shall give written notice to Landlord within ten (10) days after Tenant
elects to cease operation, (iv) Tenant
shall provide adequate protection and maintenance of any Facility during any
period of vacancy, and (v) Tenant
shall comply with all


 


8

















 


applicable laws and comply
with the terms and conditions of this Master Lease other than the continuous
use covenant set forth in Section 7.1(b). As used herein “Facility Closure Rent Increase” shall mean
an amount equal to the product of (x) a
fraction, the numerator of which is Landlord’s Investment and the denominator
of which is twelve (12) and (y) one-half
of one percent (0.5%). If at anytime during the Term of this Master Lease, a
Facility that was closed resulting in a Facility Closure Rent Increase pursuant
to this Section 7.1(c) is re-opened or is no longer included
as part of the Premises pursuant to Sections 17, 18, 24,
or otherwise, upon the date such Facility is re-opened or no longer included in
the Premises, annual Minimum Rent shall be reduced by any Facility Closure Rent
Increase imposed in connection with the closure of such Facility.


 


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


 


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


 


7.4                               Right of First Opportunity. So long as Landlord is not
in default under this Master Lease, in the event that at any time during the
Term Tenant, or an Affiliate, elects to enter into a sale-leaseback transaction
with respect to a Target Facility and market such opportunity to any third
party that is not an employee, investor, owner, or Affiliate of Tenant (the “Right of First Opportunity Event”), the
following provisions shall apply:


 


(a)                                  “Target Facility” shall mean a healthcare facility or
facilities of comparable (or superior) type, use and quality to the Facilities.


 


(b)                                  Tenant shall
provide Landlord with written notice of the Right of First Opportunity Event
and Tenant’s proposed terms on which it or its Affiliate intends to market the
Target Facility and a general description of the Target Facility (the “Opportunity Notice”). Landlord shall have
a period of fifteen (15) Business Days (the “Protected
Period”) to offer the basic terms and conditions under which
Landlord would agree to purchase the Target Facility and enter into a lease for
the Target Facility on substantially the same terms as this Master Lease


 


9

















 


(the “Target Transaction”),  which Tenant may
accept or reject in its sole and absolute discretion or for any reason or no
reason at all. In the event Tenant does not accept Landlord’s proposed Target
Transaction, then Tenant shall be free to market and sell the Target Facility
to any other person or entity.


 


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


 


8.1                               Acceptance “AS IS”; No Liens. Tenant acknowledges that
it or an Affiliate has been in possession of and operating the Premises prior
to the date of this Master Lease and is presently engaged in operations like
the Business conducted at each Facility in the state where such Facility is
located and has expertise in such industry and, in deciding to enter into this
Master Lease, has not relied on any representations or warranties, express or
implied, of any kind from Landlord with respect to the Premises. Tenant has
examined the condition of title to and thoroughly investigated the Premises,
has selected the Premises to its own specifications, has concluded that, as of
the date hereof, no improvements or modifications are required to be made by
Landlord in order to conduct the Business thereon, and accepts them on an “AS IS” basis and assumes all
responsibility and cost for the correction of any observed or unobserved
deficiencies or violations. It is expressly
understood and agreed that any inspection by or on behalf of the Landlord of
the business conducted at the Premises or of the Premises is for Landlord’s
sole and exclusive benefit and is not directly or indirectly for the benefit
of, nor should be relied in any manner upon by, Tenant, its subtenants or any
other third party. Subject to its right to Protest set forth in Section 5.1,
Tenant shall not cause or permit any lien, levy or attachment to be placed or
assessed against any portion of the Premises or the operation thereof (a “Lien”) other than “Permitted Exceptions”
as described on Exhibit D, and any mortgage, lien, encumbrance, or other
charge created by or resulting solely from any act or omission of Landlord.


 


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


 


8.3                               Upgrade Expenditures. On or before the date that
is thirty (30) days after the expiration of each Lease Year, Tenant shall
provide to Landlord documentation and other evidence demonstrating to Landlord’s
reasonable satisfaction that Tenant has, during the preceding Lease Year,
expended an amount equal to or exceeding the CapEx Amount, multiplied by the
aggregate rentable square footage of the Facilities on the last day of the
preceding Lease Year, for Upgrade Expenditures relating to the Premises. As
used herein the “CapEx Amount” shall
mean an amount equal to One Dollar ($1.00) (as adjusted at the end of each
Lease Year for increases since the Effective Date in the CPI). “Upgrade Expenditures” means expenditures
in commercially reasonable amounts to Persons not affiliated with Tenant for (i) upgrades or improvements to each
Facility that have the effect of maintaining or improving such Facility,


 


10

















 


including new or replacement
wallpaper, tiles, window coverings, lighting fixtures, painting, upgraded
landscaping, carpeting, architectural adornments, common area amenities and the
like, including, without limitation, capital improvements or repairs (including
repairs or replacements of the roof, structural elements of the walls, parking
area or the electrical, plumbing, HVAC or other mechanical or structural
systems), and (ii) other
improvements to each Facility as reasonably approved by Landlord, which shall
include those matters, if any, that Landlord has approved in writing as of the
Effective Date based on descriptions and budgets that Tenant has provided prior
thereto. As used herein, “CPI” shall
mean the United States Department of Labor, Bureau of Labor Statistics Consumer
Price Index for All Urban Wage Earners and Clerical Workers, United States
Average, Subgroup “All Items” (1982-1984 = 100).


 


8.4                               Alterations by Tenant. Tenant may alter, improve,
exchange, replace, modify or expand (collectively, “Alterations”) the Premises
from time to time as it may determine is desirable for the continuing and
proper use and maintenance of the Premises; provided, that any Alterations in
excess of Two Hundred Fifty Thousand Dollars
($250,000) with respect to any individual Facility in any rolling twelve (12) month period shall require
Landlord’s prior written consent, which consent shall not be unreasonably
withheld, conditioned or delayed; provided further, that any Alterations to the
Premises must satisfy the requirements set forth in Sections 4.04 (2) and (3) of
Revenue Procedure 2001-28, 2001-19 I.R.B. 1156. All Alterations shall
immediately become a part of the Premises and the property of Landlord subject
to this Master Lease, and the cost of all Alterations or other purchases,
whether undertaken as an on-going licensing, Medicare, Medicaid or other
regulatory requirement, or otherwise shall be borne solely by Tenant. All
Alterations shall be done in a good and workmanlike manner in compliance in all
material respects with all applicable laws and the insurance required under
this Master Lease. If an Alteration changes the rentable square footage of a
Facility, Tenant shall promptly provide Landlord notice of the same and upon
delivery of such notice, Schedule 1 shall be deemed amended to reflect
such revised rentable square footage for the applicable Facility.


 


8.5                               Hazardous Materials. Tenant’s use of the
Premises shall comply in all material respects with all Hazardous Materials
Laws. If any Environmental Activities occur or are suspected to have occurred
in material violation of any Hazardous Materials Laws or if Tenant has received
written notice of any Hazardous Materials Claim against any portion of the
Premises, Tenant shall promptly remedy any such violation or claim to the
reasonable satisfaction of Landlord and in accordance in all material respects
with all applicable governmental authorities, as required by Hazardous
Materials Laws. Tenant and Landlord shall promptly advise one another in
writing upon receiving written notice of (a) any
Environmental Activities in material violation of any Hazardous Materials Laws;
(b) any Hazardous Materials
Claims against Tenant or Landlord in connection with the Premises (or any
portion of the Premises); (c) any
remedial action taken by Tenant or Landlord in response to any Hazardous
Materials Claims or any Hazardous Materials on, under or about any portion of
the Premises in material violation of any Hazardous Materials Laws; (d) any occurrence or condition on or
in the vicinity of any portion of the Premises of which Tenant or Landlord, as
applicable, has actual knowledge and that materially increases the risk that
any portion of the Premises will be exposed to Hazardous Materials; and (e) all material communications to or
from Tenant, any governmental authority or any other Person relating to
Hazardous Materials Laws or Hazardous Materials Claims with respect to any
portion of the Premises, including copies thereof. Notwithstanding any other
provision of this Master Lease, if any Hazardous Materials are


 


11

















 


discovered on or under any
portion of a Facility in violation of any Hazardous Materials Law, the Term
shall be automatically extended with respect to such Facility only and this
Master Lease shall remain in full force and effect with respect to such
Facility only until the earlier to occur of (i) the
completion of all remedial action or monitoring, as reasonably approved by
Landlord, in accordance with all Hazardous Materials Laws, or (ii) the date specified in a written
notice from Landlord to Tenant terminating this Master Lease (which date may be
subsequent to the date upon which the Term was to have expired).
Notwithstanding the foregoing, unless the Initial Term of this Master Lease is
renewed pursuant to Section 1, above, in no event shall the
provisions of this Section 8.5 extend the Term for a Facility
beyond September 29, 2038 as to such Facility; provided, however, that
Tenant’s obligations to complete all remedial action or monitoring pursuant to
this Section 8.5 shall survive any such termination of the Term.
Landlord shall have the right, at Tenant’s sole cost and expense (including,
without limitation, Landlord’s reasonable attorneys’ fees and costs) and with
counsel chosen by Landlord, to join and participate in, as a party if it so
elects, any legal proceedings or actions initiated in connection with any
Hazardous Materials Claims.


 


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


 


8.7                               Immediate Repairs. On or before the date that
is ninety (90) days after the Effective Date (the “Outside Date”), Tenant shall, at its sole cost and expense,
complete those repairs and replacements identified and further described on Exhibit I
attached hereto and incorporated herein by reference (the “Immediate Repairs”).  On or before the Outside Date Tenant shall
provide Landlord with documentation reasonably acceptable to Landlord
evidencing that the Immediate Repairs have been completed in accordance with
the provisions of this Section 8.7. All Immediate Repairs shall be
done in a good and workmanlike manner in compliance in all material respects
with all applicable laws and the insurance required under this Master Lease.


 


9.                                      Tenant Property.


 


9.1                               Tenant Property. Tenant may obtain and install all items of
furniture, fixtures, trade fixtures, supplies and equipment as Tenant
determines are reasonably necessary or reasonably appropriate to operate the
Premises (“Tenant Personal Property”).
As used herein, “Tenant Intangible Property” means
all the following at any time owned by Tenant in connection with its use of any
portion of the Premises: Medicare, Medicaid and other accounts and proceeds
thereof; rents, profits, income or revenue derived from such operation or use;
all documents, chattel paper, instruments, contract rights (including all
leases with subtenants and contracts with employees and third-parties), deposit
accounts, general intangibles and choses in action; refunds of any Taxes or
Other Charges; if applicable, licenses and permits necessary or desirable for
Tenant’s use of any portion of the Premises, any applicable certificate of
need, occupancy or other similar certificate, and the exclusive right to
transfer, move or apply for the foregoing and manage the business conducted at
any portion of the Premises; and the right to use


 


12

















 


the names set forth on Schedule
1 and any other trade or other name now or hereafter associated with its
operation of the Premises.


 


9.2                               Schedule of Tenant Property.  Upon the execution of this Master Lease by Tenant, Tenant
shall deliver to Landlord a schedule of all lenders, purchase money equipment
financiers, equipment lessors, and other parties who, other than Tenant, have
any liens, security interests, ownership interests, or other similar interests
in and to any Tenant Personal Property with a value of or exceeding Two Hundred
Fifty Thousand Dollars ($250,000) (the “Tenant
Property Schedule”). The Tenant Property Schedule shall be in a form
reasonably acceptable to Landlord and shall include: (i) the name, address, and other contact information for
the agent or lead bank (“Agent Bank”)
in connection with Tenant’s senior credit facility, and (ii) a detailed breakdown, by
Facility, of each applicable item of Tenant Personal Property, its age, useful
economic life, and estimated value, and any lenders, purchase money equipment
financiers, equipment lessors, or other parties who have a lien, security
interest, ownership interest, or other similar ownership interest in such item
and the contact information for any and all such parties. Tenant shall be
required to deliver to Landlord an updated Tenant Property Schedule upon the
commencement of each Lease Year and in connection with any change or replacement
of Agent Bank.


 


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


 


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


 


13

















 


passwords and access keys
required to fully access or extract the subject data therefrom) created using
Microsoft Excel (2003 or newer editions). In the event Tenant fails to provide
Landlord with the reports listed in Exhibit F within the time
periods specified therein, Tenant shall have a grace period of five (5) Business
Days after receipt of written notice of such failure from Landlord to provide
such reports, after which Tenant will be assessed with a $500 administrative
fee, which administrative fee shall be immediately due and payable to Landlord.


 


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


 


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


 


(a) Tenant’s
failure to pay any Rent within two (2) Business Days of when due;


 


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


 


(c) (i) Except as
permitted in accordance with the provisions of Section 7.1(c), the
suspension or material limitation of any license, or, if applicable, the certification
of any portion of the Premises for provider status under Medicare or Medicaid
which would have a material adverse affect on the operation of any Facility for
the then permitted use pursuant to Section 7.1(a); provided,
however if any such suspension or material limitation is curable by Tenant it
shall not constitute an Event of Default if Tenant promptly commences to cure
such breach and thereafter diligently pursues such cure to the completion
thereof within the lesser of (x) the
time period in which the applicable governmental agency has given Tenant to
undertake corrective action or (y) one
hundred eighty (180) days after the occurrence of any such suspension or
material limitation; (ii) except
as permitted in accordance with the provisions of Section 7.1(c),
the revocation of any license or, if applicable, the certification of any
portion of the Premises for provider status under Medicare or Medicaid which
would have a material adverse affect on the operation of any Facility for the
then permitted use pursuant to Section 7.1(a); (iii) the discontinuance of operations
at any Facility, except as may be permitted pursuant to Sections 7.1 or 24.5;
(iv) the failure to maintain
any certificate of need or other similar certificate or license required to
operate any Facility for the then permitted use in accordance with the
provisions of Section 7.1, which failure would have a material
adverse affect on the operation of any Facility; or (v) the use of any material portion of the Premises other
than as permitted pursuant to Section 7.1;


 


14

















 


(d) A default
beyond any applicable cure period by Tenant (i) under
the Letter of Credit Agreement or with respect to any obligation in excess of
one million dollars ($1,000,000) under any other lease, agreement or obligation
between Tenant and Landlord or any of Landlord’s Affiliates, or (ii) in any payment of principal or
interest on any obligations of borrowed money having an original principal
balance of one hundred million dollars ($100,000,000) or more in the aggregate,
or in the performance of any other provision contained in any instrument under
which any such obligation is created or secured (including the breach of any
covenant thereunder), (x) if
such payment is a payment at maturity or a final payment, or (y) if an effect of such default is to
cause, or permit any Person to cause, such obligation to become due prior to
its stated maturity;


 


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


 


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


 


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


 


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


 


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


 


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


 


15














 


13.1                        General.  Without
limiting the foregoing, Landlord shall have the right (but not the obligation)
to do any of the following upon and during the continuance of an Event of
Default: (a) sue for the
specific performance of any covenant of Tenant as to which it is in breach; (b) enter upon any portion of the
Premises, terminate this Master Lease, dispossess Tenant from the Premises, by
any available legal process, and/or collect money damages by reason of Tenant’s
breach, including the acceleration of (i) all
Minimum Rent and Additional Rent which would have accrued after such
termination, discounted at an annual rate equal to the then-current U.S.
Treasury Note rate for the closest comparable term and taking into account any
obligation on behalf of Landlord to mitigate its damages to the extent required
by law, and (ii) all
obligations and liabilities of Tenant under this Master Lease which survive the
termination of the Term; (c) elect
to leave this Master Lease in place and sue for Rent and other money damages as
the same come due; and (d) (before
or after repossession of the Premises pursuant to clause (b) above and
whether or not this Master Lease has been terminated) relet any portion of the
Premises to such tenant(s), for such term(s) (which may be greater or less
than the remaining balance of the Term), rent, conditions (which may include
concessions or free rent) and uses as it may determine in its sole discretion
and collect and receive any rents payable by reason of such reletting.


 


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


 


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


 


13.4                        Limited Remedy Event of Defaults.  Notwithstanding anything to the contrary herein contained, or
any other provisions of this Master Lease or any other concurrent transaction
document, if Landlord is exercising remedies due solely to the Events of
Default described in clauses (c), (d), (e), (f) or (i) of Section 12
(“Limited Remedy Events of Default”),


 


16

















 


the aggregate amount Tenant
shall be required to pay to Landlord from and after the date of the occurrence
of such Limited Remedy Event of Default (the “Occurrence
Date”) shall be limited to the sum of (i) (A) 89.9% of the fair market value of the
Premises as of the commencement date less (B) the sum of the present value
as of the Effective Date (using an annual discount rate equal to fifteen and
65/100 percent (15.65%)) of all Minimum Rent and Additional Rent received as of
the Occurrence Date, (ii) any
amounts of Taxes and Other Charges which are due and payable or have accrued
under this Master Lease through the Occurrence Date, and (iii) any amounts of Taxes and Other
Charges which are due and payable or have accrued under this Master Lease after
the Occurrence Date while or so long as the Tenant remains in possession of the
Premises after any Limited Remedy Event of Default that relates to insurance,
utilities, repairs, maintenance, environmental maintenance, remediation and
compliance and other customary costs and expenses of operating and maintaining
the Premises in substantial compliance with the terms of this Master Lease.


 


14.                               Provisions on Termination.


 


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


 


14.2                        Removal of Tenant Personal Property.  Provided that no Event of Default then exists, in connection
with the surrender of the Premises, Tenant may remove from the Premises in a
workmanlike manner all Tenant Personal Property, leaving the Premises in good
and presentable condition and appearance, including repair of any damage caused
by such removal. Title to any Tenant Personal Property which is not removed by
Tenant as permitted above upon the expiration of the Term shall, at Landlord’s
election, vest in Landlord; provided, however, that Landlord may remove and
store or dispose at Tenant’s expense any or all of such Tenant Personal
Property which is not so removed by Tenant without obligation or accounting to
Tenant.


 


14.3                        Holding Over.  If
Tenant shall for any reason remain in possession of any portion of the Premises
after the Termination Date, such possession shall be a month-to-month tenancy
during which time Tenant shall pay as rental on the first (1st) Business
Day of each month one and one-half (11⁄2)
times the total of the monthly Minimum Rent payable with respect to
the last Lease Year plus Additional
Rent allocable to the month, all additional charges accruing during the month
and all other sums, if any, payable by Tenant pursuant to this Master Lease.
Nothing contained herein shall constitute the consent, express or implied, of
Landlord to


 


17

















 


the holding over of Tenant
after the Termination Date, nor shall anything contained herein be deemed to
limit Landlord’s remedies.


 


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


 


15.                               Certain Landlord Rights.


 


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


 


15.2                        Grant Liens.  Any
Lien or other encumbrance now existing and securing any borrowing or other means
of financing or refinancing or otherwise shall provide for the recognition of
this Master Lease and all Tenant’s rights hereunder. Subject to the foregoing
sentence and Sections 7.3 and 23, without the consent of Tenant,
Landlord may from time to time, directly or indirectly, create or otherwise
cause to exist any Lien, title retention agreement or other encumbrance upon
the Premises, or any portion thereof or interest therein (including this Master
Lease), whether to secure any borrowing or other means of financing or
refinancing or otherwise. Upon the request of Landlord, Tenant shall
subordinate this Master Lease to the Lien of any such encumbrance so long as (a) such encumbrance provides that it
is subject to the rights of Tenant under this Master Lease and that so long as
no Event of Default shall exist beyond any applicable cure period, Tenant’s
occupancy shall not be disturbed if any Person takes possession of the
applicable portion of the Premises through foreclosure proceedings or otherwise
and (b) is otherwise in form
and substance reasonably acceptable to Tenant.


 


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


 


18

















 


the part of the Requesting
Party or specifying any such default and (d) as
to such other matters as the Requesting Party may reasonably request.


 


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


 


16.                               Assignment and Subletting.


 


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


 


16.2                        Permitted Assignments and Sublets.


 


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


 


(b) Notwithstanding
Section 16.1 above, Landlord’s consent shall not be required for
any assignment of this Master Lease or change of Control of Tenant or Guarantor
if the consolidated net worth of the successor Tenant (in the case of an
assignment) or Tenant (in the case of a change of Control of Tenant), as
applicable (such entity “Resulting Tenant”)
or, successor Guarantor (in the case of an assignment) or Guarantor (in the
case of a change of


 


19

















 


Control of Guarantor), as
applicable (such entity, “Resulting Guarantor”)
immediately after the effectiveness of the assignment or change of Control is
equal to or greater than Three Hundred Million Dollars ($300,000,000) (such
assignment or change of Control, a “Strong
Tenant/Guarantor Transfer”),  and
each of the following conditions is met: (i) Resulting
Tenant and/or Resulting Guarantor, or the officers, directors or managers
thereof or of the Person that controls Resulting Tenant or Resulting Guarantor,
as applicable, has sufficient operating experience and history with respect to
the Business of the Facilities as had Tenant or Guarantor, as applicable (or
the officers, directors or managers thereof or of the Person that controls
Tenant or Guarantor) immediately prior to the Strong Tenant/Guarantor Transfer,
or has retained a management company with such expertise to manage the
Facilities; (ii) after a
Strong Tenant/Guarantor Transfer, the Resulting Tenant and/or Resulting
Guarantor, if different than the Tenant or Guarantor immediately prior to such
Strong Tenant/Guarantor Transfer, shall assume all of the obligations of Tenant
under the Lease and Guarantor under the Guaranty accruing subsequent to the
effective date of such Strong Tenant/Guarantor Transfer by a written instrument
in form and substance reasonably satisfactory to Landlord (the “Lease/Guaranty Assumption”);  and (iii) no
Event of Default shall have occurred and be continuing hereunder. A Person
shall be deemed to have “sufficient operating
experience and history” if, immediately prior to the Strong
Tenant/Guarantor Transfer, such Person (together with its Affiliates and/or
officers, directors and managers) (x) operated
or managed (whether directly or through its operating subsidiary(ies)) at least
twelve (12) facilities engaged in the Business of the Facilities (or the number
of such facilities operated and/or managed by Guarantor, whichever is less) and
(y) has been in the business
of operating or managing such facilities for at least three (3) years (or for such period
as Guarantor has been in such business, whichever is less). Upon delivery of
the Lease/Guaranty Assumption, Landlord shall release Tenant from any liability
under the Lease and Guarantor from any liability under the Guaranty first
accruing from and after the effective date of such Strong Tenant/Guarantor Transfer.


 


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


 


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


 


20

















 


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


 


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


 


17.                               Damage by Fire or Other Casualty.  Tenant shall promptly notify Landlord of any material damage
or destruction of any portion of the Premises and diligently repair or
reconstruct such portion of the Premises in a good and workman like manner to a
like or better condition than existed prior to such damage or destruction in
accordance with Section 8.4. So long as no Event of Default exists,
any award of insurance proceeds up to and including One Hundred Thousand
Dollars ($100,000) shall be paid directly to Tenant. In the event that any
award of net insurance proceeds payable with respect to the casualty are in
excess of One Hundred Thousand Dollars ($100,000), such insurance proceeds (i) shall be paid directly to Landlord
and (ii) if no Event of Default
exists, shall be made available to Tenant for the repair or reconstruction of
the applicable portion of the Premises subject to the following disbursement
requirements:


 


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


 


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


 


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


 


(d)                                  disbursements
shall be made from time to time (within reasonable time frames to perform and
complete the restoration, but not more frequently than monthly) in an amount
not exceeding the cost of the restoration completed since the last
disbursement, upon receipt of (i) satisfactory
evidence, including architects’ certificates, of the stage of completion, the
estimated total cost of completion and performance of the restoration to date
in a good and workmanlike manner in accordance with all material respects with
the contracts, plans and


 


21

















 


specifications, (ii) waivers of liens, and (iii) contractors’ and subcontractors’
sworn statements as to completed work and the cost thereof for which payment is
requested; and


 


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


 


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


 


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


 


18.                               Condemnation.  Except
as provided to the contrary in this Section 18, this Master Lease
shall not terminate and shall remain in full force and effect in the event of a
taking or condemnation of the Premises, or any portion thereof, and Tenant
hereby waives all rights under applicable law to abate, reduce or offset Rent
by reason of such taking. If during the Term all or substantially all (a “Complete Taking”) or a smaller portion (a “Partial Taking”) of any Facility is taken
or condemned by any competent public or quasi-public authority, then (a) in the case of a Complete Taking,
Tenant may at its election made within thirty
(30) days of the effective date of such Taking, terminate this
Master Lease with respect to such Facility and the current Rent shall be
equitably abated as of the effective date of such termination, or (b) in the case of a Partial Taking,
the Rent shall be abated to the same extent as the resulting diminution in Fair
Market Value of the applicable portion of the Premises. The resulting
diminution in Fair Market Value on the effective date of a Partial Taking shall
be as established pursuant to Exhibit C. In the event this Master
Lease is terminated as to any Facility under this Section 18, then
the Minimum Rent and Additional Rent due hereunder shall be reduced by the
product of (i) the amount of
the then current Minimum Rent and Additional Rent, and (ii) a fraction, the numerator of
which is the portion of Landlord’s Investment allocated to such Facility and
the denominator of which is Landlord’s Investment. Landlord alone shall be
entitled to receive and


 


22

















 


retain any award for a
taking or condemnation other than a temporary taking; provided, however,
Tenant shall be entitled to submit its own claim in the event of any such
taking or condemnation with respect to the value of (u) Tenant’s leasehold interest in any portion of the
Premises, (v) the relocation
costs incurred by Tenant as a result thereof, (w) Tenant
Personal Property, (x) other
tangible property, (y) moving
expenses, and/or (z) loss of
business, if available. In the event of a temporary taking of less than all or
substantially all of the Premises, Tenant shall be entitled to receive and
retain any and all awards for the temporary taking and the Minimum Rent and
Additional Rent due under this Master Lease shall be not be abated
during the period of such temporary taking.


 


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


 


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


 


21.                               Notices.  All
notices and demands, certificates, requests, consents, approvals and other
similar instruments under this Master Lease shall be in writing and sent by
personal delivery, U. S. certified or registered mail (return receipt
requested, postage prepaid) or FedEx or


 


23

















 


similar generally recognized
overnight carrier regularly providing proof of delivery, addressed as follows:


 


	
  If
  to Tenant:

  	
   

  	
  If
  to Landlord:

  
	
   

  	
   

  	
   

  
	
  c/o Radiation Therapy
  Services, Inc.

  	
   

  	
  Nationwide Health
  Properties, Inc.

  
	
  2234 Colonial Boulevard

  	
   

  	
  610 Newport Center Drive,
  Suite 1150

  
	
  Fort Myers, Florida 33907

  	
   

  	
  Newport Beach, California
  92660

  
	
  Attn: David Watson

  	
   

  	
  Attn: President and CFO

  
	
  Facsimile: (239) 931-7380

  	
   

  	
  Facsimile: (949) 759-6887

  
	
   

  	
   

  	
   

  
	
  With a
  copy to:

  	
   

  	
  With a
  copy to:

  
	
   

  	
   

  	
   

  
	
  Kirkland & Ellis
  LLP

  	
   

  	
  Sherry Meyerhoff
  Hanson & Crance LLP

  
	
  200 East Randolph Drive

  	
   

  	
  610 Newport Center Drive,
  Suite 1200

  
	
  Chicago, Illinois
  60601

  	
   

  	
  Newport Beach, California
  92660

  
	
  Attn: John G.
  Caruso, Esq.

  	
   

  	
  Attn: Kevin
  Sherry, Esq.

  
	
  Facsimile: (312) 861-2200

  	
   

  	
  Facsimile: (949) 719-1212

  



 


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


 


22.                               Miscellaneous.  Since
each party has been represented by counsel and this Master Lease has been
freely and fairly negotiated, all provisions shall be interpreted according to
their fair meaning and shall not be strictly construed against any party. While
nothing contained in this Master Lease should be deemed or construed to
constitute an extension of credit by Landlord to Tenant, if a portion of any
payment made to Landlord is deemed to violate any applicable laws regarding
usury, such portion shall be held by Landlord to pay the future obligations of
Tenant as such obligations arise and if Tenant discharges and performs all
obligations hereunder, such funds will be reimbursed (without interest) to
Tenant on the Termination Date. If any part of this Master Lease shall be
determined to be invalid or unenforceable, the remainder shall nevertheless
continue in full force and effect. Time is of the essence, and whenever action
must be taken (including the giving of notice or the delivery of documents)
hereunder during a certain period of time or by a particular date that ends or
occurs on a Saturday, Sunday or federal


 


24














 


holiday, then such period or
date shall be extended until the immediately following Business Day. Whenever
the words “including”, “include” or “includes” are used in this Master Lease,
they shall be interpreted in a non-exclusive manner as though the words “without
limitation” immediately followed. Whenever the words day or days are used in
this Master Lease, they shall mean “calendar day” or “calendar days” unless
expressly provided to the contrary. The titles and headings in this Master
Lease are for convenience of reference only and shall not in any way affect the
meaning or construction of any provision. Unless otherwise expressly provided,
references to any “Section” mean a section of this Master Lease (including all
subsections), to any “Exhibit” or “Schedule” mean an exhibit or schedule
attached hereto or to “Medicare” or “Medicaid” mean such programs and shall
include any successor program. If more than one Person is Tenant hereunder,
their liability and obligations hereunder shall be joint and several. Promptly
upon the request of either party and at its expense, the parties shall prepare,
enter into and record a suitable short form memorandum of this Master Lease.
This Master Lease (a) contains
the entire agreement of the parties as to the subject matter hereof and
supersedes all prior or contemporaneous verbal or written agreements or
understandings, (b) may be
executed in one or more facsimile or electronic counterparts, each of which
shall be deemed an original, but all of which shall constitute one and the same
document, (c) may only be
amended by a writing executed by the parties, (d) shall
inure to the benefit of and be binding upon the successors and permitted
assigns of the parties, (e) shall
be governed by and construed and enforced in accordance with the internal laws
of the State of California, without regard to the conflict of laws rules thereof,
provided that the law of the State in which each Facility is located (each a “Situs State”) shall govern procedures for
enforcing, in the respective Situs State, provisional and other remedies
directly related to such Facility and related personal property as may be
required pursuant to the law of such Situs State, including without limitation
the appointment of a receiver; and, further provided that the law of the Situs
State also applies to the extent, but only to the extent, necessary to create,
perfect and foreclose the security interests and liens created under this
Master Lease, and (f) incorporates
by this reference any Exhibits and Schedules attached hereto.


 


23.                               Right of First Refusal.


 


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


 


(b)                                  As used herein,
the following terms shall have the following meanings:


 


(1)                                  “Third Party Offer” shall mean a written offer,
proposal, letter of intent or similar instrument setting forth the material
terms and conditions under which a third party


 


25

















 


which is not an Affiliate of
Landlord proposes to enter into a purchase of all or a portion of the Premises.


 


(2)                                  “Subject Facilities” shall mean that portion of
the Premises (or those Facilities) that are the subject of the purchase
proposal contained in the Third Party Offer.


 


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


 


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


 


(e)                                  In the event
that (i) Tenant does not
timely provide the Purchase Notice, (ii) Landlord
and Tenant are unable to agree upon the Purchase Documentation within the
Purchase Agreement Period, or (iii) following
execution of the Purchase Documentation, the transaction that is the subject
thereof is not consummated on or before the Closing Date as a result of a
default by Tenant in its obligations under the Purchase Documentation, then
Landlord shall be free to sell the Subject Facilities to the third party who
submitted the Third Party Offer on terms not materially more favorable to the
acquiring party than are set forth in the applicable Third Party Offer. If such
sale is not consummated within one hundred eighty (180) days following the
Purchase Agreement Period, or if at any time Landlord agrees with such third
party to modify the terms of the proposed transaction in a manner materially
more favorable to the third party, Tenant’s right of first refusal as granted
herein shall be reinstituted and Landlord shall give Tenant prompt written
notice of the same.


 


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


 


26

















 


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


 


24.                               Economic Substitution.


 


24.1                        Provided that
no Event of Default exists on the Option Exercise Date or the Closing Date,
Tenant may offer to purchase an Option Premises (as defined herein) by giving
Landlord written notice thereof (the “Exercise
Notice”) at least sixty (60) days, but not more than one hundred
eighty (180) days, prior to the desired closing date (the date on which such
notice is delivered being the “Option
Exercise Date”) provided that (a) Tenant
provides Landlord with substitute Replacement Premises in accordance with the
requirements set forth below and (b) the
substitution of the Replacement Premises for the Option Premises does not
result in a decrease in the Rent Coverage Ratio from the Rent Coverage Ratio
existing as of the Exercise Date. Landlord may accept or reject such offer to
purchase an Option Premises at Landlord’s sole and absolute discretion. As used
herein, “Option Premises” shall
mean the Facility or Facilities identified as the portion of the Premises that
Tenant elects to be designated as the Option Premises in the Exercise Notice; provided,
however, in no event shall Tenant be entitled to (i) include any Facility in the Option
Premises unless Landlord has owned such Facility for a period of the greater of
(x) two (2) years or (y) the currently recognized “safe-harbor”
holding period for Real Estate Investment Trusts under the rules and
regulations relating to “prohibited transactions” or “dealer sales” under the
Internal Revenue Code of 1986, as amended, and (ii) designate more than five (5) Facilities as
Option Premises during the Term. As used herein, “Replacement Premises” shall mean a healthcare facility or
facilities, of comparable or superior type, use, and quality to the Option
Premises, and, subject to customary due diligence and property investigations
by Landlord, reasonably acceptable to Landlord to be added to the Premises
demised under this Master Lease in place of the Option Premises, as of the date
of closing. As used herein, “Rent Coverage
Ratio” means, as of the date of determination, the ratio of (A) the Portfolio EBITDARM for the immediately
preceding six calendar months, minus (I) an assumed management fee equal to
five percent (5%) of the gross revenues generated during such six month period,
and (II) one-twelfth (1/12)
of the CapEx Amount multiplied by the aggregate rentable square footage of the
Facilities on the calculation date and further multiplied by the number of
months in the period of determination, to (B) the
total amount of the Minimum Rent and Additional Rent due for such six month
period pursuant to the terms of this Master Lease. As used herein, “Portfolio EBITDARM” means, for any period
of determination, the aggregate net income (or loss) of Tenant for such period
to the extent derived from the collective operation of the Premises, adjusted
to add thereto, to the extent allocable to the Premises, without duplication,
any amounts deducted in determining such net income (or loss) for (a) interest expense, (b) income tax expense, (c) depreciation and amortization
expense, (d) rental expense,
and (e) management fee expense,
in each case determined in conformity with generally accepted accounting
principles, consistently applied. With respect to any Replacement Premises that
has been operating for less than twelve (12) months as of the Option Exercise
Date, Portfolio EBITDARM shall be calculated using a commercially reasonable
estimate of the net income (or loss) of Tenant for such Replacement Premises
during the first year of operations.


 


27

















 


Such commercially reasonable
estimate of net income (or loss) shall be based on documentation that is
reasonably satisfactory to Landlord and shall be calculated utilizing
accounting and forecasting principles consistently applied and reasonably
satisfactory to Landlord. Notwithstanding anything herein which may be
interpreted to the contrary, Tenant shall be responsible for all costs and
expenses incurred by Landlord or Tenant in connection with the transfer of the
Option Premises to Tenant and the transfer of the Replacement Premises to Landlord,
including, without limitation, all reasonable costs and expenses incurred by
Landlord in connection with its due diligence investigation of the Replacement
Premises (including reasonable attorneys’ fees), documentary transfer taxes,
any title insurance premiums pursuant to Section 24.2(d) below and
any and all recording and escrow fees.


 


24.2                        In connection
with the transfer and conveyance of the Replacement Premises from Tenant to
Landlord, the following provisions shall apply. Any capitalized terms used in
this Section 24.2 and not otherwise defined shall have the meanings
given such terms in that certain Purchase and Sale Agreement between Landlord
and Tenant (or its Affiliate) dated as of September 30, 2008 (the “Purchase Agreement”):


 


(a)                                  The closing of
the transfer of the Replacement Premises from Tenant to Landlord shall be
consummated through an escrow established with the Title Company.


 


(b)                                  Landlord’s
obligation to accept the Replacement Premises pursuant to this Section 24
shall be conditioned upon (i) the
satisfaction of those conditions precedent contained in Sections 5.1 (a) and
(b) of the Purchase Agreement, together with any additional commercially
reasonable conditions precedent reasonably requested by Landlord, (ii) Tenant providing to Landlord, on
or before the Substitution Closing Date, a certificate (in a form reasonably
acceptable to Landlord) representing and warranting to Landlord that the
representations and warranties contained in Sections 7.1(a) through (g) of
the Purchase Agreement, together with any other commercially reasonable
representations and warranties reasonably requested by Landlord, are accurate
with respect to the Replacement Premises as of the Substitution Closing Date,
and (iii) Landlord and Tenant
delivering to Title Company any additional documents, information, or
instruments reasonably necessary to accomplish the transfer of the Replacement
Premises to Landlord and the transfer of the Option Premises to Tenant.


 


(c)                                  On a date
mutually acceptable to Landlord and Tenant following the satisfaction of the
conditions contained in Section 24.1 above (the “Substitution Closing Date”), Tenant shall
convey, at no cost to Landlord, good and marketable title to the Replacement
Premises pursuant to a deed in a form reasonably acceptable to Landlord. Tenant
shall deliver said deed to the Title Company on the Business Day prior to the
Substitution Closing Date.


 


(d)                                  Concurrently
with the transfer and conveyance of the Replacement Premises to Landlord by
Tenant, at Tenant’s sole cost and expense the Title Company shall be committed
to issue an ALTA Extended Coverage Policy of Title Insurance in favor of
Landlord with respect to the Replacement Premises showing only those exceptions
approved in writing by Landlord, which approval shall not be unreasonably
withheld, conditioned or delayed, and which exceptions shall include the lien
of any then non-delinquent taxes and assessments.


 


28

















 


(e)                                  There shall be
no proration of income or expenses related to the Replacement Premises.


 


24.3                        In connection
with the conveyance of the Option Premises from Landlord to Tenant, the
following provisions shall apply:


 


(a)                                  The closing of
the transfer of the Option Premises from Landlord to Tenant shall be
consummated through an escrow established with the Title Company and shall
occur concurrently with the transfer to Landlord of the Replacement Premises.


 


(b)                                  Landlord shall
convey title to the Option Premises pursuant to the form of deed mutually
acceptable to Landlord and Tenant and in an “as is” condition without
representation or warranty, but free and clear of all liens except Permitted
Exceptions. Landlord shall deliver said deed to the Title Company on the
Business Day prior to the Substitution Closing Date.


 


(c)                                  There shall be
no proration of income or expenses related to the Option Premises.


 


24.4                        Landlord and
Tenant hereby acknowledge that either party may consummate the transfer of the
Replacement Premises to Landlord and the Option Premises to Tenant as part of a
so-called like kind exchange pursuant to section 1031 of the Internal Revenue
Code of 1986, as amended, and each party agrees to cooperate with the other
party to accomplish such an exchange, even if such an exchange may result in
the Substitution Closing Date being delayed for up to thirty (30) days as a
result of such an exchange. Notwithstanding the foregoing, the party desiring
such an exchange shall pay any additional costs that would not otherwise have
been incurred by Landlord or Tenant had such party not consummated the transfer
through such an exchange. Neither party shall by this agreement or acquiescence
to such an exchange desired by the other party (i) have its rights under this Section 24
affected or diminished in any manner except as otherwise agreed to herein or (ii) be responsible for compliance
with or be deemed to have warranted to the other party that such party’s
exchange in fact complies with section 1031 of the Internal Revenue Code of
1986, as amended.


 


24.5                        During the Term
and subject to the limitations set forth herein, if one or more of the
Facilities becomes uneconomical or unsuitable for continued use in Tenant’s
business, Tenant may, with respect to not more than two (2) uneconomical
Facilities, seek to terminate the Master Lease with respect to such
uneconomical Facility or Facilities (such facility being herein called the “EAP”) in accordance with the conditions
and limitations of this Section 24.5.


 


(a)                                  From time to
time during the Term and provided no Event of Default has occurred and is
continuing, if Tenant shall determine in good faith and deliver to Landlord a
certificate signed by the president or chief financial officer of Tenant
certifying that (i) continued
use and occupancy by Tenant in Tenant’s business at such EAP is no longer
consistent with either the business operation or business strategy of Tenant,
and (ii) Tenant has
determined to abandon the use at such EAP, then Tenant may give Landlord not
less than ninety (90) calendar


 


29

















 


days prior written notice
(the “EAP Notice”) that Tenant
intends to arrange a sale of the EAP (“EAP
Sale”)  in accordance
with the provisions of this Section 24.5.


 


(b)                                  In the case of
an EAP Sale, Tenant must arrange the sale of the EAP on behalf of Landlord on
terms and conditions reasonably acceptable to Landlord, which terms and
conditions shall include, without limitation, the following: (i) a purchase price not less than the
Replacement Value for such EAP, which purchase price shall be payable in
immediately available funds at the closing of the EAP Sale, and (ii) the EAP Sale shall be on an “as
is”, “where is”, “with all faults” basis without any representation or warranty
whatsoever on the part of Landlord. As used herein, “Replacement Value” shall be an amount equal to the greater
of: (1) the then Fair Market
Value, as determined pursuant to Exhibit C, of the EAP, or (2) Landlord’s Investment in the EAP
(minus any net award paid to Landlord for a taking pursuant to Section 18).
Prior to the closing of the EAP Sale, Tenant shall deliver to Landlord a
covenant and undertaking (“EAP Undertaking”)
in a form reasonably acceptable to Landlord pursuant to which Tenant (w) represents and warrants that
Tenant is permanently abandoning such EAP, (x) covenants
to vacate such EAP prior to the closing of the EAP Sale, (y) covenants not to operate another
radiation treatment center (or whatever the then permitted use of the EAP is at
the time of the EAP Notice) within five (5) miles of such EAP (four (4) miles
with respect to the Facility located in Cape Coral, Florida) for two (2) years
from the date of the EAP Sale, and (z) acknowledges
and agrees that a breach or violation of such EAP Undertaking shall be an
immediate Event of Default under this Master Lease. Upon the sale of the EAP,
this Master Lease shall be deemed terminated as to such EAP and Minimum Rent
and Additional Rent due hereunder shall be reduced by the product of (1) the amount of the then current
Minimum Rent and Additional Rent, and (2) a
fraction, the numerator of which is the portion of Landlord’s Investment
allocable to such EAP and the denominator of which is Landlord’s Investment. If
Landlord elects not to accept an EAP Sale and provided that Tenant has
otherwise complied with all the provisions of this Section 24.5,
the Master Lease with respect to such EAP shall be deemed terminated and
Minimum Rent and Additional Rent due hereunder shall be reduced by the product
of (A) the amount of the then
current Minimum Rent and Additional Rent and (B) a
fraction, the numerator of which is the portion of Landlord’s Investment
allocable to such EAP and the denominator of which is Landlord’s Investment.


 


(c)                                  Notwithstanding
anything else in this Master Lease to the contrary, during the Term, Tenant
shall only be permitted to cause an EAP Sale or cause the termination of the
Master Lease for up to two (2) Facilities. At any time during which there
are two (2) Facilities closed pursuant to the provisions of Section 7.1(c),
Tenant shall not have the right to cause an EAP Sale or cause the termination
of this Master Lease unless (i) the
Facility that Tenant seeks to designate as an EAP is one of the two Facilities
then closed pursuant to Section 7.1(c) or (ii) Tenant continues to operate such
Facility until the closing of the EAP Sale.


 


(d)                                  Tenant shall
pay all charges incident to any transaction pursuant to this Section 24.5,
including Landlord’s attorneys’ fees and expenses together with all prepayment
fees and expenses solely with respect to the applicable Facility, including
attorneys’ fees and expenses due a mortgagee, arising out of such transaction.


 


25.                               Tax Treatment; Reporting.  Landlord and Tenant each acknowledge that each shall treat
this transaction as a true lease for state law purposes and shall report this
transaction as


 


30

















 


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


 


31

















 


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


 


	
  TENANT:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  21st
  CENTURY ONCOLOGY, INC.,

  a Florida corporation

  	
   

  	
  Signed, Sealed and Delivered

  
	
   

  	
   

  	
  in the presence of:

  
	
  By:

  	
   

  	
   

  	
   

  
	
  Name:

  	
  David N.T. Watson

  	
   

  	
   

  
	
  Title:

  	
  Vice President

  	
   

  	
  Witness Signature

  
	
   

  	
   

  	
   

  	
   

  
	
  MARYLAND RADIATION THERAPY

  	
   

  	
  Print Witness Name

  
	
  MANAGEMENT SERVICES, INC.,

  	
   

  	
   

  
	
  a
  Maryland corporation

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Witness Signature

  
	
  By:

  	
   

  	
   

  	
   

  
	
  Name:

  	
  David N.T. Watson

  	
   

  	
  Print Witness Name

  
	
  Title:

  	
  Vice President

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  PHOENIX MANAGEMENT COMPANY, LLC,

  	
   

  	
   

  
	
  a
  Michigan limited liability company

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
  Name:

  	
  David N.T. Watson

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  AMERICAN CONSOLIDATED TECHNOLOGIES, L.L.C.,

  	
   

  	
   

  
	
  a
  Michigan limited liability company

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
  Name:

  	
  David N.T. Watson

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  	
   

  



 


S-1

















 


	
  LANDLORD:

  	
   

  	
   

  
	
   

  	
   

  	
  Signed, Sealed and Delivered

  
	
  NATIONWIDE
  HEALTH PROPERTIES, INC.,

  a Maryland corporation

  	
   

  	
  in the presence of:

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Witness Signature

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Print Witness Name

  
	
  By: 

  	
   

  	
   

  	
   

  
	
  Name: 

  	
   

  	
   

  	
   

  
	
  Title: 

  	
   

  	
   

  	
  Witness Signature

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Print Witness Name

  
	
  THE
  GUARANTOR IS MADE A PARTY HERETO SOLELY AS TO ITS ACKNOWLEDGEMENTS AND
  OBLIGATIONS UNDER THE INTRODUCTORY PARAGRAPHS TO THIS MASTER LEASE:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  GUARANTOR:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  RADIATION THERAPY SERVICES, INC.,

  	
   

  	
   

  
	
  a
  Florida corporation

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  By: 

  	
   

  	
   

  	
  Signed, Sealed and Delivered

  
	
  Name: 

  	
  David N.T. Watson

  	
   

  	
  in the presence of:

  
	
  Title: 

  	
  Executive Vice President
  and

  	
   

  	
   

  
	
   

  	
  Chief Financial Officer

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Witness Signature

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Print Witness Name

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Witness Signature

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  PRINT
  WITNESS NAME

  



 


S-2














 


EXHIBIT A


 


LEGAL DESCRIPTIONS


 


See
attached;


 


includes
all improvements thereon and all appurtenances thereto.


 


A-1

















 


EXHIBIT B


 


INTENTIONALLY OMITTED


 


B-1

















 


EXHIBIT C


 


FAIR MARKET VALUE


 


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


 


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


 


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


 


“MAI
Appraiser” shall mean an appraiser licensed or otherwise
qualified to do business in the state(s) where the Premises or applicable
portion thereof are located and who has substantial experience in performing
appraisals of facilities similar to the Premises or applicable portion thereof
and is certified as a member of the American Institute of Real Estate
Appraisers or certified as a SRPA by


 


C-1

















 


the Society of Real Estate
Appraisers, or, if such organizations no longer exist or certify appraisers,
such successor organization or such other organization as is approved by
Landlord.


 


C-2

















 


EXHIBIT D


 


PERMITTED EXCEPTIONS


 


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


 


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


 


3.                          Real property
taxes and assessments.


 


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


 


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


 


D-1

















 


EXHIBIT E


 


CERTAIN DEFINITIONS


 


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


 


ENVIRONMENTAL
DEFINITIONS


 


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


 


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


 


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


 


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


 


OTHER
DEFINITIONS


 


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


 


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


 


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


 


E-1

















 


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


 


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


 


“Landlord’s
Investment” in the Premises means Forty-Two Million Eight
Hundred Nineteen Thousand Fifty-One and 44/100ths Dollars ($42,819,051.44).


 


“Medical
Waste” shall mean all medical waste as defined by California Health and
Safety Code § 117690, as amended or supplemented. If a Situs State has a
comparable statute that defines “medical waste”, Medical Waste for purposes of
all Facilities in such Situs State shall have the meaning set forth in such
statute.


 


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


 


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


 


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


 


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


 


E-2

















 


EXHIBIT F


 


FINANCIAL, MANAGEMENT AND REGULATORY REPORTS


 


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


 


During the Term, Tenant
shall deliver to Landlord, prior to one hundred twenty (120) days after the
close of each fiscal year of Radiation Therapy Services, Inc. or any
Resulting Guarantor (“Holdings”)
annual audited financial statements of Holdings, commencing with the fiscal
year including the date of commencement of the Term, certified by a nationally
recognized firm of independent certified public accountants. In addition,
Tenant shall also furnish to Landlord prior to sixty (60) days after the end of
each of the three remaining quarters, unaudited financial statements and all
other quarterly reports of Holdings, certified by Holdings’ chief financial
officer, and all filings, if any, of Form 10-K, Form 10-Q and other
required filings with the Securities and Exchange Commission pursuant to the
provisions of the Securities Exchange Act of 1934, as amended, or any other
law.


 


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


 


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


 


On or before the date that
is forty-five (45) days after the end of each calendar quarter, Tenant shall
deliver to Landlord quarterly profit and loss reports concerning the Business
at each Facility and the combined Facilities in this Master Lease. Such reports
shall be in substantially the same form as delivered by Tenant to Landlord in
connection with Landlord’s acquisition of the Premises and shall contain a
level of detail reasonably satisfactory to Landlord. Such reports shall be sent
via email to Landlord at financials@nhp-reit.com.


 


Tenant shall furnish to
Landlord within ten (10) days of receipt written notice of any of the
following: (i) any material violation of any federal, state, or local
licensing or reimbursement certification statute or regulation, including
Medicare or Medicaid, (ii) any suspension, termination or restriction
placed on Tenant or any portion of the Premises or the operation of any portion
of the Business which would have a material adverse effect on the operation of
the Business at a Facility, and (iii) any material violation of any
permit, approval or certification in connection with any portion of the


 


F-1

















 


Premises or any portion of
the Business, by any federal, state, or local authority, including Medicare or
Medicaid, if applicable.


 


Tenant shall, on or before
the date that is sixty (60) days prior to the beginning of each fiscal year of
Holdings, provide Landlord with an annual operating budget covering the
operations of Holdings for the forthcoming fiscal year. If, for whatever
reason, the operating budget of Holdings would not include and cover the
operations of Tenant for the forthcoming fiscal year, then Tenant shall deliver
to Landlord, within sixty (60) days after the beginning of Tenant’s fiscal
year, an annual operating budget covering the operations of Tenant for such
fiscal year.


 


F-2














 


EXHIBIT G


 


FORM OF LETTER OF CREDIT AGREEMENT


 


This LETTER OF CREDIT AGREEMENT (this “Agreement”) is dated as of
                                  ,
200    , by and between NATIONWIDE
HEALTH PROPERTIES, INC., a Maryland corporation (“Beneficiary”), and                                                             ,
a
                                                                
(“LC Party”).


 


RECITALS


 


A.                                    The
Beneficiary, as landlord, and
                                  
(“Tenant”), as tenant, have entered
into that certain Master Lease dated September 30, 2008 (the “Lease”)
whereby Beneficiary has leased to [Tenant/LC
Party] certain property as more particularly described therein. All
initially-capitalized terms used herein and not otherwise defined herein shall
have the same meanings given such terms in the Lease.


 


B.                                    To secure
Tenant’s performance under the Lease, Radiation Therapy Services, Inc., a
Florida corporation (“Guarantor”),
has executed that certain Guaranty of Lease (the “Guaranty”) dated September 30, 2008 guarantying the full
performance by Tenant under the Lease.


 


C.                                    LC Party is [DESCRIBE RELATIONSHIP TO TENANT AND GUARANTOR].
LC Party derives direct and substantial benefit from the execution and delivery
of the Lease by Tenant and Beneficiary.


 


AGREEMENT


 


NOW,
THEREFORE, for valuable consideration, the receipt and
sufficiency of which are acknowledged, the parties agree as follows:


 


1.                                      Letter of Credit.


 


(a)                                  Form of
Letter of Credit. Within three (3) Business Days of the date
hereof, LC Party shall cause [NAME OF BANK]
(“Issuer”) to issue an irrevocable
letter of credit substantially in the form of Exhibit A attached
hereto (the “Letter of Credit”)
naming Beneficiary, as beneficiary. The Letter of Credit shall partially secure
the performance by [Tenant/LC Party]
under the Lease and the performance by Guarantor under the Guaranty. As used
herein, “Letters of Credit” and “Letter of Credit” shall include the Letter
of Credit and all Supplemental Letters of Credit (as hereinafter defined) and Replacement
Letters of Credit (as hereinafter defined).


 


(b)                                  Letter of
Credit Amount. The aggregate amount of all issued and outstanding
Letters of Credit shall, at all times during the term hereof as provided in Section 5,
be
                                      
Dollars
($                  )
(the “Letter of Credit Amount”).
Each Letter of Credit shall be for a term of not less than twelve (12) months


 


G-1

















 


and shall remain in effect
for at least sixty (60) days after the date upon which the Term (as defined in
the Lease) expires, but subject to termination in accordance with Section 4
of the Lease.


 


(c)                                  Replacement
Letter of Credit. The term “Reissuance
Date” shall mean a date thirty (30) days prior to the expiration date of the then issued and outstanding
Letter of Credit. If a letter of credit is then required pursuant to the Lease,
on or before each Reissuance Date, LC Party shall cause the Issuer to issue a
replacement of the then issued and outstanding Letter of Credit, which
replacement shall be in the form of Exhibit A hereto (the “Replacement Letter of Credit”).


 


(d)                                  Supplemental
Letter of Credit. If all or any portion of any Letter of Credit is
drawn against by Beneficiary, LC Party
shall, within two (2) Business Days after demand by Beneficiary, order
Issuer to issue to Beneficiary, at LC Party’s expense, a replacement or
supplementary Letter of Credit in the form of Exhibit A hereto (a “Supplemental Letter of Credit”) such that
at all times during the term of this Agreement that a letter of credit is
required under the Lease, Beneficiary shall have the ability to draw on one or
more Letters of Credit totaling, in the aggregate, the Letter of Credit Amount.
If Issuer does not issue to Beneficiary such Supplemental Letter of Credit
within seven (7) days after Beneficiary’s demand to LC Party, it shall be
a default by LC Party under this Agreement and an Event of Default under the
Lease.


 


2.                                      Beneficiary’s Right to Draw.


 


(a)                                  General. Beneficiary
shall be entitled to draw on each Letter of Credit one or more times for the
purpose of compensating Beneficiary for any amounts due to Beneficiary under
the Lease by reason of an Event of Default occurring under the Lease or a
default by Guarantor under the Guaranty. Any amount drawn by Beneficiary shall
not be deemed: (i) to fix or determine the amounts to which Beneficiary is
entitled to recover under the Lease, the Guaranty or otherwise; (ii) to
waive or cure any default under the Lease or the Guaranty; or (iii) to
limit or waive Beneficiary’s right to pursue any remedies provided for in the
Lease or the Guaranty.


 


(b)                                  Replacement
Letters of Credit. Upon the issuance of a Replacement Letter of
Credit, Beneficiary shall have the right to draw solely on such Replacement
Letter of Credit and Beneficiary shall have no right to draw against the Letter
of Credit which is replaced by such Replacement Letter of Credit. If LC Party
fails to cause the issuance of a Replacement Letter of Credit by the Reissuance
Date and a letter of credit is required under the Lease, then Beneficiary
shall, in addition to all other rights and remedies available at law or equity,
have the right to draw the full amount of the then issued and outstanding Letters of Credit, which amount shall be
held as a cash security deposit under the Lease.


 


G-2

















 


(c)                                  Supplemental
Letters of Credit. If LC Party fails to cause the issuance of any
Supplemental Letter of Credit as required pursuant to Section 1(d) hereof,
then Beneficiary shall, in addition to all other rights and remedies available
at law or equity, have the right to draw the full amount of the then issued and
outstanding Letters of Credit, which amount shall be held as a cash security
deposit under the Lease.


 


3.                                      Replacement of Issuer.


 


(a)                                  Supplemental
and Replacement Letters of Credit. Supplemental Letters of
Credit and Replacement Letters of Credit shall be issued by a financial
institution acceptable to Beneficiary in the exercise of its reasonable
discretion, provided, however, Beneficiary shall have no
obligation to approve any financial institution which does not have net worth,
as determined in accordance with generally accepted accounting principles
consistently applied, (“Net Worth”)
in excess of Two Hundred Fifty Million Dollars ($250,000,000.00) (“Issuer’s Minimum Net Worth”). Any such
replacement financial institution shall be deemed to be the “Issuer”
hereunder.


 


(b)                                  Creditworthiness
of Issuer. In the event the Net Worth of Issuer is at any
time less than the Issuer’s Minimum Net Worth or if Issuer shall admit in
writing its inability to pay its debts generally as they become due, shall file
a petition in bankruptcy or a petition to take advantage of any insolvency
statute, shall consent to the appointment of a receiver or conservator of
itself or the whole or any substantial part of its property, shall file a
petition or answer seeking reorganization or arrangement under the Federal
Bankruptcy Laws, shall have a receiver or conservator appointed for it, or if,
in Beneficiary’s reasonable determination, Issuer is not sufficiently
creditworthy or shall become subject to operational supervision by any federal
or state regulatory authority, then within thirty (30) days after a written
demand by Beneficiary, LC Party shall obtain a Replacement Letter of Credit
from another financial institution meeting the criteria set forth in Section 3(a) hereof,
whereupon such replacement financial institution shall be deemed to be the “Issuer”
under this Agreement.


 


4.                                      Successors and Assigns.


 


(a)                                  The rights of Beneficiary
under this Agreement and any outstanding Letter of Credit shall be transferable
and assignable to any assignee of, or successor in interest to, Beneficiary’s
rights under the Lease (including any assignment for security purposes of
Beneficiary’s rights under the Lease, this Agreement or any outstanding Letter
of Credit) and the term “Beneficiary” as used herein shall
refer to Nationwide Health Properties, Inc., and to each successor and assign
of all or any portion of its interest under the Lease. LC Party and Issuer
shall accept and agree to tender performance of their obligations hereunder and
under any outstanding Letter of Credit to any such successor or assign of which
LC Party and Issuer have been given written notice of by Beneficiary.


 


G-3

















 


(b)                                  LC Party shall not have the
right to assign its rights or duties under this Agreement without the prior
written consent of Beneficiary, which consent may be granted or withheld in
Beneficiary’s sole discretion.


 


5.                                      Termination of Obligation to Provide Letters of Credit. Except as
otherwise set forth in the Lease, the obligation of LC Party to cause the
issuance of any Letters of Credit shall terminate on the date which is sixty
(60) days after the date upon which the Lease Term expires, other than an
expiration or termination of the Lease Term pursuant to an Event of Default.


 


6.                                      Attorneys’ Fees. If any party brings any action to interpret
or enforce this Agreement, or for damages for any alleged breach thereof, the
prevailing party in any such action shall be entitled to reasonable attorneys’
fees and costs as awarded by the court in addition to all other recovery,
damages and costs.


 


7.                                      Miscellaneous. All terms and provisions of this Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns. The headings in this Agreement are for the
convenience of reference only and shall not limit or otherwise affect the
meaning hereof. This Agreement and all rights and duties of Tenant, LC Party
and Beneficiary, arising from or relating in any way to the subject matter of
this Agreement shall be governed by, construed and enforced in accordance with the
laws of the State of California, without regard to the conflict of law rules of
such State. This Agreement may be executed in separate counterparts, each of
which shall be considered as original when such party has executed and
delivered to the other one or more copies of this Agreement. The Recitals set
forth above are hereby incorporated by reference and made a part hereof. LC
Party represents and warrants that the Recitals are true and correct in all
material respects.


 


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


 


G-4

















 


	
  If
  to L/C Party:

  	
   

  	
  If
  to Beneficiary:

  
	
   

  	
   

  	
   

  
	
  c/o Radiation Therapy
  Services, Inc.

  	
   

  	
  Nationwide Health Properties, Inc.

  
	
  2234 Colonial Boulevard

  	
   

  	
  610 Newport Center Drive,
  Suite 1150

  
	
  Fort Myers, Florida 33907

  	
   

  	
  Newport Beach, California
  92660

  
	
  Attn: David Watson

  	
   

  	
  Attn: President and CFO

  
	
  Facsimile: (239) 931-7380

  	
   

  	
  Facsimile: (949) 759-6887

  
	
   

  	
   

  	
   

  
	
  With a
  copy to:

  	
   

  	
  With a
  copy to:

  
	
   

  	
   

  	
   

  
	
  Kirkland & Ellis
  LLP

  	
   

  	
  Sherry Meyerhoff
  Hanson & Crance LLP

  
	
  200 East Randolph Drive

  	
   

  	
  610 Newport Center Drive,
  Suite 1200

  
	
  Chicago, Illinois
  60601

  	
   

  	
  Newport Beach, California
  92660

  
	
  Attn: John G.
  Caruso, Esq.

  	
   

  	
  Attn: Kevin
  Sherry, Esq.

  
	
  Facsimile: (312) 861-2200

  	
   

  	
  Facsimile: (949) 719-1212

  



 


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


 


G-5

















 


EXECUTED as of the date
first set forth above.


 


	
   

  	
   

  	
  “LC
  PARTY”

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  a

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Its:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  “BENEFICIARY”

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  NATIONWIDE
  HEALTH PROPERTIES, INC.,

  
	
   

  	
   

  	
  a Maryland corporation

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Its:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ACCEPTED
  AND AGREED TO:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  “TENANT”

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  ,

  
	
   

  	
   

  	
  a

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Its:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  “GUARANTOR”

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Radiation
  Therapy Services, Inc.,

  
	
   

  	
   

  	
  a Florida corporation

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Its:

  	
   

  



 


G-6

















 


EXHIBIT A to EXHIBIT G


 


[NAME] BANK


 


IRREVOCABLE LETTER OF CREDIT
NO.


 


DATE:


 


EXPIRATION DATE:


 


Nationwide Health Properties, Inc.

610 Newport Center Drive, Suite 1150

Newport Beach, CA 92660


 


Ladies and Gentlemen:


 


We hereby establish our
Irrevocable Letter of Credit in your favor for the account of
                                                                      
(“Customer”) available by your
draft(s) on us payable at sight in an amount not to exceed a total
of                                            
Dollars
($                      )
when accompanied by the following documents:


 


1.                                       A certificate
which on its face appears to have been executed by an officer of Nationwide
Health Properties, Inc., a Maryland corporation (“Beneficiary”), stating the amount which
Beneficiary is drawing and that one or more of the following events has
occurred: (i) an Event of Default has occurred under the Master Lease
dated September 30, 2008 between Beneficiary and
                                        
(the “Lease”); (ii) a default
under that certain Guaranty of Lease dated September 30, 2008, executed by
Radiation Therapy Services Inc., a Florida corporation for the benefit of
Beneficiary; or (iii) a default has occurred under that certain Letter of
Credit Agreement dated
                            ,
200      , by and between Customer and
Beneficiary.


 


2.                                       The original
Letter of Credit must accompany all drafts unless a partial draw is presented,
in which case the original must accompany final draft.


 


This Letter of Credit will
be duly honored by us at sight upon delivery of the statement set forth above
without inquiry as to the accuracy of such statement and regardless of whether
Customer disputes the content of such statement.


 


This Letter of Credit may be
transferred or assigned by Beneficiary to any successor or assign of
Beneficiary’s interests under the Lease or to any lender obtaining a lien or
security interest in the property covered by the Lease. Each draft hereunder by
any assignee or


 


G-7

















 


successor shall be
accompanied by a copy of the fully executed documents or judicial orders
evidencing such encumbrance, assignment or transfer.


 


Any draft drawn hereunder shall
be in the form attached hereto as Schedule 1. Partial drawings are
permitted with the amount of the Letter of Credit being reduced, without
amendment, by the amount(s) drawn hereunder.


 


This Letter of Credit shall
expire at 2:00 p.m.,
                    
time, on the expiration date set forth above. Notwithstanding the foregoing,
this Letter of Credit shall be automatically extended for additional periods of
one year from the present or each future expiration date unless we have
notified you in writing, not less than sixty (60) days before any such
expiration date, that we elect not to renew this Letter of Credit. Our notice
of any such election shall be sent by express, registered or certified mail to
the address shown above.


 


Except so far as otherwise
expressly stated, this Letter of Credit is subject to the “Uniform Customs and
Practices for Documentary Credits (2007 Revision), International Chamber
of Commerce Publication No. 600.” We hereby agree with you and all persons
negotiating such drafts that all drafts drawn and negotiated in compliance with
the terms of this Letter of Credit will be duly honored upon presentment and
delivery of the documents specified above by certified or registered mail to
                                                                                      ,
, if negotiated on or before the expiration date shown above.


 


 


	
   

  	
  Very truly yours,

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Authorized Signature

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Authorized Signature

  



 


G-8

















 


SCHEDULE 1 TO EXHIBIT A OF EXHIBIT G


 


SIGHT DRAFT


 


	
  TO:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Attention:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  PAY
  TO THE ORDER OF:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  [NAME OF
  BENEFICIARY]

  c/o [NAME OF BANK]

  [ADDRESS OF BANK]

  ABA No. [INSERT ABA NO.]

  for the benefit of [NAME OF
  BENEFICIARY]

  Account No. [INSERT ACCOUNT
  NO.]

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  THE
  SUM OF:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
                                                
  Dollars
  ($                        )

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  DRAWN
  ON:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Irrevocable Letter of
  Credit No.

  	
   

  
	
   

  	
  dated
                            ,
  200       issued by

  	
   

  
	
   

  	
                                            
  Bank

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  [BENEFICIARY]

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  



 


G-9

















 


EXHIBIT H


 


INTENTIONALLY OMITTED


 


H-1














 


EXHIBIT I


 


IMMEDIATE REPAIRS


 


	
  Facility

  	
   

  	
  Life

  Safety/Fire

  Protection

  	
   

  	
  Landscaping

  	
   

  	
  Paving/

  Curbing

  Parking

  	
   

  	
  Roofing

  	
   

  	
  Stairs

  	
   

  	
  Exterior

  Envelope

  	
   

  	
  Exterior

  Envelope

  	
   

  	
  Total

  Immediate

  Costs

  	
   

  	
  Description

  	
   

  
	
  Ft. Myers

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Cape Coral

  	
   

  	
  $

  	
  1,000

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  $

  	
  1,000

  	
   

  	
  Impact fire control panel and Alarm Systems

  	
   

  
	
  Naples

  	
   

  	
  $

  	
  1,000

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  $

  	
  1,000

  	
   

  	
  Inspect sprinkler system, piping, and appurtenances

  	
   

  
	
  Pt. Charlotte

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Arcadia

  	
   

  	
  $

  	
  1,000

  	
   

  	
   

  	
   

  	
  $

  	
  1,275

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  $

  	
  2,275

  	
   

  	
  Replace 15 concrete car stops; inspect and refurbish
  fire extinguishers

  	
   

  
	
  Sarasota

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Englewood

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Venice

  	
   

  	
  $

  	
  1,000

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  $

  	
  1,000

  	
   

  	
  Inspect sprinkler system, piping, and appurtenances

  	
   

  
	
  Key West

  	
   

  	
  $

  	
  1,000

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  $

  	
  800

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  $

  	
  1,800

  	
   

  	
  Inspect extinguishers, alarm panel, and
  appurtenances; repair cracked stairs

  	
   

  
	
  Berlin

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Monroe

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  $

  	
  1,450

  	
   

  	
  $

  	
  413

  	
   

  	
  $

  	
  1,863

  	
   

  	
  Repair and replace metal face panels and metal
  siding.

  	
   

  
	
  Madison Heights

  	
   

  	
   

  	
   

  	
  $

  	
  1,500

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  $

  	
  1,500

  	
   

  	
  Repair damaged masonry block landscaping panels.

  	
   

  
	
  Totals

  	
   

  	
  $

  	
  5,000

  	
   

  	
  $

  	
  1,500

  	
   

  	
  $

  	
  1,275

  	
   

  	
   

  	
   

  	
  $

  	
  800

  	
   

  	
  $

  	
  1,450

  	
   

  	
  $

  	
  413

  	
   

  	
  $

  	
  10,438

  	
   

  	
   

  	
   

  



 


I-1


















 


SCHEDULE 1


 


FACILITY INFORMATION: FACILITY NAME, ADDRESS,

RENTABLE SQUARE FOOTAGE, ETC.


 


	
  Facility Name

  	
   

  	
  Facility Address

  	
   

  	
  No. of Floors

  	
   

  	
  Total Rentable

  Square Footage

  	
   

  
	
  Arcadia,
  Florida

  	
   

  	
  920 N. Mills Avenue

  Arcadia, Florida 34266

  	
   

  	
  1

  	
   

  	
  7,561

  	
   

  
	
  Berlin,
  Maryland

  	
   

  	
  314 Franklin Avenue,
  Berlin

  Maryland 21811

  	
   

  	
  1

  	
   

  	
  5,400

  	
   

  
	
  Cape
  Coral, Florida

  	
   

  	
  1419 SE 8th Terrace

  Cape Coral, Florida 33990

  	
   

  	
  1

  	
   

  	
  12,231

  	
   

  
	
  Englewood,
  Florida

  	
   

  	
  571 Medical Drive

  Englewood, Florida 34223

  	
   

  	
  1

  	
   

  	
  7,800

  	
   

  
	
  Ft.
  Myers, Florida

  	
   

  	
  7341 Gladiolus Drive

  Ft. Myers, Florida 33908

  	
   

  	
  1

  	
   

  	
  9,500

  	
   

  
	
  Key
  West, Florida

  	
   

  	
  3426 North Roosevelt Road

  Key West, Florida 33041

  	
   

  	
  2

  	
   

  	
  4,339

  	
   

  
	
  Madison
  Heights, Michigan

  	
   

  	
  30365 Dequindre Avenue

  Madison Heights, Michigan 48071

  	
   

  	
  1

  	
   

  	
  7,344

  	
   

  
	
  Monroe,
  Michigan

  	
   

  	
  1085 North Macomb Street

  Monroe, Michigan 48162

  	
   

  	
  1

  	
   

  	
  9,846

  	
   

  
	
  Naples,
  Florida

  	
   

  	
  1885 SW Health Parkway

  Naples, Florida 34109

  	
   

  	
  1

  	
   

  	
  7,653

  	
   

  
	
  Pt.
  Charlotte, Florida

  	
   

  	
  3185 Harbor Boulevard

  Pt. Charlotte, Florida 33952

  	
   

  	
  1

  	
   

  	
  11,700

  	
   

  
	
  Sarasota,
  Florida

  	
   

  	
  3210 Fruitville Road

  Sarasota, Florida 34237

  	
   

  	
  1

  	
   

  	
  10,535

  	
   

  
	
  Venice,
  Florida

  	
   

  	
  959 East Venice Avenue

  Venice, Florida 34292

  	
   

  	
  1

  	
   

  	
  9,621

  	
   

  



 


Schedule 1-1