Document:

Master Lease

    

      

      

      
        
          

        

       

      

      MASTER
        LEASE

      

      SINGLE
        LESSEE

      MULTIPLE
        FACILITIES

      

      

      

      OHI
        ASSET
        II (OH), LLC

      

      AND

      

      CSC
        MSTR
        LSCO, LLC

      

      

      DATED:
        December16, 2005

      

      CSC
        Transaction

       

                              Facilities: Aristocrat
        Berea

                   
Candlewood
        Park

                      
         Falling Water

                              
        Grande Pointe Health Care

                      
        Greenbrier RC

                      
        Greenbrier HC

                              
        Ohio Extended Care Facility

                      
        Pebble Creek

                              
        Pine Grove

                      
        Pine Valley Care Center

                     
        Wyant Woods

      
        
          
            

            

          

          
          

        

        
          
          

          
            

          

        

        
          
          

          
          

        

      

       

       

       

      

        
          	
                  TABLE
                    OF CONTENTS

                	 
	
                   

                	 Page
	
                  ARTICLE
                    I

                	
                  1

                
	
                  1.1    LEASE

                	
                  1

                
	
                  1.2    TERM

                	
                  2

                
	
                  1.3    OPTION
                    TO RENEW

                	
                  2

                
	
                  ARTICLE
                    II

                	
                  3

                
	
                  2.1    DEFINITIONS

                	
                  3

                
	
                  ARTICLE
                    III

                	
                  20

                
	
                  3.1    BASE
                    RENT; MONTHLY INSTALLMENTS

                	
                  20

                
	
                  3.2    ADDITIONAL
                    CHARGES

                	
                  20

                
	
                  3.3    LATE
                    CHARGE; INTEREST.

                	
                  20

                
	
                  3.4    NET
                    LEASE.

                	
                  20

                
	
                  ARTICLE
                    IV

                	
                  21

                
	
                  4.1    PAYMENT
                    OF IMPOSITIONS

                	
                  21

                
	
                  4.2    ADJUSTMENT
                    OF
                    IMPOSITIONS

                	
                  22

                
	
                  4.3    UTILITY
                    CHARGES

                	
                  22

                
	
                  4.4    INSURANCE
                    PREMIUMS

                	
                  22

                
	
                  ARTICLE
                    V

                	
                  22

                
	
                  5.1    NO
                    TERMINATION, ABATEMENT, ETC

                	
                  22

                
	
                  ARTICLE
                    VI

                	
                  23

                
	
                  6.1    OWNERSHIP
                    OF
                    THE LEASED PROPERTIES

                	
                  23

                
	
                  6.2    LESSOR’S
                    PERSONAL PROPERTY

                	
                  23

                
	
                  6.3    LESSEE’S
                    PERSONAL PROPERTY

                	
                  23

                
	
                  6.4    GRANT
                    OF SECURITY INTEREST IN LESSEE’S PERSONAL PROPERTY AND
                    ACCOUNTS

                	
                  24

                
	
                  ARTICLE
                    VII

                	
                  24

                
	
                  7.1    CONDITION
                    OF
                    THE LEASED PROPERTIES

                	
                  24

                
	
                  7.2    USE
                    OF
                    THE LEASED PROPERTIES

                	
                  25

                
	
                  7.3    CERTAIN
                    ENVIRONMENTAL MATTERS

                	
                  25

                
	
                  ARTICLE
                    VIII

                	
                  29

                
	
                  8.1    COMPLIANCE
                    WITH
                    LEGAL AND INSURANCE REQUIREMENTS

                	
                  29

                
	
                  8.3    MINIMUM
                    QUALIFIED CAPITAL EXPENDITURES

                	
                  31

                
	
                  8.4    MANAGEMENT
                    AGREEMENTS AND CONSULTING AGREEMENTS

                	
                  31

                
	
                  8.5    OTHER
                    FACILITIES

                	
                  31

                
	
                  8.6    NO
                    OTHER BUSINESS

                	
                  31

                
	
                  ARTICLE
                    IX

                	
                  32

                
	
                  9.1    MAINTENANCE
                    AND
                    REPAIR

                	
                  32

                
	
                  9.2    ENCROACHMENTS,
                    RESTRICTIONS, ETC.

                	
                  33

                
	
                  ARTICLE
                    XI

                	
                  34

                
	
                  11.1    LIENS

                	
                  34

                
	
                  ARTICLE
                    XII

                	
                  34

                
	
                  12.1    PERMITTED
                    CONTESTS

                	
                  34

                
	
                  12.2    LESSOR’S
                    REQUIREMENT FOR DEPOSITS

                	
                  35

                
	
                  ARTICLE
                    XIII

                	
                  35

                
	
                  13.1    GENERAL
                    INSURANCE REQUIREMENTS

                	
                  35

                
	
                  13.2    RISKS
                    TO BE INSURED

                	
                  36

                
	
                  13.3    PAYMENT
                    OF PREMIUMS; COPIES OF POLICIES; CERTIFICATES.

                	
                  37

                
	
                  13.4    UMBRELLA
                    POLICIES

                	
                  38

                
	
                  13.5    ADDITIONAL
                    INSURANCE

                	
                  38

                
	
                  13.6    NO
                    LIABILITY; WAIVER OF SUBROGATION

                	
                  38

                
	
                  13.7    INCREASE
                    IN
                    LIMITS

                	
                  38

                
	
                  13.8    BLANKET
                    POLICY

                	
                  38

                
	
                  ARTICLE
                    XIV

                	
                  39

                
	
                  14.1    INSURANCE
                    PROCEEDS

                	
                  39

                
	
                  14.2    RESTORATION
                    IN
                    THE EVENT OF DAMAGE OR DESTRUCTION

                	
                  39

                
	
                  14.3    RESTORATION
                    OF
                    LESSEE’S PROPERTY

                	
                  40

                
	
                  14.4    NO
                    ABATEMENT OF RENT

                	
                  40

                
	
                  14.5    WAIVER

                	
                  40

                
	
                  14.6    DISBURSEMENT
                    OF
                    INSURANCE PROCEEDS EQUAL TO OR GREATER THAN THE APPROVAL
                    THRESHOLD

                	
                  40

                
	
                  14.7    NET
                    PROCEEDS PAID TO FACILITY MORTGAGEE

                	
                  41

                
	
                  ARTICLE
                    XV

                	
                  41

                
	
                  15.1    TOTAL
                    TAKING OR OTHER TAKING WITH LEASED PROPERTY RENDERED UNSUITABLE
                    FOR ITS
                    PRIMARY INTENDED USE

                	
                  41

                
	
                  15.2    ALLOCATION
                    OF
                    AWARD

                	
                  42

                
	
                  15.3    PARTIAL
                    TAKING

                	
                  42

                
	
                  15.4    TEMPORARY
                    TAKING

                	
                  42

                
	
                  15.5    AWARDS
                    PAID TO FACILITY MORTGAGEE

                	
                  43

                
	
                  ARTICLE
                    XVI

                	
                  43

                
	
                  16.1    LESSOR’S
                    RIGHTS
                    UPON AN EVENT OF DEFAULT

                	
                  43

                
	
                  16.2    CERTAIN
                    REMEDIES

                	
                  43

                
	
                  16.3    DAMAGES

                	
                  44

                
	
                  16.4    WAIVER

                	
                  44

                
	
                  16.5    APPLICATION
                    OF
                    FUNDS

                	
                  45

                
	
                  ARTICLE
                    XVII

                	
                  45

                
	
                  17.1    LESSOR’S
                    RIGHT
                    TO CURE LESSEE’S DEFAULT

                	
                  45

                
	
                  17.2    LESSEE’S
                    AFFILIATES RIGHT TO CURE

                	
                  46

                
	
                  ARTICLE
                    XVIII

                	
                  46

                
	
                  18.1    HOLDING
                    OVER

                	
                  46

                
	
                  18.2    INDEMNITY

                	
                  46

                
	
                  ARTICLE
                    XIX

                	
                  46

                
	
                  19.1    SUBORDINATION

                	
                  46

                
	
                  19.2    ATTORNMENT

                	
                  47

                
	
                  19.3    LESSEE’S
                    CERTIFICATE

                	
                  47

                
	
                  19.4    NOTICE
                    AND CURE

                	
                  47

                
	
                  ARTICLE
                    XX

                	
                  48

                
	
                  20.1    RISK
                    OF
                    LOSS

                	
                  48

                
	
                  ARTICLE
                    XXI

                	
                  48

                
	
                  21.1    INDEMNIFICATION

                	
                  48

                
	
                  21.2    SURVIVAL
                    OF
                    INDEMNIFICATION

                	
                  49

                
	
                  ARTICLE
                    XXII

                	
                  49

                
	
                  22.1    GENERAL
                    PROHIBITION AGAINST TRANSFERS

                	
                  49

                
	
                  22.2    SUBORDINATION
                    AND ATTORNMENT

                	
                  50

                
	
                  22.3    SUBLEASE
                    LIMITATION

                	
                  50

                
	
                  ARTICLE
                    XXIII

                	
                  50

                
	
                  23.1    FINANCIAL
                    STATEMENTS AND OTHER REPORTS AND MATERIALS REQUIRED BY
                    LESSOR

                	
                  50

                
	
                  23.2    PUBLIC
                    OFFERING INFORMATION

                	
                  52

                
	
                  ARTICLE
                    XXIV

                	
                  53

                
	
                  24.1    LESSOR’S
                    RIGHT
                    TO INSPECT

                	
                  53

                
	
                  ARTICLE
                    XXV

                	
                  53

                
	
                  25.1    NO
                    WAIVER

                	
                  53

                
	
                  ARTICLE
                    XXVI

                	
                  53

                
	
                  26.1    REMEDIES
                    CUMULATIVE

                	
                  53

                
	
                  ARTICLE
                    XXVII

                	
                  53

                
	
                  27.1    ACCEPTANCE
                    OF
                    SURRENDER

                	
                  53

                
	
                  ARTICLE
                    XXVIII

                	
                  53

                
	
                  28.1    NO
                    MERGER OF TITLE

                	
                  53

                
	
                  28.2    NO
                    PARTNERSHIP

                	
                  53

                
	
                  ARTICLE
                    XXIX

                	
                  54

                
	
                  29.1    CONVEYANCE
                    BY
                    LESSOR

                	
                  54

                
	
                  ARTICLE
                    XXX

                	
                  54

                
	
                  30.1    QUIET
                    ENJOYMENT

                	
                  54

                
	
                  ARTICLE
                    XXXI

                	
                  54

                
	
                  31.1    NOTICES

                	
                  54

                
	
                  ARTICLE
                    XXXII

                	
                  55

                
	
                  32.1    FAIR
                    MARKET RENT

                	
                  55

                
	
                  ARTICLE
                    XXXIII

                	
                  56

                
	
                  33.1    LESSOR’S
                    OPTION
                    TO PURCHASE LESSEE’S PERSONAL PROPERTY

                	
                  56

                
	
                  33.2    FACILITY
                    TRADE
                    NAMES

                	
                  56

                
	
                  33.3    TRANSFER
                    OF
                    OPERATIONAL CONTROL OF THE FACILITIES

                	
                  57

                
	
                  33.4    INTANGIBLES
                    AND
                    PERSONAL PROPERTY

                	
                  57

                
	
                  ARTICLE
                    XXXIV

                	
                  58

                
	
                  34.1    ARBITRATION

                	
                  58

                
	
                  ARTICLE
                    XXXV

                	
                  58

                
	
                  35.1    COMMISSIONS

                	
                  58

                
	
                  ARTICLE
                    XXXVI

                	
                  58

                
	
                  36.1    MEMORANDUM
                    OR
                    SHORT FORM OF LEASE

                	
                  58

                
	
                  ARTICLE
                    XXXVII

                	
                  58

                
	
                  37.1    SECURITY
                    DEPOSIT

                	
                  58

                
	
                  37.2    APPLICATION
                    OF
                    SECURITY DEPOSIT

                	
                  59

                
	
                  37.3    TRANSFER
                    OF
                    SECURITY DEPOSIT

                	
                  59

                
	
                  ARTICLE
                    XXXVIII

                	
                  59

                
	
                  38.1    MISCELLANEOUS

                	
                  60

                
	 	 60

        

        

      

      

      
        
          
             

             

          

          
          

        

        
          
          

          
            

          

        

        
          
          

          
          

        

      

      MASTER
        LEASE

      Multiple
        Facilities

      (CSC
        Transaction)

      

      THIS
        MASTER LEASE (“Lease”)
        is
        executed and delivered as of this 16th
        day of
        December, 2005 and is entered into by OHI ASSET II (OH), LLC, a Delaware
        limited
        liability company (“Lessor”),
        the
        address of which is 9690 Deereco Road, Suite 100, Timonium, MD 21093, and
        CSC
        MSTR LSCO, LLC, an Ohio limited liability company (“Lessee”),
        the
        address of which is 4700 Ashwood Drive, Suite 200, Cincinnati, OH
        45241.

       

      RECITALS

       

      The
        circumstances underlying the execution and delivery of this Lease are as
        follows:

       

      A.  Capitalized
        terms used and not otherwise defined herein have the respective meanings
        given
        them in Article II below.

       

      B.  Lessor
        is
        the owner of the Leased Properties.

       

      C.  Pursuant
        to an Agreement to Lease, and conditioned upon, among other things, the
        acquisition of the Facilities by Lessor, Lessor agreed to Lease to Lessee,
        and
        Lessee agreed to lease from Lessor, the Facilities on the terms and conditions
        of this Lease.

       

      D.  As
        of the
        date of this Lease, Lessor has acquired the Acquired Facilities.

       

      NOW,
        THEREFORE, Lessor and Lessee agree to amend and restate the Existing Lease
        in
        its entirety as follows:

       

      ARTICLE
        I  

       

      1.1  Lease.
        Upon
        and subject to the terms and conditions set forth in this Lease, Lessor leases
        to Lessee, and Lessee leases from Lessor, the Leased Properties. The Leased
        Properties are leased subject to all covenants, conditions, restrictions,
        easements and other matters affecting the Leased Property, whether or not
        of
        record, including the Permitted Encumbrances and other matters which would
        be
        disclosed by an inspection or accurate survey of the Leased
        Properties. 

       

      1.1.1  Subleases.
        On the
        Commencement Date, with the approval of Lessor, the Leased Properties are
        subleased to the Sublessees pursuant to the Subleases. Lessee has assigned
        the
        Subleases to Lessor and each Sublessee has jointly and severally with the
        other
        Sublessee guaranteed the obligations of Lessee hereunder, and to secure its
        guaranty each Sublessee has granted Lessor a security interest in the Collateral
        with respect to the Facility subleased by it. Lessee shall not amend or modify
        the terms of any Sublease without the prior written consent of Lessor, which
        Lessor may in its sole discretion grant, withhold or condition. Each Sublessee
        under an Sublease has agreed in the Sublease that it assumes and agrees to
        be
        bound by and perform each and every obligation of the Lessee under this Lease;
        provided, however, that obligations of a Sublessee related to the operation,
        maintenance and repair of a Facility are assumed only with respect to the
        Facility being operated by such Sublessee. Lessee agrees that a default by
        a
        Sublessee under a Sublease shall be deemed a default by Lessee under this
        Lease
        which, if not cured within any applicable cure or grace period shall constitute
        an Event of Default and entitle Lessor to exercise any and all remedies provided
        by this Lease or by law. Any Notice given by Lessor to Lessee shall be deemed
        a
        Notice given to each Sublessee of a Leased Property.

       

      1.1.2  Single,
        Indivisible Lease.
        Notwithstanding
        Lessor’s approval of the Subleases of the Leased Properties, This Lease
        constitutes one indivisible lease of the Leased Properties and not separate
        leases governed by similar terms. The Leased Properties constitute one economic
        unit, and the Base Rent and all other provisions have been negotiated and
        agreed
        to based on a demise of all of the Leased Properties to Lessee as a single,
        composite, inseparable transaction and would have been substantially different
        had separate leases or a divisible lease been intended. Except as expressly
        provided in this Lease for specific, isolated purposes (and then only to
        the
        extent expressly otherwise stated), all provisions of this Lease apply equally
        and uniformly to all of the Leased Properties as one unit. An Event of Default
        with respect to any Leased Property is an Event of Default as to all of the
        Leased Properties. The parties intend that the provisions of this Lease shall
        at
        all times be construed, interpreted and applied so as to carry out their
        mutual
        objective to create an indivisible lease of all of the Leased Properties
        and, in
        particular but without limitation, that, for purposes of any assumption,
        rejection or assignment of this Lease under 11 U.S.C. 365, this is one
        indivisible and non-severable lease and executory contract dealing with one
        legal and economic unit and that this Lease must be assumed, rejected or
        assigned as a whole with respect to all (and only as to all) of the Leased
        Properties.

       

      1.2  Term.
        The
        initial term of this Lease (“Initial
        Term”)
        shall
        be December 16, 2005 through December 31, 2015.

       

      1.3  Option
        to Renew.
        Lessee
        is hereby granted two (2) successive options to renew this Lease for a period
        of
        ten (10) Lease Years each, for a maximum Term if such options are exercised
        of
        thirty (30) Lease Years. Lessee’s options to renew this Lease are subject to the
        following terms and conditions (which conditions may be waived by Lessor
        in its
        sole discretion): 

       

      (a)  An
        option
        to renew is exercisable only by Notice to Lessor at least one hundred and
        eighty
        (180) days prior to the expiration of the Initial Term (or prior to the
        expiration of the preceding Renewal Term, as the case may be);

       

      (b)  No
        Event
        of Default or Unmatured Event of Default shall have occurred and be continuing
        either at the time a renewal option is exercised or at the commencement of
        a
        Renewal Term;

       

      (c)  During
        a
        Renewal Term, all of the terms and conditions of this Lease shall remain
        in full
        force and effect; and

       

      (d)  Lessee
        may exercise its options to renew with respect to all (and no fewer than
        all) of
        the Leased Properties.

       

      ARTICLE
        II  

       

      2.1  Definitions.
        For all
        purposes of this Lease, except as otherwise expressly provided or unless
        the
        context otherwise requires, (a) the terms defined in this Article have the
        meanings assigned to them in this Article and include the plural as well
        as the
        singular; (b) all accounting terms not otherwise defined herein have the
        meanings assigned to them in accordance with GAAP as at the time applicable;
        (c)
        all references in this Lease to designated “Articles,”“Sections” and other
        subdivisions are to the designated Articles, Sections and other subdivisions
        of
        this Lease; and (d) the words “herein,”“hereof” and “hereunder” and other words
        of similar import refer to this Lease as a whole and not to any particular
        Article, Section or other subdivision. 

       

      Acquisition
        Agreements:
        means
        the Agreement of Purchase and Sale and related documents pursuant to which
        Lessor or an Affiliate of Lessor acquired the Acquired Facilities.

       

      Additional
        Charges:
        All
        Impositions and other amounts, liabilities and obligations that Lessee assumes
        or agrees to pay under this Lease.

       

      Affiliate:
        Any
        Person who, directly or indirectly, Controls or is Controlled by or is under
        common Control with another Person.

       

      Agreement
        to Lease:
        means
        the Agreement to Enter into Amended and Restated Master Lease dated as of
        June
        10, 2005 among Lessor, Lessee, the Sublessees, the Guarantors, the Consultants,
        and the Managers.

       

      Approval
        Threshold:
        One
        Hundred Thousand Dollars ($100,000).

       

      Assessment:
        Any
        governmental assessment on the Leased Properties or any part of any of them
        for
        public or private improvements or benefits, whether or not commenced or
        completed prior to the date hereof and whether or not to be completed within
        the
        Term.

       

      Assumed
        Indebtedness:
        Any
        indebtedness or other obligations expressly assumed in writing by Lessor
        and
        secured by a mortgage, deed of trust or other security agreement to which
        Lessor’s title to the Leased Properties is subject.

       

      Award:
        All
        compensation, sums or anything of value awarded, paid or received in connection
        with a Taking or Partial Taking.

       

      Base
        Rent:
        During
        the Term, the Base Rent shall be as follows:

       

      (1) During
        the first Lease Year, Eleven Million Five Hundred Fifty Thousand Dollars
        ($11,550,000); 

       

      (2)
         For
        each
        succeeding Lease Year during the Term, the Base Rent for the previous Lease
        Year, plus an amount equal to (a) the Base Rent in the previous Lease Year
        multiplied by (b) the lesser
        of (i)
        two (2) times the change in CPI and (ii) two and one half percent
        (2.5%).

       

      Subject
        to the provisions of Section 1.1.2,
        the
        Base Rent shall be allocated among the Facilities as set forth on attached
        Exhibit
        G.

       

      Business
        Day:
        Each
        Monday, Tuesday, Wednesday, Thursday and Friday that is not a day on which
        national banks in the City of New York, New York are authorized or obligated,
        by
        law or executive order, to close.

       

      Capitalization
        Rate:
        Ten
        percent (10%).

       

      Cash
        Flow:
        For any
        period, the sum of (a) Net Income of Lessee arising solely from the operation
        of
        the Facilities for the applicable period, and (b) the amounts deducted in
        computing Lessee’s Net Income for the period for (i) depreciation, (ii)
        amortization, (iii) Base Rent, (iv) interest (including payments in the nature
        of interest under Capitalized Leases and interest on any Purchase Money
        Financing), (v) income taxes (or, if greater, income tax actually paid during
        the period) and (vi) management fees.

       

      Cash
        Flow to Rent Ratio:
        For any
        fiscal period, the ratio of Cash Flow to Base Rent.

       

      Citation:
        Any
        operational or physical plant deficiency set forth in writing with respect
        to a
        Facility by any governmental body or agency, or Medicare intermediary, having
        regulatory oversight over a Facility, Lessee, any Sublessee or Manager, with
        respect to which the scope and severity of the potential penalty for such
        deficiency is one or more of the following: loss of licensure, decertification
        of a Facility from participation in the Medicare and/or Medicaid programs,
        appointment of a temporary manager or denial of payment for new admissions
        which
        lasts for thirty (30) days or more.

       

      Clean-Up:
        The
        investigation, removal, restoration, remediation and/or elimination of, or
        other
        response to, Contamination, in each case to the satisfaction of all governmental
        agencies having jurisdiction, in compliance with or as may be required by
        Environmental Laws.

       

      Code:
        The
        Internal Revenue Code of 1986, as amended.

       

      Commencement
        Date:
        December 16, 2005.

       

      Condemnor:
        Any
        public or quasi-public authority, or private corporation or individual, having
        the power of condemnation.

       

      Consulting
        Agreement:
        Any
        agreement pursuant to which financial services for a Facility is delegated
        by
        Lessee or Sublessee to any person not an employee of Lessee or a Sublessee,
        or
        to any other related or unrelated party. 

       

      Consultants:
        The
        Person to whom the financial services of a Facility is delegated pursuant
        to a
        Consulting Agreement. As of the date of this Lease, the Consultants are BELMORE
        CONSULTING CO., LLC, an Ohio limited liability company, WYANT CONSULTING
        CO.,
        LLC, an Ohio limited liability company, BRECKSVILLE CONSULTING CO., LLC,
        an Ohio
        limited liability company, JARVIS CONSULTING CO., LLC, an Ohio limited liability
        company, KOLBE CONSULTING CO., LLC, an Ohio limited liability company, PEARL
        CONSULTING CO., LLC, an Ohio limited liability company, PEARL II CONSULTING
        CO.,
        LLC, an Ohio limited liability company, PEARL III CONSULTING CO., LLC, an
        Ohio
        limited liability company, MERIT CONSULTING CO., LLC, an Ohio limited liability
        company, FALLING CONSULTING CO., LLC, an Ohio limited liability company,
        and
        FRONT CONSULTING CO., LLC, an Ohio limited liability company.

       

      Construction
        Funds:
        The
Net
        Proceeds and
        such
        additional funds as may be deposited with Lessor by Lessee pursuant to Section
        14.6 for restoration or repair work pursuant to this Lease.

       

      Contamination:
        The
        presence, Release or threatened Release of any Hazardous Substance at the
        Leased
        Properties in violation of any Environmental Law, or in a quantity that would
        give rise to any affirmative Clean-Up obligations under an Environmental
        Law,
        including, but not limited to, the existence of any injury or potential injury
        to public health, safety, natural resources or the environment associated
        therewith, or any other environmental condition at, in, about, under or
        migrating from or to the Leased Properties.

       

      Control
        (and its
        corollaries “Controlled by” and “under common Control with”): Possession,
        directly or indirectly, of the power to direct or cause the direction of
        the
        management and policies of a Person, through the ownership of voting securities,
        partnership interests or other equity interests.

       

      CPI:
        The
        United States Department of Labor, Bureau of Labor Statistics Revised Consumer
        Price Index for All Urban Consumers (1982-84=100), U.S. City Average, All
        Items,
        or, if that index is not available at the time in question, the index designated
        by such Department as the successor to such index, and if there is no index
        so
        designated, an index for an area in the United States that most closely
        corresponds to the entire United States, published by such Department, or
        if
        none, by any other instrumentality of the United States.

       

      Cross
        Default and Cross Collateralization Agreement:
        means
        the Cross Default and Cross Collateralization Agreement dated as of the date
        of
        this Lease by Lessee, Guarantors, Sublessees, Consultants, Managers, PARTNERS
        IN
        HEALTH, INC., an Ohio corporation, PARTNERS OF CITY VIEW, LLC, an Ohio limited
        liability company, PARTNERS OF CITY VIEW REAL ESTATE, LLC, an Ohio limited
        liability company, OMG MSTR LSCO, LLC, an Ohio limited liability company,
        MIDLAND LEASING CO., LLC, an Ohio limited liability company, GARDEN LEASING
        CO.,
        LLC, an Ohio limited liability company, SKYLINE (PA) LEASING CO., LLC, an
        Ohio
        limited liability company, OLD LEASING CO., LLC, an Ohio limited liability
        company, EMERY LEASING CO., LLC, an Ohio limited liability company, AVIS
        LEASING
        CO., LLC, an Ohio limited liability company, HERITAGE (OHIO) LEASING CO.,
        LLC,
        an Ohio limited liability company, CARNEGIE (OHIO) MANAGEMENT CO., LLC, an
        Ohio
        limited liability company, GARDEN MANAGEMENT CO., LLC, an Ohio limited liability
        company, MIDLAND (OHIO) MANAGEMENT CO., LLC, an Ohio limited liability company,
        SKYLINE (PA) MGMT CO, LLC, an Ohio limited liability company, HERITAGE (OHIO)
        MGMT CO, LLC, an Ohio limited liability company, AVIS (OHIO) MGMT CO, LLC,
        an
        Ohio limited liability company, SUBURBAN (OHIO) MGMT CO, LLC, an Ohio limited
        liability company, OLD MGMT CO, LLC, an Ohio limited liability company, CARNEGIE
        (OHIO) CONSULTING CO., LLC, an Ohio limited liability company, GARDEN CONSULTING
        CO., LLC, an Ohio limited liability company, MIDLAND CONSULTING CO., LLC,
        an
        Ohio limited liability company, SKYLINE (PA) CONSULTING CO, LLC, an Ohio
        limited
        liability company, HERITAGE (OHIO) CONSULTING CO, LLC, an Ohio limited liability
        company, AVIS (OHIO) CONSULTING CO, LLC, an Ohio limited liability company,
        SUBURBAN (OHIO) CONSULTING CO, LLC, an Ohio limited liability company, OLD
        CONSULTING CO, LLC, an Ohio limited liability companyin favor of Lessor and
        OHI
        Asset (OH) Lender, LLC, a Delaware limited liability company.

       

      Date
        of Taking:
        The
        date on which the Condemnor has the right to possession of the Leased Property
        that is the subject of the Taking or Partial Taking.

       

      Distribution:
        Any
        payment or distribution of cash or any assets of Lessee to one or more
        shareholders of Lessee or to any Affiliate of Lessee, whether in the form
        of a
        dividend, a fee for management in excess of the fee required by the terms
        of a
        Management Agreement (but in any event not to exceed five percent (5%) of
        net
        revenues of the Facilities), a payment for services rendered, a reimbursement
        for expenditures or overhead incurred on behalf of Lessee or a payment on
        any
        debt required by this Lease to be subordinated to the rights of Lessor.

       

      Emery
        Facilities Lease:
        means
        the Amended and Restated Master Lease dated as of June 28, 2005 pursuant
        to
        which an Affiliate of Omega leases to OMG MSTR LSCO, LLC, an Ohio limited
        liability company, the skilled nursing facilities commonly known as (i) Baldwin
        Health Center, 1717 Skyline Drive, Pittsburgh, PA 15227, (ii) Copley Health
        Center, 155 Heritage Woods Drive, Copley, OH 44321, (iii) Hanover House,
        435
        Avis Avenue NW, Massillon, OH 44646, (iv) Suburban Pavilion, 20265 Emery
        Road,
        Cleveland, OH 44128, (v) Wexford House, 9850 Old Perry Highway, Wexford ,
        PA
        15090, (vi) Waterford Commons, 955 Garden Lake Parkway, Toledo, Ohio 43614,
        and
        (vii) Crestwood Care Center, 225 W. Main Street, Shelby, Ohio 44875, as such
        document may be amended, extended, renewed or replaced.

       

      Encumbrance:
        Any
        mortgage, deed of trust, lien, encumbrance or other matter affecting title
        to
        the Leased Properties, or any portion thereof or interest therein, securing
        any
        borrowing or other means of financing or refinancing.

       

      Environmental
        Audit:
        A
        written certificate that (a) is in form and substance satisfactory to Lessor,
        (b) is from an environmental consulting or engineering firm acceptable to
        Lessor
        and (c) states that there is no Contamination on the Leased Properties and
        that
        the Leased Properties are otherwise in strict compliance with Environmental
        Laws.

       

      Environmental
        Documents:
        Each
        and every (a) document received by Lessee or any Affiliate from, or submitted
        by
        Lessee or any Affiliate to, the United States Environmental Protection Agency
        and/or any other federal, state, county or municipal agency responsible for
        enforcing or implementing Environmental Laws with respect to the condition
        of
        the Leased Properties, or Lessee’s operations at the Leased Properties; and (b)
        review, audit, report, or other analysis data pertaining to environmental
        conditions, including, but not limited to, the presence or absence of
        Contamination, at, in, under or with respect to the Leased Properties that
        have
        been prepared by, for or on behalf of Lessee.

       

      Environmental
        Laws:
        All
        federal, state and local laws (including, without limitation, common law),
        statutes, codes, ordinances, regulations, rules, orders, permits or decrees
        now
        or at any time in effect and relating to (a) the introduction, emission,
        discharge or release of Hazardous Substances into the indoor or outdoor
        environment (including without limitation, air, surface water, groundwater,
        land
        or soil), (b) the manufacture, processing, distribution, use, treatment,
        storage, transportation or disposal of Hazardous Substances or (c) the Clean-Up
        of Contamination.

       

      Event
        of Default:
        The
        occurrence of any of the following:

       

      (a)  Lessee
        fails to pay or cause to be paid the Rent when due and payable;

       

      (b)  Lessee,
        any Sublessee or any Guarantor, on a petition in bankruptcy filed against
        it, is
        adjudicated a bankrupt or has an order for relief thereunder entered against
        it,
        or a court of competent jurisdiction enters an order or decree appointing
        a
        receiver of Lessee, a Sublessee or any Guarantor or of the whole or
        substantially all of its property, or approving a petition filed against
        Lessee,
        a Sublessee or any Guarantor seeking reorganization or arrangement of Lessee,
        a
        Sublessee or such Guarantor under the federal bankruptcy laws or any other
        applicable law or statute of the United States of America or any state thereof,
        and such judgment, order or decree is not vacated or set aside or stayed
        within
        sixty (60) days from the date of the entry thereof, subject to the applicable
        provisions of the Bankruptcy Code (11 USC § 101 et. seq.) and to the provisions
        of Section 16.6 below;

       

      (c)  Lessee,
        a
        Sublessee or any Guarantor: (i) Admits in writing its inability to pay its
        debts
        generally as they become due; (ii) files a petition in bankruptcy or a petition
        to take advantage of any insolvency law; (iii) makes a general assignment
        for
        the benefit of its creditors; (iv) consents to the appointment of a receiver
        of
        itself or of the whole or any substantial part of its property; or (v) files
        a
        petition or answer seeking reorganization or arrangement under the Federal
        bankruptcy laws or any other applicable law or statute of the United States
        of
        America or any state thereof, subject to the applicable provisions of the
        Bankruptcy Code (11 USC § 101 et. seq.) and to the provisions of Section 16.6
        below; 

       

      (d)  Lessee,
        a
        Sublessee or any Guarantor is liquidated or dissolved, or begins proceedings
        toward liquidation or dissolution, or has filed against it a petition or
        other
        proceeding to cause it to be liquidated or dissolved and the proceeding is
        not
        dismissed within thirty (30) days thereafter, or Lessee, a Sublessee or any
        Guarantor in any manner permits the sale or divestiture of all or substantially
        all of its assets;

       

      (e)  The
        estate or interest of Lessee or any Sublessee in the Leased Properties or
        any
        part thereof is levied upon or attached in any proceeding and the same is
        not
        vacated or discharged within thirty (30) days thereafter (unless Lessee is
        in
        the process of contesting such lien or attachment in good faith in accordance
        with Article XII hereof);

       

      (f)  Lessee
        ceases operation of any Facility for a period in excess of five (5) Business
        Days except upon prior Notice to, and with the express prior written consent
        of,
        Lessor (which consent Lessor may withhold in its absolute discretion), or
        as the
        unavoidable consequence of damage or destruction as a result of a casualty,
        or a
        Partial or total Taking;

       

      (g)  Any
        representation or warranty made by Lessee, a Sublessee, a Guarantor or any
        Affiliate of Lessee in the Lease, any Transaction Document or in any
        certificates delivered in connection with this Lease or the Transaction
        Documents proves to be untrue when made in any material respect, Lessor is
        materially and adversely affected thereby and Lessee, a Sublessee, a Guarantor
        or any Affiliate, as the case may be, fails within twenty (20) days after
        Notice
        from Lessor or Omega, as the case may be, to cure such condition by terminating
        such adverse effect and making Lessor or Omega, as the case may be, whole
        for
        any damage suffered therefrom, or, if with due diligence such cure cannot
        be
        effected within twenty (20) days, if Lessee, a Sublessee, a Guarantor or
        any
        Affiliate, as the case may be, has failed to commence to cure the same within
        the twenty (20) days or failed thereafter to proceed promptly and with due
        diligence to cure such condition and complete such cure prior to the time
        that
        such condition causes a default in any Facility Mortgage and prior to the
        time
        that the same results in civil or criminal penalties to Lessor, Lessee, a
        Sublessee, a Guarantor, any Affiliates of any of them or the Leased
        Properties;

       

      (h)  Lessee
        (or, if applicable, any Sublessee or Manager):

       

      (i)  has
        any
        license, permit, approval, certificate of need, certificate of reimbursement
        or
        other authorization necessary to operate any Facility as a provider of health
        care services in accordance with its Primary Intended Use suspended or revoked,
        or its right to so operate a Facility or to accept patients suspended for
        a
        period in excess of thirty (30) days, and Lessee fails to remedy any condition
        causing such revocation or suspension within any cure period allowed therefor
        by
        the applicable agency or authority or, if no such cure period is allowed
        or
        specified by the applicable agency or authority, Lessee fails to remedy the
        condition promptly and diligently following Lessee’s receipt of notice of such
        condition and, in any event, prior to the final, nonappealable revocation
        or
        suspension of any such license, permit, approval, certificate of need,
        certificate of reimbursement, other authorization or right to operate the
        Facility in question or to accept patients at the Facility in question;
        or

       

      (ii)  receives
        a Citation with respect to a Facility and fails to cure the condition that
        is
        the subject of the Citation within the period of time required for such cure
        by
        the issuer of the Citation or, but in any event prior to the final,
        nonappealable revocation or suspension of any license, permit, approval,
        certificate of need, certificate of reimbursement or other authorization
        necessary to operate a Facility as a provider of health care services in
        accordance with its Primary Intended Use or to receive Medicare or Medicaid
        payments with respect to residents of any Facility, or prior to the appointment
        of a temporary manager, as the case may be; or

       

      (iii)  fails
        to
        give Lessor Notice that any event set forth in clauses (i) and (ii) above
        has
        occurred, as required pursuant to Section 23.1(h) below.

       

      (i)  A
        Transfer occurs without the prior written consent of Lessor;

       

      (j)  A
        default
        occurs under any Transaction Document and such default is not cured within
        any
        applicable cure period provided in such Transaction Document;

       

      (k)  A
        default
        occurs under any other material contract affecting any Facility,
        Lessee,
        or any Affiliate
        of
        Lessee;

       

      (l)  An
        Event
        of Default occurs under the Emery Facilities Lease;

       

      (m)  Lessee
        breaches any of the financial covenants set forth in Article VIII hereof,
        the
        breach is capable of cure and the breach is not cured within a period of
        the
        shorter of (i) forty-five (45) days after the Notice
        thereof
        from Lessor, and (ii) twenty (20) days following the date of delivery of
        a
        certificate pursuant to Section
        23.1(i) or 23.1(ii);

       

      (n)  Lessee
        or
        an Affiliate
        of
        Lessee defaults beyond any applicable grace period in the payment of any
        amount
        or the performance of any material act required of Lessee or such Affiliate
        by the
        terms of any other lease or other agreement between Lessee or such Affiliate
        and
        Lessor or any Affiliate
        of
        Lessor; or 

       

      (o)  Lessee
        fails to observe or perform any other term, covenant or condition of this
        Lease
        or any other Transaction Document and the failure is not cured by Lessee
        within
        a period of thirty (30) days after Notice thereof from Lessor, unless the
        failure cannot with due diligence be cured within a period of thirty (30)
        days,
        in which case such failure shall not be deemed an Event of Default if and
        for so
        long as Lessee proceeds promptly and with due diligence to cure the failure
        and
        completes the cure prior to the time that the same causes a Material Adverse
        Effect, a default in any Facility Mortgage and prior to the time that the
        same
        results in civil or criminal penalties to Lessor, Lessee, any Affiliates
        of
        either or to the Leased Properties.

       

      Executive
        Officer:
        Any of
        the Chairman of the Board of Directors, the President, the Chief Executive
        Officer, the Chief Operating Officer, the Chief Financial Officer, any Vice
        President and the Secretary of any corporation, a general partner of any
        partnership and a managing member of any limited liability company upon which
        service of a Notice is to be made.

       

      Expiration
        Date:
        means
        December 31, 2015 if the first Renewal Option has not been exercised, or
        December 31, 2025, if the first Renewal Option has been exercised but not
        the
        second Renewal Option, or December 31, 2035, if the second Renewal Option
        has
        been exercised.

       

      Facilit(y)(ies):
        Each
        health care facility on the Land, including the Leased Property associated
        with
        such Facility, and together, all such facilities on the Leased
        Properties.

       

      Facility
        Mortgage:
        Any
        mortgage, deed of trust or other security agreement that with the express,
        prior, written consent of Lessor is a lien upon any or all of the Leased
        Properties, whether such lien secures an Assumed Indebtedness or another
        obligation or obligations.

       

      Facility
        Mortgagee:
        The
        secured party to a Facility Mortgage, its successors and assigns, any servicer
        acting on behalf of a Facility Mortgagee with respect to a Facility Mortgage
        and, if any Facility Mortgage is deposited with a trust, then the trustee
        acting
        on behalf of the certificate holders of such trust.

       

      Facility
        Trade Names:
        The
        name(s) under which the Facilities have done business during the Term. The
        Facility Trade Names in use by the Facilities on the Commencement Date are
        set
        forth on attached Exhibit
        A.

       

      Fair
        Market Rent:
        The
        rent that, at the relevant time, a Facility would most probably command in
        the
        open market, under a lease on substantially the same terms and conditions
        as are
        set forth in this Lease with a lessee unrelated to Lessor having experience
        and
        a reputation in the health care industry and a credit standing reasonably
        equivalent to that of Lessee, and, if this Lease is guaranteed, with such
        lease
        being guaranteed by guarantors having a net worth at least equal to that
        of
        Guarantors, with evidence of such rent being the rent that is being asked
        and
        agreed to at such time under any leases of facilities comparable to such
        Facility being entered into at such time in which the lessees and lease
        guarantors meet the qualifications set forth in this sentence. Fair Market
        Rent
        shall be determined in accordance with the appraisal procedure set forth
        in
        Article XXXII or in such other manner as may be mutually acceptable to Lessor
        and Lessee. 

       

      Financial
        Statement:

       

      (A) For
        each
        quarter during Lessee’s fiscal year, on a consolidated basis for Lessee, (i) a
        statement of earnings for the current period and fiscal year to the end of
        such
        period, with a comparison to the corresponding figures for the corresponding
        period in the preceding fiscal year from the beginning of the fiscal year
        to the
        end of such period, and (ii) a balance sheet as of the end of the period,
        and
        after the first Lease Year, with a comparison to the corresponding figures
        for
        the corresponding period in the preceding fiscal year from the beginning
        of the
        fiscal year to the end of such period; and

       

      (B) For
        Lessee’s and Guarantor’s fiscal year, a compilation financial report on a
        consolidated basis, prepared by an accounting firm or any other firm of
        independent certified public accountants reasonably acceptable to Lessor,
        containing Lessee’s balance sheet as of the end of that year, its related profit
        and loss, a statement of shareholder’s equity for that year, a statement of cash
        flows for that year, any management letter prepared by the certified public
        accountants, such comments and financial details as customarily are included
        in
        reports of like character. Lessor may, at its own expense, cause any Financial
        Statement to be audited by a certified public accountant selected by Lessor
        and
        reasonably acceptable to Lessee. Lessor consents to the use of the firm of
        Mellott & Mellott, P.L.L. (Cincinnati, Ohio) to prepare such
        reports.

       

      Fixtures:
        Collectively, all permanently affixed equipment, machinery, fixtures, and
        other
        items of real and/or personal property (excluding Lessor’s Personal Property),
        including all components thereof, now and hereafter located in, on or used
        in
        connection with, and permanently affixed to or incorporated into the Leased
        Improvements, including, without limitation, all furnaces, boilers, heaters,
        electrical equipment, heating, plumbing, lighting, ventilating, refrigerating,
        incineration, air and water pollution control, waste disposal, air-cooling
        and
        air-conditioning systems and apparatus (other than individual units), sprinkler
        systems and fire and theft protection equipment, built-in oxygen and vacuum
        systems, towers and other devices for the transmission of radio, television
        and
        other signals, all of which, to the greatest extent permitted by law, are
        hereby
        deemed by the parties hereto to constitute real estate, together with all
        replacements, modifications, alterations and additions thereto.

       

      Force
        Majeure:
        An
        event or condition beyond the control of a Person, including without limitation
        a flood, earthquake, or other Act of God; a fire or other casualty resulting
        in
        a complete or partial destruction of the Facility in question; a war,
        revolution, riot, civil insurrection or commotion, terrorism, or vandalism;
        unusual governmental action, delay, restriction or regulation not reasonably
        to
        be expected; a contractor or supplier delay or failure in performance (not
        arising from a failure to pay any undisputed amount due), or a delay in the
        delivery of essential equipment or materials; bankruptcy or other insolvency
        of
        a contractor, subcontractor or construction manager (not an Affiliate of
        the
        party claiming Force Majeure); a strike, slowdown or other similar labor
        action;
        or any other similar event or condition beyond the reasonable control of
        the
        party claiming that Force Majeure is delaying or preventing such party from
        timely and fully performing its obligations under this Lease; provided that
        in
        any such event, the party claiming the existence of Force Majeure shall have
        given the other party Notice of such claim within fifteen (15) days after
        becoming aware thereof, and if the party claiming Force Majeure shall fail
        to
        give such Notice, then the event or condition shall not be considered Force
        Majeure for any period preceding the date such Notice shall be given. No
        lack of
        funds shall be construed as Force Majeure.

       

      GAAP:
        Generally accepted accounting principles in effect at the time in
        question.

       

      Ground
        Lease:
        Any
        lease of any of the Leased Properties pursuant to which Lessor is the
        lessee.

       

      Ground
        Lessor:
        The
        lessor under any Ground Lease.

       

      Guarantors:
        CommuniCare Health Services, Inc., an Ohio corporation, Resident Care Consulting
        Co., LLC, an Ohio limited liability company, and Health Care Facility
        Management, LLC, an Ohio limited liability company.

       

      Guaranties:
        means
        each Lease Guaranty from a Guarantor and each Sublessee.

       

      Hazardous
        Substance:
        Dangerous, toxic or hazardous material, substance, pollutant, contaminant,
        chemical, waste (including medical waste), including petroleum products,
        asbestos and PCBs defined, listed or described as such under any Environmental
        Law.

       

      Indebtedness:
        of a
        Person means such Person’s (i) obligations for borrowed money, (ii) obligations
        representing the deferred purchase price of property or services (other than
        accounts payable arising in the ordinary course of such Person’s business
        payable on terms customary in the trade), (iii) obligations, whether or not
        assumed, secured by liens or payable out of the proceeds or production from
        property now or hereafter owned or acquired by such Person, (iv) obligations
        which are evidenced by notes, acceptances, or other instruments, (v) obligations
        of such Person to purchase securities or other property arising out of or
        in
        connection with the sale of the same or substantially similar securities
        or
        property, (vi) leases that in accordance with GAAP are required to be
        capitalized for financial reporting purposes, and (vii) any other obligation
        for
        borrowed money or other financial accommodation which in accordance with
        GAAP
        would be shown as a liability on the consolidated balance sheet of such
        Person.

       

      Impositions:
        Collectively, all taxes (excluding all income taxes, but including, without
        limitation, all capital stock and franchise taxes of Lessor and all ad valorem,
        sales and use, single business, gross receipts, business privilege, transaction
        privilege, rent or similar taxes to the extent the same are assessed against
        Lessor in whole or in part on the basis of the value of the Leased Properties,
        the privilege of doing business in the State or States or any political
        subdivision or subdivisions of the State or States, or any combination thereof),
        assessments (including Assessments), ground rents, water, sewer or other
        rents
        and charges, excises, tax levies, fees (including, without limitation, license,
        permit, inspection, authorization and similar fees), and all other governmental
        charges, in each case whether general or special, ordinary or extraordinary,
        or
        foreseen or unforeseen, of every character that at any time prior to, during
        or
        in respect of the Term are assessed or imposed on or in respect of, or
        constitute a lien upon (a) Lessor or Lessor’s interest in the Leased Properties;
        (b) the Leased Properties or any part thereof or any rent therefrom or any
        estate, right, title or interest therein; (c) any occupancy, operation, use
        or
        possession of, or sales from, or activity conducted on or in connection with
        the
        Leased Properties or the leasing or use of the Leased Properties or any part
        thereof; or (d) Rent, but excluding any transfer or other tax imposed with
        respect to the sale, exchange or other disposition by Lessor of the Leased
        Properties or any part thereof or the proceeds thereof (other than with respect
        to the transactions contemplated by the Acquisition Agreements). 

       

      Initial
        Term:
        As
        defined in Section 1.2.

       

      Insurance
        Requirements:
        All
        terms of any insurance policy required by this Lease and all requirements
        of the
        issuer of any such policy.

       

      Intangible
        Assets:
        The
        amount of (a) unamortized debt discounts and expenses, unamortized deferred
        charges, goodwill, patents, trademarks, service marks, trade names, copyrights,
        organizational and developmental expenses, unamortized operating rights,
        unamortized licenses, unamortized leasehold rights, computer software
        development costs, start-up costs, pre-opening costs, prepaid pension costs
        and
        other intangible assets, including (a) any write-up resulting from a reversal
        of
        a reserve for bad debts or depreciation and any write-up resulting from a
        change
        in methods of accounting or inventory and (b) the amount of any investment
        in
        any Affiliate. 

       

      Investigation:
        Soil
        and chemical tests or any other environmental investigations, examinations
        or
        analyses.

       

      Judgment
        Date:
        The
        date on which a judgment is entered against Lessee that establishes, without
        the
        possibility of appeal, the amount of liquidated damages to which Lessor is
        entitled under this Lease.

       

      Land: The
        real
        property described in attached Exhibits
        B-1 through
        B-10.

       

      Lease:
        As
        defined in the Preamble.

       

      Lease
        Year:
        Each
        period from and including December 1 through November 30 during the Term
        of this
        Lease. If this Lease is terminated before the end of any Lease Year, the
        final
        Lease Year shall be December 1 through the date of termination.

       

      Leased
        Improvements:
        Collectively, all buildings, structures, Fixtures and other improvements
        of
        every kind on the Land, including, but not limited to, alleyways and connecting
        tunnels, sidewalks, utility pipes, conduits and lines (on-site and off-site),
        parking areas and roadways appurtenant to such buildings and
        structures.

       

      Leased
        Property:
        The
        parcel of the Land on which a Facility is located, the Leased Improvements
        on
        such parcel of the Land, the Related Rights with respect to such parcel of
        the
        Land, and Lessor’s Personal Property with respect to such Facility.

       

      Leased
        Properties:
        All of
        the Land, Leased Improvements, Related Rights and Lessor’s Personal
        Property.

       

      Legal
        Requirements:
        All
        federal, state, county, municipal and other governmental statutes, laws,
        rules,
        orders, waivers, regulations, ordinances, judgments, decrees and injunctions
        affecting the Leased Properties or any portion thereof, Lessee’s Personal
        Property or the construction, use or alteration of the Leased Properties
        (including but not limited to the Americans with Disabilities Act), whether
        enacted and in force before, after or on the Commencement Date, and including
        any that may (a) require repairs, modifications, alterations or additions
        in or
        to any portion or all of the Facilities, or (b) in any way adversely affect
        the
        use and enjoyment thereof, and all permits, licenses and authorizations and
        regulations relating thereto, including, but not limited to, (i) those relating
        to existing health care licenses, (ii) those authorizing the current number
        of
        licensed beds and the level of services delivered from the Leased Properties
        and
        (iii) all covenants, agreements, restrictions and encumbrances contained
        in any
        instruments, either of record or known to Lessee (other than encumbrances
        created by Lessor without the consent of Lessee) and in force at any time
        during
        the Term.

       

      Lessee’s
        Certificate:
        A
        statement in writing in substantially the form of Exhibit
        C
        attached
        hereto (with such changes thereto as may reasonably be requested by the person
        relying on such certificate).

       

      Lessee’s
        Personal Property:
        Personal Property owned or leased by Lessee that is not included within the
        definition of the term “Lessor’s Personal Property” but is used by Lessee in the
        operation of the Facilities, including Personal Property provided by Lessee
        in
        compliance with Section 6.3 hereof.

       

      Lessor’s
        Future Rent Loss:
        An
        amount equal to the Rent that would have been payable by Lessee from and
        after
        the Judgment Date through the Expiration Date had the Lease not been terminated,
        plus such additional amount as may be necessary in order to compensate Lessor
        for all other damages that are proximately caused by, and in the ordinary
        course
        of things would be likely to result from, Lessee’s failure to perform its
        obligations under this Lease.

       

      Lessor’s
        Interim Rent Loss:
        An
        amount equal to the Rent that would have been payable by Lessee from the
        Termination Date through the Judgment Date had the Lease not been terminated
        (including interest and late charges determined on the basis of the date
        or
        dates on which Lessor’s Interim Rent Loss is actually paid by Lessee), plus such
        additional amount as may be necessary in order to compensate Lessor for all
        other damages that are proximately caused by, and in the ordinary course
        of
        things would be likely to result from, Lessee’s failure to perform its
        obligations under this Lease.

       

      Lessor’s
        Monthly Rent Loss:
        For any
        month, an amount equal to the installment of Rent that would have been due
        in
        such month under the Lease if it had not been terminated, plus, if such amount
        is not paid on or before the day of the month on which such installment of
        Rent
        would have been due, the amount of interest and late charges thereon that
        also
        would have been due under the Lease, plus such additional amount as may be
        necessary in order to compensate Lessor for all other damages that are
        proximately caused by, and in the ordinary course of things would be likely
        to
        result from, Lessee’s failure to perform its obligations under this
        Lease.

       

      Lessor’s
        Personal Property:
        All
        Personal Property and intangibles, if any, owned by Lessor and leased to
        Lessee
        on the Commencement Date, together with any and all replacements thereof,
        and
        all Personal Property that pursuant to the terms of the Lease becomes the
        property of Lessor during the Term. Notwithstanding any other provision of
        this
        Lease, Lessor’s Personal Property shall not include goodwill nor shall it
        include any other intangible personal property that is severable from Lessor’s
“interests in real property” within the meaning of Section 856(d) of the Code,
        or any similar or successor provision thereto.

       

      Letter
        of Credit Agreement:
        An
        agreement between Lessor and Lessee providing for a letter of credit to be
        delivered to Lessor as the Security Deposit.

       

      Management
        Agreement:
        Any
        agreement pursuant to which management of a Facility is delegated by Lessee
        to
        any person not an employee of Lessee or to any other related or unrelated
        party.

       

      Manager:
        The
        Person to whom management of the operation of a Facility is delegated pursuant
        to a Management Agreement. As of the date of this Lease, the Managers are
        BELMORE MGT CO., LLC, an Ohio limited liability company, WYANT MGT CO., LLC,
        an
        Ohio limited liability company, BRECKSVILLE MGT CO., LLC, an Ohio limited
        liability company, JARVIS MGT CO., LLC, an Ohio limited liability company,
        KOLBE
        MGT CO., LLC, an Ohio limited liability company, PEARL (OHIO) MGT CO., LLC,
        an
        Ohio limited liability company, PEARL II MGT CO., LLC, an Ohio limited liability
        company, PEARL III MGT CO., LLC, an Ohio limited liability company, MERIT
        (OHIO)
        MGT CO., LLC, an Ohio limited liability company, FALLING MGT CO., LLC, an
        Ohio
        limited liability company, and FRONT MGT CO., LLC, an Ohio limited liability
        company.

       

      Material
        Adverse Effect:
        means
        any material adverse effect whatsoever upon (a) the validity, performance
        or
        enforceability of any Transaction Document, (b) the properties, contracts,
        business operations, profits or condition (financial or otherwise) of Lessee,
        a
        Sublessee or any Guarantor, or (c) the ability of Lessee, a Sublessee, any
        Guarantor or any of their Affiliates to fulfill its obligations under the
        Transaction Documents.

       

      Maximum
        Principal Amount:
        During
        the Term, the Maximum Principal Amount shall be:

       

      (1) For
        the
        first Lease Year, Eleven Million Two Hundred Fifty Thousand Dollars
        ($11,250,000); and

       

      (2)
         For
        each
        succeeding Lease Year in the Term, the Maximum Principal Amount for the previous
        Lease Year, plus an amount equal to (a) the Maximum Principal Amount in the
        previous Lease Year multiplied by (b) the lesser
        of (i)
        two (2) times the change in CPI and (ii) two and one half percent
        (2.5%).

       

      Net
        Income:
        For
        any
        period, Lessee’s net income (or loss) for such period attributable to the
        operation of the Facilities, determined in accordance with GAAP; provided,
        however, that Lessee’s Net Income shall not include any extraordinary gains (or
        losses) or nonrecurring gains (or losses).

       

      Net
        Proceeds:
        All
        proceeds, net of any costs incurred by Lessor in obtaining such proceeds,
        payable under any policy of insurance required by Article XIII of this Lease
        (including any proceeds with respect to Lessee’s Personal Property that Lessee
        is required or elects to restore or replace pursuant to Section 14.3) or
        paid by
        a Condemnor for a Taking or Partial Taking of a Leased Property.

       

      Net
        Reletting Proceeds:
        Proceeds of the reletting of any portion of the Leased Property received
        by
        Lessor, net of Reletting Costs.

       

      Notice:
        A
        notice given in accordance with Article XXXI hereof.

       

      Notice
        of Termination:
        A
        Notice from Lessor that it is terminating this Lease by reason of an Event
        of
        Default. 

       

      Officer’s
        Certificate:
        A
        certificate signed by an Executive Officer.

       

      Omega:
        Omega
        Healthcare Investors, Inc., a Maryland corporation.

       

      Overdue
        Rate:
        The
        rate of twelve percent (12%).

       

      Partial
        Taking:
        A
        taking of less than the entire fee of a Leased Property that either (a) does
        not
        render the Leased Property Unsuitable for its Primary Use, or (b) renders
        a
        Leased Property Unsuitable for its Primary Intended Use, but neither Lessor
        nor
        Lessee elects pursuant to Section 15.1 hereof to terminate this
        Lease.

       

      Payment
        Date:
        Any due
        date for the payment of the installments of Base Rent or for the payment
        of
        Additional Charges or any other amount required to be paid by Lessee
        hereunder.

       

      Permitted
        Encumbrances:
        Encumbrances listed on attached Exhibit
        D.

       

      Person:
        Any
        natural person, trust, partnership, corporation, joint venture, limited
        liability company or other legal entity.

       

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

       

      Pledge
        Agreement:
        The
        Pledge Agreement between Lessor, as creditor, and Lessee, as
        debtor.

       

      Present
        Value:
        The
        value of future payments, determined by discounting each such payment at
        a rate
        equal to the yield on the specified date on securities issued by the United
        States Treasury (bills, notes and bonds) maturing on the date closest to
        December 31 in the year in which such future payment would have been
        due.

       

      Primary
        Intended Use:
        Licensed skilled nursing facilities.

       

      Prime
        Rate:
        On any
        date, an interest rate equal to the prime rate published by the Wall Street
        Journal, but in no event greater than the maximum rate then permitted under
        applicable law. If the Wall Street Journal ceases to be in existence, or
        for any
        reason no longer publishes such prime rate, the Prime Rate shall be the rate
        announced as its prime rate by Fleet Bank or other financial institution
        that is
        the agent for the banks under Omega’s revolving credit agreement, and if such
        bank no longer exists or does not announce a prime rate at such time, the
        Prime
        Rate shall be the rate of interest announced as its prime rate by a national
        bank selected by Lessor.

       

      Proceeding:
        Any
        action, proposal or investigation by any agency or entity, or any complaint
        to
        such agency or entity.

       

      Purchase
        Money Financing: Any
        financing provided by a Person to Lessee or a Sublessee in connection with
        the
        acquisition of Personal Property used in connection with the operation of
        a
        Facility, whether by way of installment sale or otherwise.

       

      Qualified
        Capital Expenditures:
        Expenditures capitalized on the books of Lessee for alterations, renovations,
        repairs and replacements to the Facilities, including without limitation
        any of
        the following: Replacement of furniture, fixtures and equipment, including
        refrigerators, ranges, major appliances, bathroom fixtures, doors (exterior
        and
        interior), central air conditioning and heating systems (including cooling
        towers, water chilling units, furnaces, boilers and fuel storage tanks) and
        major replacement of siding; major roof replacements, including major
        replacements of gutters, downspouts, eaves and soffits; major repairs and
        replacements of plumbing and sanitary systems; overhaul of elevator systems;
        major repaving, resurfacing and sealcoating of sidewalks, parking lots and
        driveways; repainting of entire building exterior; but excluding major
        alterations, renovations, additions (consisting of expansions of any Facility,
        including construction of a new wing or a new story on any Facility), normal
        maintenance and repairs.

       

      Regulatory
        Actions:
        Any
        claim, demand, notice, action or proceeding brought, threatened or initiated
        by
        any governmental authority in connection with any Environmental Law, including,
        without limitation, civil, criminal and administrative proceedings, whether
        or
        not the remedy sought is costs, damages, equitable remedies, penalties or
        expenses.

       

      Related
        Rights:
        All
        easements, rights and appurtenances relating to the Land and the Leased
        Improvements.

       

      Release:
        The
        intentional or unintentional spilling, leaking, dumping, pouring, emptying,
        seeping, disposing, discharging, emitting, depositing, injecting, leaching,
        escaping, abandoning, or any other release or threatened release, however
        defined, of any Hazardous Substance.

       

      Reletting
        Costs:
        Expenses incurred by Lessor in connection with the reletting of the Leased
        Properties in whole or in part after an Event of Default, including without
        limitation attorneys’ fees and expenses, brokerage fees and expenses, marketing
        expenses and the cost of repairs and renovations reasonably required for
        such
        reletting.

       

      Renewal
        Term:
        A
        period for which the Term is renewed in accordance with Section
        1.3.

       

      Rent:
        Collectively, Base Rent and Additional Charges.

       

      Replacement
        Cost:
        The
        actual replacement cost of the Leased Properties, including an increased
        cost of
        construction endorsement, less exclusions provided in the standard form of
        fire
        insurance policy. In all events Replacement Cost shall be an amount sufficient
        that neither Lessor nor Lessee is deemed to be a co-insurer of the Leased
        Property in question.

       

      SEC:
        Securities and Exchange Commission.

       

      Security
        Agreements:
        The
        Security Agreements between Lessor, as secured party, and Lessee, each
        Sublessee, each Manager, each Consultant, and each Guarantor, as
        debtors.

       

      Security
        Deposit:
        As
        defined in ARTICLE
        XXXVII
        hereof.

       

      Special
        Default:
        The
        occurrence of any of the following: (a) Lessee fails to pay or cause to be
        paid
        the Rent when due and payable; (b) Lessee or any of its Affiliates fails
        to pay
        when due any amount required to be paid pursuant to any of the other Transaction
        Documents; or (c) commencing in the second Lease Year, Lessee and the Sublessees
        on a consolidated basis fail to maintain a Cash Flow to Rent Ratio of 1.0
        or
        more.

       

      Special
        Risk Insurance:
        The
        insurance that Lessee is required to maintain pursuant to Section 13.2.1
        of this
        Lease.

       

      State:
        The
        State in which the Leased Properties are located.

       

      Subleases:
        The
        subleases dated as of the date of this Lease with the following subsidiaries
        of
        Lessee: WYANT LEASING CO., LLC, an Ohio limited liability company, BRECKSVILLE
        LEASING CO., LLC, an Ohio limited liability company, JARVIS LEASING CO.,
        LLC, an
        Ohio limited liability company, KOLBE LEASING CO., LLC, an Ohio limited
        liability company, PEARL LEASING CO., LLC, an Ohio limited liability company,
        PEARL II LEASING CO., LLC, an Ohio limited liability company, PEARL III LEASING
        CO., LLC, an Ohio limited liability company, MERIT LEASING CO., LLC, an Ohio
        limited liability company, FALLING LEASING CO., LLC, an Ohio limited liability
        company, and FRONT LEASING CO., LLC, , an Ohio limited liability company;
        and
        such other Subleases expressly approved in writing by Lessor prior to execution
        by Lessee.

      

      Sublessees:
        The
        sublessees under the Subleases.

       

      Subordination
        Agreement:
        The
        Subordination Agreement from Lessee, the Sublessees, and Guarantor in favor
        of
        Lessor, the Subordination of Management Agreement from Lessee, the Sublessees,
        and Managers, and the Subordination of Financial Services Agreement from
        Lessee,
        the Sublessees and Consultants in favor of Lessor.

       

      Taken:
        Conveyed pursuant to a Taking or Partial Taking.

       

      Taking:
        A
        taking or voluntary conveyance during the Term of all of a Leased Property,
        or
        any interest therein or right accruing thereto or use thereof, as the result
        of,
        or in settlement of any condemnation or other eminent domain proceeding
        affecting the Leased Property, whether or not the proceeding actually has
        been
        commenced.

       

      Tangible
        Net Worth:
        At any
        date, the net worth of Lessee as determined in conformity with GAAP, less
        Intangible Assets, as determined as of such date. 

       

      Tax
        Distributions:
        A
        distribution by Lessee to the equity owners of Lessee in an amount not in
        excess
        of the actual income tax liability of each such equity owner attributable
        to
        such equity owner’s allocated share of the taxable income of Lessee.

       

      Term:
        Collectively, the Initial
        Term
        plus the
        Renewal Term or Renewal Terms, if any.

       

      Termination
        Date:
        The
        date on which a Notice of Termination is given.

       

      Third
        Party Claims:
        Any
        claims, actions, demands or proceedings (other than Regulatory Actions)
        howsoever based (including without limitation those based on negligence,
        trespass, strict liability, nuisance, toxic tort or detriment to health welfare
        or property) due to Contamination, whether or not the remedy sought is costs,
        damages, penalties or expenses, brought by any person or entity other than
        a
        governmental agency.

       

      Transaction
        Documents:
        means
        the following documents: this Lease, the Guaranties, the Letter of Credit
        Agreement, the Security Agreements, the Pledge Agreements, the Subordination
        Agreements, the Working Capital Loan Agreement, the Working Capital Note,
        the
        Cross Default and Cross Collateralization Agreement, the Agreement to Lease,
        and
        any security agreements, pledge agreements, letter of credit agreements,
        guarantees, notes or other documents which evidence, secure or otherwise
        relate
        to this Lease, the Working Capital Loan Agreement, the Agreement to Lease
        or the
        transactions contemplated by this Lease, the Agreement to Lease, or the Working
        Capital Loan Agreement; and any and all amendments, modifications, extensions
        and renewals of any of the foregoing documents.

       

      Transfer:
        The (a)
        assignment, mortgaging or other encumbering of all or any part of Lessee’s
        interest in this Lease or in the Leased Properties; (b) subletting of the
        whole
        or any part of any Leased Property (except to Sublessees pursuant to the
        Subleases); (c) entering into of any Management Agreement or Consulting
        Agreement or other arrangement under which any Facility is operated by or
        licensed to be operated by an entity other than Lessee or Borrower; (d) merger,
        consolidation or reorganization of a corporate Lessee, corporate Sublessee
        or
        corporate Manager, or corporate Consultant, or the sale, issuance, transfer
        and/or redemption, cumulatively or in one transaction, of any voting stock
        by
        Lessee, any Sublessee or Manager or Consultant or by Persons who are
        stockholders of record of Lessee, any Sublessee or Manager or Consultant,
        if
        such event or events result(s) in a change of Control of Lessee, any Sublessee
        or Manager or Consultant; or (e) sale, issuance, transfer or redemption,
        cumulatively or in one transaction, of any interest, or the termination of
        any
        interest, in Lessee, any Sublessee or Manager or Consultant, if Lessee, such
        Sublessee or such Manager or such Consultant is a joint venture, partnership,
        limited liability company or other association and such sale, issuance,
        transfer, redemption or termination of interest results in a change of Control
        of such joint venture, partnership, limited liability company or other
        association. 

       

      Transferee:
        An
        assignee, subtenant or other occupant of a Leased Property pursuant to a
        Transfer.

       

      Unmatured
        Event of Default:
        means
        the occurrence of an event which upon its occurrence, or with the giving
        of
        notice, the passage of time, or both, would constitute an Event of
        Default.

       

      Unsuitable
        for Its Primary Intended Use:
        A state
        or condition of a Facility such that by reason of a Partial Taking, the Facility
        cannot be operated on a commercially practicable basis for its Primary Intended
        Use, taking into account, among other relevant factors, the number of usable
        beds permitted by applicable law and regulation in the Facility after the
        Partial Taking, the square footage Taken and the estimated revenue impact
        of
        such Partial Taking.

       

      Working
        Capital Loan Agreement:
        means
        the Working Capital Loan Agreement dated as of the same date as this Lease
        between Lessee and the Sublessees, as borrowers, and Lessor, as
        lender.

       

      Working
        Capital Note:
        means
        the Secured Working Capital Promissory Note dated as of the same date as
        this
        Lease in the state principal amount of $12,500,000 from Lessee and the
        Sublessees in favor of Lessor.

       

      ARTICLE
        III  

       

      3.1  Base
        Rent; Monthly Installments.
        In
        addition to all other payments to be made by Lessee under this Lease, Lessee
        shall pay Lessor the Base Rent in lawful money of the United States of America
        which is legal tender for the payment of public and private debts, Lessee
        shall
        pay the Base Rent in advance. Base Rent shall be paid in equal, consecutive
        monthly installments, each of which shall be in an amount equal to one-twelfth
        (1/12) of the Base Rent payable for the Lease Year in which such installment
        is
        payable; provided, however, that if the Commencement Date is not the first
        day
        of the month, then the first month’s payment of Base Rent shall be prorated
        based upon the number of days in the month from and after the Commencement
        Date.
        Thereafter, installments of Base Rent shall be payable on the fifteenth
        (15th)
        day of
        each calendar month. Base Rent shall be paid to Lessor, or to such other
        Person
        as Lessor from time to time may designate by Notice to Lessee, by wire transfer
        of immediately available federal funds to the bank account designated in
        writing
        by Lessor. If Lessor directs Lessee to pay any Base Rent or Additional Charges
        to any Person other than Lessor, Lessee shall send to Lessor, simultaneously
        with payment of the Base Rent or Additional Charges, a copy of the transmittal
        letter or invoice and check evidencing such, or such other evidence of payment
        as Lessor requires.

       

      3.2  Additional
        Charges.
        In
        addition to the Base
        Rent,
        Lessee
        also will pay as and when due all Additional
        Charges.

       

      3.3  Late
        Charge; Interest.
        If any
        Rent payable to Lessor is not paid when due, Lessee shall pay Lessor on demand,
        as an Additional Charge, a late charge equal to the greater of (a) five percent
        (5%) of the amount not paid when due and (b) any and all charges, expenses,
        fees
        or penalties imposed on Lessor by a Facility Mortgagee for late payment,
        and, in
        addition, if such Rent (including the late charge) is not paid within thirty
        (30) days of the date on which such Rent was due, interest thereon at the
        Overdue Rate from the date when due until such Rent (including the late charge
        and interest) is paid in full.

       

      3.4  Net
        Lease.

       

      3.4.1  The
        Rent
        shall be paid absolutely net to Lessor, so that this Lease shall yield to
        Lessor
        the full amount of the Rent payable to Lessor under this Lease throughout
        the
        Term.

       

      3.4.2  If
        Lessor
        commences any proceedings for non-payment of Rent, Lessee will not interpose
        any
        counterclaim or cross complaint or similar pleading of any nature or description
        in such proceedings unless Lessee would lose or waive such claim by the failure
        to assert it, but Lessee does not waive any rights to assert such claim in
        a
        separate action brought by Lessee. The covenants to pay Rent are independent
        covenants, and Lessee shall have no right to hold back, offset or fail to
        pay
        any Rent because of any alleged default by Lessor or for any other
        reason.

       

      3.5  Payments
        In The Event of a Rent Adjustment.

       

      3.5.1  Upon
        the
        adjustment, pursuant to Section (A)(4) or Section (B) of the definition of
        the
        term “Base Rent,” in the Base Rent payable pursuant to this Lease with respect
        to any Lease Year, the adjustment shall be effective as of the first payment
        of
        Base Rent due in the Lease Year as to which such adjustment pertains. Because
        it
        may not be possible to determine the adjusted Base Rent prior to the effective
        date of such adjustment, Lessee shall continue to pay the Base Rent at the
        rate
        in effect prior to the adjustment until Lessor gives Lessee Notice of its
        determination of the adjusted Base Rent. Upon such determination, the Base
        Rent
        shall be adjusted retroactively as of the effective date of such adjustment
        On
        or before the second (2nd)
        payment
        date for Base Rent following receipt by Lessee of Lessor’s Notice of the
        adjustment, Lessee shall make an additional payment of Base Rent in such
        amount
        as will bring the Base Rent, as adjusted, current on or before such second
        (2nd)
        payment
        date, and thereafter Lessee shall pay the adjusted Base Rent in correspondingly
        adjusted monthly installments until the Base Rent is next adjusted or reset
        as
        required under this Lease.

       

      3.5.2  This
        Section 3.5 shall survive the expiration or earlier termination of this Lease
        with respect to any adjustment or reset that is not known or fully paid as
        of
        the date of expiration or earlier termination of this Lease. 

       

      ARTICLE
        IV  

       

      4.1  Payment
        of Impositions.
        Subject
        to Section 12.1 and Section 12.2, Lessee will pay all Impositions before
        any
        fine, penalty, interest or cost is added for non-payment, and will promptly,
        upon request, furnish to Lessor copies of official receipts or other
        satisfactory proof evidencing such payments. Subject to Section 12.2, if
        at the
        option of the taxpayer any Imposition may be paid in installments, Lessee
        may
        pay the same in the required installments provided it also pays any and all
        interest due thereon as and when due.

       

      Lessee
        shall prepare and file as and when required all tax returns and reports required
        by governmental authorities with respect to all Impositions. Lessor and Lessee
        shall each, upon request, provide the other with such data, including without
        limitation cost and depreciation records, as is maintained by the party to
        whom
        the request is made as is necessary to prepare any required returns and
        reports.

       

      Lessee
        shall be entitled to receive and retain any refund from a taxing authority
        in
        respect of an Imposition paid by Lessee if at the time of the refund no Event
        of
        Default has occurred, but if an Event of Default has occurred at the time
        of the
        refund, Lessee shall not be entitled to receive or retain such refund, and
        if
        and when received by Lessor such refund shall be applied as provided in Article
        XVI.

       

      Lessee
        may, upon Notice to and with the consent of Lessor (which consent shall not
        be
        withheld unreasonably), at Lessee’s sole cost and expense, protest, appeal or
        institute such other proceedings as Lessee deems appropriate to effect a
        reduction of real estate or personal property assessments and Lessor, at
        Lessee’s expense as aforesaid, shall cooperate with Lessee in such protest,
        appeal or other action. Lessee shall reimburse Lessor for Lessor’s direct costs
        of cooperating with Lessee for such protest, appeal or other
        action.

       

      4.2  Adjustment
        of Impositions.
        Impositions imposed in respect of the tax fiscal period during which the
        Term
        ends shall be adjusted and prorated between Lessor and Lessee, whether or
        not
        imposed before or after the expiration or earlier termination of the Term
        , and
        Lessee’s obligation to pay its prorated share thereof shall survive the
        expiration or earlier termination of the Term.

       

      4.3  Utility
        Charges.
        Lessee
        will pay or cause to be paid when due all charges for electricity, power,
        gas,
        oil, water and other utilities imposed upon the Leased Properties or upon
        Lessor
        or Lessee with respect to the Leased Properties.

       

      4.4  Insurance
        Premiums.
        Lessee
        shall pay or cause to be paid when due all premiums for the insurance coverage
        required to be maintained pursuant to Article XIII during the Term. Lessee
        shall
        deposit with Lessor the premiums for such insurance in accordance with the
        provisions of Section 12.2 of this Lease.

       

      ARTICLE
        V  

       

      5.1  No
        Termination, Abatement, etc.
        Lessee
        shall not take any action without the consent of Lessor and any Facility
        Mortgagee to modify, surrender or terminate this Lease, and shall not seek
        or be
        entitled to any abatement, deduction, deferment or reduction of Rent, or
        setoff
        against Rent. The respective obligations of Lessor and Lessee shall not be
        affected by reason of (a) any damage to, or destruction of, the Leased
        Properties or any portion thereof from whatever cause or any Taking or Partial
        Taking of the Leased Properties, except as expressly set forth herein; (b)
        the
        lawful or unlawful prohibition of, or restriction upon, Lessee’s use of the
        Leased Properties, or any portion thereof, or the interference with such
        use by
        any Person or by reason of eviction by paramount title; (c) any claim that
        Lessee has or might have against Lessor or by reason of any default or breach
        of
        any warranty by Lessor under this Lease or any other agreement between Lessor
        and Lessee, or to which Lessor and Lessee are parties; (d) any bankruptcy,
        insolvency, reorganization, composition, readjustment, liquidation, dissolution,
        winding up or other proceedings affecting Lessor or any assignee or transferee
        of Lessor; or (e) any other cause, whether similar or dissimilar to any of
        the
        foregoing, other than a discharge of Lessee from any such obligations as
        a
        matter of law. Lessee hereby specifically waives all rights, arising from
        any
        occurrence whatsoever, that now or hereafter may be conferred upon it by
        law to
        (a) modify, surrender or terminate this Lease or quit or surrender the Leased
        Properties or any portion thereof, or (b) entitle Lessee to any abatement,
        reduction, suspension or deferment of the Rent or other sums payable by Lessee
        hereunder.

       

      ARTICLE
        VI  

       

      6.1  Ownership
        of the Leased Properties.
        Lessee
        acknowledges that the Leased Properties are the property of Lessor and that
        Lessee has only the right to the possession and use of the Leased Properties
        upon the terms and conditions of this Lease. Lessee will not (a) file any
        income
        tax return or other associated documents, (b) file any other document with
        or
        submit any document to any governmental body or authority, (c) enter into
        any
        written contractual arrangement with any Person or (d) release any financial
        statements of Lessee, in any case that take any position other than that
        throughout the Term Lessor is the owner of the Leased Properties for federal,
        state and local income tax purposes and this Lease is a “true lease,” and an
“operating lease” and not a “capital lease.”

       

      6.2  Lessor’s
        Personal Property.
        Lessee
        shall, during the entire Term, maintain all of Lessor’s Personal Property in
        good order, condition and repair as shall be necessary in order to operate
        the
        Facilities for the Primary Intended Use in compliance with all applicable
        licensure and certification requirements, all applicable Legal Requirements
        and
        Insurance Requirements, and customary industry practice for the Primary Intended
        Use. If any of Lessor’s Personal Property requires replacement in order to
        comply with the foregoing, Lessee shall replace it with similar property
        of the
        same or better quality at Lessee’s sole cost and expense, and it shall become
        Lessor’s Personal Property without payment of additional consideration at the
        expiration or earlier termination of the Lease. Lessee shall not permit or
        suffer Lessor’s Personal Property to be subject to any lien, charge,
        encumbrance, financing statement, contract of sale, equipment lessor’s interest
        or the like, except for any purchase money security interest or equipment
        lessor’s interest expressly approved in advance, in writing, by Lessor. At the
        expiration or earlier termination of this Lease, all of Lessor’s Personal
        Property shall be surrendered to Lessor with the Leased Properties at or
        before
        the time of the surrender of the Leased Property in at least as good a condition
        as at the Commencement Date (or, as to replacements, in at least as good
        a
        condition as when placed in service at the Facilities) except for ordinary
        wear
        and tear. 

       

      6.3  Lessee’s
        Personal Property.
        Lessee
        shall provide and maintain during the Term such Personal Property, in addition
        to Lessor’s Personal Property, as shall be necessary and appropriate in order to
        operate the Facilities for the Primary Intended Use in compliance with all
        licensure and certification requirements, in compliance with all applicable
        Legal Requirements and Insurance Requirements and otherwise in accordance
        with
        customary practice in the industry for the Primary Intended Use. Without
        the
        prior written consent of Lessor, except as permitted under Section 8.2.6,
        Lessee
        shall not permit or suffer Lessee’s Personal Property to be subject to any lien,
        charge, encumbrance, financing statement or contract of sale or the like.
        Upon
        the expiration of the Term or the earlier termination of this Lease, without
        the
        payment of any additional consideration by Lessor, Lessee shall be deemed
        to
        have sold, assigned, transferred and conveyed to Lessor all of Lessee’s right,
        title and interest in and to any of Lessee’s Personal Property that, in Lessor’s
        reasonable judgment, is integral to the Primary Intended Use of the Facilities
        (or if some other use thereof has been approved by Lessor as required herein,
        such other use as is then being made by Lessee) and, as provided in Section
        33.1
        hereof,
        Lessor shall have the option to purchase any of Lessee’s Personal Property that
        is not then integral to such use. Without Lessor’s prior written consent, Lessee
        shall not remove Lessee’s Personal Property that is in use at the expiration or
        earlier termination of the Term from the Leased Properties until such option
        to
        purchase has expired or been waived in writing by Lessor. Any of Lessee’s
        Personal Property that is not integral to the use of the Facilities being
        made
        by Lessee and is not purchased by Lessor pursuant to Section 33.1
        may be
        removed by Lessee upon the expiration or earlier termination of this Lease,
        and,
        if not removed within twenty (20) days following the expiration or earlier
        termination of this Lease, shall be considered abandoned by Lessee and may
        be
        appropriated, sold, destroyed or otherwise disposed of by Lessor without
        giving
        notice thereof to Lessee and without any payment to Lessee or any obligation
        to
        account therefor. Lessee shall reimburse Lessor for any and all expense incurred
        by Lessor in disposing of any of Lessee’s Personal Property that Lessee may
        remove but within such twenty (20) day period fails to remove, and shall
        either
        at its own expense restore the Leased Properties to the condition required
        by
        Section 9.1.5, including repair of all damage to the Leased Properties caused
        by
        the removal of any of Lessee’s Personal Property, or reimburse Lessor for any
        and all expense incurred by Lessor for such restoration and repair.

       

      6.4  Grant
        of Security Interest in Lessee’s Personal Property and Accounts.
        Lessee
        has concurrently granted to Lessor a security interest in the Collateral
        as
        defined in the Security Agreement, which includes, without limitation, the
        Personal Property as defined herein and Lessee’s and Sublessee’s Accounts as
        defined in the Security Agreement. If Lessee and/or the Sublessees obtain,
        concurrently with or after the Commencement Date, a working capital line
        of
        credit (the “Working
        Capital Loan”)
        from a
        third-party working capital lender that requires that, in order to secure
        the
        working capital line of credit, Lessee and/or the Sublessees must grant to
        the
        working capital lender a first priority security interest in the accounts
        receivable from the Facilities accruing during the Term, if applicable,
then
        Lessor
        will subordinate its security interest in the accounts receivable from the
        Facilities accruing during the Term, provided
        that:

       

      (a) The
        working capital lender executes and delivers to Lessor an intercreditor
        agreement in form and substance reasonably satisfactory to Lessor;
        and

       

      (b) The
        lien
        of Lessor in accounts receivable from each Facility shall be subordinated
        to the
        lien of the working capital lender therein only to the extent of amounts
        advanced from time to time by the working capital lender to Lessee and/or
        the
        Sublessees with respect to the Facilities and only in the maximum principal
        amount of the Maximum Principal Amount, plus interest, penalties and other
        charges under the loan documents with respect to principal amounts advanced;
        

       

      (c) All
        amounts owed the lender under the Working Capital Loan Agreement and Working
        Capital Note are paid in full.

       

      ARTICLE
        VII  

       

      7.1  Condition
        of the Leased Properties.
        Lessee
        acknowledges that it has inspected and otherwise has knowledge of the condition
        of the Leased Properties prior to the execution and delivery of this Lease
        and
        has found the same to be in good order and repair and satisfactory for its
        purposes hereunder. Lessee is leasing the Leased Properties “as is” in their
        condition on the Commencement Date. Lessee waives any claim or action against
        Lessor in respect of the condition of the Leased Properties. LESSOR MAKES
        NO
        WARRANTY OR REPRESENTATION, EXPRESS OR IMPLIED, IN RESPECT OF ANY LEASED
        PROPERTY OR ANY PART THEREOF, EITHER AS TO ITS FITNESS FOR USE, DESIGN OR
        CONDITION FOR ANY PARTICULAR USE OR PURPOSE OR OTHERWISE AS TO THE QUALITY
        OF
        THE MATERIAL OR WORKMANSHIP THEREIN, LATENT OR PATENT, IT BEING AGREED THAT
        ALL
        SUCH RISKS ARE TO BE BORNE BY LESSEE. Lessee further acknowledges that
        throughout the Term Lessee is solely responsible for the condition of the
        Leased
        Properties.

       

      7.2  Use
        of
        the Leased Properties.
        Throughout the Term Lessee shall use the Leased Properties continuously for
        the
        Primary Intended Use and uses incidental thereto. Lessee shall not use the
        Leased Properties or any portion thereof for any other use without the prior
        written consent of Lessor. No use shall be made or permitted to be made of,
        or
        allowed in, the Leased Properties, and no acts shall be done, which will
        cause
        the cancellation of, or be prohibited by, any insurance policy covering the
        Leased Properties or any part thereof, nor shall the Leased Properties or
        Lessee’s Personal Property be used for any unlawful purpose. Lessee shall not
        commit or suffer to be committed any waste on the Leased Properties, or cause
        or
        permit any nuisance thereon, or suffer or permit the Leased Properties or
        any
        portion thereof, or Lessee’s Personal Property, to be used in such a manner as
        (a) might reasonably tend to impair Lessor’s (or Lessee’s, as the case may be)
        title thereto or to any portion thereof, or (b) may reasonably make possible
        a
        claim or claims of adverse usage or adverse possession by the public, as
        such,
        or of implied dedication of the Leased Properties or any portion
        thereof.

       

      7.3  Certain
        Environmental Matters.

       

      (a)  Prohibition
        Against Use of Hazardous Substances.
        Lessee
        shall not permit, conduct or allow the generation, introduction, presence,
        maintenance, use, receipt, acceptance, treatment, manufacture, production,
        installation, management, storage, disposal or release of any Hazardous
        Substance on the Leased Properties, except for those types and quantities
        of
        Hazardous Substances necessary for and ordinarily associated with the conduct
        of
        Lessee’s business and used in full compliance with all Environmental
        Laws.

       

      (b)  Notice
        of Environmental Claims, Actions or Contaminations.
        Lessee
        shall notify Lessor, in writing, immediately upon learning of any existing,
        pending or threatened: (i) investigation, inquiry, claim or action by any
        governmental authority in connection with any Environmental Laws, (ii) Third
        Party Claims, (iii) Regulatory Actions, and/or (iv) Contamination of any
        portion
        of the Leased Properties

       

      (c)  Costs
        of Remedial Actions with Respect to Environmental Matters.
        If any
        investigation and/or Clean-Up of any Hazardous Substance or other environmental
        condition on, under, about or with respect to a Leased Property is required
        by
        any Environmental Law, Lessee shall complete, at its own expense, such
        investigation and/or Clean-Up or cause any other Person who may be legally
        responsible to complete such investigation and/or Clean-Up.

       

      (d)  Delivery
        of Environmental Documents.
        Lessee
        shall deliver to Lessor complete copies of any and all Environmental Documents
        that may now be in, or at any time hereafter come into, the possession of
        Lessee.

       

      (e)  Environmental
        Audit.
        At
        Lessee’s expense, Lessee shall, upon and within thirty (30) days of a written
        request therefor from Lessor or any Facility Mortgagee, deliver an Environmental
        Audit to Lessor and the Facility Mortgagee, if any. All tests and samplings
        shall be conducted using generally accepted and scientifically valid technology
        and methodologies. Lessee shall give the engineer or environmental consultant
        conducting the Environmental Audit reasonable and complete access to the
        Leased
        Properties and to all records in the possession of Lessee that may indicate
        the
        presence (whether current or past) of a Release or threatened Release of
        any
        Hazardous Substances on, in, under, about and adjacent to any Leased Property.
        Lessee also shall provide the engineer or environmental consultant full access
        to and the opportunity to interview such persons as may be employed in
        connection with the Leased Properties as the engineer or consultant deems
        appropriate. However, neither Lessor nor any Facility Mortgagee shall be
        entitled to request an Environmental Audit from Lessee unless (i) after the
        Commencement Date there have been changes, modifications or additions to
        Environmental Laws as applied to or affecting any of the Leased Properties;
        (ii)
        Lessor has a reasonable belief that there has been a significant change in
        the
        condition of any of the Leased Properties; or (iii) there are fewer than
        six (6)
        months remaining in the Term. If the Environmental Audit discloses the presence
        of Contamination or any noncompliance with Environmental Laws, Lessee shall
        immediately perform all of Lessee’s obligations under this Lease with respect to
        such Hazardous Substances or noncompliance. 

       

      (f)  Entry
        onto Leased Properties for Environmental Matters.
        If
        Lessee fails to provide an Environmental Audit as and when required by
        Subparagraph (e) above, in addition to Lessor’s other remedies Lessee shall
        permit Lessor and any Facility Mortgagee from time to time, by its employees,
        agents, contractors or representatives, to enter upon the Leased Properties
        for
        the purpose of conducting such Investigations as Lessor may desire, the expense
        of which shall be paid or reimbursed promptly by Lessee as an Additional
        Charge.
        Lessor, any Facility Mortgagee exercising such right of entry and the employees,
        agents, contractors, consultants and/or representatives thereof, shall conduct
        any such Investigation in a manner that does not unreasonably interfere with
        Lessee’s use of and operations on the Leased Properties (however, reasonable
        temporary interference with such use and operations is permissible if the
        investigation cannot otherwise be reasonably and inexpensively conducted).
        Other
        than in an emergency, Lessor and any Facility Mortgagee exercising such right
        of
        entry shall provide Lessee with prior notice before entering any of the Leased
        Properties to conduct such Investigation, and shall provide copies of any
        reports or results to Lessee, and Lessee shall cooperate fully in such
        Investigation.

       

      (g)  Environmental
        Matters Upon Termination of the Lease or Expiration of Term.
        Upon
        the expiration or earlier termination of the Term, Lessee shall cause the
        Leased
        Properties to be delivered free of any and all Regulatory Actions and Third
        Party Claims and otherwise in compliance with all Environmental Laws with
        respect thereto, and in a manner and condition that is reasonably required
        to
        ensure that the then present use, operation, leasing, development, construction,
        alteration, refinancing or sale of the Leased Property shall not be restricted
        by any environmental condition existing as of the date of such expiration
        or
        earlier termination of the Term.

       

      (h)  Compliance
        with Environmental Laws.
        Lessee
        shall comply with, and cause its agents, servants and employees to comply
        with,
        and shall use reasonable efforts to cause each occupant and user of any of
        the
        Leased Properties, and the agents, servants and employees of such occupants
        and
        users to comply with, each and every Environmental Law applicable to Lessee,
        the
        Leased Properties and each such occupant or user with respect to the Leased
        Properties. Specifically, but without limitation:

       

      (i)  Maintenance
        of Licenses and Permits.
        Lessee
        shall obtain and maintain (and Lessee shall use reasonable efforts to cause
        each
        tenant, occupant and user to obtain and maintain) all permits, certificates,
        licenses and other consents and approvals required by any applicable
        Environmental Law from time to time with respect to Lessee, each and every
        part
        of the Leased Properties and/or the conduct of any business at a Facility
        or
        related thereto;

       

      (ii)  Contamination.
        Lessee
        shall not cause, suffer or permit any Contamination;

       

      (iii)  Clean-Up.
        If a
        Contamination occurs, Lessee promptly shall Clean-Up and remove any Hazardous
        Substance or cause the Clean-Up and the removal of any Hazardous Substance
        and
        in any such case such Clean-Up and removal of the Hazardous Substance shall
        be
        effected to Lessor’s reasonable satisfaction and in any event in strict
        compliance with applicable Environmental Laws;

       

      (iv)  Discharge
        of Lien.
        Within
        twenty (20) days of the date any lien is imposed against the Leased Properties
        or any part thereof under any Environmental Law, Lessee shall cause such
        lien to
        be discharged (by payment, by bond or otherwise to Lessor’s absolute
        satisfaction);

       

      (v)  Notification
        of Lessor.
        Within
        three (3) Business Days after receipt by Lessee of Notice or discovery by
        Lessee
        of any fact or circumstance that might result in a breach or violation of
        any
        covenant or agreement, Lessee shall give Lessor Notice of such fact or
        circumstance; and

       

      (vi)  Requests,
        Orders and Notices.
        Within
        three (3) Business Days after receipt of any request, order or other notice
        relating to the Leased Properties under any Environmental Law, Lessee shall
        forward a copy thereof to Lessor.

       

      (i)  Environmental
        Related Remedies.
        In the
        event of a breach by Lessee beyond any applicable notice and/or grace period
        of
        its covenants with respect to environmental matters, Lessor may, in its sole
        discretion, do any one or more of the following (the exercise of one right
        or
        remedy hereunder not precluding the simultaneous or subsequent exercise of
        any
        other right or remedy hereunder):

       

      (i)  Cause
        a Clean-Up.
        Cause
        the Clean-Up of any Hazardous Substance or other environmental condition
        on or
        under the Leased Properties, or both, at Lessee’s cost and expense;
        or

       

      (ii)  Payment
        of Regulatory Damages.
        Pay on
        behalf of Lessee any damages, costs, fines or penalties imposed on Lessee
        or
        Lessor as a result of any Regulatory Actions; or

       

      (iii)  Payments
        to Discharge Liens.
        On
        behalf of Lessee, make any payment or perform any other act or cause any
        act to
        be performed that will prevent a lien in favor of any federal, state or local
        governmental authority from attaching to the Leased Properties or that will
        cause the discharge of any lien then attached to the Leased Properties;
        or

       

      (iv)  Payment
        of Third Party Damages.
        Pay, on
        behalf of Lessee, any damages, cost, fines or penalties imposed on Lessee
        as a
        result of any Third Party Claims; or

       

      (v)  Demand
        of Payment.
        Demand
        that Lessee make immediate payment of all of the costs of such Clean-Up and/or
        exercise of the remedies set forth in this Section 7.2 incurred by Lessor
        and
        not paid by Lessee as of the date of such demand.

       

      (j)  Environmental
        Indemnification.
        Lessee
        shall and does hereby indemnify, and shall defend and hold harmless, Lessor,
        each Facility Mortgagee and the principals, officers, directors, agents and
        employees of Lessor and each Facility Mortgagee, from each and every incurred
        and potential claim, cause of action, damage, demand, obligation, fine,
        laboratory fee, liability, loss, penalty, imposition settlement, levy, lien
        removal, litigation, judgment, proceeding, disbursement, expense and/or cost
        (including without linmitation the cost of each and every Clean-Up), however
        defined and of whatever kind or nature, known or unknown, foreseeable or
        unforeseeable, contingent, incidental, consequential or otherwise (including,
        but not limited to, attorneys’ fees, consultants’ fees, experts’ fees and
        related expenses, capital, operating and maintenance costs, incurred in
        connection with (i) any Investigation or monitoring of site conditions, and
        (ii)
        any Clean-Up required or performed by any federal, state or local governmental
        entity or performed by any other entity or person because of the presence
        of any
        Hazardous Substance, Release, threatened Release or any Contamination on,
        in,
        under or about any of the Leased Properties) that may be asserted against,
        imposed on, suffered or incurred by, each and every indemnitee arising out
        of or
        in any way related to, or allegedly arising out of or due to any environmental
        matter including, but not limited to, any one or more of the
        following:

       

      (i)  Release
        Damage or Liability.
        The
        presence of Contamination in, on, at, under or near a Leased Property or
        migrating to a Leased Property from another location;

       

      (ii)  Injuries.
        All
        injuries to health or safety (including wrongful death), or to the environment,
        by reason of environmental matters relating to the condition of or activities
        past or present on, at, in or under a Leased Property;

       

      (iii)  Violations
        of Law.
        All
        violations, and alleged violations, of any Environmental Law relating to
        a
        Leased Property or any activity on, in, at or under a Leased
        Property;

       

      (iv)  Misrepresentation.
        All
        material misrepresentations relating to environmental matters in any documents
        or materials furnished by Lessee to Lessor and/or its representatives in
        connection with the Lease;

       

      (v)  Event
        of Default.
        Each
        and every Event of Default relating to environmental matters;

       

      (vi)  Lawsuits.
        Any and
        all lawsuits brought or threatened, settlements reached and governmental
        orders
        relating to any Hazardous Substances at, on, in or under a Leased Property,
        and
        all demands of governmental authorities, and all policies and requirements
        of
        Lessor’s, based upon or in any way related to any Hazardous Substances at, on,
        in or under a Leased Property; and

       

      (vii)  Presence
        of Liens.
        All
        liens imposed upon any of the Leased Properties in favor of any governmental
        entity or any person as a result of the presence, disposal, release or threat
        of
        release of Hazardous Substances at, on, in, from or under a Leased
        Property.

       

      (k)  Rights
        Cumulative and Survival.
        The
        rights granted Lessor under this Section are in addition to and not in
        limitation of any other rights or remedies available to Lessor under this
        Lease
        or allowed at law or in equity or rights of indemnification provided to Lessor
        in any agreement pursuant to which Lessor purchased any of the Leased Property.
        The payment and indemnification obligations set forth in this Section 7.3
        shall
        survive the expiration or earlier termination of the Term.

       

      ARTICLE
        VIII  

       

      8.1  Compliance
        with Legal and Insurance Requirements.
        In its
        use, maintenance, operation and any alteration of the Leased Properties,
        Lessee,
        at its expense, promptly will (a) comply with all Legal Requirements and
        Insurance Requirements, whether or not compliance with them requires structural
        changes in any of the Leased Improvements (which structural changes shall
        be
        subject to Lessor’s prior written approval, which Lessor shall not unreasonably
        withhold or delay) or interferes with or prevents the use and enjoyment of
        the
        Leased Properties, and (b) procure, maintain and comply with all licenses,
        certificates of need, provider agreements and other authorizations required
        for
        the use of the Leased Properties and Lessee’s Personal Property for the Primary
        Intended Use, and for the proper erection, installation, operation and
        maintenance of the Leased Properties or any part thereof. The judgment of
        any
        court of competent jurisdiction, or the admission of Lessee in any action
        or
        proceeding against Lessee, whether or not Lessor is a party thereto, that
        Lessee
        has violated any such Legal Requirements or Insurance Requirements shall
        be
        conclusive of that fact as between Lessor and Lessee. 

       

      8.2  Certain
        Covenants.

       

      8.2.1  Tangible
        Net Worth.
        At all
        times during the Term Guarantor shall maintain a positive Tangible Net Worth,
        and if at any time Guarantor’s Tangible Net Worth is not positive, within thirty
        (30) days Guarantor shall cause its shareholders to contribute to Lessee
        sufficient equity capital in the form of cash to cause Guarantor’s Tangible Net
        Worth to become positive. For purposes of this Section, Tangible Net Worth
        includes the amount of any cash Security Deposit.

       

      8.2.2  Cash
        Flow to Rent Ratio.
        Lessee
        and the Sublessees on a consolidated basis shall maintain a Cash Flow to
        Rent
        Ratio as determined quarterly on a cumulative basis for each calendar year
        during the Term of: 

       

      During
        the first Lease Year   1.1
        or
        more

       

      During
        the second Lease Year  1.20
        or
        more

       

      Thereafter     1.25
        or
        more. 

       

      8.2.3  Limitation
        of Distributions.
        In or
        with respect to any Lease Year, Lessee shall not make any Distributions to
        the
        holders of its equity securities or any Affiliate if, as of the date of such
        Distribution or upon giving effect to such Distribution, (a) an Event of
        Default
        has occurred and is continuing or (b) an Unmatured Event of Default has occurred
        and is continuing; provided, however, that so long as, as of the date of
        such
        Distribution or upon giving effect to such Distribution, no Special Default
        has
        occurred and is continuing, Lessee may make Tax Distributions.

       

      8.2.4  Indebtedness.
        Neither
        Lessee nor any Sublessee will create, incur or suffer to exist any Indebtedness,
        except:

       

      (i)  The
        equipment financing permitted under Section 8.2.6;
        and

       

      (ii)  The
        Working Capital Loan permitted under Section 6.4.

       

      8.2.5  Guarantees
        Prohibited.
        Except
        for guaranties of the Indebtedness permitted under Section 8.2.4
        and
        guaranties and assumption of obligations in favor of Lessor and its Affiliates
        under the Agreement to Lease, neither Lessee nor any Sublessee shall guarantee
        any Indebtedness of any Affiliate or other third party.

       

      8.2.6  Equipment
        Financing.The
        annual aggregate amount of principal, interest and lease payments due from
        Lessee on any equipment financing shall not exceed an amount equal to (i)
        Twenty
        Five Thousand Dollars ($25,000) multiplied
        by
        (ii) the
        number of Facilities. 

       

      8.2.7  Loans
        from Affiliates.
        Neither
        Lessee nor any Sublessee shall borrow money from any Affiliate unless the
        obligations of Lessee or such Sublessee and the rights of its Affiliates
        with
        respect to any such loan are subordinated to the rights of Lessor pursuant
        to a
        written subordination agreement in form and substance acceptable to
        Lessor.

       

      8.3  Minimum
        Qualified Capital Expenditures.
        Each
        Lease Year Lessee shall expend with respect to each Facility at least Three
        Hundred Dollars ($300) per-licensed-bed for Qualified Capital Expenditures
        to
        improve the Facilities, which amount shall be increased each Lease Year,
        beginning with the second Lease Year, by the lesser of (i) the proportionate
        to
        increases in the CPI (expressed as a percentage) or (ii) two and one half
        percent (2.5%). 

       

      8.4  Management
        Agreements and Consulting Agreements.
        Neither
        Lessee nor any Sublessee shall enter into or terminate any Management Agreement
        or Consulting Agreement without the prior written consent of Lessor and any
        Facility Mortgagee as to the identity of the Manager or Consultant, as
        applicable, and the terms of such agreement, and shall not amend, modify,
        or
        otherwise change the terms of any Management Agreement or Consulting Agreement
        without the prior written consent of Lessor and, in addition, as to any
        amendment, modification or other change that directly or indirectly increases
        the compensation of the Manager or Consultant or allows a change in the identity
        of the Manager or Consultant, without the consent of any Facility Mortgagee,
        which consent Lessor and such Facility Mortgagee may withhold in its or their
        sole discretion, and in no event without the execution by Lessee, Manager
        or
        Consultant and Lessor of an agreement, in form and substance satisfactory
        to
        Lessor and any Facility Mortgagee, pursuant to which Manager’s or Consultant’s
        right to receive its management or consulting fee is subordinated to the
        obligation of Lessee to pay the Rent as and when required under this Lease.
        Notwithstanding the foregoing, Lessee or any Sublessee may enter into a
        Management Agreement or Consulting Agreement with an Affiliate of Lessee
        without
        the written consent of Lessor provided that: (1) such Management Agreement
        or
        Consulting Agreement is subordinated to the rights of Lessor as provided
        for in
        this Section; and (2) Lessee provides Lessor prior Notice of the entry into
        such
        Management Agreement or Consulting Agreement and a copy of such agreement;
        provided, however, that if such entity ceases to be an Affiliate of Lessee,
        then
        Lessee must acquire Lessor’s written consent to such Management Agreement or
        Consulting Agreement (which consent may then be withheld in Lessor’s sole
        discretion).

       

      8.5  Other
        Facilities.
        Except
        for (a) the City View Nursing and Rehabilitation Center, 6606 Carnegie Avenue,
        Cleveland, Ohio 44103 and (b) the Greens of Lyndhurst, Lynhurst, Ohio, neither
        Lessee nor any Affiliate shall own, operate or manage any nursing home, rest
        home, assisted living facility, subacute facility, retirement center or similar
        health care facility within (i) one half mile radius of the Waterford Facility,
        (ii) ten (10) mile radius of the Crestwood Facility, and (iii) within a two
        (2)
        mile radius of any of the other Facilities. 

       

      8.6  No
        Other Business.
        Lessee
        and the Sublessees only (but not any of their Affiliates) shall not engage
        in
        any business other than the operation of the Facilities.

       

      ARTICLE
        IX  

       

      9.1  Maintenance
        and Repair.

       

      9.1.1  Lessee,
        at its expense, will keep the Leased Properties, and all appurtenant
        landscaping, private roadways, sidewalks and curbs that are under Lessee’s
        control and Lessee’s Personal Property in good order and repair, whether or not
        the need for such repairs arises out of Lessee’s use, any prior use, the
        elements or the age of the Leased Property or any portion thereof, or any
        cause
        whatsoever except the act or negligence of Lessor, and with reasonable
        promptness shall make all necessary and appropriate repairs thereto of every
        kind and nature, whether interior or exterior, structural or non-structural,
        ordinary or extraordinary, foreseen or unforeseen, or arising by reason of
        a
        condition existing prior to the Commencement Date (concealed or otherwise).
        Lessee shall maintain, operate and otherwise manage the Leased Properties
        at all
        times on a basis and in a manner consistent with the standards of competing
        facilities of comparable age in the market areas served by the Leased
        Properties. All repairs shall, to the extent reasonably achievable, be at
        least
        equivalent in quality to the original work or the property to be repaired
        shall
        be replaced. Lessee will not take or omit to take any action the taking or
        omission of which might materially impair the value or the usefulness of
        the
        Leased Properties or any parts thereof for the Primary Intended
        Use.

       

      9.1.2  Lessor
        shall not under any circumstances be required to maintain, build or rebuild
        any
        improvements on the Leased Properties (or any private roadways, sidewalks
        or
        curbs appurtenant thereto), or to make any repairs, replacements, alterations,
        restorations or renewals of any nature or description to the Leased Properties,
        whether ordinary or extraordinary, structural or non-structural, foreseen
        or
        unforeseen, or upon any adjoining property, whether to provide lateral or
        other
        support or abate a nuisance, or otherwise, or to make any expenditure whatsoever
        with respect thereto, in connection with this Lease. Lessee hereby waives,
        to
        the extent permitted by law, the right to make repairs at the expense of
        Lessor
        pursuant to any law in effect at the time of the execution of this Lease
        or
        hereafter enacted.

       

      9.1.3  Nothing
        contained in this Lease shall be construed as (a) constituting the consent
        or
        request of Lessor, expressed or implied, to any contractor, subcontractor,
        laborer, materialmen or vendor to or for the performance of any labor or
        services or the furnishing of any materials or other property for the
        construction, alteration, addition, repair or demolition of or to any Leased
        Property or any part thereof, or (b) giving Lessee any right, power or
        permission to contract for or permit the performance of any labor or services
        or
        the furnishing of any materials or other property in such fashion as would
        permit the making of any claim against Lessor in respect thereof or to make
        any
        agreement that may create, or in any way be the basis for, any right, title,
        interest, lien, claim or other encumbrance upon the estate of Lessor in the
        Leased Properties or any portion thereof. Lessor shall have the right to
        give,
        record and post, as appropriate, notices of non-responsibility under any
        mechanics’ and construction lien laws now or hereafter existing.

       

      9.1.4  Lessee
        promptly shall replace any of the Leased Improvements or Lessor’s Personal
        Property that becomes worn out, obsolete or unusable or unavailable for the
        purpose for which intended. All replacements shall have a value and utility
        at
        least equal to that of the items replaced and shall become part of the Leased
        Properties immediately upon their acquisition by Lessee. Upon Lessor’s request,
        Lessee promptly shall execute and deliver to Lessor a bill of sale or other
        instrument establishing Lessor’s lien-free ownership of such replacements.
        Lessee promptly shall repair all damage to a Leased Property incurred in
        the
        course of such replacement.

       

      9.1.5  Lessee
        will, upon the expiration or earlier termination of the Term, vacate and
        surrender the Leased Properties to Lessor in the condition in which they
        were
        originally received from Lessor, in good operating condition, ordinary wear
        and
        tear excepted, except as repaired, rebuilt, restored, altered or added to
        as
        permitted or required by the provisions of this Lease.

       

      9.2  Encroachments,
        Restrictions, etc.
        If, at
        any time, any of the Leased Improvements are alleged to encroach upon any
        property, street or right of way adjacent to a Leased Property, or to violate
        any restrictive covenant, or to impair the rights of others under any easement
        or right of way, Lessee promptly shall settle such allegations or take such
        other lawful action as may be necessary in order to be able to continue the
        use
        of a Leased Property for the Primary Intended Use substantially in the manner
        and to the extent such Leased Property was being used at the time of the
        assertion of such violation, impairment or encroachment; provided, however,
        that
        no such action shall violate any other provision of this Lease, and any
        alteration of a Leased Property must be made in conformity with the applicable
        requirements of Article X. Lessee shall not have any claim against Lessor
        or
        offset against any of Lessee’s obligations under this Lease with respect to any
        such violation, impairment or encroachment.

       

      ARTICLE
        X  

       

      10.1  Construction
        of Alterations and Additions to the Leased Properties.

       

      10.1.1  Lessee
        shall not (a) make or permit to be made any structural alterations, improvements
        or additions of or to the Leased Properties or any part thereof, or (b)
        materially alter the plumbing, HVAC or electrical systems thereon or (c)
        make
        any other alterations, improvements or additions the cost of which exceeds
        (i)
        One Hundred Thousand ($100,000.00) Dollars per alteration, improvement or
        addition, or (ii) One Hundred Thousand ($100,000.00) Dollars in any Lease
        Year,
        unless and until Lessee has (x) caused complete plans and specifications
        therefor to have been prepared and submitted to Lessor at least thirty (30)
        days
        before the planned start of construction thereof, (y) obtained Lessor’s written
        approval thereof and the approval of any Facility Mortgagee and (z), if required
        to do so by Lessor, provided Lessor with reasonable assurance of the payment
        of
        the cost of any such alterations, improvements or additions, in the form
        of a
        bond, letter of credit, cash deposit or adequate evidence of financing for
        the
        alteration, improvement or addition. If Lessor requires a deposit, Lessor
        shall
        retain and disburse the amount deposited in the same manner as is provided
        for
        insurance proceeds in Section 14.6. If the deposit is reasonably determined
        by
        Lessor at any time to be insufficient for the completion of the alteration,
        improvement or addition, Lessee immediately shall increase the deposit to
        the
        amount reasonably required by Lessor. Lessee shall be responsible for the
        completion of such improvements in accordance with the plans and specifications
        approved by Lessor, and promptly shall correct any failure with respect
        thereto.

       

      10.1.2  Alterations
        and improvements not falling within the categories described in the first
        sentence of Section 10.1.1 may be made by Lessee without the prior approval
        of
        Lessor, but Lessee shall give Lessor at least thirty (30) days prior written
        Notice of any such alterations and improvements.

       

      10.1.3  All
        alterations, improvements and additions shall (a) be constructed in a first
        class, workmanlike, manner, in compliance with all Insurance Requirements
        and
        Legal Requirements, (b) be in keeping with the character of the Leased
        Properties and the area in which the Leased Property in question is located
        and
        (c) be designed and constructed so that the value of the Leased Properties
        will
        not be diminished and the Primary Intended Use of the Leased Properties will
        not
        be changed. All improvements, alterations and additions immediately shall
        become
        a part of the Leased Properties. 

       

      10.1.4  Lessee
        shall have no claim against Lessor at any time in respect of the cost or
        value
        of any improvement, alteration or addition. There shall be no adjustment
        in the
        Rent by reason of any such improvement, alteration or addition. With Lessor’s
        consent, expenditures made by Lessee pursuant to this Article X may be included
        as capital expenditures for purposes of inclusion in the capital expenditures
        budget for the Facilities and for measuring compliance with the obligations
        of
        Lessee set forth in Section 8.3 of this Lease.

       

      10.1.5  In
        connection with any alteration that involves the removal, demolition or
        disturbance of any asbestos-containing material, Lessee shall cause to be
        prepared at its expense a full asbestos assessment applicable to such alteration
        and shall carry out such asbestos monitoring and maintenance program as
        reasonably shall be required thereafter in light of the results of such
        assessment.

       

      ARTICLE
        XI  

       

      11.1  Liens.
        Without
        the consent of Lessor or as expressly permitted elsewhere herein, Lessee
        will
        not directly or indirectly create or allow to remain and will promptly discharge
        at its expense any lien, encumbrance, attachment, title retention agreement
        or
        claim upon the Leased Properties, and any attachment, levy, claim or encumbrance
        in respect of the Rent, except for (a) Permitted Encumbrances, (b) liens
        of
        mechanics, laborers, materialmen, suppliers or vendors for sums not yet due,
        and
        (c) liens created by the malfeasance or negligence of Lessor.

       

      ARTICLE
        XII  

       

      12.1  Permitted
        Contests.
        Lessee,
        on its own or on Lessor’s behalf (or in Lessor’s name), but at Lessee’s sole
        cost and expense, shall have the right to contest, by appropriate legal
        proceedings conducted in good faith and with due diligence, the amount or
        validity of any real or personal property assessment, Imposition, Legal
        Requirement or Insurance Requirement, or any lien, attachment, levy,
        encumbrance, charge or claim or any encroachment or restriction burdening
        the
        Leased Property, provided: (a) prior Notice of such contest is given to Lessor;
        (b) the Leased Properties would not be in any danger of being sold, forfeited
        or
        attached as a result of such contest, and there is no risk to Lessor of a
        loss
        of or interruption in the payment of Rent; (c) in the case of an unpaid
        Imposition or other lien, attachment, levy, encumbrance, charge or claim,
        collection thereof is suspended during the pendency of such contest; (d)
        in the
        case of a contest of a Legal Requirement, compliance may legally be delayed
        pending such contest and pending such contest no license, permit, approval,
        certificate of need, certificate of reimbursement or other authorization
        necessary to operate any Facility as a provider of health care services in
        accordance with its Primary Intended Use may be irrevocably suspended or
        revoked, or its right to so operate a Facility or to accept patients irrevocably
        suspended. Upon request of Lessor, after the occurrence of an Event of Default
        or Unmatured Event of Default, and while it continues, Lessee shall deposit
        funds or assure Lessor in some other manner reasonably satisfactory to Lessor
        that the amount to be paid by Lessee that is the subject of a contested
        Imposition, Legal Requirement, Insurance Requirement or Claim, together with
        interest and penalties, if any, thereon, and any and all costs for which
        Lessee
        is responsible will be paid if and when required upon the conclusion of such
        contest. Lessee shall defend, indemnify and save harmless Lessor from all
        costs
        or expenses arising out of or in connection with any such contest, including
        but
        not limited to attorneys’ fees. If at any time Lessor reasonably determines that
        payment of any Imposition or other lien, attachment, levy, encumbrance, charge
        or claim, or compliance with any Legal or Insurance Requirement being contested
        by Lessee is necessary in order to prevent loss of any of the Leased Properties
        or Rent or civil or criminal penalties or other damage (including revocation
        or
        suspension of any license, permit, approval, certificate of need, certificate
        of
        reimbursement or other authorization necessary to operate any Facility as
        a
        provider of health care services in accordance with its Primary Intended
        Use or
        suspension of any right to accept patients), upon such prior Notice to Lessee
        as
        is reasonable in the circumstances Lessor may pay such amount, require Lessee
        to
        comply with such Legal or Insurance Requirement or take such other action
        as it
        may deem necessary to prevent such loss or damage. If reasonably necessary,
        upon
        Lessee’s written request, Lessor, at Lessee’s expense, shall cooperate with
        Lessee in a permitted contest, provided Lessee upon demand makes arrangements
        satisfactory to Lessor to assure the reimbursement of any and all Lessor’s costs
        incurred in cooperating with Lessee in such contest.

       

      12.2  Lessor’s
        Requirement for Deposits.
        After
        an Event of Default or Unmatured Event of Default and while it continues,
        Lessee
        shall deposit with Lessor monthly, at the time of its payments of Base Rent,
        a
        pro rata portion of the amounts required to comply with Insurance Requirements,
        Impositions, Legal Requirements and Lessee’s obligations under Section 8.3 of
        this Lease, and when such obligations become due, Lessor shall pay them (to
        the
        extent of the deposit) upon Notice from Lessee requesting such payment. If
        sufficient funds have not been deposited to cover the amount of the obligations
        due at least thirty (30) days in advance of the due date, Lessee immediately
        shall deposit the same with Lessor upon Notice from Lessor. Lessor shall
        not be
        obligated to segregate such deposited funds from its other funds or to pay
        Lessee any interest on any deposit held by Lessor. Upon an Event of Default,
        any
        of the funds remaining on deposit may be applied under this Lease in any
        manner
        and in such priority as Lessor may determine in its sole
        discretion.

       

      ARTICLE
        XIII  

       

      13.1  General
        Insurance Requirements.
        Lessee
        shall keep the Leased Properties, and all property located in or on the Leased
        Properties, including Lessor’s Personal Property and Lessee’s Personal Property,
        insured with insurance meeting the following requirements: (a) all insurance
        shall be written by companies authorized to do insurance business in the
        applicable States and having a rating classification of not less than A-
        and a
        financial size category of “Class X”, according to the then most recent issue of
        Best’s Key Rating Guide; (b) all policies must name Lessor as an additional
        insured, and name as an additional insured any Facility Mortgagee by way
        of a
        standard form of mortgagee’s loss payable endorsement in use in the applicable
        States and in accordance with any such other requirements as may be established
        by such Facility Mortgagee. However, if requested by Lessor and available
        on a
        commercially reasonable basis, all public liability and property damage
        insurance shall contain a provision that Lessor, although named as an insured,
        nevertheless shall be entitled to recovery for loss, damage or injury to
        Lessor,
        its servants, agents and employees by reason of the negligence of Lessee
        or
        Lessor; (c) losses must be payable to Lessor or Lessee as provided in Article
        XIV, and loss adjustments shall require the written consent of Lessor, any
        Facility Mortgagee and, provided it is not then in default, Lessee, which
        consent shall not be unreasonably withheld by either Lessor or Lessee; (d)
        each
        insurer must agree that it will give Lessor and any Facility Mortgagee at
        least
        sixty (60) days’ written Notice before its policy shall be altered, allowed to
        expire or canceled; (e) the amount of any deductible or retention must be
        approved by Lessor prior to the issuance of any policy; and (f) the form
        of all
        policies shall be approved by Lessor, whose approval shall not unreasonably
        be
        withheld, and by any Facility Mortgagee. 

       

      13.2  Risks
        to be Insured.
        The
        policies covering the Leased Properties and Lessee’s Personal Property shall
        insure against the following risks:

       

      13.2.1  Loss
        or
        damage by fire, vandalism and malicious mischief, earthquake, extended coverage
        perils commonly known as “Special Risk,” and all physical loss perils normally
        included in such Special Risk insurance, including but not limited to sprinkler
        leakage, in an amount not less than one hundred percent (100%) of Replacement
        Cost (provided that Lessor shall have the right from time to time, but no
        more
        frequently than once in any period of three (3) consecutive Lease Years,
        to have
        Replacement Cost reasonably redetermined by the fire insurance company then
        carrying the largest amount of fire insurance on the Leased Properties (Lessee
        hereby agreeing to pay the fee, if any, for such insurer), which determination
        shall be final and binding on the parties hereto, and upon such determination
        Lessee immediately shall increase, but not decrease, the amount of the insurance
        carried pursuant to this Section 13.2.1 to the amount so determined, subject
        to
        the approval of any Facility Mortgagee; 

       

      13.2.2  Broad
        form comprehensive boiler and machinery insurance on a blanket repair and
        replace basis, with limits for each accident in an amount not less than one
        hundred percent (100%) of Replacement Cost;

       

      13.2.3  Loss
        of
        rental under a rental value insurance policy covering risk of loss during
        reconstruction necessitated by the occurrence of any of the hazards described
        in
        Sections 13.2.1 or 13.2.2 (but in no event for a period less than twelve
        (12)
        months) in an amount sufficient to prevent Lessor and Lessee from becoming
        a
        co-insurer;

       

      13.2.4  Claims
        for bodily injury (including resulting death), personal injury or property
        damage under a policy of commercial general public liability insurance with
        a
        combined single limit per occurrence in respect of bodily injury and death
        and
        property damage of One Million Dollars ($1,000,000), and an aggregate limitation
        of Three Million Dollars ($3,000,000), which insurance shall insure Lessee’s
        contractual liability to Lessor under the indemnity provisions of this Lease
        and, if written on a “claims-made” basis, Lessee also shall provide continuous
        liability coverage for claims arising during the Term either by obtaining
        an
        endorsement providing for an extended reporting period reasonably acceptable
        to
        Lessor in the event such policy is canceled or not renewed for any reason
        whatsoever, or by obtaining “tail” insurance coverage converting the policies to
“occurrence” basis policies providing coverage for a period of at least three
        (3) years beyond the expiration of the Term; 

       

      13.2.5  Claims
        arising out of malpractice in an amount not less than One Million Dollars
        ($1,000,000) for each person and for each occurrence and, if written on a
        “claims-made” basis, Lessee also shall provide continuous liability coverage for
        claims arising during the Term either by obtaining an endorsement providing
        for
        an extended reporting period reasonably acceptable to Lessor in the event
        such
        policy is canceled or not renewed for any reason whatsoever, or by obtaining
        “tail” insurance coverage converting the policies to “occurrence” basis policies
        providing coverage for a period of at least three (3) years beyond the
        expiration of the Term;

       

      13.2.6  Flood
        (with respect to any portions of the Leased Properties located in whole or
        in
        part within a designated flood plain area) and such other hazards and in
        such
        amounts as may be customary for comparable properties in the area;

       

      13.2.7  During
        such time as Lessee is constructing any improvements, (a) worker’s compensation
        insurance and employers’ liability insurance covering all persons employed in
        connection with the improvements in statutory limits, (b) a completed operations
        endorsement to the commercial general liability and property damage insurance
        policies referred to above, (c) builder’s risk insurance, completed value form,
        covering all physical loss, in an amount satisfactory to Lessor, and (d)
        such
        other insurance, in such amounts, as Lessor deems necessary to protect Lessor’s
        interest in the Leased Properties from any act or omission of Lessee’s
        contractors or subcontractors, and certificates of insurance evidencing such
        coverage, in form satisfactory to Lessor, shall be presented to Lessor prior
        to
        the commencement of construction of such improvements;

       

      13.2.8  Primary
        automobile liability insurance with limits of One Million Dollars
        ($1,000,000.00) per occurrence each for owned and non-owned and hired
        vehicles;

       

      13.2.9  Loss
        or
        damage commonly covered by blanket crime insurance including dishonesty,
        loss of
        money orders or paper currency and depositor’s forgery, with a limit of not less
        than Five Hundred Thousand Dollars ($500,000.00).

       

      13.3  Payment
        of Premiums; Copies of Policies; Certificates.
        Subject
        to Section 12.2 of this Lease, Lessee shall pay when due all of the premiums
        for
        the insurance required by this Lease, and shall deliver to Lessor and to
        any
        Facility Mortgagee requesting such evidence, certificates of insurance in
        form
        satisfactory to Lessor and such Facility Mortgagee. Copies of the policies
        of
        insurance required by this Lease shall be delivered to Lessor within sixty
        (60)
        days of their effective date and
        certificates thereof shall be delivered to Lessor on or before their effective
        date (and, with respect to any renewal policy prior to the expiration of
        the
        existing policy), and in the event of the failure of Lessee either to carry
        the
        required insurance or pay the premiums therefor, or to deliver copies of
        policies or certificates to Lessor as required, Lessor shall be entitled,
        but
        shall have no obligation, to obtain such insurance and pay the premiums therefor
        when due, in which event Lessee shall repay to Lessor the premiums upon written
        demand therefor as Additional Charges.

       

      13.4  Umbrella
        Policies.
        If
        Lessee chooses to carry umbrella liability coverage to obtain the limits
        of
        liability required under this Lease, the umbrella policies must provide coverage
        in the same manner as the primary commercial general liability policy and
        must
        contain no exclusions in addition to, or limitations materially different
        than,
        those of the primary policy.

       

      13.5  Additional
        Insurance.
        In
        addition to the insurance described above, Lessee shall maintain such insurance
        as may be required from time to time by any Facility Mortgagee and shall
        at all
        times comply with all Legal Requirements with respect to worker’s compensation
        insurance coverage.

       

      13.6  No
        Liability; Waiver of Subrogation.
        Lessor
        shall have no liability to Lessee, and, provided Lessee provides the insurance
        required of it by this Lease, Lessee shall have no liability to Lessor,
        regardless of the cause, for any loss or expense resulting from or in connection
        with damage to or the destruction or other loss of any Leased Property or
        Lessee’s Personal Property, and neither party will have any right or claim
        against the other for any such loss or expense by way of subrogation. Each
        insurance policy carried by either party covering any of the Leased Properties
        and Lessee’s Personal Property, including without limitation, contents, fire and
        casualty insurance, shall contain an express waiver of any right of subrogation
        on the part of the insurer against the other party. Lessee shall pay any
        additional costs or charges for obtaining such waiver.

       

      13.7  Increase
        in Limits.
        If an
        independent study prepared by a third party with a knowledge of the long
        term
        care insurance industry in the State of Ohio or Pennsylvania which is reasonably
        acceptable to Lessor and Lessee determines that the limits of the personal
        injury or property damage - public liability insurance in such state then
        being
        carried are insufficient, and that such increased coverages are available
        in the
        marketplace at commercially reasonable rates, then upon Notice from Lessor,
        Lessee shall cause such limits to be increased to the level specified in
        such
        Notice until further increase pursuant to the provisions of this Section.
        Any
        such independent study shall be paid for by Lessor.

       

      13.8  Blanket
        Policy.
        Any
        insurance required by this Lease may be provided by so-called blanket policies
        of insurance carried by Lessee; provided, however, that the coverage afforded
        Lessor thereby may not be less than or materially different from that which
        would be provided by separate policies meeting the requirements of this Lease,
        and provided further that such policies meet the requirements of all Facility
        Mortgages.

       

      13.9  No
        Separate Insurance.

       

      13.9.1  Lessee
        shall not, on its own initiative or pursuant to the request or requirement
        of
        any third party, take out separate insurance concurrent in form or contributing
        in the event of loss with that required by this Lease, to be furnished by,
        or
        that may reasonably be required to be furnished by, Lessee, or increase the
        amount of any then existing insurance by securing an additional policy or
        additional policies, unless all parties having an insurable interest in the
        subject matter of the insurance, including in all cases Lessor and all Facility
        Mortgagees, are named therein as additional insureds, and losses are payable
        thereunder in the same manner as losses are payable under this
        Lease.

       

      13.9.2  Nothing
        herein shall prohibit Lessee, upon Notice to Lessor, from (a) securing insurance
        required to be carried hereby with higher limits of liability than required
        in
        this Lease, or (b) securing insurance against risks not required to be insured
        pursuant to this Lease, and as to such insurance, Lessor and any Facility
        Mortgagee need not be included therein as additional insureds, nor must losses
        thereunder be payable in the same manner as losses are payable under this
        Lease,
        except to the extent required to avoid a default under a Facility Mortgage
        or
        any other encumbrance.

       

      13.10  Captive
        Insurance.
        Lessor
        consents to Lessee insuring the coverages required by Sections 13.2.4
        and
13.2.5
        through
        a pure captive under common control with Lessee, which may not meet the AmBest
        rating requirement set forth in Section 13.1,
        provided that (a) such captive will be licensed in the State of Ohio to the
        extent required by law, (b) the organization and capitalization of such captive
        is reasonably acceptable to Lessor, and (c) the insurance coverages otherwise
        comply with this Article. If at any time Lessee is providing the coverages
        required by Sections 13.2.4
        and
13.2.5
        through
        a captive insurance company, Lessor shall be entitled (but not required)
        to
        appoint one member to the advisory board of such captive insurance
        company.

       

      ARTICLE
        XIV  

       

      14.1  Insurance
        Proceeds.
        Net
        Proceeds shall be paid to Lessor and held, disbursed or retained by Lessor
        as
        provided herein. If the Net Proceeds are less than the Approval Threshold,
        and
        no Event of Default has occurred and is continuing, Lessor shall pay the
        Net
        Proceeds to Lessee promptly upon Lessee’s completion of the restoration of the
        damaged or destroyed Leased Property. If the Net Proceeds equal or exceed
        the
        Approval Threshold, and no Event of Default has occurred and is continuing,
        the
        Net Proceeds shall be made available for restoration or repair as provided
        in
        Section 14.6. Within fifteen (15) days of the receipt of the Net Proceeds
        of
        Special Risk Insurance, Lessor and Lessee shall agree as to the portion thereof,
        if any, attributable to the Lessee’s Personal Property that Lessee is not
        required and does not elect to restore or replace, and if they cannot agree
        they
        shall submit the matter to arbitration pursuant to Article XXXV hereof, and
        the
        portion of the proceeds of such Special Risk Insurance agreed or determined
        by
        arbitration to be attributable to the Lessee’s Personal Property that Lessee is
        not required and does not elect to restore or replace shall be paid to
        Lessee.

       

      14.2  Restoration
        in the Event of Damage or Destruction.If
        all or
        any portion of a Leased Property is damaged by fire or other casualty, Lessee
        shall: (a) give Lessor Notice of such damage or destruction within five (5)
        Business Days of the occurrence thereof; (b) within thirty (30) Business
        Days of
        the occurrence commence the restoration of such Leased Property; and (c)
        thereafter proceed diligently to complete such restoration as quickly as
        reasonably possible, but in any event within one hundred eighty (180) days
        of
        the occurrence, to the end that the Leased Property is in substantially the
        same
        (or better) condition as the Leased Property was in immediately prior to
        the
        damage or destruction. Regardless of the anticipated cost thereof, if the
        restoration of a Leased Property requires any modification of structural
        elements, prior to commencing such modification Lessee shall obtain Lessor’s
        written approval of the plans and specifications therefor.

       

      14.3  Restoration
        of Lessee’s Property.
        If
        Lessee is required to restore a Leased Property, Lessee also concurrently
        shall
        restore any of Lessee’s Personal Property that is integral to the Primary
        Intended Use of such Leased Property at the time of the damage or
        destruction.

       

      14.4  No
        Abatement of Rent.
        There
        shall be no abatement of Rent by reason of any damage to or the partial or
        total
        destruction of any Leased Property.

       

      14.5  Waiver.
        Except
        as provided elsewhere in this Lease, Lessee hereby waives any statutory or
        common law rights of termination that may arise by reason of any damage to
        or
        destruction of a Leased Property.

       

      14.6  Disbursement
        of Insurance Proceeds Equal to or Greater Than The Approval
        Threshold.
        If
        Lessee restores or repairs a Leased Property pursuant to this Article XIV,
        and
        if the Net Proceeds equal or exceed the Approval Threshold, the restoration
        or
        repair and disbursement of funds to Lessee shall be in accordance with the
        following procedures:

       

      (a)  The
        restoration or repair work shall be done pursuant to plans and specifications
        approved by Lessor and a certified construction cost statement, to be obtained
        by Lessee from a contractor reasonably acceptable to Lessor, showing the
        total
        cost of the restoration or repair; to the extent the cost exceeds the Net
        Proceeds, Lessee shall deposit with Lessor the amount of the excess cost,
        and
        Lessor shall disburse the funds so deposited in payment of the costs of
        restoration or repair before any disbursement of Net Proceeds.

       

      (b)  Construction
        Funds shall be made available, subject to a ten percent (10%) holdback, to
        Lessee upon request, but no more frequently than monthly, as the restoration
        and
        repair work progresses pursuant to certificates, in form and substance
        reasonably acceptable to Lessor, of an architect selected by Lessee and
        reasonably acceptable to Lessor (such architect to be, in the reasonable
        judgment of Lessor, highly qualified in the design and construction of the
        type
        of facility being repaired).

       

      (c)  After
        the
        first disbursement to Lessee, sworn statements and lien waivers in an amount
        at
        least equal to the amount of Construction Funds previously paid to Lessee
        shall
        be delivered to Lessor from all contractors, subcontractors and material
        suppliers covering all labor and materials furnished through the date of
        the
        previous disbursement.

       

      (d)  Lessee
        shall deliver to Lessor such other evidence as Lessor reasonably may request,
        from time to time during the course of the restoration and repair, as to
        the
        progress of the work, compliance with the approved plans and specifications,
        the
        cost of restoration and repair and the total amount needed to complete the
        restoration and repair, and showing that there are no liens against the Leased
        Property arising in connection with the restoration and repair and that the
        cost
        of the restoration and repair at least equals the total amount of Construction
        Funds then disbursed to Lessee hereunder.

       

      (e)  If
        the
        Construction Funds are at any time determined by Lessor to be inadequate
        for
        payment in full of all labor and materials for the restoration and repair,
        Lessee immediately shall pay the amount of the deficiency to Lessor to be
        held
        and disbursed as Construction Funds prior to the disbursement of any other
        Construction Funds then held by Lessor.

       

      (f)  The
        Construction Funds may be disbursed by Lessor to Lessee or to the persons
        entitled to receive payment thereof from Lessee, and such disbursement in
        either
        case may be made directly or through a third party escrow agent, such as,
        but
        not limited to, a title insurance company, or its agent, all as Lessor may
        determine in its sole discretion. Provided Lessee is not in default hereunder,
        any excess Construction Funds shall be paid to Lessee upon completion of
        the
        restoration or repair.

       

      (g)  If
        Lessee
        at any time fails to perform promptly and fully the conditions and covenants
        set
        forth in subparagraphs (a) through (f) above, and the failure is not corrected
        within ten (10) days of written Notice thereof, or if during the restoration
        or
        repair an Event of Default occurs, Lessor may, at its option, immediately
        cease
        making any further payments to Lessee for the restoration and
        repair.

       

      (h)  Lessor
        may reimburse itself out of the Construction Funds for its reasonable expenses
        incurred in administering the Construction Funds and inspecting the restoration
        and repair work, including without limitation attorneys’ and other professional
        fees and escrow fees and expenses.

       

      14.7  Net
        Proceeds Paid to Facility Mortgagee.
        Notwithstanding anything in this Lease to the contrary, if any Facility
        Mortgagee is entitled to any Net Proceeds or any portion thereof under the
        terms
        of any Facility Mortgage, the Net Proceeds shall be applied, held and/or
        disbursed in accordance with the terms of the Facility Mortgage. Lessor shall
        make commercially reasonable efforts to cause the Net Proceeds to be applied
        to
        the restoration of the Leased Property.

       

      ARTICLE
        XV  

       

      15.1  Total
        Taking or Other Taking with Leased Property Rendered Unsuitable for Its Primary
        Intended Use.
        If
        title to the fee of the whole of a Leased Property is Taken, this Lease shall
        cease and terminate as to the Leased Property Taken as of the Date of Taking
        by
        the Condemnor, and Rent shall be apportioned as of the termination date.
        If
        title to the fee of less than the whole of a Leased Property is Taken, but
        such
        Leased Property is rendered Unsuitable for Its Primary Intended Use as a
        result
        of the Partial Taking, each of Lessee and Lessor shall have the option, which
        shall be exercisable by written Notice to the other at any time prior to
        the
        first to occur of the taking of possession by, or the date of vesting of
        title
        in, the Condemnor, to terminate this Lease with respect to such Leased Property
        as of the date so determined, in which event this Lease shall so cease and
        terminate with respect to that Leased Property as of the earlier of the date
        specified in the Notice or the date on which possession is taken by the
        Condemnor. If this Lease is so terminated as to a Leased Property, Rent shall
        be
        apportioned as of the termination date.

       

      15.2  Allocation
        of Award.
        The
        total Award made with respect to all or any portion of a Leased Property
        or for
        loss of Rent, or for loss of business, shall be solely the property of and
        payable to Lessor or, if so provided in a Facility Mortgage, to the Facility
        Mortgagee. Nothing contained in this lease will be deemed to create any
        additional interest in Lessee, or entitle Lessee to any payment based on
        the
        value of the unexpired term or so-called “bonus value” to Lessee of this Lease.
        Any Award made for the taking of Lessee’s Personal Property or for removal and
        relocation expenses of Lessee in any such proceedings, shall be payable to
        Lessee. In any proceedings with respect to an Award, each of Lessor and Lessee
        shall seek its own Award in conformity herewith, at its own expense.
        Notwithstanding the foregoing, Lessee may pursue a claim for loss of its
        business, provided that under the laws of the State, such claim will not
        diminish the Award to Lessor.

       

      15.3  Partial
        Taking.
        In the
        event of a Partial Taking, Lessee, at its own cost and expense, shall, within
        sixty (60) days of the first to occur of the taking of possession by, or
        the
        date of vesting of title in, the Condemnor, commence the restoration of the
        affected Leased Property to a complete architectural unit of the same general
        character and condition (as nearly as may be possible under the circumstances)
        as existed immediately prior to the Partial Taking, and complete such
        restoration with all reasonable dispatch, but in any event within one hundred
        eighty (180) days of the date on which such Notice is given. Lessor shall
        contribute to the cost of restoration only such portion of the Award as is
        made
        therefor. As long as no Event of Default has occurred and is continuing,
        if such
        portion of the Award is in an amount less than the Approval Threshold, Lessor
        shall pay the same to Lessee upon completion of such restoration. As long
        as no
        Event of Default has occurred and is continuing, if such portion of the Award
        is
        in an amount equal to or greater than the Approval Threshold, Lessor shall
        make
        such portion of the Award available to Lessee in the manner provided in Section
        14.6 with respect to Net Proceeds in excess of the Approval Threshold.
        Notwithstanding anything to the contrary in this Lease, if the Fair Market
        Rent
        of the affected Leased Property is reduced by reason of the Partial Taking,
        from
        and after the date on which possession is taken by the Condemnor the annualized
        Base Rent shall be reduced by an amount determined by dividing the portion
        of
        the Award made to Lessor expressly for such reduction in Fair Market Rent
        by the
        Capitalization Rate.

       

      15.4  Temporary
        Taking.
        If
        there is a Partial Taking of possession or the use of all or part of a Leased
        Property, but the fee of such Leased Property is not Taken in whole or in
        part,
        until such Partial Taking of possession or use continues for more than six
        (6)
        months, all the provisions of this Lease shall remain in full force and effect
        and the entire amount of any Award made for such Partial Taking shall be
        paid to
        Lessee provided there is then no Event of Default. Upon the termination of
        any
        such period of temporary use or occupancy, Lessee at its sole cost and expense
        shall restore the affected Leased Property, as nearly as may be reasonably
        possible, to the condition existing immediately prior to such Partial Taking.
        If
        any such Partial Taking continues for longer than six (6) months, and fifty
        percent (50%) or more of the patient capacity of the affected Facility is
        thereby rendered Unsuitable for Its Primary Use, this Lease shall cease and
        terminate as to the affected Leased Property only as of the last day of the
        sixth (6th)
        month,
        but if less than fifty percent (50%) of the patient capacity of such Facility
        is
        thereby rendered Unsuitable for Its Primary Use, each of Lessee and Lessor
        shall
        have the option, which shall be exercisable by giving written Notice to the
        other at least sixty (60) days prior written Notice to the other, at any
        time
        prior to the end of the temporary Partial Taking, to terminate this Lease
        as to
        the affected Leased Property of the date set forth in such Notice, and Lessee
        shall be entitled to any Award made for the period of such temporary Partial
        Taking prior to the date of termination of the Lease. Rent shall not abate
        during the period of any temporary Partial Taking.

       

      15.5  Awards
        Paid to Facility Mortgagee.
        Notwithstanding anything herein to the contrary, if any Facility Mortgagee
        is
        entitled to any Award or any portion thereof under the terms of any Facility
        Mortgage, such Award shall be applied, held and/or disbursed in accordance
        with
        the terms of the Facility Mortgage. If the Facility Mortgagee elects to apply
        the Award to the indebtedness secured by the Facility Mortgage and the Award
        represents an Award for Partial Taking as described in Section 15.3 above,
        Lessee shall restore the affected Facility as nearly as possible under the
        circumstances to a complete architectural unit of the same general character
        and
        condition as that of the Facility existing immediately prior to such Taking.
        In
        any such restoration, Lessee shall receive full credit for any portion of
        any
        award retained by Lessor and the Facility Mortgagee.

       

      ARTICLE
        XVI  

       

      16.1  Lessor’s
        Rights Upon an Event of Default.
        If an
        Event of Default occurs and while it continues, Lessor may terminate this
        Lease
        by giving Lessee a Notice of Termination, and in such event the Term shall
        end
        and all rights of Lessee under this Lease shall cease on the Termination
        Date.
        The Notice of Termination shall be in lieu of and not in addition to any
        notice
        required by the laws of any State as a condition to bringing an action for
        possession of the Leased Premises or to recover damages under this Lease.
        In
        addition to Lessor’s right to terminate this Lease, Lessor shall have all other
        rights set forth in this Lease and all remedies available at law and in
        equity.

       

      Lessee
        shall, to the extent permitted by law, pay as Additional Charges all costs
        and
        expenses incurred by or on behalf of Lessor, including, without limitation,
        reasonable attorneys’ fees and expenses (whether or not litigation is commenced,
        and if litigation is commenced, including fees and expenses incurred in appeals
        and post-judgment proceedings) as a result of any default of Lessee
        hereunder.

       

      No
        Event
        of Default (other than a failure to make payment of money) shall be deemed
        to
        exist if and for so long as Lessee is unable to prevent such Event of Default
        because of Force Majeure, provided that, upon the cessation of the Force
        Majeure, Lessee immediately shall proceed to remedy the action or condition
        giving rise to the Event of Default within the applicable cure period as
        extended by the Force Majeure.

       

      16.2  Certain
        Remedies.
        If an
        Event of Default occurs, whether or not this Lease has been terminated pursuant
        to Section 16.1, if required to do so by Lessor Lessee immediately shall
        surrender the Leased Properties to Lessor in the condition required by Section
        9.1.5 and quit the same, and Lessor may enter upon and repossess the Leased
        Properties by reasonable force, summary proceedings, ejectment or otherwise,
        and
        may remove Lessee and all other persons and any and all personal properties
        from
        the Leased Properties, subject to rights of any residents or patients and
        to any
        Legal Requirements. In addition to all other remedies set forth or referred
        to
        in this Article XVI, Lessor shall have the right to suspend any Management
        Agreement as to one or more or all Facilities and to retain a manager of
        the
        affected Facility or all Facilities at the expense of Lessee, such manager
        to
        serve for such term and at such compensation as Lessor reasonably determines
        is
        necessary under the circumstances. 

       

      16.3  Damages.
        None of
        (a) the termination of this Lease pursuant to Section 16.1, (b) the repossession
        of the Leased Properties, (c) the failure of Lessor to relet the Leased
        Properties, (d) the reletting of all or any portion thereof, or (v) the failure
        of Lessor to collect or receive any rentals due upon such any reletting,
        shall
        relieve Lessee of its liability and obligations hereunder, all of which shall
        survive any such termination, repossession or reletting. If this Lease is
        terminated by Lessor, Lessee immediately shall pay to Lessor all Rent due
        and
        payable with respect to the Leased Properties to and including the Termination
        Date, including without limitation all interest and late charges payable
        under
        Section 3.3 hereof with respect to any late payment of such Rent. Lessee
        also
        shall pay to Lessor, as liquidated damages, at Lessor’s option,
        either:

       

      (A) The
        sum
        of:

       

      (i)  Lessor’s
        Interim Rent Loss, minus Net Reletting Proceeds for such period, and minus
        the
        portion of Lessor’s Interim Rent Loss, if any, that Lessee proves reasonably
        could have been mitigated by Lessor, plus

       

      (ii)  the
        Present Value on the Judgment Date of Lessor’s Future Rent Loss, assuming the
        CPI were to increase two and one half (2.5) percentage points per Lease Year
        from the Judgment Date through the Expiration Date, minus the Present Value
        on
        the Termination Date of the portion of Lessor’s Future Rent Loss that Lessee
        proves reasonably could be mitigated by Lessor;

       

      or
        

       

      (B) Each
        month between the Termination Date and the Expiration Date, Lessor’s Monthly
        Rent Loss, minus the Net Reletting Proceeds for such month, and minus the
        portion, if any, of Lessor’s Monthly Rent Loss that Lessee proves reasonably
        could have been avoided. Any suit brought to recover liquidated damages payable
        under this subsection (B) shall not prejudice Lessor’s right to collect
        liquidated damages for subsequent months in a similar proceeding. 

       

      16.4  Waiver.
        If this
        Lease is terminated pursuant to Section 16.1, Lessee waives, to the extent
        permitted by applicable law, (a) any right of reentry, repossession or
        redesignation, (b) any right to a trial by jury in the event of summary
        proceedings to enforce the remedies set forth in this Article XVI, and (c)
        the
        benefit of any laws now or hereafter in force exempting property from liability
        for rent or for debt. Acceptance of Rent at any time does not prejudice or
        remove any right of Lessor as to any right or remedy. No course of conduct
        shall
        be held to bar Lessor from literal enforcement of the terms of this
        Lease.

       

      16.5  Application
        of Funds.
        Any
        payments received by Lessor under any of the provisions of this Lease during
        the
        existence or continuance of any Event of Default shall be applied to Lessee’s
        obligations in the order that Lessor determines in its sole discretion or
        as may
        be prescribed by law.

       

      16.6  Bankruptcy.

       

      (a)  None
        of
        Lessee’s interest in this Lease, any estate hereby created in Lessee’s interest
        or any interest herein or therein shall pass to any trustee or receiver or
        assignee for the benefit of creditors or otherwise by operation of law, except
        as specifically may be provided pursuant to the Bankruptcy Code (11 USC § 101
        et. seq.), as the same may be amended from time to time.

       

      (b)  Rights
        and Obligations Under the Bankruptcy Code.

       

      (i)  Upon
        filing of a petition by or against Lessee under the Bankruptcy Code, Lessee,
        as
        debtor and as debtor-in-possession, and any trustee who may be appointed
        with
        respect to the assets of or estate in bankruptcy of Lessee, agree to pay
        monthly
        in advance, on the first day of each month, as reasonable compensation for
        the
        use and occupancy of the Leased Premises, an amount equal to all Rent due
        pursuant to this Lease.

       

      (ii)  Included
        within and in addition to any other conditions or obligations imposed upon
        Lessee or its successor in the event of the assumption and/or assignment
        of the
        Lease are the following: (A) the cure of any monetary defaults and reimbursement
        of pecuniary loss within not more than thirty (30) days of the assumption
        and/or
        assignment; (B) the deposit of an additional amount equal to not less than
        three
        (3) months’ Base Rent, which amount is agreed to be a necessary and appropriate
        deposit to secure the future performance under the Lease of Lessee or its
        assignee; (C) the continued use of the Leased Premises for the Primary Intended
        Use; and (D) the prior written consent of any Facility Mortgagee.

       

      ARTICLE
        XVII  

       

      17.1  Lessor’s
        Right to Cure Lessee’s Default.
        If
        Lessee fails to make any payment or perform any act required to be made or
        performed under this Lease, and fails to cure the same within any grace or
        cure
        period applicable thereto, upon such Notice as may be expressly required
        herein
        (or, if Lessor reasonably determines that the giving of Notice would risk
        loss
        to the Leased Properties or cause damage to Lessor, upon such Notice as is
        practical under the circumstances), and without waiving or releasing any
        obligation of Lessee, Lessor may make such payment or perform such act for
        the
        account and at the expense of Lessee, and may, to the extent permitted by
        law,
        enter upon the Leased Properties for such purpose and take all such action
        thereon as, in Lessor’s sole opinion, may be necessary or appropriate. No such
        entry shall be deemed an eviction of Lessee. All amounts so paid by Lessor
        and
        all costs and expenses (including, without limitation, reasonable attorneys’
        fees and expenses) so incurred, together with the late charge and interest
        provided for in Section 3.3 thereon, shall be paid by Lessee to Lessor on
        demand. The obligations of Lessee and rights of Lessor contained in this
        Article
        shall survive the expiration or earlier termination of this Lease.

       

      17.2  Lessee’s
        Affiliates Right to Cure.
        If
        Lessee fails to perform any acts or obligation required to be made or performed
        under this Lease, and fails to cure the same within any applicable grace
        period
        set forth in this Lease, then Lessor shall grant to Guarantor or any Guarantor
        Affiliate the right to cure such failure by Lessee under this Lease and,
        at
        Guarantor’s option, become a substitute Lessee pursuant to Section 22.1.

       

      ARTICLE
        XVIII  

       

      18.1  Holding
        Over.
        If
        Lessee remains in possession of all or any of the Leased Properties after
        the
        expiration of the Term or earlier termination of this Lease, such possession
        shall be as a month-to-month tenant, and throughout the period of such
        possession Lessee shall pay as Rent for each month one and one half (1.5)
        times
        the sum of: (a) one-twelfth (1/12th)
        of the
        Base Rent payable during the Lease Year in which such expiration or termination
        occurs, plus (b) all Additional Charges accruing during the month, plus (c)
        any
        and all other sums payable by Lessee pursuant to this Lease. During such
        period
        of month-to-month tenancy, Lessee shall be obligated to perform and observe
        all
        of the terms, covenants and conditions of this Lease, but shall have no rights
        hereunder other than the right, to the extent given by applicable law to
        month-to-month tenancies, to continue its occupancy and use of the Leased
        Properties until the month-to-month tenancy is terminated. Nothing contained
        herein shall constitute the consent, express or implied, of Lessor to the
        holding over of Lessee after the expiration or earlier termination of this
        Lease.

       

      18.2  Indemnity.
        If
        Lessee fails to surrender the Leased Properties in a timely manner and in
        accordance with the provisions of Section 9.1.5 upon the expiration or
        termination of this Lease, in addition to any other liabilities to Lessor
        accruing therefrom, Lessee shall defend, indemnify and hold Lessor, its
        principals, officers, directors, agents and employees harmless from loss
        or
        liability resulting from such failure, including, without limiting the
        generality of the foregoing, loss of rental with respect to any new lease
        in
        which the rental payable thereunder exceeds the Rent paid by Lessee pursuant
        to
        this Lease during Lessee’s hold-over and any claims by any proposed new tenant
        founded on such failure. The provisions of this Section 18.2 shall survive
        the
        expiration or earlier termination of the Term.

       

      ARTICLE
        XIX  

       

      19.1  Subordination.
        This
        Lease is subject and subordinate to any Facility Mortgage and to any Ground
        Lease, to all advances made or hereafter to be made thereunder and to all
        renewals, modifications, consolidations, replacements and extensions thereof
        and
        substitutions therefore. This clause shall be self-operative and no further
        instrument of subordination need be required by any Facility Mortgagee or
        Ground
        Lessor; provided, however, that Lessor or any Facility Mortgagee may elect
        to
        make this Lease superior to a Facility Mortgage at any time by Notice to
        Lessee.
        As to any Facility Mortgage or Ground Lease to which this Lease is subordinate,
        Lessor shall provide Lessee with a “non-disturbance agreement” reasonably
        acceptable to Lessee and such Facility Mortgagee or Ground Lessor providing
        that, if such Facility Mortgagee acquires the Leased Properties by way of
        foreclosure or deed in lieu of foreclosure, or if the Ground Lease is
        terminated, such Facility Mortgagee or Ground Lessor will not disturb Lessee’s
        possession under this Lease and will recognize Lessee’s rights hereunder if and
        for so long as no Event of Default has occurred under this Lease and is
        continuing. Lessee agrees that it shall not withhold or delay its consent
        unreasonably to any amendment of this Lease reasonably required by a Facility
        Mortgagee or Ground Lessor, and Lessee shall be deemed to have withheld or
        delayed its consent unreasonably if Lessee has received the non-disturbance
        agreement provided for above and the requested amendment does not materially
        (a)
        alter the economic terms of this Lease, (b) diminish the rights of Lessee
        under
        this Lease or (c) increase the obligations of Lessee under this
        Lease.

       

      19.2  Attornment.
        If a
        Facility Mortgagee or Ground Lessor enforces the remedies provided for by
        law or
        by a Facility Mortgage or Ground Lease, Lessee shall, at the option of the
        party
        succeeding to the interest of Lessor as a result of such enforcement or as
        a
        result of a deed or delivery of possession of the Leased Properties in lieu
        of
        such enforcement, attorn to such successor and recognize such successor as
        Lessor under this Lease; provided, however, that such successor in interest
        shall not (a) be bound by any payment of Rent for more than one (1) month
        in
        advance, except for any such advance payments as may be expressly required
        by
        this Lease; (b) be bound by any modification of this Lease made without the
        written consent of the Facility Mortgagee or Ground Lessor or successor in
        interest; (c) be liable for any act or omission of Lessor; or (d) be subject
        to
        any offset or defense arising prior to the date such successor in interest
        acquired title to the Leased Properties or, in the case of a Ground Lessor,
        the
        date on which the Ground Lessor recovered or was given possession of the
        Leased
        Properties. Upon request, Lessee shall execute and deliver an instrument
        or
        instruments confirming the attornment provided for herein.

       

      19.3  Lessee’s
        Certificate.
        Lessee
        shall, upon not less than ten (10) days prior Notice from Lessor, execute,
        acknowledge and deliver to Lessor Lessee’s Certificate containing then-current
        facts. It is intended that any Lessee’s Certificate delivered pursuant hereto
        may be relied upon by Lessor, any prospective tenant or purchaser of the
        Leased
        Properties, any mortgagee or prospective mortgagee and any other party who
        reasonably may rely on such statement. Lessee’s failure to deliver the Lessee’s
        Certificate within such time shall constitute an Event of Default. In addition,
        if Lessee fails to deliver the Lessee’s Certificate within the ten (10) day
        period referred to above, Lessee hereby authorizes Lessor to execute and
        deliver
        a certificate to the effect (if true) that Lessee represents and warrants
        that
        (a) this Lease is in full force and effect without modification, and (b)
        Lessor
        is not in breach or default of any of its obligations under this
        Lease.

       

      19.4  Notice
        and Cure.
        If a
        Facility Mortgagee acquires title to one or more of the Leased Properties
        by way
        of foreclosure or deed in lieu of foreclosure, then commencing on the date
        the
        Facility Mortgagee acquires title, the Facility Mortgagee shall have thirty
        (30)
        days within which to cure any default by Lessor under this Lease existing
        on
        such date. If the defaults by Lessor are cured during such period, then this
        Lease shall remain in full force and effect and Lessee shall have no right
        to
        terminate this Lease so long as the Facility Mortgagee performs all of the
        Lessor’s subsequent obligations under this Lease. The foregoing rights to cure a
        Lessor default shall be exercisable in the sole discretion of the Facility
        Mortgagee, and, the Facility Mortgagee shall have no obligation to cure any
        default by Lessor.

       

      ARTICLE
        XX  

       

      20.1  Risk
        of Loss.
        During
        the Term, the risk of loss or of decrease in the enjoyment and beneficial
        use of
        the Leased Properties in consequence of the damage or destruction thereof
        by
        fire, the elements, casualties, thefts, riots, wars or otherwise, or in
        consequence of foreclosures, attachments, levies or executions (other than
        those
        caused by Lessor and those claiming from, through or under Lessor) is assumed
        by
        Lessee, and, in the absence of gross negligence, willful misconduct or material
        breach of this Lease by Lessor, Lessor in no event shall be answerable or
        accountable therefor nor shall any of the events mentioned in this Section
        entitle Lessee to any abatement of Rent.

       

      ARTICLE
        XXI  

       

      21.1  Indemnification.
        Notwithstanding the existence of any insurance or self-insurance provided
        for in
        Article XIII, and without regard to the policy limits of any such insurance
        or
        self-insurance, Lessee shall protect, indemnify, save harmless and defend
        Lessor
        and any Facility Mortgagee, and the principals, officers, directors and agents
        and employees of Lessor and of any Facility Mortgagee, from and against all
        liabilities, obligations, claims, damages, penalties, causes of action, costs
        and expenses (including, without limitation, reasonable attorneys’ fees and
        expenses) (collectively, “Losses”),
        to
        the extent permitted by law, imposed upon or incurred by or asserted against
        Lessor or any Facility Mortgagee by reason of: (a) any accident, injury to
        or
        death of persons or loss of or damage to property occurring on or about the
        Leased Properties or adjoining sidewalks, including without limitation any
        claims of malpractice; (b) any use, misuse, non-use, condition, maintenance
        or
        repair by Lessee of the Leased Properties; (c) the failure to pay any
        Impositions; (d) any failure on the part of Lessee to perform or comply with
        any
        of the terms of this Lease; (e)
        the
        management and operation of the Facilities from and after November 1, 1999;
        (f)
        the
        nonperformance of any contractual obligation, express or implied, assumed
        or
        undertaken by Lessee or any party in privity with Lessee with respect to
        the
        Leased Properties or any business or other activity carried on with respect
        to
        the Leased Properties during the Term or thereafter during any time in which
        Lessee or any such other party is in possession of the Leased Properties
        or
        thereafter to the extent that any conduct by Lessee or any such person (or
        failure of such conduct thereby if the same should have been undertaken during
        such time of possession and leads to such damage or loss) causes such loss
        or
        claim. Any amounts that become payable by Lessee under this Section shall
        be
        paid within ten (10) days after liability therefor on the part of Lessee
        is
        determined by litigation or otherwise, and, if not timely paid, shall bear
        interest (to the extent permitted by law) at the Overdue Rate from the date
        of
        such determination to the date of payment. Nothing herein shall be construed
        as
        indemnifying either Lessor or any Facility Mortgagee against its own grossly
        negligent acts or omissions or willful misconduct. At the request and expense
        of
        Lessee, Lessor agrees to use commercially reasonable efforts to pursue any
        claim
        it may have against the sellers under the Acquisition Agreements the successful
        pursuit of which may result, directly or indirectly, in a financial benefit
        to
        Lessee. At the request and expense of Lessor, Lessee agrees to use commercially
        reasonable efforts to assist Lessor in pursuing any claim it may have against
        the sellers under the Acquisition Agreements.

       

      21.2  Survival
        of Indemnification.
        Lessee’s liability under this Article shall survive the expiration or any
        earlier termination of this Lease.

       

      ARTICLE
        XXII  

       

      22.1  General
        Prohibition against Transfers.
        Lessee
        acknowledges that a significant inducement to Lessor to enter into this Lease
        with Lessee on the terms set forth herein is the combination of financial
        strength, experience, skill and reputation possessed by Lessee, the Person
        or
        Persons in Control of Lessee and the Manager of the Facilities on the
        Commencement Date, together with Lessee’s assurance that Lessor shall have the
        unrestricted right to approve or disapprove any proposed Transfer. Therefore,
        there shall be no Transfer except as specifically permitted by this Lease
        or
        consented to in advance by Lessor in writing. Lessee agrees that Lessor shall
        have the right to withhold its consent to any proposed Transfer on the basis
        of
        Lessor’s judgment as to the effect the proposed Transfer may have on the
        Facilities and the future performance of the obligations of the Lessee under
        this Lease, whether or not Lessee agrees with such judgment. Any attempted
        Transfer that is not specifically permitted by this Lease or consented to
        by
        Lessor in advance in writing shall be null and void and of no force and effect
        whatsoever. In the event of a Transfer, Lessor may collect Rent and other
        charges from the Transferee and apply the amounts collected to the Rent and
        other charges herein reserved, but no Transfer or collection of Rent and
        other
        charges shall be deemed to be a waiver of Lessor’s rights to enforce Lessee’s
        covenants or an acceptance of the Transferee as Lessee, or a release of the
        Lessee named herein from the performance of its covenants. Notwithstanding
        any
        Transfer, Lessee shall remain fully liable for the performance of all terms,
        covenants and provisions of this Lease. Any violation of this Lease by any
        Transferee shall be deemed to be a violation of this Lease by Lessee.
 Notwithstanding
        the foregoing, a Transfer to an Affiliate of Lessee will not require the
        consent
        of Lessor and is permitted under this Lease provided: (a) such transferee
        assumes all obligations under this Lease in writing and grants (and its equity
        owners grant) equivalent (in both assets covered and priority of lien) security
        interests in the assets and equity of such transferee concurrently with such
        Transfer; and (b) each of the other Transaction Documents are ratified and
        affirmed by the applicable Lessee Affiliates as being in full force and effect
        after giving effect to the proposed Transfer. Notwithstanding
        the foregoing, the following transfers are permitted and will not require
        the
        consent of Lessor and are permitted under this Lease:

       

      (a) a
        Transfer to an Affiliate of Lessee provided that: (a) such transferee assumes
        all obligations under this Lease in writing and grants (and its equity owners
        grant) equivalent (in both assets covered and priority of lien) security
        interests in the assets and equity of such transferee concurrently with such
        Transfer; and (b) each of the other Transaction Documents are ratified and
        affirmed by the applicable Lessee Affiliates as being in full force and effect
        after giving effect to the proposed Transfer;

       

      (b) 
        a
        Transfer upon the death of any equity owner of Lessee to his or her spouse,
        children, parents, heirs, lineal descendents or relatives through marriage
        or
        otherwise (or to any one or more of them);

       

      (c) the
        transfer, by gift or sale for estate planning purposes, by an equity owner
        of
        Lessee of all or any portion of his or her equity interest in Lessee to (i)
        his
        or her spouse, children, parents or other heirs (or to any one or more of
        them)
        upon such equity owner’s death, or (ii) a revocable grantor trust of which such
        equity owner is the sole trustee and settlor, (iii) a “Mallinckrodt” trust, (iv)
        any trust where such equity owner or his or her spouse is the beneficiary
        during
        his or her lifetime, or either of their descendents or some combination thereof
        are the beneficiaries of such trust after such equity owner’s death, (v) a trust
        where such equity owner is the trustee of such trust, (vi) a trust where
        the
        trust assets will revert back to such equity owner, (vii) a trust where such
        equity owner, as permitted by the trust document, may regain ownership of
        the
        assets in such trust, (viii) a trust where the ownership of such trust may
        be
        transferred to such equity owner or his or her spouse (or widow) or either
        of
        their descendents, (ix) to a trust where such ownership in the trust may
        be
        transferred into a corporation or limited liability company of which such
        trust
        is a controlling owner of such entity, (x) a corporation or limited liability
        company of which a person set forth above is a controlling owner of such
        entity,
        shall be deemed a permitted Transfer under this Agreement, or (xi) to a
“defective grantor trust”; provided, however, that Lessee shall provide Lessor
        with Notice of such Transfer and such information about such Transfer as
        Lessor
        may reasonably request.

       

      22.2  Subordination
        and Attornment.
        Lessee
        shall insert in any sublease permitted by Lessor provisions to the effect
        that
        (a) such sublease is subject and subordinate to all of the terms and provisions
        of this Lease and to the rights of Lessor hereunder, (b) if this Lease
        terminates before the expiration of such sublease, the sublessee thereunder
        will, at Lessor’s option, attorn to Lessor and waive any right the sublessee may
        have to terminate the sublease or to surrender possession thereunder, as
        a
        result of the termination of this Lease, and (c) if the sublessee receives
        a
        written Notice from Lessor or Lessor’s assignee, if any, stating that Lessee is
        in default under this Lease, the sublessee thereafter shall be obligated
        to pay
        all rentals accruing under the sublease directly to the party giving such
        Notice, or as such party may direct, and such payments shall be credited
        against
        the amounts owing by Lessee under this Lease.

       

      22.3  Sublease
        Limitation.
        Anything contained in this Lease to the contrary notwithstanding, even if
        a
        sublease of a Leased Property is permitted, Lessee shall not sublet such
        Leased
        Property on any basis such that the rental to be paid by the sublessee
        thereunder would be based, in whole or in part, on either (a) the income
        or
        profits derived by the business activities of the sublessee, or (b) any other
        formula such that any portion of the sublease rental received by Lessor would
        fail to qualify as “rents from real property” within the meaning of Section
        856(d) of the Code, or any similar or successor provision thereto. The parties
        agree that this Section shall not be deemed waived or modified by implication,
        but may be waived or modified only by an instrument in writing explicitly
        referring to this Section by number.

       

      ARTICLE
        XXIII  

       

      23.1  Financial
        Statements and Other Reports and Materials Required by Lessor.
        Lessee
        shall furnish to Lessor, in paper form and by electronic means satisfactory
        to
        Lessor:

       

      (a)  Within
        ninety (90) days after the end of each of Lessee’s fiscal years: (i) Lessee’s
        Financial Statements; (ii) separate financial statements for each of the
        Facilities that are prepared in accordance with GAAP, except for principles
        of
        consolidation; (iii) a variance report comparing actual items of income and
        expenses to such items as budgeted, together with an explanation of the reason
        or reasons for each variance of more than five percent (5%); and (iv) an
        Officer’s Certificate stating that Lessee is not in default in the performance
        or observance of any of the terms of this Lease, or if Lessee is in default,
        specifying all such defaults, the nature thereof, and the steps being taken
        to
        remedy the same;

       

      (b)  Within
        thirty five (35) days after the end of each of Lessee’s quarters, quarterly
        consolidated Financial Statements of Lessee, together with an Officer’s
        Certificate stating that (i) Lessee is not in default of any covenant set
        forth
        in Section 8 of this Lease, or if Lessee is in default, specifying all such
        defaults, the nature thereof, and the steps being taken to remedy the same;
        (ii)
        each Facility that participates in the Medicare program is in compliance
        with
        the terms of its Medicare provider agreement and in good standing with the
        Medicare program; (iii) each Facility that participates in the Medicaid program
        is in compliance with the terms of its Medicaid provider agreement and in
        good
        standing with the Medicaid program; and (iv) the then-current number of licensed
        and operating beds at each Facility;

       

      (c)  Within
        thirty (30) days after the end of each month, monthly financial reports for
        each
        Facility, including detailed statements of income and expense and detailed
        operational statistics regarding occupancy rates, patient mix and patient
        rates
        by type for the Facility, including a rent roll and an aged accounts receivables
        report in sufficient detail to show amounts due from each class of patient
        mix
        (i.e., private, Medicare, Medicaid and Veterans Administration) by the account
        age classifications of 30 days, 60 days, 90 days, 120 days and over 120
        days;

       

      (d)  Within
        fifteen (15) days of filing a copy of each cost report filed with a governmental
        agency for any Facility;

       

      (e)  Within
        fifteen (15) days of Lessee’s or Manager’s receipt thereof, copies of Medicare
        and Medicaid Rate Letters and correspondence;

       

      (f)  Within
        fifteen (15) days after they are required to be filed with the SEC, copies
        of
        any annual or quarterly report and of information, documents and other reports
        (or copies of such portions of any of the foregoing as the SEC may by rules
        and
        regulations prescribe) that Lessee or Manager is required to file with the
        SEC
        pursuant to Section 13 or 15(d) of the Securities Exchange Act of
        1934;

       

      (g)  Within
        thirty (30) days of Lessee’s or Manager’s receipt thereof, copies of surveys
        performed by the appropriate governmental agencies for licensing or
        certification purposes, including, without limitation, annual surveys, revisits
        and complaint surveys, copies of any plans of correction and all related
        correspondence;

       

      (h)  Immediate
        Notice to Lessor of any action, proposal or investigation by any agency or
        entity, or complaint to such agency or entity, known to Lessee, the result
        of
        which could be to (i) modify in a way adverse to Lessee or revoke or suspend
        or
        terminate, or fail to renew or fully continue in effect, any license or
        certificate or operating authority pursuant to which Lessee carries on any
        part
        of the Primary Intended Use of the Facilities, or (ii) suspend, terminate,
        adversely modify, or fail to renew or fully continue in effect any cost
        reimbursement or cost sharing program by any state or federal governmental
        agency, including but not limited to Medicaid or Medicare or any successor
        or
        substitute therefor, or seek return of or reimbursement for any funds previously
        advanced or paid pursuant to any such program, or (iii) impose any bed hold,
        limitation on patient admission or similar restriction on any Leased Property,
        or (iv) prosecute any party with respect to the operation of any activity
        on the
        Facilities or enjoin any party or seek any civil penalty in excess of One
        Thousand Dollars ($1,000.00) in respect thereof;

       

      (i)  As
        soon
        as it is prepared in each Lease Year, but not later than the last day of
        the
        second (2nd)
        month
        in each Lease Year (i) a capital and operating budget for the Facilities
        for
        that Lease Year, which budget shall be subject to Lessor’s reasonable approval;
        and (ii) a marketing plan for that Lease Year;

       

      (j)  With
        reasonable promptness, such other information respecting the financial condition
        and affairs of Lessee and the Facilities as Lessor reasonably may request
        from
        time to time, including, without limitation, any such other information as
        may
        be available to the administration of the Leased Properties;

       

      (k)  Upon
        Lessor’s request from time to time, such additional information and unaudited
        quarterly financial information concerning the Leased Properties and Lessee
        as
        Lessor may require for its on-going filings with the Securities and Exchange
        Commission, under both the Securities Act of 1933, as amended, and the
        Securities Exchange Act of 1934, as amended, including, but not limited to,
        10-Q
        Quarterly Reports, 10-K Annual Reports and registration statements to be
        filed
        by Lessor during the Term of this Lease; and

       

      (l)  At
        least
        fifteen (15) Business Days after the expiration of each license and permit
        required for the operation of the Facilities for the Primary Intended Use,
        evidence satisfactory to Lessor that such license or permit has been
        unconditionally renewed by the issuer thereof.

       

      23.2  Public
        Offering Information.
        Lessee
        specifically agrees that Lessor may include financial information and
        information concerning the operation of the Facilities that does not violate
        the
        confidentiality of the facility-patient relationship and the physician-patient
        privilege under applicable laws, in offering memoranda or prospectus, or
        similar
        publications in connection with syndications or public offerings of Lessor’s
        securities or interests, and any other reporting requirements under applicable
        Federal and State Laws, including those of any successor to Lessor. Lessee
        agrees to provide such other reasonable information necessary with respect
        to
        Lessee and the Leased Properties to facilitate a public offering or to satisfy
        SEC or regulatory disclosure requirements. Upon request of Lessor, Lessee
        shall
        notify Lessor of any necessary corrections to information Lessor proposes
        to
        publish within a reasonable period of time (not to exceed three (3) days)
        after
        being informed thereof by Lessor.

       

      ARTICLE
        XXIV  

       

      24.1  Lessor’s
        Right to Inspect.
        Lessee
        shall permit Lessor and its authorized representatives to inspect the Leased
        Properties and Lessee’s books and records pertaining thereto during normal
        business hours upon twenty-four hours Notice.

       

      ARTICLE
        XXV  

       

      25.1  No
        Waiver.
        No
        failure by Lessor to insist upon the strict performance of any term hereof
        or to
        exercise any right, power or remedy consequent upon a breach hereof, and
        no
        acceptance of full or partial payment of Rent during the continuance of any
        such
        breach, shall constitute a waiver of any such breach or of any such term.
        No
        waiver of any breach shall affect or alter this Lease, which shall continue
        in
        full force and effect with respect to any other then existing or subsequent
        breach.

       

      ARTICLE
        XXVI  

       

      26.1  Remedies
        Cumulative.
        To the
        extent permitted by law, each legal, equitable or contractual right, power
        and
        remedy of Lessor now or hereafter provided either in this Lease or by statute
        or
        otherwise shall be cumulative and concurrent and shall be in addition to
        every
        other right, power and remedy, and the exercise or beginning of the exercise
        by
        Lessor of any one or more of such rights, powers and remedies shall not preclude
        the simultaneous or subsequent exercise by Lessor of any or all of such other
        rights, powers and remedies.

       

      ARTICLE
        XXVII  

       

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

       

      ARTICLE
        XXVIII  

       

      28.1  No
        Merger of Title.
        There
        shall be no merger of this Lease or of the leasehold estate created hereby
        by
        reason of the fact that the same person, firm, corporation or other entity
        may
        acquire, own or hold, directly or indirectly, (a) this Lease or the leasehold
        estate created hereby or any interest in this Lease or such leasehold estate,
        and (b) the fee estate in the Leased Properties.

       

      28.2  No
        Partnership.
        Nothing
        contained in this Lease will be deemed or construed to create a partnership
        or
        joint venture between Lessor and Lessee or to cause either party to be
        responsible in any way for the debts or obligations of the other or any other
        party, it being the intention of the parties that the only relationship
        hereunder is that of Lessor and Lessee.

       

      ARTICLE
        XXIX  

       

      29.1  Conveyance
        by Lessor.
        If
        Lessor or any successor owner of the Leased Properties conveys the Leased
        Properties other than as security for a debt, Lessor or such successor owner,
        as
        the case may be, shall be released from all future liabilities and obligations
        of Lessor under this Lease arising or accruing from and after the date of
        such
        conveyance or other transfer, and all such future liabilities and obligations
        shall be binding upon the new owner.

       

      ARTICLE
        XXX  

       

      30.1  Quiet
        Enjoyment.
        So long
        as Lessee pays all Rent as it becomes due and complies with all of the terms
        of
        this Lease and performs its obligations hereunder, Lessee shall peaceably
        and
        quietly have, hold and enjoy the Leased Properties for the Term, free of
        any
        claim or other action by Lessor or anyone claiming by, through or under Lessor,
        but subject to all liens and encumbrances of record as of the date hereof
        or
        hereafter provided for in this Lease or consented to by Lessee. Except as
        otherwise provided in this Lease, no failure by Lessor to comply with the
        foregoing covenant will give Lessee any right to cancel or terminate this
        Lease
        or abate, reduce or make a deduction from or offset against the Rent or any
        other sum payable under this Lease, or to fail to perform any other obligation
        of Lessee. Lessee shall, however, have the right, by separate and independent
        action, to pursue any claim it may have against Lessor as a result of a breach
        by Lessor of the covenant of quiet enjoyment contained in this
        Section.

       

      ARTICLE
        XXXI  

       

      31.1  Notices.
        Any
        notice, request or other communication to be given by any party hereunder
        shall
        be in writing and shall be sent by registered or certified mail, postage
        prepaid, or by hand delivery or facsimile transmission to the following
        address:

       

      To
        Lessee:  CSC
        MSTR
        LSCO, LLC 

      c/o
        CommuniCare Health Services

      4700
        Ashwood Drive, Suite 200

      Cincinnati,
        OH 45241

      Attn:
        Stephen L. Rosedale

      Telephone
        No.: (513) 489 - 7100

      Facsimile
        No.: (513) 489-7199

       

      With
        copy
        to   Benesch,
        Friedlander, Coplan & Aronoff LLP

      (which
        shall not 2300
        BP
        Tower

      constitute
        notice): 200
        Public Square

      Cleveland,
        OH 44114-2378

      Attn: Harry
        M.
        Brown

      Phone:
        (216) 363-4606

      Fax:
        (216) 363-4588

       

      To
        Lessor:    OHI
        ASSET
        II (OH), LLC

      c/o
        Omega
        Healthcare Investors, Inc.

      9690
        Deereco Road, Suite 100

      Timonium,
        MD 21093

      Attn.:
        Daniel J. Booth

      Telephone
        No.: (410) 427-1700

      Facsimile
        No.: (410) 427-8800

       

      And
        with
        copy to  Myers
        Nelson Dillon & Shierk, PLLC

      (which
        shall not  125
        Ottawa Ave., N.W., Suite 270

      
        	 	
                constitute
                  notice):

              	
                Grand
                  Rapids, Michigan 49503

              

      

      
        	 	 	 	 	 	 	
                Attn:
                  Mark E. Derwent

              

      

      Telephone
        No.: (616) 233-9640

      Facsimile
        No.: (616) 233-9642 

       

      or
        to
        such other address as either party may hereafter designate. Notice shall
        be
        deemed to have been given on the date of delivery if such delivery is made
        on a
        Business Day, or if not, on the first Business Day after delivery. If delivery
        is refused, Notice shall be deemed to have been given on the date delivery
        was
        first attempted. Notice sent by facsimile transmission shall be deemed given
        upon confirmation that such Notice was received at the number specified above
        or
        in a Notice to the sender. If Lessee has vacated the Leased Properties, Lessor’s
        Notice may be posted on the door of a Leased Property.

       

      ARTICLE
        XXXII  

       

      32.1  Fair
        Market Rent.
        If it
        becomes necessary to determine Fair Market Rent for any purpose under this
        Lease, the party required or permitted to give Notice of such required
        determination shall include in the Notice the name of a person selected to
        act
        as appraiser on its behalf. Within ten (10) days after such Notice, the party
        receiving such Notice shall give Notice to the other party of its selection
        of a
        person to act as appraiser on its behalf. The appraisers thus appointed,
        each of
        whom must be a member of the Appraisal Institute (or any successor organization
        thereto) and experienced in appraising facilities used for purposes similar
        to
        the Primary Intended Use of the Facilities, shall, within forty-five (45)
        days
        after the date of the Notice appointing the first appraiser, proceed to appraise
        the Leased Property or Leased Properties, as the case may be, to determine
        the
        Fair Market Rent thereof as of the relevant date (giving effect to the impact,
        if any, of inflation between the date of their decision and the relevant
        date);
        provided, however, that if only one appraiser has been so appointed, or if
        two
        appraisers have been so appointed but only one such appraiser has made such
        determination within fifty (50) days after the date of the Notice appointing
        the
        first appraiser, then the determination of such appraiser shall be final
        and
        binding upon the parties. To the extent consistent with sound appraisal practice
        at the time of any such appraisal, such appraisal shall be made on a basis
        consistent with the basis on which the Leased Property or Leased Properties
        were
        appraised for purposes of determining its fair market value at the time of
        Lessor’s acquisition thereof. If two appraisers have been appointed and have
        made their determinations within the respective requisite periods set forth
        above, and if the difference between the amounts so determined does not exceed
        ten percent (10%) of the lesser of such amounts, then the Fair Market Rent
        shall
        be an amount equal to fifty percent (50%) of the sum of the amounts so
        determined. If the difference between the amounts so determined exceeds ten
        percent (10%) of the lesser of such amounts, then such two appraisers shall
        within twenty (20) days appoint a third appraiser. If no such appraiser is
        appointed within such twenty (20) days or within ninety (90) days of the
        date of
        the Notice appointing the first appraiser, whichever is earlier, either Lessor
        or Lessee may apply to any court having jurisdiction to have such appointment
        made by such court. Any appraiser appointed by the original appraisers or
        by
        such court shall be instructed to determine the Fair Market Rent within
        forty-five (45) days after appointment of such appraiser. The determination
        of
        the appraiser which differs most in terms of dollar amount from the
        determinations of the other two appraisers shall be excluded, and the average
        of
        the remaining two determinations shall be final and binding upon Lessor and
        Lessee as the Fair Market Rent of the Leased Property or Leased Properties,
        as
        the case may be. If the Fair Market Rent is being determined for more than
        one
        year, the Fair Market Rent may include such annual increases, if any, as
        the
        appraisers determine to be in accordance with the terms of this
        Lease.

       

      ARTICLE
        XXXIII  

       

      33.1  Lessor’s
        Option to Purchase Lessee’s Personal Property.
        At the
        expiration or termination of this Lease, at Lessor’s option Lessee shall be
        deemed to have sold, assigned, transferred and conveyed all of Lessee’s Personal
        Property not integral to the Primary Intended Use, or such portion thereof
        as
        may be designated by Lessor in its exercise of its option, to Lessor pursuant
        to
        Section 6.3 hereof for an amount equal to the fair market value of such Personal
        Property as determined pursuant to an appraisal, subject to, and with
        appropriate credits for, any obligations owing from Lessee to Lessor and
        for the
        then outstanding balances owing on all equipment leases, conditional sale
        contracts and any other encumbrances to which such Personal Property is subject.
        Lessor’s option shall be exercised by Notice to Lessee no more than one hundred
        eighty (180) days, nor less than ninety (90) days, before the expiration
        of the
        Initial Term or, if the Term is renewed as provided herein, before the
        expiration of the last Renewal Term, unless this Lease is terminated prior
        to
        its expiration date by reason of an Event of Default, in which event Lessor’s
        option shall be exercised not more than ninety (90) days after the Termination
        Date. If Lessee does not receive Lessor’s Notice exercising its option before
        the expiration of the relevant time period, Lessee shall give Lessor Notice
        thereof, and Lessor’s option shall continue in full force and effect for a
        period of thirty (30) days after such Notice from Lessee. If Lessor exercises
        its option, Lessee shall, in exchange for Lessor’s payment of the purchase
        price, deliver the purchased Lessee’s Personal Property to Lessor, together with
        a bill of sale and such other documents as Lessor reasonably may request
        in
        order to carry out the purchase, and the purchase shall be closed by such
        delivery and such payment on the date set by Lessor in its Notice of exercise.
        

       

      33.2  Facility
        Trade Names.
        If this
        Lease is terminated pursuant to Section 16.1 or Lessor exercises its option
        to
        purchase Lessee’s Personal Property pursuant to Section 34.1, Lessee shall be
        deemed to have assigned to Lessor the exclusive right to use the Facility
        Trade
        Names (except for the names “CommuniCare”, any variants thereof, and any trade
        name which is commonly used as part of a long term marketing program among
        multiple facilities by Affiliates of Lessee) in perpetuity in the markets
        in
        which the Facilities are located, and Lessee shall not after any such
        termination use the Facility Trade Names in any business that competes with
        the
        Facilities. 

       

      33.3  Transfer
        of Operational Control of the Facilities.

       

      33.3.1  Lessee
        acknowledges and agrees that, subject to applicable law, the certificates
        of
        need and licenses necessary to operate the Leased Properties for the Primary
        Intended Use are appurtenant to the Leased Properties, both during and following
        the expiration or earlier termination of the Term. If the certificates of
        need
        or licenses to operate the Leased Properties for the Primary Intended Use
        are
        issued to Lessee, the Sublessees or the Manager, Lessee agrees that it will
        cooperate with Lessor to turn over to Lessor or its designee, upon the
        expiration or earlier termination of the Term, all of Lessee’s rights in
        connection with the certificate of need and/or licenses.

       

      33.3.2  Upon
        the
        expiration or earlier termination of the Term, Lessee shall cooperate fully
        in
        transferring operational control of the Facilities to Lessor or Lessor’s nominee
        and shall use its best efforts to cause the business conducted at the Facilities
        to continue without interruption. To that end, pending completion of the
        transfer of the operational control of the Facilities to Lessor or its
        nominee:

       

      (a)  Lessee
        will not terminate the employment of any employees without just cause, or
        change
        any salaries; provided, however, that without the advance written consent
        of
        Lessor Lessee may grant pre-announced wage increases of which Lessor has
        knowledge, increases required by written employment agreements and normal
        raises
        to non-officers at regular review dates; and Lessee will not hire any additional
        employees except in good faith in the ordinary course of business;
        and

       

      (b)  Lessee
        will provide all necessary information requested by Lessor or its nominee
        for
        the preparation and filing of any and all necessary applications or
        notifications of any federal or state governmental authority having jurisdiction
        over a change in the operational control of the Facilities, and any other
        information reasonably required to effect an orderly transfer of the Facilities,
        and Lessee will use its best efforts to cause all operating health care licenses
        to be transferred to Lessor or to Lessor’s nominee; and

       

      (c)  Lessee,
        Lessor and any new operator will enter into an operations transfer agreement
        substantially in the form of Exhibit
        E
        to this
        Lease.

       

      33.4  Intangibles
        and Personal Property.
        Notwithstanding any other provision of this Lease, but subject to Section
        6.4
        relating to the security interest in favor of Lessor, Lessor’s Personal Property
        shall not include goodwill nor shall it include any other intangible personal
        property that is severable from Lessor’s “interests in real property” within the
        meaning of Section 856(d) of the Code, or any similar or successor provision
        thereto.

       

      ARTICLE
        XXXIV  

       

      34.1  Arbitration.
        Except
        with respect to the payment of Rent under this Lease, the determination of
        Fair
        Market Rent (which shall be determined solely in accordance with Section
        32.1),
        and
        any proceedings to recover possession of one or more of the Leased Properties,
        if any controversy arises between the parties hereto as to any of the provisions
        of this Lease or the performance thereof, and if the parties are unable to
        settle the controversy by agreement or as otherwise provided herein, the
        controversy shall be decided by arbitration. The arbitration shall be conducted
        by three arbitrators selected in accordance with the rules and procedures
        of the
        American Arbitration Association. The decision of the arbitrators shall be
        final
        and binding, and judgment may be entered thereon in any court of competent
        jurisdiction. The decision shall set forth in writing the basis for the
        decision. In rendering the decision and award, the arbitrators shall not
        add to,
        subtract from or otherwise modify the provisions of this Lease. The expense
        of
        the arbitration shall be divided between Lessor and Lessee unless otherwise
        specified in the award. Each party in interest shall pay the fees and expenses
        of its own counsel. The arbitration shall be conducted in Cleveland, Ohio.
        In
        any arbitration, the parties shall be entitled to conduct discovery in the
        same
        manner as permitted under Federal Rules of Civil Procedure 26 through 37,
        as
        amended. No provision in this Article shall limit the right of any party
        to this
        Agreement to obtain provisional or ancillary remedies from a court of competent
        jurisdiction before, after or during the pendency of any arbitration, and
        the
        exercise of such remedies does not constitute a waiver of the right of either
        party to arbitration.

       

      ARTICLE
        XXXV  

       

      35.1  Commissions.
        Lessee
        represents and warrants to Lessor that no real estate commission, finder’s fee
        or the like is due and owing to any person in connection with this Lease.
        Lessee
        agrees to save, indemnify and hold Lessor harmless from and against any and
        all
        claims, liabilities or obligations for brokerage, finder’s fees or the like in
        connection with this Lease or the transactions contemplated hereby, asserted
        by
        any person on the basis of any statement or act alleged to have been made
        or
        taken by Lessee.

       

      ARTICLE
        XXXVI  

       

      36.1  Memorandum
        or Short Form of Lease.
        Lessor
        and Lessee shall, promptly upon the request of either, enter into a Memorandum
        or Short Form of this Lease, substantially in the form of attached Exhibit
        F,
        with
        such modifications as may be appropriate under the laws and customs of the
        States and in the customary form suitable for recording under the laws of
        each
        of the States. Lessee shall pay all costs and expenses of recording such
        memorandum or short form of this Lease.

       

      ARTICLE
        XXXVII  

       

      37.1  Security
        Deposit.
        Concurrently
        with Lessee’s execution of this Lease, Lessee shall deliver to Lessor a security
        deposit in the amount of Nine Hundred Sixty Thousand Five Hundred Dollars
        ($962,500), in the form of an absolute, unconditional site draft letter of
        credit for a term of one (1) year (renewable automatically) issued by an
“A”
        rated financial institution (“Security
        Deposit”),
        which
        Lessor shall hold as security for the full and faithful performance by Lessee
        of
        each and every term, provision, covenant and condition of this Lease in
        accordance with, and subject to, the terms and conditions of the Letter of
        Credit Agreement. On the first day of the sixth and twelfth month of the
        Initial
        Term, Lessee shall increase the Security Deposit by depositing with Lessor
        Nine
        Hundred Sixty Thousand Five Hundred Dollars ($962,500) until the Security
        Deposit equals of Two Million Eight Hundred Eighty Seven Thousand Five Hundred
        Dollars ($2,887,500), at which time Lessee shall cause to be issued to Lessor
        a
        new letter of credit in the amount of Two Million Eight Hundred Eighty Seven
        Thousand Five Hundred Dollars ($2,887,500), upon the receipt of which Lessor
        shall return to Lessee the Letter of Credit for Nine Hundred Sixty Thousand
        Five
        Hundred Dollars ($962,500) and the cash so deposited. If at any time the
        Security Deposit is in the form of cash, it shall be deposited by Lessor
        into an
        interest-bearing account and the account will be identified as consisting
        of the
        Security Deposit under this Lease, and the interest shall be added to and
        become
        part of the Security Deposit. The Security Deposit shall not be considered
        an
        advance payment of Rent (or of any other sum payable to Lessee under this
        Lease)
        or a measure of Lessor’s damages in case of a default by Lessee. The Security
        Deposit shall not be considered a trust fund, and Lessee expressly acknowledges
        and agrees that Lessor is not acting as a trustee or in any fiduciary capacity
        in controlling or using the Security Deposit. Lessor shall have no obligation
        to
        maintain the Security Deposit separate and apart from Lessor’s general and/or
        other funds. The Security Deposit, less any portion thereof applied as provided
        in the Letter of Credit Agreement or Section 37.2, shall be returned to Lessee
        within sixty (60) days following the expiration of the Term. 

       

      37.2  Application
        of Security Deposit.
        If
        Lessee defaults in respect of any of the terms, provisions, covenants and
        conditions of this Lease or of any agreement or instrument with which this
        Lease
        is cross-defaulted), including, but not limited to, payment of any Rent and
        other sums of money payable by Lessee, Lessor may, but shall not be required
        to,
        in addition to and not in lieu of any other rights and remedies available
        to
        Lessor, apply all or any part of the Security Deposit to the payment of any
        sum
        in default, or any other sum that Lessor may expend or be required to expend
        by
        reason of Lessee’s default, including but not limited to, any damages or
        deficiency in reletting the Leased Properties,. Whenever, and as often as,
        Lessor has applied any portion of the Security Deposit to cure Lessee’s default
        hereunder or under any agreement with which this Lease is cross-defaulted,
        Lessee shall, within ten (10) days after Notice from Lessor, deliver a new
        letter of credit meeting the requirements of the Letter of Credit Agreement
        to
        Lessor (or, at Lessor’s option, deposit additional money with Lessor) sufficient
        to restore the Security Deposit to the full amount then required to be deposited
        with Lessor pursuant to Section 37.1 above, and Lessee’s failure to do so shall
        constitute an Event of Default without any further Notice.

       

      37.3  Transfer
        of Security Deposit.
        If
        Lessor transfers its interest under this Lease, Lessor shall assign the Security
        Deposit to the new lessor and thereafter Lessor shall have no further liability
        for the return of the Security Deposit, and Lessee agrees to look solely
        to the
        new lessor for the return of the Security Deposit. The provisions of the
        preceding sentence shall apply to every transfer or assignment of Lessor’s
        interest under this Lease. Lessee agrees that it will not assign or encumber
        or
        attempt to assign or encumber the Security Deposit and that Lessor, its
        successors and assigns may return the Security Deposit to the last Lessee
        in
        possession at the last address for which Notice has given by such Lessee
        and
        that Lessor thereafter shall be relieved of any liability therefor, regardless
        of one or more assignments of this Lease or any such actual or attempted
        assignment or encumbrances of the Security Deposit.

       

      ARTICLE
        XXXVIII  

       

      38.1  Miscellaneous.

       

      38.1.1  Survival,
        Choice of law.
        Anything contained in this Lease to the contrary notwithstanding, all claims
        against, and liabilities of, Lessee or Lessor arising prior to the date of
        expiration or termination of this Lease shall survive such expiration or
        termination. If any term or provision of this Lease or any application thereof
        is held invalid or unenforceable, the remainder of this Lease and any other
        application of such term or provisions shall not be affected thereby. Neither
        this Lease nor any provision hereof may be changed, waived, discharged or
        terminated except by an instrument in writing and in recordable form signed
        by
        Lessor, any Facility Mortgagee and Lessee. All the terms and provisions of
        this
        Lease shall be binding upon and inure to the benefit of the parties hereto
        and
        their respective successors and assigns. The headings in this Lease are for
        convenience of reference only and shall not limit or otherwise affect the
        meaning hereof. This Lease shall be governed by and construed in accordance
        with
        the laws of the state of Ohio, except as to matters which, under applicable
        procedural conflicts of laws rules require the application of laws of another
        State.

       

      LESSEE
        CONSENTS TO IN PERSONAM JURISDICTION BEFORE THE STATE AND FEDERAL COURTS
        OF THE
        STATES OF MARYLAND, OHIO, AND PENNSYLVANIA AND AGREES THAT ALL DISPUTES
        CONCERNING THIS AGREEMENT BE HEARD IN THE STATE AND FEDERAL COURTS LOCATED
        IN
        THE STATES OF MARYLAND OR EACH STATE IN WHICH A FACILITY IS LOCATED. LESSEE
        AGREES THAT SERVICE OF PROCESS MAY BE EFFECTED UPON IT UNDER ANY METHOD
        PERMISSIBLE UNDER THE LAWS OF THE STATES OF MARYLAND, OHIO, AND PENNSYLVANIA
        AND
        IRREVOCABLY WAIVES ANY OBJECTION TO VENUE IN THE STATE AND FEDERAL COURTS
        OF THE
        STATES OF MARYLAND, OHIO, OR PENNSYLVANIA.

       

      38.1.2  Limitation
        on Recovery.
        Lessee
        specifically agrees to look solely to Lessor’s interest in the Leased Properties
        for recovery of any judgment from Lessor, it being specifically agreed that
        no
        constituent shareholder, officer or director of Lessor shall ever be personally
        liable for any such judgment or for the payment of any monetary obligation
        to
        Lessee. Furthermore, Lessor (original or successor) shall never be liable
        to
        Lessee for any indirect or consequential damages suffered by Lessee from
        whatever cause.

       

      38.1.3  Waivers.
        Lessee
        waives any defense by reason of any disability of Lessee, and waives any
        other
        defense based on the termination of Lessee’s (including Lessee’s successor’s)
        liability from any cause. 

       

      38.1.4  Consents.
        Whenever the consent or approval of Lessor is required hereunder, Lessor
        may in
        its sole discretion and without reason withhold that consent or approval
        unless
        otherwise specifically provided.

       

      38.1.5  Counterparts.
        This
        Lease may be executed in separate counterparts, each of which shall be
        considered an original when each party has executed and delivered to the
        other
        one or more copies of this Lease.

       

      38.1.6  Options
        Personal.
        The
        renewal options granted to Lessee in this Lease are granted solely to Lessee
        and
        are not assignable or transferable except in connection with a Transfer
        permitted in Article XXII. 

       

      38.1.7  Rights
        Cumulative.
        Except
        as provided herein to the contrary, the respective rights and remedies of
        the
        parties specified in this Lease shall be cumulative and in addition to any
        rights and remedies not specified in this Lease.

       

      38.1.8  Entire
        Agreement.
        There
        are no oral or written agreements or representations between the parties
        hereto
        affecting this Lease. This Lease supersedes and cancels any and all previous
        negotiations, arrangements, representations, brochures, agreements and
        understandings, if any, between Lessor and Lessee.

       

      38.1.9  Amendments
        in Writing.
        No
        provision of this Lease may be amended except by an agreement in writing
        signed
        by Lessor, any Facility Mortgagee and Lessee.

       

      38.1.10  Lessee
        to Pay Reasonable Expenses.
        Lessee
        shall pay or reimburse Lessor for all reasonable out-of-pocket costs and
        expenses incurred by Lessor in connection with or relating in any way to
        the
        administration of this Lease, including without limitation, search costs,
        audit
        fees, appraisal fees, attorneys’ fees, and other costs paid or incurred by
        Lessor in the analysis, administration and enforcement of this Lease and
        the
        other Transaction Documents, the protection and defense of the rights of
        Lessor
        in and to the Leased Properties, the Collateral and the other Transaction
        Documents, or as otherwise referred to in this Lease or in the other Transaction
        Documents, and all costs and expenses relating to extensions, amendments,
        waivers, or consents requested by Lessee, pursuant to this Lease or any other
        Transaction Document or any agreements with other parties or termination
        of this
        Lease (collectively, “Reasonable
        Expenses”);
        provided, however that shall Lessee not be liable for payment or reimbursement
        of Reasonable Expenses incurred in connection with the initial documentation
        and
        closing of the Acquisition Agreements, the Working Capital Loan Agreement
        and
        this Lease to the extent they are included in the Investment Amount as defined
        in the Agreement to Lease. All such Reasonable Expenses shall be due on demand;
        provided, however, that so long as no Event of Default has occurred hereunder,
        Reasonable Expenses incurred after the date of this Lease which are unrelated
        to
        the closing on the Acquired Facilities shall be paid on or before the earlier
        of
        (i) 30 days following written notice thereof to Lessee or (ii) the date of
        expiration or earlier termination of this Lease. Any Reasonable Expenses
        not
        paid when due shall bear interest at the Overdue Rate.
        Notwithstanding the foregoing, unless Lessor has a reasonable basis to conclude
        that the value of one or more of the Facilities has diminished in any material
        respect, Lessee shall not be obligated to pay: (i) any appraisal fees incurred
        in connection with Lessor’s financing activities or corporate compliance
        requirements, or (ii) for more than one appraisal per Facility during any
        four
        year period. 

       

      38.1.11  Severability.
        If any
        provision of this Lease or the application of such provision to any person,
        entity or circumstance is found invalid or unenforceable by a court of competent
        jurisdiction, such determination shall not affect the other provisions of
        this
        Lease and all other provisions of this Lease shall be deemed valid and
        enforceable.

       

      38.1.12  Time
        of the Essence.
        Except
        for the delivery of possession of the Facilities to Lessee, time is of the
        essence with respect to all provisions of this Lease of which time is an
        element.

       

      SIGNATURE
        PAGES FOLLOW

       

      

       

      

       

      LESSOR:

       

      OHI
        ASSET
        II (OH), LLC

      

      By: Omega
        Healthcare Investors, a Maryland 

      corporation,
        its sole member

      

       

      By: /s/
        Daniel J. Booth 

      Name: Daniel
        J.
        Booth

      Title: Chief
        Operating Officer

       

      

       

      THE
        STATE
        OF OHIO  )

      )

      COUNTY
        OF
 CUYAHOGA  )

       

      This
        instrument was acknowledged before me on the 14th day of December, 2005,
        by
        Daniel J. Booth, the Chief Operating Officer of Omega Healthcare Investors,
        Inc., a Maryland corporation, the sole member of OHI Asset II (OH), LLC,
        a
        Delaware limited liability company, on behalf of said limited liability
        company.

       

      Notary
        Public

       

      /s/
        Donna Fuller      

       

      
        
          
            Signature
              Page of
              2

            

          

          
          

        

        
          
          

          
            

          

        

        
          
          

          
            Signature
              Page to 

            MASTER
              LEASE

            Multiple
              Facilities

            (CSC
              Transaction)

            

          

        

      

      

       

      LESSEE:

       

      CSC
        MSTR
        LSCO, LLC 

      

      By: HEALTH
        CARE HOLDINGS, LLC,

      its
        Sole
        Member

      

       

      By: /s/
        Charles R. Stoltz 

      Name: Charles
        R. Stolz

      Title: Treasurer
        

       

      

       

      THE
        STATE
        OF OHIO  )

      )

      COUNTY
        OF
        CUYAHOGA  )

       

      This
        instrument was acknowledged before me on the 14th day of December, 2005,
        by
        Charles R. Stolz, the Treasurer of HEALTH CARE HOLDINGS, LLC, a Michigan
        limited
        liability company, the sole member of CSC MSTR LSCO, LLC, an Ohio limited
        liability company, on behalf of said company.

       

      Notary
        Public

       

      /s/
        Donna Fuller     

       

      

       

      

      
        
          
            Signature
              Page of
              2

            

          

          
          

        

        
          
          

          
            

          

        

        
          
          

          Signature Page to MASTER LEASEMultiple
            Facilities(CSC Transaction)

        

      

      LIST
        OF EXHIBITS TO LEASE

       

      

       

      Exhibits
        A
        -
      Facility
        Trade Names

       

      Exhibits
        B-1 through B-11
        -
  Description
        of Land

       

      Exhibit
        C
        -
      Form
        of
        Lessee’s Certificate

       

      Exhibit
        D
        -
      Permitted
        Encumbrances 

       

      Exhibit
        E
        -
      Form
        of
        Operations Transfer Agreement

       

      Exhibit
        F
        -
      Form
        of
        Memorandum and Short Form of Lease 

       

      Exhibit
        G -      Allocation
        of Base Rent

       

      

       

      

       

      
        
          
            A-

          

          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      EXHIBIT
        A

       

      FACILITY
        TRADE NAMES

      

      

      

      
        
          
            

          

          
          

        

        
          
          

          
            

          

        

        
          
          

          
          

        

      

      EXHIBITS
        B-1 THROUGH B-11

       

      DESCRIPTION
        OF LAND

       

      

      

      

      
        
          
            B-

          

          
          

        

        
          
          

          
            

          

        

        
          
          

          
          

        

      

      EXHIBIT
        C

       

      FORM
        OF LESSEE’S CERTIFICATE

       

      The
        undersigned (“Lessee”) under that certain Lease (the “Lease”) dated , 20 and
        made with, a (“Lessor”), hereby certifies:

       

      1.  That
        it
        is Lessee under the Lease; that attached hereto as Exhibit
        “A”
        is a
        true and correct copy of the Lease; that the Lease is now in full force and
        effect and has not been amended, modified or assigned except as disclosed
        or
        included in Exhibit
        “A”;
        and
        that the Lease constitutes the entire agreement between Lessor and
        Lessee.

       

      2.  That
        there exist no defenses or offsets to enforcement of the Lease; that there
        are,
        as of the date hereof, no breaches or uncured defaults on the part of Lessee
        or
        Lessor thereunder; and that Lessee has no notice or knowledge of any prior
        assignment, hypothecation, subletting or other transfer of Lessor’s interest in
        the Lease.

       

      3.  That
        the
        Base Rent for the first Lease Year under this Lease is $_____________.
        All
        Rent which is due has been paid, and there are no unpaid Additional Charges
        owing by Lessee under the Lease as of the date hereof. No Base Rent or other
        items (including without limitation security deposit and any impound account
        or
        funds) have been paid by Lessee in advance under the Lease except for the
        security deposit held by Lessor [in the form of an irrevocable letter of
        credit]
        in the amount of $ and the monthly installment of Base Rent that became due
        on
        .

       

      4.  That
        Lessee has no claim against Lessor for any security deposit, impound account
        or
        prepaid Rent except as provided in paragraph 3 of this Certificate.

       

      5.  That
        there are no actions, whether voluntary or otherwise, pending against the
        undersigned under the bankruptcy laws of the United States or any state thereof,
        nor has Lessee nor, to the best of Lessee’s knowledge has Lessor begun any
        action, or given or received any notice for the purpose of termination of
        the
        Lease.

       

      6.  That
        there are, as of the date hereof, no breaches or uncured defaults on the
        part of
        Lessee under any other agreement executed in connection with the
        Lease.

       

      7.  This
        Certificate has been requested by Lessor pursuant to Section 19.3 of this
        Lease
        and for the benefit of __________________________________(“Relying Party”). The
        Relying Party is entitled to rely on the statements of Lessee contained in
        this
        certificate.

       

      8.  All
        capitalized terms used herein and not defined herein shall have the meanings
        for
        such terms set forth in the Lease.

       

      Dated: _____,
        20__   LESSEE:

       

      By:

      

      
        
          
            C-

          

          
          

        

        
          
          

          
            

          

        

        
          
          

          
          

        

      

      EXHIBIT
        D

       

      PERMITTED
        ENCUMBRANCES

      

      

      
        
          
            D-

          

          
          

        

        
          
          

          
            

          

        

        
          
          

          
          

        

      

      EXHIBIT
        E

       

      FORM
        OF OPERATIONS TRANSFER AGREEMENT

       

      An
        Operations Transfer Agreement substantially in the form of the MASTER LEASE
        AMENDMENT, SUBLEASE TERMINATION AND OPERATIONS TRANSFER AGREEMENT made and
        entered into as of November 7, 2003, among OMEGA HEALTHCARE INVESTORS, INC.,
        a
        Maryland corporation, CLAREMONT HEALTH CARE HOLDINGS, INC., a Delaware
        corporation, IHS ACQUISITION NO. 123, INC., a Delaware corporation, INTEGRATED
        HEALTH OF WATERFORD COMMONS, INC., a Pennsylvania corporation, OMG MSTR LSCO,
        LLC, an Ohio limited liability company, MIDLAND LEASING CO., LLC, an Ohio
        limited liability company, and GARDEN LEASING CO., LLC, an Ohio limited
        liability company.

       

      

       

      
        
          
            E-

          

          
          

        

        
          
          

          
            

          

        

        
          
          

          
          

        

      

      EXHIBIT
        F

       

      MEMORANDUM
        OR SHORT FORM OF LEASE

       

      THIS
        INSTRUMENT PREPARED BY:

      Mark
        E.
        Derwent

      Myers
        Nelson Dillon & Shierk PLLC

      125
        Ottawa Ave., N.W., Suite 270

      Grand
        Rapids, Michigan 49503

      Telephone:
        616.233.9640

      

      

      

      

      THIS
        LEASE, made and entered into as of _____________, 20__, by and between
        ___________ __________________________________, having its principal office
        at
        9690 Deereco Road, Suite 100, Timonium, MD 21093,
        as
        Lessor, and __________________ Inc., a ___________________, having its principal
        office at ___________________________, as Lessee with respect to the real
        property identified in Exhibit(s)
        ““
        attached
        hereto and located in ________________________________________.

       

      WITNESSETH:

       

      1.  For
        and
        in consideration of the rents reserved and the other covenants contained
        in that
        certain Lease made by and between the parties hereto and dated the date hereof
        (“Lease”), Lessor has and does hereby lease to Lessee, and Lessee has and does
        hereby take and rent from Lessor, all of Lessor’s rights and interest in and to
        the parcel of real property described in Exhibit(s)
        ““
        and all
        fixtures and improvements thereto, and certain personal and other property
        as
        set forth in the Lease.

       

      2.  The
        Initial Term of the Lease is approximately ____________ (_____) years,
        commencing _____________, 200__ and ending on _________________,
        200__.

       

      3.  As
        more
        particularly provided in the Lease, Lessee may elect to renew the original
        term
        for ___ (_) ___ (_) year optional renewal periods for a maximum term, if
        exercised, of_______ (__) years after the Commencement Date.

       

      4.  This
        instrument is executed and recorded for the purpose of giving notice of Lessee’s
        interest in the property covered by the Lease and giving notice of the existence
        of the Lease, to which reference is made for a full statement of the terms
        and
        conditions thereof. The respective addresses of the parties hereto
        are:

       

      Lessee:

       

      Attn:

       

      Lessor:

       

      Attn:

       

      IN
        WITNESS WHEREOF, the parties have caused this instrument to be executed by
        their
        duly authorized [officer or officers] and [general partners] [managing
        partners], as applicable, all as of the day and date first above
        written.

       

      LESSOR:

       

      ___________________________,

      a      

       

      By:      

       

      Name:     

       

      Title:     

       

      LESSEE:

       

      ______________________________

      a      

       

      Name:      

       

      Title:      

      

      
        	
                STATE
                  OF MARYLAND

              	
                )

              
	 	
                )
                  SS

              
	
                COUNTY
                  OF_______________

              	
                )

              

      

      

      This
        instrument was acknowledged before me on the ____ day of _____________, 200__,
        by ___ __________________________, the ________________ of ___________________,
        a __________________________, on behalf of said _______________.

       

      Notary
        Public

       

      

      
        	
                STATE
                  OF MARYLAND

              	
                )

              
	 	
                )
                  SS

              
	
                COUNTY
                  OF_______________

              	
                )

              

      

      

      This
        instrument was acknowledged before me on the ____ day of _____________, 200__,
        by ___ __________________________, the ________________ of ___________________,
        a __________________________, on behalf of said _______________.

       

      Notary
        Public

      

      

      
        
          
            F-

          

          
          

        

        
          
          

          
            

          

        

        
          
          

          
          

        

      

      EXHIBIT
        G

      

      ALLOCATION
        OF BASE RENTExhibit 10.1

                            EMPLOYMENT AGREEMENT

      AGREEMENT dated as of December 15, 2005, by and between NTL
Incorporated, a Delaware corporation (the "Company"), and Stephen Burch
(the "Executive").

      WHEREAS, the Company wishes to employ the Executive as President and
Chief Executive Officer of the Company, effective not later than January
16, 2006 (the "Effective Date");

      WHEREAS, the parties intend that (i) the Executive will reside in the
United Kingdom and perform duties on behalf of the consolidated enterprise
as its President and Chief Executive Officer while present in the United
Kingdom, particularly with regard to the UK business, and (ii) he will
travel to the United States where he will perform duties on behalf of the
Company as its President and Chief Executive Officer, in each case upon the
terms and conditions of this Agreement; and

      WHEREAS, the Executive wishes to accept such employment and to render
services to the Company on the terms and conditions set forth herein.

      NOW, THEREFORE, in consideration of the mutual covenants contained
herein, and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties agree as follows:

      1. EFFECTIVENESS. This Agreement shall become effective as of the
Effective Date.

      2. EMPLOYMENT TERM.
         ---------------

         (a) The term of the Executive's employment pursuant to this
Agreement (the "Employment Term") shall commence as of the Effective Date
and shall end on December 31, 2008, unless the Employment Term terminates
earlier pursuant to Section 7 of this Agreement. The Employment Term may be
extended by mutual agreement of the Company and the Executive.

         (b) TITLE; DUTIES. During the Employment Term, the Executive shall
serve the Company as its President and Chief Executive Officer and, in such
capacity, shall perform such duties, services and responsibilities as are
commensurate with such position. In his capacity as President and Chief
Executive Officer, the Executive shall report to the Board of Directors of
the Company (the "Board"). During the Employment Term, the Executive shall
be based in the United Kingdom but shall undertake such overseas travel as
is necessary for the proper performance of his duties hereunder. During the
Employment Term, the Executive shall devote substantially all of his work
time to the performance of the Executive's duties hereunder and will not,
without the prior written approval of the Chairman of the Board of the
Company, engage in any other business activity which interferes in any
material respect with the performance of the Executive's duties hereunder
or which is in violation of written policies established from time to time
by the Company.

         (c) BOARD POSITION: The Company shall nominate the Executive to
serve on the Board of Directors of the Company as a Class II Director and
the Board of Directors of the Company shall as of the Effective Date take
such actions as may be necessary under the Bylaws of the Company to appoint
the Executive to such board seat.

      3. MONETARY REMUNERATION.
         ---------------------

         (a) BASE SALARY. During the Employment Term, in consideration of
the performance by the Executive of the Executive's obligations hereunder
to the Company and its parents, subsidiaries, associated and affiliated
companies and joint ventures (collectively, the "Company Affiliated Group")
in any capacity (including any services as an officer, director, employee,
member of any Board committee or management committee or otherwise), the
Company shall cause to be paid to the Executive an annual salary of
$750,000 (the "Base Salary"), which shall accrue on a daily basis. The Base
Salary shall be payable in accordance with normal payroll practices in
effect from time to time for senior management generally; provided that the
Executive may designate at one time each year a percentage of cash
compensation, not yet paid, to be paid in British Pounds Sterling, with the
exchange rate set on the date that such designation is made by reference to
the noon buying rate as quoted by the Federal Reserve Bank of New York. The
Executive shall receive no additional compensation for services that he
provides to the Company Affiliated Group other than as set forth herein.

         (b) ANNUAL BONUS. During each fiscal year of the Company that the
Employment Term is in effect, the Executive shall be eligible to earn a
bonus in the sole discretion of the Board of (at target) 100%, but subject
to a maximum of 200%, of Base Salary (prorated for any partial fiscal year)
(the "Annual Bonus").

         (c) EXPATRIATE PACKAGE. During the Employment Term and for any
period during which the Executive is required by the Company to live in the
United Kingdom, the Executive and his family shall have the right to
receive the benefits of the Company's standard expatriate benefits package
(as applied to comparable United States expatriate employees of the
Company), but in any event such benefits will be consistent with the terms
set forth in Appendix A. Tax equalization shall be consistent with existing
Company Tax Equalization Policy, attached as Appendix B, and incorporated
by reference.

      4. EQUITY-BASED COMPENSATION.
         -------------------------

         During the Employment Term, the Executive will receive the
restricted stock as described as Appendix C, subject to a Restricted Stock
Agreement in the form attached as Appendix C-1.

      5. BENEFITS.
         --------

         (a) During the Employment Term, the Executive shall be entitled to
participate in all of the employee benefit plans, programs, policies and
arrangements (including fringe benefit and executive perquisite programs
and policies) made available by the Company Affiliate Group to, or for the
benefit of, its executive officers in accordance with the terms thereof as
they may be in effect from time to time, in so far as such benefits are
capable of being provided in the United Kingdom.

         (b) REIMBURSEMENT OF EXPENSES. During the Employment Term, the
Company shall cause the Executive to be reimbursed for all reasonable
business expenses incurred by the Executive in carrying out the Executive's
duties, services and responsibilities under this Agreement. So long as the
Executive complies with the general procedures of the Company Affiliated
Group for submission of expense reports, receipts or similar documentation
of such expenses applicable to senior management generally.

      6. VACATIONS. For each whole and partial calendar year during the
Employment Term, the Executive shall be entitled in addition to public and
statutory holidays to 25 days of paid vacation, to be credited and taken in
accordance with the Company's policy as in effect from time to time for its
similarly situated executives.

      7. TERMINATION; SEVERANCE.
         ----------------------

         (a) TERMINATION OF EMPLOYMENT. The Company may terminate the
employment of the Executive in a Termination Without Cause upon 30 days'
written notice to the Executive. The Company may (at its discretion) at any
time following the giving of such notice (but not exceeding the length of
the notice given) cease to provide work for the Executive in which event
during such notice period the other provisions of this Agreement shall
continue to have full force and effect but the Executive shall not be
entitled to access to any premises of the Company or any member of the
Company Affiliated Group. In addition, the employment of the Executive
shall automatically terminate as of the date on which the Executive dies or
is Disabled. For the purposes of this Agreement, the Executive shall be
"Disabled" as of any date if, as of such date, the Executive has been
unable, due to physical or mental incapacity, to substantially perform the
Executive's duties, services and responsibilities hereunder either for a
period of at least 180 consecutive days or for at least 270 days in any
consecutive 365-day period, whichever may be applicable. Upon termination
of the Executive's employment during the Employment Term because the
Executive dies or is Disabled, the Company shall cause the Executive (or
the Executive's estate, if applicable) to be provided with death or
disability benefits (as applicable) pursuant to the plans, programs,
policies and arrangements of the Company Affiliated Group as are then in
effect with respect to executive officers. In addition, upon any
termination of the Executive's employment during the Employment Term, the
Company shall cause the Executive to be paid any earned but unpaid portion
of the Base Salary and Annual Cash Bonus. Immediately following termination
of the Executive's employment for any reason, the Employment Term shall
terminate.

         (b) TERMINATION WITHOUT CAUSE; CONSTRUCTIVE TERMINATION WITHOUT
CAUSE. Upon a Termination Without Cause or a Constructive Termination
Without Cause, the Company shall, as soon as practicable following the
Executive's execution and delivery to the Company of the general release of
claims set forth in Section 7(e) and, following the expiration of any
applicable revocation period, cause the Executive to be paid a lump-sum
severance payment of cash equal to the product of the Base Salary times 2.

         (c) TERMINATION UPON NON-RENEWAL OF THE EMPLOYMENT TERM. Unless
the parties hereto agree otherwise, the Employment Term and the Executive's
employment with the Company shall end on December 31, 2008. In connection
with such termination of employment, the Company shall, as soon as
practicable following the Executive's execution and delivery to the Company
of the general release set forth in Section 7(e) and following the
expiration of any applicable revocation period, cause the Executive to be
paid a lump-sum severance payment of cash equal to one-half of the Base
Salary. In the event that the Executive has not obtained subsequent
employment (as a common-law employee, as an independent contractor or in
any other capacity) by the end of the six-month period following the date
of termination pursuant to this Section 7(c), then, during each of the six
calendar months after such six-month period, the Company shall cause the
Executive to be paid additional severance pay equal to one-twelfth of the
Base Salary; provided, that the right to additional severance pay pursuant
to this sentence shall terminate as to any unpaid portion of such severance
pay when the Executive first obtains any such subsequent employment. In
addition, in connection with a termination of employment pursuant to this
Section 7(c), the Company shall cause the Executive to be paid a full
annual bonus for the Company's 2008 fiscal year, determined based on actual
satisfaction of any applicable performance goals during such fiscal year,
with such bonus to be paid promptly after the determination of the amount
thereof and without application of any mandatory deferral provisions or
continued employment requirements.

         (d) TERMINATION FOR CAUSE. Upon a termination of the Executive's
employment during the Employment Term by the Company for Cause, or upon
termination by the Executive with 30 days' written notice given to the
Company (other than a Constructive Termination Without Cause), the
Executive shall be entitled to earned but unpaid Base Salary and benefits
through the date of termination, and the Executive shall not be entitled to
any other payments or benefits, in the nature of severance or termination.

DEFINITIONS
-----------

For purposes of this Agreement:

               (i) A "Constructive Termination Without Cause" means a
termination of the Executive's employment during the Employment Term by the
Executive following the occurrence of any of the following events without
the Executive's prior consent: (A) failure by the Company to continue the
Executive as the President and Chief Executive Officer (excluding a
promotion); (B) any material diminution in the Executive's working
conditions or authority, responsibilities or authorities; (C) assignment to
the Executive of duties that are inconsistent, in a material respect, with
the scope of duties and responsibilities associated with his position as
set forth herein; (D) any materially adverse change in the reporting
structure applicable to the Executive (but not including a change in the
person filling the position to which the Executive reports); (E) the
failure of the Company to maintain commercially reasonable directors' and
officers' liability insurance; or (F) a Change in Control occurs and the
Executive is terminated in a Termination Without Cause during the period
commencing on the date of the Change in Control and ending on the first
anniversary thereof. For purposes of this Agreement, a "Change in Control"
is defined in Appendix D, and incorporated by reference. The Executive
shall give the Company 10 days' notice of the Executive's intention to
terminate the Executive's employment and claim that a Constructive
Termination Without Cause (as defined in (A), (B), (C), (D), (E) or (F)
above) has occurred, and such notice shall describe the facts and
circumstances in support of such claim in reasonable detail. The Company
shall have 10 days thereafter to cure such facts and circumstances if
possible.

               (ii) A "Termination Without Cause" means a termination of the
Executive's employment during the Employment Term by the Company other than
for Cause.

               (iii) "Cause" means (x) the Executive is convicted of, or
pleads guilty or nolo contendere to, a felony or to any crime involving
fraud, embezzlement or breach of trust; (y) the willful failure of the
Executive to perform the Executive's duties hereunder (other than as a
result of physical or mental illness); or (z) in carrying out the
Executive's duties hereunder, the Executive has engaged in conduct that
constitutes gross neglect or willful misconduct, unless the Executive
believed in good faith that such conduct was in, or not opposed to, the
best interests of the Company and each member of the Company Affiliated
Group. The Company shall give the Executive 10 days' notice of the
Company's intention to terminate the Executive's employment and claim that
facts and circumstances constituting Cause exist, and such notice shall
describe the facts and circumstances in support of such claim. The
Executive shall have 10 days thereafter to cure such facts and
circumstances if possible. If the Board reasonably concludes that the
Executive has not cured such facts or circumstances within such time, Cause
shall not be deemed to have been established unless and until the Executive
has received a hearing before the Board (if promptly requested by the
Executive) and a majority of the Board within 10 days of the date of such
hearing (if so requested) reasonably confirms the existence of Cause and
the termination of the Executive therefore.

         (e) RELEASE; FULL SATISFACTION. Notwithstanding any other
provision of this Agreement, no severance pay shall become payable under
this Agreement unless and until the Executive and the Company execute the
general release of claims in form attached as Appendix E, including where
relevant a release of any statutory claims, and such release has become
irrevocable; provided, that the Executive shall not be required to release
any indemnification rights, rights to benefits, and any accrued rights
under this Agreement. The payments to be provided to the Executive pursuant
to this Section 7 upon termination of the Executive's employment shall
constitute the exclusive payments in the nature of severance or termination
pay or salary continuation which shall be due to the Executive upon a
termination of employment and shall be in lieu of any other such payments
under any severance or termination plan, program, policy or other
arrangement which has heretofore been or shall hereafter be established by
any member of the Company Affiliated Group.

         (f) RESIGNATION. Upon termination of the Executive's employment
for any reason, the Executive shall be deemed to have resigned from all
positions with any member of the Company Affiliated Group, as applicable.

         (g) COOPERATION FOLLOWING TERMINATION. Following Termination of
the Executive's employment for any reason, the Executive agrees to
reasonably cooperate with the Company upon the reasonable request of the
Board and to be reasonably available to the Company with respect to matters
arising out of the Executive's services to any member of the Company
Affiliated Group. The Company shall cause the Executive to be reimbursed
for, or, at the Executive's request, cause the Executive to be advanced,
expenses reasonably incurred in connection with such matters.

      8. [INTENTIONALLY OMITTED]

      9. EXECUTIVE'S COVENANTS.
         ---------------------

         (a) CONFIDENTIALITY. The Executive agrees and understands that The
Executive has been, and in the Executive's position with the Company the
Executive will be, exposed to and receive information relating to the
confidential affairs of the Company Affiliated Group, including, without
limitation, technical information, business and marketing plans,
strategies, customer (or potential customer) information, other information
concerning the products, promotions, development, financing, pricing,
technology, inventions, expansion plans, business policies and practices of
the Company Affiliated Group, whether or not reduced to tangible form, and
other forms of information considered by the Company Affiliated Group to be
confidential and in the nature of trade secrets. The Executive will not
knowingly disclose such information, either directly or indirectly, to any
person or entity outside the Company Affiliated Group without the prior
written consent of the Company; provided, however, that (i) the Executive
shall have no obligation under this Section 9(a) with respect to any
information that is or becomes publicly known other than as a result of the
Executive's breach of the Executive's obligations hereunder and (ii) the
Executive may (x) disclose such information to the extent he determines
that so doing is reasonable or appropriate in the performance of the
Executive's duties or, (y) after giving prior notice to the Company to the
extent practicable, under the circumstances, disclose such information to
the extent required by applicable laws or governmental regulations or by
judicial or regulatory process. Upon termination of the Executive's
employment, the Executive shall promptly supply to the Company all
property, keys, notes, memoranda, writings, lists, files, reports, customer
lists, correspondence, tapes, disks, cards, surveys, maps, logs, machines,
technical data and any other tangible product or document which has been
produced by, received by or otherwise submitted to the Executive in the
course of or otherwise in connection with the Executive's services to the
Company Affiliated Group during or prior to the Employment Term.

         (b) NON-COMPETITION AND NON-SOLICITATION. During the period
commencing upon the Effective Date and ending on the 18-month anniversary
of the termination of the Executive's employment with the Company, the
Executive shall not, as an employee, employer, stockholder, officer,
director, partner, associate, consultant or other independent contractor,
advisor, proprietor, lender, or in any other manner or capacity (other than
with respect to the Executive's services to the Company Affiliated Group),
directly or indirectly:

               (i) perform services for, or otherwise have any involvement
with, any business unit of a person, where such business unit competes
directly or indirectly with any member of the Company Affiliated Group by
owning or operating (x) broadband communications networks for telephone,
cable television or internet services or (y) transmission networks for
television and radio broadcasting, in each case principally in the United
Kingdom or Ireland (the "Core Business"); provided, however, that this
Agreement shall not prohibit the Executive from owning up to 1% of any
class of equity securities of one or more publicly traded companies;

               (ii) hire any individual who is, or within the 12 months prior
to the Executive's termination was, an employee of any member of the
Company Affiliated Group whose base salary at the time of hire exceeded
(pound)65,000 per year and with whom the Executive had direct contact
(other than on a de minimis basis); or

               (iii) solicit, in competition with any member of the Company
Affiliated Group in the Core Businesses, any business, or order of business
from any person that the Executive knows was a current or prospective
customer of any member of the Company Affiliated Group during the
Executive's employment and with whom the Executive had contact;

         (c) PROPRIETARY RIGHTS. The Executive assigns all of the
Executive's interest in any and all inventions, discoveries, improvements
and patentable or copyrightable works initiated, conceived or made by the
Executive, either alone or in conjunction with others, during the
Employment Term and related to the business or activities of any member of
the Company Affiliated Group to the Company or its nominee. Whenever
requested to do so by the Company, the Executive shall execute any and all
applications, assignments or other instruments that the Company shall in
good faith deem necessary to apply for and obtain trademarks, patents or
copyrights of the United States or any foreign country or otherwise protect
the interest of any member of the Company Affiliated Group therein. These
obligations shall continue beyond the conclusion of the Employment Term
with respect to inventions, discoveries, improvements or copyrightable
works initiated, conceived or made by the Executive during the Employment
Term.

         (d) ACKNOWLEDGMENT. The Executive expressly recognizes and agrees
that the restraints imposed by this Section 9 are reasonable as to time and
geographic scope and are not oppressive. The Executive further expressly
recognizes and agrees that the restraints imposed by this Section 9
represent a reasonable and necessary restriction for the protection of the
legitimate interests of the Company Affiliated Group, that the failure by
the Executive to observe and comply with the covenants and agreements in
this Section 9 will cause irreparable harm to the Company Affiliated Group,
that it is and will continue to be difficult to ascertain the harm and
damages to the Company Affiliated Group that such a failure by the
Executive would cause, that the consideration received by the Executive for
entering into these covenants and agreements is fair, that the covenants
and agreements and their enforcement will not deprive the Executive of an
ability to earn a reasonable living, and that the Executive has acquired
knowledge and skills in this field that will allow the Executive to obtain
employment without violating these covenants and agreements. The Executive
further expressly acknowledges that the Executive has received an
opportunity to consult independent counsel before executing this Agreement.

      10. Indemnification.
          ---------------

         (a) To the extent permitted by applicable law, the Company shall
indemnify the Executive against, and save and hold the Executive harmless
from, any damages, liabilities, losses, judgments, penalties, fines,
amounts paid or to be paid in settlement, costs and reasonable expenses
(including, without limitation, attorneys' fees and expenses), resulting
from, arising out of or in connection with any threatened, pending or
completed claim, action, proceeding or investigation (whether civil or
criminal) against or affecting the Executive by reason of the Executive's
service from and after the Effective Date as an officer, director or
employee of, or consultant to, any member of the Company Affiliated Group,
or in any capacity at the request of any member of the Company Affiliated
Group, or an officer, director or employee thereof, in or with regard to
any other entity, employee benefit plan or enterprise (other than arising
out of the Executive's acts of misappropriation of funds or actual fraud).
In the event the Company does not compromise or assume the defense of any
indemnifiable claim or action against the Executive, the Company shall
promptly cause the Executive to be paid to the extent permitted by
applicable law all costs and expenses incurred or to be incurred by the
Executive in defending or responding to any claim or investigation in
advance of the final disposition thereof; provided, however, that if it is
ultimately determined by a final judgment of a court of competent
jurisdiction (from whose decision no appeals may be taken, or the time for
appeal having lapsed) that the Executive was not entitled to indemnity
hereunder, then the Executive shall repay forthwith all amounts so
advanced. The Company may not agree to any settlement or compromise of any
claim against the Executive, other than a settlement or compromise solely
for monetary damages for which the Company shall be solely responsible,
without the prior written consent of the Executive, which consent shall not
be unreasonably withheld. This right to indemnification shall be in
addition to, and not in lieu of, any other right to indemnification to
which the Executive shall be entitled pursuant to the Company's Certificate
of Incorporation or By-laws or otherwise.

         (b) DIRECTORS' AND OFFICERS' INSURANCE. The Company shall use its
best efforts to maintain commercially reasonable directors' and officers'
liability insurance during the Employment Term which will cover the
Executive.

      11. MISCELLANEOUS.
          -------------

         (a) NON-WAIVER OF RIGHTS. The failure to enforce at any time the
provisions of this Agreement or to require at any time performance by the
other party of any of the provisions hereof shall in no way be construed to
be a waiver of such provisions or to affect either the validity of this
Agreement or any part hereof, or the right of either party to enforce each
and every provision in accordance with its terms. No waiver by either party
hereto at any time of any breach by the other party hereto of, or
compliance with, any condition or provision of this Agreement to be
performed by such other party shall be deemed a waiver of similar or
dissimilar conditions or provisions at that time or at any prior or
subsequent time.

         (b) NOTICES. All notices required or permitted hereunder will be
given in writing, by personal delivery, by confirmed facsimile transmission
(with a copy sent by express delivery) or by express next-day delivery via
express mail or any reputable courier service, in each case addressed as
follows (or to such other address as may be designated):

      If to the Company:      NTL House, Bartley Wood Business Park,
                              Hook, Hampshire RG27 9UP
                              Attention: Carolyn Walker, Group HR Director

                              With a copy to: Bryan Hall, General Counsel
                              Fax: +44 1256 752 454

      If to the Executive:    Stephen A. Burch
                              421 Garrison Forest Road
                              Owings Mill, Maryland 21117

                              With a copy to his address on file with the
                              Company's payroll department.

Notices that are delivered personally, by confirmed facsimile transmission,
or by courier as aforesaid, shall be effective on the date of delivery.

            (c) BINDING EFFECT; ASSIGNMENT. This Agreement shall inure to
the benefit of and be binding upon the parties hereto and their respective
heirs, executors, personal representatives, estates, successors (whether
direct or indirect, by purchase, merger, consolidation, reorganization or
otherwise) and assigns. Notwithstanding the provisions of the immediately
preceding sentence, the Executive shall not assign all or any portion of
this Agreement without the prior written consent of the Company. The
Company may assign its rights and obligations hereunder to Telewest Global,
Inc. (or its ultimate parent holding company, if any) in connection with
the proposed merger transaction between the Company, Merger Sub Inc. and
Telewest Global, Inc. entered into on 2 October, 2005 (as may be amended)
and notwithstanding anything to the contrary herein, any such merger
transaction shall not constitute a Change in Control.

            (d) ENTIRE AGREEMENT. This Agreement constitutes the complete
understanding between the parties with respect to the Executive's
employment and supersedes any other prior oral or written agreements,
arrangements or understandings between the Executive and any member of the
Company Affiliated Group. No agreements or representations, oral or
otherwise, express or implied, with respect to the subject matter hereof
have been made by either party that are not set forth expressly in this
Agreement.

            (e) SEVERABILITY. If any provision of this Agreement, or any
application thereof to any circumstances, is invalid, in whole or in part,
such provision or application shall to that extent be severable and shall
not affect other provisions or applications of this Agreement.

            (f) GOVERNING LAW, ETC. This Agreement shall be governed by and
construed in accordance with the internal laws of England and Wales,
without reference to the principles of conflict of laws. Both parties
irrevocably submit to the exclusive jurisdiction of the courts of England
and Wales.

            (g) MODIFICATIONS. Neither this Agreement nor any provision
hereof may be modified, altered, amended or waived except by an instrument
in writing duly signed by the party to be charged.

            (h) NUMBER AND HEADINGS. Whenever any words used herein are in
the singular form, they shall be construed as though they were also used in
the plural form in all cases where they would so apply. The headings
contained herein are solely for purposes of reference, are not part of this
Agreement and shall not in any way affect the meaning or interpretation of
this Agreement.

            (i) COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.

                          (Signature page follows)

<PAGE>

IN WITNESS WHEREOF, the Company has caused this Agreement to be executed
and the Executive has executed this Agreement as of the day and year first
above written, in each case effective as of the Effective Date.

                              NTL INCORPORATED

                                /s/ James Mooney
                              -----------------------------------
                              By: James Mooney
                              Title: Chairman of the Board

                                /s/ Stephen A. Burch
                              -----------------------------------
                              Stephen A. Burch

<PAGE>

                                 APPENDIX A

                 NTL: ASSIGNMENT COMPENSATION SUMMARY SHEET

                          [INTENTIONALLY OMITTED]

<PAGE>

                                 APPENDIX B

        NTL INCORPORATED TAX & SOCIAL SECURITY EQUALISATION POLICY

                          [INTENTIONALLY OMITTED]

<PAGE>

                                 APPENDIX C

NTL INCORPORATED EQUITY-BASED COMPENSATION

1. Restricted Stock
   ----------------

The Executive will be granted 300,000 shares of Restricted Stock of NTL
Incorporated (or its successor) pursuant to the terms of a Restricted Stock
Agreement, attached as Appendix C-1.

Vesting period = three years

150,000 shares granted will vest 33% on each anniversary of the Effective
Date.

The remaining 150,000 shares will vest 33% on each anniversary of the
Effective Date, subject to performance milestones to be agreed to by the
Company and the Executive.

Upon the occurrence of a Change in Control, the 300,000 shares will have
accelerated vesting as provided in the form of Restricted Stock Agreement.

2. Long Term Incentive
   -------------------

The Executive will be granted 50,000 shares of Restricted Stock in each of
first three years (for a total of 150,000) with individual "cliff" 3 year
vesting for each yearly tranche, based upon the Company's 3 year plan
achievement to be agreed.

Vesting upon the occurrence of a Change in Control will occur as follows:
(i) if the Change in Control occurs during the 2006 calendar year, 50,000
shares will automatically vest, and the Compensation Committee or the Board
of Directors will have the discretion to vest an additional 100,000 shares;
(ii) if the Change in Control occurs during the 2007 calendar year, 100,000
shares will automatically vest, and the Compensation Committee or the Board
of Directors will have the discretion to vest an additional 50,000 shares;
and (iii) if the Change in Control occurs during the 2008 calendar year,
150,000 shares will automatically vest.

<PAGE>

                                EXHIBIT C-1
                                -----------

                              NTL INCORPORATED
                         RESTRICTED STOCK AGREEMENT

      RESTRICTED STOCK AGREEMENT dated as of January __, 2006, between NTL
Incorporated, a Delaware corporation (the "Company"), and Stephen A. Burch
(the "Executive").

      WHEREAS, the Company wishes to grant to the Executive, and the
Executive wishes to accept from the Company, shares of common stock of the
Company, par value $0.01 per share (the "Restricted Stock"), to be granted
pursuant to the Amended and Restated NTL 2004 Stock Incentive Plan (the
"Plan");

      NOW, THEREFORE, the parties hereto agree as follows:

      1. Grant of Restricted Stock.
         -------------------------

         The Company hereby grants to the Executive, and the Executive
hereby accepts from the Company, 300,000 shares of Restricted Stock on the
terms and conditions set forth in this Agreement. This Agreement is also
subject to the terms and conditions set forth in the Plan. Capitalized
terms used but not defined herein shall have the meanings set forth in the
Plan.

      2. Rights of Executive.
         -------------------

         Except as otherwise provided in this Agreement, the Executive
shall be entitled, at all times on and after the date that the shares of
Restricted Stock are issued, to exercise all the rights of a stockholder
with respect to the shares of Restricted Stock (whether or not the
restrictions thereon shall have lapsed), including the right to vote the
shares of Restricted Stock and the right, subject to Section 6 hereof, to
receive dividends thereon. Notwithstanding the foregoing, prior to an
applicable Lapse Date (as defined below), the Executive shall not be
entitled to transfer, sell, pledge, hypothecate, assign, or otherwise
dispose of or encumber, the shares of Restricted Stock subject to such
Lapse Date (collectively, the "Transfer Restrictions").

      3. Vesting and Lapse of Transfer Restrictions.
         ------------------------------------------

         3.1      The Transfer Restrictions on 150,000 shares of the
                  Restricted Stock shall lapse and shall vest as follows:

                  (i) as to 50,000 shares on January 15, 2007;

                  (ii) as to 50,000 shares on January 15, 2008; and

                  (iii) as to 50,000 shares on December 31, 2008.

         3.2      The Transfer Restrictions on the remaining 150,000 shares
                  of the Restricted Stock shall lapse and shall vest as
                  follows:

                  (i)   as to 50,000 shares if performance conditions
                        agreed to by the Company and the Executive in
                        respect of the Company's 2006 fiscal year have been
                        met, so long as the Executive has remained
                        continuously employed by the Company from the date
                        of commencement of his employment through January
                        15, 2007;

                  (ii)  as to 50,000 shares if the performance conditions
                        agreed to by the Company and the Executive in
                        respect of the Company's 2007 fiscal year have been
                        met, so long as the Executive has remained
                        continuously employed by the Company from the date
                        of commencement of his employment through January
                        15, 2008; and

                  (iii) as to 50,000 shares if the performance conditions
                        agreed to by the Company and the Executive in
                        respect of the Company's 2008 fiscal year have been
                        met, so long as the Executive has remained
                        continuously employed by the Company from the date
                        of commencement of his employment through December
                        31, 2008.

                  The Lapse Date in respect of the shares of Restricted
                  Stock subject to this Section 3.2 shall occur on the date
                  on which the Committee determines that the applicable
                  performance conditions have been met and shall be
                  forfeited if the Committee determines that such
                  performance conditions have not been met. The Committee
                  shall meet to determine whether such performance
                  conditions have been met promptly after the completion by
                  the Company of the financial reports or other information
                  necessary to make such determination.

            3.3   Notwithstanding Section 3.1 or 3.2, upon the occurrence
                  of an Acceleration Event, the Transfer Restrictions on
                  all of the shares of Restricted Stock granted hereunder
                  and then outstanding shall lapse.

            3.4   Each date on which Transfer Restrictions on shares of
                  Restricted Stock shall lapse and shall vest is referred
                  to in this Agreement as a "Lapse Date".

       4.   Escrow and Delivery of Shares.

            4.1   Certificates representing the shares of Restricted Stock
                  shall be issued and held by the Company in escrow and
                  shall remain in the custody of the Company until their
                  delivery to the Executive or the Executive's estate as
                  set forth in Section 4.2 hereof, subject to the
                  Executive's delivery of any documents which the Company
                  in its discretion may require as a condition to the
                  issuance of shares and the delivery of shares to the
                  Executive or the Executive's estate.

            4.2   (a) Certificates representing those shares of Restricted
                  Stock in respect of which the Transfer Restrictions have
                  lapsed pursuant to Section 3 hereof shall be delivered to
                  the Executive as soon as practicable following the
                  applicable Lapse Date, provided that the Executive has
                  satisfied all applicable Withholding Tax requirements
                  with respect to the Restricted Stock.

                  (b) The Executive may receive, hold, sell, or otherwise
                  dispose of those shares delivered to the Executive
                  pursuant to paragraph (a) of this Section 4.2 free and
                  clear of the Transfer Restrictions, but subject to
                  compliance with all federal and state securities laws.

            4.3   (a) Prior to the applicable Lapse Date, each stock
                  certificate evidencing shares of Restricted Stock as to
                  which the Transfer Restrictions have not lapsed shall
                  bear a legend in substantially the following form:

                  "This certificate and the shares of stock represented
                  hereby are subject to the terms and conditions (including
                  forfeiture, restrictions against transfer and rights of
                  repurchase, if applicable) contained in the Restricted
                  Stock Agreement (the "Agreement") between the registered
                  owner of the shares represented hereby and the Company.
                  Release from such terms and conditions shall be made only
                  in accordance with the provisions of the Agreement, a
                  copy of which is on file in the office of the Secretary
                  of NTL Incorporated."

                  (b) As soon as practicable following each applicable
                  Lapse Date, the Company shall issue new certificates in
                  respect of the shares that have vested as of such Lapse
                  Date which shall not bear the legend set forth in
                  paragraph (a) of this Section 4.3, which certificates
                  shall be delivered in accordance with Section 4.2 hereof.

      5.  Effect of Termination of Employment for any Reason.
          --------------------------------------------------

          Upon termination of the Executive's employment with the Company
and its Affiliates, if applicable, for any reason, the Executive shall
forfeit the shares of Restricted Stock which are then subject to the
Transfer Restrictions, and, from and after such forfeiture, such shares of
Restricted Stock shall cease to be outstanding and the Executive shall have
no rights with respect thereto.

      6.  Voting and Dividend Rights.
          --------------------------

          All dividends declared and paid by the Company on shares of
Restricted Stock shall be deferred until the lapsing of the Transfer
Restrictions pursuant to Section 3 hereof (and shall be subject to
forfeiture upon forfeiture of the shares of Restricted Stock as to which
such deferred dividends relate). The deferred dividends shall be held by
the Company for the account of the Executive. Upon each applicable Lapse
Date, the dividends allocable to the shares of Restricted Stock as to which
the Transfer Restrictions have lapsed shall be paid to the Executive
(without interest). The Company may require that the Executive invest any
cash dividends received in additional Restricted Stock which shall be
subject to the same conditions and restrictions as the Restricted Stock
granted under this Agreement.

      7.  No Right to Continued Employment.
          --------------------------------

          Nothing in this Agreement shall be interpreted or construed to
confer upon the Executive any right with respect to continuance of
employment by the Company or any of its Affiliates, nor shall this
Agreement interfere in any way with the right of the Company or any such
Affiliate to terminate the Executive's employment at any time.

      8.  Withholding of Taxes.
          --------------------

          The Executive shall pay to the Company, or the Company and the
Executive shall agree on such other arrangements necessary for the
Executive to pay, the applicable federal, state and local income taxes
required by law to be withheld (the "Withholding Taxes"), if any, upon the
vesting and delivery of the shares. The Company shall have the right to
deduct from any payment of cash to the Executive an amount equal to the
Withholding Taxes in satisfaction of the Executive's obligation to pay
Withholding Taxes.

      9.  Modification of Agreement.
          -------------------------

          This Agreement may be modified, amended, suspended or terminated,
and any terms or conditions may be waived, but only by a written instrument
executed by the parties hereto.

      10. Severability.
          ------------

          Should any provision of this Agreement be held by a court of
competent jurisdiction to be unenforceable or invalid for any reason, the
remaining provisions of this Agreement shall not be affected by such
holding and shall continue in full force and effect in accordance with
their terms.

      11. Governing Law.
          -------------

          The validity, interpretation, construction and performance of this
Agreement shall be governed by the laws of the State of New York without
giving effect to the conflicts of laws principles thereof.

      12. Successors in Interest; Transfer.
          --------------------------------

          This Agreement shall inure to the benefit of and be binding upon
any successor to the Company. This Agreement shall inure to the benefit of
the Executive's heirs, executors, administrators and successors. All
obligations imposed upon the Executive and all rights granted to the
Company under this Agreement shall be binding upon the Executive's heirs,
executors, administrators and successors. This Agreement is not assignable
by the Executive. For the avoidance of doubt, (i) the Company may assign
its rights and obligations hereunder to Telewest Global, Inc. or its
successors (whether direct or indirect, by purchase, merger, consolidation,
reorganization or otherwise) in connection with the proposed merger
transaction pursuant to the agreement entered into between the Company and
Telewest Global, Inc. on 2 October 2005, as amended from time to time, and
(ii) in no event shall the consummation of such transaction be deemed to be
an Acceleration Event.

            [The remainder of this page is intentionally blank.]

<PAGE>

                                   NTL INCORPORATED

                                   By:
                                        -----------------------------------
                                       James Mooney, Chairman

ACCEPTED AND AGREED

By:
     ----------------------------
               Executive

<PAGE>

                                 APPENDIX D

A "Change in Control" shall be deemed to occur if the event set forth in
any one of the following paragraphs shall have occurred:

(i) Any Person is or becomes the Beneficial Owner, directly or indirectly,
of securities of the Company (not including in the securities beneficially
owned by such Person any securities acquired directly from the Company)
representing 30% or more of the combined voting power of the Company's then
outstanding securities, excluding any Person who becomes such a Beneficial
Owner in connection with a transaction described in clause (a) of Paragraph
(iii) below; or

(ii) the following individuals cease for any reason to constitute a
majority of the number of directors then serving: individuals who, on the
date the Plan is adopted by the Board of Directors of the Company,
constitute the Board and any new director (other than a director whose
initial assumption of office is in connection with an actual or threatened
election contest, including, without limitation, a consent solicitation,
relating to the election of directors of the Company) whose appointment or
election by the Board or nomination for election by the Company's
stockholders was approved or recommended by a vote of at least a majority
of the directors then still in office who either were directors on the date
hereof or whose appointment, election or nomination for election was
previously so approved or recommended; or

(iii) there is consummated a merger or consolidation of the Company or any
direct or indirect subsidiary of the Company with any other corporation,
other than (a) a merger or consolidation which would result in the voting
securities of the Company outstanding immediately prior to such merger or
consolidation continuing to represent (either by remaining outstanding or
by being converted into voting securities of the surviving entity or any
parent thereof) at least 50% of the combined voting power of the securities
of the Company or such surviving entity or any parent thereof outstanding
immediately after such merger or consolidation, or (b) a merger or
consolidation effected to implement a recapitalization of the Company (or
similar transaction) in which no Person is or becomes the Beneficial Owner,
directory or indirectly, of securities of the Company (not including in the
securities beneficially owned by such Person any securities acquired
directly from the Company) representing 30% or more of the combined voting
power of the Company's then outstanding securities; or

(iv) the stockholders of the Company approve a plan of complete liquidation
or dissolution of the Company or there is consummated an agreement for the
sale or disposition by the Company of all or substantially all of the
Company's assets, other than a sale or disposition by the Company of all
substantially all of the Company's assets to an entity, at least 50% of the
combined voting power of the voting securities of which are owned by the
stockholders of the Company immediately prior to such sale.

Notwithstanding the foregoing, a "Change in Control" shall not be deemed to
have occurred by virtue of the consummation of any transaction or series of
integrated transactions immediately following which the record holders of
the common stock of the Company immediately prior to such transaction or
series of transactions continue to have substantially the same
proportionate ownership in an entity which owns all or substantially all of
the assets of the Company immediately following such transaction or series
of transactions.

For purposes of this Appendix D:

"Affiliate" shall have the meaning set forth in Rule 12b-2 under Section 12
of the Securities Exchange Act of 1934.

"Person" shall have the meaning given in Section 3(a)(9) of the Securities
Exchange Act of 1934, as modified and used in Sections 13(d) and 14(d)
thereof, except that such terms shall not include (i) the Company or any of
its Affiliates, (ii) a trustee or other fiduciary holding securities under
an employee benefit plan of the Company or any of its subsidiaries, (iii)
an underwriter temporarily holding securities pursuant to an offering of
such securities, or (iv) a corporation owned, directly or indirectly, by
stockholders of the Company in substantially the same proportions as their
ownership of stock of the Company.

"Beneficial Owner" shall have the meaning set forth in Rule 13d-3 under the
Securities Exchange Act of 1934, except that a Person shall not be deemed
to be the Beneficial Owner of any securities which are properly filed on a
Form 13-G.

<PAGE>

                                 APPENDIX E

                             RELEASE AGREEMENT

In consideration of the severance payments and benefits provided for or
referred to in the Employment Agreement, dated as of ________, 200__, to
which the undersigned is a party (the "Benefits"), and the release from the
undersigned set forth herein, NTL Incorporated (and its successors, the
"Company") and the undersigned agree to the terms of this Release
Agreement.

      1. The undersigned acknowledges and agrees that the Company is under
no obligation to offer the undersigned the Benefits, unless the undersigned
consents to the terms of this Release Agreement. The undersigned further
acknowledges that he is under no obligation to consent to the terms of this
Release Agreement and that the undersigned has entered into this agreement
freely and voluntarily.

      2. The undersigned voluntarily, knowingly and willingly releases and
forever discharges the Company and its Affiliates, together with their
respective officers, directors, partners, shareholders, employees, agents,
and the officers, directors, partners, shareholders, employees, agents of
the foregoing, as well as each of their predecessors, successors and
assigns (collectively, "Releasees"), from any and all charges, complaints,
claims, promises, agreements, controversies, causes of action and demands
of any nature whatsoever that the undersigned or his executors,
administrators, successors or assigns ever had, now has or hereafter can,
shall or may have against Releasees by reason of any matter, cause or thing
whatsoever arising prior to the time of signing of this Release Agreement
by the undersigned. The release being provided by the undersigned in this
Release Agreement includes, but is not limited to, any rights or claims
relating in any way to the undersigned's employment relationship with the
Company, or the termination thereof, or under any statute, including the
federal Age Discrimination in Employment Act of 1967, Title VII of the
Civil Rights Act of 1964, the Civil Rights Act of 1990, the Americans with
Disabilities Act of 1990, the Employee Retirement Income Security Act of
1974, the Family and Medical Leave Act of 1993, each as amended, and any
other federal, state or local law or judicial decision (U.S. and non-U.S.).

      3. The undersigned acknowledges and agrees that he shall not,
directly or indirectly, seek or further be entitled to any personal
recovery in any lawsuit or other claim against the Company or any other
Release based on any event arising out of the matters released in paragraph 2.

      4. Nothing herein shall be deemed to release (i) any of the
undersigned's rights to the Benefits, (ii) any of the benefits that the
undersigned has accrued prior to the date this Release Agreement is
executed by the undersigned under the Company's employee benefit plans and
arrangements, or any agreement in effect with respect to the employment of
the undersigned or (iii) any claim for indemnification as provided under
Section 10 of the Employment Agreement.

      5. In consideration of the undersigned's release set forth in
paragraph 2, the Company knowingly and willingly releases and forever
discharges the undersigned from any and all charges, complaints, claims,
promises, agreements, controversies, causes of action and demands of any
nature whatsoever that the Company now has or hereafter can, shall or may
have against him by reason of any matter, cause or thing whatsoever arising
prior to the time of signing of this Release Agreement by the Company,
provided, however, that nothing herein is intended to release any claim the
Company may have against the undersigned for any illegal conduct or conduct
constituting gross negligence or willful misconduct in connection with his
employment with the Company.

      6. The undersigned acknowledges that the Company has advised him to
consult with an attorney of his choice prior to signing this Release
Agreement. The undersigned represents that, to the extent he desires, he
has had the opportunity to review this Release Agreement with an attorney
of his choice.

      7. The undersigned acknowledges that he has been offered the
opportunity to consider the terms of this Release Agreement for a period of
at least twenty-one days, although he may sign it sooner should he desire.
The undersigned further shall have seven additional days from the date of
signing this Release Agreement to revoke his consent hereto by notifying,
in writing, the Secretary of the Company. This Release Agreement will not
become effective until seven days after the date on which the undersigned
has signed it without revocation.

                                          ----------------------------------
                                          Stephen A. Burch

                                          NTL Incorporated

                                          ----------------------------------
                                          By:
                                          Title:

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