Document:

Exhibit 10.39

                         PORTFOLIO DIVESTITURE AGREEMENT

         This Portfolio Divestiture Agreement ("Agreement") is made effective as
of March 20, 2001 by and among the following:

                  o  HARLINGEN  RETIREMENT,  LC,  a  limited  liability  company
organized under the laws of the State of Texas ("Harlingen"); and

                  o  RESIDENTIAL   HEALTHCARE   PROPERTIES  OF  TEXAS,  INC.,  a
corporation organized under the laws of the State of Texas ("RHP of Texas"); and

                  o ROSWELL  RETIREMENT,  LTD. Co., a limited  liability company
organized under the laws of the State of New Mexico ("Roswell"); and

                  o VILLA  RESIDENTIAL  CARE  HOMES-OAK  PARK,  L.P.,  a limited
partnership  organized  under the laws of the State of Texas  ("Villa"  and with
Harlingen, RHP of Texas and Roswell, sometimes referred to herein,  individually
and collectively, as "Obligor"); and

                  o GREENBRIAR CORPORATION,  INC., a corporation organized under
the laws of the State of Nevada ("Greenbriar"); and

                  o kellway corporation,  a corporation organized under the laws
of the State of Texas ("Kellway"); and

                  o  RESIDENTIAL  HEALTHCARE  PROPERTIES,  INC.,  a  corporation
organized under the laws of the State of Nevada ("RHP"); and

                  o VILLA RESIDENTIAL CARE HOMES, INC., a corporation  organized
under the laws of the State of Texas ("VRCH"); and

                  o WEDGWOOD  RETIREMENT  INNS,  INC., a  corporation  organized
under  the laws of the  State of  Washington  ("Wedgwood"  and with  Greenbriar,
Kellway,   RHP  and  VRCH  sometimes   referred  to  herein,   individually  and
collectively,  as  "Guarantor"),  each of the above  having its chief  executive
office at 4265 Kellway Circle, Addison, Texas 75244; and

                  o HEALTH CARE REIT,  INC., a corporation  organized  under the
laws of the State of Delaware ("HCN"); and

                  o HCRI Texas Properties, Ltd., a limited partnership organized
under  the laws of the  State of  Texas  ("HCRI  Texas"  and,  individually  and
collectively  with HCN  "HCRI"),  each of HCN and HCRI  Texas  having  its chief
executive  office at One  SeaGate,  Suite  1500,  P.O.  Box 1475,  Toledo,  Ohio
43603-1475.

<PAGE>

                                    RECITALS

                  A. HCRI and  certain of the  Obligors  entered  into a certain
Loan  Agreement and certain  Lease  Agreements as identified on Exhibit A hereto
("Financing  Agreements").  Under the terms of the  Financing  Agreements,  HCRI
granted to Obligor loan or lease  financing for the  properties  (the  "Financed
Properties")  as  identified  on Exhibit A hereto.  For purposes  hereof,  those
Financed Properties that are subject to a Lease Agreement are sometimes referred
to herein as "Leased  Properties" and the Financed Property that is subject to a
Loan  Agreement is sometimes  referred to herein as  "Mortgaged  Property".  For
purposes hereof, "Financing Documents" means, collectively, the "Loan Documents"
and "Lease Documents" as defined in the Financing Agreements.

                  B. Each Obligor is currently an Affiliate of Greenbriar.

                  C. Any capitalized  term that is not defined herein shall have
the meaning set forth in the respective  Loan Agreement or Lease  Agreement,  as
applicable.

                  D. Each  Guarantor  has  guaranteed  the  obligations  of each
Obligor under each Loan  Agreement and Lease  Agreement  pursuant to one or more
Unconditional and Continuing  Guaranties  (individually  and  collectively,  the
"Guaranty").

                  E. HCRI and  Obligor,  with the  consent  of  Guarantor,  have
reached an agreement pursuant to which HCRI agreed to the divestiture by Obligor
of the Financed Properties under certain circumstances.

                  F. HCRI and Obligor, with the consent of Guarantor,  desire to
enter this Agreement in order to implement the divestiture agreement.

         NOW, THEREFORE, in consideration of the agreements set forth herein and
other good and valuable consideration,  the receipt and sufficiency of which are
hereby  acknowledged  by all parties,  and intending to be legally  bound,  each
party agrees as follows:

                  1.  Right to Prepay.  Subject to the terms of this  Agreement,
Obligor may prepay its  obligations to HCRI under the Financing  Agreements (the
"Prepayable  Obligations")  during the  period  from the date  hereof  until and
including December 31, 2001 (the "Prepayment Period").

                           1.1  General.  Subject  to the  terms  hereof,  on or
before April 30, 2001,  Obligor shall on the same day [i] purchase from HCRI The
Palm  House and Oak Park  Retirement  Center;  and [ii]  prepay to HCRI the loan
secured by the  Mortgaged  Property,  being all of the  Financed  Properties  in
Tranche 1. Subject to the terms hereof,  any Obligor may,  during the Prepayment
Period,  on the same day purchase from HCRI both of the Leased  Properties  (the
whole of each Leased Property, but not any part of a Leased Property) in Tranche
2, provided that all of the Financed Properties in Tranche 1 shall be refinanced
or prepaid  prior to any of the Financed  Properties in Tranche 2. Obligor shall
make a good  faith  effort to prepay  all of the  Prepayable  Obligations  on or
before the end of the Prepayment Period.

                           1.2  Tranche  1  Extension.  In the  event all of the
Financed  Properties in Tranche 1 are not closed by April 30, 2001,  Obligor can
elect  to [i]  terminate  this  Agreement  or [ii]  pay to HCRI the sum of Fifty
Thousand Dollars ($50,000.00)  ("Extension  Payment") to extend the closing date
for the Tranche 1 Financed  Properties  to May 31, 2001. If Obligor pays to HCRI
the  Extension  Payment to extend the  closing  date for the  Tranche 1 Financed
Properties  to May 31,  2001,  and then  does not  close  all of the  Tranche  1
Financed  Properties by May 31, 2001, HCRI or Obligor has the right to terminate
this  Agreement.  If this  Agreement  is so  terminated,  HCRI shall  retain the
Extension  Payment  and the  Deposit,  as  hereinafter  defined,  as  liquidated
damages.

<PAGE>

                           1.3 Harlingen Restriction.  Obligor acknowledges that
Camelot Retirement of Harlingen ("Camelot Retirement") and Greenbriar at Camelot
("Camelot Assisted Living") are integrated  facilities.  Obligor agrees that one
of the conditions to HCRI's  consent to refinance  Camelot  Retirement  prior to
Camelot  Assisted Living is the agreement of Obligor that Obligor shall not sell
Camelot  Retirement without HCRI's prior written consent until after Obligor has
acquired  Camelot  Assisted  Living.  HCRI  agrees  that it's  consent  shall be
dependant upon Obligor [i]  demonstrating  to HCRI that Camelot  Assisted Living
can operate  independently  of Camelot  Retirement and [ii] delivering to HCRI a
Letter of Credit,  which  complies with the terms and  conditions for Letters of
Credit  set forth in the  Financing  Agreements,  in the  amount  equal to fifty
percent (50%) of the sale proceeds from the sale of Camelot  Retirement.  At the
time of the prepayment of the loan serviced by the Mortgaged  Property,  Obligor
shall  grant  HCRI  a  lien  on  the  Mortgaged  Property  to  secure  Obligor's
obligations  under  this  ss.1.3,  said  Deed of  Trust  to  contain  terms  and
conditions mutually agreeable to Obligor and HCRI.

                           1.4   Conditions   Precedent   to  Right  to  Prepay.
Obligor's right to prepay the Prepayable  Obligations is subject to satisfaction
of the following conditions on or before the Closing, as hereinafter defined, of
any such prepayment.

                                    (a) Notice. HCRI must receive from Obligor a
written  notice of its intent to prepay the  Prepayable  Obligations at least 15
days prior to the  closing  date for either  Tranche  or the  expiration  of the
Prepayment  Period.  Notwithstanding  the  foregoing,  for a prepayment to occur
after  December  15,  2001,  Obligor  may give such  notice  at any time  during
December 2001.  Obligor shall use its best efforts to maximize the length of any
notice given in December 2001.

                                    (b) Sequence of Prepayment.  The sequence of
prepayment is  specifically  set forth herein.  In the event Obligor  proposes a
different  sequence,  HCRI  shall,  within  its  absolute  and sole  discretion,
determine the sequence of prepayment, based upon its evaluation of the remaining
Financed Properties, including debt service coverage and census, but in no event
shall the  Financed  Property  identified  on  Exhibit A as Oak Park  Retirement
Center be  purchased  prior to the Obligor  having [i]  purchased  the  Financed
Property  identified  on Exhibit A as The Palm House and [ii]  prepaid  the loan
secured by the Mortgaged Property.

                           1.5 Prepayment Amount.

                                    (a)  General.  The amount of the  Prepayable
Obligations for each Financed Property (the "Prepayment Amount") shall equal:

                                             (i)  With  respect  to each  Leased
Property,  (a) the  applicable  amount  set  forth on  Exhibit  B as of the date
specified for each of the Leased Properties ("Base Amount"),  plus (b) any Lease
Advances  made by HCRI after the date hereof,  plus (c) accrued and unpaid Rent,
plus  (d)   Termination   Fee,  as  defined  in   ss.1.5(b),   plus  (e)  HCRI's
"out-of-pocket expenses" as defined in ss.1.5(d).

                                             (ii) With respect to the  Mortgaged
Property,  (a) the  applicable  amount  set  forth on  Exhibit  B as of the date
specified  for the Mortgaged  Property,  plus (b) any Loan Advances made by HCRI
after the date  hereof,  plus (c) accrued and unpaid  interest,  plus (d) HCRI's
"out-of-pocket  expenses" as defined in ss.1.5(d),  less (e) any previously paid
Paydown Amount (as defined in ss.1.5(e) below).

                                    (b)  Termination  Fee.  Obligor  shall pay a
termination fee  ("Termination  Fee") as set forth below upon the exercise of an
option to purchase a Leased Property and prepay the Prepayable Obligation in the
following amount:

                                             (i) With  respect to each  Financed
Property  in Tranche  1, as  identified  on  Exhibit  A, an amount  equal to one
percent  (1%) of the Base Amount if the  Prepayment  Amount is paid on or before
March 31, 2001, an amount equal to one and one-half percent (1 1/2%) of the Base
Amount if the  Prepayment  Amount is paid after  March 31, 2001 but on or before
April 30,  2001,  an amount  equal to two percent (2%) of the Base Amount if the
Prepayment  Amount is paid after April 30, 2001 but on or before June 30,  2001,
and an amount equal to three  percent (3%) of the Base Amount if the  Prepayment
Amount is paid after June 30, 2001 but on or before December 31, 2001.

<PAGE>

                                             (ii) With respect to each  Financed
Property  in Tranche  2, as  identified  on  Exhibit  A, an amount  equal to two
percent (2%) of the Base Amount if the  Prepayment  Amount is paid after January
1, 2001 but on or before June 30,  2001,  and an amount  equal to three  percent
(3%) of the Base Amount if the Prepayment Amount is paid after June 30, 2001 but
on or before December 31, 2001.

                                    (c) Other  Closing  Expenses.  Obligor shall
pay all reasonable out-of-pocket costs in connection with this Agreement and the
arrangements  outlined  herein,  including but not limited to legal fees and all
closing costs (including  transfer taxes and conveyance fees) in connection with
the  refinancing or purchase of the Financed  Properties.  Without  limiting the
foregoing, it is agreed that HCRI shall not be responsible for any closing costs
and expenses in  connection  with the  prepayment of the  applicable  Prepayable
Obligations or, as applicable,  the sale of the applicable  Leased Property from
HCRI to Obligor or the release of HCRI's  security  interest  in the  applicable
Mortgaged  Property.  HCRI shall  cooperate  with Obligor to minimize  Obligor's
out-of-pocket  costs and  expenses.  The legal fees of HCRI with respect to this
Agreement,  but not including any subsequent  transactions  contemplated herein,
shall not exceed Twenty-five Thousand Dollars ($25,000.00).

                                    (d)  Out-of-Pocket  Costs.  Without limiting
any  other  provision  hereof,  for  the  purposes  of  this  Agreement,  HCRI's
"out-of-pocket  expenses"  shall mean HCRI's  reasonable  attorney  fees and any
travel  expenses  reasonably  incurred by HCRI in connection with the closing of
the purchase or refinancing of any of the Financed Properties.

                                    (e) Paydown. Provided HCRI has agreed to the
sequence,  at the time of the  purchase or paydown of any one but not all of the
Financed  Properties in Tranche 1, Obligor  shall in addition to the  Prepayment
Amount  pay  an  additional  amount  equal  to ten  percent  (10%)  of the  then
outstanding Lease Amount for all Financed  Properties  ("Paydown  Amount").  The
Paydown  Amount shall be applied by HCRI to the then  outstanding  Lease or Loan
Amounts in HCRI's sole discretion.

                                    (f)  Deposit.  Obligor  has on deposit  with
HCRI Fifty Thousand Dollars ($50,000.00) ("Deposit").  In addition to the rights
set forth in ss.1.2,  if Obligor fails to purchase or prepay all of the Financed
Properties in each of the Tranches as set forth  herein,  HCRI shall be entitled
to the  Deposit.  At the  time of the sale of the last  Financed  Property,  the
Deposit and the Extension Payment shall be applied to the Prepayment Amount.

                           1.6 Closing. Any prepayment of Prepayable Obligations
hereunder by Obligor shall close prior to expiration  of the  Prepayment  Period
and on a date agreed to by HCRI and Obligor ("Closing"). At the Closing, Obligor
shall pay the Prepayment Amount, and all closing costs in immediately  available
funds and HCRI shall,  as applicable [i] convey title to the  applicable  Leased
Property to Obligor by a transferable and recordable limited or special warranty
deed and bill of sale; or [ii] release its security  interest in the  applicable
Mortgaged  Property.  Obligor  acknowledges  that the Leased  Properties will be
acquired "AS IS" without any representations or warranties.  Except as otherwise
provided herein, the terms and conditions set forth in the Financing  Agreements
relating to the  acquisition  of a Leased  Property  shall be applicable to each
acquisition  under this Agreement.  If there are any  discrepancies  between the
applicable  Financing Agreement and this Agreement,  the terms and conditions of
this Agreement shall prevail.

                           1.7 Failure to Exercise  Right to Prepay.  If Obligor
for any reason does not exercise its right to prepay the Prepayable  Obligations
in accordance with the terms and conditions  hereof,  Obligor shall be deemed to
have forfeited all right to make any such prepayment  under the terms hereof and
Obligor  shall  pay to HCRI  within  10 days  following  the  expiration  of the
Prepayment  Period an amount equal to five percent (5%) of the then  outstanding
Loan Amount and Lease  Amount,  unless this  Agreement  has been  terminated  by
Obligor  pursuant to ss.1.2.  Obligor  acknowledges and agrees that the right to
prepay the Prepayable Obligations hereunder  automatically expires at the end of
the Prepayment Period.

                           1.8  Financing   Agreements.   While  this  Agreement
remains  in  effect,  the  provisions  of this  ss.1  supersede  and  amend  all
conflicting  provisions  in the  Financing  Agreements  related to the payoff or
purchase of any of the  Financed  Properties.  In the event all of the  Financed
Properties have not been purchased or refinanced  during the Prepayment  Period,
the provisions of the Financing  Agreements related to the payoff or purchase of
any Financed  Properties shall be reinstated as if they were never superseded or
amended by this Agreement.

<PAGE>

                  2. Application of Excess Funding  Amounts.  Obligor intends to
prepay the Prepayable Obligations in conjunction with the sale or refinancing of
the  Financed  Properties.  To the  extent  there  are any  sale or  refinancing
proceeds with respect to any Financed  Property (net of closing costs) in excess
of the  Prepayable  Obligations  with  respect to such  Financed  Property  (the
"Excess  Funds"),  Obligor  shall,  at the Closing,  deliver to HCRI a Letter of
Credit equal to one-third  (1/3) of such Excess Funds  ("Excess  Funds Letter of
Credit").  In the event all of the  Financed  Properties  within a  Tranche,  as
identified on Exhibit A, have been purchased or refinanced during the Prepayment
Period, HCRI shall deliver to Obligor the Excess Funds Letter of Credit relating
to the Financed  Properties  in that  Tranche.  In the event all of the Financed
Properties within a Tranche, as identified on Exhibit A, have not been purchased
or refinanced during the Prepayment  Period,  HCRI shall be entitled to draw the
full amount  under the Excess  Funds  Letter of Credit  relating to the Financed
Properties  in the Tranche.  The Excess Funds Letter of Credit shall comply with
the  terms and  conditions  applicable  to  letters  of credit  set forth in the
Financing Agreements.

                  3. Letters of Credit.

                           3.1 Increases upon Certain Prepayments. The amount of
each  Letter  of  Credit  (as  defined  in the  Financing  Agreements)  shall be
increased  or  decreased  from time to time upon any  payment of any  Prepayable
Obligations  so as to  equal  in the  aggregate  ten  percent  (10%) of the then
outstanding  Loan Amount or Lease Amount,  as applicable.  Upon the repayment in
full of all Prepayable Obligations with respect to any Financing Agreement,  the
Letter of Credit as defined in such  Financing  Agreement,  shall be released by
HCRI. The Letters of Credit equal to the aggregate of ten percent (10%) shall be
delivered at the time of Closing of a Financed Property.

                  4. Monetary  Obligations.  All monetary obligations of Obligor
under this Agreement are deemed to be monetary  obligations under the respective
Financing Agreement.

                  5.   Reaffirmation.   Each  Obligor  reaffirms  the  Financing
Agreements and all other Financing  Documents as amended hereby.  Each Guarantor
hereby reaffirms its obligations under its respective Guaranty.

                  6.  Events of  Default.  The  failure  of any  Obligor  or any
Guarantor   to  perform  any   covenant  or  to  conform  to  any   warranty  or
representation under this Agreement, and such failure continues for more than 10
days after written notice thereof is given to Obligor by HCRI, or the occurrence
of an "Event of Default"  (after  taking into account any  applicable  notice or
cure periods) as defined in any of the  Financing  Documents or any Guaranty (as
any of the same may be modified by this Agreement), will constitute an immediate
event of default under this  Agreement and each Financing  Agreement  ("Event of
Default").  The  occurrence  of any Event of Default  (after taking into account
applicable  notice or cure periods as provided for above)  shall  constitute  an
immediate  default and any additional  applicable  notice,  grace or cure period
provided in the  respective  Financing  Document or Guaranty is hereby waived by
Obligor and each Guarantor.

                  7. Cumulative Rights and Remedies.  Upon the occurrence of any
Event of Default as defined herein and at any time thereafter  until HCRI waives
the default in writing or acknowledges cure of the default in writing, at HCRI's
option, without declaration, notice of dishonor, protest, noting for protest, or
any other notice,  or demand of any kind (all of which Obligor  hereby  waives),
HCRI may  exercise  any and all rights and  remedies  provided in any  Financing
Agreement, any Financing Document or any Guaranty.

                  8.  Construction of Rights and Remedies.  This Section applies
to all  rights  and  remedies  of  HCRI  under  this  Agreement,  any  Financing
Agreement, any Financing Document or Guaranty or arising at law or in equity.

<PAGE>

                           8.1   Cumulative.   All  rights  and   remedies   are
cumulative to each other.

                           8.2  Consent  to  Remedies.  Each  Obligor  and  each
Guarantor consent to all rights and remedies of HCRI.

                           8.3 No Waivers. No waiver of any of HCRI's rights and
remedies under this Agreement,  any Financing  Document or any Guaranty shall be
effective  against  HCRI unless the waiver is in writing and signed by HCRI.  No
delay or omission by HCRI in  exercising  any right or remedy shall operate as a
waiver of the right or remedy or any other right or remedy.  A waiver on any one
occasion  shall not be  construed as a bar to or a waiver of any right or remedy
on any  other  occasion.  Each  right  and  remedy  of  HCRI  may  be  exercised
individually or concurrently  with others and as often and in such order as HCRI
may choose.

                           8.4 No Obligation to Exercise  Remedies.  HCRI is not
required to commence any action or  proceeding  or to pursue any remedy  against
any Obligor, Guarantor or any successor in interest.

                           8.5 No Marshaling. HCRI may proceed, at its election,
against all security for the Prepayable Obligations or against any item or items
of such security from time to time,  and no action  against any item or items of
security shall bar subsequent actions against any item or items of security.

                  9. Release of HCRI.  As  additional  consideration  for HCRI's
entering into this Agreement,  each Obligor and Guarantor  jointly and severally
releases  and forever  discharges  HCRI and any of HCRI's  officers,  directors,
agents, employees,  accountants,  attorneys and representatives,  as well as the
respective heirs, personal  representatives,  successors,  and assigns of any or
all of them  (collectively  called the "HCRI  Group")  from any and all  claims,
demands,  debts,  actions,  causes  of  action,  suits,  contracts,  agreements,
obligations,  accounts,  defenses,  offsets  and  liabilities  of  any  kind  or
character whatsoever, known or unknown, suspected or unsuspected, in contract or
in tort,  at law or in equity,  including  without  limitation,  such claims and
defenses as fraud,  mistake,  duress,  and usury,  any Obligor or Guarantor ever
had, now have, or might  hereafter have (to the extent relating to periods prior
to the date  hereof)  against the HCRI Group,  jointly or  severally,  for or by
reason of any matter, cause or thing whatsoever which relates to or arises from,
in whole or in part,  directly or indirectly,  [i] the  Prepayable  Obligations;
[ii] any Financing Agreement;  [iii] any Guaranty; and [iv] any other agreement,
document  or  instrument  relating  to or securing  any of the  foregoing.  Each
Obligor and Guarantor agrees that none of them shall commence,  join, prosecute,
or participate in any suit or other  proceeding in a position that is adverse to
the HCRI Group arising directly or indirectly from any of the foregoing matters.
The  provisions  of  this  paragraph  shall  survive  the  termination  of  this
Agreement.

                  10. Voluntary Agreement. Each Obligor and Guarantor represents
and warrants  that [i] each is  represented  by legal  counsel (or has knowingly
declined  legal  counsel)  in regard to the  transactions  provided  for by this
Agreement and that such counsel has  explained to each of them the  significance
of the terms, and the meaning and effect of this Agreement and all other related
documents; [ii] each is fully aware and clearly understands all of the terms and
provisions contained in this Agreement and in all other related documents; [iii]
each has voluntarily,  with full knowledge and without coercion or duress of any
kind entered into this Agreement and the documents  executed in connection  with
this Agreement;  [iv] each is not relying on any representations  either written
or oral, express or implied, made to any of them by HCRI other than as set forth
in this  Agreement;  [v] this  Agreement  essentially  reflects a proposal  each
Obligor made to HCRI on its own initiative;  and [vi] the consideration received
by each Obligor and Guarantor to enter into this  Agreement and the  arrangement
contemplated by this Agreement has been actual and sufficient.

                  11. Bankruptcy Proceedings. If any Obligor files a petition in
bankruptcy or is the subject of any petition  under Title 11 of the U.S. Code as
amended,   such  Obligor  shall  assume  or  reject  its  respective   Financing
Agreement(s) within 60 days of the petition date.

<PAGE>

                  12. Waivers. Obligor waives [i] any notice required by statute
or other law as a condition to bringing an action for possession of, or eviction
from, any of the Financed  Property;  [ii] any right of re-entry or repossession
with respect to the Financed Property; [iii] any right to a trial by jury in any
action or proceeding arising out of or relating to this Agreement, any Financing
Agreement,  any  Financing  Document  or  any  Guaranty;  [iv]  any  objections,
defenses, claims or rights with respect to the exercise by HCRI of any rights or
remedies under this Agreement,  any Financing Agreement,  any Financing Document
or any  Guaranty;  [v] all  presentments,  demands for  performance,  notices of
nonperformance,  protest,  notices of protest, notices of dishonor and any other
notice or demand of any kind arising  under or relating to this  Agreement,  any
Financing  Agreement,  any  Financing  Document  or any  Guaranty;  and [vi] all
notices of the  existence,  creation or incurring of any  obligation  or advance
under this Agreement,  any Financing  Agreement,  any Financing  Document or any
Guaranty before or after this date.

                  13. Miscellaneous.

                           13.1  Performance   Obligations.   Each  Obligor  and
Guarantor  shall  perform  their  respective  obligations  and  conform  to  all
representations  and warranties  under the Financing  Agreements,  the Financing
Documents, the Guaranties and this Agreement (collectively, the "Obligations").

                           13.2 Term of Agreement.  Unless otherwise  terminated
by a writing signed by all parties,  this Agreement shall continue in full force
and effect until the Obligations have been paid or satisfied in full.

                           13.3  Governing  Law.  The laws of the  State of Ohio
shall govern the construction of this Agreement and the rights and duties of the
parties  hereunder.  If any  provision  of this  Agreement,  or the  application
thereof  to  anyone  or  any   circumstances,   shall  be  adjudged  invalid  or
unenforceable to any extent,  the application of the remainder of the provisions
of  this  Agreement  shall  not be  affected  thereby.  Each  provision  of this
Agreement shall be valid and enforceable to the fullest extent permitted by law.

                           13.4 Time is of the  Essence.  Time is of the essence
in the performance of this Agreement.

                           13.5 Amendment. This Agreement may be amended only by
a writing signed by all parties.

                           13.6 Waivers Concerning Obligor and Guarantors.  None
of the  following  will be a course of  dealing,  estoppel,  waiver,  or implied
amendment on which any party to this Agreement, a Financing Agreement,  Guaranty
or any Financing  Document may rely:  [i] HCRI's  acceptance of one or more late
payments  or partial  performance  of this  Agreement,  a  Financing  Agreement,
Guaranty  or any  Financing  Document;  [ii]  HCRI's  current  forbearance  from
exercising  any right or remedy  under this  Agreement,  a Financing  Agreement,
Guaranty or any Financing Document;  or [iii] HCRI's forbearance from exercising
any right or remedy under this Agreement, a Financing Agreement, Guaranty or any
Financing Document on any one or more occasions.

                  Obligor and Guarantors [i] warrant that each has received good
and valuable  consideration for executing this Agreement;  and [ii] warrant that
none has executed this  Agreement in reliance upon the existence of the security
for or guaranty or promise of the performance of this Agreement or any financial
information or valuation information supplied by HCRI.

                  No  obligations  of any  party  to  this  Agreement  shall  be
affected by [i] any default in any Financing  Agreement,  Financing  Document or
Guaranty;  [ii] the  unenforceability  of or defect in any Financing  Agreement,
Financing  Document or Guaranty;  [iii] any decline in the value of any interest
in any  property  which  is the  subject  of  this  Agreement  or any  Financing
Agreement,  Financing  Document or  Guaranty;  or [iv] the death,  incompetence,
insolvency,  dissolution,  liquidation  or winding up of affairs of any party to
this Agreement or any Financing Agreement, Financing Document or Guaranty or the
start of insolvency proceedings by or against any such party. Each party to this
Agreement,  each Financing Agreement, each Financing Document, and each Guaranty
waives all suretyship and other similar  defenses.  Obligor and Guarantors waive
all  rights  of  subrogation  arising  out of this  Agreement  or any  Financing
Agreement,  Financing Document or Guaranty,  and no other party to any Financing
Agreement  or  Financing  Document  may  enforce  any  right of  subrogation  or
contribution  unless  and until all  obligations  of Obligor to HCRI are paid in
full.

<PAGE>

                  Obligor and Guarantor [i] waive notice of all advances against
the loans and leases made subject to the Financing  Agreements before this date;
and [ii] waive  protest  and all other  notices  relating  to any default in any
Financing Agreement or Financing Document.

            [THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]

<PAGE>

         IN WITNESS  WHEREOF,  the parties  hereto have  executed or caused this
Agreement to be executed as of the date set forth at the beginning.

Signed and acknowledged in the
presence of:                                HARLINGEN RETIREMENT, LC

                                            By: Wedgwood Retirement Inns, Inc.
                                                Managing Member

Signature  /s/ Teresa Priest                By:  /s/ Gene S. Bertcher
           --------------------------           --------------------------------
Print Name   Teresa Priest
             ------------------------
                                                Title:  President
                                                        ------------------------
Signature  /s/ Lauren Dunn
           --------------------------
Print Name  Lauren Dunn
            -------------------------

                                            RESIDENTIAL HEALTHCARE
                                            PROPERTIES OF TEXAS, INC.

Signature  /s/ Teresa Priest                By:  /s/ Gene S. Bertcher
           --------------------------           --------------------------------
Print Name   Teresa Priest
             ------------------------
                                                Title:  President
                                                        ------------------------
Signature  /s/ Lauren Dunn
           --------------------------
Print Name  Lauren Dunn
            -------------------------

                                            ROSWELL RETIREMENT, LTD. CO.

                                            By: Wedgwood Retirement Inns, Inc.
                                                Managing Member

Signature  /s/ Teresa Priest                By:  /s/ Gene S. Bertcher
           --------------------------           --------------------------------
Print Name   Teresa Priest
             ------------------------
                                                Title:  President
                                                        ------------------------
Signature  /s/ Lauren Dunn
           --------------------------
Print Name  Lauren Dunn
            -------------------------
                                            VILLA RESIDENTIAL CARE
                                            HOMES-OAK PARK, L.P.

                                            By: Kellway Corporation
                                                Managing General Partner

Signature  /s/ Teresa Priest                By:  /s/ Gene S. Bertcher
           --------------------------           --------------------------------
Print Name   Teresa Priest
             ------------------------
                                                Title:  President
                                                        ------------------------
Signature  /s/ Lauren Dunn
           --------------------------
Print Name  Lauren Dunn
            -------------------------
                                            HEALTH CARE REIT, INC.

Signature  /s/ Rita J. Rogge                By:  /s/ George Chapman
           --------------------------           --------------------------------
Print Name  Rita J. Rogge
            -------------------------
                                                Title: Chairman, CEO & President
                                                      --------------------------
Signature  /s/ Kathleen A. Sullivan
           --------------------------
Print Name  Kathleen A. Sullivan
            -------------------------

<PAGE>

                                            HCRI TEXAS PROPERTIES, LTD.

                                            By: Health Care REIT, Inc.
                                                General Partner

Signature  /s/ Rita J. Rogge                By:  /s/ George Chapman
           --------------------------           --------------------------------
Print Name  Rita J. Rogge
            -------------------------
                                                Title: Chairman, CEO & President
                                                       -------------------------
Signature  /s/ Kathleen A. Sullivan
           --------------------------
Print Name  Kathleen A. Sullivan
            -------------------------

<PAGE>

                          ACKNOWLEDGMENT OF GUARANTORS

         The  undersigned   Guarantors  hereby  [i]  consent  to  the  foregoing
Portfolio  Divestiture  Agreement  and  Amendment  of Lease  and Loan  Documents
("Agreement");  [ii]  agree to be  bound  by the  terms  and  provisions  of the
Agreement to the extent  applicable to Guarantor;  [iii] affirm each Guaranty of
each Guarantor in favor of HCRI which shall remain in full force and effect; and
[iv] waive any  suretyship  defenses  arising in connection  with the Agreement,
effective as of the date first set forth above.

                                        GREENBRIAR CORPORATION, INC.

                                        By:  /s/Gene S. Bertcher
                                            ------------------------------------

                                            Title:  Executive Vice President
                                                    ----------------------------

                                        KELLWAY CORPORATION

                                        By:  /s/Gene S. Bertcher
                                            ------------------------------------

                                            Title:  President
                                                    ----------------------------

                                        RESIDENTIAL HEALTHCARE PROPERTIES, INC.

                                        By:  /s/Gene S. Bertcher
                                            ------------------------------------

                                            Title:  President
                                                    ----------------------------

                                        VILLA RESIDENTIAL CARE HOMES, INC.

                                        By:  /s/Gene S. Bertcher
                                            ------------------------------------

                                            Title:  President
                                                    ----------------------------

                                        WEDGWOOD RETIREMENT INNS, INC.

                                        By:  /s/Gene S. Bertcher
                                            ------------------------------------

                                            Title:  President
                                                    ----------------------------

<PAGE>
<TABLE>
<CAPTION>

                                    EXHIBIT A

                       DESCRIPTION OF FINANCING AGREEMENTS

                             AND FINANCED PROPERTIES

---------------------------------------------------------------------------------------------------------
                                    TRANCHE 1
---------------------------------------------------------------------------------------------------------
           LANDLORD               TENANT/MORTGAGOR       TRANSACTION TYPE      FINANCED PROPERTY
--------------------------- ---------------------------- ---------------- -------------------------------
<S>                         <C>                          <C>              <C>
HCRI Texas Properties, Ltd. Residential Healthcare            Lease       The Palm House
                            Properties of Texas, Inc.                     3501 Renzel Blvd.
                                                                          Fort Worth, TX
                                                                          County:       Tarrant
--------------------------- ---------------------------- ---------------- -------------------------------
HCRI Texas Properties, Ltd. Harlingen Retirement, LC           Loan       Camelot Retirement of Harlingen
                                                                          1000 Camelot Dr.
                                                                          Harlingen, TX
                                                                          County:       Cameron
--------------------------- ---------------------------- ---------------- -------------------------------
HCRI Texas Properties, Ltd. Villa Residential Care            Lease       Oak Park Retirement Center
                            Homes-Oak Park, L.P.                          4242 Bryant Irvin Rd.
                                                                          Benbrook, TX
                                                                          County:       Tarrant
--------------------------- ---------------------------- ---------------- -------------------------------

                               TRANCHE 2
---------------------------------------------------------------------------------------------------------
           LANDLORD               TENANT/MORTGAGOR       TRANSACTION TYPE      FINANCED PROPERTY
--------------------------- ---------------------------- ---------------- -------------------------------
Health Care REIT, Inc.      Roswell Retirement, Ltd. Co.      Lease       La Villa
                                                                          2725 N. Pennsylvania Ave.
                                                                          Roswell, NM
                                                                          County:       Chaves
--------------------------- ---------------------------- ---------------- -------------------------------
HCRI Texas Properties, Ltd. Harlingen Retirement, LC          Lease       Greenbriar at Camelot
                                                                          900 Camelot Dr.
                                                                          Harlingen, TX
                                                                          County:       Cameron
---------------------------------------------------------------------------------------------------------

</TABLE>

<PAGE>

                                    EXHIBIT B

                                  BASE AMOUNTS

--------------------------------------------------------------------------------
                FACILITY        1ST QUARTER  2ND QUARTER 3RD QUARTER 4TH QUARTER
                                    2001         2001        2001        2001
------------------------------- ----------- ------------ ----------- -----------
Oak Park Retirement Center        8,035,032    7,988,808   7,942,582   7,896,357
------------------------------- ----------- ------------ ----------- -----------
La Villa                          5,306,651    5,278,254   5,249,858   5,221,461
------------------------------- ----------- ------------ ----------- -----------
The Palm House                    4,045,770    4,017,321   3,988,872   3,960,423
------------------------------- ----------- ------------ ----------- -----------
Camelot Retirement of Harlingen   4,402,429    4,390,679   4,378,592   4,366,157
------------------------------- ----------- ------------ ----------- -----------
Greenbriar at Camelot             5,728,024    5,700,608   5,673,193   5,645,777
--------------------------------------------------------------------------------
(g)Exhibit 10.10
                                  -------------

                                      Lease

            1. BASIC LEASE PROVISIONS AND IDENTIFICATION OF EXHIBITS

1.01 BASIC LEASE PROVISIONS

          A. BUILDING AND ADDRESS
          445 West Erie Street
          Chicago, Illinois 60610

          B. LANDLORD AND ADDRESS:
          Loft Development Corporation
          Agent for 445 West Erie, L.L.C.
          641 West Lake Street
          Suite 401
          Chicago, IL 60661

          C. TENANT AND CURRENT ADDRESS:
          The Children's Beverage Group
          445 West Erie Street
          Suite #106
          Chicago, IL 60610

          D. DATE OF LEASE: January 17,2001

          E. LEASE TERM: Three (3) Years

          F. COMMENCEMENT DATE OF TERM: February 1, 2001

          G. EXPIRATION DATE OF TERM: January 31, 2004

          G. MONTHLY BASE RENT:       Year 1 - $2,222/month
                                      Year 2 - $2,289/month
                                      Year 3 - $2,358/month

 1. INITIAL MONTHLY RENT ADJUSTMENT DEPOSIT: N/A

 J. SECURITY DEPOSIT: $2,222

 K. RENTABLE AREA OF THE PREMISES: 1,481 rentable square feet

 L. FLOOR(S): 1 "Floor

 M. TENANT'S PROPORTIONATE SHARE: 3.24 %

 N. TENANT'S USE OF PREMISES- General office usage

 0. REAL ESTATE BROKER(S): None

<PAGE>

         In consideration of the mutual covenants and agreements  herein stated,
Lessor  hereby  leases to Lessee and Lessee hereby leases from Lessor solely for
the above purpose the premises designated above (the "Premises"),  together with
the appurtenances thereto, for the above Term.

                        2. LEASE COVENANTS AND AGREEMENTS
2.01 RENT

         Lessee shall pay Lessor or Lessor's  agent as rent for the Premises the
sum stated  above,  monthly in advance,  until  termination  of this  Lease,  at
Lessor's  address  stated above or such other address as Lessor may designate in
writing.

2.02 CONDITION AND UPKEEP OF PREMISES

         Lessee has  examined  and knows the  condition  of the Premises and has
received  the  same  in  good  order  and  repair,   and  acknowledges  that  no
representations as to the condition and repair thereof have been made by Lessor,
or its  agent,  prior to or at the  execution  of this Lease that are not herein
expressed;  Lessee will keep the Premises including all  appurtenances,  in good
repair,  replacing  all broken  glass with glass of the same size and quality as
that broken, and will replace all damaged plumbing fixtures with others of equal
quality,  and  will  keep  the  Premises,  in a clean  and  healthful  condition
according to the applicable municipal ordinances and the direction of the proper
public officers during the term of this Lease at Lessee's expense,  and upon the
termination of this Lease, in any way, will yield up the Premises to Lessor,  in
good  condition and repair,  loss by fire and ordinary wear  excepted,  and will
deliver the keys therefor at the place of payment of said rent.

2.03 LESSEE NOT TO MISUSE; SUBLET; ASSIGNMENT

         Lessee will not allow  Premises  to be used for any  purpose  that will
increase  the rate of  insurance  thereon,  nor for any purpose  other than that
hereinbefore specified,  and will not load floors with machinery or goods beyond
the floor load rating prescribed by applicable  municipal  ordinances,  and will
not allow the Premises to be occupied in whole, or in part, by any other person,
and will not sublet the same, or any part thereof, nor assign this Lease without
in each case the written  consent of the Lessor  first had,  and Lessee will not
permit any transfer by  operation  of law of the  interest in Premises  acquired
through  this Lease,  and will not permit  Premises to be used for any  unlawful
purpose,  or for any purpose that will injure the  reputation of the building or
increase  the fire  hazard  of the  building,  or  disturb  the  tenants  or the
neighborhood,  and will not permit the same to remain vacant or  unoccupied  for
more than ten (10)  consecutive  days;  and will not allow any  signs,  cards or
placards  to be posted,  or placed  thereon,  nor permit  any  alteration  of or
addition  to any of the  Premises,  except by written  consent  of  Lessor;  all
alterations and additions to the Premises shall remain for the benefit of Lessor
unless otherwise provided in the consent aforesaid.

2.04 MECHANIC'S LIEN

         Lessee will not permit any  mechanic's  lien or liens to be placed upon
the Premises or any building or improvement  thereon during the term hereof, and
in case of the filing of such lien Lessee will  promptly pay same. If default in
payment thereof shall continue for thirty (30) days after written notice thereof
from  Lessor to the Lessee,  the Lessor  shall have the right and  privilege  at
Lessor's  option of paying the same or any portion thereof without inquiry as to
the validity thereof,  and any amounts so paid, including expenses and interest,
shall be so much additional indebtedness hereunder due from Lessee to Lessor and
shall be repaid to Lessor immediately on rendition of bill therefor.

2.05 INDEMNITY FOR ACCIDENTS

         Lessee  covenants and agrees that it will protect and save and keep the
Lessor forever harmless and indemnified  against and from any penalty or damages
or  charges  imposed  for  any  Violation  of any  laws or  ordinances,  whether
occasioned  by the neglect of Lessee or those  holding  under  Lessee,  and that
Lessee  will at all times  protect,  indemnify  and save and keep  harmless  the
Lessor against and from any and all loss, cost,  damage or expense,  arising out
of or from any accident or other  occurrence on or about the  Premises,  causing
injury to any person or property  whomsoever  or  whatsoever  and will  protect,
indemnify  and save and keep  harmless  the Lessor  against and from any and all
claims and against and from any and all loss,  cost,  damage or expense  arising
out of any  failure of Lessee in any  respect to comply with and perform all the
requirements and provisions hereof.

<PAGE>

2.07 WATER, GAS AND ELECTRIC CHARGES

         Lessee  will pay in  addition  to the rent above  specified,  all water
rents,  gas and electric  light and power bills taxed,  levied or charged on the
Premises,  for and during the time for which this Lease is granted,  and in case
said water rents and bills for gas,  electric  light and power shall not be paid
when due,  Lessor shall have the right to pay the same,  which  amounts so paid,
together  with any sums  paid by  Lessor  to keep the  Premises  in a clean  and
healthy  condition,  as above  specified,  are declared to be so much additional
rent and payable with the installment of rent next due thereafter.

2.08 KEEP PREMISES IN REPAIR

         Lessor  shall not be obliged to incur any  expense  for  repairing  any
improvements upon, said demised premises or connected therewith,  and the Lessee
at its own expense will keep all improvements in good repair (injury by fire, or
other causes beyond Lessee's  control  excepted) as well as in a good tenantable
and wholesome condition,  and will comply with all local or general regulations,
laws and ordinances  applicable  thereto,  as well as lawful requirements of all
competent authorities in that behalf. Lessee will, as far as possible, keep said
improvements   from   deterioration  due  to  ordinary  wear  and  from  falling
temporarily out of repair. If Lessee does not make repairs as required hereunder
promptly and  adequately,  Lessor may but need not make such repairs and pay the
costs thereof,  and such costs shall be so much additional rent  immediately due
from and payable by Lessee to Lessor.

2.09 ACCESS TO PREMISES

         Lessee will allow Lessor free access to the Premises for the purpose of
examining or exhibiting the same, or to make any repairs,.or alterations thereof
which Lessor may see fit to make and will allow to have placed upon the Premises
at all times notice of "For Sale" and "To Rent", and will not interfere with the
same.

2.10 ABANDONMENT AND RELETTING

         If Lessee shall abandon or vacate the Premises, or if Lessee's right to
occupy the Premises be terminated by Lessor by reason of Lessee's  breach of any
of the covenants herein,  the same may be relet by Lessor for such rent and upon
such  terms as Lessor  may deem  fit,  subject  to  Illinois  statute;  and if a
sufficient sum shall not thus be realized monthly,  after paying the expenses of
such  re-letting  and  collecting  to satisfy the rent hereby  reserved,  Lessee
agrees to satisfy and pay all deficiency  monthly during the remaining period of
this Lease.

2.11 HOLDING OVER

         Lessee  will,  at the  termination  of this  Lease  by lapse of time or
otherwise,  yield up immediate  possession to Lessor, and failing so to do, will
pay as liquidated damages,  for the whole time such possession is withheld,  the
sum of ( Two Hundred  Twenty Two Dollars)  ($220) per day; but the provisions of
this clause  shall not be held as a waiver by Lessor of any right of re-entry as
hereinafter  set forth;  nor shall the receipt of said rent or any part thereof,
or any other act in apparent  affirmance of tenancy,  operate as a waiver of the
right to forfeit  this Lease and the term hereby  granted  for the period  still
unexpired, for a breach of any of the covenants herein.

2.12 EXTRA FIRE HAZARD

         There  shall  not  be  allowed,  kept,  or  used  on the  Premises  any
inflammable or explosive  liquids or materials save such as may be necessary for
use in the business of the Lessee,  and in such case, any such substances  shall
be delivered and stored in amount, and used, in accordance with the rules of the
applicable Board of Underwriters and statutes and ordinances now or hereafter in
force.

2.13 DEFAULT BY LESSEE

         If  default  be made in the  payment  of the  above  rent,  or any part
thereof,  or in any of the covenants  herein contained to be kept by the Lessee,
Lessor may at any time  thereafter  at its election  declare said term ended and
reenter the Premises or any part  thereof,  with or (to the extent  permitted by
law)  without  notice or  process  of law,  and  remove  Lessee  or any  persons
occupying the same,  without  prejudice to any remedies which might otherwise be
used for arrears of rent, and Lessor shall have at all times the right to I

<PAGE>

2.14 NO RENT DEDUCTION OR SET OFF

         Lessee's  covenant to pay rent is and shall be  independent of each and
every  other  covenant  of this  Lease.  Lessee  agrees that any claim by Lessee
against Lessor shall not be deducted from rent nor set off against any claim for
rent in any action.

2.15 RENT AFTER NOTICE OR SUIT

         It is further agreed, by the parties hereto, that after the service of.
notice or the  commencement  of a suit or after final judgment for possession of
the  Premises,  Lessor may receive and collect any rent due,  and the payment of
said rent shall not waive or affect said notice, said suit, or said judgment.

2.16 PAYMENT OF COSTS

         Lessee will pay and discharge all reasonable costs, attorney's fees and
expenses  that shall be made and incurred by Lessor in enforcing  the  covenants
and agreements of this Lease.

2.17 RIGHTS CUMULATIVE

         The rights and remedies of Lessor under this Lease are cumulative.  The
exercise or use of any one or more thereof shall not bar Lessor from exercise or
use of any other right or remedy provided  herein or otherwise  provided by law,
nor shall  exercise  nor use of any  right or  remedy by Lessor  waive any other
right or remedy.

2.18 FIRE AND CASUALTY

         In case the Premises shall be rendered  untenantable during the term of
this Lease by fire or other  casualty,  Lessor at its option may  terminate  the
Lease or repair the Premises within sixty (60) days thereafter. If Lessor elects
to repair, this Lease shall remain in effect provided such repairs are completed
within said time.  If Lessor shall not have  repaired  the Premises  within said
time, then at the end of such time the term hereby created shall  terminate.  If
this Lease is terminated by reason of fire or casualty as herein specified, rent
shall be apportioned and paid to the day of such fire or casualty.

12.19 SUBORDINATION

         This Lease is subordinate  to all mortgages  which may now or hereafter
affect the Premises.

2.20 PLURALS; SUCCESSORS

         The words  "Lessor" and "Lessee"  wherever  herein  occurring  and used
shall be construed to mean  "Lessors" and "Lessees" in case more than one person
constitutes  either party to this Lease;  and all the covenants  and  agreements
contained  shall be binding  upon,  and inure to, their  respective  successors,
heirs,  executors,  administrators  and  assigns and may be  exercised  by their
attorney or agent.

2.21 SEVERABILITY

         Wherever  possible each provision of this Lease shall be interpreted in
such  manner as to be  effective  and valid  under  applicable  law,  but if any
provision of this Lease shall be prohibited by or invalid under  applicable law,
such  provision  shall be  ineffective  to the  extent  of such  prohibition  or
invalidity,  without  invalidating  the  remainder  of  such  provision  or  the
remaining provisions of this Lease.

<PAGE>

         IN WITNESS  WHEREOF,  this Lease has been  executed  as of the date set
forth in Section 1.01 D hereof.

LANDLORD:                                       TENANT:

Loft Development Corporation                    The Children's Beverage Group
Agent for 445 West Erie, L.L.C.

  By:  /s/ Daniel Kaplan                        By: /s/ John A. Darmstadter
      ------------------                           ------------------------
       Daniel Kaplan                                Jon Darmstadter

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