Document:

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                                                                   EXHIBIT 10.52

                             GROUND LEASE AGREEMENT

                                   * * * * *

                      NATIONAL MEDICAL SPECIALTY HOSPITAL

                                OF REDDING, INC.

                                   as Landlord

                                       AND

                        GUARDIAN POSTACUTE SERVICES, INC,

                                    as Tenant

                            Dated: November 14, 1997

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                                TABLE OF CONTENTS

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I     DEFINITIONS...............................................................         1
      1.1     "Adjoining Land"..................................................         1
      1.2     "Affiliate".......................................................         1
      1.3     "Article", "Section", "Subsection" or "Paragraph".................         1
      1.4     "Commencement Date"...............................................         1
      1.5     "CPI".............................................................         1
      1.6     "Default".........................................................         1
      1.7     "Demised Premises" or "Premises"..................................         2
      1.8     "Effective Date of Execution".....................................         2
      1.9     "Event of Default"................................................         2
      1.10    "Exhibits"........................................................         2
      1.11    "Governmental Authority(ies)".....................................         2
      1.12    "Impositions".....................................................         2
      1.13    "Land"............................................................         2
      1.14    "Landlord"........................................................         2
      1.15    "Lease"...........................................................         2
      1.16    "Leasehold Mortgage"..............................................         2
      1.17    "Leasehold Mortgagee".............................................         2
      1.18    "Legal Requirements"..............................................         2
      1.19    "Material Change".................................................         2
      1.20    "Minimum Rent"....................................................         2
      1.21    "Parking".........................................................         2
      1.22    "Permitted Encumbrances"..........................................         2
      1.23    "Person"..........................................................         2
      1.24    "Prime Rate"......................................................         2
      1.25    "Rent"............................................................         3
      1.26    "Subsequent Year".................................................         3
      1.27    "Subtenant(s)"....................................................         3
      1.28    "Tenant"..........................................................         3
      1.29    "Tenant Affiliate"................................................         3
      1.30    "Term"............................................................         3

II    GRANT AND TERM OF LEASE...................................................         3
      2.1.    Ground Lease......................................................         3
      2.2.    Habendum..........................................................         3
      2.3.    Term..............................................................         3

III   AUTHORITY AND COVENANT OF QUIET ENJOYMENT.................................         3
      3.1.    Landlord's Authority..............................................         3
      3.2.    Tenant's Authority................................................         3
      3.3.    Covenant of Quiet Enjoyment.......................................         3

IV    RENT......................................................................         4
      4.1.    Minimum Rent......................................................         4
      4.2.    Additional Rent...................................................         4
      4.3.    Place of Payment..................................................         4
      4.4.    Taxes, Assessments, etc. .........................................         4
      4.5.    Advances by Landlord on Tenant's Behalf...........................         4
      4.6.    Interest and Attorneys' Fees......................................         5
      4.7.    Net Lease.........................................................         5

V     ALTERATIONS AND REPLACEMENTS..............................................         5
      5.1.    Landlord's Consent................................................         5
      5.2.    Manner of Alterations.............................................         5
      5.3.    Plans and Specifications..........................................         5
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VI    PARKING, MAINTENANCE AND REPAIRS..........................................          6
      6.1.    Parking...........................................................          6
      6.2.    Tenant's Obligations..............................................          6
      6.3.    Landlord's Rights.................................................          6

VII   USE.......................................................................          7
      7.1.    Exclusive Use of Project..........................................          7
      7.2.    Governmental Requirements.........................................          7
      7.3.    No Discrimination.................................................          7
      7.4.    Permits, Licenses and Easements...................................          8
      7.5.    No Abandonment....................................................          8

VIII  CONDEMNATION..............................................................          8
      8.1.    Definitions.......................................................          8
      8.2.    Division of Award.................................................          8
      8.3.    Condemnation of Less Than a Substantial Portion...................          9
      8.4.    Condemnation of a Substantial Portion.............................          9
      8.5.    Arbitration.......................................................          9
      8.6.    Temporary Taking..................................................         10
      8.7.    Appraisal.........................................................         10

IX    DAMAGE OR DESTRUCTION.....................................................         10
      9.1.    Tenant's Obligations..............................................         11
      9.2.    Manner of Repair and Restoration..................................         11
      9.3.    Damage or Destruction Near End of Lease Term......................         11

X     INSURANCE.................................................................         11
      10.1.   During the Term...................................................         11
      10.2.   During Construction...............................................         12
      10.3.   Insurance With Respect to Improvements............................         12
      10.4.   Form..............................................................         12
      10.5.   Waivers of Subrogation............................................         12
      10.6.   Effect of Compliance..............................................         12
      10.7.   Blanket Policies of Insurance.....................................         13
      10.8.   Index of Amounts..................................................         13
      10.9.   Insurance Proceeds................................................         13

XI    INDEMNIFICATION...........................................................         13
      11.1.   Tenant Indemnifies Landlord.......................................         13
      11.2.   Landlord Indemnifies Tenant.......................................         13

XII   ASSIGNMENT AND SUBLETTING.................................................         14
      12.1.   Permitted Subleases...............................................         14
      12.2.   Tenant's Covenants with Respect to Subtenants.....................         14
      12.3.   Assignment by Tenant..............................................         14
      12.4.   Assignment by Landlord............................................         14

XIII  DEFAULT - FORFEITURE - TERMINATION........................................         15
      13.1.   Equitable Relief..................................................         15
      13.2.   Event of Default..................................................         15
      13.3.   Cure by Leasehold Mortgagee.......................................         16
      13.4.   Landlord's Rights Upon Default....................................         16
      13.5.   Effect of Termination.............................................         17
      13.6.   Performance of Tenant's Obligations By Landlord...................         17

XIV   LEASEHOLD MORTGAGE........................................................         17
      14.1.   Right to Encumber.................................................         17
      14.2.   Notice to Landlord................................................         17
      14.3.   Right of Leasehold Mortgagee to Cure..............................         18
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      14.4.   Additional Leasehold Mortgagee Protection Clauses.................         18

XV    TITLE TO IMPROVEMENTS.....................................................         19
      15.1.   During the Term...................................................         19
      15.2.   Following the Term................................................         19

XVI   SURRENDER OF PREMISES.....................................................         19
      16.1.   ..................................................................         19

XVII  OPTION TO PURCHASE........................................................         20

XVIII ESTOPPEL CERTIFICATES.....................................................         21
      18.1.   ..................................................................         21

XIX   MISCELLANEOUS.............................................................         21
      19.1.   Notices...........................................................         21
      19.2.   Time of Essence...................................................         22
      19.3.   No Waste..........................................................         22
      19.4.   Holding Over......................................................         22
      19.5.   Waiver............................................................         22
      19.6.   Severability......................................................         22
      19.7.   Rights Cumulative.................................................         22
      19.8.   Entire Agreement..................................................         22
      19.9.   Successors and Assigns............................................         23
      19.10.  Governing Law.....................................................         23
      19.11.  Counterparts......................................................         23
      19.12.  Relationship of Parties...........................................         23
      19.13.  Non-Merger........................................................         23
      19.14.  Memorandum of Lease...............................................         23
      19.15.  Modification as Required by Leasehold Mortgagee...................         23
      19.16.  Provision of Quit-Claim Release...................................         23
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STATE OF CALIFORNIA

COUNTY OF SHASTA

                             GROUND LEASE AGREEMENT

      THIS GROUND LEASE AGREEMENT entered into this 14th day of November, 1997,
by and between NATIONAL MEDICAL SPECIALTY HOSPITAL OF REDDING INC., a California
corporation (hereinafter referred to as "Landlord"), and GUARDIAN POSTACUTE
SERVICES, INC., a California corporation (hereinafter referred to as "Tenant").

                                   WITNESSETH:

      WHEREAS, Landlord is the owner in fee simple of the Land (as hereinafter
defined), on which is located an existing rehabilitation hospital and certain
real property improvements related to the operation of the Project
(collectively, the "Project");

      WHEREAS, Landlord, as Seller, and Tenant, as Buyer, have entered into that
certain Asset. Sale Agreement of even date herewith pursuant to which Tenant has
purchased the Project and certain equipment, fixtures and other personal
property related to the operation of the Project ("Asset Sale Agreement").

      WHEREAS, Landlord desires to lease and demise to Tenant, and Tenant
desires to lease and demise from Landlord, the Land, all upon the terms and
conditions hereinafter set forth;

      NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein contained, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged by Landlord and Tenant, Landlord
and Tenant do hereby enter into this Ground Lease Agreement, and do hereby agree
as follows:

                                    ARTICLE I

                                   DEFINITIONS

      In addition to the other terms defined herein, the following shall have
for the purposes of this Lease the following meanings, unless the context
otherwise clearly requires:

1.1   "Adjoining Land" means that certain tract of real property adjacent to the
      Land owned by the Landlord, as more particularly described in Exhibit "C"
      attached hereto and by this reference incorporated herein.

1.2   "Affiliate" means, (i) a Person directly or indirectly controlling,
      controlled by, or under common control with another Person; (ii) a Person
      owning or controlling 10 percent or more of the outstanding voting
      securities or beneficial interests of another Person; (iii) an officer,
      director, partner, or member of the immediate family of an officer,
      director or partner, of another Person; and/or (iv) any affiliate of any
      such Person.

1.3   "Article", "Section", "Subsection" or "Paragraph" means the specified
      Article, Section, Subsection or Paragraph of this Lease.

1.4   "Commencement Date" means the date of the "Closing" under the Asset Sale
      Agreement.

1.5   "CPI" means the index now known as the Consumer Price Index published by
      the Bureau of Labor Statistics of the United States Department of Labor,
      U.S. City Average, All Items and Major Group Figures for Urban Wage
      Earners and Clerical Workers (1982-84 = 100).

1.6   "Default" shall have the meaning ascribed thereto in Section 13.2.

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1.7   "Demised Premises" or "Premises" means the Land and the rights and
      easements appurtenant thereto.

1.8   "Effective Date of Execution" means the date on which the latter of the
      Landlord and Tenant executes this Lease.

1.9   "Event of Default" shall have the meaning ascribed thereto in Section
      13.2.

1.10  "Exhibits" shall mean the exhibits attached to this Lease, as may be
      amended from time to time, (or which are referred to in this Lease as
      Exhibits and are initialed for identification by representatives of the
      parties), each of which shall be deemed to form part of this Lease whether
      or not so stated in this Lease.

1.11  "Governmental Authority(ies)" means all Federal, state, city, county,
      municipal and local governments, and all departments, commissions, boards,
      bureaus and offices thereof, having jurisdiction over the Demised
      Premises.

1.12  "Impositions" means any taxes and assessments imposed on the Demised
      Premises, as more particularly described in Section 4.4.

1.13  "Land" means that certain tract of real property Owned and to be demised
      by Landlord to Tenant, as more particularly described in Exhibit "A"
      attached hereto and by this reference incorporated herein.

1.14  "Landlord" means National Medical Specialty Hospital of Redding, a
      California corporation, and its successors and assigns.

1.15  "Lease" means the entire understanding of the Landlord and Tenant as
      embodied in this Ground Lease Agreement, including specifically, without
      limitation, any amendments hereto in writing that may be agreed upon by
      the Landlord and Tenant from time to time.

1.16  "Leasehold Mortgage" means any deed to secure debt, mortgage, indenture or
      similar security instrument given by Tenant encumbering the whole or part
      of Tenant's leasehold estate and interest in and to the Demised Premises.

1.17  "Leasehold Mortgagee" means the holder of a Leasehold Mortgage, as
      expressly provided for in Section 14.1.

1.18  "Legal Requirements" shall mean all present and future laws, ordinances,
      rules, regulations and requirements of all Governmental Authorities,
      foreseen or unforeseen, ordinary or extraordinary, which may be applicable
      to the Demised Premises, or any part thereof including the improvements
      which from time to time constitute part of or are constructed on the
      Demised Premises, or the use or manner of use of any of the foregoing, and
      shall also mean and include all requirements of policies of public
      liability, fire and other insurance policies at any time in force with
      respect to any of the foregoing.

1.19  "Material Change" shall have the meaning ascribed thereto in Section 5.1.

1.20  "Minimum Rent" means the rent payable by Tenant to Landlord pursuant to
      Section 4.1.

1.21  "Parking" means that area comprising a portion of the Land, which will be
      maintained as parking to serve the Project, as expressly provided for in
      Section 6.1.

1.22  "Permitted Encumbrances" means those items more particularly described in
      Exhibit "B" attached hereto and by this reference incorporated herein.

1.23  "Person" means and includes an individual, corporation, partnership,
      association, limited liability company, trust, estate, or other entity.

                                      -2-

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1.24  "Prime Rate" means the annual rate of interest announced from time to time
      by Bank of America, N.A. at its head office in San Francisco, California,
      as its "reference rate" of interest, adjusted automatically upon any
      change in such rate of interest. In the event Bank of America, N.A.
      discontinues or suspends the practice of announcing such a "reference
      rate", the Prime Rate shall be determined by reference to any equivalent
      rate announced by a national bank selected by Landlord, which is at that
      given date one of the twenty (20) largest banks, as measured by capital
      and surplus, in the United States.

1.25  "Rent" means collectively the Minimum Rent, Percentage Rent and Additional
      Rent.

1.26  "Subsequent Year" means any calendar year following calendar year 1997.

1.27  "Subtenant(s)" means any person(s) or entity(ies) whom Tenant may permit
      to sublet any portion of the Demised Premises in accordance with the terms
      and conditions of Article XII.

1.28  "Tenant" means Guardian Postacute Services, Inc., a California
      corporation, and its successors and assigns.

1.29  "Tenant Affiliate" means any subsidiary corporation of Tenant, or any
      joint venture or partnership, whether limited or general, in which Tenant
      and/or some of its principal officers and shareholders are venturers or
      partners.

1.30  "Term" means that period of time commencing on the Commencement Date and
      extending through the thirtieth (30th) anniversary of the Commencement
      Date, as expressly provided for in Section 2.3 unless this Lease shall
      have been terminated pursuant to its terms and provisions, in which case
      the Term shall be that period of time commencing on the Commencement Date
      and continuing until the termination date.

                                   ARTICLE II

                             GRANT AND TERM OF LEASE

      Section 2.1. Ground Lease. Effective as of the Commencement Date upon the
terms and conditions hereinafter stated, Landlord does let, lease and demise
unto Tenant, and Tenant does let, lease and demise from Landlord, the Land,
subject to the Permitted Encumbrances and subject to all Legal Requirements.

      Section 2.2. Habendum. To have and to hold the Land, together with all
privileges and appurtenances thereunto belonging or appertaining and provided
for herein unto Tenant for the full Term of this Lease.

      Section 2.3. Term. The Term of this Lease shall commence on the
Commencement Date and shall continue through the thirtieth (30th) anniversary of
the Commencement Date unless this Lease shall be sooner terminated in accordance
with its terms. Upon the Commencement Date, Landlord and Tenant shall be bound
by every provision of this Lease.

                                   ARTICLE III

                    AUTHORITY AND COVENANT OF QUIET ENJOYMENT

      Section 3.1. Landlord's Authority. Landlord is a duly organized
corporation in good standing under the laws of the State of California, is not
subject to any involuntary proceeding for dissolution or liquidation thereof,
and is duly authorized by its board of directors to enter into this Lease. Upon
request, Landlord shall provide Tenant with reasonable evidence of such
authority.

      Section 3.2. Tenant's Authority. Tenant is a duly organized corporation in
good standing under the laws of the State of California, is not subject to any
proceeding for dissolution or liquidation thereof, and is duly authorized by its
board of directors to enter into this Lease. Upon request, Tenant shall provide
Landlord with reasonable evidence of such authority.

                                      -3-

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      Section 3.3. Covenant of Quiet Enjoyment. Tenant, by performing and
observing the several covenants by it to be kept and performed hereunder to
include the payment of Rent as and when provided, may peaceably hold and enjoy
the Land, subject to all the terms of this Lease. Landlord represents and
warrants to Tenant that the Land is being leased to Tenant free and clear of all
liens, encumbrances and rights of third parties except for the title exceptions
set forth in Exhibit "B" hereto (the "Permitted Encumbrances").

                                   ARTICLE IV

                                      RENT

      Section 4.1. Minimum Rent. Tenant shall pay to Landlord commencing on the
Commencement Date of this Lease (the "Rent Commencement Date"), and thereafter
for each year during the Term of this Lease, without set off or deduction in any
manner whatsoever, the yearly rent as set forth in Exhibit "C" attached hereto
and hereby incorporated herein by reference (the "Minimum Rent"). The Minimum
Rent shall be payable in advance in equal monthly installments on the first day
of each calendar month during the Term of this Lease commencing with the Rent
Commencement Date. If the Commencement Date or termination date of this Lease
falls on other than the first day of a given calendar month, Minimum Rent shall
be prorated for such month and shall be payable in advance on the first day of
such partial calendar month.

      Section 4.2. Additional Rent. In addition to the rental specified in
Section 4.1 hereof, any and all other payments which Tenant is required to make
hereunder to or on behalf of or for the benefit of Landlord shall be deemed to
be "Additional Rent", and said other sums payable hereunder as Additional Rent
shall be deemed "Rent" under this Lease, and any remedies now or hereafter
afforded to Landlord by the laws of the State of California for collection of
such rents shall be available to Landlord, in addition to any rights and
remedies specified herein. All such other Rent shall be payable in accordance
with the applicable provisions specifying the terms and conditions of payment of
such other amounts to be paid as Additional Rent.

      Section 4.3. Place of Payment. Each payment of Rent to Landlord by Tenant,
which is payable directly to Landlord, shall be payable at the office of the
Landlord at the address appearing in Section 19.1 hereof.

      Section 4.4. Taxes, Assessments, etc. Tenant shall pay to the Governing
Authority charged with the collection of same, before the same become
delinquent, and shall indemnify and hold Landlord harmless from, all taxes
(other than an increase in tax attributable to a change in ownership of the
Land), assessments, license fees, excises, imposts, and charges of every sort,
foreseen and unforeseen (the "Impositions"), that during the Term of this Lease
shall be levied, assessed, charged, or imposed upon the Demised Premises, with
such taxes for the first and last years of the Term to be prorated between
Landlord and Tenant based on the number of days in the applicable tax year the
Land is leased by Tenant. Any Imposition that may be paid, according to
applicable law, over a period of time may be paid by Tenant over that period of
time with any interest therein to be paid by Tenant. Tenant shall not have the
obligation, however, to pay any income, capital gain or franchise tax, or any
tax imposed on rentals and revenues received by Landlord hereunder that may be
payable by Landlord under any existing or future tax law of the United States
or any other country or of the State of California or any subdivision thereof;
provided, however, that Tenant shall be responsible for the payment of any
future tax levied in lieu of ad valorem property taxes on the Land. If any
Imposition shall be deemed by Tenant to be improper, illegal, or excessive,
Tenant may, at its sole cost and expense (in its own name or in the name of
Landlord or both, as may be necessary), dispute and contest the same in good
faith and with due diligence, and in such case such items need not be paid until
adjudged to be valid. Upon being adjudged valid, Tenant may continue to contest
same; provided, however, prior thereto, Tenant shall first post bond or other
security equal to that amount determined to be due and owing in such
adjudication, to be applied by Tenant, or failing to do so, by Landlord, in
satisfaction of such amount should such adjudication not be reversed or the .
case be remanded for further proceedings upon termination of appeal. Unless so
contested by Tenant, all Impositions shall be paid by Tenant within the time
provided by law; and, if contested, any such Imposition shall be paid before the
issuance of execution based on final judgment. Landlord shall cooperate with
Tenant in any such dispute or contest, but at Tenant's sole cost and expense.

                                      -4-

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      Section 4.5. Advances by Landlord on Tenant's Behalf. In case of any
default by Tenant in the payment of any Imposition or payment of any other
amount herein provided to be paid by Tenant, or in the procuring of insurance as
herein provided for, Landlord may at its sole discretion, on behalf of Tenant,
make such payment or payments or procure any such insurance, and Tenant
covenants thereupon on demand to reimburse and pay Landlord any amount
reasonably paid or expended therefor.

      Section 4.6. Interest and Attorneys' Fees. Any amount payable under the
Lease by Tenant to Landlord and not paid within ten (10) days of when due shall
bear interest at the rate of four percent (4%) in excess of the Prime Rate from
time to time during the period in which any such sum is due and owing (or the
maximum rate of interest permitted by California law whichever is the lesser.)
If it becomes necessary to bring suit for collection of the Rent, and Landlord
is successful in such suit, or of any other sums herein stipulated to be paid or
in case the same has to be collected upon demand of an attorney, Tenant agrees
to pay such attorneys' fees as Landlord may reasonably incur.

      Section 4.7. Net Lease. Except as otherwise stated in this Lease, it is
the express purpose and intent of Landlord and Tenant that the Rent to be paid
by Tenant to Landlord shall be absolutely net to Landlord, so that this Lease
shall yield to Landlord, but prior to any expenses of Landlord relating to the
management of its ownership interest or estate in and to the Premises, the Rent
specified in Section 4.1 and that all costs, expenses and obligations of every
kind and nature whatsoever relating to the use, occupancy and maintenance of the
Premises by Tenant which may arise and become due during or outside of the Term
of this Lease, and that Landlord shall be indemnified and held harmless by
Tenant from and against the same, and from the cost of defending against any
action brought to collect same.

                                    ARTICLE V

                          ALTERATIONS AND REPLACEMENTS

      Section 5.1. Landlord's Consent. Tenant shall have the right to alter, add
to, demolish or reconstruct the Project, or any portion thereof, only if there
does not exist an Event of Default under this Lease and, with respect to a
Material Change, only if Tenant has obtained the express written consent of
Landlord, which consent shall not be unreasonably withheld. Tenant shall not be
required to obtain Landlord's consent with respect to (a) any alteration or
reconstruction of interior space located in the Project, or (b) alterations or
additions of the Premises (including, without limitation, the erection,
installation, maintenance and operation in the Premises of such equipment, trade
fixtures, fixtures and signs as Tenant may deem advisable) other than Material
Changes (as hereinafter defined). For purposes of this Article V, a Material
Change shall be an alteration or addition to the Project which (i) will
materially lessen the quality of materials or workmanship utilized in
development of the Project or (ii) will violate any term of this Lease. In any
event, all such alterations and replacements shall be effected in compliance
with all Legal Requirements.

      Section 5.2. Manner of Alterations. With respect to a Material Change, for
the purpose of permitting Landlord to satisfy itself that the Premises after the
proposed Material Change will comply with the requirements of this Lease, Tenant
shall deliver to Landlord plans and specifications of the work to be performed
at least thirty (30) days before the beginning of such change or alteration,
which plans and specifications shall meet the standards set forth in Section
5.3. Landlord shall have the right to approve or disapprove said plans and
specifications as set forth in Section 5.3. Thereupon, Tenant shall proceed with
such change or alteration pursuant to the provisions of Article V hereof, to the
extent applicable to the portion of said improvements with respect to which
action is being taken pursuant to this Article V.

      Section 5.3. Plans and Specifications.

            (a) Tenant shall submit to Landlord for Landlord's approval, which
approval will not be unreasonably withheld or delayed, preliminary plans and
specifications for the Material Change to the Project. Such preliminary plans
and specifications shall further take into consideration and provide for the
aesthetic integration of the facades of the buildings to be constructed on the
Land with the existing improvements on the Adjoining Land. Within fifteen (15)
business days following

                                      -5-

<PAGE>

receipt by Landlord of said preliminary plans and specifications from Tenant,
Landlord shall notify Tenant of Landlord's approval or disapproval of said
preliminary plans and specifications. Landlord's failure to notify Tenant within
such period shall be deemed to be Landlord's approval. Any notice of approval or
disapproval shall be in writing, and if disapproved, shall set forth the grounds
for such disapproval. Following Landlord's first or any subsequent disapproval,
Tenant shall undertake, in conjunction with Landlord, to amend and modify the
preliminary plans and specifications, and, upon the completion thereof, submit
revised plans and specifications to Landlord for its review and approval, in
accordance with the foregoing.

            (b) Following approval of preliminary plans and specifications,
Tenant shall develop final plans and specifications substantially in conformity
with the preliminary plans and specifications previously approved by Landlord.
Such final plans and specifications shall be subject to review by Landlord.
Within thirty (30) days following receipt by Landlord of said final plans and
specifications from Tenant, Landlord shall notify Tenant of Landlord's approval,
which approval will not be unreasonably withheld, or disapproval, as the case
may be. Landlord's failure to notify Tenant within such period shall be deemed
to be Landlord's approval. Any notice of approval or disapproval shall be in
writing, and if Landlord disapproves, then such notice shall set forth the
grounds for such disapproval. Following Landlord's first or any subsequent
disapproval, Tenant shall undertake, to amend or modify the final plans and
specifications and then submit the revised final plans and specifications to
Landlord for its review as set forth above. Changes from the preliminary plans
and specifications shall be considered to be within the scope of the preliminary
plans and specifications, if they are not substantial, or if they are made in
order to comply with the reasonable requirements of a Leasehold Mortgagee or of
a Governmental Authority.

            (c) In no event shall Tenant begin construction prior to procuring
Landlord's approval of said final plans and specifications; provided, however,
that such approval may be procured incrementally to allow development of the
Project in phases. This prohibition applies to the commencement of any on-site
infrastructure construction as well.

                                   ARTICLE VI

                        PARKING, MAINTENANCE AND REPAIRS

      Section 6.1. Parking. Tenant shall at all times during the Term of this
Lease maintain parking facilities (the "Parking") for the Premises sufficient to
comply with all Legal Requirements to include specifically, without limitation,
applicable zoning ordinances. Tenant shall keep and maintain the Parking clean,
neat, safe and in good repair.

      Section 6.2. Tenant's Obligations. Tenant shall, at all times and at its
sole cost and expense, keep the improvements on the Premises, including, but not
limited to the Parking and the sidewalks, driveways, curbs, fencing and
landscaping on the Land, in good, clean and safe order, condition and repair.
Landlord, except as otherwise provided in this Lease, shall not be required to
make any repairs or improvements to the Premises during the Term of this Lease,
or in any manner to supply maintenance for the improvements on the Premises. If
at any time during the Term of this Lease, any addition, alteration, change,
repair, or other work of any nature, structural or otherwise, shall be required
or ordered or become necessary on account of any Legal Requirement now in effect
or hereafter adopted passed, or promulgated or on account of any other reason
with respect to any improvements hereafter placed on the Premises, Tenant
promptly shall make such changes regardless of when the same shall be incurred
or become due, and the entire cost thereof shall be the liability of Tenant, and
in no event shall the Landlord be called upon to contribute thereto or do or pay
for any work of any nature whatsoever on the Premises. All repairs of the
improvements on the Premises required to be made by Tenant hereunder shall be at
least equal in quality and material to the original construction of the Project,
and in such a manner so as not to otherwise adversely affect Landlord's interest
in or use of the Adjoining Land, or Landlord's occupancy and quiet enjoyment of
the Adjoining Land, or any portion thereof.

      Section 6.3. Landlord's Rights. Subject to any Governmental Authorities'
security rules and regulations that may apply to any portion of the Premises,
Landlord may enter the Premises at reasonable times during normal business hours
after reasonable notice to Tenant to inspect the Premises in order to determine
whether Tenant or any of its Subtenants are complying with their

                                      -6-

<PAGE>

obligations under this Lease and to take any actions authorized pursuant to this
Lease including, but not limited to, Landlord's remedies contained in Section
13.4, but shall have no obligation to do so. In the event Landlord shall
exercise its rights under this Section, it shall do so in such a manner so as to
limit interference with Tenant's occupancy and use of the Premises to a level as
minimal as is possible considering the circumstances.

                                   ARTICLE VII

                                       USE

      Section 7.1. Exclusive Use of Project. During the term of this Lease,
Tenant hereby agrees as follows:

            (a) Tenant's sole and exclusive use of the Premises shall be to own
and operate a post-acute hospital offering and providing only the following
services: (i) skilled nursing, (ii) physical rehabilitation, (iii) occupational
therapy, (iv) speech pathology, (v) social services, (vi) assisted living, (vii)
day health programs for children and adults, (viii) LTAC services, (ix)
psychiatric services, (x) geriatric clinic services, (xi) outpatient services
related to the foregoing service categories, and (xii) other post-acute
services. Neither Tenant nor any Affiliates of Tenant (nor any assignee or
successor thereto) shall, on or within the Premises, own, operate or manage,
directly or indirectly, any corporation, partnership, division or other entity
or business (whether or not the same is a not-for-profit organization), which
engages in the development, ownership, operation or management of a provider of
any health care services other than those described in the first sentence of
this Section 7.1 (a). Without limiting the generality of the foregoing, neither
Tenant nor any Affiliate of Tenant (nor any assignee or successor thereto) shall
own, operate or manage, within the Premises, any (i) general or acute care
hospital, mental health or psychiatric facility, or drug or alcohol abuse
detoxification or rehabilitation facility, (ii) surgical center, diagnostic
center, or emergency or non-emergency outpatient service centers or clinics, or
(iii) any medical practices, group medical practices, health maintenance
organizations, physician associations, integrated delivery systems or any
managed care provider or organization offering or providing any health care
services other than those described in the first sentence of this
Section 7.1(a).

            (b) Tenant acknowledges and agrees that its covenants herein set
forth form part of the consideration hereunder and is one of the inducements for
Landlord entering into this Lease, that the provisions of this Section 7.1 are
necessary to protect the interests of Landlord and the continue value of the
Premises, that the restrictive covenants set forth herein are reasonable in
scope and duration and that the provisions of this Section 7.1 are for the
benefit of, and may be enforced by, Landlord and its Affiliates and their
successors and assigns.

            (c) Tenant hereby agrees that a breach of the covenants contained in
this Section 7.1 will result in irreparable harm and damages to Landlord which
cannot be adequately compensated for by a monetary award and that in addition to
all other remedies available in law or in equity Landlord and its Affiliates and
their successors and assigns shall be entitled to the remedy of a temporary
restraining order, preliminary injunction or such other form or injunctive or
equitable relief as may be issued by a court of competent jurisdiction to
restrain or enjoin Tenant and any Affiliates of Tenant (or any successor or
assign thereto) from breaching the provisions of this Section 7.1 or otherwise
to specifically enforce the provisions of this Section 7.1.

            (d) Tenant agrees that if any restriction contained in this Section
7.1 is held by any court of competent jurisdiction to be unenforceable or
unreasonable, a lesser restriction as determined by such court to be enforceable
shall be severable therefrom and enforced in its place, and the remaining
restrictions contained herein shall be enforceable independently of each other.

      Section 7.2. Governmental Requirements. Tenant shall, at Tenant's sole
cost and expense, obtain any and all licenses and permits necessary for its
construction of the use of the Premises. Tenant shall, at its sole cost and
expense, also comply with all Legal Requirements applicable to the Premises and
the use thereof including, without limitation, all valid governmental orders and
directives for the correction, prevention and abatement of nuisances in, upon or
connected with the Premises; provided, however, that Tenant in its discretion,
shall have the right in good faith to

                                      -7-

<PAGE>

contest any such orders or directives, and Tenant shall not be obligated to
comply unless and until such order or directive has been finally adjudicated to
be valid and enforceable.

      Section 7.3. No Discrimination. Tenant covenants, that it will not
discriminate against or segregate any person or group of persons, on account of
sex, race, color, creed, national origin, or ancestry in the leasing,
subleasing, licensing, use or enjoyment of the Premises, nor shall Tenant permit
any person claiming under or through Tenant, to establish or permit any such
practice or practices of discrimination or segregation with reference to the
selection, location, number, use or occupancy of tenants, lessees, sublessees,
subtenants, or vendees in the Premises; provided, however, that, in the event
Tenant shall violate the provisions of this Section 7.3, Landlord's sole
remedies shall be (a) to enjoin Tenant from the continuation of repetition of
such violation and (b) to sue Tenant for Landlord's damages, if any, arising out
of such violation.

      Section 7.4. Permits, Licenses and Easements. Landlord agrees, promptly
upon request of Tenant, but without cost to Landlord, to join in (a) any and all
applications for permits, licenses, easements and other authorizations required
by any Governmental Authority, (b) any grants for easements for electric,
telephone, gas, water, sewer, drainage, access and such other public and private
utilities and facilities as may be reasonably necessary or desirable in the
operation of the Premises, or any improvements erected thereon, and (c) any
requests for easements or other rights, including air rights to be obtained from
any Governmental Authority. Nothing in this Section 7.4, however, shall obligate
Landlord to join in any matter referred to herein which matter is not in
accordance with the final plans and specifications for the Premises approved by
Landlord pursuant to Article V.

      Section 7.5. No Abandonment. In no event shall Tenant abandon the
Premises.

                                  ARTICLE VIII

                                  CONDEMNATION

      Section 8.1. Definitions.

            (a) The terms "condemnation," "any condemnation" or "condemn" shall
mean any taking or takings for any public or quasi-public purpose under any
governmental law, ordinance or regulation by the exercise of the right of
eminent domain or by the granting, conveying or private sale pursuant to the
threat thereof, at any time or cumulatively from time to time.

            (b) The taking of a "substantial portion" of the Premises shall mean
the taking of such portion of the Premises as (i) shall render (as determined by
agreement of both Landlord and Tenant or, failing agreement of the issue, by
arbitration pursuant to Section 8.5) the untaken portion of the Premises to be
incapable of restoration economically or operationally so as to support the
operation of the Project for the uses contemplated herein.

            (c) The "fair market value" as used herein shall mean the price to a
willing buyer not compelled to buy, if the Land were vacant, unimproved, but
encumbered by this Lease but not by any Leasehold Mortgage, and shall be
determined as expressly provided for in Section 8.7.

      Section 8.2. Division of Award.

            (a) If, during the term of this Lease, the Premises, or any portion
thereof, are condemned or taken by any Governmental Authority having the power
of eminent domain, or on behalf of which the power of eminent domain may be
exercised, the court in such condemnation proceedings shall be requested to make
separate awards to Landlord and Tenant as to their respective interests in the
Premises, and Landlord and Tenant agree to request such action by the court.
This Paragraph 8.2 (a) shall be construed as superseding any statutory
provisions now in force or hereafter enacted concerning condemnation proceedings
to the extent permitted by law.

            (b)In the event that Landlord and Tenant are unable to obtain
separate awards with respect to their respective interests in the Premises, then
the net award received (after deductions of reasonable fees and expenses of
collection, including, but not limited to, reasonable

                                      -8-

<PAGE>

attorney's fees) shall be fairly and equitably apportioned between Landlord and
Tenant to reflect their respective interests in the Premises. The portion of the
award to be received by Landlord shall reflect the taking of fee simple estate
in and to the Land based upon the fair market value of the Land as of the date
preceding the day on which title to the Land vests in the condemning authority.
In addition, there shall be taken into consideration the fact that the buildings
and other improvements constructed on the Land will belong to Landlord upon the
expiration of the Term of this Lease., The portion of the award to be received
by Tenant shall be based upon the taking and reduction of Tenant's leasehold
estate created by this Lease, the taking of any building and other improvements
on the Land, loss or interruption of business, and the cost of any restoration
or repair necessitated by such taking or condemnation. Such values shall be
determined as of the time of condemnation by agreement of the parties or by
arbitration in the manner set out in Section 8.5. Landlord and Tenant agree
that, in the event they are unable to obtain separate awards, there shall be no
settlement of any condemnation award or proceeding without the consent of any
Leasehold Mortgagee; it being understood, however, that any such Leasehold
Mortgagee shall have rights only in and to Tenant's portion of the award.

      Section 8.3. Condemnation of Less Than a Substantial Portion.

            (a) If any condemnation of the Premises results in the taking of
less than a substantial portion of the Premises, or if Tenant does not elect to
terminate this Lease following the taking of a substantial portion of the
Premises, then this Lease shall continue in full force and effect; provided,
however, that Rent shall abate in proportion to the number of square feet of the
Premises which is taken or is rendered unusable by such taking bears to the
number of square feet of the Premises immediately prior to such taking. Tenant,
with its award and any other necessary funds of Tenant, shall promptly repair
and reconstruct any of the Premises damaged or diminished by such condemnation
so as to provide buildings and improvements on the Land of the same general
appearance and quality as prior to such condemnation, unless Tenant obtains
Landlord's consent to a change in use of the Premises, which Landlord may
withhold, in its sole and absolute discretion, and Tenant shall repair and
reconstruct and add to the Parking (if possible) to the extent necessary to
provide parking as required by Section 7.1.

            (b) If Landlord and Tenant are unable to agree on either or both of
the reasonable value of any building or portion thereof forming a part of the
Premises which has been taken or has been rendered unusable by taking and which
cannot be replaced and/or the reasonable value of the entire building or group
of buildings forming a part of the Premises immediately prior to such taking,
then such value shall be determined in the manner provided in Section 8.5.

      Section 8.4. Condemnation of a Substantial Portion. If any condemnation
results in the taking of a substantial portion of the Premises, Tenant may
terminate this Lease within ninety (90) days following such condemnation upon
written notice to Landlord. If Tenant does not elect to terminate this Lease.
Tenant, with its award and any other necessary funds of Tenant, shall promptly
repair and reconstruct any of the Premises damaged or diminished by such
condemnation so as to provide buildings and improvements on the Land of the same
general appearance and quality as prior to such condemnation, unless Tenant
obtains Landlord's consent to the change in use of the Premises, which Landlord
may withhold, in its sole and absolute discretion, and Tenant shall repair and
reconstruct and add to the Parking (if possible) to the extent necessary to
provide parking as required by Section 7.1. If Tenant so elects to terminate
this Lease, then the Term hereof shall cease on the date title is transferred by
reason of such condemnation, and all rentals shall be paid up to the date of
termination, and the parties hereto shall thereupon have no further obligation
to each other hereunder. Upon such termination all awards payable to Tenant, as
described in Section 8.2, shall be free from any interest of Landlord pursuant
to the terms of this Lease, and all awards payable to Landlord, as described in
Section 8.2, shall be free from any interest of Tenant pursuant to the terms of
this Lease.

      Section 8.5. Arbitration. As used in the Lease, a taking of less than a
substantial portion of the Premises shall mean a taking of such portion as
leaves remaining a balance which can be economically operated for the purposes
for which the Premises was operated prior to such taking.

            (a) In the event the parties are unable to agree as to whether any
particular taking constitutes a taking of a substantial portion of the Premises,
either party may submit the matter to

                                      -9-
<PAGE>

binding arbitration by giving written notice to that effect to the other party
and shall in such notice appoint an arbitrator on its behalf. Within twenty (20)
days thereafter, the other party shall by written notice to the first party
appoint a second arbitrator on its behalf, and the two arbitrators so appointed
shall appoint a third arbitrator, and the three arbitrators shall determine the
matter in dispute by majority action. If the second party shall fail to appoint
the second arbitrator or if the two arbitrators fail within thirty (30) days
after the appointment of the second arbitrator to appoint a third arbitrator,
then either party to the Lease, upon written notice to the other party, may
request such appointment by the American Arbitration Association (or any
organization successor thereto), or on its failure, refusal or inability to act,
may apply for such appointment to a court of competent jurisdiction in the State
of California.

            (b) The determination made as provided above shall be conclusive
upon the parties and judgment upon the same may be entered in any court having
jurisdiction thereof. The arbitrators chosen by the parties shall give written
notice to the parties stating their determination, and shall furnish to each
party a signed copy of such determination. The decision of the arbitrators shall
be a condition precedent to any right of legal action that either party may have
against the other with respect to the subject matter of the arbitration; and

            (c) Each party shall pay the fees and expenses of the arbitrator
appointed by such party and one-half of the other expenses of the arbitration
properly incurred hereunder.

      Section 8.6. Temporary Taking. If the temporary use of the whole or any
part of the Premises shall be taken as aforesaid, the Lease shall not be
affected in any way and the Tenant shall continue to pay in full Rent payable by
the Tenant hereunder. Any award or payment for such use shall be paid to the
Landlord to be applied to the payment of Minimum Rent and other sums and charges
due hereunder, or which will become due during the period covered by such award;
provided that if any portion of such award or payment includes an amount to
compensate for damage to or destruction of the Premises, such portion shall be
held and applied as provided in Section 8.5. The balance, if any, of such award
shall be paid to the Tenant after satisfaction of all current obligations of the
Tenant under the Lease.

      Section 8.7. Appraisal. In the event that the Landlord and the Tenant have
not agreed on the fair market value of the Land on the basis aforesaid within
thirty (30) days after a taking, either party may submit the matter to binding
appraisal by giving written notice to that effect to the other party and shall
in such notice appoint a disinterested person of at least ten (10) years'
experience as a real estate appraiser in the County of Shasta, State of
California, who shall have had experience in appraising major commercial
Properties for major lending institutions, as appraiser on its behalf, and who
has a MAI designation by the American Appraisal Institute. Within twenty (20)
days thereafter, the other party shall by written notice to first party appoint
a second disinterested person possessing like qualifications as appraiser on its
behalf, and the appraisers so appointed shall appoint a third appraiser
possessing like qualifications, and the three appraisers shall determine the
fair market value of the Land on the aforesaid basis by majority action.

            (a) If either party shall first appoint an appraiser as provided in
this Section and then the other party shall fail within said twenty (20) day
period to appoint a second appraiser, then the first party, upon written notice
to the other party may request such appointment by the American Arbitration
Association (or any organization successor thereto), or on its failure, refusal
or inability to act may apply for such appointment to a court of competent
jurisdiction in the State of California, if the two appraisers appointed by the
parties shall be unable to agree, within thirty (30) days after the appointment
of the second appraiser, on the appointment of a third appraiser, they or either
of them shall promptly give written notice of such failure to agree to the
parties, and if the parties fail to agree upon the selection of such third
appraiser within fifteen (15) days after such notice, then within ten (10) days
thereafter either of the parties, upon written notice to-the other party, may
request such appointment by the American Arbitration Association (or any
organization successor thereto), or on its failure, refusal or inability to act,
may apply for such appointment to a court of competent jurisdiction in the State
of California;

            (b) The determination made as above provided shall be conclusive
upon the parties and judgment upon the same may be entered in any court having
jurisdiction thereof. The appraisers chosen by the parties shall give written
notice to the parties stating their determination,

                                      -10-

<PAGE>

and shall furnish to each party a signed copy of such determination. The
decision of the appraisers shall be a condition precedent to any right of legal
action that either party may have against the other with respect to the subject
matter of the appraisal; and

            (c) Each party shall pay the fees and expenses of the appraiser
appointed by such party and one-half of the other expense of the appraisal
properly incurred hereunder.

                                   ARTICLE IX

                              DAMAGE OR DESTRUCTION

      Section 9.1 Tenant's Obligations. In the event of damage to or destruction
of any or all of the improvements constituting a part of the Premises by fire or
other casualty, Tenant covenants immediately to notify Landlord of such damage
or destruction. If the casualty is an insured loss, then, notwithstanding such
damage or destruction, this Lease shall continue in full force and effect with
no reduction in Rent due hereunder, and Tenant, at Tenant's expense, shall
promptly repair and restore ' such improvements substantially to their condition
immediately prior to the casualty.

      Section 9.2. Manner of Repair and Restoration. For the purpose of
permitting Landlord to satisfy itself that the repair and restoration of the
Premises will comply with the requirements of this Lease, Tenant shall deliver
to Landlord architectural plans and specifications of the restoration work no
later than ninety (90) days following the date Tenant has obtained all necessary
permits for said reconstruction (with Tenant being obligated to apply for such
permits promptly after such damage or destruction and to proceed diligently with
such application process thereafter), which plans and specifications shall meet
the standards established in Section 5.3. Thereupon, Tenant shall diligently
proceed with such repair and restoration pursuant to the provisions of Article
VI (except as to the dates set forth therein which for the purposes hereof shall
be deemed to be a reasonable time), hereof and shall complete such repair or
restoration no later than twelve (12) months following the approval by Landlord
of said plans and specifications.

      Section 9.3. Damage or Destruction Near End of Lease Term. Notwithstanding
the foregoing, in the event of the damage or destruction which occurs within the
last three years of the Term and which renders more than twenty-five percent
(25%) of the improvements on the Premises unusable for their \intended use,
Tenant shall have the option to terminate this Lease by giving written notice to
Landlord within ninety (90) days of the date of such damage or destruction. In
the event of such termination, any insurance proceeds payable by reason of such
damages or destruction shall be assigned to Landlord.

                                    ARTICLE X

                                    INSURANCE

      Section 10.1. During the Term. Upon commencement of and at all times
during the Term hereof, Tenant shall obtain and maintain in effect (or cause to
be obtained and maintained in effect):

            (a) General Liability Insurance (including Premises-Operations
Liability, Independent Contractors' Protective Liability, Contractual Liability,
Completed Operations Liability. Broad Form Property Damage coverage; not
excluding "blasting or explosion," "collapse" or "underground", and also
including all three groups of Personal Injury Liability including coverage for
false arrest, wrongful detention or imprisonment, malicious prosecution, libel,
slander, defamation, violation of the right to privacy, wrongful eviction or
other invasion of the right to private occupancy) against claims for personal
injury, bodily injury, death or property damage occurring as the result of the
occupancy and use of the Premises or any portion thereof by Tenant, or any
Subtenant of a portion of the Premises, or as the result of any activities on
the Premises by Tenant or any Subtenant or by the employees, agents or
contractors of Tenant or any Subtenant or by the invitees or licensees of Tenant
or any Subtenant or by any other person, or as the result of any conditions
arising on the Premises or created thereon by any personal, which insurance
shall be in such amounts as may, from time to time, be reasonable in view of the
amounts customarily maintained in connection with development projects
substantially similar to the one contemplated hereunder occurring in the area in
which the Premises are located, but in no event less than Two

                                      -11-

<PAGE>

Million Dollars ($2,000,000) combined single limit for bodily injury and
property damage and in no event less than Two Million Dollars ($2,000,000) per
policy year from personal injuries;

            (b) Workers' Compensation and Employee's Liability insurance
covering employees of Tenant and Subtenants as may be required by the laws of
the State of California;

            (c) Automobile Liability Insurance, in an amount in no event less
than One Million Dollars ($1,000,000) combined single limit per occurrence or
accident, covering bodily injury and property damage liability arising out of
the use of any automobile (including, without limitation, owned, non-owned,
leased and borrowed) upon the Premises by Tenant or any Subtenant; and

            (d) Umbrella Liability Insurance (including Following Form, or Broad
as Primary, endorsement pertaining to all underlying policies including
business, employers, automobile and general liability) in such amount as may,
from time to time, be reasonable in view of the amount customarily maintained in
connection with development projects substantially similar to the one
contemplated hereunder occurring in the area in which the Premises are located,
but in no event less than Five Million Dollars (S5,000,000) in respect of
personal injury, bodily injury, death and property damage arising out of one
occurrence and per policy year and subject to availability.

      Section 10.2. During Construction. Upon commencement of construction on
the Premises, Tenant shall obtain and maintain in effect (or cause to be
obtained and maintained in effect) with respect to improvements constructed on
the Premises, until their completion, Builders' risk insurance on an "All Risks"
basis subject to the standard exclusions of such insurance (and excluding the
risk of damage to foundations and footings and earthquake and flood damage) in
an amount equal to the full cost of the improvements constructed on the
Premises.

      Section 10.3. Insurance With Respect to Improvements. Except as otherwise
expressly provide herein below, with respect to any improvements on the
Premises, Tenant shall obtain and maintain in effect (or cause to be obtained
and maintained in effect) with respect to such improvements, until the
expiration of the term hereof:

            (a) Fire, Extended Coverage and Vandalism insurance in an amount
equal to the then full replacement cost of such improvements;

            (b) Prior to the installation in such improvements and operation of
any steam boilers and steam piping, Boiler insurance, with respect thereto, in
such amount, in respect of any one accident may, from time to time, be
reasonable in view of the amount customarily maintained in connection with
development projects substantially similar to the one contemplated hereunder,
occurring in the area in which the Premises are located, but in no event less
than Five Hundred Thousand Dollars ($500,000); and

            (c) During any period in which Tenant or any Subtenant conducts or
permits activities or brings, operates or permits equipment on or about the
Premises involving unusual hazard (those hazards not described in Sections
10.1,10.2 and 10.3), such unusual hazard insurance as may be sufficient to cover
the risks incidental to such hazard; insurance shall not constitute a waiver of
Landlord's right, if Landlord would otherwise have such right, to demand the
removal, cessation or abatement of such hazards.

      Section 10.4. Form. All insurance policies maintained by Tenant hereunder
shall be with insurance carriers which have, according to the most current
Best's Insurance Reports, a general rating of at least "A" and a financial
rating of at least Class 8, and all such policies shall name Tenant and any
Leasehold Mortgagee as insureds as their respective interests may appear,
provided, however, as to the insurance required under Section 10.1 hereof, the
'Liability Insurance', Landlord shall be a named additional insured. Also, all
such Liability Insurance policies shall provide that no cancellation or
non-renewal of such policies shall be effective until at least thirty (30) days
after receipt of notice thereof by Landlord. Prior to the time that such
policies are required to be effective hereunder, and thereafter not less than
ten (10) days prior to the expiration dates of the expiring policies required
hereunder, Tenant shall deliver to Landlord, in a form reasonably satisfactory
to

                                      -12-
<PAGE>

Landlord, originals or certified copies of the policies or renewal policies, or
certificates of insurance with respect to such policies, or binders, as the case
may be, required by this Lease.

      Section 10.5. Waivers of Subrogation. Tenant shall obtain from each of the
insurers under all policies of insurance required hereunder a waiver of all
rights of subrogation which the insurers under such policies might otherwise
have against Landlord, said waiver to be in writing and for the express benefit
of Landlord. Landlord shall obtain from each of its insurers a waiver of all
rights of subrogation which the insurers under such policies might otherwise
have against Tenant and its Subtenants, said waiver to be in writing and for the
express benefit of Tenant and its Subtenants.

      Section 10.6. Effect of Compliance. In no event shall compliance by Tenant
with Sections 10.1 through 10.5 hereof release Tenant from any other obligations
of Tenant under this Lease or be construed as giving Tenant or employees or
agents of Tenant the right to engage in, permit or suffer any activity or
conduct otherwise prohibited by this Lease.

      Section 10.7. Blanket Policies of Insurance. All insurance policies
maintained by Tenant hereunder may at any time during the Term hereof be under
blanket policies of insurance covering liabilities and properties other than
those specified herein and covering insureds other than Tenant and Landlord,
provided such policies otherwise comply with all the provisions of this Article
X.

      Section 10.8. Index of Amounts. If reasonably necessary, and subject to
availability and reasonableness of cost, the amounts of liability and excess
liability insurance required to be maintained by Tenant pursuant to this Article
X shall be increased at the beginning of each tenth year hereunder following the
first full year during which Rent in due hereunder by multiplying the required
amounts in effect on the date hereof by an amount equal to the CPI at the time
of such adjustment, divided by the CPI in effect on the date hereof. If the CPI
is discontinued, then the Consumer Price Index published by the U.S. Department
of Commerce shall be used; and if the U.S. Department of Commerce Index is
discontinued, then Landlord and Tenant shall, in good faith, agree on a suitable
substitute.

      Section 10.9. Insurance Proceeds. The proceeds of any such insurance shall
be payable to Leasehold Mortgagee as trustee for the benefit of Tenant. Such
funds shall be held in trust for the purpose of defraying the cost of rebuilding
or repairing, an the case may be, the portion or the Premises so damaged or
destroyed. Upon completion of such rebuilding or repair of the Premises so
damaged or destroyed, any unexpended funds received from such trustee, including
any interest thereon, shall inure to and become the property of Tenant, provided
that no default exists hereunder.

                                   ARTICLE XI

                                 INDEMNIFICATION

      Section 11.1. Tenant Indemnifies Landlord. Tenant agrees to indemnify,
hold harmless and defend Landlord from and against any and all demands, claims
and causes of actions for injury to persons, loss of life, damage to or loss of
use of property (including without limitation, the Land or the Adjoining Land or
any portion thereof), from and, against any and all penalties, fines and
prosecutions, and from and against any and all suits for abatement of any public
or private nuisance, as well as any costs or expenses (including, without
limitation, reasonable attorneys' fees) incurred in connection with any such
demand, claim, cause of action, penalty, fine, prosecution and suit, whether or
not asserted during or after the Term hereof, occurring an the result of the
negligence or wilful neglect of Tenant or the employees, representatives,
agents or independent contractors of Tenant, or as the result of any failure by
Tenant to perform or comply with any of the terms and conditions contained in
this Lease or to comply with any applicable Legal Requirement. Landlord shall,
within fifteen (15) days after Landlord becomes aware of any such demand, give
Tenant written notice thereof. In the event that Landlord fails, within such
period of time, to give Tenant such notice, such failure shall be deemed to be
only a release by Landlord of those obligations of Tenant hereunder which could
have reasonably been avoided had such notice been duly given. In the event that
Tenant fails to promptly and diligently defend any such demand, Landlord shall
be entitled, but not obligated, to assume the entire defense thereof, and Tenant
shall be liable for all reasonable expenses incurred by Landlord in connection
with said defense (including, without limitation, reasonable attorneys' fees).
Tenant further agrees to repair any damage to the Premises

                                      -13-
<PAGE>

or any portion thereof, arising out of any of the causes described above in this
Article XII; provided, however, that Landlord shall pay or reimburse Tenant for
the cost of repairing any such damage arising out of an intentional tort or
negligence on the part of Landlord or the employees, representatives or agents
of Landlord.

      Section 11.2. Landlord Indemnifies Tenant. Notwithstanding anything to the
contrary contained elsewhere in this Agreement, Landlord agrees to indemnify,
hold harmless and defend Tenant to the extent and in accordance with the
provisions set forth in Paragraph 16 of the Asset Sale Agreement. In the event
of any conflict between this Agreement and the Asset Sale Agreement, the Asset
Sale Agreement shall control.

                                   ARTICLE XII

                            ASSIGNMENT AND SUBLETTING

      Section 12.1. Permitted Subleases.

            (a) Tenant shall have the right, at any time and during the Term
hereof, to sublet any portion of the Premises to Subtenants or permit any
portion of the Premises to be occupied or used by licensees or concessionaires.

            (b) If an Event of Default shall occur while the Premises or any
part thereof be subleased, Landlord, in addition to any other remedies herein
provided or provided by law, shall have the right (while such Event of Default
remains uncured) to collect directly from any and all Subtenants all rents
becoming due to Tenant under such sublease and apply such rent against any sums
due to Landlord by Tenant hereunder. No direct collection by Landlord from any
such Subtenant shall be construed to constitute a novation or release of Tenant
from the further performance of any of Tenant's obligations hereunder.
Notwithstanding anything in this Paragraph to the contrary, Landlord's rights to
so collect rents shall be subject and subordinate to the rights of a Leasehold
Mortgagee.

      Section 12.2. Tenant's Covenants with Respect to Subtenants. Tenant
hereby agrees that all subleases entered into with Subtenants shall be subject
and subordinate to all of the terms and conditions of this Lease to the extent
applicable.

      Section 12.3. Assignment by Tenant.

            (a) Subject to Tenant's right to sublet portions of the Premises,
Tenant shall not, without the consent of Landlord, have any right to assign its
interest in this Lease, except for a collateral assignment to a Leasehold
Mortgagee, and an assignment to a Tenant Affiliate; provided that, in the event
of an assignment to a Person other than an Affiliate of Tenant who
simultaneously acquires all of Tenant's interest in the improvements on the
Premises in a bona fide arm's length purchase, Landlord's consent shall not be
withheld if the prospective assignee demonstrates, to Landlord's reasonable
satisfaction, sufficient financial capacity to enable it to comply with each and
every obligation of Tenant hereunder and if such assignee assumes all of
Tenant's obligations hereunder. Notwithstanding any assignment to a Leasehold
Mortgagee or to a Tenant Affiliate undertaken in accordance with this Section
12.3, Tenant shall remain primarily liable to Landlord on this Lease; provided,
however, that Tenant shall not be liable for any obligations arising under this
Lease following the effective time of an assignment to a Person other than an
Affiliate of Tenant who simultaneously acquires all of Tenant's interest in the
improvements on the Premises in accordance with the immediately preceding
sentence.

            (b) Any person or entity to which this Lease is assigned pursuant to
the provisions of the Bankruptcy Code (Bankruptcy Reform Act of 1978, as
amended) shall be deemed without further act or deed to have assumed all of the
obligations arising under this Lease on or after the date of such assignment.
Any such assignee shall upon demand execute and deliver to Landlord an
instrument confirming such assumption.

                                      -14-
<PAGE>

            (c) Tenant shall not assign, mortgage, or encumber this Lease nor
sublet, nor suffer the Demised Premises or any part thereof to be used by others
except as expressly provided for in this Section 12.3.

            (d) Notwithstanding anything in this Lease to the contrary, all
amounts paid by the Tenant to or on behalf of Landlord, under this Lease,
whether or not expressly denominated as Rent, shall constitute rent for the
purposes of Section 502(b)(6) of the Bankruptcy Code.

      Section 12.4. Assignment by Landlord. Landlord shall have the right, at
all times during the term hereof, to hypothecate, encumber or assign (as
security or otherwise) its interests in the Premises and the Adjoining Land or
any portion thereof; provided, however, that any such hypothecation, encumbrance
or assignment shall be junior and subordinate to this Lease.

                                  ARTICLE XIII

                       DEFAULT - FORFEITURE - TERMINATION

      Section 13.1. Equitable Relief. This Lease is granted on the condition
that, if an Event of Default, as expressly provided for in Section 13.2, shall
occur and if a Default shall thereafter occur in accordance with the terms and
provisions hereof, this Lease, subject, however, to the provisions of Article
XIV hereof, may be terminated by Landlord as hereinafter provided in Section
13.4 hereof, and Landlord may, in addition to any other remedies at law or in
equity provided elsewhere in this Lease, enjoin Tenant from the continuation or
repetition of any such Event of Default.

      Section 13.2. Event of Default.

            (a) There shall be an Event of Default if and when:

                  (i) there shall have been a failure by Tenant to pay Rent to
      Landlord pursuant to the terms hereof;

                  (ii) Tenant shall fail to keep, observe, perform, carry out
      and execute in every particular the covenants, agreements, obligations and
      conditions set out in this Lease;

                  (iii) Tenant abandons the Premises;

                  (iv) Tenant or any guarantor of any of Tenant's obligations
      hereunder shall cease doing business as a going concern, make an
      assignment for the benefit of creditors, generally not pay its debts as
      they become due or admit in writing its inability to pay its debts when
      they become due, file a petition commencing a voluntary case under any
      chapter of the Bankruptcy Code (11 U.S.C. Section 101 et seq.), be
      adjudicated an insolvent, file a petition seeking for itself any
      reorganization, arrangement, composition, readjustment, liquidation,
      dissolution or similar arrangement under the Bankruptcy Code or any other
      present or future statute, law, rule or regulation, or file an answer
      admitting the material allegations of a petition filed against it in any
      such proceeding, consent to the filing of such petition or acquiesce in
      the appointment of a trustee, receiver, custodian or other similar
      official for it or any substantial part of its assets or properties, take
      any action looking to its dissolution or liquidation, or take any
      corporate action authorizing any of the foregoing; or

                  (v) A case, proceeding or other action shall be instituted
      against the Tenant or any guarantor of the Tenant's obligations hereunder,
      seeking the entry of an order for relief against Tenant or any such
      guarantor of a debtor, to adjudicate Tenant or any such guarantor as a
      bankrupt or insolvent, or seeking reorganization, arrangement, adjustment,
      liquidation, dissolution or similar relief against Tenant, or any such
      guarantor under the Bankruptcy Code or any other present or future
      statute, law, rule or regulation, which case, proceeding or other action
      either results in such entry, adjudication, or issuance or entry of any
      other order or judgment having a similar effect or remains undismissed for
      sixty (60) days or within sixty (60) days after the appointment without
      Tenant's or such guarantors consent or acquiescence of any trustee,
      receiver, Custodian or other similar official for it or

                                      -15-

<PAGE>

      such guarantor or any substantial part of it or such guarantors assets or
      properties, such appointment should not be vacated.

            (b) An Event of Default occurring under Paragraphs a(iv) and a(v)
shall be immediately deemed to place Tenant in Default.

            (c) Before a Default shall ripen from or out of any of the foregoing
Events of Default, except those Events described in Paragraphs a(iv) and a(v)
hereof, Tenant and any Leasehold Mortgagee shall have been given:

                  (i) A notice in writing of the failure of Tenant to pay, when
      due, any amounts due hereunder at least twenty (20) days in advance of the
      effective date of a Default; or

                  (ii) A notice in writing of the effective date of any other
      Event of Default hereunder, setting forth the manner in which such Event
      of Default may be cured at least thirty (30) days in advance' of the
      effective date of Default; provided, however, if the Event of Default
      cannot be cured within said forty-five (45) day period, such Event of
      Default shall not ripen into a Default hereunder if Tenant commences to
      cure said event within said forty-five (45) day period and diligently
      proceeds to cure such event within a reasonable time thereafter.

            (d) Upon the occurrence of an Event of Default and the expiration of
the notice periods as provided in this Lease, and except as otherwise provided
therein, the Tenant shall be in Default and the Landlord shall be entitled to
pursue any and all remedies provided in this Lease.

            (e) The acceptance of Rent or other performance while such Default
exists shall not constitute a waiver of Landlord's right to terminate pursuant
to Section 13.4 hereof as to any subsequent failure to so observe or perform the
obligations of Tenant hereunder.

      Section 13.3. Cure by Leasehold Mortgagee. Notwithstanding anything else
herein, if an Event of Default shall have occurred, in addition to any Leasehold
Mortgagee's rights under Section 14.3, the Leasehold Mortgagee shall have the
right to cure such Event of Default on behalf of Tenant prior to the time that
Landlord has terminated this Lease pursuant to Section 13.4. and any such party
electing to so cure shall give Landlord immediate written notice of its intent
to so cure.

      Section 13.4. Landlord's Rights Upon Default.

            (a) A Default as defined in Section 13.2 having occurred, then and
in any such event Landlord shall have the right, at its election, to pursue
either of the following remedies:

                  (i) As Tenant's legal representative, without terminating this
      Lease, to take any action necessary to preserve or maintain the property,
      to enter upon and rent the Premises at the best price obtainable by
      reasonable effort without advertisement and by private negotiations and
      for any term and on such conditions as Landlord deems proper. Upon each
      such reletting, all rentals received by Landlord shall be applied first,
      to the payment of any indebtedness other than Rent due hereunder from
      Tenant to Landlord; second, to the payment of any loss and expense of such
      reletting, including brokerage fees and attorneys fees and costs of any
      alterations or repairs; third, to the payment of Rent due and unpaid
      hereunder; and the residues if any, shall be held by Landlord and applied
      in payment of future Rent as the same may become due and payable
      hereunder. Tenant shall remain liable to Landlord for the deficiency, if
      any, between Tenant's Rent hereunder and rent obtained by Landlord on
      reletting; and

                  (ii) To terminate this Lease by written notice, which notice
      shall state the date as of which this Lease is thereby terminated, which
      date shall not be earlier than the date of such notice, and to enter into
      and upon the Premises and take possession of the same, and the Landlord
      may hold and retain said Premises as of its first or former estate. The
      election by Landlord to pursue the remedy set forth in Paragraph
      13.4(a)(i) above shall in no way

                                      -16-

<PAGE>

      preclude Landlord from thereafter exercising its right to terminate this
      Lease pursuant to this Paragraph 13.4(a)(ii).

            (b) Should Landlord at any time terminate this Lease for any breach
and/or abandonment, in addition to any other remedies Landlord may have at law,
in equity or under this Agreement, Landlord may recover including, without
limitation, any unpaid Rent and charges equivalent to rent having accrued plus
interest; all costs associated with recovering and/or reletting the Premises;
all costs associated with performing Tenant's obligations hereunder; and the
worth at the time of such termination of all Rent and charges equivalent to rent
lost over the remainder of the Term.

            (c) Pursuit of any of the foregoing remedies shall not preclude
pursuit of any of the other remedies herein provided or any other remedies
provided by law, nor shall pursuit of any remedy herein provided constitute a
forfeiture or waiver of any Rent due to Landlord hereunder or of any damages
accruing to Landlord by reason of the violation of any of the terms, provisions
and covenants herein contained. Forbearance by Landlord to enforce one or more
of the remedies herein provided upon an Event of Default shall not be deemed or
construed to constitute a waiver of any of Landlord's rights hereunder.

      Section 13.5. Effect of Termination. Upon the termination of this Lease by
Landlord pursuant to Section 13.4 or otherwise by operation of law, all rights
of the Tenant, and of all persons whomsoever claiming by, or otherwise by
operation of law through or under Tenant, whether by grant, assignment, dead to
secure debt, mortgage, deed of trust, sublease, foreclosure, proceedings or
other conveyance or encumbrance, to the Premises, and any fixtures attached
thereto, shall co-instant, wholly cease and terminate, except as provided in
Article XIV; and the Premises, and any improvements and fixtures attached
thereto shall thence forward constitute and belong to and be the absolute
property of the Landlord and Landlord's successors or assigns, without further
act or conveyance, and without liability to make compensation to the Tenant or
to anyone whosoever, and free and discharged from this and all and every lien,
encumbrance and charge of any character created or attempted to be created by
the Tenant at any time. It is further expressly understood and agreed that upon
termination of this Lease by Landlord pursuant to Section 13.4 or otherwise by
operation of law, the rights of Tenant, or any Tenant's affiliate to any fee,
commission or similar compensation for the procurement of any sublease of all or
part of the Premises shall wholly cease and terminate, and Landlord shall be
released and relieved from any further liability whatsoever therefor.

      Section 13.6. Performance of Tenant's Obligations By Landlord.

            (a) If Tenant fails to perform any covenant or agreement contained
in this Lease, Landlord may, in addition to any other remedies at law or in
equity or elsewhere in this Lease provided, immediately or at any time
thereafter upon ten (10) days prior written notice to Tenant perform the same
for the account of Tenant. Tenant agrees that neither the Landlord nor any
person acting on, its behalf shall be liable for any loss or damage resulting to
Tenant by the exercise of the rights granted under this Section 13.6.

            (b) If Landlord under any provision of this Lease exercises any
option or right conferred upon it to expend monies or incur expenses or
liabilities, and such monies and expenses or the cost of discharging such
liabilities are under the provisions of this Lease to be paid by or charged
against the Tenant, such monies and expenses and costs incurred shall also
constitute Additional Rent due hereunder, for the purposes or this Article XIII.

            (c) If Landlord reasonably expends any money for attorneys' fees,
costs and expenses in any proceedings growing out of or occasioned by a Default
of Tenant under the provisions of this Lease, such money so expended shall also
constitute Additional Rent due hereunder, for the purposes of this Article XIII.

                                      -17-

<PAGE>

                                   ARTICLE XIV

                               LEASEHOLD MORTGAGE

      Section 14.1. Right to Encumber. Tenant shall have the right during the
Term of this Lease, and from time to time, to encumber by Leasehold Mortgage,
leasehold assignment and related security instrument, all of Tenant's right,
title and interest hereunder in all respects, however, subordinate and inferior
to Landlord's rights, title, privileges, liens and interest as provided in this
Lease; provided, however, that said Leasehold Mortgage shall contain a clause or
clauses to the effect that it conveys to the Leasehold Mortgagee and to the
holder of any security issued thereunder, no rights in the Premises greater than
or extending beyond the rights of Tenant under this Lease, and that such
Leasehold Mortgage shall be subject to all and each of the rights of Landlord
herein and to all and each of the conditions, covenants, agreements and
obligations contained in this Lease.

      Section 14.2. Notice to Landlord. If at any time, and from time to time
after the execution and recording the Office of the Clerk of Superior Court of
Shasta County, California, of any such Leasehold Mortgage encumbering Tenant's
rights, title and interest hereunder, the Leasehold Mortgagee shall notify the
Landlord in writing that such Leasehold Mortgage has been given and executed by
the Tenant and shall at the same time furnish the Landlord with the address to
which it desires copies of notices to be mailed, Landlord hereby agrees that it
will mail to such party at the address so given a duplicate copy of any and all
notices in writing which the Landlord may, from time to time, give or serve upon
the Tenant under the terms of this Lease. It is understood and agreed that no
notice by Landlord to Tenant hereunder shall be deemed to have been duly given
unless and until a copy thereof has been duly given to the holder of any
leasehold mortgage as provided above. So long as there exists any unpaid loan
secured by a Leasehold Mortgage encumbering all or any part of the Premises, but
in all events subject to Landlord's rights under Article XIII, Landlord hereby
agrees that Landlord will not accept a surrender of the Premise or a
cancellation or modification of this Lease from Tenant prior to the expiration
of the Term of this Lease, without the written consent of the holder of such
Leasehold Mortgage.

      Section 14.3. Right of Leasehold Mortgagee to Cure. Any Leasehold
Mortgagee may, at its option at any time before this Lease shall have been
terminated, pay any amount or do any act or thing required of the Tenant by the
terms of this Lease; and all payments so made and all acts or things so done and
performed by any such mortgagee shall be as effective to prevent, a forfeiture
of the rights of the Tenant hereunder as if done or performed by Tenant instead
of by such Leasehold Mortgagee. Such Leasehold Mortgagee may, in addition, at
its option, enter into a new lease with Landlord; provided, however, that
Landlord shall receive written notice of the exercise of the aforesaid option
within thirty (30) days from the termination of this Lease pursuant to a Default
hereunder. In order for such written notice to remain effective such Leasehold
Mortgagee shall pay to Landlord all amounts accrued and then due and owing to
Landlord under this Lease, but for such termination, together with the
reasonable expenses incurred by Landlord in terminating this Lease, plus Minimum
Rent next coming due, within ten (10) days of receipt by such Mortgagee of
written notice from Landlord of amounts payable as aforesaid; provided, however,
that any payment required of Leasehold Mortgagee in connection with said new
lease shall be reduced by net income collected by Landlord during the period for
which it is entitled to collect rental income directly from Subtenants. In the
event any Leasehold Mortgagee exercises such option then such Mortgagee and
Landlord shall thereupon have the obligation to enter into such new lease within
thirty (30) days after the date on which notice of exercise is received by
Landlord. Such Leasehold Mortgagee shall reimburse Landlord for all expenses,
including reasonable attorneys' fees actually incurred in connection with the
execution of such new lease. Such new lease shall be effective as of the date of
termination of this Lease, shall be for a term corresponding with the remainder
of the initial term hereunder, and shall be for the same Minimum Rent and
Additional Rental and upon the same covenants, agreements, terms, conditions,
provisions and limitations as this Lease, and shall in all respects be identical
to this Lease except for the date thereof, the commencement of the initial term
thereunder and the designation of the parties thereto. Any Leasehold mortgages
entering into such new lease as lessee thereunder, shall thereupon acquire all
of the rights and assume all of the obligations hereunder of Tenant from that
time forward. Upon the execution and delivery of any such new lease in
accordance with the provisions hereof, any and all subleases which theretofore
may have been assigned and transferred to Landlord as a result of the
termination of this Lease shall

                                      -18-

<PAGE>

thereupon be assigned and transferred without recourse by Landlord to the Tenant
under such new lease.

      Section 14.4. Additional Leasehold Mortgagee Protection Clauses.

            (a) In case of a Default by Tenant in the performance or observance
of any term, covenant, condition or agreement on the Tenant's part to be
performed under this Lease concerning the payment of a sum of money, if Landlord
shall elect to exercise its remedies under Section 13.4 of this Lease, then
Landlord shall, before exercising those remedies shall give to the Leasehold
Mortgagee an additional written notice of such Default giving to the Leasehold
Mortgagee thirty (30) days within which to cure such Event of Default.

            (b) In case of a Default by Tenant in the performance or observance
of any term, covenant, condition or agreement on the Tenant's part to be
performed under this Lease a term, covenant, condition or agreement requiring
the payment of a sum of money, if such Default is of such a nature that the same
cannot practically be cured by the Leasehold Mortgagee without taking possession
of the Premises, or if such Default in of a nature that the same cannot be cured
by the Leasehold Mortgagee, then Landlord shall not terminate this Lease if and
so long as:

                  (i) the Leasehold Mortgagee is diligently seeking to obtain
      possession of the Premises, either directly or through the appointment of
      a receiver, and, upon obtaining possession, shall promptly commence and
      diligently prosecute to completion such action as may be necessary to cure
      such Default; and

                  (ii) within thirty (30) days after an additional notice of
      Default from Landlord, the Leasehold Mortgagee agrees, in writing, that it
      will cure the Default when it can do so.

            (c) If the Leasehold Mortgagee, or its nominee, or a purchaser at a
foreclosure sale shall acquire title to Tenant's leasehold estate and shall cure
all Defaults of Tenant which can be cured, then the Default of any prior holder
of the Tenant's leasehold estate which cannot be cured shall no longer be deemed
to be Defaults.

            (d) If this Lease shall be terminated by reason of a Default of the
Tenant or if the Lease is disaffirmed in a bankruptcy proceeding affecting the
Tenant, and if within thirty (30) days after such termination a Leasehold
Mortgages, by written notice to Landlord shall request Landlord to enter into a
new lease of the Premises pursuant to this Paragraph 14.4(d), then Landlord
shall enter into a new lease with the Leasehold Mortgagee, or its nominee, on
similar terms and conditions within thirty (30) days of said written notice.
Simultaneously with the giving of such notice, the Leasehold Mortgagee shall
deliver to the Landlord a written instrument agreeing to cure all Defaults of
Tenant under this Lease, other than those which can not be cured by the
Leasehold Mortgagee. Said new lease shall commence, and rent and all obligations
of the tenant under the new lease shall accrue as of the date of termination of
this Lease. The term of said new lease shall continue for the period which would
have constituted the remainder of the Term of this Lease had this Lease not been
terminated, and shall be upon all of the terms and conditions which Were in
force and effect immediately prior to the termination of the Lease. Said new
lease shall be superior to all rights, liens and interests, other than those to
which this Lease shall have been subject immediately to termination and those
matters to which this Lease may, by its terms, become subject. Simultaneously
with the delivery of the new lease, the new tenant shall pay to Landlord all
Rent and other sums of money due under the Lease on the date of termination of
this Lease, Plus all sums of money due under the new lease for the period from
the date of commencement of the term thereof to the date of delivery of the new
lease.

                                   ARTICLE XV

                              TITLE TO IMPROVEMENTS

      Section 15.1. During the Term. Notwithstanding any other provisions of
this Lease, the Project, and all other improvements erected on the Premises, and
all alterations, additions, equipment and fixtures built, made, or installed by
Tenant in, on, under, or to the Premises shall be the sole

                                      -19-

<PAGE>

property of Tenant until the expiration or other termination of the Term hereof
for any reason whatsoever.

      Section 15.2. Following the Term.

            (a) The Project, and all of said other improvements, and all of said
alterations, additions, equipment, and fixtures (including, without limitation,
such items as air conditioning equipment, boilers, furnaces, ducts, elevators,
escalators, and lighting fixtures) shall be deemed to be and shall automatically
become the property of Landlord, without cost or charge to Landlord, upon the
expiration or other termination of the Term hereof for any reason whatsoever.

            (b) Tenant may, at any time prior to the expiration or other
termination of the Term hereof, if Tenant is not in Default hereunder, remove
from the Premises any and all equipment or fixtures which Tenant has furnished
or installed, provided that Tenant shall repair any damage to the Premises
caused by the removal of such fixtures or equipment, and provided further that
Tenant shall not remove any such equipment or Fixtures (such as air conditioning
equipment, boilers, furnaces, ducts, elevators, escalators, and lighting
fixtures) which are necessary to the operation of the Project.

                                   ARTICLE XVI

                              SURRENDER OF PREMISES

      Section 16.1. Tenant shall, on or before the last day of the Term hereof
or on the sooner termination hereof, peaceably and quietly leave, surrender, and
yield up unto Landlord the Premises, together with all alterations, additions,
improvements, equipment, and fixtures (including air conditioning equipment,
boilers, furnaces, ducts, elevators, escalators, and lighting fixtures) which
may on that day be in or on the Premises, in good order and repair, ordinary
wear and tear, obsolescence and acts of God, excepted. All such equipment,
computers, moveable machinery and other personal property shall be removed on
the last day of the Term hereof, and all such equipment not so removed by Tenant
shall be deemed abandoned by Tenant and conveyed to Landlord.

                                  ARTICLE XVII

                               OPTION TO PURCHASE

            (a) Grant of Option. Landlord hereby grants to Tenant, and Tenant
hereby accepts from Landlord, the exclusive right and option (the "Option") to
purchase the Land, all subject to and in accordance with the provisions of this
Agreement. The Option may be exercised by Tenant giving Landlord written notice
of such exercise at any time commencing 180 days prior to the expiration of the
Lease Term and ending 90 days prior to the expiration of the Lease Term, such
notice to be given in the manner and at the address set forth in Section 19.1 of
this Lease.

            (b) Escrow. Within three (3) business days after the exercise of the
Option by Tenant, the parties hereto shall open an escrow (the "Escrow") at
Chicago Title Company (the "Escrow Holder"), and, concurrently therewith,
execute and deliver to Escrow Holder escrow instructions (the "Instructions") on
Escrow Holder's standard form of purchase and sale escrow instructions, which
Instructions shall be executed and delivered for the purpose of enabling the
Escrow Holder to complete the purchase and sale of the Land pursuant to the
provisions of this Article XVII. In the event of any conflict between the
Instructions and provisions of this Article XVII with regard to the purchase and
sale of the Land upon exercise of the Option, the provisions of this Article
XVII shall govern. The Instructions shall sat forth the agreement of the parties
hereto as to the purchase and sale of the Property as follows:

            (1) Title. Upon close of the Escrow, Landlord shall convey the
      Property to Tenant, or Tenant's nominee, by grand deed (the "Grand Deed")
      subject to: (i) Permitted Exceptions; (ii) non-delinquent real property
      taxes; and (iii) all other exceptions to title made or suffered by Tenant
      or any person or persons claiming through or under Tenant. Landlord shall
      deposit the Grant Deed, in recordable form, into the Escrow prior to the
      date on or before which the Escrow is to close. Landlord

                                      -20-

<PAGE>

      agrees to cause to be delivered to Tenant upon close of the Escrow, at
      Tenant's sole cost and expense, a CLTA Standard Coverage Form of Policy of
      Title Insurance issued by Chicago Title Insurance Company (the "Title
      Company"), with liability equal to the Purchase Price of the Property,
      insuring title to the Property vested in Tenant, or Tenant's nominee, in
      the condition set forth at items (i), (ii) and (iii). Tenant shall have
      the right, at any time prior to close of the Escrow, to designate by
      written notice to Escrow Holder a person or entity in which title to the
      Property shall vest upon close of the Escrow. All costs incurred in
      delivering title to the Property to Tenant in the manner required by this
      Lease shall be the responsibility of Landlord.

            (2) Purchase Price. The total purchase price of the Property (the
      "Purchase Price") shall be equal to the fair market value (the "Value") at
      the time of exercise as mutually determined by the parties. If the parties
      are unable to agree, such Value shall be determined by appraisal as
      follows: Within thirty days, each party shall appoint an appraiser who
      shall have at least ten years' experience in valuing commercial real
      estate. Each such appraiser shall arrive at the Value within 30 days of
      his appointment. If the Value of one appraiser is not more than 10% higher
      than the Value of the other appraiser, the Value shall be the average of
      such appraisers' determination. If the difference in Values is greater
      than 10%, then both appraisers shall appoint a third appraiser, which
      third appraiser shall choose one of the Values of the other two appraisers
      within ten days of his appointment.

            (3) Close of Escrow. Escrow shall close on or before thirty (30)
      days from the date of opening of the Escrow.

            (4) Payment of Costs. Expenses of the Escrow and adjustments to be
      made in the escrow shall be as follows: Tenant shall pay for (i)
      documentary transfer taxes, (ii) the premium on the policy of title
      insurance required by this Lease, and (iii) the total Escrow fees and all
      recording costs. The real property taxes on the Property for the fiscal
      year in which the Escrow closes shall be prorated as of the close of the
      Escrow.

            (5) Other Documents. Prior to the close of the Escrow, each of the
      parties hereto shall deposit into the Escrow such funds and instruments as
      are required on its part to close the Escrow in compliance with the
      provisions of this Lease.

                                 ARTICLE XVIII

                             ESTOPPEL CERTIFICATES

      Section 18.1. Landlord and Tenant agree that any time and from time to
time upon not less than twenty (20) days' prior written notice by the other or
upon request from any Leasehold Mortgagee (including any proposed Leasehold
Mortgagee) or holder of a Landlord Mortgage, Landlord or Tenant will execute,
acknowledge, and deliver to the other or to such Leasehold Mortgagee or holder
of a Landlord Mortgage, a statement in writing Certifying (a) that this Lease is
unmodified (or, if there have been modifications, that this Lease is in full
force and effect as modified, With such modifications being identified); (b) the
date charges have been paid; and (c) that, so far as the certifier knows, if
such be the case, there is no Default, set-off, defense or other claim against
Landlord (or if so, specify the nature of same) under the provisions of this
Lease. It is intended that-any such statement may be relied upon by any person
proposing to acquire Landlord's, Tenant's, Leasehold mortgagee's or the holder
of a Landlord Mortgagee's interest.

                                   ARTICLE XIX

                                  MISCELLANEOUS

      Section 19.1. Notices. All notices required or permitted to be given to
Landlord hereunder shall conspicuously bear the legend "NOTICE UNDER NATIONAL
MEDICAL SPECIALTY HOSPITAL OF REDDING GROUND LEASE" on the notice itself and on
the envelope containing

                                      -21-

<PAGE>

the notice, shall, until contrary instructions are given to Tenant in writing,
be effectively given to Landlord when delivered simultaneously by hand or mailed
by registered or certified mail, return receipt requested, to Landlord, as
follows:

                                c/o Tenet HealthSystem
                                14001 Dallas Parkway, Suite 105
                                Dallas, TX 75240
                                Attn: Donald W. Thayer
                                Facsimile (972) 789-2318

      with a copy to counsel for Landlord:

                                Tenet HealthSystem
                                14001 Dallas Parkway
                                Dallas, TX 75240
                                Attn: General Counsel
                                Facsimile (972) 789-2370

                                and

                                Gary Q. Michel, Esq.
                                Ervin, Cohen & Jessup LLP
                                9401 Wilshire Blvd., 9th  Floor
                                Beverly Hills, CA 90212-2974
                                Facsimile: (310) 859-2325

All notices required or permitted to be given to Tenant hereunder shall
conspicuously bear the legend "NOTICE UNDER NATIONAL MEDICAL SPECIALTY HOSPITAL
OF REDDING GROUND LEASE" on the notice itself and the envelope containing the
notice, and shall, until contrary instructions are given to Landlord in
writing, be effectively given when mailed by registered or certified mail,
return receipt requested, to Tenant, as follows:

                                c/o Guardian Health Group
                                5725 Paradise Drive
                                Suite 550
                                Corte Madera, CA
                                Attn: Chief Executive Officer
                                Facsimile (415) 945-2282

      with a copy to counsel for Tenant:

                                Bianchi, Engel, Keegin & Talkington, LLP
                                1000 Fourth Street
                                Suite 600
                                San Rafael, California 94901
                                Attn: Stafford W. Keegin, Esq.
                                Facsimile: (415) 456-1921

In the event that either party desires or finds it necessary to change the
manner of giving notice as herein-provided, notice of such change in the manner
of giving notice shall be given to the other party as provided in this Section
21.1.

      Section 19.2. Time of Essence. Time is of the essence of this Lease.

      Section 19.3. No Waste. Tenant will neither commit nor permit waste upon
the Premises.

                                      -22-

<PAGE>

      Section 19.4. Holding Over. If Tenant remains in possession after the
expiration of the Term of this Lease without any written agreement of the
parties, there shall be no renewal of this Lease by operation of law, and Tenant
shall be deemed to occupy the Premises on a month-to-month tenancy. In said
event, Tenant shall pay a rental at a rate equal to the rate in effect at the
end of the Term.

      Section 19.5. Waiver. No failure of Landlord to exercise any power given
Landlord hereunder or to insist upon strict compliance by Tenant with its
obligations hereunder, and no custom or practice of the parties at variance with
the terms hereof shall constitute a waiver of Landlord's right to demand exact
compliance with the terms hereof. No failure of Tenant to exercise any power
given Tenant hereunder or to insist upon strict compliance by Landlord with its
obligations hereunder, and no custom or practice of the parties at variance with
the terms hereof shall constitute a waiver of Tenant's right to demand exact
compliance with the terms hereof.

      Section.19.6. Severability. If any term, covenant, or condition of this
Lease or the application thereof to any person or circumstance shall, to any
extent, be invalid or unenforceable, the remainder of this Lease or the
application of such term, covenant, or condition to persons or circumstances
other than those as to which it is held invalid or unenforceable shall not be
affected thereby; and each term, covenant, or condition of this Lease shall be
valid and be enforced to the fullest extent permitted by law.

      Section 19.7. Rights Cumulative. All rights, powers and privileges
conferred herein upon the parties shall be cumulative but not restrictive to
those given by law.

      Section 19.8. Entire Agreement. This Lease contains the entire agreement
of the parties hereto and no representations, inducements, promises or
agreements oral or otherwise, between the parties not embodied herein shall be
of any force or effect.

      Section 19.9. Successors and Assigns. Except as otherwise expressly
provided for in this Lease, the terms of this Lease shall be binding upon and
shall inure to the benefit of the parties hereto, their respective heirs,
personal representatives, successors and assigns.

      Section 19.10. Governing Law. This Lease shall be governed by the laws of
the State of California,

      Section 19.11. Counterparts. This Lease may be executed in several
counterparts each of which shall be deemed an original, and such counterparts
shall constitute but one and the same instrument.

      Section 19.12. Relationship of Parties. No relationship exists between
Landlord and Tenant other than landlord and tenant, and the parties hereto
expressly declare that, in connection with the activities and operations
contemplated by this Lease, they are neither partners or joint venturers, nor
does a debtor-creditor, principal-agent or any other relationship, except as
aforesaid, exist between them.

      Section 19.13. Non-Merger. There shall be no merger of this Lease, or of
the leasehold estate created hereby, with a fee estate in and to the Premises by
reason of the fact that this Lease, or the leasehold estate created thereby, or
by interest in either such estate, may be held directly or indirectly by or for
the account of any person who shall own the fee estate in and to the Premises or
any portion thereof, and no such merger shall occur unless and until all persons
at the time having an interest in this Lease or the leasehold estate, including
any Leasehold Mortgagees and the holder of any mortgage upon the fee estate in
and to the Premises, shall join in a written instrument effecting such merger.

                        [Space intentionally left blank]

                                      -23-

<PAGE>

      Section 19.14. Memorandum of Lease. Each of the parties hereto agrees that
it will promptly execute in form appropriate for recording and will cause to be
recorded a short-form memorandum of this Lease satisfactory in form and
substance to the other party.

      Section 19.15. Modification as Required by Leasehold Mortgagee. In the
event any Leasehold Mortgagee requires a modification of this Lease, Landlord
shall modify the Lease as required only if such modification is in no way
detrimental to the economic interests of Landlord under this Lease.

      Section 19.16. Provision of Quit-Claim Release. In the event this Lease is
terminated either in accordance with its own terms and provisions or by virtue
of any action of Tenant, Tenant shall provide Landlord upon request with a
quit-claim deed of release to the effect that Tenant no longer possesses any
interest, legal or equitable, in and to the Premises.

      IN WITNESS WHEREOF, Landlord, acting by and through its duly authorized
officers has caused these presents to be executed and its corporate seal to be
hereunto affixed, and Tenant, acting by and through its duly authorized
officers, has caused these presents to be executed and its corporate seal to be
hereunto affixed, all on the day, month and year first above written.

                                LANDLORD:

                                NATIONAL MEDICAL SPECIALTY HOSPITAL OF REDDING,
                                a California corporation

                                By: /s/ Donald W. Thayer
                                    --------------------------------------------
                                    Its: Donald W. Thayer
                                         AUTHORIZED SIGNATORY
                                Attest: ________________________________________
                                        Its: ___________________________________

                                                  [CORPORATE SEAL]

                                Date of Execution: _____________________________

                                TENANT:

                                GUARDIAN POSTACUTE SERVICES, INC., a California
                                corporation

                                By: /s/ Robert G. Peirce
                                    --------------------------------------------
                                    Its: President
                                Attest:
                                        ----------------------------------------
                                        Its:

                                                 [CORPORATE SEAL]

                                Date of Execution: _____________________________

<PAGE>

                                LIST OF EXHIBITS

                Exhibit "A" LEGAL DESCRIPTION OF LAND TO BE OWNED

                Exhibit "B" PERMITTED ENCUMBRANCES

                                      -25-
<PAGE>

                                   EXHIBIT "A"

                      LEGAL DESCRIPTION OF LAND TO BE OWNED

The following land situated in the State of California, County of Shasta:

PARCELS A AND B AS SET FORTH AND SHOWN ON THAT CERTAIN MAP ENTITLED, "PARCEL MAP
NO. LS 104-78 FOR DAVID LEE MCGEORGE AND SHIRLEY JEAN MCGEORGE, AS CO-TRUSTEES
OF DAVES MAC., INC. PROFIT SHARING TRUST, BEING A PORTION OF TRACT E, DIVISION 2
OF THE P.B. READING GRANT, IN THE CITY OF REDDING, SHASTA COUNTY, CALIFORNIA"
FILED IN THE OFFICE OF THE COUNTY RECORDER, FEBRUARY 7, 1979 IN BOOK 17 OF
PARCEL MAPS AT PAGE 87, SHASTA COUNTY RECORDS. ASSESSOR'S PARCEL NUMBER
103-240-51.

EXCEPTING FROM SAID PARCEL 3 ALL THAT PORTION CONVEYED TO THE CITY OF REDDING BY
DEED RECORDED NOVEMBER 12, 1985 IN BOOK 2190 PAGE 500, SHASTA COUNTY RECORDS.

EXCEPTING THEREFROM ALL BUILDINGS AND IMPROVEMENTS, WHICH ARE AND SHALL REMAIN
REAL PROPERTY.

ASSESSOR'S PARCEL NUMBER 103-240-51.

<PAGE>

                                   EXHIBIT "B"

                             PERMITTED ENCUMBRANCES
<PAGE>

                                                                       EXHIBIT C

<TABLE>
<CAPTION>
                                                            LEASE PAYMENTS (YEAR)
                      -------------------------------------------------------------------------------------------------------
Facility(1)     PV       1    2      3      4      5      6      7      8      9     10      11     12     13     14    15
------------ -------- ----- ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------
<S>          <C>      <C>   <C>    <C>    <C>    <C>    <C>    <C>    <C>    <C>    <C>    <C>    <C>    <C>    <C>    <C>
Central      $179,645 9,968 10,387 10,803 11,235 11,684 12,151 12,638 13,143 13,669 14,216 14,784 15,376 15,991 16,630 17,295
California
Modesto
</TABLE>

<TABLE>
<CAPTION>
                                                            LEASE PAYMENTS (YEAR)
               --------------------------------------------------------------------------------------------------------
Facility(1)      16     17     18     19     20     21     22     23     24     25     26     27     28     29     30
-----------    ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------
<S>            <C>    <C>    <C>    <C>    <C>    <C>    <C>    <C>    <C>    <C>    <C>    <C>    <C>    <C>    <C>
Central        17,987 18,707 19,455 20,233 21,042 21,884 22,760 23,670 24,617 25,601 26,625 27,690 28,798 29,950 31,148
California
Modesto
</TABLE>

<TABLE>
<CAPTION>
                                                            LEASE PAYMENTS (YEAR)
                      --------------------------------------------------------------------------------------------------------
Facility(1)     PV      1      2      3      4      5      6      7      8      9      10     11     12     13     14     15
-----------  -------- ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------
<S>          <C>      <C>    <C>    <C>    <C>    <C>    <C>    <C>    <C>    <C>    <C>    <C>    <C>    <C>    <C>    <C>
Golden State $299,601 16,657 17,323 18,016 18,737 19,486 20,266 21,076 21,919 22,296 23,708 24,656 25,642 26,668 27,735 28,844
SanRamon
</TABLE>

<TABLE>
<CAPTION>
                                                    LEASE PAYMENTS (YEAR)
              --------------------------------------------------------------------------------------------------------
Facility(1)     16     17     18     19     20     21     22     23     24     25     26     27     28     29     30
------------  ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------
<S>           <C>    <C>    <C>    <C>    <C>    <C>    <C>    <C>    <C>    <C>    <C>    <C>    <C>    <C>    <C>
Golden State  29,998 31,198 32,446 33,744 35,093 34,497 37,957 39,475 41,054 42,696 44,404 46,180 48,028 49,949 51,947
SanRamon
</TABLE>

<TABLE>
<CAPTION>
                                                            LEASE PAYMENTS (YEAR)
                     --------------------------------------------------------------------------------------------------------
Facility(1)    PV      1      2      3      4      5      6      7      8      9      10     11     12     13     14     15
----------- -------- ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------
<S>         <C>      <C>    <C>    <C>    <C>    <C>    <C>    <C>    <C>    <C>    <C>    <C>    <C>    <C>    <C>    <C>
Redding     $284,457 15,815 16,447 17,105 17,790 18,501 19,241 20,011 20,311 21,644 22,509 23,410 24,346 25,320 26,333 27,386
</TABLE>

<TABLE>
<CAPTION>
                                                   LEASE PAYMENTS (YEAR)
             --------------------------------------------------------------------------------------------------------
Facility(1)     16    17     18     19     20     21     22     23     24     25     26     27     28     29     30
-----------  ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------
<S>          <C>    <C>    <C>    <C>    <C>    <C>    <C>    <C>    <C>    <C>    <C>    <C>    <C>    <C>    <C>
Redding      28,482 26,621 30,806 32,038 33,319 34,652 36,038 37,480 38,979 40,538 42,160 43,846 45,600 47,424 49,321
</TABLE>

<TABLE>
<CAPTION>
            PV      Year 1
         --------  --------
<S>      <C>       <C>
  Total  $763,703  $ 90,478
         --------  --------
</TABLE>

(1) Discounted at 7.5 percent with (???) percent [ILLEGIBLE] calculator.<PAGE>

                                                                   EXHIBIT 10.53

                                  GROUND LEASE

      This Lease is made and executed on July 15, 1993, by and between the West
Jersey Health System, a non-profit corporation organized and existing pursuant
to the laws of the State of New Jersey having its principal office located at
1000 Atlantic Ave., Camden, NJ, hereinafter referred to as "Lessor" and West
Jersey/Mediplex Rehabilitation Limited Partnership, a New Jersey limited
partnership having a principal office at 15 Walnut Street, Wellesley,
Massachusetts 02181.

                                   SECTION ONE
                     DEMISE, DESCRIPTION AND USE OF PREMISES

      A. Demise: Lessor hereby leases to Lessee the real property owned by
Lessor and located in Evesham Township, Burlington County, New Jersey and being
a portion of Lot 5A and 5A-1, Block 26 (Evesham Township Tax Map) as shown
outlined in red and coded "Leased Premises" upon the plan annexed hereto as
Exhibit A. The term "premises" when used in this lease shall mean the area
defined by Exhibit A outlined in red and coded and labelled "Leased Premises",
together with any improvements now or hereafter constructed thereon. The term
"West Jersey Hospital premises" when used in this lease shall mean the area
adjacent to and surrounding the premises, the perimeter of which is outlined in
black on Exhibit A and is described on Schedule C, which area is retained by
Lessor.

            As appurtenant to the premises, Lessor hereby grants Lessee the
right, during the term of this Lease, to use all of the roadways, driveways,
sidewalks, parking areas (as more particularly set forth in Section 34 hereof),
easements, and land which form a part of or are appurtenant to the West Jersey
Hospital premises, for the installation, provision and maintenance of utilities
and for access to and egress from the premises as and to the extent necessary
or desirable to allow Lessee the full use and enjoyment of the premises and for
all other purposes as roads and ways are now or hereafter commonly used in
Evesham Township.

      B. Use: The premises shall be used by Lessee for the construction and
subsequent operation of a seventy-bed (more or less) rehabilitation hospital
together with parking and other appurtenant site improvements and other uses
ancillary to a rehabilitation hospital as may now or hereafter be customary
(herein sometimes collectively, the "Project") or for any other

                                        1

<PAGE>

health care purpose authorized by a Certificate of Need heretofore or hereafter
issued by the Department of Health of the State of New Jersey to Lessee or any
other lawful use subject to the restrictions hereinafter provided. As long as
Lessee uses and operates a rehabilitation hospital it shall maintain
accreditation with the Committee on Accreditation of Rehabilitation Facilities,
a successor organization, or by any similar body which accredits rehabilitation
hospitals.

                                   SECTION TWO
                                      TERM

      A. Immediately following execution of this lease and the satisfaction of
the conditions precedent stated in Section Three paragraphs (B) and (C), Lessor
shall grant reasonable access to the premises and the Lessor's hospital premises
to Lessee for the purpose of accomplishing necessary site work, engineering and
related studies, appraisals, etc. in order to enable Lessee to process Lessee's
application(s) for site plan, zoning, building permits, and other required
governmental approvals and for mortgage financing related to the construction by
Lessee of the rehabilitation hospital and other improvements described in
Section One (B) hereof.

      B. Upon receipt of all necessary approvals and permits required in order
that Lessee may commence construction as aforesaid, Lessee shall be granted
possession of the premises and access to, over and under the Lessor's hospital
premises in order to proceed with construction.

      C. The initial term of this Lease shall be thirty-five (35) years plus the
Construction Period (as defined hereafter), and shall commence on the date of
execution of this Lease ("Commencement Date"). The period beginning on the
Commencement Date and ending upon the first day of the first month after the
later to occur of (i) receipt by Lessee of a final certificate of occupancy for
all portions of the Project, or (ii) receipt by Lessee of a license for the
operation of the Project as a 70-bed comprehensive rehabilitation hospital from
the New Jersey Department of Health is called the "Construction Period". In any
event, the Construction Period shall end no later than the date the Project is
first operated for the public as a rehabilitation hospital. The "Occupancy Date"
shall be the last day of the Construction Period. The initial term of this Lease
shall end on the last day of the 420th successive month after the Occupancy
Date. The first payment of rent shall be due on the Occupancy Date.

      D. Provided the Lessee is not at the time of exercise in

                                        2

<PAGE>

default under the terms of this Lease, continuing beyond any applicable notice
and cure period, Lessee is hereby granted the option to renew this Lease for an
additional term of thirty-five years to follow immediately the initial term
described in the preceding paragraph. Lessee shall give Lessor written notice at
least one year prior to the expiration of the initial term hereof of the
exercise by Lessee of the option granted by this paragraph. Failure to give such
notice in timely fashion shall render such option null and void. In the event
that Lessee elects to exercise such renewal option all terms of this Lease
except those relating to the amount of rent to be paid which shall be as stated
in Section Four shall remain the same.

      E. Until the expiration or sooner termination of this lease, title to any
building, structure, fixtures, equipment or other improvements erected or
installed upon the premises by Lessee shall remain in Lessee. Lessee and not
Lessor shall be entitled to all depreciation or other tax deductions to be taken
upon such buildings, structures, fixtures, equipment and improvements.

      F. Upon the expiration or sooner termination of this lease, title to all
buildings, structures, fixtures and equipment (except for Lessee's moveable
equipment) erected, constructed, installed or located upon the premises shall
vest in Lessor and shall be free and clear of all liens, claims and encumbrances
except for items shown on Exhibit "B" attached hereto and easements, agreements
and other matters now or hereafter consented to by Lessor, but not including any
liens or obligations created as security for any indebtedness of Lessee. Lessee
shall execute all necessary documents in order to transfer such title to Lessor
and to satisfy any and all such liens, claims and encumbrances. During the term
of this Lease, Lessor's interest in the buildings, structures, fixtures and
equipment erected, constructed, installed or located upon the premises shall be
subject and subordinate to the rights and remedies of any and all construction
and permanent lenders making leasehold mortgage loans (or loans secured by a
collateral assignment of this Lease) to Lessee from time to time (collectively,
"Lenders".)

                                  SECTION THREE
                            PERMITS/FINANCING ISSUES

      A. Anything herein to the contrary notwithstanding this Lease and all
obligations, rights and privileges conferred herein are expressly contingent
upon the following all of which must be fully satisfied in Lessee's judgment or
expressly waived by Lessee within the stated time periods: 1) satisfactory
mortgage commitment for 85% of the Project costs as approved by the New

                                        3

<PAGE>

Jersey Department of Health) for the rehabilitation facility received by Lessee
at no more than 12% per annum interest amortized over a period of not less than
fifteen (15) years, said commitment shall be received and communicated to Lessor
not more than ninety (90) days after all permits and approvals herein stated
have been granted; and 2) satisfactory soil boring and environmental tests
received by Lessee and communicated to the Lessor one-hundred and eighty (180)
days subsequent to the date this Lease is fully executed to the effect that the
real estate herein leased is free of hazardous or toxic material or waste and
will support and permit the construction of the rehabilitation facility, 3) all
zoning, site plans and other necessary permits and approvals for the
construction and operation of the rehabilitation facility, including without
limitation, permits, approvals and agreements for the provision of adequate
public water and sewer and for storm water runoff and drainage shall be received
and communicated to Lessor not more than three-hundred and twenty (320) days
subsequent to the date of this Lease; and 4) a certificate of occupancy for the
Project and licensure thereof by the New Jersey Department of Health being
issued; and 5) Lessee's leasehold title to the premises being good and
marketable, free and clear of all encumbrances, liens and other objections not
acceptable to Lessee, and insurable as such at regular rates by a title
insurance company selected by Lessee as of the Commencement Date and as of the
Occupancy Date. In the event Lessee does not satisfy any of the conditions
precedent and the Lease is terminated, Lessee agrees to restore the premises to
its original condition and shall indemnify Lessor against any liability, harm or
loss arising from Lessee's activities at the premises. If this Lease is
terminated, the Lessee agrees to furnish Lessor with all surveys, plans,
drawings, studies, etc.

      B. Lessor shall use its best efforts to obtain a satisfactory
non-disturbance agreement for the premises between Lessee and United Jersey
Bank, as Master Trustee under the Mortgage referred to in EXHIBIT "B." Prior to
commencing construction upon the premises, Lessee shall furnish to Lessor a
construction completion bond or bonds in the aggregate amount of the total cost
of construction and in a form reasonably satisfactory to Lessor and counsel for
Lessor.

      C. Anything herein to the contrary notwithstanding, this Lease is
expressly contingent upon Lessor receiving either a satisfactory opinion of
Lessor's counsel or private letter revenue ruling by the IRS that the Lease and
the performance of the Lease shall in no way affect Lessor's tax exempt status
or tax-exempt financing of Lessor not more than sixty (60) days subsequent to
the execution of this Lease.

                                        4

<PAGE>

                                  SECTION FOUR
                                  RENT/DEPOSIT

      A. The total rent for the initial thirty-five year term of this Lease
shall be Three-Million-One-Hundred-Fifty Thousand Dollars ($3,150,000) payable
in monthly installments without deduction or offset, as set forth in Schedule I
appended hereto. The first payment shall be made on the date described in
Paragraph C of Section Two hereof and shall continue on the first day of each
succeeding month during the initial term. If Lessee exercises the renewal option
granted by paragraph D of Section Two hereof rent to be paid during the renewal
period shall continue to be paid in monthly installments but shall be adjusted
upward or downward compounded each year in relation to increases or decreases in
the "Consumer Price Index for Urban Wage Earners and Clerical Workers
Philadelphia-New Jersey" published by the U.S. Department of Commerce ("CPI") in
the following manner. (In the event such index is no longer in effect the
parties shall upon mutual agreement substitute a comparable index.) Annual rent
for the first year of the renewal term shall be an amount determined by
multiplying the rent for the last year of the initial term (specified in
Schedule I) by a fraction the numerator of which is the CPI for the last month
of the initial term and the denominator of which is the CPI for the same month
of the immediately preceding year. The product of such computation shall be paid
in monthly installments. The rent to be paid during each succeeding year of the
renewal term shall be determined in the same manner; that is, by applying the
annual CPI increase or decrease to the preceding year's total rent in order to
arrive at the amount of rent to be paid in the then current year. Because there
may be delays in the publishing of the CPI figures, monthly rent payable for the
preceding year shall remain effective until an appropriate computation of
revised rent can be made. Any increase or decrease remaining unpaid or overpaid
shall be added to or deducted from the next monthly installment.

                                  SECTION FIVE
                              ASSIGNMENT/SUBLETTING
                              RESTRICTIVE COVENANT

      A. Lessee may not assign, sublet or transfer this Lease, nor may any
interest herein be transferred (including the transfer of the stock or any
ownership interest in Lessee) without the prior written consent of Lessor which
consent shall be granted within sixty (60) days after its being requested unless
the proposed assignment, sublease or transfer would jeopardize in any manner the
tax exempt status of the West Jersey Health System or its Revenue Bonds;
furthermore, Lessor shall be entitled to obtain as a condition of its consent
reasonable assurances that the use by the assignee, sublessee or transferee

                                        5

<PAGE>

shall continue to be a use permitted under this Lease and the operator shall not
be in competition with Lessor's Marlton acute care inpatient hospital on the
premises (it being acknowledged by Lessor that the use of the premises by such
assignee as a rehabilitation hospital as permitted under this lease shall be
deemed acceptable to Lessor). Any assignment, subletting or transfer without
Lessor's consent shall be void, and shall, at the option of Lessor, constitute
an event of default under the terms of this Lease. Neither this Lease nor
Leasehold estate of Lessee nor any interest of Lessee hereunder in the premises
or any buildings or improvements thereon shall be subject to involuntary
assignment, transfer, or sale, or to assignment, transfer or sale by operation
of law in any manner whatsoever, and any such attempted involuntary assignment,
transfer or sale shall be void and of no effect and shall, at the option of
Lessor constitute an event of default under the terms of this Lease, provided,
however, that neither the death nor disability of Lessee or any partner or
shareholder of Lessee shall cause this Lease to be terminated, it being intended
that the interest of the deceased or disabled person shall be transferable to
such person's heirs, administrators, successors and assigns subject only to the
conditions of Lessor's consent as set forth above.

      B. Except for transactions involving Lessee's Secured Financing, if Lessee
at any time during the term of this Lease desires in a single transaction either
to:

            (i) Assign substantially all of its interest in this Lease; or

            (ii) Sublease substantially all of the premises for substantially
all of the remaining term of this Lease,

then prior to offering such an assignment or sublease to any third party, Lessee
shall notify Lessor in writing, which notice shall state the terms and
conditions under which Lessee plans to offer such an assignment or sublease to
any third party. The notice shall also grant to Lessor the right to accept such
offer on those same terms and conditions. Lessor shall have a period of thirty
(30) days from the submission of such notice to either accept or reject the
offer. The failure of Lessor to accept such offer by written notice to Lessee
within such thirty (30) day period shall be deemed a rejection. After any such
rejection, Lessee shall have a period of six (6) months thereafter to assign
this Lease or sublease the premises on terms and conditions which are no less
favorable than those which were offered to Lessor. Any such assignment or
sublease during the six (6) month period shall be free and clear of any right
and interest of the Lessor except for the requirement that Lessee comply with
the approval process set forth in subparagraph A above. In the event that Lessee
shall fail to assign substantially all of its interest in this Lease or sublease
substantially all of the premises for substantially all of the remaining terra
of this Lease during such

                                        6

<PAGE>

six (6) month period, or shall elect to offer more favorable terms and
conditions than those submitted to the Lessor, Lessee shall be obligated to
again submit an offer to the Lessor for thirty (30) days consideration prior to
consummating any such transaction with a third party. The requirements of this
subparagraph B shall in no event apply to any partial assignment by Lessee of
its interest in this Lease, nor shall they apply to a sublease of a portion of
the premises, nor shall they apply to the exercise of any rights or remedies by
the holder of any collateral assignment, mortgage or security interest related
to this Lease granted in connection with any of Lessee's secured financing.

      C. During the term of this Lease, Lessee or any assignee, affiliate
transferee or successor agrees not to operate an acute care inpatient hospital
upon the Lessee's premises. Furthermore, certain of Lessee's services shall be
limited as follows:

            (i) X-rays to be performed within the Lessee's premises shall be
limited to bone and chest area X-rays.

            (ii) Laboratory services to be performed within the Lessee's
premises shall be limited to routine services such as blood counts and
urinalysis.

            (iii) Drug and alcohol rehabilitation within the Lessee's premises
shall be limited to treatment which is ancillary to physical rehabilitation and
restoration and shall not be offered as a primary treatment.

            (iv) No respite care shall be provided within the Lessee's premises.

      D. During the term of this Lease neither Lessor nor any assignee,
affiliate, lessee, sublessee, transferee or successor shall perform inpatient or
outpatient physical rehabilitation or restoration services within the West
Jersey Hospital premises including without limitation the proposed medical
office building except as follows:

            (i) Physical therapy may be provided on an inpatient basis within
the existing acute care hospital as ancillary to the providing of acute care
services but shall not be offered as a primary treatment.

            (ii) Physical therapy may be .provided on an outpatient basis within
the existing acute care hospital to patients following their discharge from the
Hospital as ancillary to the providing of acute care services for which such
patient was previously an inpatient but shall not be offered as a primary
treatment.

                                        7

<PAGE>

            (iii) Physical therapy or occupational therapy or speech therapy may
only be performed directly by a physician or by their qualified technicians or
employees working with them within such physician's office in the proposed
medical office building on the West Jersey Hospital premises but only such
therapy as is incidental to such physician's practice. Moreover, no space in the
proposed medical office building shall have as its primary use the performance
of physical therapy, physical rehabilitation or restoration services.

      Anything in this Article V to the contrary notwithstanding it is expressly
agreed and permitted by the parties hereto that nothing shall be construed to
limit Lessor or Lessee from contracting with others to provide customary and
permitted services ordinarily provided by the parties under any managed care
network or other health care integrated delivery system, if such services are
performed at a location other than the Lessee's premises or the West Jersey
Hospital premises.

                                   SECTION SIX
                              TAXES AND ASSESSMENTS

      As additional rent hereunder, Lessee shall pay and discharge as they
become due, promptly and before delinquency, all taxes, assessments, rents,
charges, license fees, municipal liens, levies, excises or imports, whether
general or special, or ordinary or extraordinary, of every name, nature or kind,
which may be levied, assessed, charged, or imposed, or which may become a lien
or charge on or against the land hereby demised, or any part thereof, the
leasehold of Lessee herein, the premises described herein, any building or
buildings, or any other improvements now or hereafter thereon during the term of
this Lease. Notwithstanding the foregoing, Lessee's obligations for taxes
hereunder shall commence on the "Commencement Date" and shall be limited to real
estate taxes and assessments in the nature of real estate taxes, and shall
specifically exclude any income, franchise or similar taxes payable by Lessor.

                                  SECTION SEVEN
                          CONSTRUCTION OF NEW BUILDING

      A. Prior to submission for building permits Lessee shall, at Lessee's sole
expense, prepare plans and specifications for the building of a rehabilitation
hospital to be erected on the premises. Such plans and specifications shall be
submitted to Lessor for Lessor's written approval to make certain that the
construction of the new building does not: 1) materially and adversely affect
the structural integrity of Lessor's Marlton Facility on the West Jersey
Hospital premises (herein sometimes referred to as the "Marlton Facility") or;
2) substantially and unreasonably disrupt or interfere with the Marlton Facility
and

                                        8

<PAGE>

patients on the campus of the Marlton Facility; 3) materially and adversely
affect the sewer, water and other utilities of the Marlton Facility; and 4)
result in a building which is aesthetically inconsistent with the architecture
and construction already existing at the West Jersey Hospital premises. Lessor
shall not unreasonably withhold such approval. In the event of disapproval,
Lessor shall give to Lessee an itemized statement of reasons therefor within
thirty (30) days of Lessee's submission of plans and specifications to Lessor.
In the event that Lessor fails to provide such itemized statement of reasons for
disapproval to Lessee in writing within forty-five (45) days of such submission
by Lessee, the Lessor shall be deemed to have approved such plans and
specifications. Upon any such disapproval of the plans and specifications for
the Project by Lessor, Lessee shall have the option to terminate this Lease
without further liability for rent or any other charges, by notice to Lessor
given within sixty (60) days after receipt of such statement of disapproval by
Lessee. In addition, after the initial approval of the plans and specifications,
Lessee shall have the right to make reasonable changes to the plans and
specifications by change order during the construction process without the
consent of Lessor. Any changes required by any governmental agency shall be
deemed reasonable and acceptable to Lessor.

      Lessee hereby covenants and agrees that once all permits are granted and
all conditions precedent as stated in Section Three above have been satisfied
that Lessee will prosecute construction diligently and with all due speed.

      B. Lessee shall have the right to make such alterations, improvements and
changes to any building which may from time to time be on the premises as Lessee
may deem necessary, or to replace any such building with a new one of at least
equal value, provided that the alterations, improvements and changes shall not
cause the value of the building to be diminished, are aesthetically consistent
with existing architecture, and the structural integrity of the building or the
Marlton facility is not materially adversely affected or disrupted by any such
alterations, improvements, or changes, and provided that in the event of any
substantial or material alterations, improvements or changes, Lessor be first
notified.

                                  SECTION EIGHT
               REPAIRS, MAINTENANCE, IMPROVEMENTS AND DESTRUCTION

      A. Except as elsewhere provided in this Lease, Lessee shall, throughout
the term of this Lease, at-its own cost, and without any expense to Lessor,
keep and maintain the premises, including all buildings and improvements of
every kind which may be a part thereof, and all appurtenances thereto, including

                                        9

<PAGE>

sidewalks, driveways, parking lots, etc. on the premises, in good, sanitary and
neat order and repair, and except as specifically provided herein or elsewhere
in this Lease, and except if such repair, restoration or rehabilitation results
from a matter for which Lessee is entitled to indemnification by Lessor under
Section 11.B. of this Lease, restore and rehabilitate any improvements of any
kind which may be destroyed by fire, casualty or any other cause whatsoever.
Lessee shall also comply with and abide by all federal, state, county, municipal
and other governmental statutes, ordinances, laws and regulations affecting the
demised premises, the improvements thereon or any activity or condition on or in
such premises.

      B. Except as elsewhere provided in this Lease, Lessor shall, throughout
the term of this Lease, at its own cost, and without any expense to Lessee, keep
and maintain the West Jersey Hospital premises, including all buildings and
improvements of every kind which may be a part thereof and all improvements
thereto including sidewalks, driveways, parking lots, etc. in good, sanitary and
neat order and repair and except as specifically provided for herein or
elsewhere in this Lease and except if such repair, restoration or rehabilitation
results from a matter for which Lessor is entitled to indemnification by Lessee
under Section 11.A. of this Lease, restore and rehabilitate any improvements of
any kind which may be destroyed by fire, casualty or any other cause whatsoever.
Lessor shall also comply with and abide with all federal, state, county,
municipal and other governmental statutes, ordinances, laws and regulations
affecting the West Jersey Hospital premises, the improvements thereon or any
activity or condition on or in such premises.

      C. The damage, destruction, or partial destruction of any building or
other improvement which is a part of the premises shall not release Lessee from
any obligation hereunder and in the event of damage to or destruction of any
such building or improvement, except as provided herein or elsewhere in this
Lease, Lessee shall at its own expense promptly rebuild, repair and restore the
same to a condition as good or better than that which existed prior to such
damage or destruction. Without limiting the obligations of Lessee, it is agreed
that the proceeds of any insurance covering such damage or destruction shall be
made available to Lessee for such repair or replacement.

      D. Notwithstanding anything contained in this Section Eight or elsewhere
in this Lease to the contrary, Lessee's obligation to repair or restore the
premises following a fire or other casualty shall be subject in all cases to the
release of sufficient insurance proceeds by the Lenders.

                                       10

<PAGE>

      E. Notwithstanding anything contained to the contrary in this section
Eight or elsewhere in this Lease, in the event that such damage, destruction or
partial destruction shall occur within the last two (2) years of the then
current term of the Lease, Lessee shall not be obligated to rebuild, restore or
repair as aforesaid and this Lease shall terminate sixty (60) days after such
damage or destruction, unless Lessee notifies Lessor of its intent to rebuild,
restore or repair.

      F. The damage, destruction or partial destruction of any building or other
improvement which is a part of the west Jersey Hospital premises shall not
release Lessor from any obligation hereunder and in the event of damage to or
destruction of any such building or improvement, Lessor shall at its own
expense, promptly rebuild, repair and restore the same to a condition as good or
better than that which existed prior to damage or destruction. Without
eliminating the obligations of Lessor, it is agreed that the proceeds of any
insurance covering such damage or destruction shall be made available to Lessor
for such repair of replacement.

                                  SECTION NINE
                                    UTILITIES

      Without limitation, Lessee shall fully and promptly pay for all water,
sewer, gas, heat, light, power, telephone service and all other public utilities
of every kind furnished to the premises throughout the term hereof, and all
other costs and expenses of every kind whatsoever of or in connection with the
use, operation and maintenance of the premises and all activities conducted
thereon and Lessor shall have no responsibility of any kind for any thereof.
Utilities for the new building will if separately metered and any charge for
sewer service will if possible be separately metered and any charge for sewer
service will, if possible, be separately billed to Lessee and not prorated. It
is understood and agreed that Lessor is not responsible for the adequacy or the
availability of any utilities and will have no liability for interruptions in
service to the Lessee.

                                   SECTION TEN
                                      LIENS

      A. Lessee shall keep all of the premises and every part thereof and all
buildings and other improvements at any time located thereon free and clear of
any and all mechanics', materialmen's, and other liens for or arising out of or
in connection with work or labor done, services performed, or materials or
appliances used or furnished for or in connection with any operations of Lessee,
any alteration, improvement, or repairs or additions which Lessee may make or
permit or cause to be made, or any work or construction, by, for, or permitted
by

                                       11

<PAGE>

Lessee on or about the premises, or any obligations of any kind incurred by
Lessee, and at all times promptly and fully pay and discharge any and all claims
on which any such lien may or could be based, and indemnify Lessor and all of
the premises and all buildings and improvements thereon against all such liens
and claims of liens and suits or other proceedings pertaining thereto. This
shall not preclude Lessee from granting a security interest in any of its
equipment in or upon the leased premises and shall not preclude the granting of
a collateral assignment or mortgage of Lessee's leasehold interest as part of a
Lessee's Secured Financing. Lessor shall execute any reasonably required waivers
of interest with respect to fixtures and equipment required by Lessee's Lenders.

      B. If Lessee desires to contest any such lien, it shall notify Lessor of
its intention to do so within thirty (30) days after the filing of such lien. In
such case, and provided that Lessee shall on demand protect Lessor by a good and
sufficient surety bond against any such lien and any cost, liability, or damage
arising out of such contest, Lessee shall not be in default hereunder until
sixty (60) days after the final determination of the validity thereof, within
which time Lessee shall satisfy and discharge such lien to the extent held
valid; but the satisfaction and discharge of any such lien shall not, in any
case, be delayed until execution is had on any judgment rendered thereon, and
such delay shall be a default of Lessee hereunder. In the event of any such
contest, Lessee shall indemnify, defend, and hold harmless Lessor against all
loss, expense, (including reasonable attorney's fees) and damage resulting
therefrom.

                                 SECTION ELEVEN
                      INDEMNIFICATION OF LESSOR AND LESSEE

      A. Lessor shall not be liable for any loss, injury, death, or damage to
persons or property which at any time may be suffered or sustained by Lessee or
by any person whosoever may at any time be using or occupying or visiting the
premises or be in, on, or about the same, whether such loss, injury, death, or
damage shall be caused by or in any way result from or arise out of any act,
omission, or negligence of Lessee or of any occupant, subtenant, visitor, or
user of any portion of the premises, or shall result from or be caused by any
other matter or thing whether of the same kind as or of a different kind than
the matters or things above set forth, and Lessee shall defend and indemnify
Lessor against all claims, liability, loss, or damage whatsoever on account of
any such loss, injury, death, or damage. Lessee hereby waives all claims against
Lessor for damages to the building and improvements that are now on or
hereafter placed or built on the premises and to the property of Lessee in, on,
or

                                       12
<PAGE>

about the premises, and for injuries to persons or property in or about the
premises, from any cause arising at any time. The two preceding sentences shall
not apply to loss, injury, death, or damage arising by reason of the negligence
or misconduct of Lessor, its agents, or employees.

      B. Lessee shall not be liable for any loss, injury, death or damage to
persons or property which at any time may be suffered or sustained by Lessor or
by any person whosoever may at any time be using or occupying or visiting the
West Jersey Hospital premises or be in, on, or about the same, whether such
loss, injury, death or damage shall be caused by or in any way result from or
arise out of any act, omission, or negligence of Lessor or of any occupant,
sub-tenant, visitor or user of any portion of the West Jersey Hospital premises,
or shall result from or be caused by any other matter or thing whether of the
same kind as or of a different kind than the matters or things above set forth,
and Lessor shall defend and indemnify Lessee against all claims, liability, loss
or damage whatsoever on account of any such laws, injury, death or damage.
Lessor hereby waives all claims against Lessee for damages to the buildings and
improvements that are now on or hereafter placed on the West Jersey Hospital
premises and to the property of Lessor in, on, or about the West Jersey Hospital
premises, and for injuries to persons or property in or about the West Jersey
Hospital premises, from any cause arising at any time. The two preceding
sentences shall not apply to loss, injury, death or damage arising by reason of
the negligence or misconduct of Lessee, its agents or employees.

                                 SECTION TWELVE
                                ATTORNEYS' FEES

      If any action at law or in equity shall be brought to recover any rent
under this Lease, or for or on account of any breach of, or to enforce or
interpret any of the covenants, terms, or conditions of this Lease, or for the
recovery of the possession of the demised premises, the prevailing party shall
be entitled to recover from the other party as part of the prevailing party's
costs reasonable attorneys' fee, the amount of which shall be fixed by the court
and shall be made a part of any judgment or decree rendered.

                                SECTION-THIRTEEN
                             REDELIVERY OF PREMISES

      Lessee shall pay the rent and all other sums required to be paid by
Lessee hereunder in the amounts, at the times, and in the manner herein
provided, and shall keep and perform all the terms and conditions hereof on its
part to be kept and performed, and,

                                       13
<PAGE>

at the expiration or sooner termination of this Lease, peaceably and quietly
quit and surrender to Lessor the premises in good order and condition subject to
the other provisions of this Lease.

                                SECTION FOURTEEN
                              REMEDIES CUMULATIVE

      All remedies hereinbefore and hereafter conferred on Lessor shall be
deemed cumulative and no one exclusive of the other, or of any other remedy
conferred by law, subject, however, to the notice and cure provisions
hereinafter set forth.

                                 SECTION FIFTEEN
                                   INSURANCE

      A. Lessee shall, at all times during the term of this Lease and during
occupancy and construction of the facility, and at Lessee's sole expense, keep
the premises and all improvements which are now or hereafter a part of the
premises insured against loss or damage by fire and the extended coverage
hazards for the full replacement value of the premises with loss payable to
Lessor, Lessee and the Lessee's Lenders as their interests may appear. Lessor
shall, at all times during the term of this Lease and at Lessor's sole expense,
keep the West Jersey Hospital premises and all improvements which are now or
hereafter a part of the West Jersey Hospital premises insured against loss or
damage by fire and extended coverage hazards for the full replacement value of
the West Jersey Hospital premises.

      B. Lessee and Lessor shall each maintain in effect throughout the term of
this Lease, and during occupancy and construction of the facility, personal
injury liability insurance covering the premises and the West Jersey Hospital
premises respectively and their appurtenances and the sidewalks, parking lots
fronting thereon in the amount of 1 million/3 million aggregate for injury to or
death of any person. Such insurance shall specifically insure Lessee against all
liability assumed by it hereunder, as well as liability imposed by law, and
shall insure both Lessor and Lessee but shall be so endorsed as to create the
same liability on the part of the insurer as though separate policies had been
written for Lessor and Lessee.

      C. All of the policies of insurance referred to in this section shall be
written in form reasonably satisfactory to Lessor and Lessee and by insurance
companies reasonably satisfactory to Lessor and Lessee. Lessor consents to
Lessee providing the required Insurance under blanket and umbrella policies
covering other properties of Lessee or its affiliates to

                                       14
<PAGE>

the extent such are adequate to cover the insurance obligations of Lessee under
this Lease. Each party shall pay all of the premiums for its policies and
deliver such policies, or certificates thereof, to the other and in the event of
the failure of Lessee or Lessor, either to effect such insurance in the names
herein called for or to pay the premiums therefor or to deliver such policies,
or certificates thereof, to the other, the other shall be entitled, but shall
have no obligation, to effect such insurance and pay the premiums therefor,
which premiums shall be repayable to the party exercising such right immediately
and failure by Lessee to repay the same shall carry with it the same consequence
as failure to pay any installment of rental. Each insurer mentioned in this
section shall agree, (if obtainable on commercially reasonable terms) by
endorsement on the policy or policies issued by it, or by independent instrument
furnished to Lessor and Lessee that it will give to Lessor and Lessee thirty
(30) days' written notice before the policy or policies in question shall be
altered or canceled. Lessor and Lessee agree that they will not unreasonably
withhold their approval as to the form or to the insurance companies selected by
the other.

      D. In the event that either party shall at any time deem the limits of the
personal injury or property damage public liability insurance then carried to be
either excessive or insufficient, the parties shall endeavor to agree on the
proper and commercially reasonable limits for such insurance then to be carried
and such insurance shall thereafter be carried with the limits thus agreed on
until further change pursuant to the provisions of this section; but, if the
parties shall be unable to agree thereon, the proper and commercially reasonable
limits for such insurance then to be carried shall be determined by an impartial
third person selected by the parties, or should they be unable to agree on a
selection, by an impartial third person chosen by the New Jersey American
Arbitration Association or their successors on application by either party made
after sixty (60) days' written notice to the other party of the time and place
of such application, and the decision of such impartial third person as to the
proper and commercially reasonable limits, for such insurance then to be carried
shall be binding on the parties and such insurance shall be carried with the
limits as thus determined until such limits shall again be changed pursuant to
the provisions of this section. The expenses of such determination shall be
borne equally by the parties.

      E. To the extent that any loss or damage to any building, structure or
other tangible property, or resulting loss of income, or losses under workmen's
compensation laws and benefits, are adequately covered by insurance, neither
Lessor nor Lessee shall be liable to the other or to any insurance company
insuring the other party (by way of subrogation or otherwise) , even though such
loss or damage might have been occasioned by the negligence

                                       15
<PAGE>

of such party, its agents or employees; provided, however, that if by reason of
the foregoing waiver, either party shall be unable to obtain any such insurance,
then the foregoing waiver shall be deemed not to have been made by such party.

                                 SECTION SIXTEEN
                PROHIBITION OF INVOLUNTARY ASSIGNMENT; EFFECT OF
                            BANKRUPTCY OR INSOLVENCY

      A. Except as provided in Section Five of this Lease, neither this Lease
nor the leasehold estate of Lessee nor any interest of Lessee hereunder in the
premises or in the building or improvements thereon shall be subject to
involuntary assignment, transfer, or sale, or to assignment, transfer, or sale
by operation of law in any manner whatsoever (except through statutory merger or
consolidation, or devise, or intestate succession) and any such attempt at
involuntary assignment, transfer, or sale shall be void and of no effect. An
assignment, transfer or sale of the Lessee's interest in this Lease following a
default under Lessee's leasehold mortgage or collateral assignment to any of the
Lessee's Lenders, shall not constitute a default under this Lease or be subject
to the prohibition set forth in this Section Sixteen (A).

      B. Without limiting the generality of the provisions of the preceding
Paragraph of this section, Lessee agrees that in the event any proceedings under
the Bankruptcy Act or any amendment thereto be commenced by or against Lessee,
and, if against Lessee, such proceedings shall not be dismissed before either an
adjudication in bankruptcy or the confirmation of a composition, arrangement, or
plan or reorganization, or in the event Lessee is adjudged insolvent or makes an
assignment for the benefit of its creditors, or if a receiver is appointed in
any proceeding or action to which Lessee is a party, with authority to take
possession or control of the premises or the business conducted thereon by
Lessee, and such receiver is not discharged within a period of thirty (30) days
after his appointment or such longer period as may be reasonably necessary
provided that Lessee is diligently and in good faith attempting to discharge
same any such event or any involuntary assignment prohibited by the provisions
of the preceding Paragraph of this section shall be deemed to constitute a
breach of this Lease by Lessee and shall, at the election of Lessor, but not
otherwise, without notice or entry or other action of Lessor terminate this
Lease and also all rights of Lessee under this Lease and in and to the premises
and also all rights of any and all persons claiming under Lessee.

                                       16
<PAGE>

                                SECTION SEVENTEEN
                                     NOTICE

      All notices required to be given under this Lease shall be sent by
certified or registered mail or by a nationally recognized overnight courier
service to the addresses below or at such other addresses as subsequently
provided by the parties. Notices shall be deemed effective upon dispatch.

        To Lessor:               To Lessee:

West Jersey Health System        Francis J. Bonner, Jr., M.D.
1000 Atlantic Ave.               264 North Radnor
Camden, N.J. 08104               Chester Road
Attn: Office of the President    Radnor, PA 19087

                                 and

                                 The Mediplex Group, Inc.
                                 15 Walnut Street
                                 Wellesley, MA 02181
                                 ATTENTION: President and
                                            General Counsel

                                SECTION EIGHTEEN
                                     DEFAULT

      In the event of an occurrence of any event of default as described in
Section Nineteen hereof or of any breach of this Lease by Lessee and expiration
of all applicable cure periods as set forth in Section Nineteen, Lessor in
addition to the other rights or remedies it may have, shall have the immediate
right of re-entry and may remove all persons and property from the premises;
such property may be removed and stored in a public warehouse or elsewhere at
the cost of, and for the account of Lessee. Should Lessor elect to re-enter, as
herein provided, or should it take possession pursuant to legal proceedings or
pursuant to any notice provided for by law, Lessor may either terminate this
lease or it may from time to time, without terminating this lease, re-let the
demised premises or any part thereof for such term or terms (which may be for a
term extending beyond the term of this lease) and at such rental or rentals and
on such other terms and conditions as Lessor in the sole discretion of Lessor
may deem advisable with the right to make reasonable alterations which are
consistent with the then use of the facility and repairs to the demised
premises. On each such re-letting (a) Lessee shall be immediately liable to pay
to Lessor, in addition to any indebtedness other than rent due hereunder, the
reasonable expenses of such re-letting and of such alterations and repairs,
incurred by Lessor, and the amount, if

                                       17
<PAGE>

any, by which the rent reserved in this Lease for the period of such re-letting
(up to but not beyond the term of this Lease) exceeds the amount agreed to be
paid as rent for the premises for such period on such re-letting; or (b) at the
option of Lessor, rents received by such Lessor from such re-letting shall be
applied, first, to the payment of any indebtedness, other than rent due
hereunder from Lessee to Lessor; second, to the payment of any expenses of such
re-letting and of such alterations and repairs; third, to the payment of rent
due and unpaid hereunder, and the residue, if any, shall be held by Lessor and
applied in payment of future rent as the same may become due and payable
hereunder. If Lessee has been credited with any rent to be received by such
re-letting under option (a) hereof, and such rent shall not be promptly paid to
Lessor by the new tenant, or if such rentals received from such re-letting under
option (b) hereof during any month is less than that to be paid during that
month by Lessee hereunder, Lessee shall pay any such deficiency to Lessor. Such
deficiency shall be calculated and paid monthly. No such re-entry or taking
possession of the demised premises by Lessor shall be construed as an election
on the part of Lessor to terminate this Lease unless a written notice of such
intention is given to Lessee or unless the termination thereof is decreed by a
court of competent jurisdiction. Notwithstanding any such re-letting without
termination, Lessor may at any time thereafter elect to terminate this Lease for
such previous breach. Should Lessor at any time terminate this Lease for any
breach, in addition to any other remedy it may have, Lessor may recover from
Lessee all damages incurred by reason of such breach, including the cost of
recovering the premises, and including the worth (at present value using a
discount rate of 10%) at the time of such termination of the excess, if any, of
the amount of rent and charges equivalent to rent reserved in this Lease for the
remainder of the stated term over the then reasonable rental value of the
premises for the remainder of the stated term, all of which amount shall be
immediately due and payable from Lessee to Lessor.

                                SECTION NINETEEN
                                EVENTS OF DEFAULT

      The occurrence of any of the following shall constitute a material default
and breach of this Lease by Lessee:

      A. A failure by Lessee to pay, when due, any installment of rent hereunder
or any such other sum herein required to be paid by Lessee where such failure
continues for fifteen (15) days after written notice thereof from Lessor to
Lessee;

      B. A failure by Lessee to observe and perform any other provisions or
covenants of this Lease to be observed or performed by Lessee, where such
failure continues for thirty (30) days

                                       18
<PAGE>

after written notice thereof from Lessor to Lessee; provided, however, that if
the nature of the default is such that the same cannot reasonably be cured
within such 30-day period, Lessee shall not be deemed to be in default if Lessee
shall, within such period, commence such cure and thereafter diligently
prosecute the same to completion;

      C. The filing of a petition by or against Lessee for adjudication as a
bankrupt or insolvent or for its reorganization or for the appointment pursuant
to any local, state or federal bankruptcy or insolvency law of a receiver or
trustee of Lessee's property; or an assignment by Lessee for the benefit of
creditors; or the taking possession of the property of Lessee by any local,
state or federal governmental office or agency or court-appointed official for
the dissolution or liquidation of Lessee or for the operating, either
temporarily or permanently, of Lessee's business; provided, however, that if any
such action is commenced against Lessee without Lessee's consent, the same shall
not constitute a default if Lessor or Lessee causes the same to be dismissed
within thirty (30) days after the filing of same or such longer period as may be
reasonably necessary provided that Lessee is diligently and in good faith
attempting to dismiss same.

                                 SECTION TWENTY
                            LESSOR'S RIGHT TO PERFORM

      In the event that Lessee by failing or neglecting to do or perform any act
or thing herein provided by it to be done or performed, shall be in default
hereunder beyond any applicable cure period, then, Lessor may, but shall not be
required to, do or perform or cause to be done or performed such act or thing
(entering on the premises for such purposes, if Lessor shall so elect), and
Lessor shall not be held liable or in any way responsible for any loss,
inconvenience, annoyance, or damage resulting to Lessee on account thereof, and
Lessee shall repay to Lessor on demand the entire expense thereof, including
compensation to the agents and employees of Lessor. Any act or thing done by
Lessor pursuant to the provisions of this section shall not be or be construed
as a waiver of any such default by Lessee, or as a waiver of any covenant,
term, or condition herein contained or the performance thereof, or of any other
right or remedy of Lessor, hereunder or otherwise. All amounts payable by
Lessee to Lessor under any of the provisions of this lease, if not paid when
the same become due as in this lease provided, shall bear interest from the date
they become due until paid at the rate of the then annual prime rate of the
Chase Manhattan Bank, N.A., compounded annually. Lessor's right to perform any
act or thing under this Section Twenty shall only arise after Lessor has given
notice to Lessee and an opportunity to cure pursuant to Section Nineteen.

                                       19
<PAGE>

                               SECTION TWENTY-ONE
                            EFFECT OF EMINENT DOMAIN

      A. In the event the entire premises shall be appropriated or taken under
the power of eminent domain by any public or quasi-public authority, this Lease
shall terminate and expire as of the date of such taking, and Lessee and Lessor
shall thereupon be released from any liability thereafter accruing hereunder.

      B. In the event a portion of the premises shall be so appropriated or
taken and the remainder of the premises shall not be suitable for the use then
being made of the premises by Lessee, Lessee shall have the right to terminate
this lease as of the date of such taking on giving to Lessor written notice of
such termination within sixty (60) days after Lessor has notified Lessee in
writing that the premises has been so appropriated or taken.

      C. In the event of such partial taking and Lessee does not so terminate
this Lease, then this Lease shall continue in full force and effect as to the
part not taken, and the rental to be paid by Lessee during the remainder of the
term, shall be equitably abated and any such determination shall not affect or
change the times at which Lessor may require an adjustment in rent under the
terms of this Lease.

      D. In the event of the total or partial taking of the premises by eminent
domain, then in any such condemnation proceedings Lessor and Lessee shall be
free to make claim against the condemning or taking authority for the amount of
any damage done to them, respectively, as a result thereof.

      E. In the event of any appropriation or taking under the power of eminent
domain and notwithstanding anything to the contrary contained herein or
elsewhere in this Lease, the buildings, improvements and equipment on the
premises shall be treated solely as property of Lessee, and all proceeds payable
therefore shall be allocated and paid solely to Lessee.

                               SECTION TWENTY-TWO
                               SURRENDER OF LEASE

      The voluntary or other surrender of this Lease by Lessee, or a mutual
cancellation thereof, shall not work a merger, and shall, at the option of
Lessor, terminate all or any existing subleases or subtenancies, or may, at the
option of Lessor, operate as an assignment to it of any or all such subleases
or subtenancies.

                                       20
<PAGE>

                              SECTION TWENTY-THREE
               DISPOSITION OF IMPROVEMENTS ON TERMINATION OF LEASE

      On termination of this Lease for any cause, Lessor shall become the owner
of the building(s) improvements on the demised premises (except as provided in
Section 21.E. of this Lease) and Lessee agrees to execute any and all documents
to effectuate such ownership as more fully set forth in Section Two (F) of this
Lease. At the end of the term, title to all buildings, structures, fixtures and
equipment (except for Lessee's movable equipment), erected, constructed,
installed or located upon the premises shall vest in Lessor.

                               SECTION TWENTY-FOUR
                                     WAIVER

      The waiver by Lessor or Lessee of, or the failure of Lessor or Lessee to
take action with respect to any breach of any term, covenant, or condition
herein contained shall not be deemed to be a waiver of such term, covenant or
condition, or subsequent breach of the same, or any other term, covenant, or
condition therein contained. The subsequent acceptance of rent hereunder by
Lessor shall not be deemed to be a waiver of any preceding breach by Lessee of
any term, covenant, or condition of this Lease, other than the failure of Lessee
to pay the particular rental so accepted, regardless of Lessor's knowledge of
such preceding breach at the time of acceptance of such rent.

                               SECTION TWENTY-FIVE
                                  PARTIES BOUND

      The covenants and conditions herein contained shall, subject to the
provisions as to assignment, transfer, and subletting, apply to and bind the
heirs, successors, executors, administrators, and assigns of all of the parties
hereto; and all of the parties hereto shall be jointly and severally liable
hereunder.

                               SECTION TWENTY-SIX
                               TIME OF THE ESSENCE

      Time is of the essence of this Lease, and of each and every covenant,
term, condition, and provision hereof.

                                       21
<PAGE>

                              SECTION TWENTY-SEVEN
                                SECTION CAPTIONS

      The captions appearing under the section number designations of this Lease
are for convenience only and are not a part of this lease and do not in any way
limit or amplify the terms and provisions of this Lease.

                              SECTION TWENTY-EIGHT
                    WARRANTIES OF TITLE AND QUIET POSSESSION

      Lessor covenants that Lessor is seized of the premises in fee simple and
has full right to make this Lease and that Lessee shall have quiet and peaceable
possession of the premises during the term hereof.

                              SECTION TWENTY-NINE
                          WASTE AND NUISANCE PROHIBITED

      During the term of this Lease, Lessee shall comply with all applicable
laws affecting the Lessee's use of the premises, the breach of which might
result in any penalty on Lessor or forfeiture of Lessor's title to the premises.
Lessee shall not commit, or suffer to be committed, any waste on the premises,
or any nuisance.

                                 SECTION THIRTY
                             ABANDONMENT OF PREMISES

      Lessee shall not vacate or abandon the premises at any time during the
term hereof, except due to fire, reasons due to temporary repair, casualty or
other reasons beyond Lessee's reasonable control. If Lessee shall abandon,
vacate or surrender the premises, except as set forth in the preceding sentence,
or be dispossessed by process of law, or otherwise, any personal property
belonging to Lessee and left on the premises shall be deemed to be abandoned, at
the option of Lessor.

                               SECTION THIRTY-ONE
                             LESSOR'S RIGHT OF ENTRY

      Lessee shall permit Lessor and the agents and employees of Lessor after
reasonable notice to enter into and upon the premises at all reasonable times
and always subject to the rights of patients in the facility for the purpose of
inspecting the same, or for the purpose of posting, notices of
non-responsibility for alterations, additions, or repairs, without any rebate of
rent and without any liability to Lessee for any loss of occupation or quiet
enjoyment of the premises thereby occasioned.

                                       22
<PAGE>

                               SECTION THIRTY-TWO
                                    RECORDING

      Lessor and Lessee shall be entitled to file and maintain a memorandum of
this Lease with the appropriate state or county real estate recording offices
which memorandum shall provide that the obligations of the Lessor and Lessee
hereunder shall run with the land and shall bind all future owners, lessees,
mortgagees and successors in title to the premises and the West Jersey Hospital
premises.

                              SECTION THIRTY-THREE
                   ENCUMBRANCE OF LESSEE'S LEASEHOLD INTEREST

      A. Lessee may encumber by mortgage or deed of trust, or other proper
instrument, its leasehold interest and estate in the demised premises, together
with all buildings and improvements placed by Lessee thereon, as security for
any indebtedness of Lessee. Lessee's mortgage shall, however, always be subject
and subordinate to the terms of this Lease.

      B. If Lessee shall encumber its leasehold interest and estate in the
demised premises and if Lessee or the holder of the indebtedness secured by
such encumbrance shall give notice to Lessor of the existence thereof and the
address of such holder, then Lessor will mail or deliver to such holder, at such
address, a duplicate copy of all notices in writing which Lessor may, from time
to time, give to or serve on Lessee under and pursuant to the terms and
provisions hereof; such copies shall be mailed or delivered to such holder, at,
or as near as possible to the same time such notices are given to or served on
Lessee. Such holder may, at its option, at any time before the rights of Lessee
shall be terminated as provided herein, pay any of the rents due hereunder, or
pay any taxes and assessments, or do any other act or thing required of Lessee
by the terms hereof, or do any act or thing that may be necessary and proper to
be done in the observance of the covenants and conditions hereof, or to prevent
the termination hereof; all payments so made, and all things so done and
performed by such holder shall be as effective to prevent a foreclosure of the
rights of Lessee thereunder as the same would have been if done and performed by
Lessee.

      C. Notwithstanding anything to the contrary contained in this Lease, upon
any default by Lessee under this Lease, Lessor shall give simultaneous notice
of such default to each Lender who has given notice to Lessor pursuant to
Subsection (B) above, and each such Lender shall have the right to cure such
default at any time within sixty (60) days after receipt of such notice, which
cure shall fully reinstate the Lease. Upon a default by Lessee

                                       23

<PAGE>

under any loan agreement with any Lender, any Lender shall have the right to
foreclose on its leasehold mortgage or collateral assignment and either assume
Lessee's obligations under this Lease, or assign the Lessee's interest in this
Lease to a new lessee which shall be bound by the terms and conditions of this
Lease. Lessor agrees to modify this Lease as may be reasonably requested by any
Lender providing financing for Lessee provided that such modifications do not
materially alter the fundamental obligations of Lessor and Lessee hereunder.

                               SECTION THIRTY-FOUR
                               PARKING AND SIGNAGE
                               INGRESS AND EGRESS

      A. Those portions of the premises depicted upon Exhibit "A" as "Rehab
Hospital Parking Area" and containing a total of one hundred and eleven (111)
parking spaces shall be used only for the parking of motor vehicles and shall be
reserved for exclusive use by Lessee and its employees, patients, visitors,
staff doctors and other invitees ("Lessee Users"). Lessee shall be entitled to
prohibit unauthorized vehicles from parking in the Rehab Hospital Parking Area
through appropriate signage, striping, and temporary barricades. Lessee shall
not install, nor permit the installation of, any fences, gates, walls, permanent
barricades, curb bumpers or other like structures for the purpose of delineating
the Rehab Hospital Parking Area or excluding vehicles therefrom.

      B. In addition to the Rehab Hospital Parking Area shown on Exhibit "A" ,
Lessee Users shall be entitled to park in such other public parking areas as may
now or in the future be located within the West Jersey Hospital premises. Such
additional parking shall be in a common with Lessor, its employees, patients,
visitors, staff doctors, tenants of other buildings located upon the West Jersey
Hospital premises, and other invitees and therefore shall not be exclusive.
Notwithstanding the foregoing, Lessee acknowledges and agrees that the existing
"Doctor's Parking Lot" which is delineated by permanent curbing and gates,
designated areas for "Emergency Room Parking" and the "Existing Employee Parking
Area" to the rear of Lessor's existing hospital building which is delineated by
tamporary barricades (both of which areas are shown on Exhibit "A") are for the
exclusive use of Lessor's employees and that such areas are for the exclusive
use of Lessor.

      C. At any time after the end of the first five years of the term of this
Lease, Lessee shall have the right to notify Lessor that an additional one
hundred thirteen (113) parking spaces shall be identified and set aside for the
exclusive use of Lessee Users anywhere on the campus site. Within ninety (90)
days after the giving or receipt of such notice, Lessor shall

                                       24
<PAGE>

designate and make available for the exclusive use of Lessee Users such
additional one hundred thirteen (113) spaces at a location within the West
Jersey Hospital premises. The selection and location of such spaces shall be
determined within Lessor's sole discretion. All such spaces shall be contiguous
to one another but need not necessarily be adjacent to the one hundred eleven
(111) spaces described in paragraph A of this section. Upon such designation by
Lessor the additional one hundred thirteen (113) spaces shall become part of the
premises subject to this Lease as additional Rehab Hospital Parking Area. Lessee
shall be entitled to prohibit unauthorized vehicles from parking in such
additional area in the same manner and subject to the same restrictions as
specified in paragraph A of this section for the original one hundred eleven
(111) parking spaces. Notwithstanding the foregoing provisions of this
paragraph, Lessee may only exercise the right of designation granted to Lessee
upon demonstrating that the common parking area (described in paragraph B of
this article) has become inadequate for Lessee's purposes. Such inadequacy shall
be presumed upon a showing that the aforesaid common parking area is
substantially full during any fifteen (15) days of any calendar month.

      D. Lessor shall, at Lessor's expense, be responsible for the maintenance,
repair, landscaping, illumination, security, cleaning, snow and ice removal and
all other services relating to all parking areas located within the West Jersey
Hospital premises and the Rehab Hospital Parking Area. Lessee shall reimburse
Lessor for Lessee's pro-rata share of the aforesaid expense. Lessee's share
shall be determined by multiplying the total cost to Lessor of all parking area
expenses by a fraction having as its numerator the number one hundred and eleven
(111) [and after the addition of the one hundred thirteen (113) , two hundred
twenty-four (224)], and having as its denominator the total number of parking
spaces located within the West Jersey Hospital premises and the Rehab Hospital
Parking Area combined. Lessor shall submit bills with appropriate back-up to
Lessee for Lessee's share of the total parking area expenses on a periodic basis
but no more frequently than monthly and such bills shall be paid by Lessee
within thirty (30) days after their submission.

      E. Lessee shall be entitled at its own cost and expense to erect exterior
signage on the premises and the West Jersey Hospital premises, identifying
Lessee's rehabilitation facility. The location, design and appearance of all
such signs shall be subject to the written approval of Lessor which shall be
obtained by Lessee prior to their erection. Lessor's approval shall not be
unreasonably withheld or delayed and Lessor's failure to deny approval within
sixty (60) days after its being requested shall be deemed to be an approval.
Lessee shall comply with all governmental requirements in connection with the
installation of any such signage and Lessee shall be solely responsible for all
maintenance and repairs in connection with such signage.

                                       25
<PAGE>

      F. Lessee and Lessor shall each provide to the other reasonable access,
ingress and egress for pedestrian and vehicular traffic, over and across those
portions of the premises and the West Jersey Hospital premises respectively as
are suitable for such access including those portions which from time to time
may contain sidewalks, driveways and internal roads. Lessor and Lessee shall
each be entitled to make such changes to its sidewalks, driveways and internal
roads from time to time as each may determine provided, however, that each shall
at all times provide to the other reasonable access in order to enable the other
to operate its property in the manner contemplated by this Lease including the
construction of the improvements described herein. It is contemplated that the
rehabilitation hospital facility and the acute care hospital and proposed
medical office building on the West Jersey Hospital premises shall be
interconnected with each other. Lessor and Lessee shall cooperate with each
other in the construction of the Project and operation of their respective
facilities and will provide the other, including the owner of the Medical Office
Building, with the necessary legal rights to ensure the free flow of pedestrian
traffic between facilities and the maintenance and repair of common party walls
and other common appurtenances. Without limiting the generality of the
foregoing, Lessor hereby grants Lessee the right to use in common with Lessor,
for all purposes: i) the stairwell located in the northwest corner of the West
Jersey Hospital as a means of ingress to and egress from the rehabilitation
hospital, as and to the extent necessary to comply with applicable law, and ii)
the area designated on Exhibit "A" as the obstacle course on which area Lessee
may erect, install, and maintain improvements and equipment suitable thereto
(Lessee shall maintain liability insurance covering the obstacle course in
accordance with the requirement of Section 15 of this Lease.)

      G. In the event that the holder of a mortgage or other lien or any party
claiming thereunder succeeds to the interest of the Lessor under this Lease or
as owner of the fee of the West Jersey Hospital premises by virtue of
foreclosure or other legal process against the Lessor or all or a portion of the
West Jersey Hospital premises and such successor is not required to or does not
agree to recognize all of Lessee's rights to use the West Jersey Hospital
premises as set forth in Section I, this Section 34 or elsewhere in this Lease
(collectively the "WJH Rights"), then Lessee shall be entitled to make the
continuation by such successor of any right to use any portion" of the premises
as set forth in this Lease conditional upon the execution and delivery by such
successor of a recordable instrument in form and substance reasonably
satisfactory to Lessee by which such, successor, for itself and its successors
and assigns, irrevocably recognizes and agrees not to disturb the continued
exercise and use of the WJH Rights by Lessee and its successors and assigns.

                                       26
<PAGE>

                               SECTION THIRTY-FIVE
                                     TITLE

      Lessor hereby represents and warrants to Lessee that Lessor has and will
maintain throughout the term of this Lease good and marketable title to the
premises free and clear of all liens and encumbrances except as follows:

      A. The conditions, restrictions and limitations, if any, now appearing of
record and listed on Exhibit "B" attached hereto and made a part hereof;

      B. Easements of roads and rights of public service companies as Lessor may
in the future grant provided that the same shall not materially conflict or
interfere with the rights of the Lessee under this Lease; and

      C. Zoning regulations and ordinances now existing or which may hereafter
exist by reason of any legal authority during the term of this Lease.

      D. The lien of any refinancing obtained by Lessor in the future provided
that the holder thereof enters into a non- disturbance agreement acceptable in
form to Lessee and its Lenders.

                               SECTION THIRTY-SIX
                                    NET RENT

      Unless expressly provided in this Lease, the Lessee is responsible for all
charges, rents or fees associated with the ownership, possession, construction
and operation of the premises.

                              SECTION THIRTY-SEVEN
                             ESTOPPEL CERTIFICATES

      Lessor and Lessee mutually agree, upon prior written notice, to execute
estoppel certificates in content and form reasonably satisfactory to the
requesting party.

                              SECTION THIRTY-EIGHT
                                  ENVIRONMENTAL

      Lessor and Lessee mutually agree to comply with all environmental laws
and, to remediate any spills, leaks, discharges or releases of hazardous or
toxic substances or wastes

                                       27
<PAGE>

occurring upon their respective premises. Lessee further represents and agrees
that it will not install any underground storage tanks at the premises and will,
to the extent applicable comply with the provisions of the Environmental
Clean-up Responsibility Act and other environmental laws. Lessor represents and
warrants to Lessee that Lessor has no knowledge of the presence on the premises
or the West Jersey Hospital premises of any hazardous substances, hazardous
wastes, solid wastes or other substances, the presence of which would create an
obligation for remediation or reporting under any federal, state or local law,
regulation or ordinance.

                               SECTION THIRTY-NINE
                     ASSISTANCE DURING CONSTRUCTION PERIOD

      All at the Lessee's sole expense, the Lessor agrees that, within five (5)
days after receipt of written request from Lessee, Lessor will take all
reasonably requested actions and join in any and all applications for permits,
licenses or other authorizations required by any governmental or other body
claiming jurisdiction in connection with any work which the Lessee may do
hereunder, and will also join in any grants for easements for electric,
telephone, gas, water, sewer and such other public utilities and facilities as
may be reasonably necessary in the operation of the premises or of any
improvements that may be erected thereon.

                                 SECTION FORTY
                                LENDER'S CONSENT

      This Lease shall not be further modified without the consent of the
Lenders holding leasehold mortgages or collateral assignments of this Lease at
the time.

                               SECTION FORTY-ONE
                                SHARED EXPENSES

      Lessor acknowledges that many of the improvements required to be made by
Lessee in connection with the Project will inure to the benefit of Lessor,
including without limitation, in connection with Lessor's proposed construction
of a medical office building on the West Jersey Hospital premises. Therefore,
Lessor and Lessee hereby agree that all costs and expenses incurred for outside
consultants, including without limitation, attorneys' (which will be shared
equally), architectural and engineering fees in connection with obtaining
required permits and approvals for the Project (including without limitation,
obtaining sewer permits and approvals for the Project) shall be shared as
follows: 60% by Lessor and 40% by Lessee; provided, however, that the costs of
obtaining amendments for all existing

                                       28
<PAGE>

zoning approvals for the Project which are required as a result of the increase
in the size of the rehabilitation hospital from 60 to 70 beds, shall be borne
entirely by Lessee.

      In WITNESS WHEREOF, the parties intending to be legally bound have
executed this lease on the day and year first above written.

                                       West Jersey/Mediplex Rehabilitation
                                       Limited Partnership

                                       By: Mediplex of New Jersey, Inc. ,
                                           as general partner but not
                                           individually

7/15/93                                By: /s/ Richard S. Mann
-------                                    ------------------------------
Date
                                       West Jersey Health System

7/15/93                                By: /s/ Barry D. Brown
-------                                    ------------------------------
Date                                       Barry D. Brown President

7/15/93                                By: /s/ Harry D. Ambrose
-------                                    -------------------------------
Date                                       Harry D. Ambrose, Jr. Esq.
                                           Immediate Past Chairman

                                       29
<PAGE>

                                   EXHIBIT "B"

1.    Easement as contained in Deed Book 1846 page 432.

2.    Easement as contained in Deed Book 1846 page 437.

3.    Easement as contained in Deed Book 2177 page 181.

4.    Mortgage by West Jersey Health System, a not-for-profit-corporation to
      United Jersey Bank, Hackensack, New Jersey, dated October 22, 1992,
      recorded October 23, 1992, in Mortgage Book 4737, page 168 to secure the
      sum of $91,395,000,00. (Provided, however, that this Mortgage does not
      cover or include the premises but does cover portions of the West Jersey
      Hospital premises and, therefore, affects some of the land and buildings
      in which Lessee has the WJH Rights.)

                                       31
<PAGE>

                                   SCHEDULE I

                            WEST JERSEY HEALTH SYSTEM
                                  GROUND LEASE
                                 RENTAL SCHEDULE

<TABLE>
<S>                                             <C>
YEAR 1                                          $65,000
YEAR 2                                          $65,000
YEAR 3                                          $65,000
YEAR 4                                          $65,000
YEAR 5                                          $65,000
YEAR 6                                          $94,167
YEAR 7                                          $94,167
YEAR 8                                          $94,167
YEAR 9                                          $94,167
YEAR 10                                         $94,167
YEAR 11                                         $94,167
YEAR 12                                         $94,167
YEAR 13                                         $94,167
YEAR 14                                         $94,167
YEAR 15                                         $94,167
YEAR 16                                         $94,167
YEAR 17                                         $94,167
YEAR 18                                         $94,167
YEAR 19                                         $94,167
YEAR 20                                         $94,167
YEAR 21                                         $94,167
YEAR 22                                         $94,167
YEAR 23                                         $94,167
YEAR 24                                         $94,167
YEAR 25                                         $94,167
YEAR 26                                         $94,167
YEAR 27                                         $94,167
YEAR 28                                         $94,167
YEAR 29                                         $94,167
YEAR 30                                         $94,167
YEAR 31                                         $94,167
YEAR 32                                         $94,167
YEAR 33                                         $54,167
YEAR 34                                         $94,167
YEAR 35                                         $94,167
</TABLE>

                                       32
<PAGE>

                     First American Title Insurance Company

                                                       Commitment No. 01-5413-93

                                   SCHEDULE C

All that certain lot, piece or porcol of land, with the buildings and
improvements thereon errected, situate lying and being in the Township of
Evesham County of Burlington and State of New Jersey:

   TRACT I

         BEGINNING at a point in the Northeasterly line of Horner Road (49.5
   feet wide), said point being South 75 degrees 39 minutes 29 seconds East,
   measured along said Northeasterly line of Horner Road 320.00 feet from the
   Easterly line of the sight corner of New Jersey State Highway Route #73
   (formerly S-41); thence

         (1) along lands n/f Garden State Community Medical Center formerly G. &
   V. Realty Company, North 13 degrees 20 minutes 30 seconds East, 726.00 feet
   to a point; thence

         (2) parallel with Horner Road, South 76 degrees 39 minutes 29 seconds
   East, 720.00 feet to a point in the line of lands formerly Samuel Eves, now
   or formerly G. & V. Realty Company; thence

         (3) along same, South 13 degrees 20 minutes 31 seconds West, 726.00
   feet to a point in the aforesaid Northeasterly line of Horner Road; thence

         (4) along same, North 76 degrees 39 minutes 29 seconds West, 720.00
   feet to the place of beginning.

   TRACT II

         BEGINNING at a point in the line of land n/f Garden State Community
   Medical Center, formerly G. & V. Realty Co. corner to other lands of American
   Medicorp Dev. Co., said point being the following two (2) courses from the
   intersection of the Northeasterly line of Hornar Road (49.5 feet wide) with
   the Easterly line of the sight corner of N.O.S.H. Route 73,

         (A) along the Northeasterly line of Horner Road, South 75 degrees 39
   minutes 29 seconds East 320.00 feet to a point; thence

         (B) along the division line between lands n/f Garden State Community
   Medical Center and other lands of American Medicorp Dev. Co. North 13 degrees
   20 minutes 31 seconds East 726.00 feet to said place of beginning extending
   therefrom; thence

         (1) along said lands of Garden State Community Medical center North 13
   degrees 20 minutes 31 seconds East, 114.77 feet to a point in the line of
   lands of Evesham Township Board of Education; thence

         (2) along said Board of Education, North 54 degrees 39 minutes 01
   seconds East, 767.24 feet to a point; thence

<PAGE>

                                                       Commitment No. 01-5413-93

                                   SCHEDULE C

                                   (Continued)

         (3) along same South 64 degrees 35 minutes 18 seconds East 329.32 feet
   to a point in the line of lands n/f G. & V. Realty Co.; thence

         (4) along said lands n/f G. & V. Realty Co., South 48 degrees 44
   minutes 20 seconds West 187.32 feet to a point; thence

         (5) along same South 13 degrees 20 minutes 31 seconds West, 469.54 feet
   to a point corner to other lands of American Medicorp Dev. Co.; thence

         (6) along said other lands of American Medicorp Dev. Co. North 76
   degrees 39 minutes 29 seconds West, 720.00 feet to the place of beginning.

         BEING known as Lot 5A, Block 26 on the Tax Map of the Township of
   Evesham.

<PAGE>

                                     [FLOOR PLAN]

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00087-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00087-of-00352.parquet"}]]