Document:

Exhibit 10.3

 

ASSIGNMENT
AND ASSUMPTION OF LEASE

 

The
Parties to this Assignment are HR ACQUISITION OF PENNSYLVANIA, INC., a Pennsylvania corporation (“Assignor”), whose
mailing address is 3310 West End Avenue, Suite 700, Nashville, Tennessee 37203, and GMR MECHANICSBURG, LLC, a Delaware limited
liability company (“Assignee”), whose mailing address is 4800 Montgomery Lane, Suite 450, Bethesda, Maryland 20814.
This Assignment shall be effective as of December 20, 2016 (the “Effective Date”). Assignor and Assignee are sometimes
referred to herein as the “Parties.”

 

WHEREAS,
Assignor is the landlord under that certain Lease Agreement, dated as of May 10, 1996 (the “Original
Lease”), whereby Lessor agreed, among other things, to lease to Lessee, and Lessee agreed to lease from Lessor,
premises located at 175 Lancaster Blvd., Mechanicsburg, Pennsylvania 17055 and generally known as HealthSouth Rehabilitation Hospital
of Mechanicsburg (the “Facility”
or the “Premises”).

 

WHEREAS,
Assignor and Lessee subsequently amended the Original Lease pursuant to (i) that certain Omnibus
Amendment Agreement No. 1 to Lease Agreements, dated as of March 31, 2006 (“Omnibus
No. 1”). (ii) that certain Omnibus Amendment Agreement No. 2 to Lease Agreements, dated as of March 11, 2009
(“Omnibus No. 2”)
(iii) that certain Omnibus Amendment Agreement No. 3 to Lease Agreements, dated as of August 1, 2011 (“Omnibus
No. 3” and, together with Omnibus No. 1 and Omnibus No. 2, the “Omnibus
Amendments”-), and (iv) that certain Fourth Amendment to Lease Agreement, dated as of November
1, 2011 (“Amendment No. 4”);

 

WHEREAS,
the Omnibus Amendments also amend
leases relating to other facilities operated by Lessee or its affiliates other than the Facility (collectively, the “Unrelated
Leases”);

 

WHEREAS,
for purposes of this Assignment, the term “Lease”
shall mean the Original Lease, as amended by the Omnibus Amendments to the extent, but only to the extent, they relate to the Facility,
and as further amended by Amendment No. 4;

 

WHEREAS,
Assignee desires to purchase and assume from Assignor, and Assignor desires to sell and assign to Assignee all of the rights, benefits,
and privileges as “Lessor” under the Lease, as set forth in this Assignment; and

 

WHEREAS,
Assignor desires to retain all of the rights, benefits, and privileges as “Lessor” under the Omnibus Amendments to
the extent they relate to the Unrelated Leases, as set forth in this Assignment.

 

NOW,
THEREFORE, in consideration of the foregoing and the mutual covenants and agreements herein set forth:

 

1.          As
of the Effective Date, Assignor does hereby assign, transfer, and deliver unto Assignee all of the right, benefits and privileges
as “Lessor” under the Lease, subject to all terms, conditions, reservations and limitations set forth in the Lease.

 

     

     

    

 

2.          As
of the Effective Date, Assignee accepts, on the terms and conditions herein specified, this Assignment, and assumes the obligations,
liabilities and performance of all the terms and conditions of “Lessor” to be performed under the Lease from and after
the Effective Date.

 

3.          Assignor
hereby agrees to indemnify and hold harmless Assignee from and against any and all loss, cost or expense (including, without limitation,
reasonable attorney’s fees) to the extent resulting by reason of the failure of Assignor to perform any of the obligations
as “Lessor” under the Lease prior to the Effective Date.

 

4.          Assignee
hereby agrees to indemnify and hold harmless Assignor from and against any and all loss, cost or expense (including, without limitation,
reasonable attorney’s fees) resulting by reason of the failure of Assignee to perform any of the obligations as “Lessor”
under the Lease on and after the Effective Date.

 

5.          Assignor
and Assignee hereby acknowledge and agree that, notwithstanding anything to the contrary contained herein, Assignor is hereby retaining
all of the rights, benefits, and privileges as “Lessor” under the Omnibus Amendments to the extent they relate to the
Unrelated Leases.

 

6.          No
course or dealing between Assignor and Assignee and no delay on the part of any party in exercising any rights under this Assignment
shall operate as a waiver of the rights of the Assignor or the Assignee. No covenant or other provision of this Assignment may
be waived unless by a written instrument signed by the Parties so waiving such covenant or other provision.

 

7.          Whenever
possible, each provision of this Assignment shall be interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Assignment shall be prohibited or invalid, the remainder of this Assignment shall continue in full
force and effect. This Assignment has been made and entered into in the State of Tennessee, and the laws of the state shall govern
the validity and interpretation hereof and the performance hereunder by the Parties hereto.

 

8.          The
signatories to this Assignment represent that they have the right and power to legally bind to this Assignment the parties they
represent. All of the covenants, terms and conditions set forth herein shall be binding upon and shall inure to the benefit of
the Parties hereto and their respective heirs, legal representatives, successors and assigns.

 

9.          This
Assignment may be executed in two (2) or more counterparts, each of which shall be deemed an original, but all of which together
shall constitute one and the same instrument. Executed counterparts of this Assignment or any amendment hereto may be delivered
by electronic or facsimile transmission.

 

[SIGNATURE
PAGES FOLLOW]

 

     

     

    

 

IN WITNESS WHEREOF,
the parties have executed this Assignment as of the Effective Date.

 

	 	“Assignor”
	 	 
	 	HR ACQUISITION OF PENNSYLVANIA, INC., a Pennsylvania corporation
	 	 
	 	By	/s/ C. Burney Dawkins
	 	 	C. Burney Dawkins 
	 	 	Vice
    President  – Acquisitions 
	 	 	and Dispositions

 

	 	“Assignee”
	 	 
	 	GMR MECHANICSBURG,
    LLC, a Delaware limited liability company
	 	 
	 	By	/s/ David A. Young
	 	Name:	David A. Young
	 	Title:	Chief Executive Officer and President

 

     

     

    

  

 

     

     

    

  

     

     

    

  

     

     

    

 

 

     

     

    

  

     

     

    

  

     

     

    

  

     

     

    

  

     

     

    

  

 

     

     

    

 

 

OMNIBUS AMENDMENT AGREEMENT

NO. 3 TO LEASE AGREEMENTS

 

Dated as of August 1, 2011

 

HEALTHCARE REALTY TRUST
INCORPORATED, a Maryland corporation (“HR Parent”), HR ACQUISITION I CORPORATION, a Maryland corporation
formerly known as Capstone Capital Corporation, formerly known as Capstone Capital Trust, Inc. (“HR Acquisition”),
HRT OF ALABAMA, INC., an Alabama corporation (“HR Alabama”), HR ACQUISITION OF PENNSYLVANIA, INC., a Pennsylvania
corporation formerly known as Capstone Capital of Pennsylvania, Inc. (“HR Pennsylvania”), PENNSYLVANIA HRT, INC.,
a Pennsylvania corporation (“Pennsylvania HRT”), HR ACQUISITION OF SAN ANTONIO, LTD., an Alabama limited
partnership formerly known as Capstone Capital of San Antonio, Ltd. (“HR San Antonio”), HEALTHSOUTH CORPORATION,
a Delaware corporation formerly known as HealthSouth Rehabilitation Corporation (“HS Parent”), HEALTHSOUTH OF
YORK, LLC, a Delaware limited liability company formerly known as HealthSouth of York, Inc., a Delaware corporation (“HS
York”), HEALTHSOUTH OF MONTGOMERY, INC., an Alabama corporation (“HS Montgomeiy”), HEALTHSOUTH OF NITTANY
VALLEY, INC., a Delaware corporation (“HS Nittany Valley”), HEALTHSOUTH OF TALLAHASSEE LIMITED PARTNERSHIP,
an Alabama limited partnership (“HS Tallahassee”), and BEAUMONT REHAB ASSOCIATES, INC., a Delaware
corporation formerly known as Beaumont Rehab Associations Limited Partnership, a Delaware limited partnership (“HS Beaumont”),
hereby agree as follows:

 

     

     

    

  

1.          Preliminary
Statements. The parties hereto entered into that certain Omnibus Amendment Agreement No. 1 to Lease Agreements, dated as of
March 31, 2006 (the “First Omnibus Amendment”) and that certain Omnibus Amendment Agreement No. 2 to Lease
Agreements, dated as of March 11, 2009 (the “Second Omnibus Amendment” and, together with the First Omnibus
Amendment, the “Omnibus Amendments”). HR Pennsylvania, as lessor, and HS Parent, as lessee, are parties to
that certain Lease Agreement dated as of March 24, 1995, as amended by the Omnibus Amendments (as amended, the “Great
Lakes Lease”), for the lease of the inpatient rehabilitation hospital and related real property and improvements located
at 143 East Second Street situated in Erie County, Pennsylvania. HR Pennsylvania, as lessor, and HS Parent, as lessee, are parties
to that certain Lease Agreement dated as of May 10, 1996, as amended by the Omnibus Amendments (as amended, the “Mechanicsburg
Lease”), for the lease of the inpatient rehabilitation hospital and related real property and improvements located at
175 Lancaster Boulevard, Mechanicsburg, Pennsylvania. HR Pennsylvania, as lessor, and HS Parent, as lessee, are parties to that
certain Lease Agreement dated as of May 10, 1996, as amended by the Omnibus Amendments (as amended, the “Altoona Lease”),
for the lease of the inpatient rehabilitation hospital and related real property and improvements located at 2005 Valley View
Boulevard, Altoona, Pennsylvania 16602. HR Alabama, as lessor, and HS Montgomery, as lessee, are parties to that certain Lease
Agreement dated as of September 30, 1998, as amended by the Omnibus Amendments (as amended, the “Montgomery Lease”),
for the lease of the inpatient rehabilitation hospital and related real property and improvements located at 4465 Narrow Lane
Road, Montgomery, Alabama 36116. Pennsylvania HRT (originally styled as “HRT of Pennsylvania, Inc.”), as lessor, and
HS Nittany Valley, as lessee, are parties to that certain Lease Agreement dated as of September 30, 1998, as amended by the Omnibus
Amendments (as amended, the “Nittany Valley Lease”), for the lease of the inpatient rehabilitation hospital
and related real property and improvements located at 550 W. College Avenue, Pleasant Gap, Pennsylvania 16823. HR San Antonio,
as lessor, and HS Beaumont, as lessee, are parties to that certain Lease Agreement dated as of April 1, 1996, as amended by that
First Amendment to Facility Lease dated as of February 7, 2006, as amended further by the Omnibus Amendments (as amended, the
“Beaumont Lease”), for the lease of the inpatient rehabilitation hospital and related real property and improvements
located at 3340 Plaza 10 Boulevard, Beaumont, Texas 77707. HR Parent, as lessor, and HS Tallahassee, as lessee, are parties to
that certain Lease Agreement having a commencement date of October 1, 1998, as amended by the Omnibus Amendments (as amended,
the “Tallahassee Lease”), for the lease of the inpatient rehabilitation hospital and related real property
and improvements located at 1675 Riggins Road, Tallahassee, Florida 32308. Pennsylvania HRT, as lessor, and HS York, as lessee,
are parties to that certain Lease Agreement dated as of September 30, 1998, as amended by the Omnibus Amendments (as amended,
the “York Lease”), for the lease of the inpatient rehabilitation hospital and related real property and improvements
located at 1850 Normandie Drive, York, Pennsylvania 17404. The Great Lakes Lease, the Mechanicsburg Lease, the Altoona Lease,
the Montgomery Lease, the Nittany Valley Lease, the Beaumont Lease, the Tallahassee Lease and the York Lease are referred to herein,
individually as a “Lease” and, collectively, as the “Leases”. HS Parent has executed (i)
the Guaranty of Obligations Under Lease Agreement, dated as of September 30, 1998, with respect to the Montgomery Lease (the “Montgomery
Guaranty”), (ii) the Guaranty of Obligations Under Lease Agreement, dated as of September 30, 1998, with respect to
the Nittany Valley Lease (the “Nittany Valley Guaranty”), (iii) the Guaranty of Obligations Under Lease Agreement,
dated as of March 11, 2009, with respect to the Beaumont Lease (the “Beaumont Guaranty”), (iv) the Guaranty
of Obligations Under Lease Agreement, dated as of September 30, 1998, with respect to the Tallahassee Lease (the “Tallahassee
Guaranty”), and (v) the Guaranty of Obligations Under Lease Agreement, dated as of September 30, 1998, with respect
to the York Lease (the “York Guaranty” and, together with the Montgomery Guaranty, the Nittany Valley Guaranty,
the Beaumont Guaranty and the Tallahassee Guaranty, the “Lease Guaranties”). Pursuant to the Lease Guaranties,
certain of the applicable Lessee’s obligations have been guaranteed, and the Lease Guaranties are an integral part of the
transactions contemplated by the parties hereto. HR Pennsylvania, as lessor, and HS Parent, as lessee, are parties to that certain
Lease Agreement, dated as of June 30, 1997, as amended and assigned pursuant to that certain Amendment to Building Lease and Assignment
and Assumption of Building Lease, dated as of even date herewith (the “Pittsburgh Amendment and Assignment”),
among HR Pennsylvania, as lessor, HS Parent, as assignor, and Pittsburgh Specialty Hospital, LLC, a Delaware limited liability
company, as assignee (as amended and assigned, the “Pittsburgh Lease”), for the lease of the premises located
at 2380 McGinley Road, Monroeville, Pennsylvania, commonly known as the Greater Pittsburgh Rehabilitation Hospital. The parties
wish to clarify certain matters with respect to the Omnibus Amendments and
the Pittsburgh Lease and to make certain amendments to the Leases in the manner set forth in this Omnibus Amendment Agreement
No. 3 to Lease Agreements (this “Agreement”).

 

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2.          Definitions.
HR Parent, HR Acquisition, HR Alabama, HR Pennsylvania, Pennsylvania HRT, and HR San Antonio are referred to herein, individually,
as a “Lessor” and, collectively, as “Lessors,” HS Paient, HS York, HS Montgomery, HS Nittany
Valley, HS Tallahassee and HS Beaumont are referred to herein, individually, as a “Lessee” and, collectively,
as “Lessees,” Unless the context otherwise requires, all other capitalized terms used herein without definition
shall have the definitions provided therefor in the respective Leases. Unless the context otherwise requires, the effective date
of the agreements and amendments set forth in this Agreement shall be the date of this Agreement (the “Effective Date’’).

 

3.          Agreements
regarding the Pittsburgh Lease. Lessors and Lessees acknowledge as follows: (i) to their actual knowledge, HR Pennsylvania,
as lessor, and HS Parent have performed or satisfied through the Effective Date all the terms of the Omnibus Amendments which are
applicable to the Pittsburgh Lease through the Effective Date; (ii) the Pittsburgh Amendment and Assignment amends and restates
all the terms of the Omnibus Amendments which shall be applicable to the Pittsburgh Lease from and after the Effective Date and
(iii) the Pittsburgh Amendment and Assignment deletes in their entirety the Omnibus Amendments as they relate to the Pittsburgh
Lease and neither Omnibus Amendment shall have any further application, force or effect with respect to the Pittsburgh Lease. Lessors
and Lessees each agree that neither Pittsburgh Specialty Hospital, LLC (“Pittsburgh Specialty”) nor the business or
operations conducted by Pittsburgh Specialty, nor its successors or assigns, if any, shall have any liability or obligation under
or with respect to the Omnibus Amendments, including this Omnibus Amendment Agreement No. 3. Pittsburgh Specialty is intended to
be a third party beneficiary of the provisions contained in this paragraph 3.

 

4.          Representations
and Warranties of Lessors. Each Lessor hereby severally, but not jointly, represents and warrants to each Lessee that is a
party to each of the Leases executed by such Lessor, as follows:

 

4.1        Authority.
Such Lessor is duly organized, validly existing and in good standing under the laws of the State of its incorporation, formation
or organization and is in good standing and is authorized to transact business in each state in which it conducts business. Such
Lessor has all requisite corporate, partnership or other (as the case may be) right, power, authority and legal capacity to execute
and deliver this Agreement, to perform its obligations hereunder, and to consummate the transactions contemplated herein.

 

4.2        Execution.
The execution, delivery and performance by such Lessor of this Agreement and the consummation by it of the transactions contemplated
herein have been duly and validly authorized by all necessary corporate, partnership or other (as the case may be) action on the
part of such Lessor. Upon its execution and delivery, this Agreement will be a valid and binding obligation of such Lessor, enforceable
against such Lessor in accordance with its terms.

 

4.3        No
contravention. Neither of the execution, delivery or performance by such Lessor of this Agreement, nor the consummation by
such Lessor of the transactions contemplated herein will (with or without the passage of time or the giving of notice or both)
(i) conflict with or violate the organizational or governing documents of such Lessor, (ii) conflict with or violate any law,
rule, regulation, order, judgment, injunction or decree applicable to such Lessor or by which its properties are bound or affected,
or (iii) require on the part of such Lessor any license, permit, consent, approval, clearance, order or authorization of, or registration,
qualification, declaration or filing with any federal, state or local government or any court, administrative agency or commission
or other governmental authority or instrumentality, domestic or foreign, or any filing with, notice to or consent of any other
person, other than as expressly provided in this Agreement.

 

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5.          Representations
and Warranties of Lessees. Each Lessee hereby severally, but not jointly, represents and warrants to each Lessor that is a
party to each of the Leases executed by such Lessee, as follows:

 

5.1           Authority.
Such Lessee is duly organized, validly existing and in good standing under the laws of the State of its incorporation, formation
or organization and is in good standing and is authorized to transact business in each state in which it conducts business. Such
Lessee has all requisite corporate, partnership or other (as the case may be) right, power, authority and legal capacity to execute
and deliver this Agreement, to perform its obligations hereunder, and to consummate the transactions contemplated herein.

 

5.2           Execution.
The execution, delivery and performance by such Lessee of this Agreement and the consummation by it of the transactions contemplated
herein have been duly and validly authorized by all necessary corporate, partnership or other (as the case may be) action on the
part of such Lessee. Upon its execution and delivery, this Agreement will be and a valid and binding obligation of such Lessee,
enforceable against such Lessee in accordance with its terms.

 

5.3           No
contravention. Neither of the execution, delivery or performance by such Lessee of this Agreement, nor the consummation by
such Lessee of the transactions contemplated herein will (with or without the passage of time or the giving of notice or both)
(i) conflict with or violate the organizational or governing documents of such Lessee, (ii) conflict with or violate any law, rule,
regulation, order, judgment, injunction or decree applicable to such Lessee or by which its properties are bound or affected, or
(iii) require on the part of such Lessee any license, permit, consent, approval, clearance, order or authorization of, or registration,
qualification, declaration or filing with any federal, state or local government or any court, administrative agency or commission
or other governmental authority or instrumentality, domestic or foreign, or any filing with, notice to or consent of any other
person, other than as expressly provided in this Agreement.

 

6           Representations
and Warranties of HS Parent. HS Parent hereby represents and warrants to each Lessor, as follows:

 

6.1           Authority.
HS Parent is duly organized, validly existing and in good standing under the laws of the State of its incorporation and is in good
standing and is authorized to transact business in each state in which if conducts business. HS Parent has all requisite corporate
right, power, authority and legal capacity to execute and deliver this Agreement, to perform its obligations hereunder, and to
consummate the transactions contemplated herein.

 

6.2           Execution.
The execution, delivery and performance by HS Parent of this Agreement and the consummation by it of the transactions contemplated
herein have been duly and validly authorized by all necessary corporate action on the part of HS Parent. Upon its execution and
delivery, this Agreement will be and a valid and binding obligation of HS Parent, enforceable against HS Parent in accordance with
its terms.

 

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6.3           No
contravention. Neither of the execution, delivery or performance by HS Parent of this Agreement, nor the consummation by HS
Parent of the transactions contemplated herein will (with or without the passage of time or the giving of notice or both)
(i) conflict with or violate the organizational or governing documents of HS Parent (ii) conflict with or violate any law, rule,
regulation, order, judgment, injunction or decree applicable to HS Parent or by which its properties are bound or affected, or
(iii) require on the part of HS Parent any license, permit, consent, approval, clearance, order or authorization of, or registration,
qualification, declaration or filing with any federal, state or local government or any court, administrative agency or commission
or other governmental authority or instrumentality, domestic or foreign, or any filing with, notice to or consent of any other
person, other than as expressly provided in this Agreement

 

7.          Confirmation
of Leases. Each party hereto (a) agrees that this Agreement shall not in any way impair or lessen its liabilities under any
of the Leases, as amended hereby, and (b) acknowledges that such Leases, as amended hereby, are in full force and effect and that
there currently exists no default nor any defenses or claims of offset or otherwise against the enforcement thereof by any other
party thereto or by any other party in favor of which such Leases were expressly made.

 

8.          Confirmation
of Lease Guaranties. HS Parent hereby (a) agrees that this Agreement shall not in any way impair or lessen its liabilities
under the Lease Guaranties, and (b) acknowledges that the Lease Guaranties are in full force and effect and that there currently
exists no defenses or claims of offset or otherwise against the enforcement thereof by any other party in favor of which such Lease
Guaranties were expressly made.

 

9.          Miscellaneous.
The validity, interpretation, enforcement and effect of this Agreement and any matter arising out of or in connection with this
Agreement shall be governed by, and construed in accordance with, the laws of the State of Alabama, without regard to principles
of conflicts of laws; provided, however, that any amendment of or agreement with respect to a particular Lease or Lease Guaranty
shall be governed by, and construed in accordance with, the laws of the state or states recited in such Lease or Lease Guaranty.
This Agreement shall be binding and shall inure to the benefit of. the parties hereto, and their respective permitted successors
and assigns. This Agreement shall not be modified or amended except by mutual written agreement. This Agreement constitutes the
entire agreement and understanding of the parties with respect to the subject matter hereof and supersedes all prior agreements,
oral or written, and all other communications among the parties relating to such subject matter. The waiver by any party of a breach
or violation of any provisions of this Agreement shall not operate as, or be construed to be, a waiver of any subsequent breach
of the same or other provision. In the event any provision of this Agreement is held to be unenforceable or invalid for any reason,
this Agreement shall remain in full force and effect and enforceable in accordance with its terms disregarding such enforceable
or invalid provision. The captions and headings used in this Agreement are made for convenience and general reference only and
should not be construed to describe, define, limit or expand the scope and intent of any term or provision of this Agreement. The
parties acknowledge that this Agreement was initially prepared by Lessors solely as a convenience and that all parties hereto,
and their counsel, have read and fully negotiated all of the language used in this Agreement. The parties acknowledge that, because
all parties and their counsel participated in negotiating and drafting this Agreement, no rule of construction shall apply to this
Agreement which construes ambiguous and unclear language in favor of or against any party because such party drafted this Agreement.
With respect to all provisions of this Agreement, time is of the essence. The words “include,” “includes”
and “including” shall be deemed to be followed by the phrase “without limitation.” Whenever the context
so permits, the use of the plural shall include the singular, the singular shall include the plural, and any gender shall be deemed
to include all genders.

 

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10.         Execution
by Counterparts and Telefacsimile. This Agreement may be executed in one or more counterparts, each of which shall be an original
and taken together shall constitute one and the same document. Signature and acknowledgment pages, if any, may be detached from
the counterparts and attached to a single copy of this document to physically form one document. For purposes of executing this
Agreement, any signed document transmitted by facsimile machine with automatic confirmation of receipt shall be treated in all
manner and respects as an original document. The signature of any party transmitted by facsimile machine shall be considered to
be an original signature, and any such document shall be considered to have the same binding legal effect as an original document
executed, delivered and exchanged between or among the parties. At the request of any party, any executed document delivered by
facsimile machine shall be re-executed by all parties in a “hard-copy” form. The parties hereto hereby agree that none
of them shall raise the use of a facsimile machine for the transmission of signatures as a defense to this Agreement, and each
such party hereby waives such defense.

 

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IN WITNESS WHEREOF, Lessors have caused this
Agreement be executed as of the day and year first above written.

 

	 	“Lessors:”
	 	 
	 	HEALTHCARE REALTY TRUST

    INCORPORATED
	 	HR ACQUISITION I CORPORATION

    HRT OF ALABAMA, INC.
	 	HR ACQUISITION OF PENNSYLVANIA,
    INC.

    PENNSYLVANIA HRT, INC.
	 	 
	 	By	/s/ James C. Douglas
	 	 	James C. Douglas
	 	 	Senior Vice President – Acquisitions
	 	 	and Dispositions
	 	 	 
	 	HR ACQUISITION OF SAN ANTONIO, LTD.
	 	 
	 	By its general partner:
	 	Healthcare Acquisition of Texas, Inc.
	 	 	 
	 	By	/s/ James C. Douglas
	 	 	James C. Douglas
	 	 	Senior Vice President – Acquisitions
	 	 	and Dispositions

 

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IN WITNESS WHEREOF, Lessees has caused this
Agreement be executed as of the day and year first above written.

 

	 	“Lessees:”
	 	 
	 	HEALTHSOUTH CORPORATION
	 	 
	 	By 	/s/ John P. Whillington
	 	 	John P. Whittington

Executive Vice President, Corporate Secretary

and General Counsel
	 	 	 
	 	HEALTHSOUTH OF YORK, LLC

HEALTHSOUTH OF MONTGOMERY, INC.

HEALTHSOUTH OF NITTANY VALLEY, INC.
	 	 	 
	 	By 	/s/ John P. Whittington
	 	 	John P. Whittington

Vice President and Secretary
	 	 	 
	 	HEALTHSOUTH OF TALLAHASSEE

LIMITED PARTNERSHIP
	 	 
	 	By its general partner:
	 	HealthSouth Real Property Holding, LLC
	 	 	 
	 	By 	/s/ John P. Whittington
	 	 	John P. Whittington

Vice President and Secretary
	 	 	 
	 	BEAUMONT REHAB ASSOCIATES, INC.
	 	 	 
	 	By 	/s/ John P. Whittington
	 	 	John P. Whittington

Vice President and Secretary

 

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OMNIBUS AMENDMENT AGREEMENT

NO. 2 TO LEASE AGREEMENTS

 

Dated
as of March 11, 2009

 

HEALTHCARE REALTY TRUST
INCORPORATED, a Maryland corporation (“HR Parent”), HR ACQUISITION I CORPORATION, a Maryland corporation
formerly known as Capstone Capital Corporation, formerly known as Capstone Capital Trust, Inc. (‘‘HR Acquisition”),
HRT OF ALABAMA, INC., an. Alabama corporation (“HR Alabama”), HR ACQUISITION OF PENNSYLVANIA, INC., a Pennsylvania
corporation formerly known as Capstone Capital of Pennsylvania, Inc. (“HR Pennsylvania”), PENNSYLVANIA HRT, INC.,
a Pennsylvania corporation (“Pennsylvania HRT”), HR ACQUISITION OF SAN ANTONIO, LTD., an Alabama limited partnership
formerly known as Capstone Capital of San Antonio, Ltd. (“HR San Antonio”), HEALTHSOUTH CORPORATION, a Delaware
corporation formerly known as HealthSouth Rehabilitation Corporation (“HS Parent”), HEALTHSOUTH OF YORK, INC.,
a Delaware corporation (“HS York”), HEALTHSOUTH OF MONTGOMERY, INC., an Alabama corporation (“HS Montgomery”),
HEALTHSOUTH OF NITTANY VALLEY, INC., a Delaware corporation (“HS Nittany Valley”), HEALTHSOUTH OF TALLAHASSEE
LIMITED PARTNERSHIP, an Alabama limited partnership (“HS Tallahassee”), and BEAUMONT REHAB ASSOCIATES
LIMITED PARTNERSHIP, a Delaware limited partnership (“HS Beaumont”), hereby agree as follows:

 

     

     

    

 

Preliminary Statements. The
parties hereto entered into that certain Omnibus Amendment Agreement No. 1 to Lease Agreements dated as of March 31,
2006 (the “First Amendment”). HR
Pennsylvania, as lessor, and HS Parent, as lessee, are parties to that certain Lease Agreement dated as of March
24, 1995, as amended by the First Amendment (as amended, the “Great Lakes Lease”), for the lease of the inpatient
rehabilitation hospital and related real property and improvements located at 143 East Second Street situated in Erie County,
Pennsylvania. HR Pennsylvania, as lessor, and HS Parent, as lessee, are parties to that certain Lease Agreement dated as of May
10, 1996, as amended by the First Amendment (as amended, the “Mechanicsburg Lease”), for the lease of the inpatient
rehabilitation hospital and related real property and improvements located at 175 Lancaster Boulevard, Mechanicsburg, Pennsylvania.
HR Pennsylvania, as lessor, and HS Parent, as lessee, are parties to that certain Lease Agreement dated as of May 10, 1996, as
amended by the First Amendment (as amended, the ‘‘Altoona Lease”), for the lease of the inpatient rehabilitation
hospital and related real properly and improvements located at 2005 Valley View Boulevard, Altoona, Pennsylvania 16602. HR Pennsylvania,
as lessor, and HS Parent, as lessee, are parties to that certain Lease Agreement dated as of June 30, 1997, as amended by the
First Amendment (as amended, the “Pittsburgh Lease”), for the lease of the inpatient rehabilitation hospital
and related real property and improvements located at 2380 McGinley Road, Monroeville, Pennsylvania 15146. HR Alabama, as lessor,
and HS Montgomery, as lessee, are parties to that certain Lease Agreement dated as of September 30, 1998, as amended by the First
Amendment (as amended, the “Montgomery Lease”), for the lease of the inpatient rehabilitation hospital and
related real property and improvements located at 4465 Narrow Lane Road, Montgomery, Alabama 36116. Pennsylvania HRT (originally
styled as “HRT of Pennsylvania, Inc.”), as lessor, and HS Nittany Valley, as lessee, are parties to that certain Lease
Agreement dated as of September 30, 1998, as amended by the First Amendment (as amended, the “Nittany Valley Lease”),
for the lease of the inpatient rehabilitation hospital and related real property and improvements located at 550 W. College Avenue,
Pleasant Gap, Pennsylvania 16823. HR San Antonio, as lessor, and HS Beaumont, as lessee, are parties to that certain Lease Agreement
dated as of April 1, 1996, as amended by that First Amendment to Facility Lease dated as of February 7, 2006, as amended farther
by the First Amendment (as amended, the “Beaumont Lease”), for the lease of the inpatient rehabilitation hospital
and related real property and improvements located at 3340 Plaza 10 Boulevard, Beaumont, Texas 77707. HR Parent, as lessor, and
HS Tallahassee, as lessee, are parties to that certain Lease Agreement having a commencement date of October 1, 1998, as amended
by the First Amendment (as amended, the “Tallahassee Lease”), for the lease of the inpatient rehabilitation
hospital and related real property and improvements located at 1675 Riggins Road, Tallahassee, Florida 32308. Pennsylvania HRT,
as lessor, and HS York, as lessee, are parties to that certain Lease Agreement dated as of September 30, 1998, as amended by the
First Amendment (as amended, the “York Lease”), for the lease of the inpatient rehabilitation hospital and
related real properly and improvements located at 1850 Normandie Drive, York, Pennsylvania 17404. The Great Lakes Lease, the Mechanicsburg
Lease, the Altoona Lease, the Pittsburgh Lease, the Montgomery Lease, the Nittany Valley Lease, the Beaumont Lease, the Tallahassee
Lease and the York Lease are referred to herein, individually as a “Lease” and, collectively, as the “Leases”.
HS Parent has executed (i) the Guaranty of Obligations Under Lease Agreement dated as of September 30, 1998 with respect to the
Montgomery Lease (the “Montgomery Guaranty”), (ii) the Guaranty of Obligations Under Lease Agreement dated
as of September 30, 1998 with respect to the Nittany Valley Lease (the “Nittany Valley Guaranty”), (iii) the
Guaranty of Obligations Under Lease Agreement dated as of September 30, 1998 with respect to the Tallahassee Lease (the “Tallahassee
Guaranty”), (iv) the Guaranty of Obligations Under Lease Agreement dated as of September 30, 1998 with respect to the
York Lease (the “York Guaranty”), and (v) the Guaranty of Obligations Under Lease Agreement dated as of March
11, 2009 with respect to HS Beaumont’s obligations under the Beaumont Lease (the “Beaumont Guaranty”
and, together with the Montgomery Guaranty, the Nittany Valley Guaranty, the Tallahassee Guaranty and the York Guaranty, the “Lease
Guaranties”). Pursuant to the Lease Guaranties, certain of the applicable Lessee’s obligations have been guaranteed,
and the Lease Guaranties are an integral part of the transactions contemplated by the parties hereto. The parties have agreed
to further amend the Leases in the manner set forth in this Omnibus Amendment Agreement No. 2 to Lease Agreements (this “Agreement”).

 

1.          Definitions.
HR Parent, HR Acquisition, HR Alabama, HR Pennsylvania, Pennsylvania HRT, and HR San Antonio are referred to herein, individually,
as a “Lessor” and, collectively, as “Lessors.” HS Parent, HS York, HS Montgomery, HS Nittany
Valley, HS Tallahassee and HS Beaumont are referred to herein, individually, as a “Lessee” and, collectively,
as “Lessees.” Unless the context otherwise requires, all other capitalized terms used herein without definition
shall have the definitions provided therefor in the respective Leases. Unless the context otherwise requires, the effective date
of the agreements and amendments set forth in this Agreement shall be the date of this Agreement (the “Effective Date”).

 

2.          Amendments
and Agreements to the Great Lakes Lease. The Great Lakes Lease is confirmed and amended, effective as of the Effective Date,
as follows:

 

    	 	2	 

     

    

  

2.1           The
following Section 2.7 is added to the Great Lakes Lease following Section 2.6:

 

2.7           Additional
Minimum Rent. Lessee shall pay to Lessor as additional minimum rent, without notice, demand, set off or counterclaim, in advance,
the annual sum set forth on Schedule 1 attached hereto under the heading “Additional
Minimum Rent” for the Great Lakes Lease (the “Additional Minimum Rent”), payable in advance in
equal, consecutive monthly installments, beginning with the first payment due on April 1, 2009, and continuing on the first day
of each calendar month thereafter until the final payment due on April 1, 2011. The Additional Minimum Rent shall be payable to
Lessor in the same manner and location as the Minimum Rent.

 

2.2           The
first sentence of Section 15.2 of the Great Lakes Lease is amended by inserting after the word “thereafter” in the
second line thereof, the following phrase: “so long as such Event of Default is continuing.”

 

2.3           Section
15.2 of the Great Lakes Lease is amended by deleting the last full unnumbered paragraph thereof and substituting the following
new subsections (c), (d) and (e) therefor:

 

(c)          The
rights and remedies of Lessor under subsections (a) and (b) of this Section 15.2 are cumulative, and except as expressly provided
otherwise in Section 15.2(d) and Section 15.2(e) below, pursuit of any of the above remedies shall not preclude pursuit of any
other remedies prescribed in other sections of this Lease and any other remedies provided by law or equity. Forbearance by Lessor
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 such Event of Default.

 

(d)          Notwithstanding
anything to the contrary set forth in this Section 15.2 or elsewhere in this Lease, the remedies available to Lessor pursuant to
Section 15.2(b) above shall only be available upon the occurrence of a Special Default Event (as defined below). The parties specifically
agree that Lessor shall not be entitled to terminate this Lease if any Event of Default other than a Special Default Event shall
have occurred and be continuing. The parties further agree that notwithstanding anything to the contrary set forth in this Section
15.2 or elsewhere in this Lease, if an Event of Default under Section 15.1(f) has occurred and is continuing, the sole and exclusive
remedy of Lessor shall be to collect from Lessee all actual damages incurred by Lessor as a result of such Event of Default. As
used herein, the term “Special Default Event” means, individually and collectively, (i) the occurrence of an
Event of Default pursuant to Section 15.1 arising out of a default or breach of a Payment Obligation (as defined below) by Lessee,
(ii) the failure of Lessee to satisfy any final, unsecured and unappealable judgment arising out of this Lease which is rendered
by a court of competent jurisdiction. As used herein, the term “Payment Obligation” means any obligation from
time to time owing by Lessee under this Lease, which obligation can be satisfied with the payment of money, including any Rent,
fees, costs or charges that would accrue but for the provisions of U.S. Bankruptcy Code, after any bankruptcy or insolvency petition
is filed thereunder.

 

    	 	3	 

     

    

  

(e)          Notwithstanding
anything to the contrary set forth in this Section 15.2 or elsewhere in this Lease, so long as no Special Default Event has occurred
and is continuing, then the remedies available to Lessor hereunder upon the occurrence of an Event of Default related to Lessee’s
breach of the continuous operations covenant in Section 6.2(c) of this Lease shall be limited to the remedies described in Section
15.2(a) above (it being understood that in such instance, Lessee will cooperate with Lessor in its efforts to secure a sublease
for the Leased Property for use that is consistent with the Primary Intended Use, which cooperation by Lessee will include taking
the actions described in Section 35.8(c) of this Lease as to any sublessee).

 

2.4           Article
XIX of the Great Lakes Lease is re-titled as “ABANDONMENT; OPTION TO PURCHASE”.

 

2.5           Section
19.3 of the Great Lakes Lease is amended by making the current paragraph subsection (a) and the following subsection (b) is added
to Section 19.3 immediately following subsection (a):

 

(b)          In
the event Lessee elects to purchase the Leased Properly pursuant to Section 19.4, then on the last day of the Term, or the next
Business Day if the last day of the Term is not a Business Day, Lessor shall, upon receipt from Lessee of the purchase price provided
for in Section 19.4 and any Rent or other sums then due and payable under this Lease (excluding the installment of Minimum Rent
due on the date of conveyance), convey the Leased Property to Lessee on such date in accordance with the provisions of Article
XVII and this Lease shall thereupon terminate as to the Leased Property.

 

2.6           The
Great Lakes Lease is hereby amended by adding the following Section 19.4 immediately following the end of Section 19.3:

 

19.4         Option
to Purchase the Leased Property. So long as no Event of Default shall have occurred that is continuing, Lessee shall have
the option to purchase Lessor’s leasehold estate in the Leased Property under the Ground Lease pursuant to the terms and
conditions set forth in this Article XIX at the end of the Fixed Term and at the end of each Extended Term upon at least 180 days’
prior written notice to Lessor for a purchase price equal to the greater of the following (such greater amount referred to herein
as the “Minimum Repurchase Price”): (i) the Fair Market Value Purchase Price or (ii) the sum of (A) the amount
set forth as the “Floor Amount” for the Great Lakes Lease on Schedule 2 attached hereto plus (B) the
cost of any Capital Additions to the Leased Property financed by Lessor pursuant to the terms of Article IX; plus (C) any
sums disbursed by Lessor or its Affiliates, with the prior written consent of Lessee, in connection with the purchase of the fee
interest in the Leased Property from the Ground Landlord (as defined below); provided that the foregoing option to purchase shall
be subject and subordinate to the right of first refusal in favor of the Ground Landlord pursuant to Section 8 of the Ground Lease.
The option to purchase granted hereby (1) is subject to the prior written consent of the Ground Landlord and (2) will expire and
be of no further force and effect upon the occurrence of either of the following events: (i) the expiration of the Fixed Term
and each Extended Term or the earlier termination of this Lease or (ii) the exercise by the Ground Landlord of its option to purchase
the Facility set forth in Section 8 of the Ground Lease. As used herein, the term “Ground Landlord” shall mean
the lessor under the Ground Lease, Regional Medical Services, Inc. as attorney-in- fact for Bayside Development Corporation, a
Pennsylvania corporation, and its successors and assigns.

 

    	 	4	 

     

    

 

2.7           Sections
24(a) and 24(b) are hereby deleted in their entirety and the following Sections (a) and (b) are substituted therefor:

 

(a)          At
any time and from time to time within 20 days following written request by Lessor, Lessee will furnish to Lessor an Officer’s
Certificate certifying that this Lease is unmodified and in full force and effect (or that this Lease is in full force and effect
as modified and setting forth the modifications) and the dates to which the Rent has been paid. Any such Officer’s Certificate
furnished pursuant to this Article may be relied upon by Lessor and any prospective purchaser of the Leased Properly.

 

(b)          Unless
specifically prohibited at any time by a Legal Requirement, Lessee will furnish, or cause to be furnished, the following information
to Lessor within the periods indicated; provided that Lessor shall keep confidential items furnished hereunder which are not generally
available to the public:

 

(i)          within
30 days after the end of each Fiscal Year, an Officer’s Certificate stating that to the best of the signer’s knowledge
and belief, Lessee is not in default in the performance or observance of any of the terms of this Lease or any loan or credit facility
which by its terms would permit an outstanding balance equal to or greater than $50,000,000, or, if Lessee shall be in default,
specifying all such defaults, the nature thereof and the steps being taken to remedy the same;

 

(ii)         within
30 days after the end of each calendar quarter, unaudited Facility Financial Statements for such calendar quarter, certified by
Lessee to Lessor;

 

(iii)        within
90 days after the end of each Fiscal Year, unaudited Facility Financial Statements for the most recently ended Fiscal Year certified
by Lessee to Lessor,

 

    	 	5	 

     

    

 

(iv)        within
150 days after written request by Lessor following the occurrence of an Event of Default, audited financial statements of Lessee,
it being understood that the public availability of Lessee’s audited financial statements on a source such as EDGAR shall
constitute satisfaction of Lessee’s obligation to cause such statements to be furnished hereunder; and

 

(v)         with
reasonable promptness, such other information respecting the operation of the Facility and the financial condition, affairs and
properties of Lessee (other than audited financial statements) as Lessor may reasonably request from time to time or as may be
required by a Facility Mortgagee.

 

2.8           Article
XXXIV is hereby deleted in its entirety, and the following Article XXXIV is substituted therefor:

 

34.1         Options
to Extend the Term. So long as no Event of Default shall have occurred and be continuing, Lessee is hereby granted the right
to extend the Term of this Lease for two consecutive five-year periods (each period, an “Extended Term”) for
a maximum possible Term of 24 years and approximately 4 months, by giving written notice to Lessor of each such extension not later
than August 31, 2008, for the first Extended Term and August 31, 2013 for the second Extended Term; provided, however, the Term
of this Lease shall not extend beyond the term of the Ground Lease (Lessor acknowledging the requirement that it obtain an extension
of the term of the Ground Lease as set forth below) unless Lessor purchases the fee interest in the Leased Property from Ground
Landlord, and subject, however, to the provisions of Section 13.7 hereof. Lessor agrees to use its best efforts to provide Lessee
with prior written notice at least 90 days prior to the foregoing dates. Upon receipt of the notice to extend from Lessee, Lessor
shall provide the notice necessary to extend the term of the Ground Lease pursuant to the terms of Section 2 of the Ground Lease.
Lessee may not exercise its option for more than one Extended Term at a time. Lessor hereby acknowledges that Lessee has timely
exercised its renewal option for the first Extended Term and that such Extended Term will commence on August 1, 2009. During each
Extended Term, all of the terms and conditions of this Lease shall continue in full force and effect, except that the Minimum Rent
shall be determined in accordance with Section 34.2 or 34.3, as the case maybe.

 

34.2         Minimum
Rent for the First Year of the First Extended Term. The Minimum Rent for the first lease year of the first Extended Term shall
be $1,550,000, as such Minimum Rent shall continue to be adjusted throughout such Extended Term pursuant to Section 2.1(b) hereof.

 

34.3         Minimum
Rent for the First Year of any other Extended Term. The Minimum Rent for the first lease year of the second Extended Term shall
be the greater of (i) the Fair Market Rental Value on the first day of such Extended Term, or (ii) 90% of the Minimum Rent in effect
immediately before the beginning of such Extended Term, as such Minimum Rent shall continue to be adjusted throughout each such.
Extended Term pursuant to Section 2.1(b) hereof.

 

    	 	6	 

     

    

  

2.9           
Section 35.8 of the Great Lakes Lease is hereby deleted in its entirety, and the following Section 35.8 is substituted therefor:

 

35.8        Transfer
of Operations and Licenses.

 

(a)          Operation
of Facility at End of Term. Upon the expiration of the Term or upon, the earlier termination of this Lease and if requested
by Lessor, Lessee agrees to (i) continue to manage the operations of the Facility as manager and not as lessee for a period of
up to 180 days, (ii) remit to Lessor on a monthly basis the ‘‘rent” for the Facility in an amount equal to the
cash flow after payment of all expenses (including the management fee) for the Facility (pro-rated through the date of transfer
to a new operator), and (iii) provide Lessor with written reports regarding the results of operations for the Facility on a monthly
basis. Lessor agrees that it will use all reasonable efforts to prepare to operate the Facility upon expiration or earlier termination
of the Term so that the management assistance of Lessee is not needed by Lessor hereunder.

 

(b)          Management
Fee. In the event that Lessee is required to manage the Facility pursuant to Section 35.8(a) above, Lessor agrees to pay Lessee
a monthly management fee equal to the greater of (i) 5% of the gross operating revenues of the Facility (after Medicaid, Medicare
and other contractual adjustments) for said month or (ii) $100,000; provided, however, that if Lessee is required to manage the
Facility pursuant to Section 35.8(a) as a result of a Special Default Event hereunder, the monthly management fee to be paid by
Lessor to Lessee under this Section 35.8(b) will be 5% of the gross operating revenues of the Facility (after Medicaid, Medicare
and other contractual adjustments) for said month.

 

(c)          Cooperation.
At the end of the Term or any early expiration of this Lease, Lessee agrees to cooperate with Lessor in the transfer of the financial
responsibility and operations of the Facility to a new operator or operators, including the good faith negotiation, execution,
and delivery of such operations transfer agreements, assignment agreements and bills of sale as are reasonably necessary to effect
such transfer. In conjunction with such cooperation, Lessee shall take all action reasonably necessary to effect or useful in
effecting the transfer to Lessor’s nominee of any certificate of need or license from the Pennsylvania Department of Health
Services or other governmental authority regulating the use of the Facility and all service contracts, which, in either case,
may be necessary or useful in the operation of the Facility by Lessor’s nominee for the Primary Intended Use.

 

    	 	7	 

     

    

  

2.10         Section
36.1 of the Great Lakes Lease is amended by adding the following definition for “Facility Financial Statements” immediately
following the definition of “Facility:” “Facility Financial Statements” means for the Facility,
as to a specific period, the Detailed Income Statement containing revenue and expenses (in reasonable detail), EBITDA, EBITDAR
and operating statistics (to include, at a minimum, inpatient days, discharges, outpatient visits and licensed beds), all presented
for the period, quartar-to-date and year-to-date.

 

2.11         Section
36.1 of the Great Lakes Lease is hereby amended by deleting the definitions of “Fair Market Rental Value,” “Minimum
Repurchase Price” and “Rent” and substituting the following definitions of “Fair Market Rental Value”,
“Minimum Repurchase Price” and “Rent”, respectively, therefor:

 

“Fair
Market Rental Value” means the fair market rental value of the Leased Property or any Substitute Property determined
as of the date of the appraisal pursuant to Article XXVIII, (a) assuming the same is unencumbered by this Lease, and (b) determined
in accordance with the appraisal procedures set forth in Article XXVIII or in such other manner as shall be mutually acceptable
to Lessor and Lessee and (c) not taking into account any reduction in value resulting from an indebtedness to which the Leased
Property or Substitute Property may be subject and (d) not including the value of any Capital Additions to the Leased Property
financed by Lessee pursuant to the terms of Article IX.

 

“Minimum
Repurchase Price” has the meaning set forth in Section 19.4

 

“Rent”
means, collectively, the Minimum Rent, the Replacement Minimum Rent, the Supplemental Rent, the Additional Minimum Rent and
the Additional Charges.

 

3.          Amendments
and Agreements to the Mechanicsburg Lease. The Mechanicsburg Lease is confirmed and amended, effective as of the Effective
Date, as follows:

 

3.1           The
following Section 2.7 is added to the Mechanicsburg Lease following Section 2.6:

 

2.7           Additional
Minimum Rent. Lessee shall pay to Lessor as additional minimum rent, without notice, demand, set off or counterclaim, in advance,
the annual sum set forth on Schedule 1
attached hereto under the heading “Additional Minimum Rent”
for the Mechanicsburg Lease (the “Additional Minimum Rent”), payable in advance in equal, consecutive
monthly installments, beginning with the first payment due on April 1, 2009, and continuing on the first day of each calendar
month thereafter until the final payment due on April 1, 2011. The Additional Minimum Rent shall be payable to Lessor in the same
manner and location as the Minimum Rent.

 

3.2           
The first sentence of Section 15.2 of the Mechanicsburg Lease is amended by inserting after the word “thereafter”
in the second line thereof, the following phrase: “so long as such Event of Default is continuing.”

 

    	 	8	 

     

    

 

3.3           Section
15.2 of the Mechanicsburg Lease is amended by deleting the last full unnumbered paragraph thereof and substituting the following
new subsections (c), (d) and (e) therefor:

 

(c)          The
rights and remedies of Lessor under subsections (a) and (b) of this Section 15.2 are cumulative, and except as expressly provided
otherwise in Section 15.2(d) and Section 15.2(e) below, pursuit of any of the above remedies shall not preclude pursuit of any
other remedies prescribed in other sections of this Lease and any other remedies provided by law or equity. Forbearance by Lessor
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 such Event of Default.

 

(d)          Notwithstanding
anything to the contrary set forth in this Section 15.2 or elsewhere in this Lease, the remedies available to Lessor pursuant
to Section 15.2(b) above shall only be available upon the occurrence of a Special Default Event (as defined below). The parties
specifically agree that Lessor shall not be entitled to terminate this Lease if any Event of Default other than a Special Default
Event shall have occurred and be continuing. The parties further agree that
notwithstanding anything to the contrary set forth in this Section 15.2 or elsewhere in this Lease, if an Event of Default under
Section 15.1(f) has occurred and is continuing, the sole and exclusive remedy of Lessor shall be to collect from Lessee all actual
damages incurred by Lessor as a result of such Event of Default. As used herein, the term “Special Default Event”
means, individually and collectively, (i) the occurrence of an Event of Default pursuant to Section 15.1 arising out of a
default or breach of a Payment Obligation (as defined below) by Lessee, (ii) the failure of Lessee to satisfy any final, unsecured
and unappealable judgment arising out of this Lease which is rendered by a court of competent jurisdiction. As used herein, the
term “Payment Obligation” means any obligation from time to time owing by Lessee under this Lease, which obligation
can be satisfied with the payment of money, including any Rent, fees, costs or charges that would accrue but for the provisions
of U.S. Bankruptcy Code, after any bankruptcy or insolvency petition is filed thereunder.

 

(e)          Notwithstanding
anything to the contrary set forth in this Section 15.2 or elsewhere in this Lease, so long as no Special Default Event has occurred
and is continuing, then the remedies available to Lessor hereunder upon the occurrence of an Event of Default related to Lessee’s
breach of the continuous operations covenant in Section 6.2(c) of this Lease shall be limited to the remedies described in Section
15.2(a) above (it being understood that in such instance, Lessee will cooperate with Lessor in its efforts to secure a sublease
for the Leased Property for use that is consistent with the Primary Intended Use, which cooperation by Lessee will include taking
the actions described in Section 35.8(c) of this Lease as to any sublessee).

 

3.4           Article
XIX of the Mechanicsburg Lease is re-titled as “ABANDONMENT
OPTION TO PURCHASE”.

 

 

    	 	9	 

     

    

 

3.5           Section
19.3 of the Mechanicsburg Lease is amended by making the current paragraph subsection (a) and the following subsection (b) is
added to Section 19.3 immediately following subsection (a):

 

(b)          In
the event Lessee elects to purchase the Leased Property pursuant to Section 19.4, then on the last day of the Term, or the next
Business Day if the last day of the Term is not a Business Day, Lessor shall, upon receipt from Lessee of the purchase price provided
for in Section 19.4 and any Rent or other sums then due and payable under this Lease (excluding the installment of Minimum Rent
due on the date of conveyance), convey the Leased Property to Lessee on such date in accordance with the provisions of Article
XVII and this Lease shall thereupon terminate as to the Leased Property.

 

3.6           The
Mechaniesburg Lease is hereby amended by adding the following Section
19.4 immediately following the end of Section 19.3:

 

19.4         Option
to Purchase the Leased Property. So long as no Event of Default shall have occurred that is continuing, Lessee shall have
the option to purchase Lessor’s leasehold estate in the Leased Property under the Ground Lease pursuant to the terms and
conditions set forth in this Article XIX at the end of the Fixed Term and at the end of each Extended Term upon at least 180 days’
prior written notice to Lessor for a purchase price equal to the greater of the following (such greater amount referred to herein
as the “Minimum Repurchase Price”): (i) the Fair Market Value Purchase Price or (ii) the sum of (A) the amount
set forth as the “Floor Amount” for the Mechanicsburg Lease on Schedule
2 attached hereto plus
(B) the cost of any Capital Additions to the Leased Property financed by Lessor pursuant to the terms of Article IX plus
(C) any sums disbursed by Lessor or its Affiliates, with the prior written consent of Lessee, in connection with the
purchase of the fee interest in the Leased Property from the Ground Landlord (as defined below). The option to purchase granted
hereby (1) is subject to the prior written consent of the Ground Landlord and (2) will expire and be of no further force and effect
upon the expiration of the Fixed Term and each Extended Term or the earlier termination of this Lease. As used herein, the term
“Ground Landlord” shall mean the lessor under the Ground Lease, Healthland, Incorporated, a Pennsylvania corporation,
and its successors and assigns.

 

3.7           Sections
24(a) and 24(b) are hereby deleted in their entirely and the following Sections (a) and (b) are substituted therefor:

 

(a)          At
any time and from time to time within 20 days following written request by Lessor, Lessee will furnish to Lessor an Officer’s
Certificate certifying that this Lease is unmodified and in full force and effect (or that this Lease is in full force and effect
as modified and setting forth the modifications) and the dates to which the Rent has been paid. Any such Officer’s Certificate
furnished pursuant to this Article may be relied upon by Lessor and any prospective purchaser of the Leased Property.

 

    	 	10	 

     

    

 

(b)          Unless
specifically prohibited at any time by a Legal Requirement Lessee will furnish, or cause to be furnished, the following information
to Lessor within the periods indicated; provided that Lessor shall keep confidential items furnished hereunder which are not generally
available to the public:

 

(i)          within
30 days after the end of each Fiscal Year, an Officer’s Certificate stating that to the best of the signer’s
knowledge and belief, Lessee is not in default in the performance or observance of any of the terms of this Lease or any loan
or credit facility which by its terms would permit an outstanding balance equal to or greater than $50,000,000, or, if
Lessee shall be in default, specifying all such defaults, the nature thereof and the steps being taken to remedy the
same;

 

(ii)         within
30 days after the end of each calendar quarter, unaudited Facility Financial Statements for such calendar quarter, certified by
Lessee to Lessor,

 

(iii)        within
90 days after the end of each Fiscal Year, unaudited Facility Financial Statements for the most recently ended Fiscal Year certified
by Lessee to Lessor,

 

(iv)        within
150 days after written request by Lessor following the occurrence of an Event of Default, audited financial statements of Lessee,
it being understood that the public availability of Lessee’s audited financial statements on a source such as EDGAR shall
constitute satisfaction of Lessee’s obligation to cause such statements to be furnished hereunder, and

 

(v)         with
reasonable promptness, such other information respecting the operation of the Facility and the financial condition, affairs and
properties of Lessee (other than audited financial statements) as Lessor may reasonably request from time to time or as may be
required by a Facility Mortgagee.

 

3.8           Article XXXIV is hereby deleted in its
entirely, and the following Article XXXIV is substituted therefor:

 

34.1         Options
to Extend the Term. So long as no Event of Default shall have occurred and be continuing, Lessee is hereby granted the right
to extend the Term of this Lease for two consecutive five-year periods (each period, an “Extended Term”) for
a maximum possible Term of 25
years, by giving written notice to Lessor of each such extension not later than November 30, 2010, for the first
Extended Term and November 30, 2015, for the second Extended Term; provided, however, the Term of this Lease shall not extend
beyond the term of the Ground Lease (Lessor acknowledging the requirement that it obtain an extension of the term of the Ground
Lease as set forth below) unless Lessor purchases the fee interest in the Leased Property from Ground Landlord, and subject, however,
to the provisions of Section 13.7 hereof. Lessor agrees to use its best efforts to provide Lessee with prior written notice at
least 90 days prior to the foregoing dates. Upon receipt of the notice to extend from Lessee, Lessor shall provide the notice
necessary to extend the term of the Ground Lease pursuant to the terms of Section 2 of the Ground Lease. Lessee may not exercise
its option for more than one Extended Term at a time. During each Extended Term, all of the terms and conditions of this Lease
shall continue in full force and effect, except that the Minimum Rent shall be determined in accordance with Section 34.2 or 34.3,
as the case may be.

 

    	 	11	 

     

    

 

34.2         Minimum
Rent for the First Year of the First Extended Term. The Minimum Rent for the first lease year of the first Extended Term shall
be the greater of (i) the Fair Market Rental Value on the first day of such Extended Term, or (ii) 85% of the Minimum Rent in
effect at the end of the Fixed Term, as such Minimum
Rent shall continue to be adjusted throughout such Extended Term pursuant to Section 2.1(b) hereof

 

34.3         Minimum
Rent for the First Year of any other Extended Term. The Minimum Rent for the first lease year of the second Extended Term
shall be the greater of (i) the Fair Market Rental Value on the first day of such Extended Term, or (ii) 90% of the Minimum Rent
in effect immediately before the beginning of such Extended Term, as such Minimum Rent shall continue to be adjusted throughout
each such Extended Term pursuant to Section 2.1(b) hereof

 

3.9           Section
35.8 of the Mechanicsburg Lease is hereby deleted in its entirely, and the following Section 35.8 is substituted
therefor:

 

35.8         
Transfer of Operations and Licenses.

 

(a)          Operation
of Facility at End of Term. Upon the expiration of the Term or upon the earlier termination of this Lease and if
requested by Lessor, Lessee agrees to (i) continue to manage the operations of the Facility as manager and not as lessee for
a period of up to 180 days, (ii) remit to Lessor on a monthly basis the “rent” for the Facility in an amount
equal to the cash flow after payment of all expenses (including the management fee) for the Facility (pro-rated through the
date of transfer to a new operator), and (iii) provide Lessor with written reports regarding the results of operations for
the Facility on a monthly basis. Lessor agrees that it will use all reasonable efforts to prepare to operate the Facility
upon expiration or earlier termination of the Term so that the management assistance of Lessee is not needed by Lessor
hereunder.

 

(b)          Management
Fee. In the event that Lessee is required to manage the Facility pursuant to Section 35.8(a) above, Lessor agrees
to pay Lessee a monthly management fee equal to the greater of (i) 5% of the gross operating revenues of the Facility (after
Medicaid, Medicare and other contractual adjustments) for said month or (ii) $100,000; provided, however, that if Lessee is
required to manage the Facility pursuant to Section 35.8(a) as a result of a Special Default Event hereunder, the monthly
management fee to be paid by Lessor to Lessee under this Section 35.8(b) will be 5% of the gross operating revenues of the
Facility (after Medicaid, Medicare and other contractual adjustments) for said month.

 

    	 	12	 

     

    

 

(c)          Cooperation.
At the end of the Term or any early expiration of this Lease, Lessee agrees to cooperate with Lessor in the transfer of the financial
responsibility and operations of the Facility to a new operator or operators, including the good faith negotiation, execution,
and delivery of such operations transfer agreements, assignment agreements and bills of sale as are reasonably necessary to effect
such transfer. In conjunction with such cooperation, Lessee shall take all action reasonably necessary to effect or useful in effecting
the transfer to Lessor’s nominee’ of any certificate of need or license from the Pennsylvania Department of Health
Services or other governmental authority regulating the use of the Facility and all service contracts, which, in either case, may
be necessary or useful in the operation of the Facility by Lessor’s nominee for the Primary Intended Use.

 

3.10         Section
36.1 of the Mechanicsburg Lease is amended by adding the following definition for “Facility Financial Statements” immediately
following the definition of “Facility:”

 

“Facility
Financial Statements” means for the Facility, as to a specific period, the Detailed Income Statement containing revenue
and expenses (in reasonable detail), EBITDA, EBITDAR and operating statistics (to include, at a minimum, inpatient days, discharges,
outpatient visits and licensed beds), all presented for the period, quarter-to-date and year-to-date.

 

3.11         Section
36.1 of the Mechanicsburg Lease is hereby amended by deleting the definitions of “Fair Market Rental Value”, “Minimum
Repurchase Price” and “Rent” and substituting the following definitions of “Fair Market Rental Value”,
“Minimum Repurchase Price” and “Rent”, respectively, therefor:

 

“Fair
Market Rental Value” means the fair market rental value of the Leased Property or any Substitute Property determined
as of the date of the appraisal pursuant to Article XXVIII, (a) assuming the same is unencumbered by this Lease, and (b) determined
in accordance with the appraisal procedures set forth in Article XXVIII or in such other manner as shall be mutually acceptable
to Lessor and Lessee and (c) not taking into account any reduction in value resulting from an indebtedness to which the Leased
Property or Substitute Property may be subject and (d) not including the value of any Capital Additions to the Leased Property
financed by Lessee pursuant to the terms of Article IX.

 

“Minimum Repurchase Price”
has the meaning set forth in Section 19.4.

 

    	 	13	 

     

    

  

“Rent”
means, collectively, the Minimum Rent, the Replacement Minimum Rent, the Supplemental Rent, the Additional Minimum Rent and the
Additional Charges.

 

4.          Amendments
and Agreements to the Altoona Lease. The Altoona Lease is confirmed and amended, effective as of the Effective Date, as follows:

 

4.1           The
following Section 2.7 is added to the Altoona Lease following Section 2.6:

 

2.7           Additional
Minimum Rent. Lessee shall pay to Lessor as additional minimum rent, without notice, demand, set off or counterclaim, in advance,
the annual sum set forth on Schedule 1 attached hereto under the heading “Additional
Minimum Rent” for the Altoona Lease (the “Additional Minimum Rent”), payable in advance in equal,
consecutive monthly installments, beginning with the first payment due on April 1, 2009, and continuing on the first day of each
calendar month thereafter until the final payment due on April 1, 2011. The Additional Minimum Rent shall be payable to Lessor
in the same manner and location as the Minimum Rent.

 

4.2           The
first sentence of Section 15.2 of the Altoona Lease is amended by inserting after the word “thereafter” in the second
line thereof, the following phrase: “so long as such Event of Default is continuing.”

 

4.3           Section
15.2 of the Altoona Lease is amended by deleting the last full unnumbered paragraph thereof and substituting the following new
subsections (c), (d) and (e) therefor:

 

(c)          The
rights and remedies of Lessor under subsections (a) and (b) of this Section 15.2 are cumulative, and except as expressly provided
otherwise in Section 15.2(d) and Section 15.2(e) below, pursuit of any of the above remedies shall not preclude pursuit of any
other remedies prescribed in other sections of this Lease and any other remedies provided by law or equity. Forbearance by Lessor
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 such Event of Default.

 

(d)          Notwithstanding
anything to the contrary set forth in this Section 15.2 or elsewhere in this
Lease, the remedies available to Lessor pursuant to Section 15.2(b) above shall only be available upon the occurrence of a Special
Default Event (as defined below). The parties specifically agree that Lessor shall not be entitled to terminate this Lease if any
Event of Default other than a Special Default Event shall have occurred and be continuing. The parties further agree that notwithstanding
anything to the contrary set forth in this Section 15.2 or elsewhere in this Lease, if an Event of Default under Section 15.1(f)
has occurred and is continuing, the sole and exclusive remedy of Lessor shall be to collect from Lessee all actual damages incurred
by Lessor as a result of such Event of Default. As used herein, the term “Special Default Event” means, individually
and collectively, (i) the occurrence of an Event of Default pursuant to Section 15.1 arising out of a default or breach of a Payment
Obligation (as defined below) by Lessee, (ii) the failure of Lessee to satisfy any final, unsecured and unappealable judgment arising
out of this Lease which is rendered by a court of competent jurisdiction. As used herein, the term “Payment Obligation”
means any obligation from time to time owing by Lessee under this Lease, which obligation can be satisfied with the payment
of money, including any Rent, fees, costs or charges that would accrue but for the provisions of U.S. Bankruptcy Code, after any
bankruptcy or insolvency petition is filed thereunder.

 

    	 	14	 

     

    

  

(e)          Notwithstanding
anything to the contrary set forth in this Section 15.2 or elsewhere in this Lease, so long as no Special Default Event has occurred
and is continuing, then the remedies available to Lessor hereunder upon the occurrence of an Event of Default related to Lessee’s
breach of the continuous operations covenant in Section 6.2(c) of this Lease shall be limited to the remedies described in Section
15.2(a) above (it being understood that in such instance, Lessee will cooperate with Lessor in its efforts to secure a sublease
for the Leased Property for use that is consistent with the Primary Mended Use, which cooperation by Lessee will include taking
the actions described in Section . 35.8(c) of this Lease as to any sublessee).

 

4.4           Sections
24(a) and 24(b) are hereby deleted in their entirely and the following Sections (a) and (b) are substituted therefor:

 

(a)          At
any time and from time to time within 20 days following written request by Lessor, Lessee will furnish to Lessor an Officer’s
Certificate certifying that this Lease is unmodified and in fell force and effect (or that this Lease is in full force and effect
as modified and setting forth the modifications) and the dates to which the Rent has been paid. Any such Officer’s Certificate
furnished pursuant to this Article may be relied upon by Lessor and any prospective purchaser of the Leased Property.

 

(b)          Unless
specifically prohibited at any time by a Legal Requirement, Lessee will furnish, or cause to be furnished, the following information
to Lessor within the periods indicated; provided that Lessor shall keep confidential items furnished hereunder which are not generally
available to the public:

 

(i)          within
30 days after the end of each Fiscal Year, an Officer’s Certificate stating that to the best of the signer’s knowledge
and belief, Lessee is not in default in the performance or observance of any of the terms of this Lease or any loan or credit facility
which by its terms would permit an outstanding balance equal to or greater than $50,000,000, or, if Lessee shall be in default,
specifying all such defaults, the nature thereof and the steps being taken to remedy the same;

 

    	 	15	 

     

    

 

(ii)         within
30 days after the end of each calendar quarter, unaudited Facility Financial Statements for such calendar quarter, certified by
Lessee to Lessor;

 

(iii)          within
90 days after the end of each Fiscal Year, unaudited Facility Financial Statements for the most recently ended Fiscal Year certified
by Lessee to Lessor,

 

(iv)        within
150 days after written request by Lessor following the occurrence of an Event of Default, audited financial statements of Lessee,
it being understood that the public availability of Lessee’s audited financial statements on a source such, as EDGAR shall
constitute satisfaction of Lessee’s obligation to cause such, statements to be furnished hereunder, and

 

(v)         with
reasonable promptness, such other information respecting the operation of the Facility and the financial condition, affairs and
properties of Lessee (other than audited financial statements) as Lessor may reasonably request from time to time or as may be
required by a Facility Mortgagee.

 

4.5           Section
35.8 of the Altoona Lease is hereby deleted in its entirety, and the following Section 35.8 is substituted therefor;

 

35.8         Transfer
of Operations and Licenses.

 

(a)          Operation
of Facility at End of Term. Upon the expiration of the Term or upon the earlier termination of this Lease and if requested
by Lessor, Lessee agrees to (i) continue to manage the operations of the Facility as manager and not as lessee for a period of
up to 180 days, (ii) remit to Lessor on a monthly basis the “rent” for the Facility in an amount equal to the cash
flow after payment of all expenses (including the management fee) for the Facility (pro-rated through the date of transfer to a
new operator), and (iii) provide Lessor with written reports regarding the results of operations for the Facility on a monthly
basis. Lessor agrees that it will use all reasonable efforts to prepare to operate the Facility upon expiration or earlier termination
of the Term so that the management assistance of Lessee is not needed by Lessor hereunder.

 

(b)          Management
Fee. In the event that Lessee is required to manage the Facility pursuant to Section 35.8(a) above, Lessor agrees to pay Lessee
a monthly management fee equal to the greater of (i) 5% of the gross operating revenues of the Facility (after Medicaid, Medicare
and other contractual adjustments) for said month or (ii) $100,000; provided, however, that if Lessee is required to manage the
Facility pursuant to Section 35.8(a) as a result of a Special Default Event hereunder, the monthly management fee to be paid by
Lessor to Lessee under this Section 35.8(b) will be 5% of the gross operating revenues of the Facility (after Medicaid, Medicare
and other contractual adjustments) for said month.

 

    	 	16	 

     

    

 

(c)          Cooperation.
At the end of the Term or any early expiration of this Lease, Lessee agrees to cooperate with Lessor in the transfer of the financial
responsibility and operations of the Facility to a new operator or operators, including the good faith negotiation, execution,
and delivery of such operations transfer agreements, assignment agreements and bills of sale as are reasonably necessary to effect
such transfer. In conjunction with such cooperation, Lessee shall take all action reasonably necessary to effect or useful in effecting
the transfer to Lessor’s nominee of any certificate of need or license from the Pennsylvania Department of Health Services
or other governmental authority regulating the use of the Facility and all service contracts, which, in either case, may be necessary
or useful in the operation of the Facility by Lessor’s nominee for the Primary Intended Use.

 

4.6           Section
36.1 of the Altoona Lease is amended by adding the following definition for “Facility Financial Statements” immediately
following the definition of “Facility.”

 

“Facility
Financial Statements” means for the Facility, as to a specific period, the Detailed Income Statement containing revenue
and expenses (in reasonable detail), EBITDA, EBITDAR and operating statistics (to include, at a minimum, inpatient days, discharges,
outpatient visits and licensed beds), all presented for the period, quarter-to-date and year-to-date.

 

4.7           Section
36.1 of the Altoona Lease is hereby amended by deleting the definitions of “Fair Market Rental Value” and ‘‘Rent”
and substituting the following definitions of “Fair Market Rental Value” and “Rent”, respectively, therefor:

 

“Fair
Market Rental Value” means the fair market rental value of the leased Property or any Substitute Property determined
as of the date of the appraisal pursuant to Article XXVIII, (a) assuming the same is unencumbered by this Lease, and (b) determined
in accordance with the appraisal procedures set forth in Article XXVIII or in such other manner as shall be mutually acceptable
to Lessor and Lessee and (c) not taking into account any reduction in value resulting from an indebtedness to which the Leased
Property or Substitute Property may be subject and (d) not including the value of any Capital Additions to the Leased Property
financed by Lessee pursuant to the terms of Article IX.

 

“Rent”
means, collectively, the Minimum Rent, the Replacement Minimum Rent, the Supplemental Rent, the Additional Minimum Rent and the
Additional Charges.

 

5.          Amendments
and Agreements to the Pittsburgh Lease. The Pittsburgh Lease is confirmed and amended, effective as of the Effective Date,
as follows:

 

5.1          The following Section
2.7 is added to the Pittsburgh Lease following Section 2.6:

 

    	 	17	 

     

    

 

2.7           Additional
Minimum Rent. Lessee shall pay to Lessor as additional minimum rent, without notice, demand, set off or counterclaim, in
advance, the annual sum set forth on Schedule 1 attached hereto under the heading “Additional Minimum Rent”
for the Pittsburgh Lease (the “Additional Minimum Rent”), payable in advance in equal, consecutive monthly
installments, beginning with the first payment due on April 1, 2009, and continuing on the first day of each calendar month thereafter
until the final payment due on April 1, 2011. The Additional Minimum Rent shall be payable to Lessor in the same manner and location
as the Minimum Rent.

 

5.2           The
fust sentence of Section 15.2 of the Pittsburgh Lease is amended by inserting after the word “thereafter” in the second
line thereof, the following phrase: “so long as such Event of Default is continuing.”

 

5.3           Section
15.2 of the Pittsburgh Lease is amended by deleting the last full unnumbered paragraph thereof and substituting the following new
subsections (c), (d) and (e) therefor:

 

(c)          The
rights and remedies of Lessor under subsections (a) and (b) of this Section 15.2 are cumulative, and except as expressly provided
otherwise in Section 15.2(d) and Section 15.2(e) below, pursuit of any of the above remedies shall not preclude pursuit of any
other remedies prescribed in other sections of this Lease and any other remedies provided by law or equity. Forbearance by Lessor
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 such Event of Default.

 

(d)          Notwithstanding
anything to the contrary set forth in this Section 15.2 or elsewhere in this Lease, the remedies available to Lessor pursuant to
Section 15.2(b) above shall only be available upon the occurrence of a Special Default Event (as defined below). The parties specifically
agree that Lessor shall not be entitled to terminate this Lease if any Event of Default other than a Special Default Event shall
have occurred and be continuing. The parties further agree that notwithstanding anything to the contrary set forth in this Section
15.2 or elsewhere in this Lease, if an Event of Default under Section 15.1(f) has occurred and is continuing, the sole and exclusive
remedy of Lessor shall be to collect from Lessee all actual damages incurred by Lessor, as a result of such Event of Default. As
used herein, the term “Special Default Event” means, individually and collectively, (i) the occurrence of an
Event of Default pursuant to Section 15.1 arising out of a default or breach of a Payment Obligation (as defined below) by Lessee,
(ii) the failure of Lessee to satisfy any final, unsecured and unappealable judgment arising out of this Lease which is rendered
by a court of competent jurisdiction. As used herein, the term “Payment Obligation’’ means any obligation
from time to time owing by Lessee under this Lease, which obligation can be satisfied with the payment of money, including any
Rent, fees, costs or charges that would accrue but for the provisions of U.S. Bankruptcy Code, after any bankruptcy or insolvency
petition is filed thereunder.

 

    	 	18	 

     

    

 

(e)          Notwithstanding
anything to the contrary set forth in this Section 15.2 or elsewhere in this Lease, so long as no Special Default Event has occurred
and is continuing, then the remedies available to Lessor hereunder upon the occurrence of an Event of Default related to Lessee’s
breach of the continuous operations covenant in Section 6.2(c) of this Lease shall be limited to the remedies described, in Section
15.2(a) above (it being understood that in such instance, Lessee will cooperate with Lessor in its efforts to secure a sublease
for the Leased Properly for use that is consistent with the Primary Intended Use, which cooperation by Lessee will include taking
the actions described in Section 3 5.8(c) of this Lease as to any sublessee).

 

5.4           Article
19 of the Pittsburgh Lease is re-titled as “ABANDONMENT; OPTION TO PURCHASE”.

 

5.5           Section
19.3 of the Pittsburgh Lease is amended by making the current paragraph subsection (a) and the following subsection (b) is added
to Section 19.3 immediately following subsection (a):

 

(b)          In
the event Lessee elects to purchase the Leased Property pursuant to Section 19.4, then on the last day of the Term, or the next
Business Day if the last day of the Term is not a Business Day, Lessor shall, upon receipt from Lessee of the purchase price provided
for in Section 19.4 and any Rent or other sums then due and payable under this Lease (excluding the installment of Minimum Rent
due on the date of conveyance), convey the Leased Property to Lessee on such date in accordance with the provisions of Article
17 and this Lease shall thereupon terminate as to the Leased Property.

 

5.6           The
Pittsburgh Lease is hereby amended by adding the following Section 19.4 immediately following the end of Section 19.3:

 

19.4         Option
to Purchase the Leased Property. So long as no Event of Default shall have occurred that is continuing, Lessee shall have
the option to purchase Lessor’s leasehold estate in the Leased Property under the Ground Lease pursuant to the terms and
conditions set forth in this Article 19 at the end of the Initial Term and at the end of each Extended Term upon at least 180
days’ prior written notice to Lessor for a purchase price equal to the greater of the following (such greater amount referred
to herein as the “Minimum Repurchase Price”): (i) the Fair Market Value Purchase Price or (ii) the sum of (A)
the amount set forth as the “Floor Amount” for the Pittsburgh Lease on Schedule 2 attached hereto plus
(B) the cost of any Capital Additions to the Leased Property financed by Lessor pursuant to the terms of Article 9 plus
(C) any sums disbursed by Lessor or its Affiliates, with the prior written consent of Lessee, in connection with the purchase
of the fee interest in the Leased Property from the Ground Landlord (as defined below). The option to purchase granted hereby
(1) is subject to the prior written consent of the Ground Landlord mid (2) will expire and be of no further force and effect upon
the expiration of the Initial Term and each Extended Term or the earlier termination of this Lease. As used herein, the term “Ground
Landlord” shall mean the lessor under the Ground Lease, Capital Region. Investments, Inc., a Pennsylvania corporation,
and its successors and assigns.

 

    	 	19	 

     

    

 

5.7           Sections
24(a) and 24(b) are hereby deleted in their entirety and the following Sections (a) and (b) are substituted therefor:

 

(a)          At
any time and from time to time within 20 days following written request by Lessor, Lessee will furnish to Lessor an Officer’s
Certificate certifying that this Lease is unmodified and in full force and effect (or that this Lease is in full force and effect
as modified and setting forth the modifications) and the dates to which the Rent has been paid. Any such Officer’s Certificate
furnished pursuant to this Article may be relied upon by Lessor and any prospective purchaser of the Leased Properly.

 

(b)          Unless
specifically prohibited at any time by a Legal Requirement, Lessee will furnish, or cause to be furnished, the following information
to Lessor within the periods indicated; provided that Lessor shall keep confidential items furnished hereunder which are not generally
available to the public:

 

(i)          within
30 days after the end of each Fiscal Year, an Officer’s Certificate stating that to the best of the signer’s knowledge
and belief, Lessee is not in default in the performance or observance of any of the terms of this Lease or any loan or credit facility
which by its terms would permit an outstanding balance equal to or greater than $50,000,000, or, if Lessee shall be in default,
specifying all such defaults, the nature thereof and the steps being taken to remedy the same;

 

(ii)         within
30 days after the end of each calendar quarter, unaudited Facility Financial Statements for such calendar quarter, certified by
Lessee to Lessor;

 

(iii)        within
90 days after the end of each Fiscal Year, unaudited Facility Financial Statements for the most recently ended Fiscal Year certified
by Lessee to Lessor;

 

(iv)        within
150 days after written request by Lessor following the occurrence of an Event of Default, audited financial statements of Lessee,
it being understood that the public availability of Lessee’s audited financial statements on a source such as EDGAR shall
constitute satisfaction of Lessee’s obligation to cause such statements to be furnished hereunder; and

 

(v)         with
reasonable promptness, such other information respecting the operation of the Facility and the financial condition, affairs and
properties of Lessee (other than audited financial statements) as Lessor may reasonably request from time to time or as may be
required by a Facility Mortgagee.

 

    	 	20	 

     

    

 

5.8           Article
34 is hereby deleted in its entirety, and the following Article 34 is substituted therefor:

 

34.1         Options
to Extend the Term. So long as no Event of Default shall have occurred and be continuing, Lessee is hereby granted the right
to extend the Term of this Lease for three consecutive five-year periods (each period, an “Extended Term”) for
a maximum possible Term of 30 years, by giving written notice to Lessor of each such extension not later than January 29, 2012,
for the first Extended Term and January 29, 2017, for the second Extended Term and January 29, 2022, for the third Extended Term;
provided, however, the Term of this Lease shall not extend beyond the term of the Ground Lease (Lessor acknowledging the requirement
that it obtain an extension of the term of the Ground Lease as set forth below) unless Lessor purchases the fee interest in the
Leased Property from Ground Landlord, and subject, however, to the provisions of Section 13.7 hereof. Lessor agrees to use its
best efforts to provide Lessee with prior written notice at least 90 days prior to the foregoing dates. Upon receipt of the notice
to extend from Lessee, Lessor shall provide the notice necessary to extend the term of the Ground Lease pursuant to the terms of
Section 2 of the Ground Lease; provided that Lessee may not exercise its option for more than one Extended Term at a time. During
each Extended Term, all of the terms and conditions of this Lease shall continue in full force and effect, except that the Minimum
Rent shall be determined in accordance with Section 34.2 or 34.3, as the case may be.

 

34.2         Minimum
Rent for the First Year of the First Extended Term. The Minimum Rent for the first lease year of the first Extended Term shall
be the greater of (i) the Fair Market Rental Value on the first day of such Extended Term, or (ii) 85% of the Minimum Rent in effect
at the end of the Initial Term, as such Minimum Rent shall continue to be adjusted throughout such Extended Term pursuant to Section
2.1(b) hereof.

 

34.3         Minimum
Rent for the First Year of any other Extended Term. The Minimum Rent for the first lease year of the second and third Extended
Terms shall be the greater of (i) the Fair Market Rental Value on the first day of such Extended Term, or (ii) 90% of the Minimum
Rent in effect immediately before the beginning of each such Extended Term, as such Minimum Rent shall continue to be adjusted
throughout each such Extended Term pursuant to Section 2.1(b) hereof.

 

5.9           Section
35.8 of the Pittsburgh Lease is hereby deleted in its entirety, and the following Section 35.8 is substituted therefor:

 

35.8         Transfer
of Operations and Licenses.

 

    	 	21	 

     

    

 

(a)          Operation
of Facility at End of Term. Upon the expiration of the Term or upon the earlier termination of this Lease and if requested
by Lessor, Lessee agrees to (i) continue to manage the operations of the Facility as manager and not as lessee for a period of
up to 180 days, (ii) remit to Lessor on a monthly basis the “rent” for the Facility in an amount equal to the cash
flow after payment of all expenses (including the management fee) for the Facility (pro-rated through the date of transfer to a
new operator), and (iii) provide Lessor with written reports regarding the results of operations for the Facility on a monthly
basis. Lessor agrees that it will use all reasonable efforts to prepare to operate the Facility upon expiration or earlier termination
of the Term so that the management assistance of Lessee is not needed by Lessor hereunder.

 

(b)          Management
Fee. In the event that Lessee is required to manage the Facility pursuant to Section 35.8(a) above, Lessor agrees to pay Lessee
a monthly management fee equal to the greater of (i) 5% of the gross operating revenues of the Facility (after Medicaid, Medicare
and other contractual adjustments) for said month or (ii) $100,000; provided, however, that if Lessee is required to manage the
Facility pursuant to Section 35.8(a) as a result of a Special Default Event hereunder, the monthly management fee to be paid by
Lessor to Lessee under this Section 35.8(b) will be 5% of the gross operating revenues of the Facility (after Medicaid, Medicare
and other contractual adjustments) for said month.

 

(c)          Cooperation.
At the end of the Term or any early expiration of this Lease, Lessee agrees to cooperate with Lessor in the transfer of the financial
responsibility and operations of the Facility to a new operator or operators, including the good faith negotiation, execution,
and delivery of such operations transfer agreements, assignment agreements and bills of sale as are reasonably necessary to effect
such transfer. In conjunction with such cooperation, Lessee shall take all action reasonably necessary to effect or useful in effecting
the transfer to Lessor’s nominee of any certificate of need or license from the Pennsylvania Department of Health Services
or other governmental authority regulating the use of the Facility and all service contracts, which, in either case, may be necessary
or useful in the operation of the Facility by Lessor’s nominee for the Primary Intended Use.

 

5.10         Section
36.1 of the Pittsburgh Lease is amended by adding the following definition for “Facility Financial Statements” immediately
following the definition of “Facility: “

 

“Facility Financial Statements”
means for the Facility, as to a specific period, the Detailed Income Statement containing revenue and expenses (in reasonable detail),
EBITDA, EBITDAR and operating statistics (to include, at a minimum, inpatient days, discharges, outpatient visits and licensed
beds), all presented for the period, quaxter-to-date and year-to-date.

 

5.11         Section
36.1 of the Pittsburgh Lease is hereby amended by deleting the definitions of “Fair Market Rental Value”, “Minimum
Repurchase Price” and “Rent” and substituting the following definitions of “Fair Market Rental Value”,
“Minimum Repurchase Price” and “Rent”, respectively, therefor:

 

    	 	22	 

     

    

 

“Fair
Market Rental Value” means the fair market rental value of the Leased Property or any Substitute Property determined
as of the date of the appraisal pursuant to Article 28, (a) assuming the same is unencumbered by this Lease, and (b) determined
in accordance with the appraisal procedures set forth in Article 28 or in such other manner as shall be mutually acceptable to
Lessor and Lessee and (c) not taking into account any reduction in value resulting from an indebtedness to which the Leased Property
or Substitute Property may be subject and (d) not including the value of any Capital Additions to the Leased Property financed
by Lessee pursuant to the terms of Article 9.

 

“Minimum
Repurchase Price” has the meaning set forth in Section 19.4.

 

“Rent”
means, collectively, the Minimum Rent, the Replacement Minimum Rent, the Supplemental Rent, the Additional Minimum Rent and the
Additional Charges.

 

6.          Amendments
and Agreements to the Montgomery Lease. The Montgomery Lease is confirmed and amended, effective as of the Effective Date,
as follows:

 

6.1           The
following Section 2.7 is added to the Montgomery Lease following Section 2.6:

 

2.7           Additional
Minimum Rent. Lessee shall pay to Lessor as additional minimum rent, without notice, demand, set off or counterclaim, in advance,
the annual sum set forth on Schedule 1 attached hereto under the heading “Additional Minimum Rent” for the Montgomery
Lease (the “Additional Minimum Rent”), payable in advance in equal, consecutive monthly installments, beginning
with the first payment due on April 1, 2009, and continuing on the first day of each calendar month thereafter until the final
payment due on April 1, 2011. The Additional Minimum Rent shall be payable to Lessor in the same manner and location as the Minimum
Rent.

 

6.2           The
first sentence of Section 15.2 of the Montgomery Lease is amended by inserting after the word “thereafter” in the second
line thereof, the following phrase: “so long as such Event of Default is continuing.”

 

6.3           Section
15.2 of the Montgomery Lease is amended by deleting the last full unnumbered paragraph thereof and substituting the following new
subsections (c), (d) and (e) therefor:

 

(c)          The
rights and remedies of Lessor under subsections (a) and (b) of this Section 15.2 are cumulative, and except as expressly provided
otherwise in Section 15.2(d) and Section 15.2(e) below, pursuit of any of the above remedies shall not preclude pursuit of any
other remedies prescribed in other sections of this Lease and any other remedies provided by law or equity. Forbearance by Lessor
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 such Event of Default.

 

    	 	23	 

     

    

 

(d)          Notwithstanding
anything to the contrary set forth in this Section 15.2 or elsewhere in this Lease, the remedies available to Lessor pursuant to
Section 15.2(b) above shall only be available upon the occurrence of a Special Default Event (as defined below). The parties specifically
agree that Lessor shall not be entitled to terminate this Lease if any Event of Default other than a Special Default Event shall
have occurred and be continuing. The parties further agree that notwithstanding anything to the contrary set forth in this Section
15.2 or elsewhere in this Lease, if an Event of Default under Section 15.1(f) has occurred and is continuing, the sole and exclusive
remedy of Lessor shall he to collect from Lessee all actual damages incurred by Lessor as a result of such Event of Default. As
used herein, the term “Special Default Event” means, individually and coËectively, (i) the occurrence of
an Event of Default pursuant to Section 15.1 arising out of a default or breach of a Payment Obligation (as defined below) by Lessee,
(ii) the failure of Lessee or Guarantor to satisfy any final, unsecured and unappealable judgment arising out of this Lease or
the Guaranty which is rendered by a court of competent jurisdiction. As used herein, the term “Payment Obligation”
means any obligation from time to time owing by Lessee under this Lease, which obligation can be satisfied with the payment of
money, including any Rent, fees, costs or charges that would accrue but for the provisions of U.S. Bankruptcy Code, after any bankruptcy
or insolvency petition is filed thereunder.

 

(e)          Notwithstanding
anything to the contrary set forth in this Section 15.2 or elsewhere in this Lease, so long as no Special Default Event has occurred
and is continuing, then the remedies available to Lessor hereunder upon the occurrence of an Event of Default under Section 15.10
above that is continuing shall be limited to the remedies described in Section 15.2(a) above (it being understood that in such
instance, Lessee will cooperate with Lessor in its efforts to secure a sublease for the Leased Property for use that is consistent
with the Primary Intended Use, which cooperation by Lessee will include taking the actions described in Section 35.8(c) of Ms Lease
as to any sublessee).

 

6.4           Article
19 of the Montgomery Lease is re-titled as “ABANDONMENT; OPTION TO PURCHASE”.

 

6.5           Section
19.3 of the Montgomery Lease is amended by making the current paragraph subsection (a) and the following subsection (b) is added
to Section 19.3 immediately following subsection (a):

 

(b)          In
the event Lessee elects to purchase the Leased Property pursuant to Section 19.4, then on the last day of the Term, or the next
Business Day if the last day of the Term is not a Business Day, Lessor shall, upon receipt from Lessee of the purchase price provided
for in Section 19.4 and any Rent or other sums then due and payable under this Lease (excluding the installment of Minimum Rent
due on the date of conveyance), convey the Leased Property to Lessee on such date in accordance with the provisions of Article
17 and this Lease shall thereupon terminate as to the Leased Properly.

 

    	 	24	 

     

    

 

6.6           The
Montgomery Lease is hereby amended by adding the following Section 19.4 immediately following the end of Section 19.3:

 

19.4         Option
to Purchase the Leased Property. So long as no Event of Default shall have occurred that is continuing, Lessee shall have
the option to purchase Lessor’s leasehold estate in the Leased Property under the Ground Lease pursuant to the terms and
conditions set forth in this Article 19 at the end of the Initial Term and at the end of each Extended Term upon at least 180
days’ prior written notice to Lessor for a purchase price equal to the greater of the following (such greater amount referred
to herein as the “Minimum Repurchase Price”): (i) the Fair Market Value Purchase Price or (ii) the sum of (A)
the amount set forth as the “Floor Amount” for the Montgomery Lease on Schedule 2 attached hereto plus
(B) the cost of any Capital Additions to the Leased Properly financed by Lessor pursuant to the terms of Article 9 plus
(C) any sums disbursed by Lessor or its Affiliates, with the prior written consent of Lessee, in connection with the purchase
of the fee interest in the Leased Properly from the Ground Landlord (as defined below). The option to purchase granted hereby
(1) is subject to the prior written consent of the Ground Landlord and (2) will expire and be of no further force and effect upon
the expiration of the Initial Term and each Extended Term or the earlier termination of this Lease. As used herein, the term “Ground
Landlord” shall mean the lessor under the Ground Lease, NLR, Inc., an Alabama corporation, and its successors and assigns.

 

6.7           Sections
24(a) and 24(b) are hereby deleted in their entirety and the following Sections (a) and (b) are substituted therefor:

 

(a)          At
any time and from time to time within 20 days following written request by Lessor, Lessee will furnish to Lessor an Officer’s
Certificate certifying that this Lease is unmodified and in full force and effect (or that this Lease is in full force and effect
as modified and setting forth the modifications) and the dates to which the Rent has been paid. Any such Officer’s Certificate
furnished pursuant to this Article may be relied upon by Lessor and any prospective purchaser of the Leased Property.

 

(b)          Unless
specifically prohibited at any time by a Legal Requirement, Lessee will furnish, or cause to be furnished, the following information
to Lessor within the periods indicated; provided that Lessor shall keep confidential items furnished hereunder which are not generally
available to the public:

 

(i)          within
30 days after the end of each Fiscal Year, an Officer’s Certificate stating that to the best of the signer’s knowledge
and belief, Lessee is not in default in the performance or observance of any of the terms of this Lease or any loan or credit facility
which by its terms would permit an outstanding balance equal to or greater than $50,000,000, or, if Lessee shall be in default,
specifying all such defaults, the nature thereof and the steps being taken to remedy the same;

 

    	 	25	 

     

    

 

(ii)         within
30 days after the end of each calendar quarter, unaudited Facility Financial Statements for such calendar quarter, certified by
Lessee to Lessor;

 

(iii)        within
90 days after the end of each Fiscal Year, unaudited Facility Financial Statements for the most recently ended Fiscal Year certified
by Lessee to Lessor;

 

(iv)        within
150 days after written request by Lessor following the occurrence of an Event of Default, audited financial statements of the Guarantor,
it being understood that the public availability of Guarantor’s audited financial statements on a source such as EDGAR shall
constitute satisfaction of Lessee’s obligation to cause such statements to be famished hereunder, and

 

(v)         with
reasonable promptness, such other information respecting the operation of the Facility and the financial condition, affairs and
properties of Lessee (other than audited financial statements) as Lessor may reasonably request from time to time or as may be
required by a Facility Mortgagee.

 

6.8           Article
34 is hereby deleted in its entirety, and the following Article 34 is substituted therefor:

 

34.1         Options
to Extend the Term. So long as no Event of Default shall have occurred and be continuing, Lessee is hereby granted the
right to extend the Term of this Lease for four consecutive five-year periods (each period, an “Extended
Term”) for a maximum possible Term of 35 years, by giving written notice to Lessor of each such extension not later
than January 1, 2013, for the first Extended Term and January 1, 2018, for the second Extended Term and January 1, 2023, for
the third Extended Term and January 1, 2028, for the fourth Extended Tern; provided, however, the Term of this Lease shall
not extend beyond the term of the Ground Lease (Lessor acknowledging the requirement that it obtain an extension of the term
of the Ground Lease as set forth below) unless Lessor purchases the fee interest in the Leased Property from Ground Landlord,
and subject, however, to the provisions of Section 13.7 hereof. Lessor agrees to use its best efforts to provide Lessee with
prior written notice at least 90 days prior to the foregoing dates. Upon receipt of the notice to extend from Lessee, Lessor
shall provide the notice necessary to extend the term of the Ground Lease pursuant to the terms of Section 2 of the Ground
Lease; provided that Lessee may not exercise its option for more than one Extended Term at a time. During each Extended Term,
all of the terms and conditions of this Lease shall continue in full force and effect, except that the Minimum Rent shall be
determined in accordance with Section 34.2 or 34.3, as the case may be.

 

    	 	26	 

     

    

 

34.2         Minimum
Rent for the First Year of the First Extended Term. The Minimum Rent for the first lease year of the first Extended Team shall
be the greater of (i) the Fair Market Rental Value on the first day of such Extended Term, or (ii) 85% of the Minimum Rent in effect
at the end of the Initial Term, as such Minimum Rent shall continue to be adjusted throughout such Extended Term pursuant to Section
2.1(b) hereof.

 

34.3         Minimum
Rent for the First Year of any other Extended Term. The Minimum Rent for the first lease year of the second, third and fourth
Extended Terms shall be the greater of (i) the Fair Market Rental Value on the first day of such Extended Term, or (ii) 90% of
the Minimum Rent in effect immediately before the beginning of each such Extended Term, as such Minimum Rent shall continue to
be adjusted throughout each such Extended Term pursuant to Section 2.1(b) hereof

 

6.9           Section
35.8 of the Montgomery Lease is hereby deleted in its entirety, and the following Section 35.8 is substituted therefor:

 

35.8         Transfer
of Operations and Licenses.

 

(a)          Operation
of Facility at End of Term. Upon the expiration of the Term or upon the earlier termination of this Lease and if requested
by Lessor, Lessee agrees to (i) continue to manage the operations of the Facility as manager and not as lessee for a period of
up to 180 days, (ii) remit to Lessor on a monthly basis the “rent” fox the Facility in an amount equal to the cash
flow after payment of all expenses (including the management fee) for the Facility (pro-rated through the date of transfer to a
new operator), and (iii) provide Lessor with written reports regarding the results of operations for the Facility on a monthly
basis. Lessor agrees that it will use all reasonable efforts to prepare to operate the Facility upon expiration or earlier termination
of the Term so that the management assistance of Lessee is not needed by Lessor hereunder.

 

(b)          Management
Fee. In the event that Lessee is required to manage the Facility pursuant to Section 35.8(a) above, Lessor agrees to pay Lessee
a monthly management fee equal to the greater of (i) 5% of the gross operating revenues of the Facility (after Medicaid, Medicare
and other contractual adjustments) for said month or (ii) $100,000; provided, however, that if Lessee is required to manage the
Facility pursuant to Section 35.8(a) as a result of a Special Default Event hereunder, the monthly management fee to be paid by
Lessor to Lessee under this Section 35.8(b) will be 5% of the gross operating revenues of the Facility (after Medicaid, Medicare
and other contractual adjustments) for said month.

 

    	 	27	 

     

    

 

(c)          Cooperation.
At the end of the Term or any early expiration of this Lease, Lessee agrees to cooperate with Lessor in the transfer of the financial
responsibility and operations of the Facility to a new operator or operators, including the good faith negotiation, execution,
and delivery of such operations transfer agreements, assignment agreements and bills of sale as are reasonably necessary to effect
such transfer. In conjunction with such cooperation, Lessee shall take all action reasonably necessary to effect or useful in effecting
the transfer to Lessor’s nominee of any certificate of need or license from the Alabama Department of Public Health or other
governmental authority regulating the use of the Facility and all service contracts, which, in either case, may be necessary or
useful in the operation of the Facility by Lessor’s nominee for the Primary Intended Use.

 

6.10         Section
36.1 of the Montgomery Lease is amended by adding the following definition for “Facility Financial Statements” immediately
following the definition of “Facility: “

 

“Facility Financial
Statements” means for the Facility, as to a specific period, the Detailed Income Statement containing revenue and expenses
(in reasonable detail), EBITDA, EBITDAR and operating statistics (to include, at a minimum, inpatient days, discharges, outpatient
visits and licensed beds), all presented for the period, quarter-to-date and year-to-date.

 

6.11         Section
36.1 of the Montgomery Lease is hereby amended by deleting the definitions of “Fair Market Rental Value”, “Minimum
Repurchase Price” and “Rent” and substituting the following definitions of “Fair Market Rental Value”,
“Minimum Repurchase Price” and “Rent”, respectively, therefor:

 

“Fair
Market Rental Value” means the fair market rental value of the Leased Property or any Substitute Property determined
as of the date of the appraisal pursuant to Article 28, (a) assuming the same is unencumbered by this Lease, and (b) determined
in accordance with, the appraisal procedures set forth in Article 28 or in such other manner as shall be mutually acceptable to
Lessor and Lessee and (c) not taking into account any reduction in value resulting from an indebtedness to which the Leased Property
or Substitute Property may be subject and (d) not including the value of any Capital Additions to the Leased Property financed
by Lessee pursuant to the terms of Article 9.

 

“Minimum
Repurchase Price” has the meaning set forth, in Section 19.4.

 

“Rent”
means, collectively, the Minimum Rent, the Replacement Minimum Rent; the Supplemental Rent, the Additional Minimum Rent and the
Additional Charges.

 

7.          Amendments
and Agreements to the Nittany Valley Lease. The Nittany Valley Lease is confirmed and amended, effective as of the Effective
Date, as follows:

 

7.1          The following Section
2.7 is added to the Nittany Valley Lease following Section 2.6:

 

    	 	28	 

     

    

 

2.7           Additional
Minimum Rent. Lessee shall pay to Lessor as additional minimum rent, without notice, demand, set off or counterclaim, in advance,
the annual sum set forth on Schedule 1 attached hereto under the heading “Additional Minimum Rent” for the Nittany
Valley Lease (the “Additional Minimum Rent”), payable in advance in equal, consecutive monthly installments,
beginning with the first payment due on April 1, 2009, and continuing on the first day of each calendar month thereafter until
the final payment due on April 1, 2011. The Additional Minimum Rent shall be payable to Lessor in the same manner and location
as the Minimum Rent.

 

7.2           The
first sentence of Section 15.2 of the Nittany Valley Lease is amended by inserting after the word “thereafter” in the
second line thereof, the following phrase: “so long as such Event of Default is continuing. “

 

7.3           Section
15.2 of the Nittany Valley Lease is amended by deleting the last full unnumbered paragraph thereof and substituting the following
new subsections (c), (d) and (e) therefor:

 

(c)          The
rights and remedies of Lessor under subsections (a) and (b) of this Section 15.2 are cumulative, and except as expressly provided
otherwise in Section 15.2(d) and Section 15.2(e) below, pursuit of any of the above remedies shall not preclude pursuit of any
other remedies prescribed in other sections of this Lease and any other remedies provided by law or equity. Forbearance by Lessor
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 such Event of Default.

 

(d)          Notwithstanding
anything to the contrary set forth in this Section 15.2 or elsewhere in this Lease, the remedies available to Lessor pursuant to
Section 15.2(b) above shall only be available upon the occurrence of a Special Default Event (as defined below). The parties specifically
agree that Lessor shall not be entitled to terminate this Lease if any Event of Default other than a Special Default Event shall
have occurred and be continuing. The parties further agree that notwithstanding anything to the contrary set forth in this Section
15.2 or elsewhere in this Lease, if an Event of Default under Section 15.1(f) has occurred and is continuing, the sole and exclusive
remedy of Lessor shall be to collect from Lessee all actual damages incurred by Lessor as a result of such Event of Default. As
used herein, the term “Special Default Event” means, individually and collectively, (i) the occurrence of an
Event of Default pursuant to Section 15.1 arising out of a default or breach of a Payment Obligation (as defined below) by Lessee,
(ii) the failure of Lessee or Guarantor to satisfy any final, unsecured and unappealable judgment arising out of this Lease or
the Guaranty which is rendered by a court of competent jurisdiction. As used herein, the term “Payment Obligation”
means any obligation from time to time owing by Lessee under this Lease, which obligation can be satisfied with the payment of
money, including any Rent, fees, costs or charges that would accrue but for the provisions of U.S. Bankruptcy Code, after any bankruptcy
or insolvency petition is filed thereunder.

 

    	 	29	 

     

    

 

(e)          Notwithstanding
anything to the contrary set forth in this Section 15.2 or elsewhere in this Lease, so long as no Special Default Event has occurred
and is continuing, then the remedies available to Lessor hereunder upon the occurrence of an Event of Default under Section 15.1(h)
above that is continuing shall be limited to the remedies described in Section 15.2(a) above (it being understood that in such
instance, Lessee will cooperate with Lessor in its efforts to secure a sublease for the Leased Property for use that is consistent
with the Primary Intended Use, which cooperation by Lessee will include lairing the actions described in Section 35.8(c) of this
Lease as to any sublessee).

 

7.4           Article
19 of the Nittany Valley Lease is re-titled as “ABANDONMENT; OPTION TO PURCHASE”.

 

7.5           Section
19.3 of the Nittany Valley Lease is amended by making the current paragraph subsection (a) and the following subsection (b) is
added to Section 19.3 immediately following subsection (a):

 

(b)          In
the event Lessee elects to purchase the Leased Property pursuant to Section 19.4, then on the last day of the Term, or the next
Business Day if the last day of the Term is not a Business Day, Lessor shall, upon receipt from Lessee of the purchase price provided
for in Section 19.4 and any Rent or other sums then due and payable under this Lease (excluding the installment of Minimum Rent
due on the date of conveyance), convey the Leased Property to Lessee on such date in accordance with the provisions of Article
17 and this Lease shall thereupon terminate as to the Leased Property.

 

7.6           The
Nittany Valley Lease is hereby amended by adding the following Section 19.4 immediately following the end of Section 19.3:

 

19.4         Option
to Purchase the Leased Property. So long as no Event of Default shall have occurred that is continuing, Lessee shall have the
option to purchase the Leased Property pursuant to the terms and conditions set forth in this Article 19 at the end of the Initial
Term and at the end of each Extended Term upon at least 180 days’ prior written notice to Lessor for a purchase price equal
to the greater of the following (such greater amount referred to herein as the “Minimum Repurchase Price”):
(i) the Fair Market Value Purchase Price or (ii) the sum of (A) the amount set forth as the “Floor Amount” for the
Nittany Valley Lease on Schedule 2 attached hereto plus (B) the cost of any Capital Additions to the Leased Property
financed by Lessor pursuant to the terms of Article 9. If not sooner exercised, the option to purchase granted hereby will expire
and be of no further force and effect upon the expiration of the Initial Term and each Extended Term or the earlier termination
of this Lease.

 

7.7           Sections
24(a) and 24(b) are hereby deleted in their entirety and the following Sections (a) and (b) are substituted therefor:

 

    	 	30	 

     

    

 

(a)          At
any time and from time to time within 20 days following written request by Lessor, Lessee will furnish to Lessor an Officer’s
Certificate certifying that this Lease is unmodified and in full force and effect (or that this Lease is in full force and effect
as modified and setting forth the modifications) and the dates to which the Rent has been paid. Any such Officer’s Certificate
famished pursuant to this Article may be relied upon by Lessor and any prospective purchaser of the Leased Property.

 

(b)          Unless specifically
prohibited at any time by a Legal Requirement, Lessee will furnish, or cause to be furnished, the following information to Lessor
within the periods indicated; provided that Lessor shall keep confidential items furnished hereunder which, are not generally available
to the public:

 

(i)          within
30 days after the end of each Fiscal Year, an Officer’s Certificate stating that to the best of the signer’s knowledge
and belief, Lessee is not in default in the performance or observance of any of the terms of this Lease or any loan or credit facility
which by its terms would permit an outstanding balance equal to or greater than $50,000,000, or, if Lessee shall be in default,
specifying all such defaults, the nature thereof and the steps being taken, to remedy the same;

 

(ii)         within
30 days after the end of each calendar quarter, unaudited Facility Financial Statements for such calendar quarter, certified by
Lessee to Lessor,

 

(iii)        within
90 days after the end of each. Fiscal Year, unaudited Facility Financial Statements for the most recently ended Fiscal Year certified
by Lessee to Lessor;

 

(iv)        within
150 days after written request by Lessor following the occurrence of an Event of Default, audited financial statements of the Guarantor;
it being understood that the public availability of Guarantor’s audited financial statements on a source such as EDGAR shall
constitute satisfaction of Lessee’s obligation to cause such statements to be furnished hereunder; and

 

(v)         with
reasonable promptness, such other information respecting the operation of the Facility and the financial condition, affairs and
properties of Lessee (other than audited financial statements) as Lessor may reasonably request from time to time or as may be
required by a Facility Mortgagee.

 

7.8           Article
34 is hereby deleted in its entirety, and the following Article 34 is substituted therefor:

 

    	 	31	 

     

    

 

34.1         Options
to Extend the Term. So long as no Event of Default shall have occurred and be continuing, Lessee is hereby granted the right
to extend the Term of this Lease for four consecutive five-year periods (each period, an “Extended Term”) for
a maximum possible Term of 35 years, by giving written notice to Lessor of each such extension not later than January 1,2013, for
the first Extended Term and January 1, 2018, for the second Extended Term and January 1, 2023, for the third Extended Term and
January 1, 2028, for the fourth Extended Term; subject, however, to the provisions of Section 13.7 hereof Lessor agrees to use
its best efforts to provide Lessee with prior written notice at least 90 days prior to the foregoing dates. Lessee may not exercise
its option for more than one Extended Term at a time. As a condition to exercising any option to extend hereunder, (i) if one or
more of the Associated Leases (as defined below) are then still in effect, then at least one of such Associated Leases simultaneously
must be extended by Lessee or its applicable Affiliate and (ii) if the Montgomery Lease (as defined in Section 1 of this Agreement)
is then still in effect, then the Montgomery Lease simultaneously must be extended by Lessee or its applicable Affiliate. For purposes
hereof, “Associated Leases” shall mean, collectively, the York Lease and the Tallahassee Lease as defined in
Section 1 of this Agreement. During each Extended Term, all of the terms and conditions of this Lease shall continue in full force
and effect, except that the Minimum Rent shall be determined in accordance with Section 34.2 or 34.3, as the case maybe.

 

34.2         Minimum
Rent for the First Year of the First Extended Term. The Minimum Rent for the first lease year of the first Extended Term shall
be the greater of (i) the Fair Market Rental Value on the first day of such Extended Term, or (ii) 85% of the Minimum Rent in
effect at the end of the Initial Term, as such Minimum Rent shall continue to be adjusted throughout such Extended Term pursuant
to Section 2.1(b) hereof. 

 

34.3         Minimum
Rent for the First Year of any other Extended Term. The Minimum Rent for the first lease year of the second, third and fourth
Extended Terms shall be the greater of (i) the Fair Market Rental Value on the first day of such Extended Term, or (ii) 90% of
the Minimum Rent in effect immediately before the beginning of each such Extended Term, as such Minimum Rent shall continue to
be adjusted throughout each such Extended Term pursuant to Section 2.1(b) hereof.

 

7.9         Section 35.8 of the
Nittany Valley Lease is hereby deleted in its entirety, and the following Section 35.8 is substituted therefor:

 

35.8        Transfer
of Operations and Licenses.

 

(a)          Operation
of Facility at End of Term. Upon the expiration of the Term or upon the earlier termination of this Lease and if requested
by Lessor, Lessee agrees to (i) continue to manage the operations of the Facility as manager and not as lessee for a period of
up to 180 days, (ii) remit to Lessor on a monthly basis the “rent” for the Facility in an amount equal to the cash
flow after payment of all expenses (including the management fee) for the Facility (pro-rated through the date of transfer to
a new operator), and (iii) provide Lessor with written reports regarding the results of operations for the Facility on a monthly
basis. Lessor agrees that it will use all reasonable efforts to prepare to operate the Facility upon expiration or earlier termination
of the Term so that the management assistance of Lessee is not needed by Lessor hereunder.

 

    	 	32	 

     

    

 

(b)          Management
Fee. In the event that Lessee is required to manage the Facility pursuant to Section 35.8(a) above, Lessor agrees to pay Lessee
a monthly management fee equal to the greater of (i) 5% of the gross operating revenues of the Facility (after Medicaid, Medicare
and. other contractual adjustments) for said month or (ii) $100,000; provided, however, that if Lessee is required to manage the
Facility pursuant to Section 35.8(a) as a result of a Special Default Event hereunder, the monthly management fee to be paid by
Lessor to Lessee under this Section 35.8(b) will be 5% of the gross operating revenues of the Facility (after Medicaid, Medicare
and other contractual adjustments) for said month.

 

(c)          Cooperation.
At the end of the Term or any early expiration of this Lease, Lessee agrees to cooperate with Lessor in the transfer of the financial
responsibility and operations of the Facility to a new operator or operators, including the good faith, negotiation, execution,
and delivery of such operations transfer agreements, assignment agreements and bills of sale as are reasonably necessary to effect
such transfer. In conjunction with such cooperation, Lessee shall take all action reasonably necessary to effect or useful in
effecting the transfer to Lessor’s nominee of any certificate of need or license from the Pennsylvania Department of Health
Services or other Governmental Authority regulating the use of the Facility and all service contracts, which, in either case,
may be necessary or useful in the operation of the Facility by Lessor’s nominee for the Primary Intended Use.

 

7.10         Section
36.1 of the Nittany Valley Lease is amended by adding the following definition for “Facility Financial Statements”
immediately following the definition of “Facility; “

 

“Facility Financial
Statements” means for the Facility, as to a specific period, the Detailed Income Statement containing revenue and expenses
(in reasonable detail), EBITDA, EBITDAR and operating statistics (to include, at a minimum, inpatient days, discharges, outpatient
visits and licensed beds), all presented for the period, quarter-to-date and year-to-date.

 

7.11         Section
36.1 of the Nittany Valley Lease is hereby amended by deleting the definitions of “Fair Market Rental Value”, “Minimum
Repurchase Price” and “Rent” and substituting the following definitions of “Fair Market Rental Value”,
“Minimum Repurchase Price” and “Rent”, respectively, therefor:

 

“Fair
Market Rental Value” means the fair market rental value of the Leased Property or any Substitute Property
determined as of the date of the appraisal pursuant to Article 28, (a) assuming the same is unencumbered by this Lease, and
(b) determined in accordance with the appraisal procedures set forth in Article 28 or in such other manner as shall he
mutually acceptable to Lessor and Lessee and (c) not talking into account any reduction in value resulting from an.
indebtedness to which the Leased Properly or Substitute Property may be subject and (d) not including the value of any
Capital Additions to the Leased Property financed by Lessee pursuant to the terms of Article 9.

 

    	 	33	 

     

    

  

“Minimum Repurchase
Price” has the meaning set forth in Section 19.4.

 

“Rent”
means, collectively, the Minimum Rent, the Replacement Minimum Rent, the Supplemental Rent, the Additional Minimum Rent and
the Additional Charges.

 

8.          Amendments
and Agreements to the Beaumont Lease. The Beaumont Lease is confirmed and amended, effective as of the Effective Date, as
follows:

 

8.1           Section
2.1 of the Beaumont Lease is hereby amended by deleting in their entirely the definitions for “Consolidated Financials”
and “Continental.”

 

8.2           Section
2.1 of the Beaumont Lease is amended by adding the following definition for “Facility Financial Statements” immediately
following the definition of “Facility:”

 

“Facility
Financial Statements” means for the Facility, as to a specific period, the Detailed Income Statement containing revenue
and expenses (in reasonable detail), EBITDA, EBITDAR and operating statistics (to include, at a minimum, inpatient days, discharges,
outpatient visits and licensed beds), all presented for the period, quarter-to-date and year-to-date.

 

8.3           Section
2.1 of the Beaumont Lease is amended by adding the following definition for “Guarantor” immediately following the definition
of “Fixtures:”

 

“Guarantor”
means HealthSouth Corporation, a Delaware corporation.

 

8.4           Section
2.1 of the Beaumont Lease is hereby amended by deleting the definition of “Rent” and substituting the following definition
of “Rent” therefor:

 

“Rent”
means, collectively, the Minimum Rent, the Replacement Minimum Rent; the Supplemental Rent, the Additional Minimum Rent and
the Additional Charges,

 

8.5           All
applicable provisions of the Beaumont Lease are amended by deleting each reference to “Continental” as it appears in
the Beaumont Lease and substituting the term “Guarantor” therefor.

 

8.6           The
following Section 3.7 is added to the Beaumont Lease following Section 3.6:

 

 

    	 	34	 

     

    

 

3.7           Additional
Minimum Rent. Tenant shall pay to Landlord as additional minimum rent, without notice, demand, set off or counterclaim, in
advance, the annual sum set forth on Schedule 1 attached hereto under the heading “Additional Minimum Rent’’
for the Beaumont Lease (the “Additional Minimum Rent”), payable in advance in equal, consecutive monthly installments,
beginning with the first payment due on April 1, 2009, and continuing on the first day of each calendar month thereafter until
the final payment due on April 1, 2011. The Additional Minimum Rent shall be payable to Landlord in the same manner and location
as the Minimum Rent

 

8.7           The
introductory phrase of Section 16.3A of the Beaumont Lease is hereby deleted in its entirety and replaced with the following phrase:
“If an Event of Default shall have occurred and be continuing, Landlord may do any one or more of the following:.”

 

8.8           Subsection
F of Section 16.3 of the Beaumont Lease is hereby deleted in its entirely and the following new subsections F, G and H are substituted
therefor:

 

F.           The
rights and remedies of Landlord under subsections A through E of Section 16.3 are cumulative, and except as expressly provided
otherwise in Section 16.3G and Section 16.3H below, pursuit of any of the above remedies shall not preclude pursuit of any other
remedies prescribed in other sections of this Lease and any other remedies provided by law or equity. 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 such Event of Default.

 

G.           Notwithstanding
anything to the contrary set forth in this Section 16.3 or elsewhere in this Lease, the remedies available to Landlord pursuant
to Section 16.3A above shall only be available upon the occurrence of a Special Default Event (as defined below). The parties
specifically agree that Landlord shall not be entitled to terminate this Lease if any Event of Default other than a Special Default
Event shall have occurred and be continuing. The parties further agree that notwithstanding anything to the contrary set forth
in this Section 16.3 or elsewhere in this Lease, if an Event of Default under Section 16.1(g) has occurred and is continuing,
the sole and exclusive remedy of Landlord shall be to collect from Tenant all actual damages incurred by Landlord as a result
of such Event of Default. As used herein, the term “Special Default Event” means, individually and collectively,
(i) the occurrence of an Event of Default pursuant to Section 16.1 arising out of a default or breach of a Payment Obligation
(as defined below) by Tenant, (ii) the failure of Tenant to satisfy any final, unsecured and unappealable judgment arising out
of this Lease which is rendered by a court of competent jurisdiction. As used herein, the term “Payment Obligation”
means any obligation from time to time owing by Tenant under this Lease, which obligation can be satisfied with the payment
of money, including any Rent, fees, costs or charges that would accrue but for the provisions of U.S. Bankruptcy Code, after any
bankruptcy or insolvency petition is filed thereunder.

 

 

    	 	35	 

     

    

 

H.           Notwithstanding
anything to the contrary set forth in this Section 16.3 or elsewhere in this Lease, so long as no Special Default Event has
occurred and is continuing, then the remedies available to Landlord hereunder upon the occurrence of an Event of Default
under Section 16.1(f) above that is continuing shall be limited to the remedies described in Section 16.3A(2) above (it being
understood that in such instance, Tenant will cooperate with Landlord in its efforts to secure a sublease for the Leased
Properly for use that is consistent with the Primary Intended Use, which cooperation by Tenant will include taking the
actions described in Section 38.3(c) of this Lease as to any sublessee).

 

8.9           Article
23 of the Beaumont Lease is hereby deleted in its entirely and the following Article 23 is substituted therefor:

 

ARTICLE 23

 

OFFICER’S CERTIFICATES
AND FINANCIAL STATEMENTS

 

23.1         Officer’s
Certificates. At any time and from time to time within 20 days following written request by Landlord, Tenant will furnish
to Landlord an Officer’s Certificate certifying that this Lease is unmodified and in full force and effect (or that this
Lease is in full force and effect as modified and setting forth the modifications) and the dates to which the Rent has been paid.
Any such Officer’s Certificate furnished pursuant to this Article may be relied upon by Landlord and any prospective purchaser
of the Leased Property

 

23.2         Financial
Statements. Unless specifically prohibited at any time by a Legal Requirement, Tenant will furnish, or cause to be furnished,
the following information to Landlord within the periods indicated; provided that Landlord shall keep confidential items furnished
hereunder which are not generally available to the public:

 

(i)          within
30 days after the end of each Fiscal Year, an Officer’s Certificate stating that to the best of the signer’s knowledge
and belief, Tenant is not in default in the performance or observance of any of the terms of this Lease or any loan or credit facility
which by its terms would permit an outstanding balance equal to or greater than $50,000,000, or, if Tenant shall be in default,
specifying all such defaults, the nature thereof and the steps being taken to remedy the same;

 

(ii)         within
30 days after the end of each calendar quarter, unaudited Facility Financial Statements for such calendar quarter, certified by
Tenant to Landlord;

 

(iii)        within
90 days after the end of each Fiscal Year, unaudited Facility Financial Statements for the most recently ended Fiscal Year certified
by Tenant to Landlord;

 

 

    	 	36	 

     

    

 

(iv)        within
150 days after written request by Landlord following the occurrence of an Event of Default audited financial statements of
HealthSouth Corporation, it being understood that the public availability of HealthSouth Corporation’s audited
financial statements on a source such as EDGAR shall constitute satisfaction of Tenants obligation to cause such statements
to be furnished hereunder, and

 

(v)         with
reasonable promptness, such other information respecting the operation of the Facility and the financial condition, affairs and
properties of Tenant (other than audited financial statements) as Landlord may reasonably request from time to time or as may be
required by a Facility Mortgagee.

 

8.10         Section
32.1 of the Beaumont Lease is hereby deleted in its entirely and the following Section 32.1 is hereby substituted therefor:

 

32.1         Option
to Purchase the Leased Property. So long as no Event of Default shall have occurred that is continuing, Tenant shall have
the option to purchase the Leased Property pursuant to the terms and conditions set forth in this Article 32 at the end of the
Fixed Term and at the end of each Extended Term upon at least 180 days’ prior written notice to Landlord for a purchase
price equal to the greater of the following: (i) the Fair Market Value Purchase Price determined as of the date of the appraisal
pursuant to Article 34 or (ii) the sum of (A) the amount set forth as the “Floor Amount” for the Beaumont Lease on
Schedule 2 attached hereto plus (B) the cost of any Capital Additions to the Leased Property financed by Landlord
pursuant to the terms of Article 10. If not sooner exercised, the option to purchase granted hereby will expire and be of no further
force and effect upon the expiration of the Fixed Term and each Extended Term or the earlier termination of this Lease.

 

8.11         Section
32.2 of the Beaumont Lease is amended by deleting the phrase “Article 14” each time it appears therein and substituting
the phrase “Section 32.1” therefor:

 

8.12         Article
33 of the Beaumont Lease is hereby deleted in its entirety, and the following Article 33 is substituted therefor:

 

ARTICLE 33

 

EXTENDED TERMS

 

33.1         Options
to Extend the Term. So long as no Event of Default shall have occurred and be continuing, Lessee is hereby granted the right
to extend the Term of this Lease for three consecutive five-year periods (each period, an “Extended Term”)
for a maximum possible Term of 25 years, by giving written notice to Lessor not later than October 11, 2010, for the second Extended
Term and October 11, 2015, for the third Extended Term; subject, however, to the provisions of Section 14.7 hereof. Lessor agrees
to use its best efforts to provide Lessee with prior written notice at least 90 days prior to the foregoing dates. Lessee may
not exercise its option for more than one Extended Term at a time. During each Extended Term, all of the terms and conditions
of this Lease shall continue in full force and effect, except that the Minimum Rent for the second and third Extended Terms shall
be determined in accordance with Section 33.3.

 

    	 	37	 

     

    

 

33.2         First
Extended Term. Landlord and Tenant acknowledge that Tenant has exercised its right to extend the Term for the first Extended
Term and that the first Extended Term commenced on April 12, 2006.

 

33.3         Minimum
Rent for the First Year of the Second and Third Extended Terms. The Minimum Rent for the first lease year of the second and
third Extended Terms shall be the greater of (i) the Fair Market Rent on the first day of such Extended Term, or (ii) 90% of the
Minimum Rent in effect immediately before the beginning of each such Extended Term.

 

8.13         Section
38.3 of the Beaumont Lease is hereby deleted in its entirety, and the following Section 38.3 is substituted therefor:

 

38.3         Transfer
of Operations and Licenses.

 

(a)          Operation
of Facility at End of Term. Upon the expiration of the Term or upon the earlier termination of this Lease and if requested
by Landlord, Tenant agrees to (i) continue to manage the operations of the Facility as manager and not as tenant for a period
of up to 180 days, (ii) remit to Landlord on a monthly basis the “rent” for the Facility in an amount equal to the
cash flow after payment of all expenses (including the management fee) for the Facility (pro- rated through the date of transfer
to a new operator), and (iii) provide Landlord with written reports regarding the results of operations for the Facility on a
monthly basis. Landlord agrees that it will use all reasonable efforts to prepare to operate the Facility upon expiration or earlier
termination of the Term so that the management assistance of Tenant is not needed by Landlord hereunder.

 

(b)          Management
Fee. In the event that Tenant is required to manage the Facility pursuant to Section 38.3(a) above, Landlord agrees to pay
Tenant a monthly management fee equal to the greater of (i) 5% of the gross operating revenues of the Facility (after Medicaid,
Medicare and other contractual adjustments) for said month or (ii) $100,000; provided, however, that if Tenant is required to
manage the Facility pursuant to Section 3 8.3(a) as a result of a Special Default Event hereunder, the monthly management fee
to be paid by Landlord to Tenant under this Section 38.3(b) will be 5% of the gross operating revenues of the Facility (after
Medicaid, Medicare and other contractual adjustments) for said month.

 

(c)          Cooperation.
At the end of the Term or any early expiration of this Lease, Tenant agrees to cooperate with Landlord in the transfer of
the financial responsibility and operations of the Facility to a new operator or operators, including the good faith
negotiation, execution, and delivery of such operations transfer agreements, assignment agreements and bills of sale as are
reasonably necessary to effect such transfer. In conjunction with, such cooperation, Tenant shall take all action reasonably
necessary to effect or useful in effecting the transfer to Landlord’s nominee of any certificate of need or license
from the Texas Department of State Health Services or other governmental authority regulating the use of the Facility and all
service contracts, which, in either case, may be necessary or useful in the operation of the Facility by Landlord’s
nominee for the Primary Intended Use.

 

    	 	38	 

     

    

 

9.          Amendments
and Agreements to the Tallahassee Lease. The Tallahassee Lease is confirmed and amended, effective as of the Effective Date,
as follows:

 

9.1           The
following Section 2.7 is added to the Tallahassee Lease following Section 2.6:

 

2.7           Additional
Minimum Rent. Lessee shall pay to Lessor as additional minimum rent, without notice, demand, set off or counterclaim, in advance,
the annual sum set forth on Schedule 1 attached hereto wider the heading “Additional Minimum Rent” for the
Tallahassee Lease (the “Additional Minimum Rent”), payable in advance in equal, consecutive monthly installments,
beginning with the first payment due on April 1, 2009, and continuing on the first day of each calendar month thereafter until
the final payment due on April 1, 2011. The Additional Minimum Rent shall be payable to Lessor in the same manner and location
as the Minimum Rent.

 

9.2           The
first sentence of Section 15.2 of the Tallahassee Lease is amended by inserting after the word “thereafter” in the
second line thereof, the following phrase: “so long as such Event of Default is continuing.”

 

9.3           Section
15.2 of the Tallahassee Lease is amended by deleting the last full unnumbered paragraph thereof and substituting the following
new subsections (c), (d) and (e) therefor:

 

(c)          The
rights and remedies of Lessor under subsections (a) and (b) of this Section 15.2 are cumulative, and except as expressly provided
otherwise in Section 15.2(d) and Section 15.2(e) below, pursuit of any of the above remedies shall not preclude pursuit of any
other remedies prescribed in other sections of this Lease and any other remedies provided by law or equity. Forbearance by Lessor
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 such Event of Default.

 

    	 	39	 

     

    

 

(d)          Notwithstanding
anything to the contrary set forth in this Section 15.2 or elsewhere in this Lease, the remedies available to Lessor pursuant
to Section 15.2(b) above shall only be available upon the occurrence of a Special Default Event (as defined below). The parties
specifically agree that Lessor shall not be entitled to terminate this Lease if any Event of Default other than a Special Default
Event shall have occurred and be continuing. The parties farther agree that notwithstanding anything to the contrary set forth
in this Section 15.2 or elsewhere in this Lease, if an Event of Default under Section 15.1(f) has occurred and is continuing,
the sole and exclusive remedy of Lessor shall be to collect from Lessee all actual damages incurred by Lessor as a result of such
Event of Default. As used herein, the term “Special Default Event” means, individually and collectively, (i)
the occurrence of an Event of Default pursuant to Section 15.1 arising out of a default or breach of a Payment Obligation (as
defined below) by Lessee, (ii) the failure of Lessee or Guarantor to satisfy any final, unsecured and unappealable judgment arising
out of this Lease or the Guaranty which is rendered by a court of competent jurisdiction. As used herein, the term “Payment
Obligation” means any obligation from time to time owing by Lessee under this Lease, which obligation can be satisfied
with the payment of money, including any Rent; fees, costs or charges that would accrue but for the provisions of U.S. Bankruptcy
Code, after any bankruptcy or insolvency petition is filed thereunder.

 

(e)          Notwithstanding
anything to the contrary set forth in this Section 15.2 or elsewhere in
this Lease, so long as no Special Default Event has occurred and is continuing, then the remedies available to Lessor
hereunder upon the occurrence of an Event of Default under Section 15.1(j) above that is continuing shall be limited to the
remedies described in Section 15.2(a) above (if being understood that in such instance, Lessee will cooperate with Lessor in
its efforts to secure a sublease for the Leased Property for use that is consistent with the Primary Intended Use, which
cooperation by Lessee will include taking the actions described in Section 35.8(c) of this Lease as to any sublessee).

 

9.4           Article
19 of the Tallahassee Lease is re-titled as “ABANDONMENT; OPTION TO PURCHASE”.

 

9.5           Section
19.3 of the Tallahassee Lease is amended by making the current paragraph subsection (a) and the following subsection (b) is added
to Section 19.3 immediately following subsection (a):

 

(b)          In
the event Lessee elects to purchase the Leased Properly pursuant to Section 19.4, then on the last day of the Term, or the
next Business Day if the last day of the Term is not a Business Day, Lessor shall, upon receipt from Lessee of the purchase
price provided for in Section 19.4 and any Rent or other sums then due and payable under this Lease (excluding the
installment of Minimum Rent due on the date of conveyance), convey the Leased Property to Lessee on such date in accordance
with the provisions of Article 17 and this Lease shall thereupon terminate as to the Leased Property.

 

9.6           The
Tallahassee Lease is hereby amended by adding the following Section
19.4 immediately following the end of Section 19.3:

 

    	 	40	 

     

    

 

19.4         Option
to Purchase the Leased Property. So long as no Event of Default shall have occurred that is continuing, Lessee shall have
the option to purchase Lessor’s leasehold estate in the Leased Properly under the Ground Lease pursuant to the terms and
conditions set forth in this Article 19 at the end of the Initial Term and at the end of each Extended Term upon at least 180
days’ prior written notice to Lessor for a purchase price equal to the greater of the following (such greater amount referred
to herein as the “Minimum Repurchase Price”): (i) the Fair Market Value Purchase Price or (ii) the sum of (A)
the amount set forth as the “Floor Amount” for the Tallahassee Lease on Schedule 2 attached hereto plus (B)
the cost of any Capital Additions to the Leased Property financed by Lessor pursuant to the terms of Article 9 plus (C)
any stuns disbursed by Lessor or its Affiliates, with the prior written consent of Lessee, in connection with the purchase of
the fee interest in the Leased Properly from the Ground Landlord (as defined below). The option to purchase granted hereby (1)
is subject to the prior written consent of the Ground Landlord and (2) will expire and be of no further force and effect upon
the expiration of the Initial Term and each Extended Term or the earlier termination of this Lease. As used herein, the term “Ground
Landlord” shall mean the lessor under the Ground Lease, Tallahassee Health Associates II, Ltd., a Florida limited partnership,
and its successors and . assigns.

 

9.7           Sections 24(a) and 24(b) are hereby deleted in their entirety and the following Sections (a) and (b) are substituted
therefor:

 

(a)          At
any time and from time to time within 20 days following written request by Lessor, Lessee will furnish to Lessor an Officer’s
Certificate certifying that this Lease is unmodified and in full force and effect (or that this Lease is in full force and effect
as modified and setting forth the modifications) and the dates to which the Rent has been paid. Any such Officer’s Certificate
furnished pursuant to this Article may be relied upon by Lessor and any prospective purchaser of the Leased Property.

 

(b)          Unless
specifically prohibited at any time by a Legal Requirement, Lessee will furnish, or cause to be furnished, the following
information to Lessor within the periods indicated; provided that Lessor shall keep confidential items furnished hereunder
which are not generally available to the public:

 

(i)          within
30 days after the end of each Fiscal Year, an Officer’s Certificate stating that to the best of the signer’s knowledge
and belief, Lessee is not in default in the performance or observance of any of the terms of this Lease or any loan or credit facility
which by its terms would permit an outstanding balance equal to or greater than $50,000,000, or, if Lessee shall be in default,
specifying all such defaults, the nature thereof and the steps being taken to remedy the same;

 

(ii)         within
30 days after the end of each calendar quarter, unaudited Facility Financial Statements for such calendar quarter, certified by
Lessee to Lessor;

 

    	 	41	 

     

    

 

(iii)        within
90 days after the end of each Fiscal Year, unaudited Facility Financial Statements for the most recently ended Fiscal Year certified
by Lessee to Lessor;

 

(iv)        within
150 days after written request by Lessor following the occurrence of an Event of Default, audited financial statements of the Guarantor,
it being understood that the public availability of Guarantor’s audited financial statements on a source such as EDGAR shall
constitute satisfaction of Lessee’s obligation to cause such statements to be furnished hereunder, and

 

(v)         with
reasonable promptness, such other information respecting the operation of the Facility and the financial condition, affairs and
properties of Lessee (other than audited financial statements) as Lessor may reasonably request from time to time or as may be
required by a Facility Mortgagee.

 

9.8           Article
34 is hereby deleted in its entirely, and the following Article 34 is substituted therefor:

 

34.1         Options
to Extend the Term. So long as no Event of Default shall have occurred and be continuing, Lessee is hereby granted the right
to extend the Term of this Lease for four consecutive five-year periods (each period, an “Extended Term”) for
a maximum possible Term of 35 years, by giving written notice to Lessor of each such extension not later than January 1, 2013,
for the first Extended Term and January 1, 2018, for the second Extended Term and January 1, 2023, for the third Extended Term
and January 1, 2028, for the fourth Extended Term; provided, however, the Term of this Lease shall not extend beyond the term
of the Ground Lease (Lessor acknowledging the requirement that it obtain an extension of the term of the Ground Lease as set forth
below) unless Lessor purchases the fee interest in the Leased Property from Ground Landlord, and subject, however, to the provisions
of Section 13.7 hereof Lessor agrees to use its best efforts to provide Lessee with prior written notice at least 90 days prior
to the foregoing dates. Upon receipt of the notice to extend from Lessee, Lessor shall provide the notice necessary to extend
the term of the Ground Lease pursuant to the terms of Section 2 of the Ground Lease; provided that Lessee may not exercise its
option for more than one Extended Term at a time. As a condition to exercising any option to extend hereunder, (i) if one or more
of the Associated Leases (as defined below) are then still in effect, then at least one of such Associated Leases simultaneously
must be extended by Lessee or its applicable Affiliate and (ii) if the Montgomery Lease (as defined in Section 1 of this Agreement)
is then still in effect, then the Montgomery Lease simultaneously must be extended by Lessee or its applicable Affiliate. For
purposes hereof “Associated Leases” shall mean, collectively, the York Lease and the Nittany Valley Lease as
defined in Section 1 of this Agreement. During each Extended Term, all of the terms and conditions of this Lease shall continue
in full force and effect, except that the Minimum Rent shall be determined in accordance with Section 34.2 or 34.3, as the case
may be.

 

 

    	 	42	 

     

    

 

34.2         Minimum
Rent for the First Year of the First Extended Term. The Minimum Rent for file first lease year of the first Extended Term
shall be the greater of (i) the Fair Market Rental Value on the first day of such Extended Term, or (ii) 85% of the Minimum
Rent in effect at the end of the Initial Term, as such Minimum Rent shall continue to be adjusted throughout such Extended
Term pursuant to Section 2.1(b) hereof.

 

3 4.3        Minimum
Rent for the First Year of any other Extended Term. The Minimum Rent for the first lease year of the second, third and fourth
Extended Terms shall be the greater of (i) the Fair Market Rental Value on the first day of such Extended Term, or (ii) 90% of
the Minimum Rent in effect immediately before the beginning of each such Extended Term, as such Minimum Rent shall continue to
be adjusted throughout each such Extended Term pursuant to Section 2.1(b) hereof

 

9.9           Section
35.8 of the Tallahassee Lease is hereby deleted in its entirety, and the following Section 35.8 is substituted therefor:

 

35.8         Transfer
of Operations and Licenses.

 

(a)          Operation
of Facility at End of Term. Upon the expiration of the Term or upon the earlier termination of this Lease and if
requested by Lessor, Lessee agrees to (i) continue to manage the operations of the Facility as manager and not as lessee for
a period of up to 180 days, (ii) remit to Lessor on a monthly basis the “rent” for the Facility in an amount
equal to the cash flow after payment of all expenses (including the management fee) for the Facility (pro-rated through the
date of transfer to a new operator), and (iii) provide Lessor with written reports regarding the results of operations for
the Facility on a monthly basis. Lessor agrees that it will use all reasonable efforts to prepare to operate the Facility
upon expiration or earlier termination of the Term so that the management assistance of Lessee is not needed by Lessor
hereunder.

 

(b)          Management
Fee. In the event that Lessee is required to manage the Facility pursuant to Section 35.8(a) above, Lessor agrees to pay Lessee
a monthly management fee equal to the greater of (i) 5% of the gross operating revenues of the Facility (after Medicaid, Medicare
and other contractual adjustments) for said month or (ii) $100,000; provided, however, that if Lessee is required to manage the
Facility pursuant to Section 35.8(a) as a result of a Special Default Event hereunder, the monthly management fee to be paid by
Lessor to Lessee under this Section 35.8(b) will be 5% of the gross operating revenues of the Facility (after Medicaid, Medicare
and other contractual adjustments) for said month.

 

    	 	43	 

     

    

 

(c)          Cooperation.
At the end of the Term or any early expiration of this Lease, Lessee agrees to cooperate with Lessor in the transfer of the financial
responsibility and operations of the Facility to a new operator or operators, including the good faith negotiation, execution,
and delivery of such operations transfer agreements, assignment agreements and bills of sale as are reasonably necessary to effect
such transfer. In conjunction with such cooperation, Lessee shall take all action reasonably necessary to effect or useful in
effecting the transfer to Lessor’s nominee of any certificate of need or Ecense from the Florida Department of Health or
other governmental authority regulating the use of the Facility and all service contracte, which, in either case, may be necessary
or useful in the operation of the Facility by Lessor’s nominee for the Primary Intended Use.

 

9.10         Section
36.1 of the Tallahassee Lease is amended by adding the following definition for “Facility Financial Statements” immediately
following the definition of ‘‘Facility:’’

 

“Facility
Financial Statements” means for the Facility, as to a specific period, the Detailed Income Statement containing revenue
and expenses (in reasonable detail), EBITDA, EBITDAR and operating statistics (to include, at a minimum, inpatient days, discharges,
outpatient visits and licensed beds), all presented for the period, quarter-to-date and year-to-date.

 

9.11         Section
36.1 of the Tallahassee Lease is hereby amended by deleting the definitions of “Fair Market Rental Value”, “Minimum
Repurchase Price” and “Rent” and substituting the following definitions of “Fair Market Rental Value”,
“Minimum Repurchase Price” and “Rent”, respectively, therefor:

 

“Fair
Market Rental Value” means the fair market rental value of the Leased Property or any Substitute Property determined
as of the date of the appraisal pursuant to Article 28, (a) assuming the same is unencumbered by this Lease, and (b) determined
in accordance with the appraisal procedures set forth in Article 28 or in such other manner as shall be mutually acceptable to
Lessor and Lessee and (c) not taking into account any reduction in value resulting from an indebtedness to which the Leased Property
or Substitute Property may be subject and (d) not including the value of any Capital Additions to the Leased Property financed
by Lessee pursuant to the terms of Article 9.

 

“Minimum
Repurchase Price” has the meaning set forth in Section 19.4.

 

“Rent”
means, collectively, the Minimum Rent, the Replacement Minimum Rent, the Supplemental Rent, the Additional Minimum Rent and
the Additional Charges.

 

10.         Amendments
and Agreements to the York Lease. The York Lease is confirmed and amended, effective as of the Effective Date, as follows:

 

10.1         The
following Section 2.7 is added to the York Lease following Section 2.6:

 

 

    	 	44	 

     

    

 

2.7           Additional
Minimum Rent. Lessee shall pay to Lessor as additional minimum rent, without notice, demand, set off or counterclaim, in advance,
the annual sum set forth on Schedule 1 attached hereto under the heading “Additional Minimum Rent” for the
York Lease (the “Additional Minimum Rent”), payable in advance in equal, consecutive monthly installments,
beginning with the first payment due on April 1, 2009, and continuing on the first day of each calendar month thereafter until
the final payment due on April 1, 2011. The Additional Minimum Rent shall be payable to Lessor in the same manner and location
as the Minimum Rent

 

10.2         The
first sentence of Section 15.2 of the York Lease is amended by inserting after the word “thereafter” in the second
line thereof, the following phrase: “so long as such Event of Default is continuing.”

 

10.3         Section
15.2 of the York Lease is amended by deleting the last  full unnumbered paragraph thereof and substituting the following new
subsections (c), (d) and (e) therefor:

 

(c)          The
rights and remedies of Lessor under subsections (a) and (b) of this Section 15.2 are cumulative, and except as expressly provided
otherwise in Section 15.2(d) and Section 15.2(e) below, pursuit of any of the above remedies shall not preclude pursuit of any
other remedies prescribed in other sections of this Lease and any other remedies provided by law or equity. Forbearance by Lessor
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 such Event of Default.

 

(d)          Notwithstanding
anything to the contrary set forth in this Section 15.2 or elsewhere in this Lease, the remedies available to Lessor pursuant
to Section 15.2(b) above shall only be available upon the occurrence of a Special Default Event (as defined below). The parties
specifically agree that Lessor shall not be entitled to terminate this Lease if any Event of Default other than a Special Default
Event shall have occurred and be continuing. The parties further agree that notwithstanding anything to the contrary set forth
in this Section 15.2 or elsewhere in this Lease, if an Event of Default under Section 15.1(f) has occurred and is continuing,
the sole and exclusive remedy of Lessor shall be to collect from Lessee all actual damages incurred by Lessor as a result of such
Event of Default. As used herein, the term “Special Default Event” means, individually and collectively, (i)
the occurrence of an Event of Default pursuant to Section 15.1 arising out of a default or breach of a Payment Obligation (as
defined below) by Lessee, (ii) the failure of Lessee or Guarantor to satisfy any final, unsecured and unappealable judgment arising
out of this Lease or the Guaranty which is rendered by a court of competent jurisdiction. As used herein, the term “Payment
Obligation” means any obligation from time to time owing by Lessee under this Lease, which obligation can be satisfied
with the payment of money, including any Rent, fees, costs or charges that would accrue but for the provisions of U.S. Bankruptcy
Code, after any bankruptcy or insolvency petition is filed thereunder.

 

    	 	45	 

     

    

  

(e)          Notwithstanding
anything to the contrary set forth in this Section 15.2 or elsewhere in
this Lease, so long as no Special Default Event has occurred and is continuing, then the remedies available to Lessor
hereunder upon the occurrence of an Event of Default under Section 15.1(h) above that is continuing shall be limited to the
remedies described in Section 15.2(a) above (it being understood that in such instance, Lessee will cooperate with Lessor in
its efforts to secure a sublease for the Leased Property for use that is consistent with the Primary Intended Use, which
cooperation by Lessee will include taking the actions described in Section 35.8(c) of this Lease as to any sublessee).

 

10.4         Article
19 of the York Lease is re-titled as “ABANDONMENT: OPTION TO PURCHASE”.

 

10.5         Section
19.3 of the York Lease is amended by making the current paragraph subsection (a) and the following subsection (b) is added to Section
19.3 immediately following subsection (a):

 

(b)          In
the event Lessee elects to purchase the Leased Property pursuant to Section 19.4, then on the last day of the Term, or the next
Business Day if the last day of the Term is not a Business Day, Lessor shall, upon receipt from Lessee of the purchase price provided
for in Section 19.4 and any Rent or other sums then due and payable under this Lease (excluding the installment of Minimum Rent
due on the date of conveyance), convey the Leased Property to Lessee on such date in accordance with the provisions of Article
17 and this Lease shall thereupon terminate as to the Leased Property.

 

10.6         The
York Lease is hereby amended by adding the following Section 19.4 immediately following the end of Section 19.3:

 

19.4         Option
to Purchase the Leased Property. So long as no Event of Default shall have occurred that is continuing, Lessee shall have
the option to purchase the Leased Property pursuant to the terms and conditions set forth in this Article 19 at the end of the
Initial Term and at the end of each Extended Term upon at least 180 days’ prior written notice to Lessor for a purchase
price equal to the greater of the following (such greater amount referred to herein as the “Minimum Repurchase Price”):
(i) the Fair Market Value Purchase Price or (ii) the sum of (A) the amount set forth as the “Floor Amount” for the
York Lease on Schedule 2 attached hereto plus (B) the cost of any Capital Additions to the Leased Property financed
by Lessor pursuant to the terms of Article 9. If not sooner exercised, the option to purchase granted hereby will expire and be
of no further force and effect upon the expiration of the Initial Term and each Extended Term or the earlier termination of this
Lease.

 

10.7         Sections
24(a) and 24(b) are hereby deleted in their entirety and the following Sections (a) and (b) are substituted therefor:

 

    	 	46	 

     

    

 

(a)          At
any time and from time to time within 20 days following written request by Lessor, Lessee will furnish, to Lessor an Officer’s
Certificate certifying that this Lease is unmodified and in full force and effect (or that this Lease is in full force and effect
as modified and setting forth the modifications) and the dates to which the Rent has been paid. Any such Officer’s Certificate
furnished pursuant to this Article may be relied upon by Lessor and any prospective purchaser of the Leased Property.

 

(b)          Unless
specifically prohibited at any time by a Legal Requirement, Lessee will furnish, or cause to be furnished, the following
information to Lessor within the periods indicated; provided that Lessor shall keep confidential items furnished hereunder
which are not generally available to the public:

 

(i)          within
30 days after the end of each Fiscal Year, an Officer’s Certificate stating that to the best of the signer’s knowledge
and belief, Lessee is not in default in the performance or observance of any of the terms of this Lease or any loan or credit Facility
which by its terms would permit an outstanding balance equal to or greater than $50,000,000, or, if Lessee shall be in default,
specifying all such defaults, the nature thereof and the steps being taken to remedy the same;

 

(ii)         within
30 days after the end of each calendar quarter, unaudited Facility Financial Statements for such calendar quarter, certified by
Lessee to Lessor,

 

(iii)        within
90 days after the end of each Fiscal Year, unaudited Facility Financial Statements for the most recently ended Fiscal Year certified
by Lessee to Lessor,

 

(iv)        within
150 days after written request by Lessor following the occurrence of an Event of Default, audited financial statements of the Guarantor,
it being understood that the public availability of Guarantor’s audited financial statements on a source such as EDGAR shall
constitute satisfaction of Lessee’s obligation to cause such statements to be furnished hereunder, and

 

(v)         with
reasonable promptness, such other information respecting the operation of the Facility and the financial condition, affairs and
properties of Lessee (other than audited financial statements) as Lessor may reasonably request from time to time or as may be
required by a Facility Mortgagee.

 

10.8         Article
34 is hereby deleted in its entirely, and the following Article 34 is substituted therefor:

 

 

    	 	47	 

     

    

 

34.1         Options
to Extend the Term. So long as no Event of Default shall have occurred and be continuing, Lessee is hereby granted the right
to extend the Term of this Lease for four consecutive five-year periods (each period, an “Extended Term”) for
a maximum possible Term of 35 years, by giving written notice to Lessor of each such extension not later than January 1, 2013,
for the first Extended Term and January 1, 2018, for the second Extended Term and January 1, 2023, for the third Extended Term
and January 1, 2028, for the fourth Extended Term; subject, however, to the provisions of Section 13.7 hereof Lessor agrees to
use its best efforts to provide Lessee with prior written notice at least 90 days prior to the foregoing dates. Lessee may not
exercise its option for more than one Extended Term at a time. As a condition to exercising any option to extend hereunder, (i)
if one or more of the Associated Leases (as defined below) are then still in effect, then at least one of such Associated Leases
simultaneously must be extended by Lessee or its applicable Affiliate and (ii) if the Montgomery Lease (as defined in Section
1 of this Agreement) is then still in effect, then the Montgomery Lease simultaneously must be extended by Lessee or its applicable
Affiliate. For purposes hereof, “Associated Leases” shall mean, collectively, the Nittany Valley Lease and
the Tallahassee Lease as defined in Section 1 of this Agreement. During each Extended Term, all of the terms and conditions of
this Lease shall continue in full force and effect, except that the Minimum Rent shall be determined in accordance with Section
34.2 or 34.3, as the case may be.

 

34.2         Minimum
Rent for the First Year of the First Extended Term. The Minimum Rent for the first lease year of the first Extended Term shall
be the greater of (i) the Fair Market Rental Value on the first day of such Extended Term, or (ii) 85% of the Minimum Rent in
effect at the end of the Initial Term, as such Minimum Rent shall continue to be adjusted throughout such Extended Term pursuant
to Section 2.1(b) hereof.

 

34.3         Minimum
Rent for the First Year of any other Extended Term. The Minimum Rent for the first lease year of the second, third and fourth
Extended Terms shall be the greater of (i) the Fair Market Rental Value on the first day of such Extended Term, or (ii) 90% of
the Minimum Rent in effect immediately before the beginning of each such Extended Term, as such Minimum Rent shall continue to
be adjusted throughout each such Extended Term pursuant to Section 2.1(b) hereof.

 

10.9         Section
35.8 of the York Lease is hereby deleted in its entirely, and the following Section 35.8 is substituted therefor:

 

35.8         Transfer
of Operations and Licenses.

 

(a)          Operation
of Facility at End of Term. Upon the expiration of the Term or upon the earlier termination of this Lease and if requested
by Lessor, Lessee agrees to (i) continue to manage the operations of the Facility as manager and not as lessee for a period of
up to 180 days, (ii) remit to Lessor on a monthly basis the “rent” for the Facility in an amount equal to the cash
flow after payment of all expenses (including the management fee) for the Facility (pro-rated through the date of transfer to
a new operator), and (iii) provide Lessor with written reports regarding the results of operations for the Facility on a monthly
basis. Lessor agrees that it will use all reasonable efforts to prepare to operate the Facility upon expiration or earlier termination
of the Term so that the management assistance of Lessee is not needed by Lessor hereunder,

 

    	 	48	 

     

    

 

(b)          Management
Fee. In the event that Lessee is required to manage the Facility pursuant to Section 35.8(a) above, Lessor agrees to pay Lessee
a monthly management fee equal to the greater of (i) 5% of the gross operating revenues of the Facility (after Medicaid, Medicare
and other contractual adjustments) for said month or (ii) $100,000; provided, however, that if Lessee is required to manage the
Facility pursuant to Section 35.8(a) as a result of a Special Default Event hereunder, the monthly management fee to be paid by
Lessor to Lessee under this Section 35.8(b) will be 5% of the gross operating revenues of the Facility (after Medicaid, Medicare
and other contractual adjustments) for said month.

 

(c)          Cooperation.
At the end of the Term or any early expiration of this Lease, Lessee agrees to cooperate with Lessor in the transfer of the financial
responsibility and operations of the Facility to a new operator or operators, including the good faith negotiation, execution,
and delivery of such operations transfer agreements, assignment agreements and bills of sale as are reasonably necessary to effect
such transfer. In conjunction with such cooperation, Lessee shall take all action reasonably necessary to effect or useful in
effecting the transfer to Lessor’s nominee of any certificate of need or license from the Pennsylvania Department of Health
Services or other governmental authority regulating the use of the Facility and all service contracts, which, in either case,
may be necessary or useful in the operation of the Facility by Lessor’s nominee for the Primary Intended Use.

 

10.10         Section
36.1 of the York Lease is amended by adding the following definition for “Facility Financial Statements” in alphabetical
order:

 

“Facility
Financial Statements” means for the Facility, as to a specific period, the Detailed Income Statement containing revenue
and expenses (in reasonable detail), EBITDA, EBITDAR and operating statistics (to include, at a minimum, inpatient days, discharges,
outpatient visits and licensed beds), all presented for the period, quarter-to-date and year-to-date.

 

10.11         Section
36.1 of the York Lease is hereby amended by deleting the definitions of “Fair Market Rental Value”, “Minimum
Repurchase Price” and “Rent” and substituting the following definitions of “Fair Market Rental Value”,
“Minimum Repurchase Price” and “Rent”, respectively, therefor:

 

    	 	49	 

     

    

 

“Fair
Market Rental Value” means the fair market rental value of the Leased Property or any Substitute Properly
determined as of the date of the appraisal pursuant to Article 28, (a) assuming the same is unencumbered by this Lease, and
(b) determined, in accordance with the appraisal procedures set forth in Article 28 or in such other maimer as shall be
mutually acceptable to Lessor and Lessee and (c) not taking into account any reduction in value resulting from an
indebtedness to which the Leased Property or Substitute Properly may be subject and (d) not including the value of any
Capital Additions to the Leased Property financed by Lessee pursuant to the terms of Article 9.

 

“Minimum
Repurchase Price” has the meaning set forth in Section 19.4.

 

“Rent”
means, collectively, the Minimum Rent, the Replacement Minimum Rent, the Supplemental Rent, the Additional Minimum Rent and
the Additional Charges.

 

11.         Representations
and Warranties of Lessors. Each Lessor hereby severally, but not jointly, represents and warrants to each Lessee that is a
party to each of the Leases executed by such Lessor, as follows:

 

11.1         Authority.
Such Lessor is duly organized, validly existing and in good standing under the laws of the State of its incorporation, formation
or organization and is in good standing and is authorized to transact business in each state in which it conducts business. Such
Lessor has all requisite corporate, partnership or other (as the case may be) right, power, authority and legal capacity to execute
and deliver this Agreement, to perform its obligations hereunder, and to consummate the transactions contemplated herein.

 

11.2         Execution.
The execution, delivery and performance by such Lessor of this Agreement and the consummation by it of the transactions contemplated
herein have been duly and validly authorized by all necessary corporate, partnership or other (as the case may be) action on the
part of such Lessor. Upon its execution and delivery, this Agreement will be a valid and binding obligation of such Lessor, enforceable
against such Lessor in accordance with its terms.

 

11.3         No
contravention. Neither of the execution, delivery or performance by such Lessor of this Agreement, nor the consummation by
such Lessor of the transactions contemplated herein will (with or without the passage of time or the giving of notice or both)
(i) conflict with or violate the organizational or governing documents of such Lessor, (ii) conflict with or violate any law,
rule, regulation, order, judgment, injunction or decree applicable to such Lessor or by which its properties are bound or affected,
or (iii) require on the part of such Lessor any license, permit, consent, approval, clearance, order or authorization of, or registration,
qualification, declaration or filing with any federal, state or local government or any court; administrative agency or commission
or other governmental authority or instrumentality, domestic or foreign, or any filing, with, notice to or consent of any other
person, other than as expressly provided in this Agreement.

 

12.         Representations
and Warranties of Lessees. Each Lessee hereby severally, but not jointly, represents and warrants to each Lessor that is a
party to each of the Leases executed by such Lessee, as follows:

 

 

    	 	50	 

     

    

 

12.1         Authority.
Such Lessee is duly organized, validly existing and in good standing under the laws of the State of its incorporation, formation
or organization and is in good standing and is authorized to transact business in each state in which it conducts business. Such
Lessee has all requisite corporate, partnership or other (as the case may be) right, power, authority and legal capacity to execute
and deliver this Agreement, to perform its obligations hereunder, and to consummate the transactions contemplated herein.

 

12.2         Execution.
The execution, delivery and performance by such Lessee of this Agreement and the consummation by it of the transactions contemplated
herein have been duly and validly authorized by all necessary corporate, partnership or other (as the case may be) action on the
part of such Lessee. Upon its execution and delivery, this Agreement will be and a valid and binding obligation of such Lessee,
enforceable against such Lessee in accordance with its terms.

 

12.3         No
contravention. Neither of the execution, delivery or performance by such Lessee of this Agreement, nor the consummation by
such Lessee of the transactions contemplated herein will (with or without the passage of time or the giving of notice or both)
(i) conflict with or violate the organizational or governing documents of such Lessee, (ii) conflict with or violate any law,
rule, regulation, order, judgment, injunction or decree applicable to such Lessee or by which its properties are bound or affected,
or (iii) require on the part of such Lessee any license, permit, consent, approval, clearance, order or authorization of, or registration,
qualification, declaration or filing with any federal, state or local government or any court, administrative agency or commission
or other governmental authority or instrumentality, domestic or foreign, or any filing with, notice to or consent of any other
person, other than as expressly provided in this Agreement.

 

13.         Representations
and Warranties of HS Parent. HS Parent hereby represents and warrants to each Lessor, as follows:

 

13.1         Authority.
HS Parent is duly organized, validly existing and in good standing under the laws of the State of its incorporation and is in
good standing and is authorized to transact business in each state in which it conducts business. HS Parent has all requisite
corporate right, power, authority and legal capacity to execute and deliver this Agreement, to perform its obligations hereunder,
and to consummate the transactions contemplated herein.

 

13.2         Execution.
The execution, delivery and performance by HS Parent of this Agreement and the consummation by it of the transactions contemplated
herein have been duly and validly authorized by all necessary corporate action on the part of HS Parent. Upon its execution and
delivery, this Agreement will be and a valid and binding obligation of HS Parent enforceable against HS Parent in accordance with
its terms.

 

13.3         No
contravention. Neither of the execution, delivery or performance by HS Parent of this Agreement, nor the consummation by
HS Parent of the transactions contemplated herein will (with or without the passage of time or the giving of notice or both)
(i) conflict with or violate the organizational or governing documents of HS Parent, (ii) conflict with or violate any law,
rule, regulation, order, judgment; injunction or decree applicable to HS Parent or by which its properties are bound or
affected, or (iii) require on the part of HS Parent any license, permit, consent; approval, clearance, order or authorization
of, or registration, qualification, declaration or filing with any federal, state or local government or any court,
administrative agency or commission or other governmental authority or instrumentality, domestic or foreign, or any filing
with, notice to or consent of any other person, other than as expressly provided in this Agreement.

 

    	 	51	 

     

    

 

14.         Confirmation
of Leases. Each party hereto (a) agrees that this Agreement shall not in any way impair or lessen its liabilities under any
of the Leases, as amended hereby, and (b) acknowledges that such Leases, as amended hereby, are in full force and effect and that
there currently exists no default nor any defenses or claims of offset or otherwise against the enforcement thereof by any other
parly thereto or by any other party in favor of which such Leases were expressly made.

 

15.         Confirmation
of Leases and Lease Guaranties.

 

15.1         HS
Parent hereby (a) agrees that this Agreement shall not in any way impair or lessen its liabilities under the Lease Guaranties,
and (b) acknowledges that the Lease Guaranties are in full force and effect and that there currently exists no defenses or claims
of offset or otherwise against the enforcement thereof by any other party in favor of which such Lease Guaranties were expressly
made.

 

16.         Miscellaneous. The
validity, interpretation, enforcement and effect of this Agreement and any matter arising out of or in connection with this
Agreement shall be governed by, and construed in accordance with, the laws of the State of Alabama, without regard to
principles of conflicts of laws; provided, however, that any amendment of or agreement with respect to a particular Lease or
Lease Guaranty shall be governed by, and construed in accordance with, the laws of the state or states recited in such Lease
or Lease Guaranty. This Agreement shall be binding and shall inure to the benefit of the parties hereto, and their respective
permitted successors and assigns. This Agreement shall not be modified or amended except by mutual written agreement. This
Agreement constitutes the entire agreement and understanding of the parties with respect to the subject matter hereof and
supersedes all prior agreements, oral or written, and all other communications among the parties relating to such subject,
matter. The waiver by any party of a breach or violation of any provisions of this Agreement shall not operate as, or be
construed to be, a waiver of any subsequent breach of the same or other provision. In the event any provision of this
Agreement is held to be unenforceable or invalid for any reason, this Agreement shall remain in full force and effect and
enforceable in accordance with its terms disregarding such enforceable or invalid provision. The captions and headings used
in this Agreement are made for convenience and general reference only and should not be construed to describe, define, limit
or expand the scope and intent of any term or provision of this Agreement. The parties acknowledge that this Agreement was
initially prepared by Lessors solely as a convenience and that all parties hereto, and their counsel, have read and fully
negotiated all of the language used in this Agreement. The parties acknowledge that, because all parties and their counsel
participated in negotiating and drafting this Agreement, no rule of construction shall apply to this Agreement which
construes ambiguous and unclear language in favor of or against any party because such party drafted this Agreement, With
respect to all provisions of this Agreement, time is of the essence. The words “include,”
“includes” and “including” shall be deemed to be followed by the phrase “without
limitation.” Whenever the context so permits, the use of the plural shall include the singular, the singular shall
include the plural, and any gender shall be deemed to include all genders.

 

    	 	52	 

     

    

 

17.         Execution
by Counterparts and Telefacsimile. This Agreement may be executed in one or more counterparts, each of which shall be an original
and taken together shall constitute one and the same document. Signature and acknowledgment pages, if any, may be detached from
the counterparts and attached to a single copy of this document to physically form one document. For purposes of executing this
Agreement, any signed document transmitted by facsimile machine with automatic confirmation of receipt shall be treated in all
manner and respects as an original document The signature of any party transmitted by facsimile machine shall be considered to
be an original signature, and any such document shall be considered to have the same binding legal effect as an original document
executed, delivered and exchanged between or among the parties. At the request of any party, any executed document delivered by
facsimile machine shall be re-executed by all parties in a “hard-copy” form. The parties hereto hereby agree that
none of them shall raise the use of a facsimile machine for the transmission of signatures as a defense to this Agreement, and
each such party hereby waives such defense.

 

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    	 	53	 

     

    

 

IN WITNESS WHEREOF, Lessors
have caused this Agreement be executed as of the day and year first above written.

 

	 	“Lessors:”
	 	 
	 	HEALTHCARE REALTY TRUST

INCORPORATED
	 	HR ACQUISITION I CORPORATION

HRT OF ALABAMA, INC.
	 	HR ACQUISITION OF PENNSYLVANIA, INC.

PENNSYLVANIA HRT, INC.
	 	 
	 	By 	/s/John M. Bryant, Jr.
	 	 	John M. Bryant, Jr.
	 	 	Executive Vice President 

and General Counsel
	 	 	 
	 	HR ACQUISITION OF SAN ANTONIO, LTD.
	 	 	 
	 	By its general partner:
	 	Healthcare Acquisition of Texas, Inc.
	 	 	 
	 	By:	/s/ John M. Bryant, Jr.
	 	 	John M. Bryant, Jr.

Executive Vice President and

General Counsel

 

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    	 	54	 

     

    

 

IN WITNESS WHEREOF, Lessees
has caused this Agreement be executed as of the day and year first above written.

 

	 	“Lessees:’’
	 	 
	 	HEALTHSOUTH CORPORATION
	 	 
	 	By 	/s/ Arthur E. Wilson, Jr.
	 	 	Arthur E. Wilson, Jr.
	 	 	Senior Vice President
	 	 	 
	 	HEALTHSOUTH OF YORK, INC. 

HEALTHSOUTH OF MONTGOMERY, INC. 

HEALTHSOUTH OF NITTANY VALLEY, INC.
	 	 	 
	 	By 	/s/ Arthur E. Wilson, Jr.
	 	 	Arthur E. Wilson, Jr.
	 	 	Vice President
	 	 	 
	 	HEALTHSOUTH OF TALLAHASSEE LIMITED PARTNERSHIP
	 	 	 
	 	By its general partner:
	 	HealthSouth Real Properly Holding Corporation
	 	 	 
	 	By 	/s/ Arthur E. Wilson, Jr.
	 	 	Arthur E. Wilson, Jr.
	 	 	Vice President
	 	 	 
	 	BEAUMONT REHAB ASSOCIATES
    LIMITED PARTNERSHIP
	 	 
	 	By its general partner:
	 	Southeast Texas Rehabilitation Hospital, Inc.
	 	 	 
	 	By 	/s/ Arthur E. Wilson, Jr.
	 	 	Arthur E. Wilson, Jr.
	 	 	Vice President

 

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    	 	55	 

     

    

  

SCHEDULE 1

 

Annual Payment
Obligations

 

	 	 	 	 	 	 	 	Current	 	 	 	 	 	 	 
	 	 	 	 	Current	 	 	Replacement	 	 	 	 	 	Additional	 
	ENTITY	 	 	 	Minimum	 	 	Minimum	 	 	Supplemental	 	 	Minimum	 
	ID	 	Lease Name	 	Rent	 	 	Rent	 	 	Rent	 	 	Rent	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	ALT00	 	Altoona Lease	 	$	2,227,678	 	 	$	340,405.80	 	 	$	6,203.16	 	 	$	230,526.00	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	GREA00	 	Great Lakes Lease (Erie)	 	$	2,380,460	 	 	$	354,626.04	 	 	$	6,629.82	 	 	$	246,336.24	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	MECH00	 	Mechanicsburg Lease	 	$	1,611,392	 	 	$	246,232.56	 	 	$	4,487.06	 	 	$	166,751.04	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	MONT00	 	Montgomery Lease	 	$	2,082,550	 	 	$	319,663.68	 	 	$	5,816.65	 	 	$	215,507.64	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	NITT00	 	Nittany Valley Lease (Pleasant Gap)	 	$	2,305,212	 	 	$	353,841.60	 	 	$	6,438.56	 	 	$	238,549.32	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	PITT00	 	Pittsburg Lease (Monroeville)	 	$	2,050,139	 	 	$	312,346.32	 	 	$	5,655.30	 	 	$	212,153.76	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	STEX00	 	Beaumont Lease	 	$	1,302,669	 	 	$	188,113.20	 	 	$	3,405.95	 	 	$	134,803.56	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	TALL00	 	Tallahassee Lease	 	$	1,375,268	 	 	$	211,098.60	 	 	$	3,841.19	 	 	$	142,316.28	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	YORK00	 	York Lease	 	$	2,305,212	 	 	$	353,841.60	 	 	$	6,438.56	 	 	$	238,549.32	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	TOTAL	 	 	 	$	17,640,580	 	 	$	2,680,169.40	 	 	$	48,916.25	 	 	$	1,825,493.16	 

 

    	 	56	 

     

    

 

SCHEDULE 2

 

FLOOR PRICES

 

	ENTITY

 ID	 	Lease Name	 	Floor Price	 
	 	 	 	 	 	 
	GREA00	 	Great Lakes Lease (Erie)	 	$	19,000,000	 
	 	 	 	 	 	 	 
	MECH00	 	Mechanicsburg Lease	 	$	15,700,000	 
	 	 	 	 	 	 	 
	PITT00	 	Pittsburgh Lease (Monroeville)	 	$	17,000,000	 
	 	 	 	 	 	 	 
	ALT00	 	Altoona Lease	 	 	N/A	 
	 	 	 	 	 	 	 
	STEX00	 	Beaumont Lease	 	$	13,200,000	 
	 	 	 	 	 	 	 
	MONT00	 	Montgomery Lease	 	$	17,500,000	 
	 	 	 	 	 	 	 
	NITT00	 	Nittany Valley Lease (Pleasant Gap)	 	$	17,600,000	 
	 	 	 	 	 	 	 
	YORK00	 	York Lease	 	$	17,600,000	 
	 	 	 	 	 	 	 
	TALL00	 	Tallahassee Lease	 	$	11,700,000	 

 

    	 	57	 

     

    

 

OMNIBUS
AMENDMENT AGREEMENT

NO.
1 TO LEASE AGREEMENTS

 

Dated
as of March 31, 2006

 

HEALTHCARE
REALTY TRUST INCORPORATED, a Maryland corporation (“HR Parent”), HR ACQUISITION I CORPORATION, a
Maryland corporation formerly known as Capstone Capital Corporation, formerly known as Capstone Capital Trust, Inc. (“HR
Acquisition”), HRT OF ALABAMA, INC., an Alabama corporation (“HR Alabama”), HR ACQUISITION
OF PENNSYLVANIA, INC., a Pennsylvania corporation formerly known as Capstone Capital of Pennsylvania, Inc. (“HR Pennsylvania”),
PENNSYLVANIA HRT, INC., a Pennsylvania corporation (“Pennsylvania HRT”), HR ACQUISITION OF SAN ANTONIO,
LTD., an Alabama limited partnership formerly known as Capstone Capital of San Antonio, Ltd. (“HR San Antonio”),
HEALTHSOUTH CORPORATION, a Delaware corporation formerly known as HealthSouth Rehabilitation Corporation (“HS
Parent”), HEALTHSOUTH OF YORK, INC., a Delaware corporation (“HS York”), HEALTHSOUTH OF
MONTGOMERY, INC., an Alabama corporation (“HS Montgomery”), HEALTHSOUTH OF NITTANY VALLEY, INC.,
a Delaware corporation (“HS Nittany Valley”), HEALTHSOUTH OF TALLAHASSEE LIMITED PARTNERSHIP, an Alabama
limited partnership (“HS Tallahassee”), and BEAUMONT REHAB ASSOCIATES LIMITED PARTNERSHIP, a Delaware
limited partnership (“HS Beaumont”), agree as follows:

 

     

     

    

 

1.          Preliminary
Statements. (a) HR Pennsylvania, as lessor, and HS Parent, as lessee, are parties to that certain Lease Agreement dated as
of March 24, 1995 (as amended, the “Great Lakes Lease”), for the lease of the inpatient rehabilitation hospital
and related real property and improvements located at 143 East Second Street situated in Erie County, Pennsylvania. (b) HR Pennsylvania,
as lessor, and HS Parent, as lessee, are parties to that certain Lease Agreement dated as of May 10, 1996 (as amended, the “Mechanicsburg
Lease”), for the lease of the inpatient rehabilitation hospital and related real property and improvements located at
175 Lancaster Boulevard, Mechanicsburg, Pennsylvania. (c) HR Pennsylvania, as lessor, and HS Parent, as lessee, are parties to
that certain Lease Agreement dated as of May 10, 1996 (as amended, the “Altoona Lease”), for the lease of the
inpatient rehabilitation hospital and related real property and improvements located at 2005 Valley View Boulevard, Altoona, Pennsylvania
16602. (d) HR Pennsylvania, as lessor, and HS Parent, as lessee, are parties to that certain Lease Agreement dated as of June
30, 1997 (as amended, the “Pittsburg Lease”), for the lease of the inpatient rehabilitation hospital and related
real property and improvements located at 2380 McGinley Road, Monroeville, Pennsylvania 15146. (e) HR Alabama, as lessor, and
HS Montgomery, as lessee, are parties to that certain Lease Agreement dated as of September 30, 1998 (as amended, the “Montgomery
Lease”), for the lease of the inpatient rehabilitation hospital and related real property and improvements located at
4465 Narrow Lane Road, Montgomery, Alabama, 36116. (f) Pennsylvania HRT (originally styled as “HRT of Pennsylvania, Inc.”),
as lessor, and HS Nittany Valley, as lessee, are parties to that certain Lease Agreement dated as of September 30, 1998 (as amended,
the “Nittany Valley Lease”), for the lease of the inpatient rehabilitation hospital and related real property
and improvements located at 550 W. College Avenue, Pleasant Gap, Pennsylvania, 16823. (g) HR San Antonio, as lessor, and HS Beaumont,
as lessee, are parties to that certain Lease Agreement dated as of April 1, 1996, as amended by that First Amendment to Facility
Lease dated as of February 7, 2006 (as amended, the “Beaumont Lease”), for the lease of the inpatient rehabilitation
hospital and related real property and improvements located at 3340 Plaza 10 Boulevard, Beaumont, Texas, 77707. (h) HR Parent,
as lessor, and HS Tallahassee, as lessee, are parties to that certain Lease Agreement having a commencement date of October 1,
1998 (as amended, the “Tallahassee Lease”), for the lease of the inpatient rehabilitation hospital and related
real property and improvements located at 1675 Riggins Road, Tallahassee, Florida, 32308. (i) Pennsylvania HRT, as lessor, and
HS York, as lessee, are parties to that certain Lease Agreement dated as of September 30, 1998 (as amended, the “York
Lease”), for the lease of the inpatient rehabilitation hospital and related real property and improvements located at
1850 Normandie Drive, York, Pennsylvania, 17404. The Great Lakes Lease, the Mechanicsburg Lease, the Altoona Lease, the Pittsburg
Lease, the Montgomery Lease, the Nittany Valley Lease, the Beaumont Lease, the Tallahassee Lease and the York Lease are referred
to herein, individually as a “Lease” and, collectively, as the “Leases”. HS Parent has executed
(i) the Guaranty of Obligations Under Lease Agreement dated as of September 30, 1998 with respect to the Montgomery Lease (the
“Montgomery Lease Guaranty”), (ii) the Guaranty of Obligations Under Lease Agreement dated as of September
30, 1998 with respect to the Nittany Valley Lease (the “Nittany Valley Lease Guaranty”), (iii) the Guaranty
of Obligations Under Lease Agreement dated as of September 30, 1998 with respect to the Tallahassee Lease (the “Tallahassee
Lease Guaranty”), and (iv) the Guaranty of Obligations Under Lease Agreement dated as of September 30, 1998 with respect
to the York Lease (the “York Lease Guaranty” and, together with the Montgomery Lease Guaranty, the Nittany
Valley Lease Guaranty and the Tallahassee Lease Guaranty, the “Lease Guaranties”). Pursuant to the Lease Guaranties
certain of the applicable Lessee’s obligations have been guaranteed, and the Lease Guaranties are an integral part of the
transactions contemplated by the parties hereto. HS Parent, its affiliate, HealthSouth Medical Center, Inc., an Alabama corporation
(“HSMC”), and HR Parent have entered into the Property Defeasance and Substitution Agreement dated as of March
27, 2006 (the “Defeasance Agreement”) pursuant to which, HR Parent has agreed, among other things, to cause
the sale of the three medical office buildings in Birmingham, Alabama (the “Birmingham MOBs”) at the request
of HS Parent and HSMC. The parties to the Defeasance Agreement have agreed, among other things, that the aggregate rent paid by
HSMC related to the Birmingham MOBs will continue to be paid and will be allocated in part to each of the Leases amended hereby
on a pro rata basis to increase the rent payable under each such Lease accordingly, as more particularly shown in the attached
Schedule 1. The parties further agree that HR Parent would not have entered into the Defeasance Agreement without the confirmations,
ratifications, amendments and agreements set forth in this Omnibus Amendment Agreement No. 1 to Lease Agreements (this “Agreement”).

 

2.          Definitions.
HR Parent, HR Acquisition, HR Alabama, HR Pennsylvania, Pennsylvania HRT, and HR San Antonio are referred to herein, individually,
as a “Lessor” and, collectively, as “Lessors.” HS Parent, HS York, HS Montgomery, HS Nittany
Valley, HS Tallahassee and HS Beaumont are refereed to herein, individually, as a “Lessee” and, collectively,
as “Lessees.” Unless the context otherwise requires, all other capitalized terms used herein without definition
shall have the definitions provided therefor in the respective Leases. Unless the context otherwise requires, the effective date
of the agreements and amendments set forth in this Agreement shall be the date of this Agreement (the “Effective Date”).

 

    2 

     

    

 

3.           Amendments
and Agreements to the Great Lakes Lease. The Great Lakes Lease is confirmed and amended, effective as of the Effective Date,
as follows:

 

3.1         The
current Minimum Rent under the Great Lakes Leaseis the annual amount set forth under the heading “Current Rent”
for the Great Lakes Lease on Schedule 1 attached hereto.

 

3.2         Sections
2.3, 2.4 and 31.1 of the Great Lakes Lease arehereby amended by deleting the phrase “Minimum Rent” each time that
it appears in such Sections 2.3, 2.4 and 31.1 and substituting the word “Rent” therefor.

 

3.3          The
following Sections 2.5 and 2.6 are added to theGreat Lakes Lease following Section 2.4:

 

2.5          Replacement
Minimum Rent.

 

(a)          Replacement
Minimum Rent. Lessee shall pay to Lessor, without notice, demand, set off or counterclaim, in advance the annual sum set forth
on Schedule 1 attached hereto under the heading “Replacement Minimum Rent” for the Great Lakes Lease (as such
amount shall be increased annually pursuant to Section 2.5(b), the “Replacement Minimum Rent”). The Replacement
Minimum Rent shall be payable in advance in equal, consecutive monthly installments, beginning on the Effective Date and continuing
on the first day of each calendar month thereafter until the final payment to be made on June 1, 2009. The Replacement Minimum
Rent shall be prorated as to any partial month and shall be payable to Lessor in the same manner and location as the Minimum Rent.

 

(b)          On
each Adjustment Date beginning with the first Adjustment Date following the Effective Date and continuing on each Adjustment Date
thereafter until the Replacement Minimum Rent is no longer payable hereunder, the current Replacement Minimum Rent shall be increased
effective at such Adjustment Date by 75% of the increase in the Consumer Price Index from the previous Adjustment Date to the
current Adjustment Date; provided that such increase shall not be greater than five percent nor less than two percent.

 

2.6          Supplemental
Rent. Lessee shall pay to Lessor as supplemental rent, without notice, demand, set off or counterclaim, in advance in advance
the annual sum set forth on Schedule 1 attached hereto under the heading “Supplemental Rent” for the Great
Lakes Lease (the “Supplemental Rent”), payable in advance in equal, consecutive monthly installments, beginning
on the Effective Date, and continuing on the first day of each calendar month thereafter until April 12, 2011. Supplemental Rent
shall be prorated as to any partial month and shall be payable to Lessor in the same manner and location as the Minimum Rent.

 

    3 

     

    

 

3.4           Section
36.1 of the Great Lakes Lease is hereby amended by deleting the definitions of “Affiliate” and “Rent”
and substituting the following definitions of “Affiliate” and “Rent” therefor:

 

“Affiliate”
means, as to any Person other than a natural person, any Person or entity which directly or indirectly through one or more
intermediaries controls, is controlled by or is under common control with such Person. For purposes hereof, the terms “control”,
“controlled”, or “controlling” shall include, (i) the ownership, control or power to vote ten percent
or more of (x) the outstanding shares of any class of voting securities of any Person or (y) any holder of beneficial interests
of any Person or any such person or entity, as the case may be, directly or indirectly, or acting through one or more persons
or entities, (ii) the control in any manner over a general partner(s) of any Person or the election of more than one manager,
director or trustee (or persons exercising similar functions) of such Person or entity, or (iii) the power to exercise, directly
or indirectly, control over the management or policies of such Person.

 

“Rent”
means, collectively, the Minimum Rent, the Replacement Minimum Rent, the Supplemental Rent and the Additional Charges.

 

4.            Amendments
and Agreements to the Mechanicsburg Lease. The Mechanicsburg Lease is confirmed and amended, effective as of the Effective
Date, as follows:

 

4.1          The
current Minimum Rent under the Mechanicsburg Lease is the annual amount set forth under the heading “Current Rent”
for the Mechanicsburg Lease on Schedule 1 attached hereto.

 

4.2          Sections
2.3, 2.4 and 31.1 of the Mechanicsburg Lease are hereby amended by deleting the phrase “Minimum Rent” each time that
it appears in such Sections 2.3, 2.4 and 31.1 and substituting the word “Rent” therefor.

 

4.3          The
following Sections 2.5 and 2.6 are added to the Mechanicsburg Lease following Section 2.4:

 

2.5         Replacement
Minimum Rent.

 

(a)          Replacement
Minimum Rent. Lessee shall pay to Lessor, without notice, demand, set off or counterclaim, in advance the annual sum set forth
on Schedule 1 attached hereto under the heading “Replacement Minimum Rent” for the Mechanicsburg Lease (as
such amount shall be increased annually pursuant to Section 2.5(b), the “Replacement Minimum Rent”). The Replacement
Minimum Rent shall be payable in advance in equal, consecutive monthly installments, beginning on the Effective Date and continuing
on the first day of each calendar month thereafter until the final payment to be made on June 1, 2009. The Replacement Minimum
Rent shall be prorated as to any partial month and shall be payable to Lessor in the same manner and location as the Minimum Rent.

 

    4 

     

    

 

(b)          On
each Adjustment Date beginning with the first Adjustment Date following the Effective Date and continuing on each Adjustment Date
thereafter until the Replacement Minimum Rent is no longer payable hereunder, the current Replacement Minimum Rent shall be increased
effective at such Adjustment Date by 75% of the increase in the Consumer Price Index from the previous Adjustment Date to the
current Adjustment Date; provided that such increase shall not be greater than five percent nor less than two percent.

 

2.6         Supplemental
Rent. Lessee shall pay to Lessor as supplemental rent, without notice, demand, set off or counterclaim, in advance in advance
the annual sum set forth on Schedule 1 attached hereto under the heading “Supplemental Rent” for the Mechanicsburg
Lease (the “Supplemental Rent”), payable in advance in equal, consecutive monthly installments, beginning on
the Effective Date, and continuing on the first day of each calendar month thereafter until April 12, 2011. Supplemental Rent
shall be prorated as to any partial month and shall be payable to Lessor in the same manner and location as the Minimum Rent.

 

4.4           Section
36.1 of the Mechanicsburg Lease is hereby amended by deleting the definitions of “Affiliate” and “Rent”
and substituting the following definitions of “Affiliate” and “Rent” therefor:

 

“Affiliate”
means, as to any Person other than a natural person, any Person or entity which directly or indirectly through one or more
intermediaries controls, is controlled by or is under common control with such Person. For purposes hereof, the terms “control”,
“controlled”, or “controlling” shall include, (i) the ownership, control or power to vote ten percent
or more of (x) the outstanding shares of any class of voting securities of any Person or (y) any holder of beneficial interests
of any Person or any such person or entity, as the case may be, directly or indirectly, or acting through one or more persons
or entities, (ii) the control in any manner over a general partner(s) of any Person or the election of more than one manager,
director or trustee (or persons exercising similar functions) of such Person or entity, or (iii) the power to exercise, directly
or indirectly, control over the management or policies of such Person.

 

“Rent”
means, collectively, the Minimum Rent, the Replacement Minimum Rent, the Supplemental Rent and the Additional Charges.

 

5.             Amendments
and Agreements to the Altoona Lease. The Altoona Lease is confirmed and amended, effective as of the Effective Date, as follows:

 

5.1           The
current Minimum Rent under the Altoona Lease is the annual amount set forth under the heading “Current Rent” for the
Altoona Lease on Schedule 1 attached hereto.

 

5.2           Sections
2.3, 2.4 and 31.1 of the Altoona Lease are hereby amended by deleting the phrase “Minimum Rent” each time that it
appears in such Sections 2.3, 2.4 and 31.1 and substituting the word “Rent” therefor.

 

    5 

     

    

 

5.3          The
following Sections 2.5 and 2.6 are added to the Altoona Lease following Section 2.4:

 

2.5         Replacement
Minimum Rent.

 

(a)          Replacement
Minimum Rent. Lessee shall pay to Lessor, without notice, demand, set off or counterclaim, in advance the annual sum set forth
on Schedule 1 attached hereto under the heading “Replacement Minimum Rent” for the Altoona Lease (as such amount
shall be increased annually pursuant to Section 2.5(b), the “Replacement Minimum Rent”). The Replacement Minimum
Rent shall be payable in advance in equal, consecutive monthly installments, beginning on the Effective Date and continuing on
the first day of each calendar month thereafter until the final payment to be made on June 1, 2009. The Replacement Minimum Rent
shall be prorated as to any partial month and shall be payable to Lessor in the same manner and location as the Minimum Rent.

 

(b)          On
each Adjustment Date beginning with the first Adjustment Date following the Effective Date and continuing on each Adjustment Date
thereafter until the Replacement Minimum Rent is no longer payable hereunder, the current Replacement Minimum-Rent shall be increased
effective at such Adjustment Date by 75% of the increase in the Consumer Price Index from the previous Adjustment Date to the
current Adjustment Date; provided that such increase shall not be greater than five percent nor less than two percent.

 

2.6           Supplemental
Rent. Lessee shall pay to Lessor as supplemental rent, without notice, demand, set off or counterclaim, in advance in advance
the annual sum set forth on Schedule 1 attached hereto under the heading “Supplemental Rent” for the Altoona
Lease (the “Supplemental Rent”), payable in advance in equal, consecutive monthly installments, beginning on
the Effective Date, and continuing on the first day of each calendar month thereafter until April 12, 2011. Supplemental Rent
shall be prorated as to any partial month and shall be payable to Lessor in the same manner and location as the Minimum Rent.

 

5.4           Section
36.1 of the Altoona Lease is hereby amended by deleting the definitions of “Affiliate” and “Rent” and
substituting the following definitions of “Affiliate” and “Rent” therefor:

 

“Affiliate”
means, as to any Person other than a natural person, any Person or entity which directly or indirectly through one or more
intermediaries controls, is controlled by or is under common control with such Person. For purposes hereof, the terms “control”,
“controlled”, or “controlling” shall include, (i) the ownership, control or power to vote ten percent
or more of (x) the outstanding shares of any class of voting securities of any Person or (y) any holder of beneficial interests
of any Person or any such person or entity, as the case may be, directly or indirectly, or acting through one or more persons
or entities, (ii) the control in any manner over a general partner(s) of any Person or the election of more than one manager,
director or trustee (or persons exercising similar functions) of such Person or entity, or (iii) the power to exercise, directly
or indirectly, control over the management or policies of such Person.

 

    6 

     

    

 

“Rent”
means, collectively, the Minimum Rent, the Replacement Minimum Rent, the Supplemental Rent and the Additional Charges.

 

6.            Amendments
and Agreements to the Pittsburg Lease. The Pittsburgh Lease is confirmed and amended, effective as of the Effective Date,
as follows:

 

6.1           The
current Minimum Rent under the Pittsburgh Lease is the annual amount set forth under the heading “Current Rent” for
the Pittsburgh Lease on Schedule 1 attached hereto.

 

6.2           Sections
2.3, 2.4 and 31.1 of the Pittsburg Lease are hereby amended by deleting the phrase “Minimum Rent” each time that it
appears in such Sections 2.3, 2.4 and 31.1 and substituting the word “Rent” therefor.

 

6.3           The
following Sections 2.5 and 2.6 are added to the Pittsburgh Lease following Section 2.4:

 

2.5         Replacement
Minimum Rent.

 

(a)          Replacement
Minimum Rent. Lessee shall pay to Lessor, without notice, demand, set off or counterclaim, in advance the annual sum set forth
on Schedule 1 attached hereto under the heading “Replacement Minimum Rent” for the Pittsburgh Lease (as such
amount shall be increased annually pursuant to Section 2.5(b), the “Replacement Minimum Rent”). The Replacement
Minimum Rent shall be payable in advance in equal, consecutive monthly installments, beginning on the Effective Date and continuing
on the first day of each calendar month thereafter until the final payment to be made on June 1, 2009. The Replacement Minimum
Rent shall be prorated as to any partial month and shall be payable to Lessor in the same manner and location as the Minimum Rent.

 

(b)          On
each Adjustment Date beginning with the first Adjustment Date following the Effective Date and continuing on each Adjustment Date
thereafter until the Replacement Minimum Rent is no longer payable hereunder, the current Replacement Minimum Rent shall be increased
effective at such Adjustment Date by 75% of the increase in the Consumer Price Index from the previous Adjustment Date to the
current Adjustment Date; provided that such increase shall not be greater than five percent nor less than two percent.

 

2.6           Supplemental
Rent. Lessee shall pay to Lessor as supplemental rent, without notice, demand, set off or counterclaim, in advance in advance
the annual sum set forth on Schedule 1 attached hereto under the heading “Supplemental Rent” for the Pittsburgh
Lease (the “Supplemental Rent”), payable in advance in equal, consecutive monthly installments, beginning on
the Effective Date, and continuing on the first day of each calendar month thereafter until April 12, 2011. Supplemental Rent
shall be prorated as to any partial month and shall be payable to Lessor in the same manner and location as the Minimum Rent.

 

    7 

     

    

 

6.4           Section
36.1 of the Pittsburgh Lease is hereby amended by deleting the definitions of “Affiliate” and “Rent” and
substituting the following definitions of “Affiliate” and “Rent” therefor:

 

“Affiliate”
means, as to any Person other than a natural person, any Person or entity which directly or indirectly through one or more
intermediaries controls, is controlled by or is under common control with such Person. For purposes hereof, the terms “control”,
“controlled”, or “controlling” shall include, (i) the ownership, control or power to vote ten percent
or more of (x) the outstanding shares of any class of voting securities of any Person or (y) any holder of beneficial interests
of any Person or any such person or entity, as the case may be, directly or indirectly, or acting through one or more persons
or entities, (ii) the control in any manner over a general partner(s) of any Person or the election of more than one manager, director
or trustee (or persons exercising similar functions) of such Person or entity, or (iii) the power to exercise, directly or indirectly,
control over the management or policies of such Person.

 

“Rent”
means, collectively, the Minimum Rent, the Replacement Minimum Rent, the Supplemental Rent and the Additional Charges.

 

7.            Amendments
and Agreements to the Montgomery Lease. The Montgomery Lease is confirmed and amended, effective as of the Effective Date,
as follows:

 

7.1          The
current Minimum Rent under the Montgomery Lease is the annual amount set forth under the heading “Current Rent” for
the Montgomery Lease on Schedule 1 attached hereto.

 

7.2          Sections
2.3, 2.4 and 31.1 of the Montgomery Lease are hereby amended by deleting the phrase “Minimum Rent” each time that
it appears in such Sections 2.3, 2.4 and 31.1 and substituting the word “Rent” therefor.

 

7.3          The
following Sections 2.5 and 2.6 are added to the Montgomery Lease following Section 2.4:

 

2.5           Replacement
Minimum Rent.

 

(a)          Replacement
Minimum Rent. Lessee shall pay to Lessor, without notice, demand, set off or counterclaim, in advance the annual sum set forth
on Schedule 1 attached hereto under the heading “Replacement Minimum Rent” for the Montgomery Lease (as such
amount shall be increased annually pursuant to Section 2.5(b), the “Replacement Minimum Rent”). The Replacement
Minimum Rent shall be payable in advance in equal, consecutive monthly installments, beginning on the Effective Date and continuing
on the first day of each calendar month thereafter until the final payment to be made on June 1, 2009. The Replacement Minimum
Rent shall be prorated as to any partial month and shall be payable to Lessor in the same manner and location as the Minimum Rent.

 

    8 

     

    

 

(b)          On
each Adjustment Date beginning with the first Adjustment Date following the Effective Date and continuing on each Adjustment Date
thereafter until the Replacement Minimum Rent is no longer payable hereunder, the current Replacement Minimum Rent shall be increased
effective at such Adjustment Date by 75% of the increase in the Consumer Price Index from the previous Adjustment Date to the
current Adjustment Date; provided that such increase shall not be greater than five percent nor less than two percent.

 

2.6           Supplemental
Rent. Lessee shall pay to Lessor as supplemental rent, without notice, demand, set off or counterclaim, in advance in advance
the annual sum set forth on Schedule 1 attached hereto under the heading “Supplemental Rent” for the Montgomery
Lease (the “Supplemental Rent”), payable in advance in equal, consecutive monthly installments, beginning on
the Effective Date, and continuing on the first day of each calendar month thereafter until April 12, 2011. Supplemental Rent
shall be prorated as to any partial month and shall be payable to Lessor in the same manner and location as the Minimum Rent.

 

7.4           Section
36.1 of the Montgomery Lease is hereby amended by deleting the definitions of “Affiliate” and “Rent” and
substituting the following definitions of “Affiliate” and “Rent” therefor:

 

“Affiliate”
means, as to any Person other than a natural person, any Person or entity which directly or indirectly through one or more
intermediaries controls, is controlled by or is under common control with such Person. For purposes hereof, the terms “control”,
“controlled”, or “controlling” shall include, (i) the ownership, control or power to vote ten percent
or more of (x) the outstanding shares of any class of voting securities of any Person or (y) any holder of beneficial interests
of any Person or any such person or entity, as the case may be, directly or indirectly, or acting through one or more persons
or entities, (ii) the control in any manner over a general partner(s) of any Person or the election of more than one manager,
director or trustee (or persons exercising similar functions) of such Person or entity, or (iii) the power to exercise, directly
or indirectly, control over the management or policies of such Person.

 

“Rent”
means, collectively, the Minimum Rent, the Replacement Minimum Rent, the Supplemental Rent and the Additional Charges.

 

8.             Amendments
and Agreements to the Nittany Valley Lease. The Nittany Valley Lease is confirmed and amended, effective as of the Effective
Date, as follows:

 

    9 

     

    

 

8.1          The
current Minimum Rent under the Nittany Valley Lease is the annual amount set forth under the heading “Current Rent”
for the Nittany Valley Lease on Schedule 1 attached hereto.

 

8.2          The
Nittany Valley Lease ishereby amended generally by deleting any and all references to “HRT of Pennsylvania, Inc.”
therein and substituting “Pennsylvania HRT, Inc.” therefor.

 

8.3          Sections
2.3, 2.4 and 31.1 of the Nittany Valley Lease are hereby amended by deleting
the phrase “Minimum Rent” each time that it appears in such Sections 2.3, 2.4 and 31.1 and substituting the word “Rent”
therefor.

 

8.4          The
following Sections 2.5 and 2.6 are added to the Nittany Valley
Lease following Section 2.4:

 

2.5         Replacement
Minimum Rent.

 

(a)          Replacement
Minimum Rent. Lessee shall pay to Lessor, without notice, demand, set off or counterclaim, in advance the annual sum set forth
on Schedule 1 attached hereto under the heading “Replacement Minimum Rent” for the Nittany Valley Lease (as
such amount shall be increased annually pursuant to Section 2.5(b), the “Replacement Minimum Rent”). The Replacement
Minimum Rent shall be payable in advance in equal, consecutive monthly installments, beginning on the Effective Date and continuing
on the first day of each calendar month thereafter until the final payment to be made on June 1, 2009. The Replacement Minimum
Rent shall be prorated as to any partial month and shall be payable to Lessor in the same manner and location as the Minimum Rent.

 

(b)          On
each Adjustment Date beginning with the first Adjustment Date following the Effective Date and continuing on each Adjustment Date
thereafter until the Replacement Minimum Rent is no longer payable hereunder, the current Replacement Minimum Rent shall be increased
effective at such Adjustment Date by 75% of the increase in the Consumer Price Index from the previous Adjustment Date to the
current Adjustment Date; provided that such increase shall not be greater than five percent nor less than two percent.

 

2.6         Supplemental
Rent. Lessee shall pay to Lessor as supplemental rent, without notice, demand, set off or counterclaim, in advance in advance
the annual sum set forth on Schedule 1 attached hereto under the heading “Supplemental Rent” for the Nittany
Valley Lease (the “Supplemental Rent”), payable in advance in equal, consecutive monthly installments, beginning
on the Effective Date, and continuing on the first day of each calendar month thereafter until April 12, 2011. Supplemental Rent
shall be prorated as to any partial month and shall be payable to Lessor in the same manner and location as the Minimum Rent.

 

    10 

     

    

 

8.5           Section
36.1 of the Nittany Valley Lease is hereby amended by deleting the definitions of “Affiliate” and “Rent”
and substituting the following definitions of “Affiliate” and “Rent” therefor:

 

“Affiliate”
means, as to any Person other than a natural person, any Person or entity which directly or indirectly through one or more
intermediaries controls, is controlled by or is under common control with such Person. For purposes hereof, the terms “control”,
“controlled”, or “controlling” shall include, (i) the ownership, control or power to vote ten percent
or more of (x) the outstanding shares of any class of voting securities of any Person or (y) any holder of beneficial interests
of any Person or any such person or entity, as the case may be, directly or indirectly, or acting through one or more persons
or entities, (ii) the control in any manner over a general partner(s) of any Person or the election of more than one manager,
director or trustee (or persons exercising similar functions) of such Person or entity, or (iii) the power to exercise, directly
or indirectly, control over the management or policies of such Person.

 

“Rent”
means, collectively, the Minimum Rent, the Replacement Minimum Rent, the Supplemental Rent and the Additional Charges.

 

9.            Amendments
and Agreements to the Beaumont Lease. The Beaumont Lease is confirmed and amended, effective as of the Effective Date,
as follows:

 

9.1           The
current Minimum Rent under the Beaumont Lease is the annual amount set forth under the heading “Current Rent” for
the Beaumont Lease on Schedule 1 attached hereto.

 

9.2           Section
2.1 of the Beaumont Lease is hereby amended by deleting the definitions of “Affiliate” and “Rent” and
substituting the following definitions of “Affiliate” and “Rent” therefor:

 

“Affiliate”
means, as to any Person other than a natural person, any Person or entity which directly or indirectly through one or more
intermediaries controls, is controlled by or is under common control with such Person. For purposes hereof, the terms “control”,
“controlled”, or “controlling” shall include, (i) the ownership, control or power to vote ten percent
or more of (x) the outstanding shares of any class of voting securities of any Person or (y) any holder of beneficial interests
of any Person or any such person or entity, as the case may be, directly or indirectly, or acting through one or more persons
or entities, (ii) the control in any manner over a general partner(s) of any Person or the election of more than one manager,
director or trustee (or persons exercising similar functions) of such Person or entity, or (iii) the power to exercise, directly
or indirectly, control over the management or policies of such Person.

 

“Rent”
means, collectively, the Minimum Rent, the Replacement Minimum Rent, the Supplemental Rent and the Additional Charges.

 

    11 

     

    

 

9.3          Section
2.1 of the Beaumont Lease is hereby amended by inserting the following definition immediately after “Consolidated
Financials” and immediately before “Continental”:

 

Consumer
Price Index or CPI: The Consumer Price Index for all Urban Consumers for the U.S. City Average for all Items (1982-1984=100)
as published by the United States Department of Labor, Bureau of Labor Statistics.

 

9.4           Sections
3.3 and 3.4 of the Beaumont Lease are hereby amended by deleting the phrase “Minimum Rent” each time that it appears
in such Sections 3.3 and 3.4 and substituting the word “Rent” therefor.

 

9.5           The
following Sections 3.5 and 3.6 are added to the Beaumont Lease following Section 3.4:

 

3.5         Replacement
Minimum Rent.

 

(a)          Replacement
Minimum Rent. Tenant shall pay to Landlord, without notice, demand, set off or counterclaim, in advance the annual sum set
forth, on Schedule 1 attached hereto under the heading “Replacement Minimum Rent” for the Beaumont Lease (as
such amount shall be increased annually pursuant to Section 3.5(b), the “Replacement Minimum Rent”). The Replacement
Minimum Rent shall be payable in advance in equal, consecutive monthly installments, beginning on the Effective Date and continuing
on the first day of each calendar month thereafter until the final payment to be made on June 1, 2009. The Replacement Minimum
Rent shall be prorated as to any partial month and shall be payable to Landlord in the same manner and location as the Minimum
Rent.

 

(b)          On
June 30, 2006, and each June 30 thereafter (each such annual date individually referred to as the “Adjustment Date”)
until the Replacement Minimum Rent is no longer payable hereunder, the current Replacement Minimum Rent shall be increased effective
at such Adjustment Date by 75% of the increase in the Consumer Price Index from the previous Adjustment Date to the current Adjustment
Date; provided that such increase shall not be greater than five percent nor less than two percent.

 

3.6         Supplemental
Rent. Tenant shall pay to Landlord as supplemental rent, without notice, demand, set off or counterclaim, in advance in advance
the annual sum set forth on Schedule 1 attached hereto under the heading “Supplemental Rent” for the Beaumont
Lease (the “Supplemental Rent”), payable in advance in equal, consecutive monthly installments, beginning on
the Effective Date, and continuing on the first day of each calendar month thereafter until April 12, 2011. Supplemental Rent
shall be prorated as to any partial month and shall be payable to Landlord in the same manner and location as the Minimum Rent.

 

    12 

     

    

 

10.          Amendments
and Agreements to the Tallahassee Lease. The Tallahassee Lease is confirmed and amended, effective as of the Effective Date,
as follows:

 

10.1        The
current Minimum Rent under the Tallahassee Lease is the annual amount set forth under the heading “Current Rent” for
the Tallahassee Lease on Schedule 1 attached hereto.

 

10.2        Sections
2.3, 2.4 and 31.1 of the Tallahassee Lease are hereby amended by deleting the phrase “Minimum Rent” each time that
it appears in such Sections 2.3, 2.4 and 31.1 and substituting the word “Rent” therefor.

 

10.3        The
following Sections 2.5 and 2.6 are added to the Tallahassee Lease following Section 2.4:

 

2.5          Replacement
Minimum Rent.

 

(a)          Replacement
Minimum Rent. Lessee shall pay to Lessor, without notice, demand, set off or counterclaim, in advance the annual sum set forth
on Schedule 1 attached hereto under the heading “Replacement Minimum Rent” for the Tallahassee Lease (as such
amount shall be increased annually pursuant to Section 2.5(b), the “Replacement Minimum Rent”). The Replacement
Minimum Rent shall be payable in advance in equal, consecutive monthly installments, beginning on the Effective Date and continuing
on the first day of each calendar month thereafter until the final payment to be made on June 1, 2009. The Replacement Minimum
Rent shall be prorated as to any partial month and shall be payable to Lessor in the same manner and location as the Minimum Rent.

 

(b)          On
each Adjustment Date beginning with the first Adjustment Date following the Effective Date and continuing on each Adjustment Date
thereafter until the Replacement Minimum Rent is no longer payable hereunder, the current Replacement Minimum Rent shall be increased
effective at such Adjustment Date by 75% of the increase in the Consumer Price Index from the previous Adjustment Date to the
current Adjustment Date; provided that such increase shall not be greater than five percent nor less than two percent.

 

2.6         Supplemental
Rent. Lessee shall pay to Lessor as supplemental rent, without notice, demand, set off or counterclaim, in advance in advance
the annual sum set forth on Schedule 1 attached hereto under the heading “Supplemental Rent” for the Tallahassee
Lease (the “Supplemental Rent”), payable in advance in equal, consecutive monthly installments, beginning on
the Effective Date, and continuing on the first day of each calendar month thereafter until April 12, 2011. Supplemental Rent
shall be prorated as to any partial month and shall be payable to Lessor in the same manner and location as the Minimum Rent.

 

    13 

     

    

 

10.4         Section
36.1 of the Tallahassee Lease is hereby amended by deleting the definitions of “Affiliate” and “Rent”
and substituting the following definitions of “Affiliate” and “Rent” therefor:

 

“Affiliate”
means, as to any Person other than a natural person, any Person or entity which directly or indirectly through one or more
intermediaries controls, is controlled by or is under common control with such Person. For purposes hereof, the terms “control”,
“controlled”, or “controlling” shall include, (i) the ownership, control or power to vote ten percent
or more of (x) the outstanding shares of any class of voting securities of any Person or (y) any holder of beneficial interests
of any Person or any such person or entity, as the case may be, directly or indirectly, or acting through one or more persons
or entities, (ii) the control in any manner over a general partner(s) of any Person or the election of more than one manager,
director or trustee (or persons exercising similar functions) of such Person or entity, or (iii) the power to exercise, directly
or indirectly, control over the management or policies of such Person.

 

“Rent”
means, collectively, the Minimum Rent, the Additional Rent, the Replacement Minimum Rent, the Supplemental Rent and the Additional
Charges.

 

11.           Amendments
and Agreements to the York Lease. The York Lease is confirmed and amended, effective as of the Effective Date, as follows:

 

11.1         The
current Minimum Rent under the York Lease is the annual amount set forth under the heading “Current Rent” for the
York Lease on Schedule 1 attached hereto.

 

11.2         The
York Lease is hereby amended generally by deleting any and all references to “HRT of Pennsylvania, Inc.” and substituting
“Pennsylvania HRT, Inc,” therefor.

 

11.3         Sections
2.3, 2.4 and 31.1 of the York Lease are hereby amended by deleting the phrase “Minimum Rent” each time that it appears
in such Sections 2.3, 2.4 and 31.1 and substituting the word “Rent” therefor.

 

11.4         The
following Sections 2.5 and 2.6 are added to the York Lease following Section 2.4:

 

2.5           Replacement
Minimum Rent.

 

(a)          Replacement
Minimum Rent. Lessee shall pay to Lessor, without notice, demand, set off or counterclaim, in advance the annual sum set forth
on Schedule 1 attached hereto under the heading “Replacement Minimum Rent” for the York Lease (as such amount
shall be increased annually pursuant to Section 2.5(b), the “Replacement Minimum Rent”). The Replacement Minimum
Rent shall be payable in advance in equal, consecutive monthly installments, beginning on the Effective Date and continuing on
the first day of each calendar month thereafter until the final payment to be made on June 1, 2009. The Replacement Minimum Rent
shall be prorated as to any partial month and shall be payable to Lessor in the same manner and location as the Minimum Rent.

 

    14 

     

    

 

(b)          On
each Adjustment Date beginning with the first Adjustment Date following the Effective Date and continuing on each Adjustment Date
thereafter until the Replacement Minimum Rent is no longer payable hereunder, the current Replacement Minimum Rent shall be increased
effective at such Adjustment Date by 75% of the increase in the Consumer Price Index from the previous Adjustment Date to the
current Adjustment Date; provided that such increase shall not be greater than five percent nor less than two percent.

 

2.6           Supplemental
Rent. Lessee shall pay to Lessor as supplemental rent, without notice, demand, set off or counterclaim, in advance in advance
the annual sum set forth on Schedule 1 attached hereto under the heading “Supplemental Rent” for the York Lease
(the “Supplemental Rent”), payable in advance in equal, consecutive monthly installments, beginning on the
Effective Date, and continuing on the first day of each calendar month thereafter until April 12, 2011. Supplemental Rent shall
be prorated as to any partial month and shall be payable to Lessor in the same manner and location as the Minimum Rent.

 

11.5          Section
36.1 of the York Lease is hereby amended by deleting the definitions of “Affiliate” and “Rent” and substituting
the following definitions of “Affiliate” and “Rent” therefor:

 

“Affiliate”
means, as to any Person other than a natural person, any Person or entity which directly or indirectly through one or more
intermediaries controls, is controlled by or is under common control with such Person. For puiposes hereof, the terms “control”,
“controlled”, or “controlling” shall include, (i) the ownership, control or power to vote ten percent
or more of (x) the outstanding shares of any class of voting securities of any Person or (y) any holder of beneficial interests
of any Person or any such person or entity, as the case may be, directly or indirectly, or acting through one or more persons
or entities, (ii) the control in any manner over a general partners) of any Person or the election of more than one manager, director
or trustee (or persons exercising similar functions) of such Person or entity, or (iii) the power to exercise, directly or indirectly,
control over the management or policies of such Person.

 

“Rent”
means, collectively, the Minimum Rent, the Replacement Minimum Rent, the Supplemental Rent and the Additional Charges.

 

12.           Representations
and Warranties of Lessors. Each Lessor hereby severally, but not jointly, represents and warrants to each Lessee that is a
party to each of the Leases executed by such Lessor, as follows:

 

12.1         Authority.
Such Lessor is duly organized, validly existing and in good standing under the laws of the State of its incorporation, formation
or organization and is in good standing and is authorized to transact business in each state in which it conducts business. Such
Lessor has all requisite corporate, partnership or other (as the case may be) right, power, authority and legal capacity to execute
and deliver this Agreement, to perform its obligations hereunder, and to consummate the transactions contemplated herein.

 

    15 

     

    

 

12.2         Execution.
The execution, delivery and performance by such Lessor of this Agreement and the consummation by it of the transactions contemplated
herein have been duly and validly authorized by all necessary corporate, partnership or other (as the case may be) action on the
part of such Lessor. Upon its execution and delivery, this Agreement will be a valid and binding obligation of such Lessor, enforceable
against such Lessor in accordance with its terms.

 

12.3         No
contravention. Neither of the execution, delivery or performance by such Lessor of this Agreement, nor the consummation by
such Lessor of the transactions contemplated herein will (with or without the passage of time or the giving of notice or both)
(i) conflict with or violate the organizational or governing documents of such Lessor, (ii) conflict with or violate any law,
rule, regulation, order, judgment, injunction or decree applicable to such Lessor or by which its properties are bound or affected,
or (iii) require on the part of such Lessor any license, permit, consent, approval, clearance, order or authorization of, or registration,
qualification, declaration or filing with any federal, state or local government or any court, administrative agency or commission
or other governmental authority or instrumentality, domestic or foreign, or any filing with, notice to or consent of any other
person, other than as expressly provided in this Agreement.

 

13.           Representations
and Warranties of Lessees. Each Lessee hereby severally, but not jointly, represents and warrants to each Lessor that is a
party to each of the Leases executed by such Lessee, as follows:

 

13.1         Authority.
Such Lessee is duly organized, validly existing andingood standing under the laws of the State of its incorporation, formation
or organization and is in good standing and is authorized to transact business in each state in which it conducts business. Such
Lessee has all requisite corporate, partnership or other (as the case may be) right, power, authority and legal capacity to execute
and deliver this Agreement, to perform its obligations hereunder, and to consummate the transactions contemplated herein.

 

13.2         Execution.
The execution, delivery and performance by such Lessee of this Agreement and the consummation by it of the transactions contemplated
herein have been duly and validly authorized by all necessary corporate, partnership or other (as the case may be) action on the
part of such Lessee. Upon its execution and delivery, this Agreement will be and a valid and binding obligation of such Lessee,
enforceable against such Lessee in accordance with its terms.

 

13.3         No
contravention. Neither of the execution, delivery or performance by such Lessee of this Agreement, nor the consummation by
such Lessee of the transactions contemplated herein will (with or without the passage of time or the giving of notice or both)
(i) conflict with or violate the organizational or governing documents of such Lessee, (ii) conflict with or violate any law,
rule, regulation, order, judgment, injunction or decree applicable to such Lessee or by which its properties are bound or affected,
or (iii) require on the part of such Lessee any license, permit, consent, approval, clearance, order or authorization of, or registration,
qualification, declaration or filing with any federal, state or local government or any court, administrative agency or commission
or other governmental authority or instrumentality, domestic or foreign, or any filing with, notice to or consent of any other
person, other than as expressly provided in this Agreement.

 

    16 

     

    

 

14.           Representations
and Warranties of HS Parent. HS Parent hereby represents and warrants to each Lessor, as follows:

 

14.1         Authority.
HS Parent is duly organized, validly existing and in good standing under the laws of the State of its incorporation and is in
good standing and is authorized to transact business in each state in which it conducts business. HS Parent has all requisite
corporate right, power, authority and legal capacity to execute and deliver this Agreement, to perform its obligations hereunder,
and to consummate the transactions contemplated herein.

 

14.2         Execution.
The execution, delivery and performance by HS Parent of this Agreement and the consummation by it of the transactions contemplated
herein have been duly and validly authorized by all necessary corporate action on the part of HS Parent. Upon its execution and
delivery, this Agreement will be and a valid and binding obligation of HS Parent, enforceable against HS Parent in accordance
with its terms.

 

14.3         No
contravention. Neither of the execution, delivery or performance by HS Parent of this Agreement, nor the consummation by HS
Parent of the transactions contemplated herein will (with or without the passage of time or the giving of notice or both) (i)
conflict with or violate the organizational or governing documents of HS Parent, (ii) conflict with or violate any law, rule,
regulation, order, judgment, injunction or decree applicable to HS Parent or by which its properties are bound or affected, or
(iii) require on the part of HS Parent any license, permit, consent, approval, clearance, order or authorization of, or registration,
qualification, declaration or filing with any federal, state or local government or any court, administrative agency or commission
or other governmental authority or instrumentality, domestic or foreign, or any filing with, notice to or consent of any other
person, other than as expressly provided in this Agreement.

 

15.           Confirmation
of Leases. Each party hereto (a) renews, reaffirms and ratifies the Leases, as amended hereby, to which it is a party, (b)
agrees that this Agreement shall not in any way impair or lessen its liabilities under any such Leases, as amended hereby, and
(c) acknowledges that such Leases, as amended hereby, are in full force and effect and that there currently exists no default
nor any defenses or claims of offset or otherwise against the enforcement thereof by any other party thereto or by any other party
in favor of which such Leases were expressly made.

  

16.           Confirmation
of Leases and Lease Guaranties. HS Parent hereby (a) renews, reaffirms and ratifies the Leases, as amended hereby, and the
Lease Guaranties, (b) agrees that this Agreement shall not in any way impair or lessen its liabilities under any of the Leases,
as amended hereby, or Lease Guaranties, and (c) acknowledges that the Leases, as amended hereby, and Lease Guaranties are in full
force and effect and that there currently exists no defenses or claims of offset or otherwise against the enforcement thereof
by any other party thereto or by any other party in favor of which such Leases or Lease Guaranties were expressly made.

 

    17 

     

    

 

17.           Legal
Opinions.

 

17.1           Lessors
shall cause its legal counsel to deliver Lessees a legal opinion substantially in the form of Schedule 2 attached hereto
dated as of the date hereof.

 

17.2         Lessees
shall cause its legal counsel to deliver Lessors a legal opinion substantially in the form of Schedule 3 attached hereto
dated as of the date hereof.

 

18.           Reimbursement
of Attorneys’ Fees. Lessees shall promptly reimburse the reasonable attorneys’ fees and expenses incurred by Lessors
in connection with the preparation and negotiation of this Agreement and the review of related documents, which payment shall
be made directly to counsel for Lessors.

 

19.          Miscellaneous.
The validity, interpretation, enforcement and effect of this Agreement and any matter arising out of or in connection with
this Agreement shall be governed by, and construed in accordance with, the laws of the State of Alabama, without regard
to principles of conflicts of laws; provided, however, that any amendment of or agreement with respect to a particular Lease or
Lease Guaranty shall be governed by, and construed in accordance with, the laws of the state or states recited in such Lease or
Lease Guaranty. This Agreement shall be binding and shall enure to the benefit of the parties hereto, and their respective permitted
successors and assigns. This Agreement shall not be modified or amended except by mutual written agreement This. Agreement constitutes
the entire agreement and understanding of the parties with respect by the subject matter hereof and supersedes all prior agreements,
oral or written, and all other communications among the parties relating to such subject matter. The waiver by any party of a
breach or violation of any provisions of this Agreement shall not operate as, or be construed to be, a waiver of any subsequent
breach of the same or other provision. In the event any provision of this Agreement is held to be unenforceable or invalid for
any reason, this Agreement shall remain in full force and effect and enforceable in accordance with its terms disregarding such
enforceable or invalid provision. The captions and headings used in this Agreement are made for convenience and general reference
only and should not be construed to describe, define, limit or expand the scope and intent of any term or provision of this Agreement.
The parties acknowledge that this Agreement was initially prepared by Lessors solely as a convenience and that all parties hereto,
and their counsel, have read and fully negotiated all of the language used in this Agreement. The parties acknowledge that, because
all parties and their counsel participated in negotiating and drafting this Agreement, no rule of construction shall apply to
this Agreement which construes ambiguous and unclear language in favor of or against any party because such party drafted this
Agreement. With respect to all provisions of this Agreement, time is of the essence. The words “include,” “includes”
and “including” shall be deemed to be followed by the phrase “without limitation.” Whenever the context
so permits, the use of the plural shall include the singular, the singular shall include the plural, and any gender shall be deemed
to include all genders.

 

    18 

     

    

 

20.         Execution
by Counterparts and Telefacsimile. This Agreement may be executed in one or more counterparts, each of which shall be an original
and taken together shall constitute one and the same document. Signature and acknowledgment pages, if any, may be detached from
the counterparts and attached to a single copy of this document to physically form one document. For purposes of executing this
Agreement, any signed document transmitted by facsimile machine with automatic confirmation of receipt shall be treated in all
manner and respects as an original document. The signature of any party transmitted by facsimile machine shall be considered to
be an original signature, and any such document shall be considered to have the same binding legal effect as an original document
executed, delivered and exchanged between or among the parties. At the request of any party, any executed document delivered by
facsimile machine shall be re-executed by all parties in a “hard-copy” form. The parties hereto hereby agree that
none of them shall raise the use of a facsimile machine for the transmission of signatures as a defense to this Agreement, and
each such party hereby waives such defense.

 

-THE
REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK -

 

    19 

     

    

  

IN
WITNESS WHEREOF, the parties hereto have caused this Agreement be executed as of the day and year first above written.

 

	 	“Lessors:”
	 	 
	 	HEALTHCARE
REALTY TRUST
	 	INCORPORATED
	 	HR
ACQUISITION I CORPORATION
	 	HRT OF ALABAMA, INC.
	 	HR
    ACQUISITION OF PENNSYLVANIA, INC. PENNSYLVANIA HRT, INC.
	 	 	 
	 	By:	/s/
    J.D. Carter Steele
	 	 	J.D. Carter Steele
	 	 	Senior Vice President
    and
	 	 	Chief Operating Officer
	 	 	 
	 	HR
    ACQUISITION OF SAN ANTONIO, LTD.
	 	 	 
	 	By its
    general partner:
	 	Healthcare
    Acquisition of Texas, Inc.
	 	 	 
	 	By:	/s/
    J.D. Carter Steele
	 	 	J.D. Carter Steele
	 	 	Senior Vice President
    and
	 	 	Chief Operating Officer

 

-THE
REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK -

 

    20 

     

    

 

	 	“Lessees:”
	 	 
	 	HEALTHSOUTH
    CORPORATION
	 	 
	 	By 	/s/ Arthur
    E. Wilson, Jr.
	 	 	Arthur E. Wilson, Jr.
	 	 	Senior Vice President
	 	 
	 	HEALTHSOUTH
    OF YORK, INC.
	 	HEALTHSOUTH
    OF MONTGOMERY, INC.
	 	HEALTHSOUTH
    OF NITTANY VALLEY, INC.
	 	 	 
	 	By
    	/s/
    Arthur E. Wilson, Jr.
	 	 	Arthur E. Wilson,
    Jr.
	 	 	Vice President
	 	 	 
	 	HEALTHSOUTH
    OF TALLAHASSEE
	 	LIMITED
    PARTNERSHIP
	 	 
	 	By its general partner:
	 	HealthSouth
    Real Property Holding Corporation
	 	 	 
	 	By	/s/
    Arthur E. Wilson, Jr.
	 	 	Arthur E. Wilson,
    Jr.
	 	 	Vice President
	 	 	 
	 	BEAUMONT
    REHAB ASSOCIATES LIMITED
	 	PARTNERSHIP
	 	 
	 	By its general partner:
	 	Southeast Texas Rehabilitation Hospital,
    Inc.
	 	 	 
	 	By
    	/s/ Arthur
    E. Wilson, Jr.
	 	 	Artnur E. Wilson,
    Jr.
	 	 	Vice President

 

-THE REMAINDER
OF THIS PAGE IS INTENTIONALLY LEFT BLANK -

 

    21 

     

    

 

	SCHEDULE
    1

 

 

		 		 		 	 	REPLACEMENT	 	 		 
	ENTITY

ID	 	LEASE NAME	 	CURRENT

RENT	 	 	MINIMUM
 RENT
	 	 	SUPPLEMENTAL

RENT	 
	ALT000	 	Altoona Lease	 	$	2,017,969	 	 	$	315,762.60	 	 	$	6,203.16	 
	GREA00	 	Great Lakes Lease	 	$	2,156,766	 	 	$	337,480.92	 	 	$	6,629.82	 
	MECH00	 	Mechanicsburg Lease	 	$	1,459,699	 	 	$	228,407.05	 	 	$	4,487.06	 
	MONT00	 	Montgomery Lease	 	$	1,892,233	 	 	$	296,088.00	 	 	$	5,816.65	 
	NITT00	 	Nittany Valley Lease	 	$	2,094,547	 	 	$	327,745.17	 	 	$	6,438.56	 
	PITT00	 	Pittsburg Lease	 	$	1,839,742	 	 	$	287,874.45	 	 	$	5,655.30	 
	STEX00	 	Beaumont Lease	 	$	1,108,000	 	 	$	173,374.79	 	 	$	3,405.95	 
	TALL00	 	Tallahassee Lease	 	$	1,249,588	 	 	$	195.529.84	 	 	$	3,841.19	 
	YORK00	 	York Lease	 	$	2,094,547	 	 	$	327,745.17	 	 	$	6,438.56	 
	 	 	TOTAL	 	$	15,913,091	 	 	$	2,490,008.00	 	 	$	48,916.25	 

 

    22 

     

    

 

SCHEDULE
2

 

[LETTERHEAD
OF SIROTE & PERMUTT, P.C.]

 

March 31, 2006

 

HealthSouth
Corporation

One HealthSouth
Parkway

Birmingham,
Alabama 35243

 

		Re:	OmnibusAmendment

 

Ladies
and Gentlemen:

 

[Description
of parties, transaction and transaction documents.]

 

[Insert
Assumptions]

 

Based on
our review of the foregoing and subject to the assumptions and qualifications set forth herein, it is our opinion that, as of
the date of this letter:

 

1.          Each
Lessor is validly existing and in good standing under the laws of the state of its incorporation, formation or organization
and is in good standing and is authorized to transact business in [specify relevant state]. Each Lessor has the full corporate
or limited partnership power and authority to enter into the Amendment Agreement and to execute and deliver all other documents
and instruments required in connection therewith and to perform Lessor’s obligations thereunder.

 

2.          Each
general partner of a Lessor is validly existing and in good sanding under the laws of the State of its formation or organization
and is in good standing and is authorized to transact business in [specify relevant state]. Each general partner of a Lessor acting
individually has the full corporate power and authority to be a general partner of such Lessor, and to execute and deliver the
Amendment Agreement and all other documents and instruments required in connection therewith on behalf of such Lessor, as a general
partner.

 

3.          All
necessary action has been taken to authorize each Lessor to undertake the transactions contemplated by the Amendment Agreement,
and the execution and delivery by each Lessor of the Amendment Agreement and all other documents and instruments required in connection
therewith.

 

4.          All
necessary action has been taken to authorize each general partner of a Lessor to execute and deliver the Amendment Agreement and
all other documents and instruments required in connection therewith on behalf of such Lessor and on its own behalf.

 

5.          The
Amendment Agreement has been duly executed and delivered by each Lessor and constitutes the legal, valid and binding obligations
of each Lessor, as the case may be, enforceable against such Lessor in accordance with its terms.

 

    23 

     

    

 

[Insert
qualifications and limitations]

 

This
opinion is made for the benefit of and can be relied on by the Lessees, their successors and/or assigns and their respective counsel.

 

	 	Very
    truly yours,

 

    24 

     

    

 

SCHEDULE
3

 

[LETTERHEAD
OF BALCH & BINGHAM LLP]

 

March
31, 2006

 

Healthcare
Realty Trust Incorporated

3310 West
End Avenue

Suite 700

Nashville,
Tennessee 37203

 

		Re:	Omnibus Amendment

 

Ladies and
Gentlemen:

 

[Description
of parties, transaction and transaction documents.]

 

[Insert Assumptions]

 

Based on our
review of the foregoing and subject to the assumptions and qualifications set forth herein, it is our opinion that, as of the
date of this letter:

 

1.          Each
Lessee is validly existing and in good standing under the laws of the State of its incorporation, formation or organization and
is in good standing and is authorized to transact business in [specify relevant state]. Each Lessee has the full corporate or
limited partnership power and authority to enter into the Amendment Agreement and to execute and deliver all other documents and
instruments required in connection therewith and to perform Lessee’s obligations thereunder.

 

2.          Each
general partner of a Lessee is validly existing and in good sanding under the laws of the State of its formation or organization
and is in good standing and is authorized to transact business in [specify relevant state]. Each general partner of a Lessee acting
individually has the full corporate power and authority to be a general partner of such Lessee, and to execute and deliver the
Amendment Agreement and all other documents and instruments required in connection therewith on behalf of such Lessee, as a general
partner.

 

3.          All
necessary action has been taken to authorize each Lessee to undertake the transactions contemplated by the Amendment Agreement,
and the execution and delivery by each Lessee of the Amendment Agreement and all other documents and instruments required in connection
therewith.

 

4.          All
necessary action has been taken to authorize each general partner of a Lessee to execute and deliver the Amendment Agreement and
all other documents and instruments required in connection therewith on behalf of such Lessee and on its own behalf.

 

5.          The
Amendment Agreement has been duly executed and delivered by each Lessee and constitutes the legal, valid and binding obligations
of each Lessee, as the case may be, enforceable against such Lessee in accordance with its terms.

 

    25 

     

    

 

[Insert
qualifications and limitations]

 

This
opinion is made for the benefit of and can be relied on by the Lessors, their successors and/or assigns and their respective counsel.

 

	 	Very
    truly yours,

 

    26 

     

    

 

(4)

 

LEASE
AGREEMENT

 

     

     

    

  

LEASE
AGREEMENT

 

CAPSTONE
CAPITAL OF PENNSYLVANIA, INC.

a
Pennsylvania corporation

 

(“Lessor”)

 

AND

 

HEALTHSOUTH
Corporation

a
Delaware corporation

 

(“Lessee”)

 

May
10, 1996

 

for

HEALTHSOUTH
Rehabilitation Hospital of Mechanicsburg

175
Lancaster Boulevard

Mechanicsburg,
Pennsylvania 17055

 

     

     

    

 

TABLE
OF CONTENTS

 

	ARTICLE
    I	LEASED
    PROPERTY: TERM 	1
	 	 	 
	ARTICLE
    II	RENT
    	2
	2.1	Minimum
    Rent and Adjustments to Minimum Rent	2
	2.2	Calculation
    of Increases to Minimum Rent	2
	2.3	Additional
    Charges	3
	2.4	Net
    Lease	3
	 	 	 
	ARTICLE
    III	IMPOSITIONS	3
	3.1	Payment
    of Impositions	3
	3.2	Proration
    of Impositions	4
	3.3	Utility
    Charges	4
	3.4	Insurance
    Premiums	4
	3.5	Ground
    Lease	4
	 	 	 
	ARTICLE
    IV	NO
    TERMINATION	4
	 	 	 
	ARTICLE
    V	OWNERSHIP
    OF LEASED PROPERTY	5
	5.1	Ownership
    of the Property	5
	5.2	Personal
    Property	5
	 	 	 
	ARTICLE
    VI	CONDITION
    AND USE OF LEASED PROPERTY	5
	6.1	Condition
    of the Leased Property	5
	6.2	Use
    of the Leased Property	5
	6.3	Management
    of Facility	6
	6.4	Lessor
    to Grant Easements	6
	6.5	Ground
    Lease Provisions	7
	 	 	 
	ARTICLE
    VII	LEGAL,
    INSURANCE AND FINANCIAL REQUIREMENTS 	7
	7.1	Compliance
    with Legal and Insurance Requirements	7
	7.2	Legal
    Requirement Covenants	7
	 	 	 
	ARTICLE
    VIII	REPAIRS:
    RESTRICTIONS AND ANNUAL INSPECTIONS	7
	8.1	Maintenance
    and Repair	7
	8.2	Encroachments;
    Restrictions	8
	8.3	Annual
    Inspections	8
	 	 	 
	ARTICLE
    IX	CAPITAL
    ADDITIONS	9
	9.1	Construction
    of Capital Additions to the Leased Property	9
	9.2	Capital
    Additions Financed by Lessee	9
	9.3	Capital
    Additions Financed by Lessor	10
	9.4	Remodeling
    and Non-Capital Additions 	11
	9.5	Salvage	12
	 	 	 
	ARTICLE
    X	LIENS	12

 

     i

     

    

 

	ARTICLE
    XI	PERMITTED
    CONTESTS	12
	 	 	 
	ARTICLE
    XII	INSURANCE	13
	12.1	General
    Insurance Requirements	13
	12.2	Replacement
    Cost 	14
	12.3	Additional
    Insurance	14
	12.4	Waiver
    of Subrogation	14
	12.5	Form
    of Insurance	15
	12.6	Change
    in Limits	15
	12.7	Blanket
    Policy	15
	12.8	No
    Separate Insurance	15
	 	 	 
	ARTICLE
    XIII	FIRE
    AND CASUALTY	16
	13.1	Insurance
    Proceeds	16
	13.2	Reconstruction
    in the Event of Damage or Destruction Covered by Insurance	16
	13.3	Reconstruction
    in the Event of Damage or Destruction Not Covered by Insurance	17
	13.4	Lessee’s
    Property	17
	13.5	Restoration
    of Lessee’s Property	17
	13.6	No
    Abatement of Rent	17
	13.7	Damage
    Near End of Term	17
	13.8	Waiver	17
	 	 	 
	ARTICLE
    XIV	CONDEMNATION	18
	14.1	Parties’
    Rights and Obligations	18
	14.2	Total
    Taking	18
	14.3	Partial
    Taking	18
	14.4	Restoration	18
	14.5	Award
    Distribution	18
	14.6	Temporary
    Taking	18
	 	 	 
	ARTICLE
    XV	DEFAULT	19
	15.1	Events
    of Default	19
	15.2	Remedies	20
	15.3	Additional
    Expenses	21
	15.4	Waiver	21
	15.5	Application
    of Funds	22
	15.6	Notices
    by Lessor	22
	 	 	 
	ARTICLE
    XVI	LESSOR’S
    RIGHT TO CURE	22
	 	 	 
	ARTICLE
    XVII	PURCHASE
    OP THE LEASED PROPERTY	22
	 	 	 
	ARTICLE
    XVIII	HOLDING
    OVER	23
	 	 	 
	ARTICLE
    XIX	ABANDONMENT	23

 

     ii

     

    

 

	19.1	Discontinuance
    of Operations on the Leased Property	23
	19.2	Obsolescence
    of the Leased Property; Offer to Purchase	23
	19.3	Conveyance
    of Leased Property	24
	 	 	 
	ARTICLE
    XX	SUBSTITUTION
    OF PROPERTY	24
	20.1	Substitution
    of Property for the Leased Property 	24
	20.2	Conditions
    to Substitution	26
	20.3	Conveyance
    to Lessee	27
	20.4	Expenses	27
	 	 	 
	ARTICLE
    XXI	RISK
    OF LOSS	27
	 	 	 
	ARTICLE
    XXII	INDEMNIFICATION	27
	 	 	 
	ARTICLE
    XXIII	SUBLETTING
AND ASSIGNMENT	28
	23.1	Subletting
    and Assignment	28
	23.2	Non-Disturbance,
    Subordination and Attornment	28
	 	 	 
	ARTICLE
    XXIV	OFFICER’S
    CERTIFICATES AND FINANCIAL STATEMENTS	29
	 	 	 
	ARTICLE
    XXV	INSPECTION	29
	 	 	 
	ARTICLE
    XXVI	QUIET
    ENJOYMENT 	29
	 	 	 
	ARTICLE
    XXVII	NOTICES	30
	 	 	 
	ARTICLE
    XXVIII	APPRAISAL	31
	 	 	 
	ARTICLE
    XXIX 	PURCHASE	32
	29.1	First
    Refusal to Purchase	32
	 	 	 
	ARTICLE
    XXX	DEFAULT
    BY LESSOR	33
	30.1	Default
    by Lessor	33
	30.2	Lessee’s
    Right to Cure	33
	 	 	 
	ARTICLE
    XXXI	ARBITRATION	33
	31.1	Controversies	33
	31.2	Appointment
    of Arbitrators	33
	31.3	Third
    Arbitrator	34
	31.4	Arbitration
    Procedure	34
	31.5	Expenses	34
	 	 	 
	ARTICLE
    XXXII	FINANCING
    OF THE LEASED PROPERTY	34
	 	 	 
	ARTICLE
    XXXIII	SUBORDINATION,
    ATTORNMENT AND NON-DISTURBANCE	35
	 	 	 
	ARTICLE
    XXXIV	EXTENDED
    TERMS	36

 

     iii

     

    

 

	ARTICLE
    XXXV	MISCELLANEOUS	36
	35.1	No
    Waiver	36
	35.2	Remedies
    Cumulative	36
	35.3	Surrender	36
	35.4	No
    Merger of Title	36
	35.5	Transfers
    by Lessor	36
	35.6	General	37
	35.7	Memorandum
    of Lease	37
	35.8	Transfer
    of Licenses	37
	 	 	 
	ARTICLE
    XXXVI	GLOSSARY
    OF TERMS	37

 

     iv

     

    

 

LEASE

 

THIS
LEASE (“Lease”) dated as of May 10, 1996 is entered into by and between CAPSTONE
CAPITAL OF PENNSYLVANIA, INC., a Pennsylvania corporation, having its principal office at
1000 Urban Center Drive, Suite 630, Birmingham, Alabama 35242 (“Lessor”) and HEALTHSOUTH Corporation,
a Delaware corporation, having its principal office at Two Perimeter Park South, Suite 224W, Birmingham, Alabama 35243 (“Lessee”).

 

ARTICLE
I

LEASED
PROPERTY: TERM

 

Upon
and subject to the terms and conditions hereinafter set forth, Lessor leases to Lessee and Lessee rents from Lessor all of Lessor’s
leasehold interest in and to the following real property (collectively, the “Leased Property”):

 

(a)          the
real property more particularly described on Exhibit A attached hereto together with all covenants, licenses, privileges
and benefits thereto belonging, and any easements, rights-of-way, rights of ingress and egress or other interests of Lessor in,
on or to any land, highway, street, road or avenue, open or proposed, in, on, across, in front of, abutting or adjoining such
real property including, without limitation any strips and gores adjacent to or lying between such real property and any adjacent
real property (the “Land”);

 

(b)          all
buildings, structures, Fixtures (as hereinafter defined) and other improvements of every kind including all alleyways and connecting
tunnels, crosswalks, sidewalks, landscaping, parking lots and structures and roadways appurtenant to such buildings and structures
presently or hereafter situated upon the Land, and Capital Additions financed by Lessor (but specifically excluding Capital Additions
financed by Lessee), drainage and all above-ground and underground utility structures (collectively, the “Leased Improvements”);

 

(c)          all
permanently affixed equipment, machinery, fixtures and other items of real and/or personal property, including all components thereof,
now and hereafter located in, on or used in connection with, and permanently affixed to or incorporated into the Leased Improvements,
including all furnaces, boilers, heaters, electrical equipment, heating, plumbing, lighting, ventilating, refrigerating, incineration,
air and water pollution control, waste disposal, air-cooling and air conditioning systems and apparatus, sprinkler systems and
fire and theft protection equipment, carpet, moveable or immoveable walls or partitions and built-in oxygen and vacuum systems,
all of which are hereby deemed by the parties hereto to constitute real estate, together with all replacements, modifications,
alterations and additions thereto, but specifically excluding all items included within the category of Personal Property (collectively
the “Fixtures”); and

 

(d)          to
the extent permitted by law, all permits, approvals and other intangible property or any interest therein now or hereafter owned
or held by Lessor in connection with the Leased Property or any business or businesses now or hereafter conducted by Lessee or
with the use thereof, including all contract rights, agreements, trade names, water rights and reservations, zoning rights, business
licenses and warranties (including those relating to construction or fabrication) related to the Leased Property or any part thereof,
specifically excluding the general corporate trademarks, service marks, logos or insignia or books and records of Lessee; and

 

     

     

    

 

(e)          all
site plans, surveys, soil and substrata studies, architectural drawings, plans and specifications, engineering plans and studies,
floor plans, landscape plans, and other plans and studies that relate to the Land or the Improvements and are in Lessee’s
possession or control.

 

SUBJECT,
HOWEVER, to the matters set forth on Exhibit B attached hereto (the “Permitted Exceptions”), to have and to
hold for a fixed term of 15 years (the “Fixed Term”) commencing on May 10, 1996 (the “Commencement Date”)
and ending on May 9, 2011, as may be extended pursuant to the terms of Article XXXIV hereof.

 

ARTICLE
II

RENT

 

2.1           Minimum
Rent and Adjustments to Minimum Rent. Lessee shall pay to Lessor; without notice, demand,
set off (except as set forth in Section 30.2 or Article XXXII hereof) or counterclaim, in advance in lawful money of the United
States of America, at Lessor’s address set forth herein or at such other place or to such other person, firms or corporations
as Lessor from time to time may designate in writing, Minimum Rent, as adjusted annually pursuant to Section 2.1(b) during the
Term, as follows:

 

(a)           Minimum
Rent. Lessee will pay to Lessor as rent (the “Minimum Rent”) for the Leased Property the annual sum of $1,632,447.13,
payable in advance in 12 equal, consecutive monthly installments of $136,037.26, on the first day of each calendar month of the
Term, plus any rent or other sums due under the Ground Lease which may be due from time to time thereunder to the landlord; provided
that such ground rent or other sums due under the Ground Lease shall be paid directly by Lessee to the landlord under the Ground
Lease; provided, further, that in the event Lessor purchases the fee simple title to the Land, Lessee shall continue to pay to
Lessor an amount of rent with respect to the Land determined by Lessor and Lessee to represent a fair marekt rental. Minimum Rent
shall be prorated as to any partial month, and is subject to adjustment as provided in Sections 9.3(b)(iv) and 20.1 below.

 

(b)           Increases
to Minimum Rent. On each anniversary of the Commencement Date (each such annual date individually referred to as the “Adjustment
Date”) throughout the remainder of the Fixed Term and any Extended Terms, the then-current Minimum Rent shall be increased
annually effective at such Adjustment Date by the increase in the Consumer Price Index from the Commencement Date to the first
Adjustment Date and, thereafter, from one Adjustment Date to the then-current Adjustment Date; provided that such increase shall
not be greater than five percent nor less than two percent.

 

2.2           Calculation
of Increases to Minimum Rent. Prior to or upon each Adjustment Date, Lessor will calculate
the increase in the Minimum Rent pursuant to the provisions of Section 2.1(b) hereof and will provide Lessee with ten days’
prior written notice of same.

 

     2

     

    

 

2.3           Additional
Charges. Lessee will also pay and discharge as and when due (a) all other amounts, liabilities,
obligations and Impositions which Lessee assumes or agrees to pay under this Lease including, to the extent applicable, any amounts
due by Lessor under the Ground Lease and any condominium association dues, assessments or other charges, and (b) in the event
of any failure on the part of Lessee to pay any of those items referred to in clause (a) above, Lessee will also promptly pay
and discharge every fine, penalty, interest and cost which may be added for non-payment or late payment of such items (the items
referred to in clauses (a) and (b) above being referred to herein collectively as the “Additional Charges”), and Lessor
shall have all legal, equitable and contractual rights, powers and remedies provided in this Lease, by statute or otherwise, in
the case of non-payment of the Additional Charges, as well as the Minimum Rent. If any installment of Minimum Rent or Additional
Charges (but only as to those Additional Charges which are payable directly to Lessor) shall not be paid within ten days after
the date when due, Lessee will pay Lessor on demand, as Additional Charges, interest (to the extent permitted by law) computed
at the Overdue Rate on the amount of such installment, from the due date when due to the date of payment in full thereof. In the
event Lessor provides Lessee with written notice of failure to timely pay any installment of Minimum Rent or any Additional Charges
pursuant to Section 15.1(b) more than three times within any twelve-month period, Lessee shall pay an administrative fee to Lessor
in the amount of $500.00 for each additional written notice Lessor gives pursuant to Section 15.1(b) during the next twelve months.
To the extent that Lessee pays any Additional Charges to Lessor pursuant to any requirement of this Lease, Lessee shall be relieved
of its obligation to pay such Additional Charges to the entity to which such Additional Charges would otherwise be due.

 

2.4           Net
Lease. The Rent shall be paid absolutely net to Lessor, so that this Lease shall yield to
Lessor the full amount of the installments of Minimum Rent and the payments of Additional Charges throughout the Term but subject
to any provisions of this Lease which expressly provide for payments by Lessor or the adjustment of the Rent or other charges.

 

ARTICLE
III

IMPOSITIONS

 

3.1           Payment
of Impositions. Subject to Article XI relating to permitted contests, Lessee will pay, or
cause to be paid, all Impositions before any fine, penalty, interest or cost may be added for non-payment, such payments to be
made directly to the taxing authorities where feasible, and Lessee will promptly, upon request, furnish to Lessor copies of official
receipts or other satisfactory proof evidencing such payments. Lessee’s obligation to pay such Impositions and the amount
thereof shall be deemed absolutely fixed upon the date such Impositions become a lien upon the Leased Property or any part thereof.
If any such Imposition may lawfully be paid in installments (whether or not interest shall accrue on the unpaid balance of such
Imposition), Lessee may exercise the option to pay the same (and any accrued interest on the unpaid balance of such Imposition)
in installments and, in such event, shall pay such installments during the Term hereof as the same become due and before any fine,
penalty, premium, further interest or cost may be added thereto. Lessor, at its expense, shall, to the extent permitted by applicable
law, prepare and file all tax returns and reports as may be required by governmental authorities in respect of Lessor’s
net income, gross receipts, franchise taxes and taxes on its capital stock. Lessee, at its expense, shall, to the extent permitted
by applicable laws and regulations, prepare and file all other tax returns and reports in respect of any Imposition as may be
required by governmental authorities. If any refund shall be due from any taxing authority in respect of any Imposition paid by
Lessee, the same shall be paid over to or retained by Lessee if no Event of Default shall have occurred hereunder and be continuing.
Any such funds retained by Lessor due to an Event of Default shall be applied as provided in Article XV. Lessor and Lessee shall,
upon request of the other, provide such data as is maintained by the party to whom the request is made with respect to the Leased
Property as may be necessary to prepare any required returns and reports. In the event governmental authorities classify any property
covered by this Lease as personal property, Lessee shall file all personal property tax returns in such jurisdictions where filing
is required. Lessor and Lessee will provide the other party, upon request, with cost and depreciation records necessary for filing
returns for any property so classified as personal property. Where Lessor is legally required to file personal property tax returns,
and Lessee is obligated for the same hereunder, Lessee will be provided with copies of assessment notices in sufficient time for
Lessee to file a protest. Lessee may, upon giving 30 days’ prior written notice to Lessor, at Lessee’s option and
at Lessee’s sole cost and expense, protest, appeal, or institute such other proceedings as Lessee may deem appropriate to
effect a reduction of real estate or personal property assessments and Lessor, if requested by Lessee and at Lessee’s expense
as aforesaid, shall fully cooperate with Lessee in such protest, appeal, or other action. Billings for reimbursement by Lessee
to Lessor of personal property taxes shall be accompanied by copies of an invoice therefor and payments thereof which identify
the personal property with respect to which such payments are made. Lessor will cooperate with Lessee in order that Lessee may
fulfill its obligations hereunder, including the execution of any instruments or documents reasonably requested by Lessee.

     3

     

    

 

3.2           Proration
of Impositions. Impositions imposed in respect of the tax-fiscal period during which the
Term terminates shall be prorated between Lessor and Lessee, whether or not such Imposition is imposed before or after such termination,
and Lessee’s and Lessor’s obligation to pay their prorated shares thereof shall survive such termination.

 

3.3           Utility
Charges. Lessee will contract for, in its own name, and will pay or cause to be paid all
charges for, electricity, power, gas, oil, water and other utilities used in the Leased Property during the Term.

 

3.4           Insurance
Premiums. Lessee will contract for, in its own name, and will pay or cause to be paid all
premiums for, the insurance coverage required to be maintained by Lessee pursuant to Article XII during the Term.

 

3.5           Ground
Lease. So long as Lessee is not prevented or prohibited from doing so by any applicable
Legal Requirement and except as provided below in this Section, Lessee will timely perform all obligations and pay all charges
required to be paid by Lessor under the Ground Lease in the same manner and to the same extent as if Lessee were the “Partnership”
as defined in the Ground Lease. Notwithstanding the foregoing provision to the contrary, Lessor (i) shall provide notices to extend
the term of the Ground Lease under Section 2 thereof as required pursuant to Article XXXIV of this Lease and (ii) shall have the
sole right and authority to exercise the option to purchase set forth in Section 9 on page 13 of the Ground Lease.

 

ARTICLE
IV

NO
TERMINATION

 

Except
as provided in this Lease, Lessee shall remain bound by this Lease in accordance with its terms and shall neither take any action
without the consent of Lessor to modify, surrender or terminate the same, nor seek nor be entitled to any abatement, deduction,
deferment or reduction of Rent, or set-off against the Rent, nor shall the respective obligations of Lessor and Lessee be otherwise
affected by reason of (a) any damage to, or destruction of, the Leased Property or any portion thereof from whatever cause or any
Taking of the Leased Property or any portion thereof, (b) the lawful or unlawful prohibition of, or restriction upon, Lessee’s
use of the Leased Property, or any portion thereof, or the interference with such use by any person, corporation, partnership or
other entity, or by reason of eviction by paramount title, (c) any claim which Lessee has or might have against Lessor or by reason
of any default or breach of any warranty by Lessor under this Lease or any other agreement between Lessor and Lessee or to which
Lessor and Lessee are parties, including the failure of Lessee to perform its obligations under the Ground Lease pursuant to Articles
II and HI hereof, (d) any bankruptcy, insolvency, reorganization, composition, readjustment, liquidation, dissolution, winding
up or other proceedings affecting Lessor or any assignee or transferee of Lessor, or (e) for any other cause whether similar or
dissimilar to any of the foregoing. Lessee hereby specifically waives all rights arising from any occurrence whatsoever which may
now or hereafter be conferred upon it by law to (i) modify, surrender or terminate this Lease or quit or surrender the Leased Property
or any portion thereof, or (ii) entitle Lessee to any abatement, reduction, suspension or deferment of the Rent or other sums payable
by Lessee hereunder, except as otherwise specifically provided in this Lease. The obligations of Lessor and Lessee hereunder shall
be separate and independent covenants and agreements and the Rent and all other sums payable by Lessee hereunder shall continue
to be payable in all events unless the obligations to pay the same shall be terminated pursuant to the express provisions of this
Lease. Notwithstanding the foregoing, Lessee shall have the right by separate and independent action to pursue any claim or seek
any damages it may have against Lessor as a result of a breach by Lessor of the terms of this Lease.

     4

     

    

 

ARTICLE
V

OWNERSHIP
OF LEASED PROPERTY

 

5.1           Ownership
of the Property. Lessee acknowledges that the Leased Property is the property of Lessor
and that Lessee has only the right to the possession and use of the Leased Property upon the terms and conditions of this Lease
and the Ground Lease.

 

5.2           Personal
Property. Lessee may (and shall as provided hereinbelow), at its expense, install, affix
or assemble or place on any parcels of the Land or in any of the Improvements any items of the Personal Property, and may remove,
replace or substitute for the same from time to time in the ordinary course of Lessee’s business. Lessee shall provide and
maintain during the entire Term all such Personal Property as shall be necessary in order to operate the Facility in compliance
with all licensure and certification requirements, in compliance with all applicable Legal Requirements and Insurance Requirements
and otherwise in accordance with customary practice in the industry for the Primary Intended Use.

 

ARTICLE
VI

CONDITION
AND USE OF LEASED PROPERTY

 

6.1           Condition
of the Leased Property. Lessee acknowledges receipt and delivery of possession of the Leased
Property and that Lessee has examined and otherwise acquired knowledge of the condition of the Leased Property prior to the execution
and delivery of this Lease and has found the same to be in good order and repair and satisfactory for its purpose hereunder. Lessee
is leasing the Leased Property “as is” in its present condition. Lessee waives any claim or action against Lessor
in respect of the condition of the Leased Property. Lessor makes no warranty or representation, express or implied, in respect
of the Leased Property or any part thereof, either as to its fitness for use, suitability, design or condition for any particular
use or purpose or otherwise, as to quality of the material or workmanship therein, latent or patent, it being agreed that all
such risks are to be borne by Lessee. Lessee acknowledges that the Leased Property has been inspected by Lessee and is satisfactory
to it.

 

6.2           Use
of the Leased Property.

 

(a)          After
the Commencement Date and during the entire Term, Lessee shall use or cause to be used the Leased Property and the improvements
thereon as an inpatient rehabilitation hospital and for such other uses as may be necessary in connection with or incidental to
such use (the “Primary Intended Use”). Lessee shall not use the Leased Property or any portion thereof for any other
use without the prior written consent of Lessor, which consent shall not be unreasonably withheld or delayed.

 

     5

     

    

 

(b)          Lessee
covenants that it will obtain and maintain all material approvals needed to use and operate the Leased Property and the Facility
for the Primary Intended Use in compliance with all applicable Legal Requirements.

 

(c)          Lessee
covenants and agrees that during the Term it will use its reasonable best efforts to operate continuously the Leased Property in
accordance with its Primary Intended Use and to maintain its certifications for reimbursement and licensure and its accreditation,
if compliance with accreditation standards is required to maintain the operations of the Facility and if a failure to comply would
adversely affect operations of the Facility.

 

(d)          Lessee
shall not commit or suffer to be committed any waste on the Leased Property, or in the Facility, nor shall Lessee cause or permit
any nuisance thereon.

 

(e)          Lessee
shall neither suffer nor permit the Leased Property or any portion thereof, including any Capital Addition whether or not financed
by Lessor, to be used in such a manner as (i) might reasonably tend to impair Lessor’s (or Lessee’s, as the case may
be) title thereto or to any portion thereof, or (ii) may reasonably result in a claim or claims of adverse usage or adverse possession
by the public, as such, or of implied dedication of the Leased Property or any portion thereof.

 

(f)          Lessee
will not utilize any Hazardous Materials on the Leased Property except in accordance with applicable Legal Requirements and will
not permit any contamination which may require remediation under any applicable Hazardous Materials Law. Lessee agrees not to dispose
of any Hazardous Materials or substances within the sewerage system of the Leased Property, and that it will handle all “red
bag” wastes in accordance with applicable Hazardous Materials Laws.

 

6.3          Management
of Facility. Lessee shall cause the Facility to be managed (including any leasing activities)
at all times by Lessee or an Affiliate of Lessee. Lessee shall not enter into any agreement for such management and leasing activities,
written or oral, unless the terms thereof and the proposed manager or leasing agent have been approved in writing by Lessor. All
such management or leasing agreements must be in writing and all management or leasing agreements with an Affiliate of Lessee
must contain a provision to the effect that the obligation of Lessee to pay management fees is subordinate to its obligation to
pay the Rent, and that the manager shall not have the right to collect any management fees during the continuance of an Event
of Default.

 

6.4          Lessor
to Grant Easements. To the extent permitted by the Ground Lease, Lessor will, from time
to time, at the request of Lessee and at Lessee’s cost and expense, but subject to the approval of Lessor (a) grant easements
and other rights in the nature of easements, (b) release existing easements or other rights in the nature of easements which are
for the benefit of the Leased Property, (c) dedicate or transfer unimproved portions of the Leased Property for road, highway
or other public purposes, (d) execute petitions to have the Leased Property annexed to any municipal corporation or utility district,
(e) execute amendments to any covenants and restrictions affecting the Leased Property and (f) execute and deliver to any person
any instrument appropriate to confirm or effect such grants, releases, dedications and transfers (to the extent of its interest
in the Leased Property), but only upon delivery to Lessor of an Officer’s Certificate stating (and such other information
as Lessor may reasonably require confirming) that such grant, release, dedication, transfer, petition or amendment is required
or beneficial for and not detrimental to the proper conduct of the business of Lessee on the Leased Property and does not reduce
its value.

 

     6

     

    

 

6.5           Ground
Lease Provisions. Lessee understands and acknowledges that its obligations hereunder shall
at all times remain in full force and effect and shall in no way be affected by (i) the renewal of the Ground Lease, (ii) the
termination of the Ground Lease prior to the expiration hereof or (iii) 
the purchase of the fee simple title to the Land by Lessor.

 

ARTICLE
VII

LEGAL.
INSURANCE AND FINANCIAL REQUIREMENTS

 

7.1           Compliance
with Legal and Insurance Requirements. Subject to Article XI relating to permitted contests,
Lessee, at its expense, will promptly (a) comply with all material Legal Requirements and Insurance Requirements in respect of
the use, operation, maintenance, repair and restoration of the Leased Property, whether or not compliance therewith shall require
structural change in any of the Leased Improvements or interfere with the use and enjoyment of the Leased Property, and (b) directly
or indirectly with the cooperation of Lessor, but at Lessee’s sole cost and expense, procure, maintain and comply with all
material licenses, certificates of need and other authorizations required for (i) any
use of the Leased Property then being made, and for (ii) the proper erection, installation, operation and maintenance of the Leased
Improvements or any part thereof, including any Capital Additions.

 

7.2           Legal
Requirement Covenants. Lessee covenants and agrees that the Leased Property shall not be
used for any unlawful purpose. Lessee shall, directly or indirectly with the cooperation of Lessor, but at Lessee’s sole
cost and expense, acquire and maintain all material licenses, certificates, permits and other authorizations and approvals needed
to operate the Leased Property in its customary manner for the Primary Intended Use and any other use conducted on the Leased
Property as may be permitted from time to time hereunder. Lessee further covenants and agrees that Lessee’s use of the Leased
Property and Lessee’s maintenance, alteration, and operation of the same, and all parts thereof, shall at all times conform
to all applicable Legal Requirements.

 

ARTICLE
VIII

REPAIRS:
RESTRICTIONS AND ANNUAL INSPECTIONS

 

8.1         Maintenance
and Repair.

 

(a)          Lessee,
at its expense, will keep the Leased Property and all private roadways, sidewalks and curbs appurtenant thereto in reasonably good
order and repair (whether or not the need for such repairs occurs as a result of Lessee’s use, any prior use, the elements,
the age of the Leased Property or any portion thereof), and, except as otherwise provided in Articles XIII and XIV, with reasonable
promptness, will make all necessary and appropriate repairs thereto of every kind and nature, whether interior or exterior, structural
or non-structural, ordinary or extraordinary, foreseen or unforeseen or arising by reason of a condition existing prior to or after
the commencement of the Term of this Lease (concealed or otherwise). All repairs shall, to the extent reasonably achievable, be
at least equivalent in quality to the original work and shall be accomplished by Lessee or a party selected by Lessee. Lessee will
not take or omit to take any action the taking or omission of which might materially impair the value or usefulness of the Leased
Property or any part thereof for the Primary Intended Use.

 

(b)          Except
for the use of any insurance proceeds as set forth in Sections 13.1 and 13.2 hereof, Lessor shall not under any circumstances be
required to build or rebuild any improvements on the Leased Property, or to make any repairs, replacements, alterations, restorations,
or renewals of any nature or description to the Leased Property, whether ordinary or extraordinary, structural or nonstructural,
foreseen or unforeseen, or to make any expenditure whatsoever with respect thereto in connection with this Lease, or to maintain
the Leased Property in any way.

 

     7

     

    

 

(c)          Nothing
contained in this Lease and no action or inaction by Lessor shall be construed as (i) constituting the consent or request of Lessor,
expressed or implied, to any contractor, subcontractor, laborer, materialman or vendor to or for the performance of any particular
labor or services or the furnishing of any particular materials or other property for the construction, alteration; addition, repair
or demolition of or to the Leased Property or any part thereof, or (ii) giving Lessee any right, power or permission to contract
for or permit the performance of any labor or services or the finishing of any materials or other property in such fashion as would
permit the making of any claim against Lessor in respect thereof or to make any agreement that may create, or in any way be the
basis for, any right, title, interest, lien, claim or other encumbrance upon the estate of Lessor in the Leased Property or any
portion thereof.

 

(d)          Unless
Lessor shall convey any of the Leased Property to Lessee pursuant to the provisions of this Lease, Lessee will, upon the expiration
or prior termination of this Lease, vacate and surrender the Leased Property to Lessor in the condition in which the Leased Property
was originally received from Lessor, except for ordinary wear and tear (subject to the obligation of Lessee to maintain the Property
in good order and repair during the entire Term), damage caused by the gross negligence or willful acts of Lessor, and damage or
destruction described in Article XIII or resulting from a Taking described in Article XIV which Lessee is not required by the terms
of this Lease to repair or restore and except as repaired, rebuilt, restored, altered or added to as permitted or required by the
provisions of this Lease.

 

8.2          Encroachments;
Restrictions. If any of the Improvements shall, at any time, encroach upon any property,
street or right-of-way adjacent to the Leased Property, or shall violate the agreements or conditions contained in any applicable
Legal Requirement, lawful restrictive covenant or other agreement affecting the Leased Property, or any part thereof, or shall
impair the rights of others under any easement or right-of-way to which the Leased Property is subject, then promptly upon the
request of Lessor, Lessee shall, at its expense, subject to its right to contest the existence of any encroachment, violation
or impairment, (a) obtain valid and effective waivers or settlements of all claims, liabilities and damages resulting from each
such encroachment, violation or impairment, whether the same shall affect Lessor or Lessee, or (b) make such changes in the Improvements,
and take such other actions, as Lessor in the good faith exercise of its judgment deems reasonably practicable, to remove such
encroachment, or to end such violation or impairment, including, if necessary, the alteration of any of the Leased Improvements,
and in any event take all such actions as may be necessary in order to be able to continue the operation of the Facility for the
Primary Intended Use substantially in the manner and to the extent the Facility was operated prior to the assertion of such violation
or encroachment. Any such alteration shall be made in conformity with the applicable requirements of Article IX. Lessee’s
obligations under this Section 8.2 shall be in addition to and shall in no way discharge or diminish any obligation of any insurer
under any policy of title or other insurance and Lessee shall be entitled to a credit for any sums recovered by Lessor under any
such policy of title or other insurance.

 

8.3          Annual
Inspections. During each year of the Term after the first anniversary of the Commencement
Date, Lessor shall have the right to inspect the Leased Property and all systems contained therein at any reasonable time to determine
Lessee’s compliance with its obligations under this Lease, including those obligations set forth in Article VII herein.
Lessee shall be responsible for the costs of such inspections, which costs shall not exceed on an annual basis the sum of $2,000.00.

 

     8

     

    

 

ARTICLE
IX

CAPITAL
ADDITIONS

 

9.1         Construction
of Capital Additions to the Leased Property.

 

(a)          If
no Event of Default shall have occurred and be continuing, Lessee shall have the right, upon and subject to the terms and conditions
set forth below, to construct or install Capital Additions on the Leased Property with the prior written consent of Lessor which
consent shall not be unreasonably withheld; provided that Lessee shall not be permitted to create any Encumbrance on the Leased
Property in connection with such Capital Addition without first complying with Section 9.1(b) hereof. Prior to commencing construction
of any Capital Addition, Lessee shall submit to Lessor in writing a proposal setting forth in reasonable detail any proposed Capital
Addition and shall provide to Lessor such plans and specifications, permits, licenses, contracts and other information concerning
the proposed Capital Addition as Lessor may reasonably request. Without limiting the generality of the foregoing, such proposal
shall indicate the approximate projected cost of constructing such Capital Addition and the use or uses to which it will be put.

 

(b)          Prior
to commencing construction of any Capital Addition, Lessee shall first request Lessor to provide funds to pay for such Capital
Addition in accordance with the provisions of Section 9.3. If Lessor declines or is unable to provide such financing on terms acceptable
to Lessee and Lessee rejects Lessor’s offer of financing, Lessee may arrange or provide other financing, subject to the provisions
of Section 9.2. Notwithstanding any other provision of this Article IX to the contrary, no prior written consent of Lessor shall
be required for Lessee to construct a Capital Addition unless the Capital Addition, when aggregated with the costs of all other
Capital Additions made by Lessee, would exceed 25% of the Fair Market Value of the Leased Property or would diminish the Fair Market
Value of the Leased Property. Additionally, Lessor shall reasonably cooperate with Lessee regarding the grant of any consents or
easements or the like necessary or appropriate in connection with any Capital Addition. Further, no Capital Addition shall be made
which would tie in or connect any Leased Improvements on the Leased Property with any other improvements on property adjacent to
the Leased Property (and not part of the Land covered by this Lease) including tie-ins of buildings or other structures or utilities,
unless Lessee shall have obtained the prior written approval of Lessor, which approval shall not be unreasonably withheld. All
proposed Capital Additions shall be architecturally integrated and consistent with the Property.

 

9.2         Capital
Additions Financed by Lessee. If Lessee provides or arranges to finance any Capital
Addition with a party other than Lessor or if Lessee pays cash for any Capital Addition, this Lease shall be and hereby is amended
to provide as follows:

 

(a)          There
shall be no adjustment in the Minimum Rent by reason of any such Capital Addition.

 

(b)          Upon
the expiration or earlier termination of this Lease, Lessor shall compensate Lessee for all Capital Additions paid for or financed
by Lessee in any of the following ways:

 

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(i)          By
purchasing all Capital Additions paid for by Lessee from Lessee for cash in the amount of the Fair Market Added Value at the time
of purchase by Lessor of all such Capital Additions paid for or financed by Lessee; or

 

(ii)         Such
other arrangement regarding such compensation as shall be mutually acceptable to Lessor and Lessee.

 

Any
amount owed by Lessee to Lessor under this Lease at such termination or expiration may be deducted from any compensation for Capital
Additions payable by Lessor to Lessee under this Section 9.2.

 

9.3         Capital
Additions Financed by Lessor.

 

(a)          Lessee
shall request that Lessor provide or arrange financing for a Capital Addition by providing to Lessor such information about the
Capital Addition as Lessor may reasonably request (a “Request”), including all information referred to in Section 9.1
above. Lessor may, but shall be under no obligation to provide or obtain the funds necessary to meet the Request. Within 30 days
of receipt of a Request, Lessor shall notify Lessee as to whether it will finance the proposed Capital Addition and, if so, the
terms and conditions upon which it would do so, including the terms of any amendment to this Lease. In no event (i) shall the portion
of the projected Capital Addition Cost comprised of land, if any, materials, labor charges and fixtures be less than 90% of the
total amount of such cost, or (ii) shall Lessee or any of its Affiliates be entitled to any commission or development fee, directly
or indirectly, as a portion of the Capital Addition Cost. Any Capital Addition not Financed by Lessor must still be approved in
writing by Lessor pursuant to the terms of Section 9.1 hereof, which consent will not be unreasonably withheld. Lessee may withdraw
its Request by notice to Lessor at any time before or after receipt of Lessor’s terms and conditions.

 

(b)           If
Lessor agrees to finance the proposed Capital Addition, Lessor’s obligation to advance any funds shall be subject to receipt
of all of the following, in form and substance reasonably satisfactory to Lessor:

 

(i)          such
loan documentation as may be required by Lessor;

 

(ii)         any
information, certificates, licenses, permits or documents requested by Lessor or any lender with whom Lessor has agreed or may
agree to provide financing which are necessary to confirm that Lessee will be able to use the Capital Addition upon completion
thereof in accordance with the Primary Intended Use, including all required federal, state or local government licenses and approvals;

 

(iii)        an
Officer’s Certificate and, if requested, a certificate from Lessee’s architect, setting forth in detail reasonably
satisfactory to Lessor the projected (or actual, if available) cost of the proposed Capital Addition;

 

(iv)        an
amendment to this Lease, duly executed and acknowledged, in form and substance satisfactory to Lessor and Lessee (the “Lease
Amendment”), and containing such provisions as may be necessary or appropriate due to the Capital Addition, including any
appropriate changes in the legal description of the Land and the Rent, all such changes to be mutually agreed upon by Lessor and
Lessee;

 

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(v)         a
deed conveying title to Lessor to any land and improvements or other rights acquired for the purpose of constructing the Capital
Addition, free and clear of any liens or encumbrances except those approved in writing by Lessor and, both prior to and following
completion of the Capital Addition, an as-built survey thereof reasonably satisfactory to Lessor;

 

(vi)        endorsements
to any outstanding policy of title insurance covering the Leased Property or a supplemental policy of title insurance covering
the Leased Property reasonably satisfactory in form and substance to Lessor (A) updating the same without any additional exceptions,
except as may be permitted by Lessor; and (B) increasing the coverage thereof by an amount equal to the Fair Market Value of the
Capital Addition (except to the extent covered by the owner’s policy of title insurance referred to in subparagraph (vii)
below);

 

(vii)       if
required by Lessor, (A) an owner’s policy of title insurance insuring fee simple title to any land conveyed to Lessor pursuant
to subparagraph (v), free and clear of all liens and encumbrances except those approved by Lessor and (B) a lender’s policy
of title insurance satisfactory in form and substance to Lessor and the Lending Institution advancing any portion of the Capital
Addition Cost;

 

(viii)      if
required by Lessor upon completion of the Capital Addition, an M.A.I appraisal of the Leased Property; and

 

(ix)         such
other certificates (including endorsements increasing the insurance coverage, if any, at the time required by Section 12.1), documents,
customary opinions of Lessee’s counsel, appraisals, surveys, certified copies of duly adopted resolutions of the Board of
Directors of Lessee authorizing the execution and delivery of the Lease Amendment and any other instruments as may be reasonably
required by Lessor.

 

(c)          Upon
making a Request to Finance a Capital Addition, whether or not such financing is actually
consummated, Lessee shall pay or agree to pay mutually agreed upon reasonable costs and expenses of Lessor and any Lending
Institution which has committed to finance such Capital Addition paid or incurred in connection with the financing of the
Capital Addition, including (i) the fees and expenses of their respective counsel, (ii) the amount of any recording or
transfer taxes and fees, (iii) documentary stamp taxes, if any, (iv) title insurance charges, appraisal fees, if any, and (v)
commitment fees, if any.

 

9.4          Remodeling
and Non-Capital Additions. Lessee shall have the right and the obligation to
make additions, modifications or improvements to the Leased Property which are not Capital Additions, from time to time as may
reasonably be necessary for its uses and purposes and to permit the Lessee to comply fully with its obligations set forth in this
Lease; provided that such action will be undertaken expeditiously, in a workmanlike manner and will not significantly alter the
character or purpose or detract from the value or operating efficiency of the Leased Property and will not significantly impair
the revenue producing capability of the Leased Property or adversely affect the ability of the Lessee to comply with the provisions
of this Lease. Title to all non-Capital Additions, modifications and improvements shall, without payment by Lessor at any time,
be included under the terms of this Lease and, upon expiration or earlier termination of this Lease, shall pass to and become
the property of Lessor.

 

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9.5           Salvage.
All materials which are scrapped or removed in connection with the making of either Capital
Additions permitted by Section 9.1 or repairs required by Article VIII shall be or become the property of Lessor; provided that
Lessor may require Lessee to dispose of such materials and remit the net proceeds thereof to Lessor within 15 days of such disposal.

 

ARTICLE
X

LIENS

 

Subject
to the provisions of Article XI relating to permitted contests, Lessee will not directly or indirectly create or suffer to exist
and will promptly discharge at its expense any lien, encumbrance, attachment, title retention agreement or claim upon the Leased
Property or any attachment, levy, claim or encumbrance in respect of the Rent, not including, however, (a) this Lease, (b) the
matters, if any, set forth in Exhibit B attached hereto, (c) restrictions, liens and other encumbrances which are consented
to in writing by Lessor, or any easements granted pursuant to the provisions of Section 6.3 of this Lease, (d) liens
for those taxes of Lessor which Lessee is not required to pay hereunder, (e) subleases permitted by Article XXIV, (f) liens for
Impositions or for sums resulting from noncompliance with Legal Requirements so long as (1) the same are not yet payable or are
payable without the addition of any fine or penalty or (2) such liens are in the process of being contested as permitted by Article
XI. (g) liens of mechanics, laborers, materialmen, suppliers or vendors for sums either disputed or not yet due, provided that
(1) the payment of such sums shall not be postponed for more than 60 days after the completion of the action (including any appeal
from any judgment rendered therein) giving rise to such lien and such reserve or other appropriate provisions as shall be required
by law or generally accepted accounting principles shall have been made therefor or (2) any such liens are in the process of being
contested as permitted by Article XI, and (h) any Encumbrance placed on the Leased Property by Lessor.

 

ARTICLE
XI

PERMITTED
CONTESTS

 

Lessee,
after ten days’ prior written notice to Lessor, on its own or on Lessor’s behalf (or in Lessor’s name),
but at Lessee’s expense, may contest, by appropriate legal proceedings conducted in good faith and with due diligence,
the amount, validity or application, in whole or in part, of any Imposition, Legal Requirement, Insurance Requirement, lien,
attachment, levy, encumbrance, charge or claim (collectively, “Charge”) not otherwise permitted by Article X,
which is required to be paid or discharged by Lessee; provided that (a) in the case of an unpaid Charge, the commencement and
continuation of such proceedings, or the posting of a bond or certificate of deposit as may be permitted by applicable law,
shall suspend the collection thereof from Lessor and from the Leased Property; (b) neither the Leased Property nor any Rent
therefrom nor any part thereof or interest therein would be in any immediate danger of being sold, forfeited, attached or
lost; (c) Lessor would not be in any immediate danger of civil or criminal liability for failure to comply therewith pending
the outcome of such proceedings; (d) in the event that any such contest shall involve a sum of money or potential loss in
excess of $50,000.00, then Lessee shall deliver to Lessor and its counsel an Officer’s Certificate as to the matters
set forth in clauses (a), (b) and (c); (e) in the case of an Insurance Requirement, the coverage
required by Article XII shall be maintained; and (f) if such contest be finally resolved against Lessor or Lessee, Lessee
shall, as Additional Charges due hereunder, promptly pay the amount required to be paid, together with all interest and
penalties accrued thereon, or otherwise comply with the applicable Charge; provided further that nothing contained herein
shall be construed to permit Lessee to contest the payment of Rent, or any other sums payable by Lessee to Lessor hereunder.
Lessor, at Lessee’s expense, shall execute and deliver to Lessee such authorizations and other documents as may
reasonably be required in any such contest and, if reasonably requested by Lessee or if Lessor so desires and then at its own
expense, Lessor shall join as a party therein. Lessor shall do all things reasonably requested by Lessee in connection with
such action. Lessee shall indemnify and save Lessor harmless against any liability, cost or expense of any kind that may be
imposed upon Lessor in connection with any such contest and any loss resulting therefrom.

 

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ARTICLE
XII

INSURANCE

 

12.1         General
Insurance Requirements. During the Term of this Lease, Lessee shall at all times keep the
Leased Property, and all property located in or on the Leased Property insured with the kinds and amounts of insurance required
by the Ground Lease and as described below and written by companies reasonably acceptable to Lessor authorized to do insurance
business in the state in which the Leased Property is located. The policies must name Lessor together with any other parties required
by the Ground Lease, as an additional insured and losses shall be payable to Lessor and/or Lessee as provided in Article XIII.
In addition, the policies shall name as an additional insured the holder (“Facility Mortgagee”) of any mortgage, deed
of trust or other security agreement securing any Encumbrance placed on the Leased Property in accordance with the provisions
of Article XXXII (“Facility Mortgage”), if any, by way of a standard form of mortgagee’s loss payable endorsement.
Any loss adjustment in excess of $100,000.00 shall require the written consent of Lessor, each affected Facility Mortgagee and,
if necessary or appropriate, the landlord under the Ground Lease. Evidence of insurance shall be deposited with Lessor and, if
requested, with any Facility Mortgagee(s). If any provision of any Facility Mortgage which constitutes a first lien on the Leased
Property requires deposits of insurance to be made with such Facility Mortgagee, Lessee shall either pay to Lessor monthly the
amounts required and Lessor shall transfer such amounts to such Facility Mortgagee or, pursuant to written direction by Lessor,
Lessee shall make such deposits directly with such Facility Mortgagee. The policies on the Leased Property, including the Leased
Improvements, the Fixtures and the Personal Property, shall insure against the following risks:

 

(a)          Loss
or damage by fire, vandalism and malicious mischief, extended coverage perils commonly known as “All Risk” and all
physical loss perils, including sprinkler leakage, in an amount not less than 90% of the then Full Replacement Cost thereof (as
defined below in Section 12.2) with a replacement cost endorsement sufficient to prevent Lessee from becoming a co-insurer together
with an agreed value endorsement;

 

(b)          Loss
or damage by explosion of steam boilers, pressure vessels or similar apparatus now or hereafter installed in the Facility, in such
limits with respect to any one accident as may be reasonably requested by Lessor from time to time;

 

(c)          Loss
of rental under a rental value insurance policy covering risk of loss during the first 12 months of reconstruction necessitated
by the occurrence of any of the hazards described in Sections 12.1(a) or 12.1(b), in an amount sufficient to prevent Lessee from
becoming a co-insurer; provided that in the event that Lessee shall not be in default hereunder and Lessor shall receive any proceeds
from such rental insurance which, when added to rental amounts received with respect to the applicable time period, exceed the
amount of rental owed by Lessee hereunder, Lessor shall immediately pay such excess to Lessee;

 

(d)          Loss
or damage by hurricane and earthquake in the amount of the Full Replacement Cost, after deductible;

 

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(e)          Claims
for personal injury or property damage under a policy of comprehensive general public liability insurance including insurance against
assumed or contractual liability including indemnities under this Lease, with amounts not less than $5,000,000.00 per occurrence
in respect of bodily injury and death and $10,000,000.00 for property damage; provided that if it becomes customary for tenants
occupying similar buildings in the same City where the Leased Property is located to be required to provide liability coverage
with higher limits than the foregoing, then Lessee shall provide Lessor with an insurance policy with coverage limits that are
not less than such customary limits;

 

(f)          Flood
(when the Leased Property is located in whole or in part within a designated flood plain area) and such other hazards and in such
amounts as may be customary for comparable properties in the area and if available from insurance companies authorized to do business
in the state in which the Leased Property is located.

 

(g)          If
Lessee shall engage or cause to be engaged any contractor to perform work on the Leased Property, Lessee shall require such contractor
to carry and maintain insurance coverage comparable to the foregoing requirements, at no expense to Lessor; provided that Lessee
may allow any such contractor to carry or maintain alternative coverage in reasonable amounts upon Lessor’s prior written
consent, which shall not be unreasonably withheld.

 

12.2        Replacement
Cost. The term “Full Replacement Cost” as used herein shall mean the actual
replacement cost of the Facility from time to time, including increased cost of construction endorsement, less exclusions provided
in the normal fire insurance policy. In the event Lessor or Lessee believes that the Full Replacement Cost has increased or decreased
at any time during the Term, it shall have the right at its own expense to have such Full Replacement Cost redetermined by the
insurance company which is then providing the largest amount of casualty insurance carried on the Leased Property, hereinafter
referred to as the “impartial appraiser”. The party desiring to have the Full Replacement Cost so redetermined shall
forthwith, on receipt of such determination by the impartial appraiser, give written notice thereof to the other party hereto.
The determination of such impartial appraiser shall be final and binding on the parties hereto, and Lessee shall forthwith increase,
or may decrease, the amount of the insurance carried pursuant to this Article to the amount so determined by the impartial appraiser.

 

12.3        Additional
Insurance. In addition to the insurance described above, Lessee shall maintain such additional
insurance as may be reasonably required from time to time by any Facility Mortgagee which is consistent with insurance coverage
for similar buildings in the county and state where the Leased Property is located, or required pursuant to any applicable Legal
Requirement and shall at all times maintain adequate worker’s compensation insurance coverage for all persons employed by
Lessee on the Leased Property, in accordance with all applicable Legal Requirements.

 

12.4        Waiver
of Subrogation. All insurance policies carried by either party covering the Leased Property,
the Fixtures, the Facility and/or the Personal Property, including contents, fire and casualty insurance, shall expressly waive
any right of subrogation on the part of the insurer against the other party. The parties hereto agree that their policies will
include such a waiver clause or endorsement so long as the same is obtainable without extra cost, and in the event of such an
extra charge the other party, at its election, may request and pay the same, but shall not be obligated to do so.

 

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12.5        Form
of Insurance. All of the policies of insurance referred to in this Section shall be
written in form reasonably satisfactory to Lessor and in compliance with the requirements of the Ground Lease by insurance
companies reasonably satisfactory to Lessor; provided that the deductibles for insurance
required by Sections 12.1(a) and (b) shall be no greater than $50,000.00 and the deductible for coverage required by Section
12.1(c) shall be no greater than $100,000.00. Lessee shall pay all premiums therefor, and deliver such policies or
certificates thereof to Lessor prior to their effective date (and, with respect to any renewal policy, at least 30 days prior
to the expiration of the existing policy). In the event of the failure of Lessee 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 Lessor at the times
required, Lessor shall be entitled, but shall have no obligation, to enact such insurance and pay the premiums therefor,
which premiums shall be repayable by Lessee to Lessor upon written demand therefor, and failure to repay the same shall
constitute an Event of Default within the meaning of Section 15.1(c). Each insurer mentioned in this Section shall agree, by
endorsement on the policy or policies issued by it, or by independent instrument furnished to Lessor, that it will give to
Lessor prior written notice before the policy or policies in question shall be altered, allowed to expire or
canceled.

 

12.6         Change
in Limits. In the event that Lessor shall at any time reasonably and in good faith believe
the limits of the personal injury, property damage or general public liability insurance then carried to be insufficient, the
parties shall endeavor to agree on the proper and reasonable limits for such insurance 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. If the parties
shall be unable to agree thereon, the proper and reasonable limits for such insurance shall be determined by an impartial third
party selected by the parties the costs of which shall be divided equally between the parties. Such redeterminations, whether
made by the parties or by arbitration, shall be made no more frequently than every two years. Nothing herein shall permit the
amount of insurance to be reduced below the amount or amounts reasonably required by any Facility Mortgagee or the amounts required
by the Ground Lease.

 

12.7         Blanket
Policy. Notwithstanding anything to the contrary contained in this Section, Lessee’s
obligations to carry the insurance provided for herein may be brought within the coverage of a so-called blanket policy or policies
of insurance carried and maintained by Lessee; provided that the coverage afforded Lessor will not be reduced or diminished or
otherwise be different from that which would exist under separate policies meeting all other requirements of this Lease; provided
further that the requirements of this Article XII are otherwise satisfied.

 

12.8         No
Separate Insurance. Without the prior written consent of Lessor, Lessee shall not, on Lessee’s
own initiative or pursuant to the request or requirement of any third party, take out separate insurance concurrent in form or
contributing in the event of loss with that required in this Article XII to be furnished by, or which may reasonably be required
by a Facility Mortgagee to be furnished by, Lessee, or increase the amounts of any then-existing insurance required under this
Article XII by securing an additional policy or additional policies, unless all parties having an insurable interest in the subject
matter of the insurance, including in all cases Lessor and all Facility Mortgagees, are included therein as additional insureds
and the loss is payable under said insurance in the same manner as losses are required to be payable under this Lease. Lessee
shall immediately notify Lessor of the taking out of any such separate insurance or of the increasing of any of the amounts of
the then-existing insurance required under this Article XII by securing an additional policy or additional policies.

 

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ARTICLE
XIII

FIRE
AND CASUALTY

 

13.1        Insurance
Proceeds. All proceeds payable by reason of any loss or damage to the Leased Property or
any portion thereof, and insured under any policy of insurance required by Article XII of this
Lease shall be paid to Lessor and held by Lessor in trust (subject to the provisions of Section 13.7) and shall be made available
for reconstruction or repair, as the case may be, of any damage to or destruction of the Leased Property, or any portion thereof,
and shall be paid out by Lessor from time to time for the reasonable cost of such reconstruction or repair in accordance with
this Article XIII after Lessee has expended an amount equal to or exceeding the deductible under any applicable insurance policy.
Any excess proceeds of insurance remaining after the completion of the restoration or reconstruction of the Leased Property shall
be retained by Lessee free and clear upon completion of any such repair and restoration except as otherwise specifically provided
below in this Article XIII; provided that in the event neither Lessor or Lessee is required or elects to repair or restore the
Leased Property, then all such insurance proceeds shall be retained by Lessor. All salvage resulting from any risk covered by
insurance shall belong to Lessee, including any salvage relating to Capital Additions paid for by Lessee.

 

13.2       Reconstruction
in the Event of Damage or Destruction Covered by Insurance.

 

(a)          Except
as provided in Section 13.7 or as may be otherwise required by the Ground Lease, if during the Term, the Facility is totally or
partially destroyed from a risk covered by the insurance described in Article XII and the Facility thereby is rendered Unsuitable
for its Primary Intended Use, Lessee shall have the option, by giving notice to Lessor within 60 days following the date of such
destruction, to (i) apply all proceeds payable with respect thereto to restore the Facility to substantially the same condition
as existed immediately before the damage or destruction, or (ii) offer (A) to acquire the Leased Property from Lessor for a purchase
price equal to the Minimum Repurchase Price of the Leased Property immediately prior to such damage or destruction or (B) to substitute
a new property pursuant to and in accordance with the provisions of Article XX. In the event Lessor does not accept Lessee’s
offer to so purchase or substitute for the Leased Property, Lessee shall, by giving notice to Lessor within 30 days after receipt
of Lessor’s notice, withdraw its offer to purchase or substitute for the Leased Property and proceed to restore the Facility
to substantially the same condition as existed immediately before the damage or destruction.

 

(b)          Except
as provided in Section 13.7, if during the Term, the Facility is partially destroyed from a risk covered by the insurance described
in Article XII, but the Facility is not thereby rendered Unsuitable for its Primary Intended Use, Lessee shall restore the Facility
to substantially the same condition as existed immediately before the damage or destruction. Such damage or destruction shall not
terminate this Lease; provided that if Lessee cannot within a reasonable time obtain all necessary governmental approvals, including
building permits, licenses, conditional use permits and any certificates of need, after diligent efforts to do so, in order to
be able to perform all required repair and restoration work and to operate the Facility for its Primary Intended Use in substantially
the same manner as immediately prior to such damage or destruction, Lessee may either (i) offer pursuant to Article XX to substitute
a new property, substantially equivalent to the Leased Property immediately before such damage or destruction, or (ii) after the
fourth anniversary of the Commencement Date, offer to purchase the Leased Property for a purchase price equal to the Minimum Repurchase
Price of the Leased Property immediately prior to such damage or destruction.

 

(c)          In
the event Lessor accepts Lessee’s offer to purchase the Leased Property or to provide a Substitute Property, this
Lease shall terminate upon payment of the purchase price and execution and delivery of all appropriate documentation, or
execution and delivery of all documents required in connection with a Substitute Property under Article XX, and Lessor shall
remit to Lessee, or allow Lessee a credit
toward the purchase price in an amount equal to, all insurance proceeds being held in trust by Lessor.

 

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13.3        Reconstruction
in the Event of Damage or Destruction Not Covered by Insurance. Except as provided in Section
13.7 below, if during the Term the Facility is totally or materially destroyed from a risk (including earthquake) not covered
by the insurance described in Article XII, whether or not such damage or destruction renders the Facility Unsuitable for Its Primary
Intended Use; Lessee at its option shall either (a) restore the Facility to substantially the same condition it was in immediately
before such damage or destruction and such damage or destruction shall not terminate this Lease, or (b) acquire the Leased Property
from Lessor for a purchase price equal to the Minimum Repurchase Price immediately prior to such damage or destruction or (c)
if all of the criteria for such substitution are satisfied, offer to substitute a new property substantially equivalent to the
Leased Property immediately before such damage or destruction pursuant to the provisions of Article XX. If such damage or destruction
is not material in the reasonable opinion of Lessor, Lessee shall restore the Leased Property.

 

13.4        Lessee’s
Property. Lessee shall use any insurance proceeds payable by reason of any loss of or damage
to any of the Personal Property to restore such personal property to the Leased Property with items of substantially equivalent
value to the items being replaced.

 

13.5        Restoration
of Lessee’s Property. If Lessee is required or elects to restore the Facility as provided
in Sections 13-2 or 13.3, Lessee shall also restore the Personal Property as required pursuant to Section 13.4 and all Capital
Additions paid for or financed by Lessor. Insurance proceeds payable by reason of damage to Capital Additions paid for or financed
by Lessor shall be paid to Lessor and Lessor shall hold such insurance proceeds in trust to pay the cost of repairing or replacing
such Capital Additions in the event Lessee does not terminate this Lease or purchase or substitute for the Leased Property as
provided in Section 13.2 above.

 

13.6        No
Abatement of Rent. This Lease shall remain in full force and effect and Lessee’s obligation
to make rental payments and to pay all other charges required by this Lease shall remain unabated during any period required for
repair and restoration.

 

13.7        Damage
Near End of Term. Notwithstanding any provisions of Sections 13.2 or 13.3 to the contrary,
if damage to or destruction of the Facility occurs during the last 12 months of the Term, and if such damage or destruction cannot
be fully repaired and restored within the lesser of (i) six months or (ii) the period remaining in the Term immediately following
the date of loss, either party shall have the right to terminate this Lease by giving notice to the other within 30 days after
the date of damage or destruction, in which event Lessor shall be entitled to retain the insurance proceeds and Lessee shall pay
to Lessor on demand the amount of any deductible or uninsured loss arising in connection therewith; provided that any such notice
given by Lessor shall be void and of no force and effect if Lessee exercises an available option to extend the Term for one Extended
Term, or one additional Extended Term, as the case may be, within 30 days following receipt of such termination notice.

 

13.8        Waiver.
Lessee hereby waives any statutory or common law rights of termination which may arise by
reason of any damage or destruction of the Facility.

 

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ARTICLE
XIV

CONDEMNATION

 

14.1         Parties’
Rights and Obligations. If during the Term there is any Taking of all or any part of the
Leased Property or any interest in this Lease by Condemnation, the rights and obligations of the parties shall be determined by
this Article XIV, subject to the terms of Section 14 of the Ground Lease.

 

14.2         Total
Taking. If there is a Taking of all of the Leased Property by Condemnation, this Lease shall
terminate on the Date of Taking, and the Minimum Rent and all Additional Charges paid or payable hereunder shall be apportioned
and paid to the Date of Taking.

 

14.3         Partial
Taking. If there is a Taking of a portion of the Leased Property by Condemnation such that
the Facility is not thereby rendered Unsuitable for Its Primary Intended Use, this Lease shall remain in effect. If, however,
the Facility is thereby rendered Unsuitable for Its Primary Intended Use, Lessee shall have the right subject to the terms of
the Ground Lease (a) to take such proceeds of any Award as shall be necessary and restore the Facility, at its own expense, to
the extent possible, to substantially the same condition as existed immediately before the partial Taking, or (b) to offer (i)
to acquire the Leased Property from Lessor for a purchase price equal to the Minimum Repurchase Price of the Leased Property immediately
prior to such partial Taking, in which event this Lease shall terminate upon payment of the purchase price, or (ii) to substitute
a new property pursuant to and in accordance with the provisions of Article XX or (c) terminate this Lease. Lessee shall exercise
its option by giving Lessor notice thereof within 60 days after Lessee receives notice of the Taking. In the event Lessor does
not accept Lessee’s offer to so purchase or substitute for the Leased Property within 30 days after receipt of the notice
described in the preceding sentence, Lessee may either (a) withdraw its offer to purchase or substitute for the Leased Property
and proceed to restore the Facility, to the extent possible, to substantially the same condition as existed immediately before
the partial Taking, or (b) terminate the offer and this Lease by written notice to Lessor.

 

14.4         Restoration.
If there is a partial Taking of the Leased Property and this Lease remains in full force
and effect pursuant to Section 14.3, Lessee shall accomplish all necessary restoration.

 

14.5         Award
Distribution. In the event Lessor accepts Lessee’s offer to purchase the Leased
Property, or to substitute a new property for the Leased Property, the entire Award shall belong to Lessee and Lessor agrees
to assign to Lessee all of its rights thereto. Except as otherwise provided in Section
14.3 above, in any other event, the entire Award shall belong to and be
paid to Lessor, except that, if this Lease is terminated, and subject to the rights of the Facility Mortgagee, Lessee shall
be entitled to receive from the Award, if and to the extent such Award includes such items, the following: any sum
attributable to the Capital Additions for which Lessee would be entitled to reimbursement at the end of the Term pursuant to
the provisions of Section 9.2(b). If Lessee is required or elects to restore the Facility, Lessor agrees that, subject to the
rights of the Facility Mortgagees, its portion of the Award shall be used for such restoration and it shall hold such portion
of the Award in trust, for application to the cost of the restoration.

 

14.6        Temporary
Taking. The Taking of the Leased Property, or any part thereof, by military or other public
authority shall constitute a Taking by Condemnation only when the use and occupancy by the Taking authority has continued for
longer than six months. During any such six-month period all the provisions of this Lease shall remain in full force and effect
and the Rent shall not be abated or reduced during such period of Taking; provided that Lessee
will receive any compensation from the Taking authority as a result of such temporary Taking.

 

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ARTICLE
XV

DEFAULT

 

15.1        Events
of Default. The occurrence of any one or more of the following events shall constitute events
of default (individually, an “Event of Default” and, collectively, “Events of Default”) hereunder:

 

(a)           An
event of default shall occur under any other lease between Lessor or any of its Affiliates and Lessee, HEALTHSOUTH Medical Center,
Inc., or HEALTHSOUTH of Virginia, Inc..

 

(b)           if
Lessee shall fail to make a payment of the Rent payable by Lessee under this Lease when the same becomes due and payable and such
failure continues for a period of ten days after written notice from Lessor to Lessee, or, after Lessor has provided such ten days’
prior written notice twice in any twelve-month period, then if Lessee shall fail to make a payment of the Rent when the same becomes
due and payable, or

 

(c)           if
Lessee shall fail to observe or perform any other term, covenant or condition of this Lease and such failure is not cured by Lessee
within a period of 30 days after receipt by Lessee of notice thereof from Lessor, unless such faillite cannot with due diligence
be cured within a period of 30 days, in which case such failure shall not be deemed to continue if Lessee proceeds promptly and
with due diligence to cure the failure and diligently completes the curing thereof (as soon as reasonably possible), or

 

(d)          if
Lessee shall:

 

(i)          admit
in writing its inability to pay its debts generally as they become due,

 

(ii)         file
a petition in bankruptcy or a petition to take advantage of any insolvency
law,

 

(iii)        make
an assignment for the benefit of its creditors,

 

(iv)        consent
to the appointment of a receiver of itself or of the whole or any substantial part of its
property, or

 

(v)         file
a petition or answer seeking reorganization or arrangement under the Federal bankruptcy laws
or any other applicable law or statute of the United States of America or any state thereof, or

 

(e)           if
Lessee shall default beyond any applicable grace period contained in any major credit facility which by its terms would permit
an outstanding balance equal to or greater than $50,000,000.00 and the same shall be accelerated by the lender or other applicable
party, or

 

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(f)
         if any of the representations or warranties made by Seller in the
Purchase and Sale Agreement or in certificates delivered in connection therewith prove to have been untrue in any material
respect when made, and which is not cured within 30 days after receipt by Lessee of written notice thereof from Lessor,
or

 

(g)          if
Lessee shall fail to pay or perform any obligation of the Lessor under the Ground Lease which Lessee is obligated to play or perform
pursuant to Section 3.5 hereof in a timely manner and such failure continues after written notice of such default to Lessee from
the Lessor or the landlord under the Ground Lease and such default continues beyond any applicable cure period set forth in the
Ground Lease, or

 

(h)          if
an event of default shall occur and continue beyond any applicable cure period under the Lease Assignment between Lessor and Lessee.

 

15.2        Remedies. If
an Event of Default shall have occurred, Lessor shall have the right at its election, then
or at any time thereafter, to pursue any one or more of the following remedies, in addition to any remedies which may
be permitted by law or by other provisions of this Lease, without further notice or demand, except as hereinafter
provided:

 

(a)          Without
any notice or demand whatsoever, Lessor may take any one or more actions permissible at law to ensure performance by Lessee of
Lessee’s covenants and obligations under this Lease. In this regard, it is agreed that if Lessee abandons or vacates the
Leased Property, Lessor may enter upon and take possession of such Leased Property in order to protect it from deterioration and
continue to demand from Lessee the monthly rentals and other charges provided in this Lease. Lessor shall use reasonable efforts
to relet but shall have no absolute obligation to relet. If Lessor does, at its sole discretion, elect to relet the Leased Property,
such action by Lessor shall not be deemed as an acceptance of Lessee’s surrender of the Leased Property unless Lessor expressly
notifies Lessee of such acceptance in writing, Lessee hereby acknowledging that Lessor shall otherwise be reletting as Lessee’s
agent. It is further agreed in this regard that in the event of any Event of Default described in this Article XV, Lessor shall
have the right to enter upon the Leased Property and do whatever Lessee is obligated to do under the terms of this Lease; and Lessee
agrees to reimburse Lessor on demand for any reasonable expenses which Lessor may incur in thus effecting compliance with Lessee’s
obligations under this Lease, and further agrees that Lessor shall not be liable for any damages resulting to the Lessee from such
action provided that Lessor is not negligent.

 

(b)          Lessor
may terminate this Lease by written notice to Lessee, in which event Lessee shall immediately surrender the Leased Property to
Lessor, and if Lessee fails to do so, Lessor may, without prejudice to any other remedy which Lessor may have for possession or
arrearage in rent (including any interest which may have accrued pursuant to Section 2.3 of this Lease or otherwise), enter upon
and take possession of the Leased Property and expel or remove Lessee and any other person who may be occupying said premises or
any part thereof. In addition, Lessee agrees to pay to Lessor on demand the amount of all loss and damage which Lessor may suffer
by reason of any termination effected pursuant to this subsection (b), said loss and damage to be determined, at Lessor’s
option, by either of the following alternative measures of damages:

 

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(i)          Although
Lessor shall be under no absolute obligation to attempt and shall be obligated only to use
reasonable efforts, to relet the Leased Property, until the Leased Property is relet Lessee shall pay to Lessor on or before
the first day of each calendar month the monthly rentals and other charges provided in this Lease. After the Leased Property
has been relet by Lessor, Lessee shall pay to Lessor on the 10th day of each calendar month the difference between the
monthly rentals and other charges provided in this Lease for the preceding calendar month and that actually collected by
Lessor for such month; provided that such collections are less than the rental and other charges due under this Lease. If it
is necessary for Lessor to bring suit in order to collect any deficiency, Lessor shall have a right to allow such
deficiencies to accumulate and to bring an action on several or all of the accrued deficiencies at one time. Any such suit
shall not prejudice in any way the right of Lessor to bring a similar action for any subsequent deficiency or deficiencies.
Any amount collected by Lessor from subsequent tenants for any calendar month in excess of the monthly rentals and other
charges provided in this Lease shall be credited to Lessee in reduction of Lessee’s liability for any calendar month
for which the amount collected by Lessor will be less than the monthly rentals and other charges provided in this Lease; but
Lessee shall have no right to such excess other than the above described credit; or

 

(ii)         When
Lessor desires, Lessor may demand a final settlement not to exceed the Minimum Repurchase Price at the time of such final settlement.
Upon demand for a final settlement, Lessor shall have a right to, and Lessee hereby agrees to pay, the difference between the total
of all monthly rentals and other charges provided in this Lease for the remainder of the Term and the reasonable rental value of
the Leased Property for such period (including a reasonable time to relet the Leased Property), as determined pursuant to the provisions
of Article XXVIII hereof, such difference to be discounted to present value at a rate equal to the lowest rate of capitalization
(highest present worth) reasonably consistent with industry standards at the time of such determination and allowed by applicable
law.

 

The
rights and remedies of Lessor hereunder are cumulative, and pursuit of any of the above remedies shall not preclude pursuit of
any other remedies prescribed in other sections of this Lease and any other remedies provided by law or equity. Forbearance by
Lessor 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 such Event of Default.

 

15.3         Additional
Expenses. In addition to payments required pursuant to subsections (a) and (b) of Section
15.2 above, Lessee shall compensate Lessor for all reasonable expenses incurred by Lessor in repossessing the Leased Property
(including any increase in insurance premiums caused by the vacancy of the Leased Property), all reasonable expenses incurred
by Lessor in reletting (including repairs, remodeling, replacements, advertisements and brokerage fees), all reasonable concessions
granted to a new tenant upon reletting (including renewal options), all fees and expenses incurred by Lessor as a direct or indirect
result of any appropriate action by a Facility Mortgagee, any expenses of Lessor incurred for the installation of separate lines
or meters for any public utilities not previously metered separately from adjacent property of Lessee and a reasonable allowance
for Lessor’s administrative efforts, salaries and overhead attributable directly or indirectly to Lessee’s default
and Lessor’s pursuing the rights and remedies provided herein and under applicable law.

 

15.4        Waiver. If
this Lease is terminated pursuant to law or the provisions of this Article XV, Section 15.1, Lessee waives, to the extent
permitted by applicable law, (a) any right of redemption, reentry or repossession and (b)
the benefit of any laws now or hereafter in force exempting property from liability for rent or for
debt.

 

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15.5        Application
of Funds. All payments otherwise payable to Lessee which are received by Lessor under any
of the provisions of this Lease during the existence or continuance of any Event of Default shall be applied to Lessee’s
obligations in the order which Lessor may reasonably determine or as may be prescribed by the laws of the state in which the Facility
is located.

 

15.6        Notices
by Lessor. The provisions of this Article XV concerning notices shall be liberally construed
insofar as the contents of such notices are concerned, and any such notice shall be sufficient if it shall generally apprise Lessee
of the nature and approximate extent of any default.

 

ARTICLE
XVI 

LESSOR’S
RIGHT TO CURE

 

If
Lessee, without the prior written consent of Lessor, shall fail to make any payment, or to perform any act required to be made
or performed under this Lease and to cure the same within the relevant time periods provided in Section 15.1, Lessor, without waiving
or releasing any obligation or Event of Default, may (but shall be under no obligation to) make such payment or perform such act
for the account and at the expense of Lessee, and may, to the extent permitted by law, enter upon the Leased Property for such
purpose and take all such action thereon as, in Lessor’s opinion, may be necessary or appropriate therefor. No such entry
shall be deemed an eviction of Lessee. All sums so paid by Lessor, together with a late charge thereon (to the extent permitted
by law) at the Overdue Rate from the date on which such sums or expenses are paid or incurred by Lessor, and all costs and expenses
(including reasonable attorneys’ fees and expenses, in each case, to the extent permitted by law) so incurred shall be paid
by Lessee to Lessor on demand. The obligations of Lessee and rights of Lessor contained in this Article shall survive the expiration
or earlier termination of this Lease.

 

ARTICLE
XVII

PURCHASE
OF THE LEASED PROPERTY

 

In
the event Lessee purchases the Leased Property from Lessor pursuant to any of the terms of this Lease, Lessor shall, upon
receipt from Lessee of the applicable purchase price, together with full payment of any unpaid Rent due and payable with
respect to any period ending on or before the date of the purchase and any other amounts owing to Lessor hereunder, deliver
to Lessee an appropriate special warranty deed or assignment of ground lease (in substantially the same form used to convey
the Leased Property to Lessor) and any other documents reasonably requested by Lessee to convey the interest of Lessor in and
to the Leased Property, subject only to the Permitted Exceptions and the Permitted Liens, to Lessee, and such other standard
documents usually and customarily prepared in connection with such transfers, free and clear of all encumbrances other than
(a) those that Lessee has agreed hereunder to pay or discharge, (b) those mortgage liens, if any, which Lessee has agreed in
writing to accept and to take title subject to, (c) any other Encumbrances permitted to be imposed on the Leased Property
under the provisions of Article XXXII which are assumable at no cost to Lessee, and (d) any matters affecting the Leased
Property on or as of the Commencement Date. The difference between the applicable purchase price and the total of the
encumbrances assigned or taken subject to shall be paid in cash to Lessor, or as Lessor may direct, in federal or other
immediately available funds except as otherwise mutually agreed by Lessor and Lessee. The closing of any such sale shall be
contingent upon and subject to Lessee obtaining all required governmental consents and approvals for such transfer. If such
sale shall fail to be consummated by reason of the inability of Lessee to obtain all such approvals and consents, any options
to extend the Term which otherwise would have expired during the period from the date when Lessee elected or became obligated
to purchase the Leased Property until Lessee’s inability to obtain the approvals and consents is confirmed shall be
deemed to remain in effect for 30 days after the end of such period. All expenses of such conveyance, including the cost of
title examination or standard coverage title insurance, attorneys’ fees incurred by Lessor in connection with such
conveyance, and transfer taxes, shall be paid by Lessor. Recording fees and similar charges shall be paid for by
Lessee. Additionally, any sale to Lessee shall be subject to delivery of an opinion of Lessor’s counsel confirming that
(i) the sale will not result in ordinary recapture income to the Lessor pursuant to Code Section 1245 or 1250 or any other
Code provision, (ii) the sale will result in income, if any, to the Lessor of a type described in Code Section 856(c)(2) or
(3) and will not result in income of the types described in Code Section 856(c)(4) or result in the tax imposed under Code
Section 857(b)(6), and (iii) the sale, together with all other substitutions and sales made or requested by Lessee pursuant
to any other leases with Lessor of properties hereto or any other transfers of the Leased Property or the properties leased
under other such operating leases, during the relevant time period, will not jeopardize the qualification of Lessor as a real
estate investment trust under Code Sections 856-860.

 

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ARTICLE
XVIII

HOLDING
OVER

 

If
Lessee shall for any reason remain in possession of the Leased Property after the expiration of the Term or any earlier termination
of the Term hereof, such possession shall be as a tenancy at will during which time Lessee shall pay as rental each month, (a)
150% of the aggregate of 1/12 of the aggregate Minimum Rent payable with respect to the last complete year prior to the expiration
of the Term; plus (b) all Additional Charges accruing during the month; and plus (c) all other sums, if any, payable pursuant to
the provisions of this Lease with respect to the Leased Property. During such period of tenancy, Lessee and Lessor shall be obligated
to perform and observe all of the terms, covenants and conditions of this Lease and to continue its occupancy and use of the Leased
Property. Nothing contained herein shall constitute the consent, express or implied, of Lessor to the holding over of Lessee after
the expiration or earlier termination of this Lease.

 

ARTICLE
XIX

ABANDONMENT

 

19.1        Discontinuance
of Operations on the Leased Property; Substitution. If Lessee has discontinued use of the
Leased Property for its Primary Intended Use for 90 consecutive days without Lessor’s prior written consent for alterations
or remodeling pursuant to Article IX or otherwise, Lessee, if Lessor has not terminated this Lease as provided in Section 15.1,
will offer to substitute a new property or properties pursuant to and in accordance with the provisions of Article XX, on the
first Payment Date occurring not less than 120 days after the date of such discontinuance of business operations.

 

19.2        Obsolescence
of the Leased Property; Offer to Purchase. If, in the reasonable good faith judgment of
Lessee, the Leased Property becomes uneconomic or Unsuitable for Its Primary Intended Use, all as set forth in an Officer’s
Certificate delivered to Lessor, Lessee, if Lessor has not terminated this Lease as provided in Section 15.1, may after the fifteenth
anniversary of the Commencement Date, offer to purchase the Leased Property for a purchase, price equal to the Minimum Repurchase
Price on the first Payment Date occurring not less than 120 days after the date of such Officer’s Certificate.

 

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19.3         Conveyance
of Leased Property. In the event Lessee elects to purchase the Leased Property
pursuant to Section 19.2, then on the first Payment Date occurring not less than 120 days after the date of the Officer’s
Certificate referenced in Section 19.2, Lessor shall, upon receipt from Lessee of the purchase price provided for above and any
Rent or other sums then due and payable under this Lease (excluding the installment of Minimum Rent due on the date of conveyance),
convey the Leased Property to Lessee on such date in accordance with the provisions of Article XVII and this Lease shall thereupon
terminate as to the Leased Property.

 

ARTICLE
XX

SUBSTITUTION
OF PROPERTY

 

20.1       Substitution
of Property for the Leased Property.

 

(a)          In
the event a right or requirement of substitution of the Leased Property arises as a result of (i) damage or destruction of the
Leased Property as set forth in Article XIII hereof or (ii) a Taking of a portion of the Leased Property as set forth in Section
14.3 hereof, or (iii) the discontinuance of the use of the Leased Property as set forth in Section 19.1 hereof, Lessee, if no Event
of Default shall have occurred and be continuing, shall have the right subject to the conditions set forth below in this Article
XX, upon notice to Lessor, to substitute one or more properties (collectively referred to as “Substitute Properties”
or individually as a “Substitute Property”) on a monthly Payment Date specified in such notice (the “Substitution
Date”) occurring not less than 90 days after receipt by Lessor of such notice. The notice shall be in the form of an Officer’s
Certificate and shall specify the reason(s) for the proposed substitution and the proposed Substitution Date. Notwithstanding anything
contained herein to the contrary, any other substitution for the Leased Property shall require the prior written consent of Lessor
which shall be within the sole discretion of Lessor.

 

(b)          If
Lessee gives the notice referred to in Section 20.1(a) above, Lessee shall present to Lessor one or more properties (or groups
of properties) each of which property (or groups of properties) shall provide Lessor with a yield (i.e., an annual return on its
equity in such property) substantially equivalent to Lessor’s yield from the Leased Property at the time of such proposed
substitution (or in the case of substitution because of damage or destruction, the yield immediately prior to such damage or destruction)
and as reasonably projected over the remaining Term of this Lease and shall have a Fair Market Value substantially equivalent to
the Fair Market Value of the Leased Property. Lessor shall have a period of 90 days within which to review such information and
either accept or reject the Substitute Properties so presented unless Lessee is required by a court order or administrative action
to divest or otherwise dispose of the Leased Property within a shorter time period, in which case the time period shall be shortened
appropriately to meet the reasonable needs of Lessee, but in no event shall said period be less than 15 Business Days after Lessor’s
receipt of said notice (subject to further extension for any period of time in which Lessor is not timely provided with the information
provided for in Section 20.2 and Section 20.3 below); provided that if Lessor shall contend that the Substitute Properties fail
to meet all the conditions for substitution set forth in this Article XX, including the provisions of Sections 20.1(d), (e) and
(f) below, the matter shall be submitted to arbitration in accordance with Article XXXI and the time periods for Lessor’s
approval or rejection shall be tolled during the period of such arbitration.

 

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(c)          In
the event that, on or before the expiration of the applicable time period for Lessor’s review, Lessor has rejected all
of the Substitute Properties so presented, then Lessee shall, for a period of 60 days after the expiration of such period,
have the right to terminate this Lease as to the Leased Property upon notice to Lessor
accompanied by an offer to purchase the Leased Property on the first Payment Date occurring at least 90 days after the date
of such notice, as specified in such notice, for a purchase price equal to the greater of the Fair Market Value Purchase
Price or the Minimum Repurchase Price, and this Lease shall terminate on the purchase date.

 

(d)          Lessee’s
right to offer substitution as set forth in this Article is subject to the conditions set forth in Section 20.2 below, and
to the delivery of an opinion of counsel for Lessor confirming that
(i) the substitution of the Substitute Property for the Leased
Property will qualify as an exchange solely of property of a like-kind under Section 1031 of the Code, in which, generally,
except for “boot” such as cash needed to equalize exchange values or discharge indebtedness, no gain or loss is
recognized to the Lessor, (ii) the substitution or sale will not result in ordinary recapture income to the Lessor pursuant
to Code Section 1245 or 1250 or any other Code provision, (iii) the substitution or sale will result in income, if any, to
the Lessor of a type described in Code Section 856(c)(2) or (3) and will not result in income of the types described in Code
Section 856(c)(4) or result in the tax imposed under Code Section 857(b)(6), and (iv) the substitution or sale, together with
all other substitutions and sales made or requested by Lessee pursuant to any other leases with Lessor of properties hereto
or any other transfers of the Leased Property or the properties leased under other such operating leases, during the relevant
time period, will not jeopardize the qualification of Lessor as a real estate investment trust under Code Sections
856-860.

 

(e)          In
the event that the equity value of the Substitute Property or group of Substitute Properties (i.e., the Fair Market Value of the
Substitute Property or group of Substitute Properties minus the encumbrances subject to which the Lessor will take the Substitute
Property or group of Substitute Properties) as of the Substitution Date is greater than the equity value of the Leased Property
(i.e., the Fair Market Value of the Leased Property minus the encumbrances subject to which the Lessee will take the Leased Property)
as of the Substitution Date (or in the case of damage or destruction, the Fair Market Value immediately prior to such damage or
destruction), Lessor shall pay to Lessee an amount equal to the difference, subject to the limitation set forth below; in the event
that said equity value of the Substitute Property or group of Substitute Properties is less than said equity value of the Leased
Property, Lessee shall pay to Lessor an amount equal to the difference, subject to the limitation set forth below; provided that
neither Lessor nor Lessee shall be obligated to consummate such substitution if such party would be required to make a payment
to the other in excess of an amount equal to ten percent of said Fair Market Value of the Leased Property (the amount of cash paid
by one party to the other being hereinafter referred to as the “Cash Adjustment”).

 

(f)          The
Rent for such Substitute Property in all respects shall provide Lessor with a substantially equivalent yield at the time of such
substitution (i.e., annual return on its investment in such Substitute Property) to the Current Yield (and reasonably expected
to be received thereafter throughout the Term of this Lease) from the Leased Property, taking into account the Cash Adjustment
paid or received by Lessor and any other relevant factors.

 

(g)          The
Minimum Repurchase Price of the Substitute Property shall be an amount equal to the Minimum Repurchase Price of the Leased Property
(i) increased by any Cash Adjustment paid by Lessor pursuant to paragraph (e) above, or (ii) decreased by any Cash Adjustment paid
by Lessee pursuant to paragraph (e) above.

 

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20.2        Conditions
to Substitution. On the Substitution Date, the Substitute Property will become the Leased
Property hereunder upon delivery by Lessee to Lessor of the following items in form and substance reasonably satisfactory to Lessor:

 

(a)          an
Officer’s Certificate certifying that (i) the Substitute Property has been accepted by Lessee for all purposes of this Lease
and there has been no material damage to the improvements located on the Substitute Property nor is any condemnation or eminent
domain proceeding pending with respect thereto; (ii) all permits, licenses and certificates (including a permanent, unconditional
certificate of occupancy and, to the extent permitted by law, all certificates of need and licenses) which are necessary to permit
the use of the Substitute Property in accordance with the provisions of this Lease have been obtained and are in full force and
effect; (iii) under applicable zoning and use laws, ordinances, rules and regulations the Substitute Property may be used for the
purposes contemplated by Lessee and all necessary subdivision approvals have been obtained; (iv) there are no mechanic’s
or materialmen’s liens outstanding or threatened to the knowledge of Lessee against the Substitute Property arising out of
or in connection with the construction of the improvements thereon, other than those being contested by Lessee pursuant to Article
XI; (v) any mechanic’s or materialmen’s liens being contested by Lessee will be promptly paid by Lessee if such contest
is resolved in favor of the mechanic or materialman; (vi) to the best knowledge of Lessee, there exists no Event of Default under
this Lease, and no defense, offset or claim exists with respect to any sums to be paid by Lessee hereunder; and (vii) any exceptions
to Lessor’s title to the Substitute Property do not materially interfere with the intended use of the Substitute Property
by Lessee;

 

(b)          a
special warranty deed with warranties against claims arising under Lessee conveying to Lessor title to the Substitute Property
free and clear of any liens and encumbrances except those approved in writing or assumed by Lessor;

 

(c)          a
lease duly executed, acknowledged and delivered by Lessee, containing the same terms and conditions as are contained herein except
that (i) the legal description of the Land shall refer to the Substitute Property, (ii) the Minimum Repurchase Price, Rent and
any Additional Charges for the Substitute Property shall be consistent with the requirements of Section 20.1 and (iii) such other
changes therein as may be necessary or appropriate under the circumstances shall be made;

 

(d)          counterparts
of a standard owner’s or lessee’s (as applicable) policy of title insurance covering the Substitute Property (or a
valid, binding, unconditional commitment therefor), dated the Substitution Date, in current form and including mechanics’
and materialmen’s lien coverage, issued to Lessor by a title insurance company reasonably satisfactory to Lessor. Such policy
shall (i) insure (A) Lessor’s fee title to the Substitute Property’, subject to no liens or encumbrances except those
approved or assumed by Lessor, and (B) that any restrictions affecting the Substitute Property have not been violated and that
a further violation thereof will not result in a forfeiture or reversion of title, (ii) be in an amount at least equal to the Fair
Market Value of the Substitute Property, and (iii) contain such endorsements as may be reasonably requested by Lessor;

 

(e)          certificates
of insurance with respect to the Substitute Property fulfilling the requirements of Article XII;

 

(f)          current
appraisals or other evidence satisfactory to Lessor, in its sole discretion, as to the current Fair Market Values of such Substitute
Property;

 

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(g)          all
available revenue data relating to the Substitute Property for the period from the date of opening for business of the Facility
on such Substitute Property to the date of Lessee’s most recent Fiscal-Year end, or for the most recent three years, whichever
is less; and

 

(h)          such
other certificates, documents, opinions of counsel (which may be in-house counsel), and other instruments as may be reasonably
required by Lessor.

 

20.3         Conveyance
to Lessee. On the Substitution Date or the date specified in the notice given pursuant to
Section 20.1 Lessor will convey the Leased Property to Lessee in accordance with the provisions of Article XVII (except as to
payment of any expenses in connection therewith which shall be governed by Section 20.4 below) upon either (a) payment in cash
therefor or (b) conveyance to Lessor of the Substitute Property, as appropriate.

 

20.4         Expenses.
Lessee shall pay or cause to be paid, on demand, all reasonable costs and expenses paid
or incurred by Lessor in connection with the substitution and conveyance of the Leased Property and the Substitute Property, including
(a) fees and expenses of Lessor’s counsel, (b) the amount of any recording taxes and filing fees, (c) the cost of preparing
and recording, if appropriate, a release of the Leased Property from the lien of any mortgage, (d) broker’s fees and commissions
for Lessee, if any, (e) documentary stamp and transfer taxes, if any, (f) title insurance charges, and (g) escrow fees, if any.

 

ARTICLE
XXI

RISK
OF LOSS

 

Except
as otherwise provided in this Lease, during the Term of this Lease, the risk of loss or of decrease in the enjoyment and beneficial
use of the Leased Property in consequence of the damage or destruction thereof by fire, the elements, casualties, thefts, riots,
wars or otherwise, or in consequence of foreclosures, attachments, levies or executions (other than by Lessor and those claiming
from, through or under Lessor) is assumed by Lessee and, Lessor shall in no event be answerable or accountable therefor nor shall
any of the events mentioned in this Section entitle Lessee to any abatement of Rent except as specifically provided in this Lease.

 

ARTICLE
XXII

INDEMNIFICATION

 

Notwithstanding
the existence of any insurance or self insurance provided for in Article XII, and without regard to the policy limits of any such
insurance or self insurance, Lessee will protect, indemnify, save harmless and defend Lessor from and against all liabilities,
obligations, claims, damages, penalties, causes of action, costs and expenses (including reasonable attorneys’ fees and
expenses), to the extent permitted by law, imposed upon or incurred by or asserted against Lessor by reason of: (a) any accident,
injury to or death of persons or loss to property occurring on or about the Leased Property, including any claims of malpractice,
(b) any use, misuse, no use, condition, maintenance or repair by Lessee of the Leased Property, (c) any Impositions (which are
the obligations of Lessee to pay pursuant to the applicable provisions of this Lease), (d) any failure on the part of Lessee to
perform or comply with any of the terms of this Lease, (e) the non-performance of any of the terms and provisions of any and all
existing and future subleases of the Leased Property to be performed by Lessee as landlord thereunder and (f) the violation of
any Hazardous Materials Law. Any amounts which become payable by Lessee under this Section shall be paid within 20 days after
liability therefor on the part of Lessor is finally determined by litigation or otherwise (including the expiration of any time
for appeals) and, if not timely paid, shall bear interest (to the extent permitted by law) at the Overdue Rate from the date of
such determination to the date of payment. Lessee, at its expense, shall contest, resist and defend any such claim, action or
proceeding asserted or instituted against Lessor or may compromise or otherwise dispose of the same as Lessee sees fit. Lessor
shall cooperate with Lessee in a reasonable manner to permit Lessee to satisfy Lessee’s obligations hereunder, including
the execution of any instruments or documents reasonably requested by Lessee. Nothing herein shall be construed as indemnifying
Lessor or its agents for their own negligent acts or omissions or willful misconduct. Lessee’s liability for a breach of
the provisions of this Article shall survive any termination of this Lease.

 

     27

     

    

 

ARTICLE
XXIII 

SUBLETTING
AND ASSIGNMENT

 

23.1         Subletting
and Assignment. Subject to the rights of the Sublessee under the Sublease and the provisions
of Section 23.3 below and any other express conditions or limitations set forth herein, Lessee may, without the consent of Lessor,
sublet all or any part of the Leased Property consistently with the Primary Intended Use. Lessor shall not unreasonably withhold
its consent to any other or further subletting or assignment; provided that (a) in the case of a subletting, the sublessee shall
comply with the provisions of Section 23.2, (b) in the case of an assignment, the assignee shall assume in writing and agree to
keep and perform all of the terms of this Lease on the part of Lessee to be kept and performed and shall be and become jointly
and severally liable with Lessee for the performance thereof, (c) an original counterpart of each such sublease and assignment
and assumption, duly executed by Lessee and such sublessee or assignee, as the case may be, in form and substance reasonably satisfactory
to Lessor, shall be delivered promptly to Lessor, and (d) in case of either an assignment or subletting, Lessee shall remain primarily
liable, as principal rather than as surety, for the prompt payment of the Rent and for the performance and observance of all of
the covenants and conditions to be performed by Lessee hereunder.

 

23.2         Non-Disturbance,
Subordination and Attornment. Lessee shall insert in each sublease permitted under Section
23.1 provisions to the effect that (a) such sublease is subject and subordinate to all of the terms and provisions of this Lease
and to the rights of Lessor hereunder, (b) in the event this Lease shall terminate before the expiration of such sublease, the
sublessee thereunder will, at Lessor’s option, attorn to Lessor and waive any right the sublessee may have to terminate
the sublease or to surrender possession thereunder as a result of the termination of this Lease and (c) in the event the sublessee
receives a written notice from Lessor or Lessor’s assignees, if any, stating that Lessee is in default under this Lease,
the sublessee, including Sublessee, shall thereafter be obligated to pay all rentals accruing under said sublease directly to
the party giving such notice, or as such party may direct. All rentals received from the sublessee, including Sublessee, by Lessor
or Lessor’s assignees, if any, as the case may be, shall be credited against amounts owing by Lessee under this Lease. Lessor
agrees that notwithstanding any default, termination, expiration, sale, entry or other act or omission of Lessee pursuant to the
terms of this Lease, or at law or in equity, any tenant’s or the Sublessee’s possession shall not be disturbed unless
such possession may otherwise be terminated pursuant to the terms of the applicable sublease or the Sublease. Lessor hereby agrees,
upon Lessee’s request, to execute a nondisturbance agreement in favor of any sublessee, including Sublessee, under any sublease
permitted under Section 23.1 above; provided that any such sublessee, including Sublessee, has acknowledged all of the foregoing
provisions and executed all documents required by this Section 23.2.

 

     28

     

    

 

ARTICLE
XXIV

OFFICER’S
CERTIFICATES AND FINANCIAL STATEMENTS

 

(a)           At
any time and from time to time within 20 days following written request by Lessor, Lessee will furnish to Lessor an Officer’s
Certificate certifying that this Lease is unmodified and in full force and effect (or that this Lease is in full force and effect
as modified and setting forth the modifications) and the dates to which the Rent has been paid. Any such Officer’s Certificate
furnished pursuant to this Article maybe relied upon by Lessor and any prospective purchaser of the Leased Property.

 

(b)           Lessee
will furnish or cause to furnish the following statements to Lessor; provided that Lessor shall keep confidential items furnished
by Lessee which are not generally available to the public:

 

(i)          within
120 days after the end of each of Lessee’s fiscal years (A) a copy of the Consolidated Financial Statements for the preceding
fiscal year of Lessee, (B) an Officer’s Certificate stating that to the best of the signer’s knowledge and belief,
Lessee is not in default in the performance or observance of any of the terms of this Lease or any loan or credit facility which
by its terms would permit an outstanding balance equal to or greater than $50,000,000.00, or, if Lessee shall be in default to
its knowledge, specifying all such defaults, the nature thereof and the steps being taken to remedy the same, and (C) a statement
of revenues and expenses of the Leased Property for the previous 12-month period in detail reasonably satisfactory to Lessor, and

 

(ii)         with
reasonable promptness, such other information respecting the financial condition and affairs of Lessee as Lessor may reasonably
request from time to time.

 

ARTICLE
XXV

INSPECTION

 

Lessee
shall permit Lessor and its authorized representatives to inspect the Leased Property during usual business hours subject to any
security, health, safety or confidentiality requirements of Lessee, any governmental agency, any Insurance Requirements relating
to the Leased Property, or imposed by law or applicable regulations.

 

ARTICLE
XXVI

QUIET
ENJOYMENT

 

So
long as Lessee shall pay all Rent as the same becomes due and shall fully comply with all of the terms of this Lease and fully
perform its obligations hereunder, Lessee shall peaceably and quietly have, hold and enjoy the Leased Property for the Term hereof,
free of any claim or other action by Lessor or anyone claiming by, through or under Lessor, but subject to all liens and encumbrances
of record as of the date hereof or hereafter consented to by Lessee. No failure by Lessor to comply with the foregoing covenant
shall give Lessee any right to cancel or terminate this Lease, or to fail to pay any other sum payable under this Lease, or to
fail to perform any other obligation of Lessee hereunder. Notwithstanding the foregoing, Lessee shall have the right by separate
and independent action to pursue any claim or seek any damages it may have against Lessor as a result of a breach by Lessor of
the covenant of quiet enjoyment contained in this Article.

 

     29

     

    

 

ARTICLE
XXVII

NOTICES

 

All
notices, demands, requests, consents, approvals and other communications or documents to be provided under this Lease shall be
in writing and shall be given to the party at its address or telecopy number set forth below or such other address or telecopy
number as the party may later specify for that purpose by notice to the other party. Each notice shall, for all purposes shall
be deemed given and received:

 

(i)          If
given by telecopy, when the telecopy is transmitted to the party’s telecopy number specified below and confirmation of complete
receipt is received by that transmitting party during normal business hours on any Business Day or on the next Business Day if
not confirmed during normal business hours;

 

(ii)         If
hand delivered to a party when the copy of the notice is delivered;

 

(iii)        If
given by nationally recognized and reputable overnight delivery service, the day on which the notice is actually received by the
party; or

 

(iv)        If
given by certified mail, return receipt requested, postage prepaid, two Business Days after posted with the United States Postal
Service, at the address of the party specified below:

 

If
to Lessor:

 

CAPSTONE
CAPITAL OF PENNSYLVANIA, INC. 

%
CAPSTONE CAPITAL CORPORATION

1000
Urban Center Drive Suite 630 

Birmingham,
Alabama 35242

Attention: John W. McRoberts, President

Telephone:
(205) 967-2092

Telecopy: (205) 967-9066 

 

With
a copy to:

 

Mr.
Thomas A. Ansley

Sirote
& Permutt, P.C. 

2222
Arlington Avenue South

Birmingham, Alabama 35205

Telephone: (205) 930-5300

Telecopy: (205) 930-5301

 

     30

     

    

 

If
intended for Lessee:

 

HEALTHSOUTH
Corporation

Two Perimeter Park South

Suite
224W 

Birmingham,
Alabama 35243 

Attention:
C. Richard Byrd, III, Vice President - Real Estate

Telephone: (205) 967-7116

Telecopy: (205) 969-4739

 

With
a copy to:

 

Mr.
William W. Horton 

Senior
Vice President and Corporate Counsel 

HEALTHSOUTH
Corporation 

Two
Perimeter Park South 

Suite
224W 

Birmingham,
Alabama 35243

Telephone: (205) 967-7116

Telecopy: (205) 969-4732

 

ARTICLE
XXVIII

APPRAISAL

 

In
the event that it becomes necessary to determine the Fair Market Value, Fair Market Value Purchase Price, the Fair Market
Added Value, the Minimum Repurchase Price or the Fair Market Rental Value of the Leased Property or a Substitute Property for
any purpose of this Lease, the party required or permitted to give notice of such required determination shall include in the
notice the name of a person selected to act as an appraiser on its behalf. Within ten days after receipt of any such notice,
Lessor (or Lessee, as the case may be) shall by notice to Lessee (or Lessor, as the case may be) appoint a second person as
an appraiser on its behalf. The appraisers thus appointed (each of whom must be a member of the American Institute of Real
Estate Appraisers or any successor organization thereto) shall, within 45 days after the date of the notice appointing the
first appraiser, proceed to appraise the Leased Property or the Substitute Property, as the case may be, to determine any of
the foregoing values as of the relevant date (giving effect to the impact, if any, of inflation from the date of their
decision to the relevant date); provided that if only one appraiser shall have been so appointed, or if two appraisers shall
have been so appointed but only one such appraiser shall have made such determination within 50 days after the making of
Lessee’s or Lessor’s request, then the determination of such appraiser shall be final and binding upon the
parties. If two appraisers shall have been appointed and shall have made their determinations within the respective requisite
periods set forth above and if the difference between the amounts so determined shall not exceed ten percent of the lesser of
such amounts, then the Fair Market Value or Fair Market Added Value or the Fair Market Rental Value shall be an amount equal
to 50% of the sum of the amounts so determined. If the difference between the amounts so determined shall exceed 10 % of the
lesser of such amounts, then such two appraisers shall have 20 days to appoint a third appraiser, but if such appraisers fail
to do so, then either party may request the American Arbitration Association or any successor organization thereto to appoint
an appraiser within 20 days of such request, and both parties shall be bound by any appointment so made within such 20-day
period. If no such appraiser shall have been appointed within such 20 days or within 90 days of the original request for a
determination of Fair Market Value or Fair Market Added Value or the Fair Market Rental Value, whichever is earlier, either
Lessor or Lessee may apply to any court having jurisdiction to have appointment made by such court. Any appraiser appointed,
by the American Arbitration Association or by such court, shall be instructed to determine the Fair Market Value or Fair
Market Added Value or the Fair Market Rental Value within 30 days after appointment of such appraiser. The determination of
the appraiser which differs most in terms of dollar amount from the determinations of the other two appraisers shall be
excluded, and 50% of the sum of the remaining two determinations shall be final and binding upon Lessor and Lessee as the
Fair Market Value or Fair Market Added Value or the Fair Market Rental Value for such interest. However, in the event that
following the appraisal performed by said third appraiser, the dollar amount of two of such appraisals are higher and lower,
respectively, than the dollar amount of the remaining appraisal in equal degrees, the determinations of both the highest and
lowest appraisal, respectively, shall be rejected and the determination of the remaining appraisal shall be final and binding
upon Lessor and Lessee as the Fair Market Value or Fair Market Added Value or the Fair Market Rental Value for such interest.
This provision for determination by appraisal shall be specifically enforceable to the extent such remedy is available under
applicable law, and any determination hereunder shall be final and binding upon the parties except as otherwise provided by
applicable law. Lessor and Lessee shall each pay the fees and expenses of the appraiser appointed by it and each shall pay
one-half of the fees and expenses of the third appraiser and one-half of all other costs and expenses incurred in connection
with each appraisal.

 

     31

     

    

 

ARTICLE
XXIX

PURCHASE
RIGHTS

 

29.1         First
Refusal to Purchase. During the Term hereof, provided that Lessee is not in material default
at such time, Lessee shall have a first refusal option to purchase the Leased Property upon the same terms and conditions as Lessor,
or its successors and assigns, shall propose to sell the Leased Property, or shall have received an offer from a third party to
purchase the Leased Property, which offer Lessor intends to accept (or has accepted subject to Lessee’s right of first refusal
granted herein). If, during the Term, Lessor reaches such agreement with a third party or proposes to offer the Leased Property
for sale, Lessor shall promptly provide Lessee with a copy of such offer. Lessee shall have 30 days after receipt of such notice
from Lessor within which time to exercise Lessee’s option to purchase. If Lessee exercises its option, then such purchase
shall be consummated within the time set forth in the third-party offer and in accordance with the provisions of Article XVII
hereof to the extent not inconsistent herewith. If Lessee shall not exercise Lessee’s option to purchase within said 30-day
period after receipt of said notice from Lessor, Lessor shall be free for a period of 90 days after the expiration of said 30-day
period to sell the Leased Property to the third party at the price and terms set forth in such offer. Whether or not such sale
is consummated, Lessee shall be entitled to exercise its right of first refusal as provided in this Article, as to any subsequent
sale of the Leased Property during the Term of this Lease.

 

29.2         Option
to Purchase the Personal Property. Unless the Leased Property is conveyed to Lessee pursuant
to the terms hereof, Lessor shall have the option to purchase the Personal Property at the expiration or earlier termination of
this Lease upon ten days prior written notice to Lessee. The purchase price for the Personal Property shall be an amount equal
to the then-current book value (original cost less accumulated depreciation on the books of Lessee pertaining thereto) subject
to and with appropriate price adjustments for all equipment leases, conditional sales contracts, security interests and other
encumbrances to which the Personal Property is subject.

 

     32

     

    

 

29.3        Negative
Pledge. Lessee shall not, and shall not permit any of its Affiliates to, create, incur,
permit or suffer to exist any lien upon the Personal Property or the Leased Property now owned or hereafter acquired, except for
Permitted Liens.

 

ARTICLE
XXX

DEFAULT
BY LESSOR

 

30.1        Default
by Lessor. Lessor shall be in default of its obligations under this Lease if Lessor shall
fail to observe or perform any term, covenant or condition of this Lease on its part to be performed and such failure shall continue
for a period of 30 days after written notice thereof from Lessee, unless such failure cannot with due diligence be cured within
a period of 30 days, in which case such failure shall not be deemed to continue if Lessor, within said 30-day period, proceeds
promptly and with due diligence to cure the failure and diligently completes the curing thereof. The time within which Lessor
shall be obligated to cure any such failure shall also be subject to extension of time due to the occurrence of any Unavoidable
Delay. In the event Lessor fails to cure any such default, Lessee, without waiving or releasing any obligations hereunder, and
in addition to all other remedies available to Lessee hereunder or at law or in equity, may purchase the Leased Property from
Lessor for a purchase price equal to the greater of the Fair Market Value Purchase Price or the Minimum Repurchase Price of the
Leased Property minus an amount equal to any damage suffered by Lessee by reason of such default. In the event Lessee elects to
purchase the Leased Property, it shall deliver a notice thereof to Lessor specifying a Payment Date occurring no less than 90
days subsequent to the date of such notice on which it shall purchase the Leased Property, and the same shall be thereupon conveyed
in accordance with the provisions of Article XVII. Any sums owed Lessee by Lessor hereunder shall bear interest at the Overdue
Rate from the date due and payable until the date paid.

 

30.2        Lessee’s
Right to Cure. Subject to the provisions of Section 30.1, if Lessor shall breach any covenant
to be performed by it under this Lease, Lessee, after notice to and demand upon Lessor in accordance with Section 30.1, without
waiving or releasing any obligation of Lessor hereunder, and in addition to all other remedies available hereunder and at law
or in equity to Lessee, may (but shall be under no obligation at any time thereafter to) make such payment or perform such act
for the account and at the expense of Lessor. All sums so paid by Lessee and all costs and expenses (including reasonable attorneys’
fees) so incurred, together with interest thereon at the Overdue Rate from the date on which such sums or expenses are paid or
incurred by Lessee, shall be paid by Lessor to Lessee on demand or set off against the Rent. The rights of Lessee hereunder to
cure and to secure payment from Lessor in accordance with this Section 30.2 shall survive the termination of this Lease.

 

ARTICLE
XXXI

ARBITRATION

 

31.1        Controversies.
Except with respect to the payment of Minimum Rent hereunder, in case any controversy shall
arise between the parties hereto as to any of the requirements of this Lease or the performance thereof which controversy the
parties shall be unable to settle by agreement or as otherwise provided herein, such controversy shall be determined by arbitration
to be initiated and conducted as provided in this Article XXXI.

 

31.2        Appointment
of Arbitrators. The party or parties requesting arbitration shall serve upon the other a
written demand therefor specifying the matter to be submitted to arbitration, and nominating an arbitrator. Within 20 days after
receipt of such written demand and notification, the other party shall, in writing, nominate
a competent disinterested person and the two arbitrators so designated shall, within ten days thereafter, select a third arbitrator
and give immediate written notice of such selection to the parties and shall fix in said notice a time and place for the first
meeting of the arbitrators, which meeting shall be held as soon as conveniently possible after the selection of all arbitrators,
at which time and place the parties to the controversy may appear and be heard.

 

     33

     

    

 

31.3        Third
Arbitrator. In case the notified party or parties shall fail to make a selection upon notice,
as aforesaid, or in case the first two arbitrators selected shall fail to agree upon a third arbitrator within ten days after
their selection, then such arbitrator or arbitrators may, upon application made by either of the parties to the controversy, after
20 days’ written notice thereof to the other party or parties, have a third arbitrator appointed by any judge of any United
States court of record having jurisdiction in the state in which the Leased Property is located or, if such office shall not then
exist, by a judge holding an office most nearly corresponding thereto.

 

31.4        Arbitration
Procedure. Said arbitrators shall give each of the parties not less than ten days’
written notice of the time and place of each meeting at which the parties or any of them may appear and be heard and after hearing
the parties in regard to the matter in dispute and taking such other testimony and making such other examinations and investigations
as justice shall require and as the arbitrators may deem necessary, they shall decide the questions submitted to them. The decision
of said arbitrators in writing signed by a majority of them shall be final and binding upon the parties to such controversy. In
rendering such decisions and award, the arbitrators shall not add to, subtract from or otherwise modify the provisions of this
Lease.

 

31.5        Expenses.
The expenses of such arbitration shall be divided between Lessor and Lessee unless otherwise
specified in the decision of the arbitrators. Each party in interest shall pay the fees and expenses of its own counsel.

 

ARTICLE
XXXII

FINANCING
OF THE LEASED PROPERTY

 

Lessor
agrees that it will not grant or create any mortgage, deed of trust, lien, encumbrance or other title retention agreement
(“Encumbrance”) upon the Leased Property unless the holder of each such Encumbrance shall simultaneously with or
prior to recording the Encumbrance agrees (a) to give Lessee the same notice, if any, given to Lessor of any default or
acceleration of any obligation underlying any such Encumbrance or any sale in foreclosure of such Encumbrance, (b) to permit
Lessee to appear with its representatives and to bid at any public foreclosure sale with respect to any such Encumbrance and
(c) to enter into an agreement with
Lessee containing the provisions described in Article XXXIII of this Lease. Lessee agrees to execute and deliver to Lessor or
the holder of an Encumbrance any written agreement required by this Article within ten days of written request thereof by
Lessor or the holder of an Encumbrance.

 

     34

     

    

 

Lessee
hereby consents to the assignment of and grant of a security interest and lien in this Lease together with the other documents
and instruments delivered to Lessor by Lessee pursuant hereto and in connection herewith (collectively, the “Assigned Documents”),
including all rights of Lessor in, to and under each Assigned Document, by Lessor to NationsBank of Georgia, National Association,
as Agent (the “Agent”) for itself and the other lenders from time to time parties to that certain Revolving Credit
and Reimbursement Agreement dated as of June 22, 1994, among Lessor, the lenders party thereto (the “Lenders”) and
the Agent, as amended by that certain Amendment Agreement No. I to Revolving Credit and Reimbursement Agreement and Certain Other
Loan Documents dated as of October 26, 1994, and by that certain Amendment Agreement No. 2 to Revolving Credit and Reimbursement
Agreement and Certain Other Loan Documents dated as of March 17, 1995 (as so amended and as it may be further amended, modified
or supplemented from time to time, the “Credit Agreement”), pursuant to which the Lenders have established a revolving
credit facility and letter of credit facility in favor of Lessor. Lessee hereby further agrees to execute a Consent to Assignment
in substantially the form attached hereto as Exhibit E. Lessee further agrees that in connection with the execution of
any such assignment by Lessor, Lessee will execute and deliver to the Agent a tenant estoppel certificate in substantially the
form attached hereto as Exhibit F.

 

ARTICLE
XXXIII

SUBORDINATION,
ATTORNMENT AND NON-DISTURBANCE

 

At
the request from time to time by one or more holders of an Encumbrance that may hereafter be placed upon the Leased Property or
any part thereof, and any and all renewals, replacements, modifications, consolidations, spreaders and extensions thereof, Lessee
will subordinate this Lease and all of Lessee’s rights and estate hereunder to each such Encumbrance and agree with each
such holder; provided that Lessee will attorn to and recognize such holder (or the purchaser at any foreclosure sale or any sale
under a power of sale contained in any such Encumbrance or a holder by a deed in lieu of foreclosure, as the case may be) as Lessor
under this Lease for the balance of the Term then remaining, subject to all of the terms and provisions of this Lease; provided
further that each such institutional holder simultaneously with or prior to recording any such Encumbrance executes and delivers
a written agreement in recordable form (a) consenting to this Lease and agreeing that, notwithstanding any such other lease, mortgage,
deed of trust, right, title or interest, or any default, expiration, termination, foreclosure, sale, entry or other act or omission
under, pursuant to or affecting any of the foregoing, Lessee shall not be disturbed in peaceful enjoyment of the Leased Property
nor shall this Lease be terminated or canceled at any time, except in the event Lessor shall have the right to terminate this Lease
under the terms and provisions expressly set forth herein; (b) agreeing that it will be bound by all the terms of this Lease, perform
and observe all of Lessor’s obligations set forth herein; and (c) agreeing that all proceeds of the casualty insurance described
in Article XIII of this Lease and all Awards described in Article XIV will be made available to Lessor for restoration of the Leased
Property as and to the extent required by this Lease, subject only to reasonable regulation regarding the manner of disbursement
and application thereof. Lessee agrees to execute and deliver to Lessor or the holder of an Encumbrance any written agreement required
by this Article within ten days of written request thereof by Lessor or the holder of an Encumbrance. Lessee agrees to execute
at the request from time to time of Lessor or an institutional investor a certificate setting forth any. defaults of Lessor hereunder
and the dates through which Rent has been paid and such other matters as may be reasonably requested.

 

     35

     

    

 

ARTICLE
XXXIV

EXTENDED
TERMS

 

If
no Event of Default shall have occurred and be continuing, Lessee is hereby granted the right to extend the Term of this
Lease for two consecutive five-year periods (each period, an “Extended Term”) for a maximum possible Term of 25
years, by giving written notice to Lessor of each such extension by not later than November 30, 2010, for the first Extended
Term, and November 30, 2015, for the second Extended Term; subject, however, to the provisions of Section 13.7 hereof. Lessor
agrees to use its best efforts to provide Lessee with prior written notice at least 90 days prior to the foregoing dates.
Upon receipt of the notice to1 extend from Lessee, Lessor shall provide the notice necessary to extend the term of
the Ground Lease pursuant to the terms of Section 2 of the Ground Lease; provided that Lessee may not exercise its option for
more than one Extended Term at a time. During each Extended Term, all of the terms and conditions of this Lease shall
continue in full force and effect, except that the Minimum Rent for and during each of the Extended Terms shall be the Fair
Market Rental Value on the first day of such Extended Term. In any event, the Minimum Rent shall continue to be adjusted
throughout each of the Extended Terms pursuant to the provisions of Section 2.1(b) hereof.

 

ARTICLE
XXXV

MISCELLANEOUS

 

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

 

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

 

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

 

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

 

35.5        Transfers
by Lessor. If Lessor or any successor owner of the Leased Property shall convey the Leased
Property in accordance with the terms hereof, other than as security for a debt, the grantee or transferee of the Leased Property
shall expressly assume all obligations of Lessor hereunder arising or accruing from and after the date of such conveyance or transfer,
and shall be reasonably capable of performing the obligations of Lessor hereunder and Lessor or such successor owner, as the case
may be, shall thereupon be released from all future liabilities and obligations of Lessor under this Lease arising or accruing
from and after the date of such conveyance or other transfer and all such future liabilities and obligations shall thereupon be
binding upon the new owner.

 

     36

     

    

 

35.6        General.
Anything contained in this Lease to the contrary notwithstanding, all claims against, and
liabilities of, Lessee and Lessor against the other arising out of or relating to this Lease and arising prior to any date of
termination of this Lease shall survive such termination. If any term or provision of this Lease or any application thereof shall
be invalid or unenforceable, the remainder of this Lease and any other application of such term or provision shall not be affected
thereby. If any late charges provided for in any provision of this Lease are based upon a rate
in excess of the maximum rate permitted by applicable law, the parties agree that such charges shall be fixed at the maximum permissible
rate. Neither this Lease nor any provision hereof may be changed, waived, discharged or terminated except by an instrument in
writing and in recordable form signed by Lessor and Lessee. All the terms and provisions of this Lease shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and assigns. The headings in this Lease are for convenience
of reference only and shall not limit or otherwise affect the meaning hereof. This Lease shall be governed by and construed in
accordance with the laws of Alabama, but not including its conflict of laws rules. This Lease may be executed in one or more counterparts,
each of which shall be an original but, when taken together, shall constitute but one document.

 

35.7        Memorandum
of Lease. Lessor and Lessee shall, promptly upon the request of either, enter into a short
form memorandum of this Lease in form suitable for recording under the laws of the state in which the Leased Property is located
in which reference to this Lease, and all options contained herein, shall be made.

 

35.8        Transfer
of Licenses. Upon the expiration or earlier termination of the Term, Lessee shall take all
action necessary to effect or useful in effecting the transfer to Lessor or Lessor’s nominee of all licenses, operating
permits and other governmental authorizations and all service contracts which may be necessary or useful in the operation of the
Facility and which relate exclusively to the Facility, which have not previously been transferred or assigned to Lessor.

 

ARTICLE
XXXVI

GLOSSARY
OF TERMS

 

36.1         For
purposes of this Lease, except as otherwise expressly provided or unless the context otherwise requires, (a) the terms defined
in this Article XXXVI have the meanings assigned to them in this Article XXXVI and include the plural as well as the singular,
(b) all accounting terms not otherwise defined herein have the meanings assigned to them in accordance with generally accepted
accounting principles as at the time applicable, (c) all references in this Lease to designated ‘‘Articles’’,
“Sections” and other subdivisions are to the designated Articles, Sections and other subdivisions of this Lease, and
(d) the words “herein”, ‘‘hereof” and
“hereunder” and other words of similar import refer to this Lease as a whole and not to any particular Article, Section
or other subdivision and (e) the word “including” shall mean “including without limitation”. For purposes
of this Lease, the following terms shall have the meanings indicated:

 

“Additional
Charges” has the meaning set forth in Section 2.3 hereof.

 

“Adjustment
Date” has the meaning set forth in Section 2.1(b) hereof.

 

“Affiliate”,
when used with respect to Lessee, means any person directly or indirectly controlling or controlled by or under direct or indirect
common control with Lessee. For the purposes of this definition, “control”, as used with respect to any person, shall
mean the possession, directly and indirectly, of the power to direct or cause the direction of the management and policies of such
person, through the ownership of voting securities, partnership interests or other equity interests.

 

“Agent”
has the meaning set forth in Article XXXII hereof.

 

     37

     

    

 

“Assigned
Documents” has the meaning set forth in Article XXXII hereof.

 

“Award”
means all compensation, sums or anything of value awarded, paid or received on a total or partial Condemnation, specifically excluding
the interest of the landlord under the Ground Lease in such award.

 

“Business
Day” means each Monday, Tuesday, Wednesday, Thursday and Friday which is not a day on which national banks in the City of
Birmingham, Alabama are closed.

 

“Capital
Additions” means one or more new buildings or one or more additional structures annexed to any portion of any of the Leased
Improvements, which are constructed on any parcel or portion of the Land during the Term, including the construction of a new wing
or new story, or the rebuilding of the existing Leased Improvements or any portion thereof not normal, ordinary or recurring to
maintain the Leased Property.

 

“Capital
Addition Cost” means the cost of any Capital Additions proposed to be made by Lessee whether paid for by Lessee or
Lessor. Such cost shall include and be limited to (a) the cost of construction of the Capital Additions, including site
preparation and improvement, materials, labor, supervision and certain related design, engineering and architectural services
and the cost of any fixtures, construction financing and miscellaneous items approved in writing by Lessor, (b) if agreed to
by Lessor in writing in advance, the cost of any land contiguous to the Leased Property purchased for the purpose of placing
thereon the Capital Additions or any portion thereof or for providing means of access thereto, or parking facilities
therefor, including the cost of surveying the same, (c) the cost of insurance, real estate taxes, water and sewage charges
and other carrying charges for such Capital Additions during construction, (d) the cost of title insurance, (e) reasonable
fees and expenses of legal counsel and accountants, (f) filing, registration and recording taxes and fees, (g) documentary
stamp taxes, if any, (h) environmental
assessments and boundary surveys and (i) all reasonable costs and expenses of Lessor and any Lending Institution which has
committed to finance the Capital Additions, including, (A) the reasonable fees and expenses of their respective legal
counsel, (B) all printing expenses, (C) the amount of any filing, registration and recording taxes and fees, (D) documentary
stamp taxes, if any, (E) title insurance charges, appraisal fees, if any, (F) rating agency fees, if any, and (G) commitment
fees, if any, charged by any Lending Institution advancing or offering to advance any portion of the financing for such
Capital Additions.

 

“Cash
Adjustment” has the meaning set forth in Section 20.1(d).

 

“Charge”
has the meaning set forth in Article XI hereof.

 

“Code”
means the Internal Revenue Code of 1986, as amended.

 

“Commencement
Date” has the meaning set forth in Article I.

 

“Condemnation”
means the transfer of all or any part of the Leased Property as a result of (i) the exercise of any governmental power, whether
by legal proceedings or otherwise, by a Condemnor or (ii) a voluntary sale or transfer by Lessor to any Condemnor, either under
threat of Condemnation or while legal proceedings for Condemnation are pending.

 

     38

     

    

 

“Condemnor”
means any public or quasi-public authority, or private corporation or individual, having the power of Condemnation.

 

“Consolidated
Financial Statements” means for any fiscal year or other accounting period for Lessee arid its respective consolidated subsidiaries,
including Lessee, audited statements of earnings and retained earnings and of changes in financial position for such period and
for the period from the beginning of the respective fiscal year of Lessee to the end of such period and the related balance sheet
as at the end of such period, together with the notes thereto, all in reasonable detail and setting forth in comparative form the
corresponding figures for the corresponding period in the preceding fiscal year of Lessee, and prepared in accordance with generally
accepted accounting principles consistently applied, except as noted.

 

“Consumer
Price Index” or “CPI” means the Consumer Price Index for All Urban Consumers for the U.S. City Average for all
Items (1982-1984= 100) as published by the United States Department of Labor, Bureau of Labor Statistics. If the manner in which
the Consumer Price Index is determined by the Bureau of Labor Statistics shall be substantially revised (including a change in
the base index year), an adjustment shall be made by Lessor in such revised index which would produce results equivalent, as nearly
as possible, to those which would have been obtained if the Consumer Price Index had not been so revised. If the Consumer Price
Index shall become unavailable to the public because publication is discontinued or otherwise, or if equivalent data is not readily
available to enable Lessor to make the adjustment referred to in the preceding sentence, Lessor will substitute therefor a comparable
index based upon changes in the cost of living or purchasing power of the consumer dollar published by any other governmental agency,
or if no such index shall be available, then a comparable index published by a major bank or other financial institution or by
a university or a recognized financial publication.

 

“Credit
Agreement” has the meaning set forth in Article XXXII hereof.

 

“Current
Yield” means as of any date the annual Minimum Rent, as adjusted from time-to-time pursuant to the terms of this Lease, divided
by the sum of (i) the purchase price as set forth in the Purchase and Sale Agreement plus (ii) all Capital Additions Costs paid
for or financed by Lessor which have not been repaid by Lessee,

 

“Date
of Taking” means the date the Condemnor has the right to possession of the property being condemned.

 

“Encumbrance”
has the meaning set forth in Article XXXII.

 

“Event
of Default” has the meaning set forth in Section 15.1.

 

“Extended
Term” has the meaning set forth in Section XXXIV.

 

“Facility”
means the 66-bed inpatient rehabilitation hospital to be operated on the Leased Property.

 

“Facility
Mortgage” has the meaning set forth in Section 12.1.

 

“Facility
Mortgagee” has the meaning set forth in Section 12.1.

 

    	 	40	 

     

    

 

“Fair
Market Added Value” means the Fair Market Value (as hereinafter defined) of the Leased Property (including all Capital Additions)
less the Fair Market Value of the Leased Property determined as if no Capital Additions paid for by Lessee without financing by
Lessor had been constructed.

 

“Fair
Market Rental Value” means the fair market rental value of the Leased Property or any Substitute Property, (a) assuming
the same is unencumbered by this Lease, and (b) determined in accordance with the appraisal procedures set forth in Article
XXVIII or in such other manner as shall be mutually acceptable to Lessor and Lessee and (c) not taking into account any
reduction in value resulting from an indebtedness to which the Leased Property or Substitute Property may be
subject.

 

“Fair
Market Value” means the fair market value of the Leased Property or any Substitute Property, including all Capital Additions,
(a) assuming the same is unencumbered by this Lease, (b) determined in accordance with the appraisal procedures set forth in Article
XXVIII or in such other manner as shall be mutually acceptable to Lessor and Lessee, and (c) not taking into account any reduction
in value resulting from any indebtedness to which the Leased Property or such Substitute Property is subject or which encumbrance
Lessee or Lessor is otherwise required to remove pursuant to any provision of this Lease or agrees to remove at or prior to the
closing of the transaction as to which such Fair Market Value determination is being made. The positive or negative effect on the
value of the Leased Property or Substitute Property attributable to the interest rate, amortization schedule, maturity date, prepayment
penalty and other terms and conditions of any Encumbrance on the Leased Property or any Substitute Property, as the case may be,
which is not so required or agreed to be removed shall be taken into account in determining such Fair Market Value.

 

“Fair
Market Value Purchase Price” means the Fair Market Value less the Fair Market Added Value.

 

“Fiscal
Year” means the 12-month period from January  1 to December 31.

 

“Fixed
Term” has the meaning set forth in Article I.

 

“Fixtures”
has the meaning set forth in Article I.

 

“Full
Replacement Cost” has the meaning set forth in Section 12.2.

 

“Ground
Lease” means that certain Second Amended and Restated Land Lease Agreement dated as of December 18, 1987, between Healthland,
Incorporated, a Pennsylvania corporation (“Healthland”) and Seller, a memorandum of which is recorded in Miscellaneous
Book 344, Page 620, as conveyed from Healthland to Ronald L. Felty and Walter W. Wilt by deed dated                           ,
19        , and recorded in Deed Book              ,
Page              , of the Public Records of
Cumberland County, Pennsylvania, and as amended in that certain Amendment to Second Amended and Restated Land Lease Agreement
dated as of May 10, 1996, among Walter W. Wilt and Ronald L. Felty, as landlord, and Lessor, as tenant in order to, among other
things, (i) extend the term through April 30, 2011, (ii) increase the rent due thereunder initially to $150,000.00 per year, and
(iii) increase the rent at the rate of increase of the CPI (not to exceed 5% per year) beginning on May 10, 1997.

 

“Hazardous
Materials” means any substance, including asbestos or any substance containing asbestos, the group of organic compounds known
as polychlorinated biphenyls, flammable explosives, radioactive materials, medical waste, chemicals, pollutants, effluents, contaminants,
emissions or related materials and items included in the definition of hazardous or toxic wastes, materials or substances under
any Hazardous Materials Law.

 

    	 	41	 

     

    

  

“Hazardous
Materials Law” means any law, regulation or ordinance relating to environmental conditions, medical waste and industrial hygiene,
including the Resource Conservation and Recovery Act of 1976 (“RCRA”), the Comprehensive Environmental Response, Compensation
and Liability Act of 1980 (“CERCLA”), as amended by the Superfund Amendments and Reauthorization Act of 1986 (“SARA”),
the Hazardous Materials Transportation Act, the Federal Water Pollution Control Act, the Clean Air Act, the Clean Water Act, the
Toxic Substances Control Act, the Safe Drinking Water Act, and all similar federal, state and local environmental statutes and
ordinances, whether heretofore or hereafter enacted or effective and all regulations, orders, or decrees heretofore or hereafter
promulgated thereunder.

 

“Impositions”
means, collectively, all taxes relating to the Leased Property, including all ad valorem, sales and use, gross receipts, action,
privilege, rent (with respect to the Ground Lease) or similar taxes, assessments (including all assessments for public improvements
or benefits, whether or not commenced or completed prior to the date hereof and whether or not to be completed within the Term),
water, sewer or other rents and charges, excises, tax levies, fees (including license, permit, inspection, authorization and similar
fees), and all other governmental charges, in each case whether general or special, ordinary or extraordinary, or foreseen or unforeseen,
of every character in respect of the Leased Property and/or the Rent (including all interest and penalties thereon due to any failure
in payment by Lessee), which at any time prior to, during or in respect of the Term hereof may be assessed or imposed on or in
respect of or be a lien upon (a) Lessor or Lessor’s interest in the Leased Property, (b) the Rent, the Leased Property or
any part thereof or any rent therefrom or any estate, right, title or interest therein, or (c) any occupancy, operation, use or
possession of, sales from, or activity conducted on, or in connection with, the Leased Property or use of the Leased Property or
any part thereof; provided that nothing contained in this Lease shall be construed to require Lessee to pay (1) any tax based on
net income (whether denominated as a franchise or capital stock or other tax) imposed on Lessor, (2) any transfer or net revenue
tax of Lessor, (3) any tax imposed with respect to the sale, exchange or other disposition by Lessor of any portion of the Leased
Property or the proceeds thereof, or (4) except as expressly provided elsewhere in this Lease, any principal or interest on any
Encumbrance on the Leased Property, except to the extent that any tax, assessment, tax levy or charge which Lessee is obligated
to pay pursuant to this definition and which is in effect at any time during the Term hereof is totally or partially repealed,
and a tax, assessment, tax levy or charge set forth in clause (1), (2) or (3) is levied, assessed or imposed expressly in lieu
thereof.

 

“Insurance
Requirements” means all terms of any insurance policy required by this Lease and all requirements of the issuer of any such
policy.

 

“Land”
has the meaning set forth in Article I.

 

“Lease”
means this Lease.

 

“Leased
Improvements” and “Leased Property” have the meanings set forth in Article I.

  

“Legal
Requirements” means all federal, state, county, municipal and other governmental statutes, laws, rules, orders,
regulations, ordinances, judgments, decrees and injunctions affecting the Leased Property or the construction, use or
alteration thereof, whether now or hereafter enacted and in force, including any which may (a) require repairs, modifications
or alterations of or to the Leased Property, or (b) in any way adversely affect the use and enjoyment thereof, and all
permits, licenses, authorizations and regulations relating thereto, and all covenants, agreements, actions and encumbrances
contained in any instruments, either of record or known to Lessee (other than encumbrances created by Lessor without the
consent of Lessee), at any time in force affecting the Leased Property.

 

    	 	42	 

     

    

 

“Lenders”
has the meaning set forth in Article XXXII hereof.

 

“Lending
Institution” means any insurance company, federally insured commercial or savings bank, national banking association, savings
and loan association, employees’ welfare, pension or retirement fund or system, corporate profit-sharing or pension plan,
college or university, or real estate investment including any corporation qualified to be treated for federal tax purposes as
a real estate investment trust having a net worth of at least $50,000,000.

 

“Lessee”
means HEALTHSOUTH Corporation, a Delaware corporation, its successors and assigns.

 

“Lessor”
means CAPSTONE CAPITAL OF PENNSYLVANIA, INC., a Pennsylvania corporation, and its successors and assigns.

 

“Minimum
Rent” has the meaning set forth in Section 2.1(a) hereof.

 

“Minimum
Repurchase Price” means the greater of (i) the Fair Market Value of the Leased Property at the time of repurchase hereunder
by Lessee or (ii) the Purchase Price paid to Lessee for the Leased Property pursuant to the Purchase and Sale Agreement as such
amount is increased at the rate of three percent compounded annually for each year (to be prorated for partial years) between the
Commencement Date and the date of repurchase by Lessee, plus the sum of all Capital Additions Cost paid for or financed by Lessor
which as of the date of repurchase of the Leased Property have not been repaid by Lessee, less the net amount (after deduction
of all reasonable legal fees and other costs and expenses, including without limitation, expert witness fees, incurred by Lessor
in connection with obtaining any such award) of all Awards received by Lessor from Condemnation of the Leased Property.

 

“Officer’s
Certificate” means a certificate of Lessee signed by the Chairman of the Board of Directors, the President, any Vice President
or another officer authorized to so sign by the Board of Directors or By-Laws of Lessee, or any other person whose power and authority
to act has been authorized by delegation in writing by any of the persons holding the foregoing offices.

 

“Overdue
Rate” means as of any date, a rate per annum equal to the Prime Rate as of such date, plus two percent, but in no event greater
than the maximum rate then permitted under applicable law.

 

“Payment
Date” means any due date for the payment of the installments of Minimum Rent under this Lease.

 

“Permitted
Exceptions” has the meaning set forth in Article I hereof.

 

    	 	43	 

     

    

  

“Permitted
Liens” means (i) liens described on Exhibit C attached hereto, which includes the Permitted Exceptions pursuant
to the Purchase and Sale Agreement, (ii) pledges or deposits made to secure payments of worker’s compensation insurance
(or to participate in any fund in connection with worker’s compensation insurance), unemployment insurance, pensions or
social security programs, (iii) liens imposed by mandatory provisions of law such as for materialmen, mechanics, warehousemen
and other like liens arising in the Ordinary Course of Business, securing indebtedness whose payment is not yet due and
payable, (iv) liens for taxes, assessments and governmental charges or levies if die same are not yet due and payable or if
the same are being contested in good faith and as to which adequate cash reserves have been provided, (v) liens arising from
good faith deposits in connection with tenders, leases, real estate bids or contracts (other than contracts involving the
borrowing of money), pledges or deposits to secure public or statutory obligations and deposits to secure (or in lieu of)
surety, stay, appeal or customs bonds and deposits to secure the payment of taxes, assessments, duties or other similar
charges, (vi) liens to secure purchase money indebtedness, so long as the indebtedness incurred to purchase the new asset is
secured only by such asset, or (vii) encumbrances consisting of zoning restrictions, easements or other restrictions on the
use of real property; provided that such items do not impair the use of such property for the purposes intended, none of
which is violated by existing or proposal structures or land use.

 

“Person”
means a natural person, corporation, partnership, trust, association, limited liability company or other entity.

 

“Personal
Property” means all machinery, equipment, furniture, furnishings, computers, signage, trade fixtures or other personal property
and consumable inventory and supplies used or useful in the operation of the Leased Property for its Primary Intended Use, together
with all replacements and substitutions therefor, except for any portion of the Leased Property, all as more specifically set
forth on Exhibit D attached hereto.

 

“Primary
Intended Use” has the meaning set forth in Section 6.2(a).

 

“Prime
Rate” means the annual rate reported by The Wall Street Journal, Eastern Edition (or, if The Wall Street Journal shall no
longer be published or shall cease to report such rates, then a publication or journal generally accepted in the financial industry
as authoritative evidence of prevailing commercial lending rates), from time to time as being the prevailing prime rate (or, if
more than one such rate shall be published in any given edition, the arithmetic mean of such rates). The prime rate is’an
index rate used by The Wall Street Journal to report prevailing lending rates and may not necessarily be its most favorable lending
rate available. Any change in the Prime Rate hereunder shall take effect on the effective date of such change in the prime rate
as reported by The Wall Street Journal, without notice to Lessee or any other action by Lessor. Interest shall be computed on
the basis that each year contains 360 days, by multiplying the principal amount by the per annum rate set forth above, dividing
the product so obtained by 360, and multiplying the quotient thereof by the actual number of days elapsed.

 

“Purchase
and Sale Agreement” means the agreement dated as of May 1, 1996 between Seller and Lessor, as “Purchaser,” relating
to the acquisition by Lessor of the Leased Property.

 

’‘Rent”
means, collectively, the Minimum Rent and the Additional Charges.

 

“Request”. has the meaning set forth in Section 9.3(a).

 

“Seller”
means CUMBERLAND HEALTH ASSOCIATES, a Pennsylvania limited partnership.

 

    	 	44	 

     

    

 

	 	LESSEE:
	 	 
	 	HEALTHSOUTH
    Corporation
	 	a Delaware corporation
	 	 
	 	/s/ Michael D. Martin
	 	Michael D. Martin
	 	Executive Vice President - Finance
	 	and Treasurer

 

    	 	45	 

     

    

 

	
        EXHIBIT
        A

         

        PROPERTY
        DESCRIPTION

 

ALL
THOSE CERTAIN tracts or parcels of land situated in Upper Allen Township and Lower Allen Township, Cumberland County, Pennsylvania,
as shown on a Land Title Survey for Rehab Hospital in Mechanicsburg as prepared by Charles W. Junkins, Registered Surveyor, dated
June 6, 1986, more particularly described as follows:

 

LOT
NO. 1

  

BEGINNING
at a point, being the northeasterly comer of Lot No. 1 and the intersection of lands now or formerly known as Windsor Park and
the westerly boundary line of the dedicated right-of-way line of Lancaster Boulevard; thence S 44° 19“38” E, a distance
of 11.88 feet to a point; thence by a curve to the right having a radius of 234 feet, an arc distance of 78.66 feet to a point;
thence S 25°00’ E, a distance of 8.60 feet to a point; thence by a curve to the right having a radius of 20 feet, an
arc distance of 27.09 feet to a point; thence S 52°36’30” W, a distance of 76.14 feet to an iron pin at the boundary
line of Upper Allen Township and Lower Allen Township; thence N 42o41’20” W, a distance of 101.50 feet to
a post; thence N 46#20’43” E, a distance of 110.00 feet to an iron pin, being the point and place of BEGINNING.

 

LOT
NO. 3

 

BEGINNING
at a concrete monument at the intersection of the easterly dedicated right-of-way line of Lancaster Boulevard, the
southwesterly comer of lands known as Windsor Park and the northwesterly comer of Lot No. 3; thence N
46°20’43” E, a distance of 346.04 feet to an iron pin at the intersection of lands known as Windsor Park and
lands now or formerly of Florence C. Manning and John P. Manning; thence S 43°55’26” E, a distance of472.04
feet, more or less, to an iron pipe; thence S 45°00”38” W, a distance of 75.86 feet to an iron pin;
thence S 24°44’4r E, a distance of 388.21 feet to a concrete monument; thence S.5803ri2” W, a distance of
83 feet to a point; thence N 31°28’48” W, a distance of 5 feet to a point; thence S
58°31’12” W, a distance of 110 feet to a point; thence S 3l°28’48” E, a distance of 5 feet to a
point; thence S 58°31“12” W, a distance of 172.93 feet to an iron pin; thence S 25°00’ E, a distance of 546.51
(erroneously described on prior plans and deeds as 576.73 feet) to a concrete monument at the point of intersection of lands
of Mechanicsburg Rehab Associates and the northerly right-of-way line of Wilson Lane; thence S 58°30’47” W, a
distance of 25.16 feet along said right-of-way line to a concrete monument at the intersection of Wilson Lane and the
easterly right-of- way line of Lancaster Boulevard; thence N 25°00’ W, a distance of 1,231.21 feet along said
dedicated right-of-way line to a point; thence along same by a curve to the left having a radius of 284 feet, an arc distance
of 95.47 feet to a point; thence along same, N 44°19’38” W, a distance of 11.82 feet to a concrete monument,
being the point and place of BEGINNING.

 

BEING
the same premises which Rehab Realty Company, a Pennsylvania general partnership, by deed dated October 30, 1985, recorded November
1, 1985 in Cumberland County Deed Book 0, Volume 31, Page 635, granted and conveyed unto Healthland, Incorporated, a Pennsylvania
corporation.

 

BEING
Lot No. 3 on the Final Subdivision Plan for Rehab Realty Company last revised October 14, 1985.

 

     

     

    

 

EXHIBIT
B

 

LIST
OF PERMITTED EXCEPTIONS

 

		1.	Taxes
and assessments which are not yet due and payable.

 

		2.	

 

     

     

    

 

EXHIBIT
C

 

PERMITTED
LIENS

 

NONE

 

     

     

    

 

EXHIBIT
D

 

PERSONAL
PROPERTY

 

     

     

    

 

EXHIBIT
E

 

CONSENT
TO ASSIGNMENT

 

The
undersigned corporations (the “Consenting Parties”) deliver this Consent to Capstone Capital of Pennsylvania, Inc.
as of May 7, 1996, in connection with the transactions contemplated by (i) the Revolving Credit and Reimbursement Agreement dated
June 22, 1994 (“the “Original Credit Agreement”) among Capstone Capital Trust, Inc. (now known as Capstone Capital
Corporation) (the “Borrower”), the lenders party thereto (the “Lenders”) and NationsBank of Georgia, National
Association, as Agent (the “Agent”), the Amendment Agreement No. 1 to Revolving Credit and Reimbursement Agreement
and Certain Other Loan Documents dated October 26, 1994 (“Amendment No. 1”) among the Borrower, the Agent and the Lenders,
and the Amendment Agreement No. 2 to Revolving Credit and Reimbursement Agreement and Certain Other Loan Documents dated March
17, 1995 (“Amendment No. 2”) among the Borrower, the Agent and the Lenders (the Original Credit Agreement, as amended
by Amendment No. 1 and Amendment No. 2, as amended, modified or supplemented from time to time, the “Credit Agreement”)
pursuant to which the Lenders have established a revolving credit facility and letter of credit facility in favor of the Borrower,
and (ii) the Guaranty Agreement (Crescent of Pennsylvania) dated June 22, 1994, between Crescent Capital of Pennsylvania, Inc.
(now known as Capstone Capital of Pennsylvania, Inc.) (the “Assignor”) and the Agent (as amended, modified or supplemented
from time to time, the “Guaranty”), pursuant to which the Assignor has guaranteed the obligations under the Credit
Agreement and related instruments.

 

Reference
is made to:

 

(a)          the
Mortgage, Deed of Trust, Deed to Secure Debt, Leasehold Mortgage, Leasehold Deed of Trust, Leasehold Deed to Secure Debt, Security
Agreement, Fixture Financing Statement, Assignment of Leases and Rents, and Financing Statement (the “Deed of Trust”)
executed by the Assignor for the benefit of the Agent in connection with the Credit Agreement and the Guaranty, and

 

(b)          the
Assignment of Leases and Guaranties (the “Assignment”) executed by the Assignor and the Agent in connection with the
Credit Agreement and the Guaranty. The Consenting Parties hereby acknowledge and consent to the Deed of Trust and the Assignment,
pursuant to which the Assignor has assigned and granted to the Agent (for itself and the Lenders) a security interest and lien
in certain lease agreements, guaranty agreements and other property of the Borrower, including without limitation the rights of
the Borrower in, to and under each of the agreements listed on Exhibit A attached hereto (the “Assigned Agreements”).

 

Notwithstanding
anything contained in this Consent which is or may be construed to be to the contrary, the Assignor hereby acknowledges and
agrees that (i) it has not furnished the Consenting Parties with any of the documents or instruments referred to or
incorporated in this Consent, (ii) the Consenting Parties are under no duty or obligation to review any of such documents or
instruments, (iii) it is the intent of the Assignor and the Consenting Parties that, other than the effect of the Consenting
Parties’ consent set forth above, the Consenting Parties are not, and shall not be, bound or affected by any of the
terms, provisions or conditions set forth in or contemplated by any of such documents or instruments, including, without
limitation, the Credit Agreement or the Guaranty, and (iv) none of the Consenting Parties’ rights, remedies, powers,
benefits or privileges arising in, to or under the Assigned Agreements shall be impaired, diminished, abrogated or otherwise
adversely affected in any manner whatsoever, nor shall the Consenting Parties’ obligations, duties or liabilities
arising in, to or under the Assigned Agreements be enlarged, increased or expanded or otherwise adversely affected in any
manner whatsoever, other than the effect of the Consenting Parties’ consent set forth above.

 

     

     

    

 

IN WITNESS WHEREOF, the Consenting Parties
have executed this Consent as of the date first above written.

 

	 	HEALTHSOUTH Corporation
	 	 
	 	 
	 	Michael D. Martin
	 	Executive Vice President – Finance
	 	and Treasurer
	 	 
	 	HEALTHSOUTH of Mechanicsburg, Inc.
	 	 
	 	 
	 	Michael D. Martin
	 	Vice President

 

     

     

    

 

EXHIBIT
A

 

ASSIGNED
AGREEMENTS

 

		1.	Lease
dated as of May 7, 1996, between the Assignor and HEALTHSOUTH Corporation.

 

		2.	Sublease
dated as of May 7, 1996 between the Consenting Parties.

 

     

     

    

 

EXHIBIT
F

 

TENANT’S
ESTOPPEL CERTIFICATE

 

		TO:	NationsBank
of Georgia, National Association

as
Agent for the Lenders 

600
Peachtree Street, N.E. 

21st
Floor 

Atlanta,
Georgia 30308-2213

 

		Attention:	CorporateBanking
Department

 

		RE:	$100,000,000RevolvingCredit
Facility to Capstone Capital Corporation

 

The
undersigned, as Tenant under that certain Lease Agreement dated May 7, 1996 (the “Lease”), made with Capstone Capital
of Pennsylvania, Inc. (“Landlord”), for Landlord’s 66-bed rehabilitation hospital (the “Building”),
in Blair County, Pennsylvania, hereby certifies as follows:

 

1.          That
the undersigned has entered into occupancy of the premises described in said Lease;

 

2.          That
said Lease is in full force andeffect and has not been assigned,modified, supplemented
or amended in any way;

 

3.          That
said Lease represents theentire agreement between the parties as to said leasing; 

 

4.          That
the Commencement Date(as defined in the Lease) of the term of said Lease is May 7,
1996;

 

5.          That
the expiration date of the term of said Lease is May 6, 2011. The undersigned has no rights to renew or extend the term of the
Lease except as set forth in the Lease;

 

6.          That
all conditions of said Lease to be performed by Landlord and necessary to the enforceability of said Lease have been satisfied;

 

7.          That
there are no defaults byeither Tenant or Landlord thereunder, and no even has occurred
or situation exists which would, withthe passage of time, constitute a default under the Lease;

 

8.          That
no rents have been prepaid;

 

9.          That
on this date there are no existingdefenses, offsets, claims or creditswhich the undersigned
has against the enforcement of said Lease by Landlord;

 

10.         That
the undersigned has all governmental permits, licenses and consents required for the activities and operations being conducted
or to be conducted by it in or around the building; and

 

     

     

    

 

11.         That
as of this date there are no actions, whether voluntary or otherwise, pending against the undersigned under the bankruptcy or insolvency
laws of the United States or any state thereof.

 

EXECUTED
this ____ day of_________, 1996.

  

	 	HEALTHSOUTH
    Corporation
    
	 	 
	 	 
	 	Michael
    D. Martin
	 	Executive
    Vice President -
    Finance
	 	and
    Treasurer

 

	ATTEST:	 
	 	 	 
	By	 	 
	 	 	 
	Its		 
	 	 	 
	[CORPORATE SEAL]Exhibit 4.1

 

Issue Date: December 23, 2016

 

NEITHER THIS SECURITY NOR THE SECURITIES
ISSUABLE UPON EXERCISE OF THIS SECURITY HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION
OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF
THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR
TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY.

 

COMMON
STOCK PURCHASE WARRANT

 

To Purchase 200,000 Shares of Class A Common
Stock of

 

cinedigm
corp.

 

THIS COMMON STOCK PURCHASE WARRANT (the “Warrant”)
certifies that, for value received, Cap 1 LLC (the “Holder”), is entitled, upon the terms and subject to the
limitations on exercise and the conditions hereinafter set forth, in accordance with the vesting provisions of Section 2(b) hereof
and on or prior to the close of business on December 22, 2021 (the “Termination Date”) but not thereafter, to
subscribe for and purchase from Cinedigm Corp., a Delaware corporation (the “Company”), up to 200,000 shares
(the “Warrant Shares”) of the Company’s Class A Common Stock, par value $0.001 per share, of the Company
(the “Common Stock”). The purchase price of one share of Common Stock under this Warrant shall be equal to the
Exercise Price, as defined in Section 2(c). This Warrant is issued to Holder pursuant to the Exchange Agreement, dated as of December
22, 2016 between the Company and the Holder (the “Agreement”).

 

Section 1.             Definitions.
As used in this Warrant, the following terms shall have the meanings set forth below:

 

(a)          “Additional
Shares of Common Stock” means any shares of Common Stock issued (whether from the Company’s treasury or authorized
and unissued shares of capital stock) or, as provided in Section 3(f)(i), deemed to be issued by the Company after the Closing
Date; provided that, notwithstanding anything to the contrary contained herein, Additional Shares of Common Stock shall
not include (a) issuances of Common Stock (including any deemed issuance pursuant to Section 3(f)(i)) that are pursuant
to employee benefit plans and compensation-related arrangements approved by the Board (including any duly authorized committee
thereof), (b) shares of Common Stock issuable upon the exercise, exchange or conversion of the Convertible Securities outstanding
on the initial issuance date of the Warrants (including, without limitation, the Warrants) or (c) securities issued as consideration
pursuant to acquisitions of businesses or entities by the Company or its subsidiaries approved by a majority vote of the non-employee
members of the Board (but excluding any transaction in which the Company is issuing securities primarily for the purpose of raising
capital or to an entity whose primary business is investing in securities).

 

     

     

    

 

(b)          “Beneficially
Own,” “Beneficially Owned,” or “Beneficial Ownership” shall have the meaning set
forth in Rule 13d-3 of the rules and regulations promulgated under the Exchange Act; provided, however, that the
Holder shall not be deemed to Beneficially Own any securities owned by its portfolio companies, if applicable, as long as the Holder
does not directly or indirectly encourage, assist or provide any information to such portfolio company in respect of the acquisition,
disposition or voting of such securities.

 

(c)          “Board”
means the Board of Directors of the Company.

 

(d)          “Convertible
Securities” means any debt or other evidences of indebtedness, capital stock, rights, options, warrants or other securities
directly or indirectly convertible into or exercisable or exchangeable for Common Stock.

 

(e)          “Daily
Price” means (i) the closing sale price or, if no closing sale price is reported, the last reported sale price of the
shares of Common Stock on the Trading Market on such date, or (ii) if the shares of Common Stock then are not listed and traded
on any such securities exchange, the last quoted bid price on such date for the shares of Common Stock in the over-the-counter
market. If on any determination date the shares of Common Stock are not quoted by any such organization or such bid price is not
available, the Daily Price shall be the fair market value of the shares of Common Stock on such date as determined by a nationally
recognized investment bank, appraisal or accounting firm (whose fees and expenses will be paid by the Company) selected by mutual
agreement of the Company and the holders of Warrants then exercisable for a majority of the Warrant Shares.

 

(f)          “Fair
Market Value” means the value determined (x) by the closing price of the Common Stock on the Trading Market on the determination
date; (y) if the determination under (x) is unavailable, mutually by the Board and the Holder; or (z) if the determination under
(y) is unavailable, by a nationally recognized investment bank, appraisal or accounting firm (whose fees and expenses will be paid
equally by the Company and the Holder) selected by mutual agreement between the Board and the Holder.

 

(g)          “Group”
shall have the meaning assigned to it in Section 13(d)(3) of the Exchange Act.

 

(h)          “Maximum
Voting Power” means, at the time of determination of the Maximum Voting Power, the total number of votes which may be
cast in respect of all capital stock of the Company on the applicable matter subject to the vote of the Common Stock.

 

(i)          “Measurement
Date” means, with respect to a transaction, the public announcement of such transaction (or, if no such public announcement
is made, the date of consummation of the transaction).

 

    	 	2	 

     

    

 

(j)          “Person”
means an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability
company, joint stock company, government (or an agency or subdivision thereof) or other entity of any kind.

 

(k)          “Trading
Day” means a day on which the Common Stock is traded on a Trading Market.

 

(l)          “Trading
Market” means the primary one of the following markets or exchanges on which the Common Stock is listed or quoted for
trading on the date in question: the New York Stock Exchange, NYSE MKT, the Nasdaq Global Market, the Nasdaq Capital Market, or
any other recognized exchange or automated quotation system (or any successors to any of the foregoing), and which is initially
the Nasdaq Global Market.

 

Section 2.             Exercise.

 

(a)          Exercise
of Warrant. Exercise of the purchase rights represented by this Warrant may be made, in whole or in part, in accordance with
Section 2(b) and on or before the Termination Date by delivery to the Company of a duly executed facsimile copy of the notice of
exercise, in the form annexed hereto (the “Notice of Exercise”) (or such other office or agency of the Company
as it may designate by notice in writing to the registered Holder at the address of such Holder appearing on the books of the Company);
provided, however, within five Trading Days of the date said Notice of Exercise is delivered to the Company, the Holder
shall have surrendered this Warrant to the Company and the Company shall have received payment of the aggregate Exercise Price
of the shares thereby purchased in the amount and manner specified in Section 2(c).

 

(b)          Vesting
of Warrant. The Warrants shall vest and become exercisable in full on June 23, 2017.

 

(c)          Exercise
Price. The exercise price of the Common Stock under this Warrant shall be $1.60 per share (the “Exercise Price”),
and is to be paid in cash by wire transfer.

 

(d)          Mechanics
of Exercise.

 

(i)          Authorization
of Warrant Shares. The Company covenants that all Warrant Shares which may be issued upon the exercise of the purchase rights
represented by this Warrant will, upon due exercise of the purchase rights represented by this Warrant, be duly authorized, validly
issued, fully paid and nonassessable and free from all taxes, liens and charges in respect of the issue thereof (other than taxes
in respect of any transfer occurring contemporaneously with such issue).

 

(ii)         Delivery
of Certificates Upon Exercise. Certificates for shares purchased hereunder shall be transmitted by the transfer agent of the
Company to the Holder by physical delivery to the address specified by the Holder in the Notice of Exercise, or by electronic delivery
under the Direct Registration System operated by The Depository Trust Company, within three Trading Days from the receipt by the
Company of all of the Notices of Exercise, surrender of this Warrant and payment of the aggregate Exercise Price as set forth above
(“Warrant Share Delivery Date”). This Warrant shall be deemed to have been exercised on the date the Company
has received all of the Notices of Exercise, this Warrant and the full Exercise Price for the Warrant Shares being purchased upon
the exercise. The Warrant Shares shall be deemed to have been issued, and Holder or any other Person so designated to be named
therein shall be deemed to have become a holder of record of such shares for all purposes, as of the date the Warrant has been
exercised by payment to the Company of the Exercise Price and all taxes required to be paid by the Holder, if any, pursuant to
Section 2(d)(vi) prior to the issuance of such shares, have been paid.

 

    	 	3	 

     

    

 

(iii)        Delivery
of New Warrants Upon Exercise. If this Warrant shall have been exercised in part, the Company shall, within five Trading Days
after the time of delivery of the certificate or certificates, or confirmation of electronic notation, representing Warrant Shares,
deliver to Holder a new Warrant evidencing the rights of Holder to purchase the unpurchased Warrant Shares called for by this Warrant,
which new Warrant shall in all other respects be identical with this Warrant.

 

(iv)        Right
to Rescind Exercise. If the Company fails to cause its transfer agent to transmit to the Holder a certificate or certificates,
or confirmation of electronic notation, representing the Warrant Shares pursuant to this Section 2(d) by the second Trading
Day immediately following the Warrant Share Delivery Date, then the Holder will have the right to rescind such exercise.

 

(v)         No
Fractional Shares or Scrip. No fractional shares or scrip representing fractional shares of Common Stock shall be issued upon
the exercise of this Warrant. As to any fraction of a share of Common Stock which Holder would otherwise be entitled to purchase
upon such exercise, the Company shall pay a cash adjustment in respect of such final fraction in an amount equal to such fraction
multiplied by the Exercise Price.

 

(vi)        Charges,
Taxes and Expenses. Issuance of certificates for Warrant Shares shall be made without charge to the Holder for any issue or
transfer tax or other incidental expense in respect of the issuance of such certificate, all of which taxes and expenses shall
be paid by the Company, and such certificates shall be issued in the name of the Holder or in such name or names as may be directed
by the Holder; provided, however, that in the event certificates for Warrant Shares are to be issued in a name other
than the name of the Holder, this Warrant when surrendered for exercise shall be accompanied by the Assignment Form attached hereto
duly executed by the Holder; and the Company may require, as a condition thereto, the payment of a sum sufficient to reimburse
it for any expenses incidental thereto. The Holder shall be responsible for all other tax liability that may arise as a result
of holding or transferring this Warrant or receiving Warrant Shares upon exercise thereof.

 

(vii)       Closing
of Books. The Company will not close its stockholder books or records in any manner which prevents the timely exercise of this
Warrant, pursuant to the terms hereof.

 

(e)          Limitation
on Exercise. No Holder will be permitted to exercise the right to purchase Warrant Shares, if and to the extent, following
such exercise, either (i) the aggregate voting power of such Holder (or of any Group including such Holder) on a matter being voted
on by holders of the Common Stock would exceed 4.99% of the Maximum Voting Power or (ii) such Holder (or any Group including such
Holder) would Beneficially Own more than 4.99% of the then outstanding Common Stock. At any time upon the written request of the
Holder, the Company shall within two (2) Trading Days confirm in writing to the Holder the number of shares of Common Stock and
Maximum Voting Power then outstanding.

 

    	 	4	 

     

    

 

Section 3.             Certain
Adjustments.

 

(a)          Changes
in Common Stock. In the event that at any time or from time to time after the date hereof, the Company shall (i) pay a dividend
or make a distribution on its Common Stock, in each case in shares of its Common Stock, (ii) subdivide its outstanding shares of
Common Stock into a larger number of shares of Common Stock, (iii) combine its outstanding shares of Common Stock into a smaller
number of shares of Common Stock or (iv) increase or decrease the number of shares of Common Stock outstanding by reclassification
of its Common Stock (in each case, other than a transaction to which Section 3(d) is applicable), then the number of shares
of Common Stock purchasable upon exercise of this Warrant immediately after the happening of such event shall be adjusted so that,
after giving effect to such adjustment, the Holder of this Warrant shall be entitled to receive the number of shares of Common
Stock upon exercise that such Holder would have owned or have been entitled to receive had this Warrant been exercised immediately
prior to the happening of the events described above (or, in the case of a dividend or distribution of Common Stock, immediately
prior to the record date therefor), and the Exercise Price shall be adjusted in inverse proportion. An adjustment made pursuant
to this Section 3(a) shall become effective immediately after the effective date, retroactive to the record date therefor
in the case of a dividend or distribution in shares of Common Stock, and shall become effective immediately after the effective
date in the case of a subdivision, combination or reclassification.

 

(b)          Cash
Dividends and Other Distributions. In the event that at any time or from time to time after the date hereof, the Company shall
distribute to all holders of Common Stock (i) any dividend or other distribution of cash, evidences of its indebtedness, shares
of its capital stock or any other properties or securities, or (ii) any options, warrants or other rights to subscribe for or purchase
any of the foregoing (other than, in each case set forth in (i) and (ii), (x) any dividend or distribution described in Section
3(a) or Section 3(e), (y) any rights, options, warrants or other Convertible Securities described in Section 3(c)
or (z) in connection with any transaction resulting in the issuance of additional warrants pursuant to Section 3(m)), then
(1) the number of shares of Common Stock purchasable upon the exercise of this Warrant shall be increased to a number determined
by multiplying the number of shares of Common Stock purchasable upon the exercise of this Warrant immediately prior to the record
date for any such dividend or distribution by a fraction, (A) the numerator of which shall be the Fair Market Value per share of
Common Stock on the record date for such distribution, and (B) the denominator of which shall be such Fair Market Value per share
of Common Stock less the sum of (x) any cash distributed per share of Common Stock and (y) the Fair Market Value of the portion,
if any, of the distribution applicable to one share of Common Stock consisting of evidences of indebtedness, shares of stock, securities,
other property, options, warrants or subscription or purchase rights and (2) the Exercise Price shall be adjusted to a number determined
by dividing the Exercise Price immediately prior to such record date by the above fraction. Such adjustments shall be made whenever
any distribution is made and shall become effective as of the date of distribution, retroactive to the record date for any such
distribution. No adjustment shall be made pursuant to this Section 3(b) which shall have the effect of decreasing the number
of shares of Common Stock purchasable upon exercise of each Warrant or increasing the Exercise Price.

 

    	 	5	 

     

    

 

(c)          Rights
Issue. In the event that at any time or from time to time after the date hereof, the Company shall issue, sell, distribute
or otherwise grant any rights to subscribe for or to purchase, or any options or warrants for the purchase of, or any securities
exercisable for, or convertible or exchangeable into, Common Stock to all holders of Common Stock, entitling such holders to subscribe
for or purchase shares of Common Stock or securities exchangeable for, or convertible or exchangeable into, Common Stock, whether
or not immediately exercisable, convertible or exchangeable, as the case may be, and the subscription or purchase price per share
of Common Stock or the price per share of Common Stock issuable upon exercise, conversion or exchange thereof is lower at the record
date for such issuance than the then Fair Market Value per share of Common Stock, the number of shares of Common Stock thereafter
purchasable upon the exercise of this Warrant shall be determined by multiplying the number of shares of Common Stock purchasable
upon the exercise of this Warrant prior to the record date by a fraction, (A) the numerator of which shall be the number of shares
of Common Stock outstanding on the date of issuance of such rights, options, warrants or other securities plus the number of additional
shares of Common Stock offered for subscription or purchase or into or for which such securities are exercisable, convertible or
exchangeable, and (B) the denominator of which shall be the number of shares of Common Stock outstanding on the date of issuance
of such rights, options, warrants or other securities plus the total number of shares of Common Stock which could be purchased
at the Fair Market Value with the aggregate consideration received through the issuance of such rights, options, warrants, or other
securities. In the event of any such adjustment, the Exercise Price shall be adjusted to a number determined by dividing the Exercise
Price immediately prior to such date of issuance by the above fraction. Such adjustment shall be made whenever such rights, options
or warrants are issued and shall become effective retroactively immediately after the record date for the determination of stockholders
entitled to receive such rights, options, warrants or securities.

 

If the Company at any time shall issue two or
more securities as a unit and one or more of such securities shall be rights, options or warrants for or securities exercisable
for, or convertible or exchangeable into, Common Stock subject to this Section 3(c), the consideration allocated to each
such security shall be the relative Fair Market Value thereof as compared to the other security or securities issued as such unit.

 

(d)          Disposition
Events. If any of the following events (any such event, a “Disposition Event”) occurs:

 

(i)          any
reclassification or exchange of the Common Stock;

 

(ii)         any
merger, consolidation or other combination to which the Company is a constituent party; or

 

(iii)        any
sale, conveyance, lease, or other disposal of all or substantially all the properties and assets of the Company to any other Person;

 

    	 	6	 

     

    

 

in each case, as a result of which all or substantially
all of the holders of Common Stock shall be entitled to receive cash, securities and/or other property for their shares of Common
Stock, then, as a condition precedent to such Disposition Event, proper and adequate provision shall be made so that, upon the
basis and terms and in the manner provided in this Warrant, the Holder shall be entitled upon the exercise of this Warrant at any
time after the consummation of such Disposition Event, to the extent this Warrant is not exercised in full prior to such Disposition
Event, to receive at the Exercise Price in effect at the time immediately prior to the consummation of such Disposition Event,
in lieu of the Common Stock otherwise issuable upon such exercise of this Warrant prior to such Disposition Event, the kind and
amount of cash, securities and/or other property to which such Holder would have been entitled upon the consummation of such Disposition
Event (without giving effect to the limitations set forth in Section 2(f) and Section 3(f)(iv)) if such Holder had
exercised this Warrant immediately prior thereto. In determining the kind and amount of cash, securities and/or other property
receivable upon exercise of this Warrant following the consummation of such Disposition Event, if the holders of Common Stock have
the right to elect the kind or amount of consideration receivable upon consummation of such Disposition Event, then the Holder
shall have the right to make a similar election upon exercise of this Warrant with respect to the kind and amount of cash, securities
and/or other property which the Holder will receive upon exercise of this Warrant. The Company may not cause, or agree to cause
or permit to occur, a Disposition Event, unless the issuer of any securities or other property into which this Warrant thereafter
becomes exercisable (if other than the Company) agrees, for the express benefit of the holders of record of this Warrant (including
making them beneficiaries of such agreement), to issue such securities or other property and to otherwise assume the due and punctual
observance and performance of each and every covenant and condition of this Warrant to be performed and observed by the Company
and all the obligations and liabilities hereunder. To the extent that equity securities are received by the holders of Common Stock
in connection with a Disposition Event, the portion of this Warrant that will be exercisable into such equity securities will continue
to be subject to the adjustments set forth in this Section 3. The provisions of this Section 3(d) shall similarly
apply to successive Disposition Events. If this Section 3(d) applies to any event or occurrence, neither Section 3(a)
nor Section 3(e) shall apply; provided, however, that this Section 3(d) shall not apply to any subdivision
or combination of shares of Common Stock to which Section 3(a) is applicable.

 

(e)          Adjustment
for Certain Tender Offers or Exchange Offers. In case the Company or any of its Subsidiaries shall, at any time or from time
to time, while this Warrant is outstanding, distribute cash or other consideration in respect of a tender offer or an exchange
offer that is treated as a “tender offer” under U.S. federal securities laws made by the Company or any Subsidiary
for all or any portion of the Common Stock, where the sum of the aggregate amount of such cash distributed and the aggregate Fair
Market Value as of the Tender Expiration Date (as defined below) of such other consideration distributed (such sum, the “Aggregate
Amount”) expressed as an amount per share of Common Stock validly tendered or exchanged, and not withdrawn, pursuant
to such tender offer or exchange offer as of the Expiration Time (as defined below) (such tendered or exchanged shares of Common
Stock, the “Purchased Shares”) exceeds the Daily Price per share of the Common Stock on the first Trading Day
immediately following the last date (such last date, the “Tender Expiration Date”) on which tenders or exchanges
could have been made pursuant to such tender offer or exchange offer (as the same may be amended through the Tender Expiration
Date), then, effective immediately prior to the opening of business on the second Trading Day immediately following the Tender
Expiration Date:

 

    	 	7	 

     

    

 

(i)          The
Exercise Price shall be decreased so that the same shall equal the price determined by multiplying the Exercise Price in effect
immediately prior to the close of business on the Trading Day immediately following the Tender Expiration Date by a fraction: (i)
the numerator of which shall be equal to the product of (A) the number of shares of Common Stock outstanding as of the Expiration
Time (including all Purchased Shares) and (B) the Daily Price per share of the Common Stock on the first Trading Day immediately
following the Tender Expiration Date; and (ii) the denominator of which is equal to the sum of (A) the Aggregate Amount and (B)
the product of (I) an amount equal to (x) the number of shares of Common Stock outstanding as of the last time (the “Expiration
Time”) at which tenders or exchanges could have been made pursuant to such tender offer or exchange offer less (y) the
Purchased Shares and (II) the Daily Price per share of the Common Stock on the first Trading Day immediately following the Tender
Expiration Date; and

 

(ii)         The
number of Warrant Shares issuable upon exercise of this Warrant will be adjusted by multiplying such number by a fraction: (A)
the numerator of which shall be the Exercise Price immediately prior to the adjustment pursuant to Section 3(e)(i) and (ii)
the denominator of which shall be the Exercise Price immediately after such adjustment.

 

In the event that the Company or a Subsidiary
is obligated to purchase shares of Common Stock pursuant to any such tender offer or exchange offer, but the Company or such subsidiary
is permanently prevented by applicable law from effecting any such purchases, or all such purchases are rescinded, then the Exercise
Price and number of Warrant Shares issuable shall again be adjusted to be the Exercise Price and number of Warrant Shares issuable
which would then be in effect if such tender offer or exchange offer had not been made. Except as set forth in the preceding sentence,
if the application of this ‎Section 3(e) to any tender offer or exchange offer would result in an increase in the Exercise
Price or reduction in the number of Warrant Shares issuable, no adjustment shall be made for such tender offer or exchange offer
under this ‎Section 3(e).

 

If this Section 3(e) applies to any event,
Section 3(b) shall not apply.

 

(f)          Issuance
of Additional Shares of Common Stock.

 

(i)          Deemed
Issuances of Additional Shares of Common Stock. The maximum number of shares of Common Stock (as set forth in the instrument
relating thereto without regard to any provision contained therein for a subsequent adjustment of such number) issuable upon the
exercise, conversion or exchange of Convertible Securities will be deemed to be Additional Shares of Common Stock issued as of
the time of the issuance of such Convertible Securities; provided, however, that:

 

(A)         No
adjustment in the Exercise Price will be made upon the subsequent issuance of shares of Common Stock upon the exercise, conversion
or exchange of such Convertible Securities;

 

    	 	8	 

     

    

 

(B)         To
the extent that Additional Shares of Common Stock are not issued pursuant to any such Convertible Security upon the expiration
or termination of an unissued, unexercised, unconverted or unexchanged Convertible Security, the Exercise Price will be readjusted
to the Exercise Price that would have been in effect had such Convertible Security (to the extent outstanding immediately prior
to such expiration or termination) never been issued; and

 

(C)         In
the event of any change in the number of shares of Common Stock issuable upon the exercise, conversion or exchange of any Convertible
Security, excluding a change resulting from any transaction giving rise to an adjustment pursuant to Section 3(a) but including
periodic or scheduled accretions or adjustments to a Convertible Security, interest and dividends paid in kind, repricings of the
exercise or conversion price of such Convertible Securities or otherwise, the Exercise Price then in effect will be readjusted
to the Exercise Price that would have been in effect if, on the date of issuance, such Convertible Security were exercisable, convertible
or exchangeable for such changed number of shares of Common Stock.

 

(ii)         Determination
of Consideration. The Fair Market Value of the consideration received by the Company for the issue of any Additional Shares
of Common Stock will be computed as follows:

 

(A)         Cash
and Property. Aggregate consideration consisting of cash and other property will: (x) insofar as it consists of cash, be computed
at the aggregate of cash received by the Company, excluding amounts paid or payable for accrued interest or accrued dividends;
(y) insofar as it consists of property other than cash, be computed at the Fair Market Value thereof on the Measurement Date; and
(z) insofar as it consists of both cash and other property, be the proportion of such consideration so received.

 

(B)         Convertible
Securities. The aggregate consideration per share received by the Company for Convertible Securities will be determined by
dividing: (x) the total amount, if any, received or receivable by the Company as consideration for the issuance of such Convertible
Securities, plus the minimum aggregate amount of additional consideration (as set forth in the instruments relating thereto, without
regard to any provision contained therein for a subsequent adjustment of such consideration) payable to the Company upon the full
and complete exercise, conversion or exchange of such Convertible Securities, by (y) the maximum number of shares of Common Stock
(as set forth in the instruments relating thereto, without regard to any provision contained therein for a subsequent adjustment
of such number) issuable upon the full and complete exercise, conversion or exchange of such Convertible Securities.

 

(iii)        Adjustment
of Exercise Price. Subject to Section 3(f)(iv), in the event the Company shall, at any time and from time to time while
any of the Warrants is outstanding, issue or sell Additional Shares of Common Stock for a consideration per share, as determined
by such consideration’s Fair Market Value in accordance with Section 3(f)(ii), less than the Exercise Price in effect
immediately prior to such issuance (a “Below Exercise Price Issuance”), then, effective immediately upon the
date of such Below Exercise Price Issuance:

 

    	 	9	 

     

    

 

(A)         the
Exercise Price in effect immediately after such Below Exercise Price Issuance shall be reduced so that the same shall equal the
price determined by multiplying the Exercise Price in effect immediately prior to such Below Exercise Price Issuance by a fraction:
(1) the numerator of which shall be the sum of (a) the number of shares of Common Stock outstanding immediately prior to such Below
Exercise Price Issuance; plus (b) (x) the Fair Market Value of the aggregate consideration received by the Company in respect of
such Below Exercise Price Issuance, divided by (y) the Exercise Price in effect immediately prior to such Below Exercise Price
Issuance, and (2) the denominator of which shall be the sum of (a) the number of shares of Common Stock outstanding immediately
prior to such Below Exercise Price Issuance, plus (b) the number of such Additional Shares of Common Stock issued in such Below
Exercise Price Issuance; and

 

(B)         the
number of Warrant Shares issuable upon exercise of this Warrant shall be adjusted by multiplying such number by a fraction: (A)
the numerator of which shall be the Exercise Price immediately prior to the adjustment pursuant to Section 3(f)(iii)(A)
and (B) the denominator of which shall be the Exercise Price immediately after such adjustment.

 

(iv)        Limitations.
In no event shall any adjustment pursuant to this Section 3(f) (i) cause the Exercise Price to be less than $1.40 (the “Floor
Price”) or the number of Warrant Shares issuable to be greater than the number of Warrant Shares issuable at such Exercise
Price, provided that such Floor Price and corresponding number of Warrant Shares issuable shall be adjusted in the same
manner as the Exercise Price and number of Warrant Shares issuable to reflect any adjustments made in accordance with this Section
3 (other than adjustments pursuant to this Section 3(f)(iv) or (ii) cause the shares issuable upon exercise of this
Warrant, when aggregated with the shares issued in connection with the Exchange Agreement, to exceed 1,791,314 shares.

 

(g)          Other
Events. If any event occurs as to which the foregoing provisions of this Section 3 are not strictly applicable or, if
strictly applicable, would not, in the good faith judgment of the Board, fairly and adequately protect the purchase rights of the
Warrants in accordance with the essential intent and principles of such provisions, then the Board shall make such adjustments
in the application of such provisions, in accordance with such essential intent and principles, as shall be reasonably necessary,
in the good faith opinion of the Board, to protect such purchase rights as aforesaid.

 

(h)          Superseding
Adjustment. Upon the expiration of any rights, options, warrants or conversion or exchange privileges which resulted in any
adjustments pursuant to this Section 3 (other than Section 3(f), if any of the foregoing shall not have been exercised,
the number of Warrant Shares purchasable upon the exercise of each Warrant shall be readjusted as if (i) the only shares of Common
Stock issuable upon exercise of such rights, options, warrants, conversion or exchange privileges were the shares of Common Stock,
if any, actually issued upon the exercise of such rights, options, warrants or conversion or exchange privileges and (ii) shares
of Common Stock actually issued, if any, were issuable for the consideration actually received by the Company upon such exercise
plus the aggregate consideration, if any, actually received by the Company for the issuance, sale or grant of all such rights,
options, warrants or conversion or exchange privileges whether or not exercised and the Exercise Price shall be readjusted inversely;
provided, however, that no such readjustment shall (except by reason of an intervening adjustment under Section 3(a)
or, if applicable, Section 3(g) have the effect of decreasing the number of Warrant Shares purchasable upon the exercise
of each Warrant or increasing the Exercise Price by an amount in excess of the amount of the adjustments to the number of Warrant
Shares purchasable and the Exercise Price initially made in respect of the issuance, sale or grant of such rights, options, warrants
or conversion or exchange privileges.

 

    	 	10	 

     

    

 

(i)          Minimum
Adjustment. The adjustments required by the preceding Sections of this Section 3 shall be made whenever and as often
as any specified event requiring an adjustment pursuant to this Section 3 shall occur, except that no adjustment of the
Exercise Price or the number of shares of Common Stock purchasable upon exercise of the Warrants that would otherwise be required
shall be made (except in the case of a subdivision or combination of shares of Common Stock, as provided for in Section 3(a))
unless and until such adjustment either by itself or together with all other adjustments pursuant to this Section 3 not
previously made as a result of this Section 3(i) increases or decreases by at least one percent (1%) the Exercise Price
or the number of shares of Common Stock purchasable upon exercise of the Warrants immediately prior to the making of such adjustment.
Any adjustment representing a change of less than such minimum amount shall be carried forward and made as soon as such adjustment,
together with other adjustments required by this Section 3 and not previously made, would result in a minimum adjustment.
For the purpose of any adjustment, any specified event shall be deemed to have occurred at the close of business on the date of
its occurrence. In computing adjustments under this Section 3, fractional interests in Common Stock shall be taken into
account to the nearest one-hundredth of a share.

 

(j)          Other
Provisions Regarding Adjustments. In the event that at any time, as a result of an adjustment made pursuant to Section 3(a)
hereof, the Holder shall become entitled to receive any shares of capital stock of the Company other than shares of Common Stock,
thereafter the number of such other shares of capital stock so receivable upon exercise of this Warrant shall be subject to adjustment
from time to time in a manner and on terms as nearly equivalent as practicable to the provisions with respect to the Common Stock
contained in this Section 3 and the provisions contained elsewhere herein with respect to Common Stock shall apply on like
terms to any such other shares.

 

(k)          Notice
of Adjustment. Whenever the Exercise Price or the number of shares of Common Stock and other property, if any, purchasable
upon exercise of Warrants is adjusted, as herein provided, the Company shall promptly deliver to the Holder a certificate of a
firm of independent accountants (who may be the regular accountants employed by the Company) or the Chief Financial Officer of
the Company setting forth, in reasonable detail, the event requiring the adjustment and the method by which such adjustment was
calculated (including a description of the basis on which the Board determined the Fair Market Value of any evidences of indebtedness,
other securities or property or warrants or other subscription or purchase rights), and specifying the Exercise Price and the number
of shares of Common Stock or other securities or property purchasable upon exercise of Warrants after giving effect to such adjustment.

 

    	 	11	 

     

    

 

(l)          Notice
of Certain Transactions. In the event that the Company shall resolve or agree to take any action or permit any event to occur
that would require any adjustment of the number of Warrant Shares subject to this Warrant or the Exercise Price, the Company shall
within five (5) Business Days send to the Holder, a notice of such proposed action or offer, such notice to be mailed to the Holder,
which shall specify the record date for the purposes of such dividend, distribution or rights, or the date such action or event
is to take place and the date of participation therein by the holders of Common Stock, if any such date is to be fixed, and shall
briefly indicate the effect of such action or event on the Common Stock and on the number and kind of any other shares of stock
and on other property, if any, and the number of shares of Common Stock and other securities or property, if any, purchasable upon
exercise of each Warrant and the Exercise Price after giving effect to any adjustment which will be required as a result of such
action or event.

 

(m)          Issuance
of Additional Warrants. In connection with the declaration, issuance or consummation of any dividend, spin-off or other distribution
or similar transaction by the Company of the capital stock of any of its Subsidiaries, the Company shall cause (i) additional warrants
of such Subsidiary with, subject to clause (iii) below, substantially similar terms as the Warrants, to be issued to the Holder
or one or more of its nominees so that after giving effect to such transaction the Warrants and such warrants of such Subsidiary
each represent the same percentage interest in the fully diluted number of common shares of such entity as the Warrants represented
in the Company immediately prior to such transaction, and (ii) (A) the exercise price of the Warrants to be reduced by an amount
reasonably acceptable to the Holder to reflect the value of the capital stock of the Subsidiary to be dividended, spun-off or otherwise
distributed and (B) the exercise price of the additional warrants of such Subsidiary to be fixed in a manner reasonably acceptable
to such Holder to reflect the amount by which the exercise price of the Warrants was reduced pursuant to clause (iii)(A) above,
as adjusted to reflect any differences in the fully-diluted number of the shares of common stock of the Company and such Subsidiary.

 

Section 4.             Transfer
of Warrant.

 

(a)          Transferability.
Subject to compliance with any applicable securities laws and the conditions set forth in Sections 5(a) and 4(d) hereof, this
Warrant and all rights hereunder are transferable, in whole or in part, but only with the prior written consent of the Company,
not to be unreasonably withheld, upon surrender of this Warrant at the principal office of the Company, together with a written
assignment of this Warrant substantially in the form attached hereto duly executed by the Holder or its agent or attorney and funds
sufficient to pay any transfer taxes payable upon the making of such transfer. Upon such surrender and, if required, such payment,
the Company shall execute and deliver a new Warrant or Warrants in the name of the assignee or assignees and in the denomination
or denominations specified in such instrument of assignment, and shall issue to the assignor a new Warrant evidencing the portion,
if any, of this Warrant not so assigned, and this Warrant shall promptly be cancelled. A Warrant, if properly assigned, may be
exercised by a new holder for the purchase of Warrant Shares without having a new Warrant issued.

 

(b)          New
Warrants. This Warrant may be divided or combined with other Warrants upon presentation hereof at the aforesaid office of the
Company, together with a written notice specifying the names and denominations in which new Warrants are to be issued, signed by
the Holder or its agent or attorney. Subject to compliance with Section 4(a), as to any transfer which may be involved in
such division or combination, the Company shall execute and deliver a new Warrant or Warrants in exchange for the Warrant or Warrants
to be divided or combined in accordance with such notice.

 

    	 	12	 

     

    

 

(c)          Warrant
Register. The Company shall register this Warrant, upon records to be maintained by the Company for that purpose (the “Warrant
Register”), in the name of the record Holder hereof from time to time. The Company may deem and treat the registered
Holder of this Warrant as the absolute owner hereof for the purpose of any exercise hereof or any distribution to the Holder, and
for all other purposes, absent actual notice to the contrary.

 

(d)          Transfer
Restrictions. If, at the time of the surrender of this Warrant in connection with any transfer of this Warrant, the transfer
of this Warrant shall not be registered pursuant to an effective registration statement under the Securities Act and under applicable
state securities or blue sky laws, the Company may require, as a condition of allowing such transfer (i) that the Holder or
transferee of this Warrant, as the case may be, furnish to the Company a written opinion of counsel (which opinion shall be in
form, substance and scope customary for opinions of counsel in comparable transactions) to the effect that such transfer may be
made without registration under the Securities Act and under applicable state securities or blue sky laws, (ii) that the Holder
or transferee execute and deliver to the Company an investment letter and (iii) that the transferee provide evidence satisfactory
to the Company, its reasonable discretion, that such transferee is an “accredited investor” as defined in Rule 501(a)
promulgated under the Securities Act or a qualified institutional buyer as defined in Rule 144A(a) under the Securities Act.

 

Section 5.             Miscellaneous.

 

(a)          Title
to Warrant. Prior to the Termination Date and subject to compliance with applicable laws and Section 4 of this Warrant, this
Warrant and all rights hereunder are transferable, in whole or in part, at the office or agency of the Company by the Holder in
person or by duly authorized attorney, upon surrender of this Warrant together with the Assignment Form annexed hereto properly
endorsed and the legal opinion required under Section 4(d), if required by the Company. The transferee shall sign an investment
letter to the Company.

 

(b)          No
Rights as Shareholder Until Exercise. This Warrant does not entitle the Holder to any voting rights or other rights as a shareholder
of the Company prior to the exercise hereof. Upon the surrender of this Warrant and the payment of the aggregate Exercise Price,
the Warrant Shares so purchased shall be and be deemed to be issued to such Holder as the record owner of such shares as of the
close of business on the later of the date of such surrender or payment.

 

(c)          Loss,
Theft, Destruction or Mutilation of Warrant. The Company covenants that upon receipt by the Company of evidence reasonably
satisfactory to it of the loss, theft, destruction or mutilation of this Warrant or any stock certificate relating to the Warrant
Shares, and in case of loss, theft or destruction, of indemnity or security reasonably satisfactory to it (which, in the case of
the Warrant, shall not include the posting of any bond), and upon surrender and cancellation of such Warrant or stock certificate,
if mutilated, the Company will make and deliver a new Warrant or stock certificate of like tenor and dated as of such cancellation,
in lieu of such Warrant or stock certificate.

 

    	 	13	 

     

    

 

(d)          Saturdays,
Sundays, Holidays, etc. If the last or appointed day for the taking of any action or the expiration of any right required or
granted herein shall be a Saturday, Sunday or a legal holiday, then such action may be taken or such right may be exercised on
the next succeeding day not a Saturday, Sunday or legal holiday.

 

(e)          Authorized
Shares. The Company covenants that during the period the Warrant is outstanding, it will reserve from its authorized and unissued
Common Stock a sufficient number of shares to provide for the issuance of the Warrant Shares upon the exercise of any purchase
rights under this Warrant. The Company further covenants that its issuance of this Warrant shall constitute full authority to its
officers who are charged with the duty of executing stock certificates to execute and issue the necessary certificates for the
Warrant Shares upon the exercise of the purchase rights under this Warrant. The Company will take all such reasonable action as
may be necessary to assure that such Warrant Shares may be issued as provided herein without violation of any applicable law or
regulation, or of any requirements of the Trading Market upon which the Common Stock may be listed.

 

Except as, and to the extent, waived or consented
to by the Holder, the Company shall not by any action, including, without limitation, amending its certificate of incorporation
or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other
voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant, but will at all times
in good faith assist in the carrying out of all such terms and in the taking of all such actions as may be necessary or appropriate
to protect the rights of Holder as set forth in this Warrant against impairment. Without limiting the generality of the foregoing,
the Company will (a) not increase the par value of any Warrant Shares above the amount payable therefor upon such exercise immediately
prior to such increase in par value, (b) take all such action as may be necessary or appropriate in order that the Company
may validly and legally issue fully paid and nonassessable Warrant Shares upon the exercise of this Warrant, and (c) use commercially
reasonable efforts to obtain all such authorizations, exemptions or consents from any public regulatory body having jurisdiction
thereof as may be necessary to enable the Company to perform its obligations under this Warrant.

 

Before taking any action which would result
in an adjustment in the number of Warrant Shares for which this Warrant is exercisable or in the Exercise Price, the Company shall
obtain all such authorizations or exemptions thereof, or consents thereto, as may be necessary from any public regulatory body
or bodies having jurisdiction thereof.

 

(f)          Jurisdiction.
All questions concerning the construction, validity, enforcement and interpretation of this Warrant shall be governed by and construed
and enforced in accordance with the internal laws of the State of New York, without regard to the principles of conflicts of law
thereof.

 

(g)          Restrictions.
The Holder acknowledges that the Warrant Shares acquired upon the exercise of this Warrant, if not registered, will have restrictions
upon resale imposed by state and federal securities laws and will contain a restrictive legend substantially in the following form:

 

    	 	14	 

     

    

 

THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT
BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION
FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY
NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE
EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH
APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF
WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY.

 

(h)          Nonwaiver
and Expenses. No course of dealing or any delay or failure to exercise any right hereunder on the part of Holder shall operate
as a waiver of such right or otherwise prejudice Holder’s rights, powers or remedies, notwithstanding the fact that all rights
hereunder terminate on the Termination Date. If the Company fails to comply with any provision of this Warrant, which results in
any material damages to the Holder, the Company shall pay to Holder such amounts as shall be sufficient to cover any costs and
expenses including, but not limited to, reasonable attorneys’ fees, including those of appellate proceedings, incurred by
Holder in collecting any amounts due pursuant hereto or in otherwise enforcing any of its rights, powers or remedies hereunder.

 

(i)          Notices.
Any notice, request or other document required or permitted to be given or delivered to the Holder by the Company shall be delivered
to Holder at its last address as it shall appear upon the Warrant Register of the Company.

 

(j)          Limitation
of Liability. No provision hereof, in the absence of any affirmative action by Holder to exercise this Warrant or purchase
Warrant Shares, and no enumeration herein of the rights or privileges of Holder, shall give rise to any liability of Holder for
the purchase price of any Common Stock or as a stockholder of the Company, whether such liability is asserted by the Company or
by creditors of the Company.

 

(k)          Remedies.
Holder, in addition to being entitled to exercise all rights granted by law, including recovery of damages, will be entitled to
specific performance of its rights under this Warrant. The Company agrees that monetary damages would not be adequate compensation
for any loss incurred by reason of a breach by it of the provisions of this Warrant and hereby agrees to waive the defense in any
action for specific performance that a remedy at law would be adequate.

 

    	 	15	 

     

    

 

(l)          Successors
and Assigns. Subject to applicable securities laws, this Warrant and the rights and obligations evidenced hereby shall inure
to the benefit of and be binding upon the successors of the Company and the successors and permitted assigns of Holder. The provisions
of this Warrant are intended to be for the benefit of all Holders from time to time of this Warrant and shall be enforceable by
any such Holder.

 

(m)          Amendment.
This Warrant may be modified or amended or the provisions hereof waived with the written consent of the Company and the Holder.

 

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

 

(o)           Headings.
The headings used in this Warrant are for the convenience of reference only and shall not, for any purpose, be deemed a part of
this Warrant.

 

[Signature page follows]

 

    	 	16	 

     

    

 

IN WITNESS WHEREOF, the Company has caused this
Warrant to be duly executed by an authorized officer as of the day and year first above written.

 

	 	CINEDIGM CORP.
	 	 
	 	By: 	 
	 	 	Name:	Gary S. Loffredo
	 	 	Title:	Executive Vice President

 

     

     

    

 

NOTICE
OF EXERCISE

 

		TO:	Cinedigm Corp.

 

(1)         The
undersigned hereby elects to purchase ________ Warrant Shares of the Company pursuant to the terms of the attached Warrant, and
tenders herewith payment of the Exercise Price in full, together with all applicable transfer taxes, if any.

 

(2)         Payment
shall take the form lawful money of the United States by wire transfer or cashier’s check drawn on a United States bank.

 

(3)         Please
issue a certificate or certificates representing said Warrant Shares in the name of the undersigned or in such other name as is
specified below:

 

_______________________________

 

The Warrant Shares shall be delivered to the
following:

 

_______________________________

 

_______________________________

 

_______________________________

 

 

	Name of Investor: 
	 
	 
	 
	Signature of Authorized Signatory of Investor:  
	 
	 
	 
	Name of Authorized Signatory:  
	 
	 
	 
	Title of Authorized Signatory:  
	 
	 
	 
	SSN or Tax ID of Investor:  
	 
	 
	 
	Date:_____________________

 

     

     

    

 

ASSIGNMENT
FORM

 

(To assign the foregoing note, execute

this form and supply required information.

Do not use this form to exercise the note.)

 

FOR VALUE RECEIVED, the foregoing Warrant and
all rights evidenced thereby are hereby assigned to ____________________________________________________________, whose address
is _______________________________________________________________ _____________________________________________________________________________.

 

	 	Dated:	 

 

	 	Holder’s Signature:	 

 

	 	Holder’s Address:	 

 

	Signature Guaranteed:	 
	 	 
	 	 

 

NOTE: The signature to this Assignment Form must correspond with
the name as it appears on the face of the Warrant, without alteration or enlargement or any change whatsoever, and must be guaranteed
by a bank or trust company. Officers of corporations and those acting in a fiduciary or other representative capacity should file
proper evidence of authority to assign the foregoing Warrant.

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