Document:

exv10w65

 

Exhibit 10.65

 

HSH NORDBANK, NEW YORK BRANCH

Hines REIT Properties, L.P.

2800 Post Oak Blvd.

Suite 4800

Houston, Texas 77056

Our ref.: PBO-155330
 

Dear Sirs,

The purpose of this agreement is to confirm the terms and conditions of the Swap Transaction
entered into between us on the Trade Date specified below (the “Swap Transaction”). This agreement
constitutes a “Confirmation” as referred to in the Agreement specified below.

The definitions and provisions contained in the 2000 ISDA Definitions (as published by the
International Swap Dealers Association, Inc.) are incorporated into this Confirmation. In the event
of any inconsistency between those definitions and provisions and this Confirmation, this
Confirmation will govern.

This Confirmation supplements, forms part of, and is subject to, the ISDA Master Agreement which
will be promptly agreed between you and us. The parties agree to diligently negotiate and execute
such agreement as quickly as reasonably practicable, and until such time the transaction hereunder
will be governed by the terms and conditions of the standard ISDA Master Agreement.”(but without
any Schedule except for the election of the laws of the State of New York as the governing law and
US Dollar as the termination currency)”. All provisions contained in the Agreement govern this
Confirmation except as expressly modified below.

The terms of the particular swap transaction to which this confirmation relates are as follows:

	 	 	 
	Trade Date:
	 	June 05, 2006
	 
	 	 
	Currency:
	 	USD
	 
	 	 
	Business Days:
	 	London and New York
	 
	 	 
	Broker:
	 	Direct
	 
	 	 
	Swap Transaction:
	 	 
	 
	 	 
	Notional Amount:
	 	USD-$185,000,000.00
	 
	 	 
	Effective Date:
	 	August 01, 2006
	 
	 	 
	Termination Date:
	 	August 01, 2016
	 
	 	 
	Fixed Payer:
	 	HINES REIT PROPERTIES, L.P.

 

 

	 	 	 
	Fixed Payer Payment Date:
	 	The first day of each month, commencing on September
	 
	 	01, 2006 to and including the Termination Date, subject
	 
	 	to adjustment in accordance with the Modified Following
	 
	 	Business Day Convention.
	 
	 	 
	Fixed Rate Day Count Fraction:
	 	Actual/360
	 
	 	 
	Fixed Rate:
	 	5.4575%
	 
	 	 
	Floating Amounts
	 	 
	 
	 	 
	Floating Rate Payer:
	 	HSH Nordbank AG NY Branch
	 
	 	 
	Floating Rate Payer Payment Dates:
	 	The first day of each month, commencing on September
	 
	 	01, 2006 to and including the Termination Date, subject
	 
	 	to adjustment in accordance with the Modified Following

	 
	 	Business Day Convention.
	 
	 	 
	Floating Rate for initial

Calculation Periods:
	 	TBD
	 
	 	 
	Floating Rate Option:
	 	USD-LIBOR-BBA
	 
	 	 
	Designated Maturity:
	 	One-month
	 
	 	 
	Day Count Fraction:
	 	Actual/360
	 
	 	 
	Spread:
	 	None
	 
	 	 
	Reset Dates:
	 	The first day of each Calculation Period
	 
	 	 
	Netting:
	 	Yes
	 
	 	 
	Account Details
	 	 
	 
	 	 
	Payments to CUSTOMER
	 	A/C No: 00113350863 F/B/O Hines REIT Properties, L.P.
	 
	 	With JP Morgan Chase Bank N.A.,
	 
	 	ABA 11300609
	 
	 	 
	Payments to HSH NORDBANK
	 	A/C No: 400949687 F/B/O HSH Nordbank AG NY Branch
	NEW YORK BRANCH:
	 	With JP Morgan Chase Bank NA, New York
	 
	 	ABA 021000021
	 
	 	 
	Other Provisions:
	 	 
	 
	 	 
	Fee Payment Date:
	 	June 7, 2006
	 
	 	 
	Fee Payment Amount by Customer:
	 	USD-$552,000.00
	 
	 	 
	Additional Definition
	 	N/A

 

 

Please confirm that the foregoing correctly sets forth the terms of our agreement by executing the
copy of this Confirmation enclosed for that purpose and returning it to us or by sending us a
letter substantially similar to this letter, which letter sets forth the material terms of the Swap
Transaction to which this Confirmation relates and indicates your agreement to those terms.

	 	 	 	 	 	 	 	 	 
	For and behalf of	 	For and behalf of
	 
	 	 	 	 	 	 	 	 
	HINES REIT PROPERTIES, L.P.,	 	HSH Nordbank AG NY Branch
	a Delaware limited partnership	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	By:	 	Hines Real Estate Investment Trust, Inc.,	 	By:	 	/s/ Charles Dotto
	 

	 	 	 	 	 	 	 	 
	 	 	a Maryland corporation	 	Name:	 	Charles Dotto
	 

	 	 	 	 	 	Title:
	 	SMP & Head of Operations
	 
	 	 	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Sherri W. Schugart	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	Name:
	 	Sherri W. Schugart	 	 	 	 
	 

	 	Title:
	 	Chief Financial Officer	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Hines REIT Properties, L.P.	 	HSH Nordbank AG NY Branch
	2800 Post Oak Blvd.	 	230 Park Avenue
	Suite 4800	 	New York, N.Y. 10169-0005
	Houston, Texas 77056exv10w01

 

Exhibit 10.01

Form of

FY07 Executive Annual Incentive Plan

This Annual Incentive Plan (“Plan”) of Symantec Corporation (“Symantec”) is effective as of April
1, 2006. The Board of Directors reserves the right to alter or cancel all or any portion of the
Plan for any reason at any time.

	 	 	 
	
Job Category:                                                             
 
	 
	 	 
	Purpose:

	 	Provide critical focus on specific, measurable corporate goals and provide
performance-based compensation based upon the level of attainment of such goals.
	 
	 	 
	Bonus Target:

	 	The target incentive bonus for this executive position is ___%* of the annual base
salary. Annual base salary has been established at the beginning of the fiscal year. Bonuses
will be paid based on actual annual base salary earnings from time of eligibility under the
Plan through March 30, 2007. Payments will be subject to applicable payroll taxes and
withholdings.
	 
	 	 
	Bonus Payments:

	 	The annual incentive bonus will be paid once annually. Payment will be made
within six weeks of the financial close of the fiscal year. Any payment made under this Plan
is at the sole discretion of the Administrator of the Plan.
	 
	 	 
	Components:

	 	Two performance metrics* will be used to determine the annual incentive bonus payment
as determined by the Compensation Committee:

	 	 	 	 	 
	Metric	 	Weighting	 
	Corporate Revenue
	 	 	 	 
	Corporate Earnings per Share
	 	 	 	 

	 	 	 
	Achievement Schedule:

	 	The established threshold must be exceeded for the applicable performance
metric before the bonus applicable to such performance metric will be paid. This Plan is
uncapped.
	 
	 	 
	Pro-ration:

	 	The calculation of the annual incentive bonus will be based on eligible base salary
earnings for the fiscal year and, subject to the eligibility requirements below, will be
pro-rated based on the number of days participant is employed as a regular, full-time employee
of Symantec during the fiscal year.
	 
	 	 
	Eligibility:

	 	Participants must be regular full-time employees on the day bonus checks are
distributed. If the company grants an interim payment for any reason, the participant must be a
regular, full-time employee at the end of that performance period in order to
receive such payment. A participant who leaves before the end of the fiscal year
will not be eligible to receive the annual incentive bonus or any pro-rated portion
thereof. The Plan participant must be a regular, full-time employee of Symantec at
the end of the fiscal year in order to be eligible to receive the annual incentive
bonus and at the time the bonus checks are distributed, unless otherwise determined
by the Administrator.
	 
	 	 
	Exchange Rates:

	 	The performance metrics will not be adjusted for any fluctuating currency exchange
rates. Actual growth numbers will be used.
	 
	 	 
	Target Changes:

	 	In the event of an accretive event, such as a stock buyback, or other events that
might have an effect on the revenue or EPS targets of the Company, such as acquisition or
purchase of products or technology, the Administrator may at its discretion adjust the

1

 

	 	 	 
	 

	 	Revenue Growth and
Earnings per Share Targets to reflect the potential impact upon Symantec’s
financial performance.
	 
	 	 
	Plan Provisions:

	 	This Plan is adopted under the Symantec Senior Executive Incentive Plan effective
as of April 3, 2004 and approved by Symantec’s stockholders on August 21, 2003.
	 
	 	 
	 

	 	This Plan supersedes the FY06 Executive Annual Incentive Plan dated April 1, 2005,
which is null and void as of the adoption of this Plan.
	 
	 	 
	 

	 	Participation in the Plan does not guarantee participation in other or future
incentive plans. Plan structures and participation will be determined on a
year-to-year basis.
	 
	 	 
	 

	 	The Board of Directors reserves the right to alter or cancel all or any portion of
the Plan for any reason at any time. The Plan shall be administered by the
Compensation Committee of the Board of Directors (the “Administrator”), and the
Administrator shall have all powers and discretion necessary or appropriate to
administer and interpret the Plan.
	 
	 	 
	 

	 	The Board of Directors reserves the right to exercise its own judgment with regard
to company performance in light of events outside the control of management and/or
participant.

 

			
	 	 	*See Annex A

2

 

Annex A

2007 Executive Annual Incentive Plan

Additional Terms

Under the
terms of the Executive Incentive Plans, Symantec’s named executive officers will be eligible
to receive performance-based incentive bonuses at the end of the fiscal year with target payouts
ranging from 60% to 125% of a participant’s annual base salary. The actual bonus amounts are
subject to the following metrics and weighting: (a) achievement of targeted annual revenue
growth of Symantec (50% weighting); and (b) achievement of targeted annual earnings per share
growth of Symantec (50% weighting). The measurement period for targeted revenue and earnings
per share growth is the fiscal year ending on March 30, 2007.

3Exhibit 10.32

                           SECOND AMENDED AND RESTATED
                             MASTER LEASE AGREEMENT

                                      AMONG

                             HEALTH CARE REIT, INC.

             HCRI NORTH CAROLINA PROPERTIES III, LIMITED PARTNERSHIP

                         HCRI WISCONSIN PROPERTIES, LLC

                          HCRI INDIANA PROPERTIES, LLC

                       HCRI TENNESSEE PROPERTIES, INC. AND

                           HCRI TEXAS PROPERTIES, LTD.

                                       AND

                         ALTERRA HEALTHCARE CORPORATION

                                  APRIL 7, 2006

                               TABLE OF CONTENTS
                               -----------------

SECTION                                                                     PAGE
--------------------------------------------------------------------------------

ARTICLE 1:  LEASED PROPERTY, TERM AND DEFINITIONS..............................1
   1.1    Leased Property......................................................1
   1.2    Indivisible Lease....................................................1
   1.3    Term.................................................................2
   1.4    Definitions..........................................................2
   1.5    Landlord As Agent...................................................10

ARTICLE 2:  RENT..............................................................10
   2.1    Base Rent...........................................................10
   2.2    Increase of Lease Rate and Base Rent................................11
   2.3    Additional Rent.....................................................12
   2.4    Place of Payment of Rent............................................12
   2.5    Net Lease...........................................................12
   2.6    No Termination, Abatement, Etc......................................12
   2.7    Computational Method................................................13

ARTICLE 3:  IMPOSITIONS AND UTILITIES.........................................13
   3.1    Payment of Impositions..............................................13
   3.2    Definition of Impositions...........................................14
   3.3    Escrow of Impositions...............................................14
   3.4    Utilities...........................................................14
   3.5    Discontinuance of Utilities.........................................15
   3.6    Business Expenses...................................................15
   3.7    Permitted Contests..................................................15

ARTICLE 4:  INSURANCE.........................................................16
   4.1    Property Insurance..................................................16
   4.2    Liability Insurance.................................................17
   4.3    Builder's Risk Insurance............................................18
   4.4    Insurance Requirements..............................................18
   4.5    Replacement Value...................................................19
   4.6    Blanket Policy......................................................19
   4.7    No Separate Insurance...............................................19
   4.8    Waiver of Subrogation...............................................19
   4.9    Mortgages...........................................................19
   4.10   Escrows.............................................................20

ARTICLE 5:  INDEMNITY.........................................................20
   5.1    Tenant's Indemnification............................................20
          5.1.1    Notice of Claim............................................20
          5.1.2    Survival of Covenants......................................20
          5.1.3    Reimbursement of Expenses..................................21

SECTION                                                                     PAGE
--------------------------------------------------------------------------------

   5.2    Environmental Indemnity; Audits.....................................21
   5.3    Limitation of Landlord's Liability..................................21

ARTICLE 6:  USE AND ACCEPTANCE OF PREMISES....................................21
   6.1    Use of Leased Property..............................................21
   6.2    Acceptance of Leased Property.......................................22
   6.3    Conditions of Use and Occupancy.....................................22

ARTICLE 7:  MAINTENANCE AND MECHANICS' LIENS..................................22
   7.1    Maintenance.........................................................22
   7.2    Required Alterations................................................22
   7.3    Mechanic's Liens....................................................23
   7.4    Replacements of Fixtures and Landlord's Personal Property...........23

ARTICLE 8:  DEFAULTS AND REMEDIES.............................................24
   8.1    Events of Default...................................................24
   8.2    Remedies............................................................26
   8.3    Right of Set-Off....................................................28
   8.4    Performance of Tenant's Covenants...................................29
   8.5    Late Payment Charge.................................................29
   8.6    Interest............................................................29
   8.7    Litigation; Attorneys' Fees.........................................29
   8.8    Escrows and Application of Payments.................................30
   8.9    Remedies Cumulative.................................................30

ARTICLE 9:  DAMAGE AND DESTRUCTION............................................30
   9.1    Notice of Casualty..................................................30
   9.2    Substantial Destruction.............................................30
   9.3    Partial Destruction.................................................31
   9.4    Restoration.........................................................31
   9.5    Insufficient Proceeds...............................................32
   9.6    Not Trust Funds.....................................................32
   9.7    Landlord's Inspection...............................................32
   9.8    Landlord's Costs....................................................33
   9.9    No Rent Abatement...................................................33

ARTICLE 10:  CONDEMNATION.....................................................33
   10.1   Total Taking........................................................33
   10.2   Partial Taking......................................................33
   10.3   Condemnation Proceeds Not Trust Funds...............................34

ARTICLE 11:  TENANT'S PROPERTY................................................34
   11.1   Tenant's Property...................................................34
   11.2   Requirements for Tenant's Property..................................34

ARTICLE 12:  RENEWAL OPTIONS..................................................35
   12.1   Renewal Options.....................................................35

                                      (ii)

SECTION                                                                     PAGE
--------------------------------------------------------------------------------

   12.2   Effect of Renewal...................................................36
   12.3   Effect of Non-Renewal or Expiration of Lease........................36

ARTICLE 13:  OPTION TO PURCHASE...............................................36
   13.1   Option to Purchase..................................................36
   13.2   Option Price........................................................37
   13.3   Fair Market Value...................................................37
   13.4   Closing.............................................................38
   13.5   Failure to Close Option.............................................39
   13.6   Failure to Exercise Option to Purchase and Renewal Option...........39
   13.7   Early Option to Purchase............................................39

ARTICLE 14:  NEGATIVE COVENANTS...............................................40
   14.1   No Debt.............................................................40
   14.2   No Liens............................................................40
   14.3   [INTENTIONALLY OMITTED].............................................40
   14.4   No Transfer.........................................................40
   14.5   No Dissolution......................................................40
   14.6   [INTENTIONALLY OMITTED].............................................40
   14.7   [INTENTIONALLY OMITTED..............................................40
   14.8   Contracts...........................................................40
   14.9   Subordination of Payments to Affiliates.............................40
   14.10  Change of Location or Name..........................................41

ARTICLE 15:  AFFIRMATIVE COVENANTS............................................41
   15.1   Perform Obligations.................................................41
   15.2   Proceedings to Enjoin or Prevent Construction.......................41
   15.3   Documents and Information...........................................41
          15.3.1   Furnish Documents..........................................41
          15.3.2   Furnish Information........................................41
          15.3.3   Further Assurances and Information.........................42
          15.3.4   Material Communications....................................42
          15.3.5   Requirements for Financial Statements......................42
          15.3.6   Confidentiality............................................42
   15.4   Compliance With Laws................................................42
   15.5   Broker's Commission.................................................43
   15.6   Existence and Change in Control.....................................43
   15.7   Financial Covenants.................................................43
          15.7.1   Definitions................................................43
          15.7.2   Coverage Ratio.............................................43
          15.7.3   Net Worth..................................................43
          15.7.4   Current Ratio [INTENTIONALLY OMITTED]......................43
          15.7.5   Debt to Equity Ratio [INTENTIONALLY OMITTED]...............43
          15.7.6   Working Capital............................................43
   15.8   Transfer of License and Facility Operations.........................44

                                      (iii)

SECTION                                                                     PAGE
--------------------------------------------------------------------------------

ARTICLE 16:  ALTERATIONS, CAPITAL IMPROVEMENTS, AND SIGNS.....................44
   16.1   Prohibition on Alterations and Improvements.........................44
   16.2   Approval of Alterations.............................................44
   16.3   Permitted Alterations...............................................44
   16.4   Requirements for Permitted Alterations..............................44
   16.5   Ownership and Removal of Permitted Alterations......................45
   16.6   Signs...............................................................45

ARTICLE 17:  [RESERVED].......................................................45

ARTICLE 18:  ASSIGNMENT AND SALE OF LEASED PROPERTY...........................45
   18.1   Prohibition on Assignment and Subletting............................45
   18.2   Requests for Landlord's Consent to Assignment, Sublease or
          Management Agreement................................................46
   18.3   Agreements with Residents...........................................47
   18.4   Sale of Leased Property.............................................47
   18.5   Assignment by Landlord..............................................47

ARTICLE 19:  HOLDOVER AND SURRENDER...........................................47
   19.1   Holding Over........................................................47
   19.2   Surrender...........................................................47

ARTICLE 20:  LETTER OF CREDIT.................................................48
   20.1   Terms of Letter of Credit...........................................48
   20.2   Replacement Letter of Credit........................................48
   20.3   Draws...............................................................49
   20.4   Partial Draws.......................................................49
   20.5   Substitute Letter of Credit.........................................49
   20.6   Retention of Letter of Credit.......................................49

ARTICLE 21:  QUIET ENJOYMENT, SUBORDINATION, ATTORNMENT AND
             ESTOPPEL CERTIFICATES............................................49
   21.1   Quiet Enjoyment.....................................................49
   21.2   Subordination.......................................................50
   21.3   Attornment..........................................................50
   21.4   Estoppel Certificates...............................................51

ARTICLE 22:  REPRESENTATIONS AND WARRANTIES...................................51

ARTICLE 23:  FUTURE PROJECTS..................................................51
   23.1   INTENTIONALLY OMITTED...............................................51

ARTICLE 24:  SECURITY INTEREST................................................51
   24.1   Collateral..........................................................51
   24.2   Additional Documents................................................52
   24.3   Notice of Sale......................................................52

                                      (iv)

SECTION                                                                     PAGE
--------------------------------------------------------------------------------

ARTICLE 25:  MISCELLANEOUS....................................................52
   25.1   Notices.............................................................52
   25.2   Advertisement of Leased Property....................................53
   25.3   Entire Agreement....................................................53
   25.4   Severability........................................................53
   25.5   Captions and Headings...............................................53
   25.6   Governing Law.......................................................53
   25.7   Memorandum of Lease.................................................53
   25.8   Waiver..............................................................53
   25.9   Binding Effect......................................................54
   25.10  Power of Attorney...................................................54
   25.11  No Offer............................................................54
   25.12  Modification........................................................54
   25.13  Landlord's Modification.............................................55
   25.14  No Merger...........................................................55
   25.15  Laches..............................................................55
   25.16  Limitation on Tenant's Recourse.....................................55
   25.17  Construction of Lease...............................................55
   25.18  Counterparts........................................................55
   25.19  Custody of Escrow Funds.............................................55
   25.20  Landlord's Status as a REIT.........................................55
   25.21  Exhibits............................................................55
   25.22  WAIVER OF JURY TRIAL................................................56
   25.23  CONSENT TO JURISDICTION.............................................56
   25.24  Attorney's Fees and Expenses........................................56
   25.25  Survival............................................................57

EXHIBIT A:  LEGAL DESCRIPTIONS

EXHIBIT B:  PERMITTED EXCEPTIONS

EXHIBIT C:  FACILITY INFORMATION

EXHIBIT D:  LANDLORD'S PERSONAL PROPERTY

EXHIBIT E:  DOCUMENTS TO BE DELIVERED

EXHIBIT F:  TENANT'S CERTIFICATE AND FACILITY FINANCIAL REPORTS

EXHIBIT G:  GOVERNMENT AUTHORIZATIONS TO BE OBTAINED; ZONING PERMITS

EXHIBIT H:  PENDING LITIGATION

EXHIBIT I:  LIST OF LEASES AND CONTRACTS

                                       (v)

               SECOND AMENDED AND RESTATED MASTER LEASE AGREEMENT

     This Second Amended and Restated Master Lease Agreement ("Lease") is made
effective as of April 7, 2006 (the "Effective Date") among HEALTH CARE REIT,
INC., a corporation organized under the laws of the State of Delaware ("HCRI"
and a "Landlord" as further defined in ss.1.4 below), HCRI NORTH CAROLINA
PROPERTIES III, LIMITED PARTNERSHIP, a limited partnership organized under the
laws of the State of North Carolina ("HCRI-NC" and a "Landlord"), HCRI TENNESSEE
PROPERTIES, INC., a corporation organized under the laws of the State of
Delaware ("HCRI-TN" and a "Landlord"), HCRI INDIANA PROPERTIES, LLC, a limited
liability company organized under the laws of the State of Indiana ("HCRI-IN"
and a "Landlord"), HCRI WISCONSIN PROPERTIES, LLC, a limited liability company
organized under the laws of the State of Wisconsin ("HCRI-WI" and a "Landlord"),
and HCRI TEXAS PROPERTIES, LTD., a limited partnership organized under the laws
of the State of Texas ("HCRI-TX" and a "Landlord"), each Landlord having its
principal office located at One SeaGate, Suite 1500, P.O. Box 1475, Toledo, Ohio
43603-1475, and ALTERRA HEALTHCARE CORPORATION, a corporation organized under
the laws of the State of Delaware ("Tenant"), having its chief executive office
located at 6737 W. Washington Street, Suite 2300, Milwaukee, Wisconsin 53214.

                                 R E C I T A L S

     A. Tenant is the tenant of the Leased Property (defined below) pursuant to
a certain Amended and Restated Master Lease Agreement by and between Landlord
and Tenant dated July 1, 2001, as amended from time to time ("2001 Lease").

     B. Landlord and Tenant desire to amend certain provisions of the 2001 Lease
and do hereby restate the 2001 Lease in its entirety as set forth herein.

     NOW, THEREFORE, Landlord and Tenant agree as follows:

                ARTICLE 1: LEASED PROPERTY, TERM AND DEFINITIONS

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

     1.2 Indivisible Lease. This Lease constitutes one indivisible lease of the
entire Leased Property. The Leased Property constitutes one economic unit and
the Base Rent and all other provisions have been negotiated and agreed to based
on a lease of all of the Leased Property as a single, composite, inseparable
transaction and would have been materially different had separate leases or a
divisible lease been intended. Except as expressly provided herein for specific,
isolated purposes (and then only to the extent expressly otherwise stated), all
provisions of this Lease shall apply equally and uniformly to all the Leased
Property as one unit and any Event of Default under this Lease is an Event of
Default as to the entire Leased Property. The parties intend that the provisions
of this Lease shall at all times be construed, interpreted and applied so as to
carry out their mutual objective to create a single indivisible lease of all the

Leased Property and, in particular but without limitation, that for purposes of
any assumption, rejection or assignment of this Lease under the Bankruptcy Code,
this is one indivisible and non-severable lease and executory contract dealing
with one legal and economic unit which must be assumed, rejected or assigned as
a whole with respect to all (and only all) the Leased Property covered hereby.
The parties agree that the existence of more than one Landlord under this Lease
does not affect the indivisible, non-severable nature of this Lease. The parties
may amend this Lease from time to time to include one or more additional
Facility Properties as part of the Leased Property and such future addition to
the Leased Property shall not in any way change the indivisible and
non-severable nature of this Lease and all of the foregoing provisions shall
continue to apply in full force.

     1.3 Term. The initial term ("Initial Term") of this Lease commences on the
Effective Date and expires at 12:00 Midnight Eastern Time on March 31, 2017 (the
"Expiration Date"); provided, however, that [i] Tenant has one or more options
to renew the Lease pursuant to Article 12, and [ii] that any addition to the
Leased Property pursuant to amendment of this Lease shall extend the Initial
Term so that the Initial Term shall expire on the fifteenth anniversary of the
Amended Commencement Date as set forth in such amendment.

     1.4 Definitions. Except as otherwise expressly provided, [i] the terms
defined in this section have the meanings assigned to them in this section and
include the plural as well as the singular; [ii] all accounting terms not
otherwise defined herein have the meanings assigned to them in accordance with
generally accepted accounting principles as of the time applicable; and [iii]
the words "herein", "hereof", and "hereunder" and similar words refer to this
Lease as a whole and not to any particular section.

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

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

     "Affiliate Facility" means each facility leased by Landlord or any Landlord
Affiliate to any Affiliate, whether now or hereafter existing.

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

     "Allocated Lease Amount" means the portion of the Lease Amount allocated to
a specific Facility for certain specified purposes as set forth on the attached
Exhibit C, including any Lease Advance Amount designated by Landlord as
allocated to such specific Facility.

     "Amended Commencement Date" means the Commencement Date as amended pursuant
to the most recent amendment of this Lease in effect at such time.

                                      -2-

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

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

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

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

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

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

     "Closing" means the closing of the lease of the Leased Property to Tenant.

     "Collateral" has the meaning set forth in ss.24.1.

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

     "Commitment" means the Commitment Letter for the Lease dated June 26, 2001.

     "Company Financial Model" means Tenant's projection of its financial
statement for the next fiscal year, which shall include the balance sheet,
statement of income and statement of cash flow.

     "CPI Index" has the meaning set forth in ss.2.2.

     "Early Option to Purchase" means the exercise of the Option to Purchase
provided in ss.13.7.

     "Effective Date" means the date of this Lease as set forth in the first
paragraph hereof.

     "Entity Guarantor" means Brookdale Senior Living Inc., a Delaware
corporation.

     "Environmental Laws" means all federal, state, and local ecological,
wetlands, and other environmental laws and regulations, as amended from time to
time, including but not limited to [i] CERCLA; [ii] the Resource Conservation
and Recovery Act; [iii] the Hazardous

                                      -3-

Materials Transportation Act; [iv] the Clean Air Act; [v] Clean Water Act; [vi]
the Toxic Substances Control Act; and [vii] the Safe Drinking Water Act.

     "Event of Default" has the meaning set forth in ss.8.1.

     "Expiration Date" has the meaning set forth in ss.1.3.

     "Extended Term" has the meaning set forth in ss.12.3(a).

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

     "Facility Financial Statement" means a financial statement for each
Facility which shall include the statement of income and expense, occupancy
census data (including payor mix to the extent presently provided by Affiliates)
and a comparison of the actual financial data versus the Annual Facility Budget
for the applicable period.

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

     "Facility Property" means the portion of the Land on which a Facility is
located, the legal description of which is set forth beneath the applicable
Facility Name on Exhibit A, the Improvements on such portion of the Land, the
Related Rights with respect to such portion of the Land, and Landlord's Personal
Property with respect to such Facility. References in this Lease to the
"Facility Property" shall mean the entire Facility Property unless expressly
stated otherwise.

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

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

     "Financial Statements" means [i] the annual, quarterly and year to date
financial statements of Tenant; and [ii] all operating statements for each
Facility, that were submitted to Landlord prior to the Effective Date.

     "Fixtures" means all permanently affixed equipment, machinery, fixtures and
other items of real and/or personal property (excluding Landlord's Personal
Property), including all components thereof, now and hereafter located in, on or
used in connection with, and permanently affixed to or incorporated into the
Improvements, including, without limitation, all furnaces, boilers, heaters,
electrical equipment, heating, plumbing, lighting, ventilating, refrigerating,
incineration, air and water pollution control, waste disposal, air-cooling and
air-conditioning systems and apparatus, sprinkler systems and fire and theft
protection equipment, built-in oxygen and vacuum systems, towers and other
devices for the transmission of radio, television and other signals, all of
which, to the greatest extent permitted by law, are

                                      -4-

hereby deemed by the parties hereto to constitute real estate, together with all
replacements, modifications, alterations and additions thereto. References in
this Lease to the "Fixtures" shall mean all Fixtures unless expressly stated
otherwise.

     "Government Authorizations" means all permits, licenses, approvals,
consents, and authorizations required to comply with all Legal Requirements,
including, but not limited to, [i] zoning permits, variances, exceptions,
special use permits, conditional use permits, and consents; [ii] to the extent
applicable, the permits, licenses, provider agreements and approvals required
for licensure and operation of each Facility in accordance with its respective
Facility Uses and certified, if applicable, as a provider under the federal
Medicare and state Medicaid programs; [iii] environmental, ecological, coastal,
wetlands, air, and water permits, licenses, and consents; [iv] curb cut,
subdivision, land use, and planning permits, licenses, approvals and consents;
[v] building, sign, fire, health, and safety permits, licenses, approvals, and
consents; and [vi] architectural reviews, approvals, and consents required under
restrictive covenants.

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

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

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

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

     "HCRI-IN" means HCRI Indiana Properties, LLC, a limited liability company
organized under the laws of the State of Indiana.

     "HCRI-NC" means HCRI North Carolina Properties III, Limited Partnership, a
limited partnership organized under the laws of the State of North Carolina.

     "HCRI-TN" means HCRI Tennessee Properties, Inc., a corporation organized
under the laws of the State of Delaware.

     "HCRI-TX" means HCRI Texas Properties, Ltd., a limited partnership
organized under the laws of the State of Texas.

     "HCRI-WI" means HCRI Wisconsin Properties, LLC, a limited liability company
organized under the laws of the State of Wisconsin.

                                      -5-

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

     "Improvements" means all buildings, structures, Fixtures and other
improvements of every kind on the Land, including, but not limited to, alleys,
sidewalks, utility pipes, conduits and lines (on-site and off-site), parking
areas and roadways appurtenant to such buildings and structures, now or
hereafter situated upon the Land. References in this Lease to the "Improvements"
shall mean all Improvements unless expressly stated otherwise.

     "Indiana Facility" means each Facility located in the State of Indiana.

     "Initial Lease Advance" means $119.873,313.00.

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

     "Issuer" means a financial institution satisfactory to Landlord issuing the
Letter of Credit and such Issuer's successors and assigns. Any "Issuer" shall
have a Lace Financial Service Rating of "C+" or higher (or comparable rating
from a comparable rating entity if Lace Financial Service should cease providing
such ratings) at all times throughout the Term. Landlord agrees that LaSalle
Bank is an acceptable Issuer as of the Effective Date.

     "Land" means the real property described in Exhibit A attached hereto.
References in this Lease to the "Land" shall mean the entire Land unless
expressly stated otherwise.

     "Landlord" means HCRI, HCRI-IN, HCRI-NC, HCRI-TN, HCRI-TX, and HCRI-WI,
individually and collectively.

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

     "Landlord's Personal Property" means all Personal Property owned by
Landlord on the Effective Date, together with any and all replacements thereof,
and all Personal Property that pursuant to the terms of this Lease becomes the
property of Landlord during the Term. References in this Lease to "Landlord's
Personal Property" shall mean all Landlord's Personal Property unless expressly
stated otherwise. As of the Effective Date, Landlord's Personal Property
includes all Personal Property located at the Leased Property, except Personal
Property that is leased or financed by Tenant from an entity other than
Landlord.

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

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

     "Lease Advance" means [i] the Initial Lease Advance; and [ii] any other
advance of funds by Landlord to Tenant pursuant to the terms of this Lease after
the Effective Date.

                                      -6-

     "Lease Advance Amount" means the amount of any Lease Advance. The first
Lease Advance Amount is the amount of the Initial Lease Advance on the Effective
Date.

     "Lease Advance Date" means the date on which Landlord makes a Lease
Advance.

     "Lease Amount" is an aggregate concept and means the sum of the Lease
Advance Amounts outstanding at the applicable time. As of the Effective Date,
the Lease Amount is $119,873,313.00.

     "Lease Documents" means this Lease and all documents executed by Landlord
and Tenant relating to this Lease and the lease of the Facilities pursuant to
this Lease.

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

     "Lease Rate" means the annual rate used to determine Base Rent for each
Lease Advance. The Lease Rate for the Initial Lease Advance for the Initial Term
is 10.72%. On the Renewal Date, the Lease Rate will be the Renewal Rate.

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

     "Leased Property" means all of the Land, Improvements, Related Rights and
Landlord's Personal Property. References in this Lease to the "Leased Property"
shall mean the entire Leased Property unless expressly stated otherwise.

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

     "Letter of Credit" means an irrevocable and transferable Letter of Credit
as required under Article 20 hereof, issued by Issuer in favor of Landlord as
security for the Lease and in form acceptable to Landlord, and any amendments
thereto or replacements or substitutions therefor.

                                      -7-

     "Material Obligation" means [i] any indebtedness secured by a security
interest in or a lien, deed of trust or mortgage on any of the Leased Property
(or any part thereof, including any Personal Property) and any agreement
relating thereto that has an outstanding principal balance or obligation in an
amount not less than $500,000.00; [ii] any obligation to or agreement with the
Issuer relating to the Letter of Credit; and [iii] any sublease of the Leased
Property.

     "North Carolina Facility" means each Facility located in the State of North
Carolina.

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

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

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

     "Overdue Rate" has the meaning set forth in ss.8.6.

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

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

     "Permitted Exceptions" means [i] the exceptions to title set forth on
Exhibit B attached hereto; [ii] any sublease of any portion of the Leased
Property made in complete accordance with Article 18; and [iii] all easements,
liens, encumbrances, restrictions, agreements and other title matters existing
as of the Effective Date, expressly excluding, however, such matters arising
solely by, through or under Landlord (unless consented to by Tenant).

     "Permitted Liens" means [i] liens granted to Landlord; [ii] liens
customarily incurred by Tenant in the ordinary course of business for items not
delinquent, including mechanic's liens and deposits and charges under worker's
compensation laws; [iii] liens for taxes and assessments not yet due and
payable; [iv] any lien, charge, or encumbrance which is being contested in good
faith pursuant to this Lease; [v] the Permitted Exceptions; and [vi] purchase
money financing and capitalized equipment leases for the acquisition of Personal
Property provided, however, that Landlord obtains a nondisturbance agreement
from the purchase money lender or equipment lessor in form and substance as may
be satisfactory to Landlord if the original cost of the equipment exceeds
$100,000.00.

                                      -8-

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

     "Portfolio Cash Flow" has the meaning set forth in ss.15.7.1.

     "Portfolio Coverage Ratio" has the meaning set forth in ss.15.7.1.

     "Pro Forma Statement" means a financial forecast for each Facility for the
next 12-month period prepared in accordance with the standards for forecasts
established by the American Institute of Certified Public Accountants.

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

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

     "Related Lease" means any lease, now or hereafter existing, between
Landlord or any Landlord Affiliate and Tenant or any Affiliate.

     "Related Rights" means all easements, rights (including bed operating
rights) and appurtenances relating to the Land and the Improvements, and only
with respect to the Facility located in Fayetteville, New York, a certain Lease
dated as of September 30, 1997 between Manlius Highbridge Street, LLC and
Manlius Partners, as amended and assigned from time to time.

     "Renewal Date" means the first day of each Renewal Term.

     "Renewal Option" has the meaning set forth in ss.12.1.

     "Renewal Rate" has the meaning set forth in ss.12.2.

     "Renewal Term" has the meaning set forth in ss.12.1.

     "Rent" has the meaning set forth in ss.2.3.

     "Rent Adjustment Date" means July 1, 2006 and each July 1 thereafter.

                                      -9-

     "Rent Schedule" means the schedule issued by Landlord to Tenant showing the
Base Rent to be paid by Tenant pursuant to the terms of this Lease, as such
schedule is amended from time to time by Landlord in accordance with the terms
of this Lease.

     "SALI Tenant, LLC Lease" means each lease entered into by and between
Landlord or a Landlord Affiliate and SALI Tenant, LLC, a North Carolina limited
liability company.

     "Secured Obligations" means all payment and performance obligations of
Tenant under this Lease and all documents executed by Tenant in connection with
this Lease.

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

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

     "Subtenant" means Manlius Clare Bridge Operator, Inc., a New York
corporation. Each Subtenant will be the licensed operator of its respective
Facility as shown on Exhibit C. References in this Lease to Subtenant shall
relate to such Subtenant's Facility unless expressly stated otherwise.

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

     "Tennessee Facility" means each Facility located in the State of Tennessee.

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

     "Texas Facility" means each Facility located in the State of Texas.

     "Underperforming Facilities" shall mean those Facilities that are not
meeting performance expectations as initially identified from time to time by
Tenant and approved by Landlord in Landlord's sole and absolute discretion.

     "Wisconsin Facility" means each Facility located in the State of Wisconsin.

     1.5 Landlord As Agent. With respect to each Indiana Facility, Wisconsin
Facility, North Carolina Facility, Tennessee Facility and Texas Facility, each
of HCRI-IN, HCRI-NC, HCRI-TN, HCRI-TX and HCRI-WI, respectively, appoints HCRI
as its agent and lawful attorney-in-fact to act for it for all purposes and
actions of Landlord under this Lease. All notices, consents, waivers and all
other documents and instruments executed by HCRI pursuant to this Lease, and all
notices from Tenant pursuant to this Lease, from time to time and all other
actions of HCRI as Landlord under this Lease shall be binding upon HCRI-IN,
HCRI-NC, HCRI-TN, HCRI-TX and HCRI-WI, as applicable. All Rent payable under
this Lease shall be paid to HCRI.

                                 ARTICLE 2: RENT

     2.1 Base Rent. Tenant shall pay Landlord base rent ("Base Rent") in advance
in consecutive monthly installments payable on the first day of each month
during the Term

                                      -10-

commencing on the Commencement Date. If the Effective Date is not the first day
of a month, Tenant shall pay Landlord Base Rent on the Effective Date for the
partial month, i.e., for the period commencing on the Effective Date and ending
on the day before the Commencement Date. The Base Rent for the Initial Term will
be computed monthly and will be equal to 1/12th of the sum of the products of
each Lease Advance times the Lease Rate for each Lease Advance. The Base Rent
for the Renewal Term will be computed in accordance with ss.12.2.

     2.1.1 Base Rent Adjustment. If Landlord makes a Lease Advance after the
Effective Date, the Base Rent will be increased effective on the Payment Date
based upon the applicable Lease Rate in effect on the Payment Date. Until Tenant
receives a revised Rent Schedule from Landlord, Tenant shall for each month [i]
continue to make installments of Base Rent according to the payment schedule
existing on the Effective Date or according to the Rent Schedule in effect on
the day before the Payment Date; and [ii] within 10 days following Landlord's
issuance of an invoice, pay the difference between the installment of Base Rent
that Tenant paid to Landlord for such month and the installment of Base Rent
actually due to Landlord for such month as a result of the Lease Advance. On the
first day of the month following receipt of the revised Rent Schedule, Tenant
shall pay the monthly installment of Base Rent specified in the revised Rent
Schedule.

     2.2 Increase of Lease Rate and Base Rent. Commencing on July 1, 2006 and on
each anniversary thereafter during the Term, including any Renewal Term and
Extended Term, (each such date shall be herein defined as "Rent Adjustment
Date") the Base Rent shall increase to an amount equal to the Base Rent for the
prior Lease Year plus the lesser of (a) the Maximum Rent Adjustment (defined
below), or (b) an amount determined by multiplying the Base Rent then in effect
times a fraction, the numerator of which shall be the CPI Index on the
applicable Rent Adjustment Date and the denominator of which shall be the CPI
Index on the preceding Rent Adjustment Date.

     If, for any Lease Year or any portion thereof, the Base Rent is adjusted in
accordance with clause (b) above, then the difference between the Base Rent for
such Lease Year, and the Base Rent for such Lease Year if adjusted in accordance
with clause (a) above shall be referred to herein as the "Rent Shortfall". If,
for any Lease Year, the Base Rent is adjusted in accordance with clause (a),
then the difference between the Base Rent for such Lease Year and the Base Rent
for such Lease Year if adjusted in accordance with clause (b), shall be referred
to herein as the "Rent Surplus".

     Any Rent Surplus for a Lease Year shall be applied first to payment of the
unpaid balance of any Rent Shortfalls for any previous Lease Years.

     As used herein, the "Maximum Rent Adjustment" shall be the Base Rent in any
applicable year, which would result solely by multiplying, in each year, on the
Rent Adjustment Date, the Base Rent then in effect (as adjusted pursuant to this
ss.2.2 only) by 1.025.

     As used herein, the "CPI Index" shall mean and refer to the Consumer Price
Index for Urban Wage Earners and Clerical Workers, U.S. Cities Average. All
items (1982-84-100) published by the Bureau of Labor Statistics of the U.S.
Department of Labor; provided that if compilation of the CPI Index in its
present form and calculated on its present basis is

                                      -11-

discontinued or transferred to any other governmental department or bureau, then
the index most nearly the same as the CPI Index published by the Bureau of Labor
statistics shall be used. If there is no such similar index, a substitute index
which is then generally recognized as being similar to the CPI Index shall be
used, such substitute index to be reasonably selected by Landlord. Until the CPI
Index is established, Tenant shall pay the Base Rent calculated in accordance
with clause (a) above, and once the CPI Index for the Rent Adjustment Date of
such Lease Year is published, the new Base Rent (as increased) shall be
effective retroactively as of the Rent Adjustment Date with the remaining
payments to be adjusted ratably.

     2.3 Additional Rent. In addition to Base Rent, Tenant shall pay all other
amounts, liabilities, obligations and Impositions which Tenant assumes or agrees
to pay under this Lease and any fine, penalty, interest, charge and cost which
may be added for nonpayment or late payment of such items (collectively the
"Additional Rent"). The Base Rent and Additional Rent are hereinafter referred
to as "Rent". Landlord shall have all legal, equitable and contractual rights,
powers and remedies provided either in this Lease or by statute or otherwise in
the case of nonpayment of the Rent.

     2.4 Place of Payment of Rent. As of the Effective Date hereof, Tenant shall
make all payments of Rent to Landlord by electronic wire transfer in accordance
with wiring instructions provided to Tenant by Landlord from time to time.

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

     2.6 No Termination, Abatement, Etc. Except as otherwise specifically
provided in this Lease, Tenant shall remain bound by this Lease in accordance
with its terms. Tenant shall not, without the consent of Landlord, modify,
surrender or terminate the Lease, nor seek nor be entitled to any abatement,
deduction, recoupment, deferment or reduction of Rent, or set-off against the
Rent. Except as expressly provided in this Lease, the obligations of Landlord
and Tenant shall not be affected by reason of [i] any damage to, or destruction
of, the Leased Property or any part thereof from whatever cause or any Taking
(as hereinafter defined) of the Leased Property or any part thereof; [ii] the
lawful or unlawful prohibition of, or restriction upon, Tenant's use of the
Leased Property, or any part thereof, the interference with such use by any
person, corporation, partnership or other entity, or by reason of eviction by
paramount title (subject to the provisions of Article 10); [iii] any claim which
Tenant has or might have against Landlord or by reason of any default or breach
of any warranty by Landlord under this Lease or any other agreement between
Landlord and Tenant, or to which Landlord and Tenant are parties; [iv] any
bankruptcy, insolvency, reorganization, composition, readjustment, liquidation,
dissolution, winding up or other proceeding affecting Landlord or any assignee
or transferee of Landlord; or [v] any other cause, whether similar or dissimilar
to any of the foregoing, other than a discharge of Tenant from any such
obligations as a matter of law. Except as otherwise specifically provided in
this Lease, Tenant hereby specifically waives all rights, arising from any
occurrence whatsoever, which may now or hereafter be conferred upon it by law
[a] to modify, surrender or terminate this Lease or quit or surrender the Leased
Property or any portion thereof; or [b] entitling Tenant to any abatement,
reduction, suspension or deferment of the Rent or other sums payable by Tenant
hereunder. The obligations of Landlord and Tenant hereunder shall be

                                      -12-

separate and independent covenants and agreements and the Rent and all other
sums payable by Tenant hereunder shall continue to be payable in all events
unless the obligations to pay the same shall be terminated pursuant to the
express provisions of this Lease or by termination of this Lease other than by
reason of an Event of Default.

     2.7 Computational Method. Landlord and Tenant acknowledge that all rates
under this Lease will be computed based on the actual number of days elapsed
over a 360-day year (365/360 method).

                      ARTICLE 3: IMPOSITIONS AND UTILITIES

     3.1 Payment of Impositions. Tenant shall pay, as Additional Rent, all
Impositions that may be levied or become a lien on the Leased Property or any
part thereof at any time (whether prior to or during the Term), without regard
to prior ownership of said Leased Property, before any fine, penalty, interest,
or cost is incurred; provided, however, Tenant may contest any Imposition in
accordance with ss.3.7. Tenant shall deliver to Landlord [i] not more than 10
days after the due date of each Imposition, copies of the invoice for such
Imposition and the check delivered for payment thereof; and [ii] not more than
30 business days after the due date of each Imposition, a copy of the official
receipt evidencing such payment or other proof of payment satisfactory to
Landlord. Tenant's obligation to pay such Impositions shall be deemed absolutely
fixed upon the date such Impositions become a lien upon the Leased Property or
any part thereof. Tenant, at its expense, shall prepare and file all tax returns
and reports in respect of any Imposition as may be required by governmental
authorities. Tenant shall be entitled to any refund due from any taxing
authority if no Event of Default shall have occurred hereunder and be
continuing. Landlord shall be entitled to any refund from any taxing authority
if an Event of Default has occurred and is continuing. Any refunds retained by
Landlord due to an Event of Default shall be applied as provided in ss.8.8.
Landlord and Tenant shall, upon request of the other, provide such data as is
maintained by the party to whom the request is made with respect to the Leased
Property as may be necessary to prepare any required returns and reports. In the
event governmental authorities classify any property covered by this Lease as
personal property, Tenant shall file all personal property tax returns in such
jurisdictions where it may legally so file. Landlord, to the extent it possesses
the same, and Tenant, to the extent it possesses the same, will provide the
other party, upon request, with cost and depreciation records necessary for
filing returns for any property so classified as personal property. Where
Landlord is legally required to file personal property tax returns, Tenant will
be provided with copies of assessment notices indicating a value in excess of
the reported value in sufficient time for Tenant to file a protest. Tenant may,
upon notice to Landlord, at Tenant's option and at Tenant's sole cost and
expense, protest, appeal, or institute such other proceedings as Tenant may deem
appropriate to effect a reduction of real estate or personal property
assessments and Landlord, at Tenant's expense as aforesaid, shall fully
cooperate with Tenant in such protest, appeal, or other action. Tenant shall
reimburse Landlord for all personal property taxes paid by Landlord within 30
days after receipt of billings accompanied by copies of a bill therefor and
payments thereof which identify the personal property with respect to which such
payments are made. Impositions imposed in respect to the tax-fiscal period
during which the Term terminates shall be adjusted and prorated between Landlord
and Tenant, whether or not such Imposition is imposed before or after such
termination, and Tenant's obligation to pay or Landlord's obligation to refund
its prorated share thereof shall survive such termination.

                                      -13-

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

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

     3.4 Utilities. Tenant shall pay, or cause to be paid, as Additional Rent,
all taxes, assessments, charges, deposits, and bills for utilities, including,
without limitation, charges for water, gas, oil, sanitary and storm sewer,
electricity, telephone service, and trash collection, which may be charged
against the occupant of the Improvements during the Term. If an Event of Default
occurs and while it remains uncured, Tenant shall, at Landlord's election,
deposit with Landlord on the first day of each month a sum equal to 1/12th of
the amount of the annual utility expenses for the preceding Lease Year, which
sums shall be used by Landlord to promptly pay such utilities. Tenant shall, on
demand, pay to Landlord any additional amount needed to pay such utilities.
Landlord's receipt of such payments shall only be an accommodation to Tenant

                                      -14-

and the utility companies and shall not constitute rent or income to Landlord.
Tenant shall at all times maintain that amount of heat necessary to ensure
against the freezing of water lines. Tenant hereby agrees to indemnify and hold
Landlord harmless from and against any liability or damages to the utility
systems and the Leased Property that may result from Tenant's failure to
maintain sufficient heat in the Improvements unless the failure arises from
Landlord's failure to make prompt payment of utility expenses to the extent that
funds for such expenses have been deposited with Landlord under this section.

     3.5 Discontinuance of Utilities. Landlord will not be liable for damages to
person or property or for injury to, or interruption of, business for any
discontinuance of utilities nor will such discontinuance in any way be construed
as an eviction of Tenant or cause an abatement of rent or operate to release
Tenant from any of Tenant's obligations under this Lease unless Landlord has
failed to make prompt payment of utility expenses to the extent that funds for
such expenses have been deposited with Landlord under ss.3.4 above.

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

     3.7 Permitted Contests. Tenant, on its own or on Landlord's behalf (or in
Landlord's name), but at Tenant's expense, may contest, by appropriate legal
proceedings conducted in good faith and with due diligence, the amount or
validity or application, in whole or in part, of any Imposition or any Legal
Requirement or insurance requirement or any lien, attachment, levy, encumbrance,
charge or claim provided that [i] in the case of an unpaid Imposition, lien,
attachment, levy, encumbrance, charge or claim, the commencement and
continuation of such proceedings shall suspend the collection thereof from
Landlord and from the Leased Property; [ii] neither the Leased Property nor any
Rent therefrom nor any part thereof or interest therein would be in any
immediate danger of being sold, forfeited, attached or lost; [iii] in the case
of a Legal Requirement, Landlord would not be in any immediate danger of civil
or criminal liability for failure to comply therewith pending the outcome of
such proceedings; [iv] in the event that any such contest shall involve a sum of
money or potential loss in excess of $50,000.00, Tenant shall deliver to
Landlord and its counsel an opinion of Tenant's counsel to the effect set forth
in clauses [i], [ii] and [iii], to the extent applicable; [v] in the case of a
Legal Requirement and/or an Imposition, lien, encumbrance or charge, Tenant
shall give such reasonable security as may be demanded by Landlord to insure
ultimate payment of the same and to prevent any sale or forfeiture of the
affected Leased Property or the Rent by reason of such nonpayment or
noncompliance; provided, however, the provisions of this section shall not be
construed to permit Tenant to contest the payment of Rent (except as to contests
concerning the method of computation or the basis of levy of any Imposition or
the basis for the assertion of any other claim) or any other sums payable by
Tenant to Landlord hereunder; [vi] in the case of an insurance requirement, the
coverage required by Article 4 shall be maintained; and [vii] if such contest be
finally resolved against Landlord or Tenant, Tenant shall, as Additional Rent
due hereunder, promptly pay the amount required to be paid, together with all
interest and penalties accrued thereon, or comply with the applicable Legal
Requirement or insurance requirement. Landlord, at Tenant's expense, shall
execute and deliver to Tenant such authorizations and other documents as may be
reasonably required in any such contest, and, if reasonably requested by

                                      -15-

Tenant or if Landlord so desires, Landlord shall join as a party therein. Tenant
hereby agrees to indemnify and save Landlord harmless from and against any
liability, cost or expense of any kind that may be imposed upon Landlord in
connection with any such contest and any loss resulting therefrom.

                              ARTICLE 4: INSURANCE

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

          (a) Loss or damage commonly covered by a "Special Form" policy
insuring against physical loss or damage to the Improvements and Personal
Property, including, but not limited to, risk of loss from fire and other
hazards, collapse, transit coverage, vandalism, malicious mischief, theft,
earthquake (if the Leased Property is in earthquake zone 1 or 2 per the ISO
rating system) and sinkholes (if usually recommended in the area of the Leased
Property). The policy shall be in the amount of the full replacement value (as
defined in ss.4.5) of the Improvements and Personal Property and shall contain a
deductible amount acceptable to Landlord. Landlord shall be named as an
additional insured. The policy shall include a stipulated value endorsement or
agreed amount endorsement and endorsements for contingent liability for
operations of building laws, demolition costs, and increased cost of
construction.

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

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

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

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

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

                                      -16-

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

          (a) Claims for personal injury or property damage commonly covered by
comprehensive general liability insurance with endorsements for incidental
malpractice, contractual, personal injury, owner's protective liability,
voluntary medical payments, products and completed operations, broad form
property damage, and extended bodily injury, with commercially reasonable
amounts for bodily injury, property damage, and voluntary medical payments
acceptable to Landlord, but with a combined single limit of not less than
$5,000,000.00 per occurrence.

          (b) Claims for personal injury and property damage commonly covered by
comprehensive automobile liability insurance, covering all owned and non-owned
automobiles, with commercially reasonable amounts for bodily injury, property
damage, and for automobile medical payments acceptable to Landlord, but with a
combined single limit of not less than $1,000,000.00 per occurrence.

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

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

          (e) Landlord acknowledges that, due to insurance market conditions,
Tenant has secured insurance coverage for the general liability and professional
liability insurance through a self-funding insurance program, whereby Tenant
assumes a $1,000,000.00 per claim self-insured retention with $5,000,000.00
annual aggregate insurance coverage over the self-insured retention amount.
Notwithstanding the terms and conditions set forth in ss.4.2, Landlord hereby
[i] waives any prior default or Event of Default as a result of Tenant's failure
to comply with the insurance requirements of ss.4.2 of the Lease as a result of
the self-funding insurance program, including without limitation, the ratings
requirement and the policy's operation on a "claims made" rather than
"occurrence" basis; and [ii] consents to Tenant maintaining general liability
and professional insurance through the self-funding insurance program, which may
operate on a "claims made" rather than "occurrence" basis and may not comply
with the ratings requirements of the Lease, provided Tenant [a] agrees to
continue to review the availability of insurance in an attempt to find coverage
which will comply with ss.4.2 (excluding ss.4.2(e)) and shall comply with ss.4.2
(excluding ss.4.2(e)) as and when such insurance coverage becomes generally
available to operators of assisted living facilities owned by institutional
landlords and similar to the Facilities at commercially reasonable rates; [b]
shall not modify (in any manner materially adverse to Landlord) or terminate the
self-funding program without Landlord's prior written consent; [c] names
Landlord as the equivalent of an additional insured under the self-funding
program; and [d] does not grant a securing interest in the self-funding program
to any other entity, other than any other self-funding program certificate
holder. Tenant shall otherwise comply with all applicable Legal Requirements
regarding general

                                      -17-

liability and professional liability insurance and shall maintain traditional
liability insurance (as opposed to the self-funding program) if so required by
applicable law.

     4.3 Builder's Risk Insurance. In connection with any construction, Tenant
shall maintain in full force and effect a builder's completed value risk policy
("Builder's Risk Policy") of insurance in a nonreporting form insuring against
all "Special Form" risk of physical loss or damage to the Improvements,
including, but not limited to, risk of loss from fire and other hazards,
collapse, transit coverage, vandalism, malicious mischief, theft, earthquake (if
Leased Property is in earthquake zone 1 or 2) and sinkholes (if usually
recommended in the area of the Leased Property). The Builder's Risk Policy shall
include endorsements providing coverage for building materials and supplies and
temporary premises. The Builder's Risk Policy shall be in the amount of the full
replacement value of the Improvements and shall contain a deductible amount
acceptable to Landlord. Landlord shall be named as an additional insured. The
Builder's Risk Policy shall include an endorsement permitting initial occupancy.

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

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

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

          (c) Tenant shall be the "named insured" and Landlord shall be an
"additional insured" on each liability policy. On all property and casualty
policies, Landlord and Tenant shall be joint loss payees.

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

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

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

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

                                      -18-

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

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

     4.7 No Separate Insurance. Tenant shall not take out separate insurance
concurrent in form or contributing in the event of loss with that required in
this Article, or increase the amounts of any then existing insurance, by
securing an additional policy or additional policies, unless all parties having
an insurable interest in the subject matter of the insurance, including Landlord
and any mortgagees, are included therein as additional insureds or loss payees,
the loss is payable under said insurance in the same manner as losses are
payable under this Lease, and such additional insurance is not prohibited by the
existing policies of insurance. Tenant shall immediately notify Landlord of the
taking out of such separate insurance or the increasing of any of the amounts of
the existing insurance by securing an additional policy or additional policies.

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

     4.9 Mortgages. The following provisions shall apply if Landlord now or
hereafter places a mortgage on the Leased Property or any part thereof: [i]
Tenant shall obtain a standard form of lender's loss payable clause insuring the
interest of the mortgagee; [ii] Tenant shall deliver evidence of insurance to
such mortgagee; [iii] loss adjustment of claims in excess of $50,000.00 shall
require the consent of the mortgagee, which consent shall not be unreasonably
withheld; and [iv] Tenant shall provide such other information and documents as
may be reasonably required by the mortgagee.

                                      -19-

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

                              ARTICLE 5: INDEMNITY

     5.1 Tenant's Indemnification. Tenant hereby indemnifies and agrees to hold
harmless Landlord, any successors or assigns of Landlord, and Landlord's and
such successor's and assign's directors, officers, employees and agents from and
against any and all demands, claims, causes of action, fines, penalties, damages
(including consequential damages), losses, liabilities (including strict
liability), judgments, and expenses (including, without limitation, reasonable
attorneys' fees, court costs, and the costs set forth in ss.8.7) incurred in
connection with or arising from: [i] the use or occupancy of the Leased Property
by Tenant or any persons claiming under Tenant; [ii] any activity, work, or
thing done, or permitted or suffered by Tenant in or about the Leased Property;
[iii] any acts, omissions, or negligence of Tenant or any person claiming under
Tenant, or the contractors, agents, employees, invitees, or visitors of Tenant
or any such person; [iv] any breach, violation, or nonperformance by Tenant or
any person claiming under Tenant or the employees, agents, contractors,
invitees, or visitors of Tenant or of any such person, of any term, covenant, or
provision of this Lease or any law, ordinance, or governmental requirement of
any kind, including, without limitation, any failure to comply with any
applicable requirements under the ADA; [v] any injury or damage to the person,
property or business of Tenant, its employees, agents, contractors, invitees,
visitors, or any other person entering upon the Leased Property; and [vi] any
construction, alterations, changes or demolition of the Facility performed by or
contracted for by Tenant or its employees, agents or contractors. Provided,
however, that Tenant shall have no indemnity obligation with respect to matters,
liabilities, obligations, claims, damages, penalties, causes of actions, costs
and expenses caused by Landlord's gross negligence or willful misconduct. If any
action or proceeding is brought against Landlord, its employees, or agents by
reason of any such claim, Tenant, upon notice from Landlord, will defend the
claim at Tenant's expense with counsel reasonably satisfactory to Landlord. All
amounts payable to Landlord under this section shall be payable on written
demand and any such amounts which are not paid within 10 days after demand
therefor by Landlord shall bear interest at the Overdue Rate. In case any
action, suit or proceeding is brought against Tenant by reason of any such
occurrence, Tenant shall use its best efforts to defend such action, suit or
proceeding.

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

     5.1.2 Survival of Covenants. The covenants of Tenant contained in this
section shall remain in full force and effect after the termination of this
Lease until the expiration of the period stated in the applicable statute of
limitations during which a claim or cause of action may be brought and payment
in full or the satisfaction of such claim or cause of action and of all

                                      -20-

expenses and charges incurred by Landlord relating to the enforcement of the
provisions herein specified.

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

     5.2 Environmental Indemnity; Audits. Tenant hereby indemnifies and agrees
to hold harmless Landlord, any successors to Landlord's interest in this Lease,
and Landlord's and such successors' directors, officers, employees and agents
from and against any losses, claims, damages (including consequential damages),
penalties, fines, liabilities (including strict liability), costs (including
cleanup and recovery costs), and expenses (including expenses of litigation and
reasonable attorneys' fees) incurred by Landlord or any other indemnitee or
assessed against any portion of the Leased Property by virtue of any claim or
lien by any governmental or quasi-governmental unit, body, or agency, or any
third party, for cleanup costs or other costs pursuant to any Environmental Law.
Tenant's indemnity shall survive the termination of this Lease. Provided,
however, Tenant shall have no indemnity obligation with respect to [i] Hazardous
Materials first introduced to the Leased Property subsequent to the date that
Tenant's occupancy of the Leased Property shall have fully terminated; or [ii]
Hazardous Materials introduced to the Leased Property by Landlord, its agent,
employees, successors or assigns. If at any time during the Term of this Lease
any governmental authority notifies Landlord or Tenant of a violation of any
Environmental Law or Landlord reasonably believes that a Facility may violate
any Environmental Law, Landlord may require one or more environmental audits of
such portion of the Leased Property, in such form, scope and substance as
specified by Landlord, at Tenant's expense. Tenant shall, within 30 days after
receipt of an invoice from Landlord, reimburse Landlord for all costs and
expenses incurred in reviewing any environmental audit, including, without
limitation, reasonable attorneys' fees and costs.

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

                    ARTICLE 6: USE AND ACCEPTANCE OF PREMISES

     6.1 Use of Leased Property. Tenant shall use and occupy the Leased Property
exclusively for the Facility Uses specified for each Facility and for all lawful
and licensed

                                      -21-

ancillary uses, and for no other purpose without the prior written consent of
Landlord which consent shall not be unreasonably withheld. Tenant shall obtain
and maintain all approvals, licenses, and consents needed to use and operate the
Leased Property as herein permitted. Tenant shall deliver to Landlord complete
copies of material surveys, examinations, certification and licensure
inspections, compliance certificates, and other similar reports issued to Tenant
by any governmental agency within 10 days after Tenant's receipt of each item.

     6.2 Acceptance of Leased Property. Tenant acknowledges that [i] Tenant and
its agents have had an opportunity to inspect the Leased Property; [ii] Tenant
has found the Leased Property fit for Tenant's use; [iii] Landlord will deliver
the Leased Property to Tenant in "as-is" condition; [iv] Landlord is not
obligated to make any improvements or repairs to the Leased Property; and [v]
the roof, walls, foundation, heating, ventilating, air conditioning, telephone,
sewer, electrical, mechanical, elevator, utility, plumbing, and other portions
of the Leased Property are in good working order. Tenant waives any claim or
action against Landlord with respect to the condition of the Leased Property.
LANDLORD MAKES NO WARRANTY OR REPRESENTATION, EXPRESS OR IMPLIED, IN RESPECT OF
THE LEASED PROPERTY OR ANY PART THEREOF, EITHER AS TO ITS FITNESS FOR USE,
DESIGN OR CONDITION FOR ANY PARTICULAR USE OR PURPOSE OR OTHERWISE, OR AS TO
QUALITY OF THE MATERIAL OR WORKMANSHIP THEREIN, LATENT OR PATENT, IT BEING
AGREED THAT ALL SUCH RISKS ARE TO BE BORNE BY TENANT.

     6.3 Conditions of Use and Occupancy. Tenant agrees that during the Term it
shall use and keep the Leased Property in a careful, safe and proper manner; not
commit or suffer waste thereon; not use or occupy the Leased Property for any
unlawful purposes; not use or occupy the Leased Property or permit the same to
be used or occupied, for any purpose or business deemed extrahazardous on
account of fire or otherwise; keep the Leased Property in such repair and
condition as may be required by the Board of Health, or other city, state or
federal authorities, free of all cost to Landlord; not permit any acts to be
done which will cause the cancellation, invalidation, or suspension of any
insurance policy; and permit Landlord and its agents to enter upon the Leased
Property at all reasonable times to examine the condition thereof and
accompanied by a representative of Tenant to the extent such a representative is
available.

                   ARTICLE 7: MAINTENANCE AND MECHANICS' LIENS

     7.1 Maintenance. Tenant shall maintain, repair, and replace the Leased
Property, including, without limitation, all structural and nonstructural
repairs and replacements to the roof, foundations, exterior walls, parking
areas, sidewalks, water, sewer and gas connections, pipes and mains. Tenant
shall pay, as Additional Rent, the full cost of maintenance, repairs, and
replacements. Tenant shall maintain all drives, sidewalks, parking areas, and
lawns on or about the Leased Property in a clean and orderly condition, free of
accumulations of dirt, rubbish, snow and ice. Tenant shall permit Landlord to
inspect the Leased Property at all reasonable times, and shall implement all
reasonable suggestions of the Landlord as to the maintenance and replacement of
the Leased Property.

     7.2 Required Alterations. Tenant shall, at Tenant's sole cost and expense,
make any additions, changes, improvements or alterations to the Leased Property,
including

                                      -22-

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

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

     7.4 Replacements of Fixtures and Landlord's Personal Property. Tenant shall
not remove Fixtures and Landlord's Personal Property from the Leased Property
except to replace the Fixtures and Landlord's Personal Property by other similar
items of equal quality and value. Items being replaced by Tenant may be removed
and shall become the property of Tenant and items replacing the same shall be
and remain the property of Landlord. Tenant shall execute, upon written request
from Landlord, any and all documents necessary to evidence Landlord's ownership
of Landlord's Personal Property and replacements therefor. Tenant may finance
replacements for the Fixtures and Landlord's Personal Property by equipment
lease or by a security agreement and financing statement and, if the original
cost of the equipment at any one Facility exceeds $50,000.00, Tenant must obtain
the following: [i] Landlord's consent to the terms and conditions of the
equipment lease or security agreement; and [ii] a nondisturbance agreement from
the equipment lessor or lender upon terms and conditions reasonably acceptable
to Landlord, including without limitation, the following: [a] Landlord shall
have the right (but not the obligation) to assume such security agreement or
equipment lease upon the occurrence of an Event of Default under this Lease; [b]
the equipment lessor or lender shall notify Landlord of any default by Tenant
under the equipment lease or security agreement and give Landlord a reasonable
opportunity to cure such default; and [c] Landlord shall have the right to
assign its rights under the equipment lease, security agreement, or
nondisturbance agreement. Tenant shall, within 30 days after receipt of an
invoice from Landlord, reimburse Landlord for all costs and expenses incurred in
reviewing and approving the equipment lease, security agreement, and
nondisturbance agreement, including, without limitation, reasonable attorneys'
fees and costs.

                                      -23-

                        ARTICLE 8: DEFAULTS AND REMEDIES

     8.1 Events of Default. The occurrence of any one or more of the following
shall be an event of default ("Event of Default") hereunder:

          (a) Tenant fails to pay in full any installment of Rent or any other
monetary obligation payable by Tenant under this Lease (including the Option
Price) within three business days after Tenant is given written notice of such
failure, which written notice shall be given, at Landlord's option, at any time
after the expiration of 10 days from the date such payment is due; provided,
however, that, if Tenant receives two notices of default during any one year
period, regardless of any subsequent cure of such default, thereafter Landlord
shall not be obligated to give Tenant written notice of any failure to make any
such payments, and it shall be an Event of Default if Tenant fails to pay any
installment of Rent or any other monetary obligation payable by Tenant under
this Lease (including the Option Price) within 10 days after such payment is
due.

          (b) Tenant, Subtenant or Entity Guarantor fails to comply with any
covenant set forth in Article 14, ss.15.6, ss.15.7, ss.15.8 or Article 20 of
this Lease, to the extent such covenant is applicable to such entity; provided
however, that, with respect to ss.15.7.2, the failure to maintain the Portfolio
Coverage Ratio as set forth therein shall be an Event of Default only if Tenant
fails to provide and maintain a Letter of Credit in the Approved Amount, as
provided for in ss.20.1 hereof, within 30 days after the due date for the
delivery to Landlord of the financial report required pursuant to ss.15.3.1 that
reveals Tenant's failure to comply with the Portfolio Coverage Ratio.

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

          (d) Tenant or Subtenant abandons or vacates any Facility Property or
any material part thereof or ceases to do business or ceases to exist for any
reason for any one or more days except as a result of condemnation or casualty.

          (e) [i] The filing by Tenant Subtenant, or Entity Guarantor of a
petition under the Bankruptcy Code or the commencement of a bankruptcy or
similar proceeding by Tenant; [ii] the failure by Tenant, Subtenant or Entity
Guarantor within 60 days to dismiss an involuntary bankruptcy petition or other
commencement of a bankruptcy, reorganization or similar proceeding against
Tenant, Subtenant or Entity Guarantor, or to lift or stay any execution,
garnishment or attachment of such consequence as will impair its ability to
carry on its operation at the Leased Property; [iii] the entry of an order for
relief under the Bankruptcy Code in respect of Tenant, Subtenant or Entity
Guarantor; [iv] any assignment by Tenant, Subtenant or Entity Guarantor for the
benefit of its creditors; [v] the entry by Tenant, Subtenant or Entity Guarantor

                                      -24-

into an agreement of composition with its creditors; [vi] the approval by a
court of competent jurisdiction of a petition applicable to Tenant, Subtenant or
Entity Guarantor in any proceeding for its reorganization instituted under the
provisions of any state or federal bankruptcy, insolvency, or similar laws;
[vii] appointment by final order, judgment, or decree of a court of competent
jurisdiction of a receiver of a whole or any substantial part of the properties
of Tenant, Subtenant or Entity Guarantor (provided such receiver shall not have
been removed or discharged within 60 days of the date of his qualification).

          (f) [i] Any receiver, administrator, custodian or other person takes
possession or control of any of the Leased Property and continues in possession
for 60 days; [ii] any writ against any of the Leased Property is not released
within 60 days; [iii] any judgment is rendered or proceedings are instituted
against the Leased Property, Tenant, Subtenant or Entity Guarantor which affect
the Leased Property or any part thereof, which is not dismissed for 60 days
(except as otherwise provided in this section); [iv] all or a substantial part
of the assets of Tenant, Subtenant or Entity Guarantor are attached, seized,
subjected to a writ or distress warrant, or are levied upon, or come into the
possession of any receiver, trustee, custodian, or assignee for the benefit of
creditors; [v] Tenant, Subtenant or Entity Guarantor is enjoined, restrained, or
in any way prevented by court order (other than ex parte order) from conducting
all or a substantial part of its business or affairs at the Leased Property; or
[vi] except as otherwise permitted hereunder, a final notice of lien, levy or
assessment is filed of record with respect to all or any part of the Leased
Property or any property of Tenant, Subtenant or Entity Guarantor located at the
Leased Property and is not dismissed, discharged, or bonded-off within 30 days
or is not otherwise addressed pursuant to ss.7.3.

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

          (h) Tenant, Subtenant, Entity Guarantor or any Affiliate defaults on
any indebtedness or obligation to Landlord or any Landlord Affiliate, including,
without limitation, any lease with Landlord or any Landlord Affiliate, or Tenant
or any Affiliate receives notice of acceleration of payment in connection with a
default under any Material Obligation unless Tenant can demonstrate to Landlord
that such acceleration will not cause Tenant to be in violation of ss.15.7, and
any applicable grace or cure period with respect to default under such
indebtedness or obligation expires without such default having been cured. This
provision applies to all such indebtedness and obligations as they may be
amended, modified, extended, or renewed from time to time.

          (i) Except as otherwise specifically permitted herein, the assignment,
sublease or the occurrence of any other change in Tenant's leasehold interest in
any of the Leased Property, which shall not include any change in Tenant's stock
ownership.

          (j) The license to operate any Facility for the applicable Facility
Use, for the Facility or any other Government Authorization which is material to
the operation of such

                                      -25-

Facility, is canceled, suspended or otherwise invalidated after expiration of
any cure or appeal period, notice of impending revocation proceedings is
received and Tenant or Subtenant fails to diligently contest such proceeding, or
any reduction occurs in the number of licensed beds or units at any Facility in
excess of 3%.

          (k) Notwithstanding anything in this ss.8.1 to the contrary, an Event
of Default under [i] ss.8.1(b) (but only with respect to ss.15.7); [ii]
ss.8.1(c); [iii] ss.8.1(d); [iv] ss.8.1(f) (but only with respect to [v]
thereof); or [v] ss.8.1(j) (each a "Potential Event of Default") shall not
constitute an Event of Default hereunder unless such Potential Event of Default
negatively effects 5% or more of the total beds at the Leased Property. If the
Potential Event of Default negatively effects less than 5% of the total beds at
the Leased Property, then Tenant shall have 90 days (in addition to any cure
period set forth above) after the occurrence of the Potential Event of Default
to cure such Potential Event of Default. If such Potential Event of Default is
not cured within said 90-day period, then Tenant shall be obligated within 12
months thereafter to either [i] provide a substitute property for that portion
of the Leased Property that caused the Potential Event of Default, which
substitute property shall satisfy all of the Landlord's underwriting
requirements, in Landlord's sole discretion, or [ii] acquire that portion of the
Leased Property which caused the Potential Event of Default at a price equal to
the greater of Fair Market Value, as determined pursuant to ss.13.3 hereof or
the Allocated Lease Amount for the Facility plus 10% of the Allocated Lease
Amount. The terms and conditions set forth in ss.13.4 hereof shall apply to any
closing.

          (l) Any Guarantor of this Lease dissolves, terminates, or fails to
comply with any covenant or requirement of such Guarantor set forth in this
Lease or in the Guaranty of such Guarantor.

     8.2 Remedies. Landlord may exercise any one or more of the following
remedies upon the occurrence of an Event of Default:

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

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

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

                                      -26-

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

          (e) Landlord may accelerate all of the unpaid Rent hereunder so that
the aggregate Rent for the unexpired term of this Lease becomes immediately due
and payable.

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

          (g) With respect to the Collateral or any portion thereof and
Landlord's security interest therein, Landlord may exercise all of its rights as
secured party under Article 9 of the Uniform Commercial Code as adopted in the
State. Landlord may sell the Collateral by public or private sale upon 10 days
notice to Tenant. Tenant and Subtenant agree that a commercially reasonable
manner of disposition of the Collateral shall include, without limitation and at
the option of Landlord, a sale of the Collateral, in whole or in part,
concurrently with the sale of the Leased Property.

          (h) Landlord may obtain control over and collect the Receivables and
apply the proceeds of the collections to satisfaction of the Secured Obligations
unless prohibited by law. Tenant and Subtenant appoint Landlord or its designee
as attorney for Tenant or Subtenant with powers [i] to receive, to endorse, to
sign and/or to deliver, in Tenant's or Subtenant's name or Landlord's name, any
and all checks, drafts, and other instruments for the payment of money relating
to the Receivables, and to waive demand, presentment, notice of dishonor,
protest, and any other notice with respect to any such instrument; [ii] to sign
Tenant's or Subtenant's name on any invoice or bill of lading relating to any
Receivable, drafts against account debtors, assignments and verifications of
Receivables, and notices to account debtors; [iii] to send verifications of
Receivables to any account debtor; and [iv] to do all other acts and things
necessary to carry out this Lease. Landlord shall not be liable for any
omissions, commissions, errors of judgment, or mistakes in fact or law made in
the exercise of any such powers provided Landlord's exercise of such power is
commercially reasonable. At Landlord's option, Tenant and Subtenant shall [i]
provide Landlord a full accounting of all amounts received on account of
Receivables with such frequency and in such form as Landlord may require, either
with or without applying all collections on Receivables in payment of the
Secured Obligations or [ii] deliver to Landlord on the day of receipt all such
collections in the form received and duly endorsed by Tenant. At Landlord's
request, Tenant and Subtenant shall institute any action or enter into any
settlement determined by Landlord to be necessary to obtain recovery or redress
from any account debtor in default of Receivables. Landlord may give notice of
its security interest in the Receivables to any or all account debtors with
instructions to make all payments on Receivables directly to Landlord, thereby
terminating Tenant's or Subtenant's authority to collect Receivables. After
terminating Tenant's or Subtenant's authority to enforce or collect Receivables,
Landlord shall have the right to take possession of any or all Receivables and
records thereof and is hereby authorized to do so, and only Landlord shall have
the right to collect and enforce the Receivables. Prior to the occurrence of an
Event of Default, at Tenant's

                                      -27-

and Subtenant's cost and expense, but on behalf of Landlord and for Landlord's
account, Tenant and Subtenant shall collect or otherwise enforce all amounts
unpaid on Receivables and hold all such collections in trust for Landlord, but
Tenant may commingle such collections with Tenant's and Subtenant's own funds,
until Tenant's or Subtenant's authority to do so has been terminated, which may
be done only after an Event of Default. Notwithstanding any other provision
hereof, Landlord does not assume any of Tenant's or Subtenant's obligations
under any Receivable, and Landlord shall not be responsible in any way for the
performance of any of the terms and conditions thereof by Tenant or Subtenant.

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

          (j) Landlord may terminate its obligation to disburse Lease Advances.

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

     8.3 Right of Set-Off. After an Event of Default occurs hereunder and is
continuing, Landlord may, and is hereby authorized by Tenant to, at any time and
from time to time without advance notice to Tenant (any such notice being
expressly waived by Tenant), set-off or recoup and apply any and all sums held
by Landlord, any indebtedness of Landlord to Tenant, and any claims by Tenant
against Landlord, against any obligations of Tenant hereunder and against any
claims by Landlord against Tenant, whether or not such obligations or claims of
Tenant are matured and whether or not Landlord has exercised any other remedies
hereunder. The rights of Landlord under this section are in addition to any
other rights and remedies Landlord may have against Tenant.

                                      -28-

     8.4 Performance of Tenant's Covenants. Landlord may perform any obligation
of Tenant which Tenant has failed to perform within 10 days after Landlord has
sent a written notice to Tenant informing it of its specific failure. Tenant
shall reimburse Landlord on demand, as Additional Rent, for any expenditures
thus incurred by Landlord and shall pay interest thereon at the Overdue Rate (as
defined in ss.8.6).

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

     8.6 Interest. In addition to the late payment charge, any payment not made
by Tenant within 10 days after the due date shall thereafter bear interest at
the rate (the "Overdue Rate") of the greater of [i] 18.5% per annum; or [ii]
2.5% per annum above the Lease Rate then in effect (except that, to the extent
this Lease is governed by Texas law, the Overdue Rate shall be 18.0% per annum);
provided, however, that at no time will Tenant be required to pay interest at a
rate higher than the maximum legal rate and, provided further, that if a court
of competent jurisdiction determines that any other charges payable under this
Lease are deemed to be interest, the Overdue Rate shall be adjusted to ensure
that the aggregate interest payable under this Lease does not accrue at a rate
in excess of the maximum legal rate. Tenant shall not be required to pay
interest upon any late payment fees assessed pursuant to ss.8.5.

     8.7 Litigation; Attorneys' Fees. Within five days after Tenant has
knowledge of any litigation or other proceeding that may be instituted against
Tenant that is material to the construction or operation of any Facility or that
is material to Tenant's business or financial condition, against all or any
portion of the Leased Property to secure or recover possession thereof, or that
may affect the title to or the interest of Landlord in all or any portion of the
Leased Property, Tenant shall give written notice thereof to Landlord. Tenant
shall pay all reasonable costs and expenses incurred by Landlord in enforcing or
preserving Landlord's rights under this Lease, whether or not an Event of
Default has actually occurred or has been declared and thereafter cured,
including, without limitation, [i] the fees, expenses, and costs of any
litigation, receivership, administrative, bankruptcy, insolvency or other
similar proceeding; [ii] reasonable attorney, paralegal, consulting and witness
fees and disbursements, whether in-house counsel or outside counsel; and [iii]
the expenses, including, without limitation, lodging, meals, and transportation,
of Landlord and its employees, agents, attorneys, and witnesses in preparing for
litigation, administrative, bankruptcy, insolvency or other similar proceedings
and attendance at hearings, depositions, and trials in connection therewith. All
such costs, charges and fees payable by Tenant shall be deemed to be Additional
Rent under this Lease.

                                      -29-

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

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

                        ARTICLE 9: DAMAGE AND DESTRUCTION

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

     9.2 Substantial Destruction.

     9.2.1 If any Facility's Improvements are substantially destroyed at any
time other than during the final 18 months of the Initial Term or any Renewal
Term, Tenant shall promptly rebuild and restore such Improvements in accordance
with ss.9.4 through ss.9.9 and Landlord shall make the insurance proceeds
available to Tenant for such restoration. The term "substantially destroyed"
means any casualty resulting in the loss of use of 50% or more of the licensed
beds or units at any one Facility.

     9.2.2 If any Facility's Improvements are substantially destroyed during the
final 18 months of the Initial Term or any Renewal Term, Tenant shall elect one
of the following options: [i] to promptly rebuild in accordance with ss.9.4
through ss.9.9; [ii] to renew this Lease in accordance with ss.9.2.3 and
promptly rebuild in accordance with ss.9.4 through ss.9.9 (except that Tenant
shall not have this option if the Casualty occurs during the final 18 months of
the final Renewal Term); or [iii] to exercise its option to purchase the Leased
Property under this Lease in

                                      -30-

accordance with ss.9.2.4. Tenant shall give notice ("Election Notice") of its
election of one of the foregoing options within 30 days after the date of the
Casualty Notice. If Tenant fails to give Landlord the Election Notice within
such 30-day period, Tenant shall be deemed to have elected to rebuild the
damaged Leased Property. If Tenant elects to rebuild the damaged Leased Property
but does not elect to renew this Lease for a Renewal Term in accordance with
ss.9.2.3, Tenant shall provide to Landlord with the Election Notice an estimate
of the schedule to complete the restoration of the damaged Leased Property. If
the estimate of time for completion of the restoration extends beyond the
expiration date of the then current Term, Landlord and Tenant shall extend the
current Term by mutual agreement in order to allow Tenant sufficient time to
complete the restoration within the current Term. At the expiration of the
extended current Term, Tenant may exercise its Renewal Option under Article 12
(unless the extended current Term was the final Renewal Term) or may exercise
its Option to Purchase under Article 13.

     9.2.3 If any Facility's Improvements are substantially destroyed during the
final 18 months of the Initial Term and Tenant elects to renew this Lease in its
entirety by delivery of an Election Notice to such effect, this ss.9.2.3 shall
apply. If Tenant so elects to renew, the Renewal Term will be in effect for the
balance of the then current Term plus a 15-year period. The Renewal Term will
commence on the third day following Landlord's receipt of Tenant's Election
Notice. All other terms of this Lease for the Renewal Term shall be in
accordance with Article 12. The damaged Improvements will be restored by Tenant
in accordance with the provisions of this Article 9 regarding partial
destruction.

     9.2.4 If any Facility's Improvements are substantially destroyed during the
final 18 months of the Initial Term or the Renewal Term and Tenant elects to
purchase the Leased Property under this Lease by delivery of any Election Notice
to such effect, this ss.9.2.4 shall apply. The Option Price will be determined
in accordance with ss.13.2 and the Fair Market Value will be determined in
accordance with ss.13.3 except as otherwise provided in this section. For
purposes of determining the Fair Market Value, the Leased Property will be
valued as if it had been restored to be equal in value to the Leased Property
existing immediately prior to the occurrence of the damage. All other terms of
the option to purchase shall be in accordance with Article 13. Landlord shall
hold the insurance proceeds until the closing of the purchase of the Leased
Property and at closing shall deliver the proceeds to Tenant.

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

     9.4 Restoration. Tenant shall promptly repair, rebuild, or restore the
damaged Leased Property, at Tenant's expense, so as to make the Leased Property
at least equal in value to the Leased Property existing immediately prior to
such occurrence and as nearly similar to it in character as is practicable and
reasonable. Before beginning such repairs or rebuilding, or letting any
contracts in connection with such repairs or rebuilding, Tenant will submit for
Landlord's approval, which approval Landlord will not unreasonably withhold or
delay, plans and specifications meeting the requirements of ss.16.2 for such
repairs or rebuilding. Promptly after receiving Landlord's approval of the plans
and specifications and receiving the proceeds of insurance, Tenant will begin
such repairs or rebuilding and will prosecute the repairs and

                                      -31-

rebuilding to completion with diligence, subject, however, to strikes, lockouts,
acts of God, embargoes, governmental restrictions, and other causes beyond
Tenant's reasonable control. Landlord will make available to Tenant the net
proceeds of any fire or other casualty insurance paid to Landlord for such
repair or rebuilding as the same progresses, after deduction of any costs of
collection, including attorneys' fees. Payments will be made against properly
certified vouchers of a competent architect in charge of the work and approved
by Landlord. Payments for deposits for the repairing or rebuilding or delivery
of materials to the Facility will be made upon Landlord's receipt of evidence
satisfactory to Landlord that such payments are required in advance. Prior to
commencing the repairing or rebuilding, Tenant shall deliver to Landlord for
Landlord's approval a schedule setting forth the estimated monthly draws for
such work. Landlord will contribute to such payments out of the insurance
proceeds an amount equal to the proportion that the total net amount received by
Landlord from insurers bears to the total estimated cost of the rebuilding or
repairing, multiplied by the payment by Tenant on account of such work. Landlord
may, however, withhold 10% from each payment due subcontractors until the work
is completed and proof has been furnished to Landlord that no lien or liability
has attached or will attach to the Leased Property or to Landlord in connection
with such repairing or rebuilding. Upon the completion of rebuilding and the
furnishing of such proof, the balance of the net proceeds of such insurance
payable to Tenant on account of such repairing or rebuilding will be paid to
Tenant. Tenant will obtain and deliver to Landlord a temporary or final
certificate of occupancy before the damaged Leased Property is reoccupied for
any purpose. Tenant shall complete such repairs or rebuilding in accordance with
the building codes and all applicable laws, ordinances, regulations, or orders
of any state, municipal, or other public authority affecting the repairs or
rebuilding, and also in accordance with all requirements of the insurance rating
organization, or similar body. Any remaining proceeds of insurance after such
restoration will be Tenant's property.

     9.5 Insufficient Proceeds. If the proceeds of any insurance settlement are
not sufficient to pay the costs of Tenant's repair, rebuilding or restoration
under ss.9.4 in full, Tenant shall deposit with Landlord at Landlord's option,
and within 20 days of Landlord's request, an amount sufficient in Landlord's
reasonable judgment to complete such repair, rebuilding or restoration. Tenant
shall not, by reason of the deposit or payment, be entitled to any reimbursement
from Landlord or diminution in or postponement of the payment of the Rent.

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

     9.7 Landlord's Inspection. During the progress of such repairs or
rebuilding, Landlord and its architects and engineers may, from time to time,
inspect the Leased Property and will be furnished, if required by them, with
copies of all plans, shop drawings, and specifications relating to such repairs
or rebuilding. Tenant will keep all plans, shop drawings, and specifications at
the building, and Landlord and its architects and engineers may examine them at
all reasonable times. If, during such repairs or rebuilding, Landlord and its
architects and engineers determine that the repairs or rebuilding are not being
done in accordance with the

                                      -32-

approved plans and specifications, Landlord will give prompt notice in writing
to Tenant, specifying in detail the particular deficiency, omission, or other
respect in which Landlord claims such repairs or rebuilding do not accord with
the approved plans and specifications. Upon the receipt of any such notice,
Tenant will cause corrections to be made to any deficiencies, omissions, or such
other respect. Tenant's obligations to supply insurance, according to Article 4,
will be applicable to any repairs or rebuilding under this section.

     9.8 Landlord's Costs. Tenant shall, within 30 days after receipt of an
invoice from Landlord, pay the reasonable costs, expenses, and fees of any
architect or engineer employed by Landlord to review any plans and
specifications and to supervise and approve any construction, or for any
services rendered by such architect or engineer to Landlord as contemplated by
any of the provisions of this Lease, or for any services performed by Landlord's
attorneys in connection therewith. With respect to any inspections by the
architect or engineer employed by Landlord, Tenant shall pay no more than
$500.00 per day plus out of pocket expenses for travel, lodging, food and
transportation.

     9.9 No Rent Abatement. Except to the extent that business interruption
insurance proceeds are received by Landlord, Rent will not abate pending the
repairs or rebuilding of the Leased Property.

                            ARTICLE 10: CONDEMNATION

     10.1 Total Taking. If, by exercise of the right of eminent domain or by
conveyance made in response to the threat of the exercise of such right
("Taking"), any entire Facility Property is taken, or so much of any Facility
Property is taken that the Facility Property cannot be used by Tenant for the
purposes for which it was used immediately before the Taking, then this Lease
will terminate with respect to such Facility Property only on the earlier of the
vesting of title to the Facility Property in the condemning authority or the
taking of possession of the Facility Property by the condemning authority. Upon
such termination, the Lease Amount shall be reduced by the Allocated Lease
Amount for such Facility Property and Rent hereunder shall be reduced
accordingly unless there is only one Facility Property subject to this Lease in
which case the Lease will terminate. All damages awarded for such Taking under
the power of eminent domain shall be the property of Landlord, except for
damages awarded to Tenant as compensation for diminution in value of the
leasehold of the Leased Property provided the award to Landlord is not less than
the Allocated Lease Amount for the applicable Facility.

     10.2 Partial Taking. If, after a Taking, so much of the Facility Property
remains that the Facility Property can be used for substantially the same
purposes for which it was used immediately before the Taking, then [i] this
Lease will terminate as to the part taken on the earlier of the vesting of title
to such Leased Property in the condemning authority or the taking of possession
of such Leased Property by the condemning authority and the Rent will be
adjusted accordingly; [ii] at its cost, Tenant shall restore so much of the
Facility Property as remains to a sound architectural unit substantially
suitable for the purposes for which it was used immediately before the Taking,
using good workmanship and new, first-class materials; [iii] upon completion of
the restoration, Landlord will pay Tenant the lesser of the net award made to
Landlord on the account of the Taking (after deducting from the total award,
attorneys', appraisers', and other reasonable fees and costs incurred in
connection with the obtaining of the

                                      -33-

award and amounts paid to the holders of mortgages granted by Tenant, and
consented to by Landlord, secured by the Facility Property), or Tenant's actual
out-of-pocket costs of restoring the Facility Property; and [iv] Landlord shall
be entitled to the balance of the net award. The restoration shall be completed
in accordance with ss.ss.9.4, 9.5, 9.7, 9.8 and 9.9 with such provisions deemed
to apply to condemnation instead of casualty.

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

                          ARTICLE 11: TENANT'S PROPERTY

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

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

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

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

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

          (d) If Tenant's Property is damaged or destroyed by fire or any other
cause, Tenant shall promptly repair or replace Tenant's Property unless Tenant
elects to purchase Leased Property pursuant to ss.9.2.2.

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

                                      -34-

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

          (g) Tenant shall perform its obligations under any equipment lease or
security agreement for Tenant's Property. For equipment loans or leases for
equipment having an original cost in excess of $100,000.00, Tenant shall cause
such equipment lessor or lender to enter into a nondisturbance agreement with
Landlord upon terms and conditions acceptable to Landlord, including, without
limitation, the following: [i] Landlord shall have the right (but not the
obligation) to assume such equipment lease or security agreement upon the
occurrence of an Event of Default by Tenant hereunder; [ii] such equipment
lessor or lender shall notify Landlord of any default by Tenant under the
equipment lease or security agreement and give Landlord a reasonable opportunity
to cure such default; and [iii] Landlord shall have the right to assign its
interest in the equipment lease or security agreement and nondisturbance
agreement. Tenant shall, within 30 days after receipt of an invoice from
Landlord, reimburse Landlord for all costs and expenses incurred in reviewing
and approving the equipment lease, security agreement and nondisturbance
agreement, including, without limitation, reasonable attorneys' fees and costs.

                           ARTICLE 12: RENEWAL OPTIONS

     12.1 Renewal Options. Tenant has the option to renew ("Renewal Option")
this Lease for one 15-year renewal term (each a "Renewal Term"). Tenant can
exercise each Renewal Option only upon satisfaction of the following conditions:

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

          (b) Tenant shall give Landlord irrevocable written notice of renewal
("Renewal Notice") no later than the date which is [i] 90 days prior to the
expiration date of the then current Term; or [ii] if applicable, three days
after Tenant's delivery of the Election Notice as set forth in ss.9.2.2.

                                      -35-

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

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

          (b) Lease Amount. Effective as of the Renewal Date, a single Lease
Amount will be computed by summing all Lease Advance Amounts.

          (c) Lease Rate. Effective as of the Renewal Date, the Renewal Rate
will be the highest Lease Rate in effect during the last year of the Initial
Term plus the increase as set forth in ss.2.2 hereof ("Renewal Rate").

          (d) Base Rent. Effective as of the Renewal Date, the Base Rent will be
changed to equal 1/12th of the product of [i] the Lease Amount on the Renewal
Date times [ii] the Renewal Rate.

          (e) Other Terms and Conditions. Except for the modifications set forth
in this ss.12.2, all other terms and conditions of the Lease will remain the
same for the Renewal Term. The Lease Rate and Base Rent will increase annually
as set forth in ss.2.2.

     12.3 Effect of Non-Renewal or Expiration of Lease. The following terms and
conditions will be applicable if Tenant does not renew this Lease or exercise
its Option to Purchase by the expiration date for the then current Term:

          (a) Extension of Current Term. The current Term will be extended (the
"Extended Term") for 180 days; provided, however, that the Extended Term will
expire on such earlier date of the closing of the sale pursuant to the Option to
Purchase.

          (b) Lease Payments. During the Extended Term, Tenant shall continue to
make monthly payments of Rent (including Base Rent) based upon the then existing
Lease Rate in effect.

                         ARTICLE 13: OPTION TO PURCHASE

     13.1 Option to Purchase. Landlord hereby grants to Tenant an option to
purchase ("Option to Purchase") all of the Leased Property (but not any part
thereof, except as provided in ss.13.7) in accordance with the terms and
conditions of this Article 13. Tenant may exercise its Option to Purchase only
by giving an irrevocable notice of Tenant's election to purchase the Leased
Property ("Purchase Notice") in accordance with the following:

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

          (b) If any Facility's Improvements are substantially destroyed during
the final 18 months of the Initial Term or the Renewal Term, Tenant must give
the Election

                                      -36-

Notice to exercise the Option to Purchase within 30 days after the date of the
Casualty Notice as set forth in ss.9.2.2.

Tenant shall have no right to exercise the Option to Purchase other than in
accordance with subparagraphs (a) - (b).

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

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

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

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

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

     The Leased Property is to be valued upon the three conventional approaches
     to estimate value known as the Income, Sales Comparison and Cost
     Approaches. Once the approaches are

                                      -37-

     completed, the appraiser correlates the individual approaches into a final
     value conclusion.

The three approaches to estimate value are summarized as follows:

     INCOME APPROACH: This valuation approach recognizes that the value of the
     operating tangible and intangible assets can be represented by the expected
     economic viability of the business giving returns on and of the assets and
     shall use a management fee of 7%.

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

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

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

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

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

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

     13.4 Closing. The purchase of the Leased Property by Tenant shall close on
a date agreed to by Landlord and Tenant which shall be not less than 60 days
after the Fair Market Value of the Leased Property has been determined and the
then expiring term of the Lease shall

                                      -38-

be extended on the same terms and conditions, if necessary, until the Closing
Date. At the closing, Tenant shall pay the Option Price and all closing costs in
immediately available funds and Landlord shall convey title to the Leased
Property to Tenant or to Tenant's assignee by a recordable limited warranty deed
subject only to Permitted Exceptions and encumbrances approved in writing by
Tenant and limited warranty bill of sale. The warranties provided for in such
documents shall not be limited by any limitations upon Landlord's liability as
provided in this Lease. Landlord shall also execute those affidavits reasonably
required by the title company for the issuance of an owner's policy of title
insurance.

     13.5 Failure to Close Option. If Tenant for any reason fails to purchase
the Leased Property after Tenant has given the Purchase Notice other than as a
result of Landlord's default or inability to fulfill its obligations hereunder,
then Tenant shall pay Landlord all costs and expenses incurred by Landlord as a
result of the failure to close, including costs of unwinding swap transactions
or other interest rate protection devices and preparing for the closing. Tenant
shall continue to be obligated as lessee hereunder for the remainder of the Term
(including the Extended Term as set forth in ss.12.3).

     13.6 Failure to Exercise Option to Purchase and Renewal Option. If Tenant
for any reason does not exercise its Option to Purchase or Renewal Option in
accordance with the terms and conditions of this Lease before the expiration of
the then current Term, Tenant shall be deemed to have forfeited Tenant's right
to exercise the Option to Purchase or Renewal Option respectively, at such time
but shall not impact Tenant's right to exercise its Option to Purchase or
Renewal Option thereafter as herein provided, unless the Lease has terminated in
which case Tenant shall have forfeited all of Tenant's rights to exercise the
Option to Purchase or Renewal Option, as the case may be.

     13.7 Early Option to Purchase Notwithstanding any provision to the contrary
contained in this Article 13, provided no Event of Default has occurred and is
continuing, then Tenant may from time to time exercise the Early Option to
Purchase with respect to some, or all, of the Underperforming Facilities during
the period commencing on the Effective Date hereof and terminating 24 months
thereafter (the "Early Option Period") subject to the same terms and conditions
of this Article 13 except that [i] the required Purchase Notice shall be given
at any time during the Early Option Period; [ii] the Option Price shall be equal
to the allocated Lease Amount for each Underperforming Facility; [iii] the
aggregate Option Price for the Underperforming Facilities for which Tenant has
exercised the Early Option to Purchase shall not exceed $20,000,000.00, which
amount shall include the aggregate Lease Amount or Investment Amount, as defined
in an Affiliate Lease, allocated to each facility purchased by an Affiliate
under an Affiliate Lease during the Early Option Period; [iv] the closing for
each Underperforming Facility shall occur not later than 60 days after the
Purchase Notice provided during the Early Option Period; [v] no exercise or
failure to exercise the Early Option to Purchase with respect to any or all
Underperforming Facilities shall result in any forfeiture or loss of Tenant's
right to exercise the Option to Purchase or Renewal Option with respect to all
of the Leased Property or remainder thereof; and [vi] following the closing for
each Underperforming Facility, the Lease Amount shall be reduced by the net
proceeds received by Landlord at such closing.

                                      -39-

                         ARTICLE 14: NEGATIVE COVENANTS

     Until the Secured Obligations shall have been performed in full, Tenant
covenants and agrees that Tenant shall not do any of the following without the
prior written consent of Landlord which consent shall not be unreasonably
withheld:

     14.1 No Debt. Tenant shall not create, incur, assume, or permit to exist
any indebtedness related to any Facility other than [i] trade debt incurred in
the ordinary course of Tenant's business; [ii] the outstanding principal balance
and all accrued and unpaid interest arising from indebtedness for Facility
working capital purposes in an amount not to exceed $10,000,000.00 in the
aggregate for all Facilities and all SALI Tenant, LLC Leases; [iii] indebtedness
relating to the Letter of Credit; [iv] indebtedness that is secured by any
Permitted Lien; and [v] unsecured indebtedness that will not cause Tenant to be
in violation of ss.15.7.

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

     14.3 No Guaranties. INTENTIONALLY OMITTED.

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

     14.5 No Dissolution. Tenant or Entity Guarantor shall not dissolve,
liquidate, merge, consolidate or terminate its existence or sell, assign, lease,
or otherwise transfer (whether in one transaction or in a series of
transactions) all or substantially all of its assets (whether now owned or
hereafter acquired) except for mergers, consolidations or other structural
changes in Tenant that will [a] not cause Entity Guarantor to be in violation of
ss.15.7 or [b] not cause Landlord's then applicable loan covenants regarding
operator concentration limits to be exceeded.

     14.6 [INTENTIONALLY OMITTED]

     14.7 [INTENTIONALLY OMITTED].

     14.8 Contracts. Tenant shall not execute or modify any material contracts
or agreements with respect to the Facility except for contracts and
modifications approved by Landlord. Contracts made in the ordinary course of
business and in an amount less than $150,000.00 shall not be considered
"material" for purposes of this paragraph.

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

                                      -40-

Affiliate, or any shareholder, member or partner of Tenant or any Affiliate,
except for ordinary payroll.

     14.10 Change of Location or Name. Tenant shall not change any of the
following without giving Landlord at least 60 days' advance written notice: [i]
the location of the principal place of business or chief executive office of
Tenant, or any office where any of Tenant's books and records are maintained; or
[ii] the name under which Tenant conducts any of its business or operations.

                        ARTICLE 15: AFFIRMATIVE COVENANTS

     15.1 Perform Obligations. Tenant and Subtenant shall each perform all of
its obligations under this Lease, the Government Authorizations, the Permitted
Exceptions, and all Legal Requirements.

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

     15.3 Documents and Information.

     15.3.1 Furnish Documents. Tenant shall periodically during the term of the
Lease deliver to Landlord the Annual Financial Statements and other documents
described on Exhibit E within the specified time periods. With each delivery of
Annual Financial Statements and Periodic Financial Statements to Landlord,
Tenant shall also deliver to Landlord a certificate signed by the Chief
Financial Officer of Tenant, an Annual Facility Financial Report or Quarterly
Facility Financial Report, as applicable, and a Quarterly Facility Accounts
Receivable Aging Report all in the form of Exhibit F. In addition, Tenant shall
deliver to Landlord the applicable Annual Facility Financial Report and the
applicable Quarterly Facility Accounts Receivable Aging Report (based upon
internal financial statements) within 90 days after the end of each fiscal year.

     15.3.2 Furnish Information. Tenant shall [i] promptly supply Landlord with
such information concerning its financial condition, affairs and property, as
Landlord may reasonably request from time to time hereafter; [ii] promptly
notify Landlord in writing of any condition or event that constitutes a breach
or event of default of any term, condition, warranty, representation, or
provisions of this Lease or any other material agreement (provided that for
purposes of this section, material agreement includes, without limitation, any
agreement relating to a Material Obligation or any agreement necessary for the
operation of the Facility as then conducted, such as the provider agreement),
and of any material adverse change in its financial condition; [iii] maintain a
standard and modern system of accounting; [iv] permit Landlord or any of its
agent or representatives to have access to and to examine all of its books and
records

                                      -41-

regarding the financial condition of the Facility at any time or times hereafter
during business hours and after reasonable oral or written notice; and [v]
permit Landlord to copy and make abstracts from any and all of said books and
records.

     15.3.3 Further Assurances and Information. Tenant shall, on request of
Landlord from time to time, execute, deliver, and furnish documents as may be
necessary to fully consummate the transactions contemplated under this Lease.
Within 15 days after a request from Landlord, Tenant shall provide to Landlord
such additional information regarding Tenant, Tenant's financial condition or
any Facility as Landlord, or any existing or proposed creditor of Landlord, or
any auditor or underwriter of Landlord, may reasonably require from time to
time, including, without limitation, a current Tenant's Certificate and Facility
Financial Report in the form of Exhibit F.

     15.3.4 Material Communications. Tenant shall transmit to Landlord, within
five Business Days after receipt thereof, any material communication affecting a
Facility, this Lease, the Legal Requirements or the Government Authorizations,
and Tenant will promptly respond to Landlord's inquiry with respect to such
information. Tenant shall promptly notify Landlord in writing after Tenant has
knowledge of any potential, threatened or existing litigation or proceeding
against, or investigation of, Tenant or the Facility that may affect the right
to operate the Facility or Landlord's title to the Facility or Tenant's interest
therein. Without otherwise limiting the term "material" as used in the preceding
sentence, any litigation or proceeding involving a claim of $50,000.00 or more
or involving a threatened or alleged violation of an Environmental Law shall be
deemed to be material.

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

     15.3.6 Confidentiality. Landlord shall use reasonable efforts not to
disclose the information provided by Tenant under this ss.15.3; provided,
however, that Landlord may disclose such information to any person or entity to
whom Landlord is required to make such disclosure; to governmental authorities;
and to any other person or entity having a legitimate business interest in the
Landlord, including, but not limited to, regulators, auditors, accountants,
attorneys, investors, underwriters, rating agencies, bond or surety companies,
and lenders of Landlord (including, but not limited to, collateral pool lenders
and line of credit lenders).

     15.4 Compliance With Laws. Tenant shall comply with all Legal Requirements
and keep all Government Authorizations in full force and effect. Tenant shall
pay when due all taxes and governmental charges of every kind and nature that
are assessed or

                                      -42-

imposed upon Tenant at any time during the term of the Lease, including, without
limitation, all income, franchise, capital stock, property, sales and use,
business, intangible, employee withholding, and all taxes and charges relating
to Tenant's business and operations. Tenant shall be solely responsible for
compliance with all Legal Requirements, including the ADA, and Landlord shall
have no responsibility for such compliance.

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

     15.6 Existence and Change in Control. Tenant or any entity into which
Tenant is merged shall maintain its existence throughout the term of this Lease.

     15.7 Financial Covenants. The defined terms used in this section are
defined in ss.15.7.1. The following financial covenants shall be met throughout
the term of this Lease:

     15.7.1 Definitions.

          (a) "Net Worth" means consolidated stockholder's equity as determined
in accordance with GAAP.

          (b) "Portfolio Cash Flow" means the aggregate net income arising from
all Facilities under this Lease as reflected on the Facility Financial Statement
of each Facility plus [i] the amount of the provision for depreciation and
amortization; [ii] the amount of the provision for management fees; plus [iii]
the amount of the provision for income taxes; plus [iv] the amount of the
provision for Rent payments and interest and lease payments, if any, relating to
the Facilities; minus [v] an imputed management fee equal to 5% of revenues of
the Facilities (net of contractual allowances); and minus [vi] an imputed
replacement reserve of $300.00 per unit at the Facilities, per year.

          (c) "Portfolio Coverage Ratio" is the ratio of [i] Portfolio Cash Flow
for each applicable period; to [ii] the Rent payments under this Lease and all
other debt service and lease payments relating to the Facilities for the
applicable period.

     15.7.2 Portfolio Coverage Ratio. Tenant shall maintain for each fiscal
quarter for the year a Portfolio Coverage Ratio of not less than 1.20 to 1.00.

     15.7.3 Net Worth. Entity Guarantor shall maintain a Net Worth of not less
than $400,000,000.00.

     15.7.4 Current Ratio. [INTENTIONALLY OMITTED].

     15.7.5 Debt to Equity Ratio. [INTENTIONALLY OMITTED].

     15.7.6 Working Capital. Tenant shall maintain available working capital for
each Facility in the amount not less than $100,000.00.

                                      -43-

     15.8 Transfer of License and Facility Operations. If this Lease is
terminated due to expiration of the Term, pursuant to an Event of Default or for
any reason other than Tenant's purchase of the Leased Property, or if Tenant
vacates the Leased Property or any part thereof without termination of this
Lease, Tenant shall execute, deliver and file all documents and statements
requested by Landlord to effect the transfer of the applicable Facility license
and Government Authorizations to an entity designated by Landlord, subject to
any required approval of governmental regulatory authorities, and Tenant shall
provide to Landlord all information and records required by Landlord in
connection with the transfer of the license and Government Authorizations.

            ARTICLE 16: ALTERATIONS, CAPITAL IMPROVEMENTS, AND SIGNS

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

     16.2 Approval of Alterations. If Tenant desires to perform any Permitted
Alterations, Tenant shall deliver to Landlord plans, specifications, drawings,
and such other information as may be reasonably requested by Landlord
(collectively the "Plans and Specifications") showing in reasonable detail the
scope and nature of the Alterations that Tenant desires to perform. It is the
intent of the parties hereto that the level of detail shall be comparable to
that which is referred to in the architectural profession as "design development
drawings" as opposed to working or biddable drawings. Landlord agrees not to
unreasonably delay its review of the Plans and Specifications. Provided Tenant
has given Landlord written notice at the time of delivery of the Plans and
Specifications of the effect of Landlord's failure to respond, Landlord's
failure to respond within 60 days of receipt of Plans and Specifications shall
be deemed to constitute Landlord's approval. Within 30 days after receipt of an
invoice, Tenant shall reimburse Landlord for all costs and expenses incurred by
Landlord in reviewing and, if required, approving or disapproving the Plans and
Specifications, inspecting the Leased Property, and otherwise monitoring
compliance with the terms of this Article 16. Tenant shall comply with the
requirements of ss.16.4 in making any Permitted Alterations.

     16.3 Permitted Alterations. Permitted Alterations means any one of the
following: [i] Alterations approved by Landlord; [ii] Alterations required under
ss.7.2; [iii] Alterations having a total cost of less than $100,000.00; or [iv]
repairs, rebuilding and restoration required or undertaken pursuant to ss.9.4.

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

          (a) The Permitted Alterations shall be made in accordance with the
approved Plans and Specifications.

          (b) The Permitted Alterations and the installation thereof shall
comply with all applicable legal requirements and insurance requirements.

                                      -44-

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

          (d) Tenant shall, at Tenant's expense, obtain a builder's completed
value risk policy of insurance insuring against all risks of physical loss,
including collapse and transit coverage, in a nonreporting form, covering the
total value of the work performed, and equipment, supplies, and materials, and
insuring initial occupancy. Landlord and any mortgagee of Landlord shall be
additional insureds of such policy. Landlord shall have the right to approve the
form and substance of such policy.

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

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

          (g) Tenant shall, not later than 30 days after Landlord sends an
invoice, reimburse Landlord for any reasonable costs and expenses, including
attorneys' fees and architects' and engineers' fees, incurred in connection with
reviewing and approving the Permitted Alterations and ensuring Tenant's
compliance with the requirements of this section. The fee for Landlord's
consulting engineer is $500.00 per day plus out-of-pocket expenses for travel,
lodging, food and transportation.

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

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

                             ARTICLE 17: [RESERVED]

               ARTICLE 18: ASSIGNMENT AND SALE OF LEASED PROPERTY

     18.1 Prohibition on Assignment and Subletting. Tenant acknowledges that
Landlord has entered into this Lease in reliance on the personal services and
business expertise of Tenant. Tenant may not assign, sublease, mortgage,
hypothecate, pledge, or transfer any interest in this Lease, or in the Leased
Property, in whole or in part, without the prior written consent of Landlord,
which Landlord may withhold in its sole and absolute discretion, except as

                                      -45-

otherwise specifically provided for in this Lease; provided, however, that
Landlord's consent shall not be required for the sublease of 750 square feet or
less at a Facility for ancillary services to be provided to residents of the
Facility. The following transactions will be deemed an assignment or sublease
requiring Landlord's prior written consent: [i] an assignment by operation of
law (other than as a result of mergers, consolidation or other structured
changes in Tenant that will not cause Tenant to be in violation of ss.15.7);
[ii] an imposition (whether or not consensual) of a lien, mortgage, or
encumbrance upon Tenant's interest in the Lease; and [iii] an arrangement
(including, but not limited to, management agreements, concessions, licenses,
and easements) which allows the use or occupancy of all or part of the Leased
Property by anyone other than Tenant or any other permitted manager. Landlord's
consent to any assignment or sublease will not release Tenant (or any guarantor)
from its payment and performance obligations under this Lease, but rather
Tenant, any guarantor, and Tenant's assignee or sublessee will be jointly and
severally liable for such payment and performance. An assignment or sublease
without the prior written consent of Landlord will be void at Landlord's option.
Landlord's consent to one assignment or sublease will not waive the requirement
of its consent to any subsequent assignment or sublease. Subject to the
foregoing and ss.18.2, Landlord shall consent to a sublease of any Facility or a
management agreement, provided the sublessee or manager is an Affiliate, the
execution of the sublease or management agreement does not result in a lapse in
licensure, the sublessee becomes a guarantor under this Lease and the manager
enters into a collateral assignment of management agreement on terms acceptable
to manager and Landlord.

     18.2 Requests for Landlord's Consent to Assignment, Sublease or Management
Agreement. If Tenant requests Landlord's consent to a specific assignment,
sublease, or management agreement, Tenant shall give Landlord [i] the name and
address of the proposed assignee, subtenant or manager; [ii] a copy of the
proposed assignment, sublease or management agreement; [iii] reasonably
satisfactory information about the nature, business and business history of the
proposed assignee, subtenant, or manager and its proposed use of the Leased
Property; and [iv] banking, financial, and other credit information, and
references about the proposed assignee, subtenant or manager sufficient to
enable Landlord to determine the financial responsibility and character of the
proposed assignee, subtenant or manager. Any assignment, sublease or management
agreement shall contain provisions to the effect that [a] such assignment,
sublease or management agreement is subject and subordinate to all of the terms
and provisions of this Lease and to the rights of Landlord; [b] such assignment,
sublease or management agreement may not be modified without the prior written
consent of Landlord not to be unreasonably withheld or delayed; [c] if this
Lease shall terminate before the expiration of such assignment, sublease or
management agreement, the assignee, subtenant or manager thereunder will, at
Landlord's option, attorn to Landlord and waive any right the assignee,
subtenant or manager may have to terminate the assignment, sublease or
management agreement or surrender possession thereunder as a result of the
termination of this Lease; and [d] if the assignee, subtenant or manager
receives a written notice from Landlord stating that Tenant is in default under
this Lease, the assignee, subtenant or manager shall thereafter pay all rentals
or payments under the assignment, sublease or management agreement directly to
Landlord until such default has been cured. Tenant hereby collaterally assigns
to Landlord, as security for the performance of its obligations hereunder, all
of Tenant's right, title, and interest in and to any assignment, sublease or
management agreement now or hereafter existing for all or part of the Leased
Property. Tenant shall, at the request of Landlord, execute such other
instruments or

                                      -46-

documents as Landlord may request to evidence this collateral assignment. If
Landlord, in its sole and absolute discretion, consents to such assignment,
sublease, or management agreement, such consent shall not be effective until [i]
a fully executed copy of the instrument of assignment, sublease or management
agreement has been delivered to Landlord; [ii] in the case of an assignment,
Landlord has received a written instrument in which the assignee has assumed and
agreed to perform all of Tenant's obligations under the Lease; and [iii] Tenant
has paid to Landlord a fee in the amount of $1,500.00; and [iv] Landlord has
received reimbursement from Tenant or the assignee for all reasonable attorneys'
fees and expenses and all other reasonable out-of-pocket expenses incurred in
connection with determining whether to give its consent, giving its consent and
all matters relating to the assignment.

     18.3 Agreements with Residents. Notwithstanding ss.18.1, Tenant may enter
into an occupancy agreement with residents of the Leased Property without the
prior written consent of Landlord provided that [i] the agreement does not
provide for lifecare services (a single payment to provide services for the
remainder of occupant's life); [ii] Tenant may not collect rent for more than
one month in advance except that Tenant may collect security deposits in an
amount that does not exceed two months rent; and [iii] all residents of the
Leased Property are accurately shown in Tenant's accounting records for the
Facility.

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

     18.5 Assignment by Landlord. Landlord may transfer, assign, mortgage,
collaterally assign, or otherwise dispose of Landlord's interest in this Lease
or the Leased Property.

                       ARTICLE 19: HOLDOVER AND SURRENDER

     19.1 Holding Over. Should Tenant, with or without the express or implied
consent of Landlord, continue to hold and occupy the Leased Property or any part
thereof after the expiration of the Term or earlier termination of this Lease
(other than pursuant to Tenant's purchase of the Leased Property), such holding
over beyond the Term and the acceptance or collection of Rent by Landlord shall
operate and be construed as creating a tenancy from month to month and not for
any other term whatsoever. Said month-to-month tenancy may be terminated by
Landlord by giving Tenant 10 days written notice, and at any time thereafter
Landlord may re-enter and take possession of the Leased Property.

     19.2 Surrender. Except for [i] Permitted Alterations; [ii] normal and
reasonable wear and tear (subject to the obligation of Tenant to maintain the
Leased Property in good order and repair during the Term); and [iii] damage and
destruction not required to be repaired by

                                      -47-

Tenant, Tenant shall surrender and deliver up the Leased Property at the
expiration or termination of the Term in as good order and condition as of the
Commencement Date.

                          ARTICLE 20: LETTER OF CREDIT

     20.1 Terms of Letter of Credit. As of the Effective Date, Tenant is not
obligated to provide a Letter of Credit under the terms of this Lease at
Closing. However, if from time to time Tenant fails to maintain the Portfolio
Coverage Ratio as set forth in ss.15.7.2, then Tenant shall have the option to
provide one or more Letters of Credit in the Approved Amount, as hereinafter
defined. If Tenant provides a Letter of Credit in the Approved Amount, such
Letter of Credit shall be released if and when the Portfolio Coverage Ratio is
achieved for four consecutive quarters, provided that, at the end of such four
consecutive quarters, there is no outstanding uncured Event of Default then
existing. In the event Tenant provides the Letter of Credit and prior to its
release as hereinbefore provided, Tenant shall maintain the Letter of Credit in
favor of Landlord until the Secured Obligations are performed in full. The
Letter of Credit shall permit partial draws and shall permit drawing upon
presentation of a draft drawn on the issuer and a certificate signed by Landlord
stating that an Event of Default has occurred under this Lease and the
applicable notice and cure periods have elapsed. The Letter of Credit shall be
for an initial term of one year and shall be automatically renewed annually for
successive terms of at least one year unless Landlord receives notice from the
Issuer, by certified mail, at least 60 days prior to the expiry date then in
effect that the Letter of Credit will not be extended for an additional one-year
period. For purposes of this ss.20.1, the "Approved Amount" for the Letter of
Credit shall be an amount equal to the then existing difference between [i]
EBITDAR required to achieve the required Portfolio Coverage Ratio; and [ii]
actual EBITDAR, as said amount may change from time to time, but in no event
greater than $1,000,000.00.

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

                                      -48-

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

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

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

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

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

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

                                      -49-

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

     21.3 Attornment. If any holder of any mortgage, indenture, deed of trust,
or other similar instrument described in ss.21.2 succeeds to Landlord's interest
in the Leased Property, Tenant will pay to such holder all Rent subsequently
payable under this Lease. Tenant shall, upon request of anyone succeeding to the
interest of Landlord, automatically become the tenant of, and attorn to, such
successor in interest without changing this Lease. The successor in interest
will not be bound by [i] any payment of Rent for more than one month in advance;
[ii] any amendment or modification of this Lease thereafter made without its
consent as provided in this Lease provided Tenant has knowledge that Landlord's
interest has been transferred and that such successor in interests consent is
required; [iii] any claim against Landlord arising prior to the date on which
the successor succeeded to Landlord's interest; or [iv] any claim or offset of
Rent against Landlord. Upon request by Landlord or such successor in interest
and without cost to Landlord or such successor in interest, Tenant will execute,
acknowledge and deliver an instrument or instruments confirming the attornment.
If Tenant fails or refuses to execute, acknowledge, and deliver any such
instrument within 20 days after written demand, then Landlord or such successor
in interest will be entitled to execute, acknowledge, and deliver any document
on behalf of Tenant as Tenant's attorney-in-fact. Tenant hereby constitutes and
irrevocably appoints Landlord, its successors and assigns, as Tenant's
attorney-in-fact to execute, acknowledge, and deliver on behalf of Tenant any
such document. This power of attorney is coupled with an interest and is
irrevocable.

                                      -50-

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

                   ARTICLE 22: REPRESENTATIONS AND WARRANTIES

     [INTENTIONALLY OMITTED]

                           ARTICLE 23: FUTURE PROJECTS

     23.1 INTENTIONALLY OMITTED.

                          ARTICLE 24: SECURITY INTEREST

     24.1 Collateral. Tenant hereby grants to each Landlord a security interest
in the following described property, whether now owned or hereafter acquired by
Tenant (the "Collateral"), to secure the payment and performance of the Secured
Obligations:

          (a) All machinery, furniture, equipment, trade fixtures, appliances,
inventory and all other goods (as "equipment," "inventory" and "goods" are
defined for purposes of Article 9 ("Article 9") of the Uniform Commercial Code
as adopted in the State) and any leasehold interest of Tenant in any of the
foregoing (except for any leasehold interest in property owned by Landlord), now
or hereafter located in or on or used or usable in connection with the Land,
Improvements, or Fixtures and replacements, additions, and accessions thereto,
including, without limitation, those items which are to become fixtures or which
are building supplies and materials to be incorporated into an Improvement or
Fixture.

                                      -51-

          (b) All accounts, contract rights, general intangibles, instruments,
documents, and chattel paper [as "accounts", "contract rights", "general
intangibles", "instruments", "documents", and "chattel paper", are defined for
purposes of Article 9] now or hereafter arising in connection with the business
located in or on or used or usable in connection with the Land, Improvements, or
Fixtures, and replacements, additions, and accessions thereto.

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

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

          (e) All ledger sheets, files, records, computer programs, tapes, other
electronic data processing materials, and other documentation relating to the
preceding listed property or otherwise used or usable in connection with the
Land and Improvements.

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

     24.2 Additional Documents. At the request of Landlord, Tenant shall execute
additional security agreements, financing statements, and such other documents
as may be requested by Landlord to maintain and perfect such security interest.
Tenant hereby irrevocably appoints Landlord, its successors and assigns, as
Tenant's attorney-in-fact to execute, acknowledge, deliver and file such
documents on behalf of Tenant. This power of attorney is coupled with an
interest and is irrevocable.

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

                            ARTICLE 25: MISCELLANEOUS

     25.1 Notices. Landlord and Tenant hereby agree that all notices, demands,
requests, and consents (hereinafter "notices") required to be given pursuant to
the terms of this Lease shall be in writing, shall be addressed to the addresses
set forth in the introductory paragraph of this Lease, and shall be served by
[i] personal delivery; [ii] United States mail, postage prepaid; or [iii]
nationally recognized overnight courier; provided, however, that any notice of
an Event of Default shall be served by (I) personal delivery; (II) certified
United States mail, postage prepaid, return receipt requested; or (III)
nationally recognized overnight courier.

                                      -52-

A copy of any notice given to Tenant shall be sent to [i] Brookdale Senior
Living Inc., 330 N. Wabash Avenue, Suite 1400, Chicago, Illinois 60611,
Attention: Deborah C. Paskin, Esq. and to [ii] Miriam J. Dent, Esq., Rogers &
Hardin, 229 Peachtree Street, N.E., 2700 International Tower, Peachtree Center,
Atlanta, Georgia 30303, but the failure to give the notice required by this
sentence shall not affect the validity or effectiveness of the notices to Tenant
hereunder. All notices shall be deemed to be given upon the earlier of actual
receipt or three Business Days after mailing or one Business Day after deposit
with the overnight courier. Any notices meeting the requirements of this section
shall be effective, regardless of whether or not actually received. Landlord or
Tenant may change its notice address at any time by giving the other party
notice of such change.

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

     25.3 Entire Agreement. The Commitment and this Lease constitute the entire
agreement between Landlord and Tenant with respect to the subject matter hereof.
No representations, warranties, and agreements have been made by Landlord except
as set forth in the Commitment and this Lease. If there is any direct conflict
between the terms and provisions of the Commitment and the terms of this Lease,
this Lease shall govern. Tenant hereby reaffirms the Commitment and all
provisions thereof. The Commitment shall survive the execution of this Lease.

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

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

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

     25.7 Memorandum of Lease. Tenant shall not record this Lease. Tenant may,
however, record a memorandum of lease approved by Landlord.

     25.8 Waiver. No waiver by Landlord of any condition or covenant herein
contained, or of any breach of any such condition or covenant, shall be held or
taken to be a

                                      -53-

waiver of any subsequent breach of such covenant or condition, or to permit or
excuse its continuance or any future breach thereof or of any condition or
covenant, nor shall the acceptance of Rent by Landlord at any time when Tenant
is in default in the performance or observance of any condition or covenant
herein be construed as a waiver of such default, or of Landlord's right to
terminate this Lease or exercise any other remedy granted herein on account of
such existing default.

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

     25.10 Power of Attorney. Effective upon [i] the occurrence and during the
continuance of an Event of Default or upon [ii] termination of the Lease, Tenant
hereby irrevocably and unconditionally appoints Landlord, or Landlord's
authorized officer, agent, employee or designee, as Tenant's true and lawful
attorney-in-fact, to act for Tenant in Tenant's name, place, and stead, to
execute, deliver and file all applications and any and all other necessary
documents or things to effect the issuance, transfer, reinstatement, renewal
and/or extension of any and all Governmental Authorizations issued to Tenant or
applied for by Tenant in connection with Tenant's operation of the Facility, to
permit any transferee to operate the Facility under the Governmental
Authorizations, and to do any and all other acts incidental to any of the
foregoing. Tenant irrevocably and unconditionally grants to Landlord as its
attorney-in-fact full power and authority to do and perform every act necessary
and proper to be done in the exercise of any of the foregoing powers as fully as
Tenant might or could do if personally present or acting, with full power of
substitution, hereby ratifying and confirming all that said attorney shall
lawfully do or cause to be done by virtue hereof. This power of attorney is
coupled with an interest and is irrevocable prior to the full performance of
Tenant's Obligations. Except in the case of an emergency, Landlord shall give
Tenant three Business Days prior written notice before acting on behalf of
Tenant pursuant to this power of attorney.

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

     25.12 Modification. This Lease may only be modified by a writing signed by
both Landlord and Tenant except for the automatic extension of the Term pursuant
to ss.1.3. All references to this Lease, whether in this Lease or in any other
document or instrument, shall be deemed to incorporate all amendments,
modifications and renewals of this Lease, made after the date hereof. If Tenant
requests Landlord's consent to any change in ownership, merger or consolidation
of Tenant, any assumption of the Lease, or any modification of the Lease, Tenant
shall provide Landlord all relevant information and documents sufficient to
enable Landlord to evaluate the request. In connection with any such request,
Tenant shall pay to Landlord a fee in the amount of $1,500.00 and shall pay all
of Landlord's reasonable attorney's fees and expenses and other reasonable
out-of-pocket expenses incurred in connection with Landlord's evaluation of
Tenant's request, the preparation of any documents and amendments, the
subsequent amendment of any documents between Landlord and its collateral pool
lenders (if applicable), and all related matters.

                                      -54-

     25.13 Landlord's Modification. Tenant acknowledges that Landlord may
mortgage the Leased Property or use the Leased Property as collateral for a
collateralized mortgage obligations or Real Estate Mortgage Investment Companies
(REMICS). If any mortgage lender of Landlord desires any modification of this
Lease, Tenant agrees to consider such modification in good faith and to execute
an amendment of this Lease if Tenant finds such modification acceptable in
Tenant's reasonable discretion provided such modification does not materially
diminish Tenant's rights under the Lease.

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

     25.15 Laches. No delay or omission by either party hereto to exercise any
right or power accruing upon any noncompliance or default by the other party
with respect to any of the terms hereof shall impair any such right or power or
be construed to be a waiver thereof.

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

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

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

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

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

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

                                      -55-

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

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

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

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

     25.24 Attorney's Fees and Expenses. Tenant shall pay to Landlord all
reasonable costs and expenses incurred by Landlord in administering this Lease
and the security for this Lease, enforcing or preserving Landlord's rights under
this Lease and the security for this Lease, and in all matters of collection,
whether or not an Event of Default has actually occurred or has been declared
and thereafter cured, including, but not limited to, [a] reasonable attorney's
and paralegal's fees and disbursements; [b] the fees and expenses of any
litigation, administrative, bankruptcy, insolvency, receivership and any other
similar proceeding; [c] court costs; [d] the expenses of Landlord, its
employees, agents, attorneys and witnesses in preparing for litigation,
administrative, bankruptcy, insolvency and other proceedings and for lodging,

                                      -56-

travel, and attendance at meetings, hearings, depositions, and trials; and [e]
consulting and witness fees incurred by Landlord in connection with any
litigation or other proceeding.

     25.25 Survival. The following provisions shall survive termination of the
Lease: Article 8 (Defaults and Remedies); Article 9 (Damage and Destruction);
Article 10 (Condemnation); ss.15.3.6 (Confidentiality); ss.15.8 (Transfer of
License and Facility Operations); Article 19 (Holdover and Surrender); ss.20.6
(Retention of Letter of Credit) and ss.25.25 (Survival).

            [THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]

                                      -57-

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

Signed and acknowledged in the presence of:  HEALTH CARE REIT, INC.

Signature   /s/ Rita J. Rogge                By: /s/ Erin C. Ibele
            ------------------------------       ------------------------------
Print Name      Rita J. Rogge                Title: Senior Vice President -
                                                    Administration And
                                                    Corporate Secretary
Signature   /s/ Kathleen A. Sullivan
            ------------------------------
Print Name      Kathleen  A. Sullivan

                                             HCRI INDIANA PROPERTIES, LLC

                                             By: Health Care REIT, Inc., Member
Signature   /s/ Rita J. Rogge
            ------------------------------   By: /s/ Erin C. Ibele
Print Name      Rita J. Rogge                    ------------------------------
                                             Title: Senior Vice President -
                                                    Administration And
Signature   /s/ Kathleen A. Sullivan                Corporate Secretary
            ------------------------------
Print Name      Kathleen A. Sullivan

                                             HCRI NORTH CAROLINA PROPERTIES III,
                                             LIMITED PARTNERSHIP

                                             By: HCRI North Carolina
                                                 Properties II, Inc., its
Signature   /s/ Rita J. Rogge                    General Partner
            ------------------------------
Print Name      Rita J. Rogge                By: /s/ Erin C. Ibele
                                                 ------------------------------
                                             Title: Senior Vice President -
Signature   /s/ Kathleen A. Sullivan                Administration And Corporate
            ------------------------------          Secretary
Print Name      Kathleen A. Sullivan

                                             HCRI TENNESSEE PROPERTIES, INC.

Signature   /s/ Rita J. Rogge                By: /s/ Erin C. Ibele
            ------------------------------       ------------------------------
Print Name      Rita J. Rogge                Title: Senior Vice President -
                                                    Administration And
                                                    Corporate Secretary
Signature   /s/ Kathleen A. Sullivan
            ------------------------------
Print Name      Kathleen A. Sullivan

                                           HCRI TEXAS PROPERTIES, LTD.

                                           By: Health Care REIT, Inc., its
                                               General Partner

                                           By: /s/ Erin C. Ibele
Signature   /s/ Rita J. Rogge                  --------------------------------
            ----------------------------   Title: Senior Vice President -
Print Name      Rita J. Rogge                     Administration And Corporate
                                                  Secretary

Signature   /s/ Kathleen A. Sullivan
            ----------------------------
Print Name      Kathleen A. Sullivan

                                           HCRI WISCONSIN PROPERTIES, LLC

                                           By: Health Care REIT, Inc., Member

Signature   /s/ Rita J. Rogge              By: /s/ Erin C. Ibele
            ----------------------------       --------------------------------
Print Name      Rita J. Rogge              Title: Senior Vice President -
                                                  Administration And Corporate
                                                  Secretary

Signature   /s/ Kathleen A. Sullivan
            ----------------------------
Print Name      Kathleen A. Sullivan

                                           ALTERRA HEALTHCARE CORPORATION

Signature                                  By: /s/ Kristin A. Ferge
            ----------------------------       --------------------------------
Print Name
            ----------------------------   Title: VP
                                                  -----------------------------
Signature
            ----------------------------   Tax I.D. No.:
Print Name                                               ----------------------
            ----------------------------

STATE OF OHIO        )
                     ) SS:
COUNTY OF LUCAS      )

     The foregoing instrument was acknowledged before me this 3rd day of
______April____, 2006 by ___Erin C. Ibele____________, the __Senior Vice
President - Administration and Corporate Secretary__ of Health Care REIT, Inc.,
a Delaware corporation and the sole member of HCRI Indiana Properties, LLC, a
limited liability company organized under the laws of the State of Indiana on
behalf of the limited liability company.

                                                  /s/ Rita J. Rogge
                                                  ------------------------------
                                                      Notary Public

My Commission Expires: 8/26/10                                            [SEAL]
                       -------

STATE OF OHIO        )
                     ) SS:
COUNTY OF LUCAS      )

     The foregoing instrument was acknowledged before me this 3rd day of
______April____, 2006 by ___Erin C. Ibele____________, the __Senior Vice
President - Administration and Corporate Secretary__ of Health Care REIT, Inc.,
a Delaware corporation and the sole member of HCRI Indiana Properties, LLC, a
limited liability company organized under the laws of the State of Indiana on
behalf of the limited liability company.

                                                  /s/ Rita J. Rogge
                                                  ------------------------------
                                                      Notary Public

My Commission Expires: 8/26/10                                            [SEAL]
                       -------

STATE OF OHIO        )
                     ) SS:
COUNTY OF LUCAS      )

     The foregoing instrument was acknowledged before me this 3rd day of
______April____, 2006 by ___Erin C. Ibele____________, the __Senior Vice
President - Administration and Corporate Secretary__ of Health Care REIT, Inc.,
a Delaware corporation and the sole member of HCRI Indiana Properties, LLC, a
limited liability company organized under the laws of the State of Indiana on
behalf of the limited liability company.

                                                  /s/ Rita J. Rogge
                                                  ------------------------------
                                                      Notary Public

My Commission Expires: 8/26/10                                            [SEAL]
                       -------

STATE OF OHIO        )
                     ) SS:
COUNTY OF LUCAS      )

     The foregoing instrument was acknowledged before me this 3rd day of
______April____, 2006 by ___Erin C. Ibele____________, the __Senior Vice
President - Administration and Corporate Secretary__ of Health Care REIT, Inc.,
a Delaware corporation and the sole member of HCRI Indiana Properties, LLC, a
limited liability company organized under the laws of the State of Indiana on
behalf of the limited liability company.

                                                  /s/ Rita J. Rogge
                                                  ------------------------------
                                                      Notary Public

My Commission Expires: 8/26/10                                            [SEAL]
                       -------

STATE OF OHIO        )
                     ) SS:
COUNTY OF LUCAS      )

     The foregoing instrument was acknowledged before me this 3rd day of
______April____, 2006 by ___Erin C. Ibele____________, the __Senior Vice
President - Administration and Corporate Secretary__ of Health Care REIT, Inc.,
a Delaware corporation and the sole member of HCRI Indiana Properties, LLC, a
limited liability company organized under the laws of the State of Indiana on
behalf of the limited liability company.

                                                  /s/ Rita J. Rogge
                                                  ------------------------------
                                                      Notary Public

My Commission Expires: 8/26/10                                            [SEAL]
                       -------

STATE OF OHIO        )
                     ) SS:
COUNTY OF LUCAS      )

     The foregoing instrument was acknowledged before me this 3rd day of
______April____, 2006 by ___Erin C. Ibele____________, the __Senior Vice
President - Administration and Corporate Secretary__ of Health Care REIT, Inc.,
a Delaware corporation and the sole member of HCRI Indiana Properties, LLC, a
limited liability company organized under the laws of the State of Indiana on
behalf of the limited liability company.

                                                  /s/ Rita J. Rogge
                                                  ------------------------------
                                                      Notary Public

My Commission Expires: 8/26/10                                            [SEAL]
                       -------

STATE OF ______________  )
                         ) SS:
COUNTY OF _____________  )

     The foregoing instrument was acknowledged before me this ___ day of
_______________, 2006 by _________________________, the
_________________________ of Alterra Healthcare Corporation, a Delaware
corporation, on behalf of the corporation.

                                                  ------------------------------
                                                  Notary Public

My Commission Expires:                                                    [SEAL]
                      -------------

THIS INSTRUMENT PREPARED BY:

OKSANA M. LUDD, ESQ.
SHUMAKER, LOOP & KENDRICK, LLP
1000 JACKSON
TOLEDO, OHIO 43624

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