Document:

EX-10.35

LEASE CROSS-GUARANTY

(Subtenants)

THIS LEASE CROSS-GUARANTY (“Guaranty”) is made effective as of January 10, 2012, (the
“Effective Date”) by and among the following parties (individually and collectively, “Guarantor”):
(i) LTC Consulting, L.P. (“Rockdale Subtenant”), (ii) Congress Street Partners, L.P. (“Sea Breeze
Subtenant”), (iii) Pharr Court Associates, L.P. (“Buckhead Subtenant”), (iv) Irving Place
Associates, L.P. (“Shreveport Subtenant”), (v) Hamilton Mill Associates, L.P. (“Bell Minor
Subtenant”), (vi) Facility Investments, L.P. (“Westminster Subtenant”), (vii) South Parkway
Associates, L.P. (“Parkway Subtenant”), (viii) Wellington Healthcare Properties, L.P. (“Millington
Subtenant”), (ix) Riverside Healthcare, L.P. (“Riverside Subtenant”), and (x) England Associates,
L.P. (“New London Tenant”), each a Georgia limited partnership, in favor of the following parties
(individually and collectively, “Landlord”): (i) G&E HC REIT II Rockdale SNF, LLC (“Rockdale
Landlord”), (ii) G&E HC REIT II Mobile SNF, LLC (“Sea Breeze Landlord”), (iii) G&E HC REIT II
Buckhead SNF, LLC (“Buckhead Landlord”), (iv) G&E HC REIT II Shreveport SNF, LLC (“Shreveport
Landlord”), (v) G&E HC REIT II Gainesville SNF, LLC (“Bell Minor Landlord”), (vi) G&E HC REIT II
 Westminster SNF, LLC (“Westminster Landlord”), (vii) G&E HC REIT II Memphis SNF, LLC (“Parkway
Landlord”), (viii) G&E HC REIT II Millington SNF, LLC (“Millington Landlord”), (ix) G&E HC REIT
II Covington SNF, LLC (“Riverside Landlord”), and (x) G&E HC REIT II Snellville SNF, LLC (“New
London Landlord”), each a Delaware limited liability company. Guarantor’s office address is 20
Mansell Court East, Suite 200, Roswell, Georgia 30076. Landlord’s office address is c/o Grubb &
Ellis Healthcare REIT II, Inc., 1551 N. Tustin Avenue, Suite 300, Santa Ana, California 97205.

RECITALS

WHEREAS, (a) Rockdale Landlord is the owner of the land described on Schedule A-1 and the
improvements located thereon (the “Rockdale Premises”) and certain personal property located
thereon and used in connection with the ownership and operation thereof and operation of the
business conducted thereon (the “Rockdale Personal Property”) (b) Sea Breeze Landlord is the owner
of the land described on Schedule A-2 and the improvements located thereon (the “Sea Breeze
Premises”) and certain personal property located thereon and used in connection with the ownership
and operation thereof and operation of the business conducted thereon (the “Sea Breeze Personal
Property”), (c) Buckhead Landlord is the owner of the land described on Schedule A-3 and the
improvements located thereon (the “Buckhead Premises”) and certain personal property located
thereon and used in connection with the ownership and operation thereof and operation of the
business conducted thereon (the “Buckhead Personal Property”), (d) Shreveport Landlord is the owner
of the land described on Schedule A-4 and the improvements located thereon (the “Shreveport
Premises”) and certain personal property located thereon and used in connection with the ownership
and operation thereof and operation of the business conducted thereon (the “Shreveport Personal
Property”), (e) Bell Minor Landlord is the owner of the land described on Schedule A-5 and the
improvements located thereon (the “Bell Minor Premises”) and certain personal property located
thereon and used in connection with the ownership and operation thereof and operation of the
business conducted thereon (the “Bell Minor Personal Property”), (f) Westminster Landlord is the
owner of the land described on Schedule A-6 and the improvements located thereon (the “Westminster
Premises”) and certain personal property located thereon and used in connection with the ownership
and operation thereof and operation of the business conducted thereon (the “Westminster Personal
Property”), (g) Parkway Landlord is the owner of the land described on Schedule A-7 and the
improvements located thereon (the “Parkway Premises”) and certain personal property located thereon
and used in connection with the ownership and operation thereof and operation of the business
conducted thereon (the “Parkway Personal Property”), (h) Millington Landlord is the owner of the
land described on Schedule A-8 and the improvements located thereon (the “Millington Premises”) and
certain personal property located thereon and used in connection with the ownership and operation
thereof and operation of the business conducted thereon (the “Millington Personal Property”), (i)
Riverside Landlord is the owner of the land described on Schedule A-9 and the improvements located
thereon (the “Riverside Premises”) and certain personal property located thereon and used in
connection with the ownership and operation thereof and operation of the business conducted thereon
(the “Riverside Personal Property”), and (j) New London Landlord is the owner of the land described
on Schedule A-10 and the improvements located thereon (the “New London Premises”) and certain
personal property located thereon and used in connection with the ownership and operation thereof
and operation of the business conducted thereon (the “New London Personal Property”), and;

WHEREAS, Landlord and Warsaw Road, L.P., a Georgia limited partnership (“Master Tenant”),
have executed that certain master lease dated of even date herewith (as the same may be amended
from time to time, the “Master Lease”) pursuant to which Master Tenant leases (i) the Rockdale
Premises and the Rockdale Personal Property (collectively, the “Rockdale Property”) from Rockdale
Landlord, (ii) the Sea Breeze Premises and the Sea Breeze Personal Property (collectively, the “Sea
Breeze Property”) from Sea Breeze Landlord, (iii) the Buckhead Premises and the Buckhead Personal
Property (collectively, the “Buckhead Property”) from Buckhead Landlord, (iv) the Shreveport
Premises and the Shreveport Personal Property (collectively, the “Shreveport Property”) from
Shreveport Landlord, (v) the Bell Minor Premises and the Bell Minor Personal Property
(collectively, the “Bell Minor Property”) from Bell Minor Landlord, (vi) the Westminster Premises
and the Westminster Personal Property (collectively, the “Westminster Property”) from Westminster
Landlord, (vii) the Parkway Premises and the Parkway Personal Property (collectively, the “Parkway
Property”) from Parkway Landlord, (viii) the Millington Premises and the Millington Personal
Property (collectively, the “Millington Property”) from Millington Landlord, and (ix) the Riverside
Premises and the Riverside Personal Property (collectively, the “Riverside Property”) from
Riverside Landlord; and

WHEREAS, New London Landlord and New London Tenant have also executed that certain operating
lease dated of even date herewith (as the same may be amended from time to time, the “New London
Lease”) pursuant to which New London Tenant leases the New London Premises and the New London
Personal Property (collectively, the “New London Property”) from New London Landlord. Upon the
consummation of HUD Financing by Capital Funding, LLC for the New London Property, as contemplated
in and pursuant to the terms of the Master Lease, the New London Lease shall be terminated and (i)
the New London Property shall be added to the Master Lease, and (ii) Master Tenant shall enter into
a sublease with New London Tenant for the New London Property (the “New London Sublease”); and

WHEREAS, simultaneously with the execution of the Master Lease and the New London Lease,
Master Tenant desires to enter into (i) a sublease agreement (the “Rockdale Sublease”) with
Rockdale Subtenant pursuant to which Master Tenant will sublease all of the Rockdale Property to
Rockdale Subtenant, (ii) a sublease agreement (the “Sea Breeze Sublease”) with Sea Breeze Subtenant
pursuant to which Master Tenant will sublease all of the Sea Breeze Property to Sea Breeze
Subtenant, (iii) a sublease agreement (the “Buckhead Sublease”) with Buckhead Subtenant pursuant to
which Master Tenant will sublease all of the Buckhead Property to Buckhead Subtenant, (iv) a
sublease agreement (the “Shreveport Sublease”) with Shreveport Subtenant pursuant to which Master
Tenant will sublease all of the Shreveport Property to Shreveport Subtenant, (v) a sublease
agreement (the “Bell Minor Sublease”) with Bell Minor Subtenant pursuant to which Master Tenant
will sublease all of the Bell Minor Property to Bell Minor Subtenant, (vi) a sublease agreement
(the “Westminster Sublease”) with Westminster Subtenant pursuant to which Master Tenant will
sublease all of the Westminster Property to Westminster Subtenant, (vii) a sublease agreement (the
“Parkway Sublease”) with Parkway Subtenant pursuant to which Master Tenant will sublease all of the
Parkway Property to Parkway Subtenant, (viii) a sublease agreement (the “Millington Sublease”) with
Millington Subtenant pursuant to which Master Tenant will sublease all of the Millington Property
to Millington Subtenant, and (ix) a sublease agreement (the “Riverside Sublease”) with Riverside
Subtenant pursuant to which Master Tenant will sublease all of the Riverside Property to Riverside
Subtenant; and

WHEREAS, for purposes of this Guaranty, the term “Premises” shall mean and refer to the
Rockdale Premises, the Sea Breeze Premises, the Buckhead Premises, the Shreveport Premises, the
Bell Minor Premises, the Westminster Premises, the Parkway Premises, the Millington Premises, the
Riverside Premises and the New London Premises, and the term “Operating Subleases” shall mean and
refer to the Rockdale Sublease, the Sea Breeze Sublease, the Buckhead Sublease, the Shreveport
Sublease, the Bell Minor Sublease, the Westminster Sublease, the Parkway Sublease, the Millington
Sublease, the Riverside Sublease and the New London Sublease (once executed); and

WHEREAS, Landlord has required as a condition of its execution of the Master Lease and the New
London Lease and its approval of the Operating Subleases pursuant to Section 9.1 of the Master
Lease and the New London Lease that each Guarantor unconditionally become guarantor and surety to
Landlord for (i) all of the obligations of the other Guarantors under the other Operating Subleases
during the original term of each of the other Operating Subleases as well as during any renewal
term or any extension thereof, and assume primary liability for the performance of the Operating
Subleases; and

WHEREAS, each Guarantor is an affiliate of Master Tenant and the other Guarantors, and each
will benefit financially from Landlord entering into the Master Lease and the New London Lease and
Landlord approving the Operating Subleases pursuant to Section 9.1 of the Master Lease and the New
London Lease and, thus, each Guarantor desires that Landlord enter into the Master Lease and the
New London Lease with Master Tenant and New London Tenant (respectively) and approve the Operating
Subleases pursuant to Section 9.1 of the Master Lease and the New London Lease.

NOW, THEREFORE, incorporating the foregoing recitals herein by reference, in consideration of
the Master Lease and the New London Lease of the Premises, Landlord’s approval of the Operating
Subleases, and of other good and valuable consideration, the receipt of which is hereby
acknowledged and to induce Landlord to execute the Master Lease and the New London Lease and to
approve the Operating Subleases, Guarantor, intending to be legally bound hereby, agrees as
follows:

1. Guaranty and Suretyship. Guarantor hereby unconditionally and irrevocably becomes
guarantor and surety to Landlord, its successors and assigns for the full, faithful and punctual
performance of each and all of the covenants, agreements and conditions of the Operating Subleases
to be kept and performed by the other subtenants, including the punctual payment of all rent and
any other monetary obligations due and owing by the other subtenants under the Operating Subleases
(including monetary obligations owing by reason of a non-monetary default by Tenant), whether by
acceleration or otherwise, in accordance with and within the time prescribed by the Operating
Subleases, as well as all other liabilities now or hereafter contracted by subtenants with Master
Tenant and/or Landlord, together with all costs and expenses (including reasonable attorneys’ fees
and cost of suit) incurred by Landlord in connection with any of the foregoing (hereinafter
collectively referred to as the “Liabilities”).

2. Representations of Guarantor. Guarantor represents and warrants that at the
Effective Date and, except as expressly stated as of a particular time, throughout the term of this
Guaranty:

(a) Each Guarantor is a limited partnership, validly existing under the laws of the State of
Georgia, and has the requisite power and authority to make and perform this Guaranty.

(b) To Guarantor’s knowledge, nothing exists to impair the effectiveness of the obligations of
Guarantor to Landlord hereunder.

(c) The consolidated financial statements of Guarantor’s parent, Wellington Healthcare
Services, L.P., a Georgia limited partnership (“Parent”), furnished to Landlord in connection with
this Guaranty are: (i) true, correct and complete in all material respects; (ii) have been
prepared in accordance with generally accepted accounting principles consistently applied; and
(iii) present fairly the financial condition of Parent and its consolidated subsidiaries, including
Guarantor, as of the respective dates thereof, except for the absence of footnotes and subject to
year-end adjustments in the case of interim financial statements.

(d) Guarantor will furnish Landlord with the annual reports, balance sheets, financial
statements and other information specified in Article 19 of the Master Lease and the New
London Lease in the form and within the time frames required by said Article. All data, statements
and information shall be prepared in accordance with generally accepted accounting principles
consistently applied and shall fairly set forth the financial condition of Guarantor, and annual
statements shall be audited and certified by certified public accountants. Landlord shall be
permitted to rely upon the accuracy and completeness of the item furnished pursuant to this
paragraph, the Master Lease and the New London Lease and to disclose and publish the same as
required by Applicable Laws. Without limiting the generality of the foregoing, Guarantor
acknowledges that Landlord is a subsidiary of a Real Estate Investment Trust and that, as such, it
is subject to certain filing and reporting requirements in accordance with federal laws and
regulations, including but not limited to, regulations promulgated by the Securities and Exchange
Commission. Accordingly, and notwithstanding any provision of this Guaranty, the Master Lease, the
New London Lease, the Operating Subleases or the provisions of any other existing agreement between
the parties hereto to the contrary, Guarantor acknowledges that Landlord may publicly file,
disclose, report or publish any and all information related to the Master Lease, the New London
Lease, the Operator Subleases and this Guaranty that may be reasonably interpreted as being
required by federal law or regulation after Closing.

(e) Guarantor is not in default under any agreement, the effect of which could materially and
adversely affect performance of its obligations under this Guaranty. There are no actions, suits
or proceedings pending or, to Guarantor’s knowledge, threatened against Guarantor before any court
or any other governmental authority of any kind which could materially and adversely affect
performance of its obligations under this Guaranty.

(f) Guarantor hereby represents and warrants to Landlord that, as of the Effective Date, the
owners of Parent are WCP GP LLC, RIDC WCP Healthcare LP, Andwell Investments, LLC and Rewell
Investments, LLC, and the owners of Guarantor are Parent and Elkins Road Associates, LLC.
Guarantor hereby covenants that there shall not be a change of control (as “control” is defined in
Section 9.1 of the Master Lease and the New London Lease) of any Guarantor without the prior
written consent of Landlord, which consent may not be unreasonably withheld, conditioned or
delayed; provided, however, that the prior consent of Landlord shall not be required with respect
to (i) a change in the ownership of any Guarantor so long as thereafter less than twenty-five
percent (25%) of voting control of such Guarantor is held by any Person that did not have such
ownership prior thereto (the foregoing 25% limitation shall apply to any subsequent transfer to any
such Person pursuant to the following clause (ii)), or (ii) transfers of ownership interests in any
Guarantor amongst the existing direct or indirect owners of such Guarantor. Notwithstanding the
foregoing or any other language to the contrary in this Agreement, no such change in ownership or
transfer shall be permitted without the prior written consent of Landlord, which consent may not be
unreasonably, withheld, conditioned or delayed, if such change in ownership or transfer would
result in Master Tenant’s Principals having less of a direct or indirect ownership interest in any
of Master Tenant and/or Guarantor than Master Tenant’s Principals possess as of the Effective Date
(the foregoing restriction not to apply in the event of the death or legal incapacity of Master
Tenant’s Principals).

3. Landlord’s Rights to Amend Lease, etc. Subject to the provisions of the Master
Lease and the New London Lease, Landlord shall have the right from time to time, and at any time in
its sole discretion, without notice to or consent from Guarantor, or without affecting, impairing,
or discharging in whole or in part, any of the Liabilities of Guarantor hereunder, to modify,
change, extend, alter, amend, or supplement in any respect whatever, the Master Lease and the New
London Lease, or any agreement or transaction between Landlord and Master Tenant or New London
Tenant, or between Landlord and any other party liable for the Liabilities, or any portion thereof;
to grant extensions of time and other indulgences of any kind to Master Tenant or New London Tenant
(as applicable); to compromise, release, substitute, exercise, enforce or fail to refuse to
exercise or enforce any claims, rights or remedies of any kind which Landlord may have at any time
against Master Tenant or New London Tenant (as applicable) or any other party liable for the
Liabilities, or any part thereof, or with respect to any security of any kind held by Landlord at
any time under any agreement or otherwise. Nor shall the obligations of Guarantor hereunder be
affected, impaired or discharged, in whole or in part, by reason of payments by Master Tenant or
New London Tenant (as applicable) of all or any portion of the Liabilities, which payments shall be
turned over as “voidable preferences” or otherwise disgorged, or by reason of any action whatsoever
taken by Landlord, including any sale, lease, disposition, liquidation or other realization (which
may be negligent, willful or otherwise with respect to any security in which Landlord may at any
time have any interest or against any other party liable for all or any part of the Liabilities).

4. WAIVERS, ETC. GUARANTOR HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES:
(A) ANY NOTICES AND DEMANDS, INCLUDING: (I) NOTICE OF ACCEPTANCE OF THIS GUARANTY; (II) NOTICE OF
PRESENTMENT, DEMAND FOR PAYMENT, NOTICE OF DEFAULT, OR PROTEST OF ANY LIABILITIES, OR THE
OBLIGATION OF ANY PERSON, FIRM, OR CORPORATION HELD BY LANDLORD AS COLLATERAL SECURITY; (III) ANY
NOTICES OF THE FINANCIAL CONDITION OF MASTER TENANT OR NEW LONDON TENANT OR OF ANY ADVERSE OR OTHER
CHANGE IN THE FINANCIAL CONDITION OF MASTER TENANT OR NEW LONDON TENANT; AND (IV) ANY NOTICES OF
THE EXISTENCE, CREATION, OR INCURRING OF NEW OR ADDITIONAL OBLIGATIONS; (B) OFFSETS AND
COUNTERCLAIMS WHICH GUARANTOR MAY AT ANY TIME HAVE TO ANY OF THE LIABILITIES, INCLUDING: (I) ANY
DEFENSES BASED ON THE TERMINATION OF MASTER TENANT’S OR NEW LONDON TENANT’S LIABILITY FROM ANY
CAUSE; AND (II) ANY DEFENSES BASED UPON THE NEGLIGENCE OF THE LANDLORD IN ADMINISTERING THE MASTER
LEASE AND/OR THE NEW LONDON LEASE, OR TAKING OR FAILING TO TAKE ANY ACTION IN CONNECTION THEREWITH;
(C) TRIAL BY JURY AND THE RIGHT THERETO IN ANY PROCEEDING OF ANY KIND, WHETHER ARISING ON OR OUT
OF, UNDER, OR BY REASON OF, THIS GUARANTY, OR ANY OTHER AGREEMENT OR TRANSACTION BETWEEN GUARANTOR,
LANDLORD, MASTER TENANT AND/OR NEW LONDON TENANT; (D) THE BENEFIT OF ALL APPRAISEMENT, VALUATION,
MARSHALLING, FORBEARANCE, STAY, EXTENSION, REDEMPTION, HOMESTEAD, EXEMPTION OR MORATORIUM LAWS NOW
OR HEREAFTER IN EFFECT AND ANY STATUTE OF LIMITATIONS AFFECTING GUARANTOR’S LIABILITY UNDER THIS
GUARANTY; (E) ALL DILIGENCE IN THE COLLECTION OF ANY OF THE LIABILITIES; (F) ANY RIGHT TO REQUIRE
LANDLORD TO (I) PROCEED AGAINST MASTER TENANT OR NEW LONDON TENANT; (II) PROCEED AGAINST OR EXHAUST
ANY SECURITY THAT LANDLORD HOLDS FROM MASTER TENANT OR NEW LONDON TENANT; OR (III) PURSUE ANY OTHER
REMEDY IN LANDLORD’S POWER; (G) ANY RIGHT, CLAIM OR ACTION THAT IT MAY NOW OR HEREAFTER HAVE
AGAINST MASTER TENANT OR NEW LONDON TENANT ARISING OUT OF, OR IN CONNECTION WITH, GUARANTOR’S
OBLIGATIONS UNDER THIS GUARANTY OR THE PAYMENT OR PERFORMANCE BY GUARANTOR OF ALL OR ANY PART OF
THE LIABILITIES, INCLUDING ANY RIGHT OR CLAIM FOR SUBROGATION, CONTRIBUTION, REIMBURSEMENT,
EXONERATION, OR INDEMNITY; AND (H) ANY RIGHTS TO PARTICIPATE IN ANY SECURITY NOW OR LATER HELD BY
LANDLORD.

5. Assignment of Guaranty. Landlord may, without notice, but only in connection with
an assignment of the Master Lease and/or the New London Lease, assign this Guaranty in whole or in
part, and no assignment of this Guaranty or assignment or transfer of the Master Lease or the New
London Lease or subletting of the Premises shall operate to extinguish or diminish the liability of
Guarantor hereunder. Guarantor may not assign this Guaranty or delegate its obligation hereunder
without the prior written consent of Landlord, which consent may be withheld in Landlord’s sole
discretion.

6. Primary Liability of Guarantor. The liability of Guarantor under this Guaranty
shall be primary and not secondary and Landlord may, at its option, proceed directly against
Guarantor or any security granted to Landlord without having to commence any action, or having
obtained any judgment against Master Tenant or New London Tenant (as applicable).

7. Insolvency of Tenant. All of the Liabilities and the obligations of Guarantor
hereunder shall be immediately due and payable by Guarantor, anything contained herein to the
contrary notwithstanding, immediately upon the application for appointment or appointment of a
trustee, receiver, conservator, liquidator, sequester, custodian, or other similar judicial
representative for Master Tenant or any of Master Tenant’s assets, or New London Tenant or any of
New London Tenant’s assets; the making by Master Tenant or New London Tenant of any assignment for
the benefit of creditors; the commencement of an action by or against Master Tenant or New London
Tenant under any insolvency, bankruptcy, creditor adjustment or debtor rehabilitation law, state or
federal, including arrangement, composition, liquidation or reorganization laws; the commencement
of levy, execution or attachment proceedings against Master Tenant or any of Master Tenant’s assets
or New London Tenant or any of New London Tenant’s assets that could reasonably be expected to have
a material adverse effect on Master Tenant’s or New London Tenant’s financial condition, whether or
not Landlord has exercised any option which it may have to require payment in full or acceleration
of payment of the Liabilities from any other person liable for payment of the Liabilities.

8. Governing Law/Consent to Jurisdiction/Venue. Irrespective of the place of
execution and/or delivery of this Guaranty or the location of the Premises, this Guaranty shall be
governed by and shall be construed in accordance with, the Applicable Laws of the State or States
in which the Premises are located applicable to agreements entered into without regarding to
conflicts of law principles. Landlord and Guarantor hereby consent and submit to the exclusive
jurisdiction of the state and Federal courts located in the state in which the Premises are located
with respect to any claim or litigation arising hereunder or any alleged breach of the covenants or
provisions contained herein, and acknowledge that proper venue in any matter so claimed or
litigated shall be in the state and Federal courts located in which the Premises are located;
provided, however, that (1) Landlord shall be permitted, in addition, if required by Applicable Law
in the jurisdiction where the Premises are located, to bring any action against Guarantor and/or to
enforce this Guaranty in the jurisdiction where the Premises are located and (2) Guarantor shall be
permitted, in addition, if required by Applicable Law in the jurisdiction where the Premises are
located to bring any action against Landlord and/or to enforce this Guaranty in the jurisdiction
where the Premises are located.

9. No Impairment of Obligations. The obligations of Guarantor hereunder shall not be
affected, modified, changed, amended, limited, impaired, released or discharged, in whole or in
part, by reason of: (a) the entry of an order for relief pursuant to the United States Bankruptcy
Code by or against Master Tenant, New London Tenant, or Guarantor; (b) the modification, change,
amendment, limitation, impairment or release of the liability of Master Tenant, New London Tenant
or their estate in bankruptcy or of any remedy for the enforcement thereof, resulting from the
operation of any present or future provision of the U.S. Bankruptcy Code, or from the decision of
any federal, state or local court; (c) the proposal or confirmation of a plan of reorganization
concerning Master Tenant, New London Tenant, or Guarantor or by any rejection of the Master Lease
or the New London Lease pursuant to any such proceeding; (d) except as otherwise provided for in
the Master Lease or the New London Lease, the assignment of any Guarantor’s obligations pursuant
to: (i) the Master Lease, the New London Lease and/or the Operating Subleases; (ii) an order of
court; or (iii) by operation of law.

10. Limitation of Waivers by Landlord. The waiver of any right by Landlord or its
failure to exercise promptly any right shall not be construed as the waiver of any other right,
including the right to exercise the same at any time thereafter. No waiver or modification of any
of the terms or conditions of this Guaranty shall be binding against Landlord unless such waiver or
modification is in a writing signed by Landlord.

11. Binding Effect. The provisions of this Guaranty shall bind all of the successors
and assigns of Guarantor and shall inure to the benefit of Landlord, its successors and assigns.

12. Remedies Cumulative. All rights and remedies of Landlord hereunder and under the
Master Lease and the New London Lease are cumulative and may be pursued simultaneously or in
whichever order Landlord shall determine.

13. Terms. Each capitalized term not specifically defined in this Guaranty shall have
the same meaning as is ascribed to it in the Master Lease and/or the New London Lease. As used
herein, and when required by the context, each number (singular and plural) shall include all
numbers, and each gender shall include all genders; and unless the context otherwise requires, the
word “person” or “party” shall include “individual, corporation, company, firm, partnership or
association.”

14. Multiple Guarantors; Joint and Several Liability. If less than all persons who
were intended to sign this Guaranty do so, the same shall nevertheless be binding upon those who do
sign and if one person shall sign, all plural references shall be read as singular. If Guarantor
consists of more than one person or entity, the obligations of such persons and entities hereunder
shall be joint and several. A separate action may be brought or prosecuted against any Guarantor
whether the action is brought or prosecuted against any other Guarantor or Master Tenant, or all,
or whether any other Guarantor or Master Tenant, or all, are joined in the action. Landlord may
compromise or settle with any one or more of Guarantors for such sums, if any, as it may see fit
and may in its discretion release any one or more of Guarantors from any further liability to
Landlord without impairing, affecting or releasing the right of Landlord to proceed against any one
or more of Guarantors not so released.

15. Notices. Any notice or demand given or made under this Guaranty shall be given or
made by mailing the same by certified mail to the party to whom the notice or demand is given or
made at the address of such party set forth in this Guaranty as may be changed by written notice
from time to time.

16. Landlord’s Remedies. Landlord may exercise all of its rights and remedies
hereunder immediately upon the occurrence of a Default beyond all applicable notice, grace and cure
periods expressly stated in the Master Lease, the New London Lease or this Guaranty.

[Signatures follow on the next page.]

1

IN WITNESS WHEREOF, Guarantor has caused this Guaranty to be executed and delivered by its
duly authorized officer as of the date first above written.

GUARANTOR:

	 	 	 
	LTC CONSULTING, L.P.

	By:

	 	/s/ James J. Andrews
	
 
	 	 

	 	 	Name: James J. Andrews

Title: President

	 	 	 
	CONGRESS STREET PARTNERS, L.P.

	By:

	 	/s/ James J. Andrews
	
 
	 	 

	 	 	Name: James J. Andrews

Title: President

	 	 	 
	PHARR COURT ASSOCIATES, L.P.

	By:

	 	/s/ James J. Andrews
	
 
	 	 

	 	 	Name: James J. Andrews

Title: President

	 	 	 
	IRVING PLACE ASSOCIATES, L.P.

	By:

	 	/s/ James J. Andrews
	
 
	 	 

	 	 	Name: James J. Andrews

Title: President

	 	 	 
	HAMILTON MILL ASSOCIATES, L.P.

	By:

	 	/s/ James J. Andrews
	
 
	 	 

	 	 	Name: James J. Andrews

Title: President

[Signatures continue on the following page.]

2

	 	 	 
	FACILITY INVESTMENTS, L.P.

	By:

	 	/s/ James J. Andrews
	
 
	 	 

	 	 	Name: James J. Andrews

Title: President

	 	 	 
	SOUTH PARKWAY ASSOCIATES, L.P.

	By:

	 	/s/ James J. Andrews
	
 
	 	 

	 	 	Name: James J. Andrews

Title: President

WELLINGTON HEALTHCARE PROPERTIES, L.P.

By: /s/ James J. Andrews

Name: James J. Andrews

Title: President

	 	 	 
	RIVERSIDE HEALTHCARE, L.P.

	By:

	 	/s/ James J. Andrews
	
 
	 	 

	 	 	Name: James J. Andrews

Title: President

	 	 	 
	ENGLAND ASSOCIATES, L.P.

	By:

	 	/s/ James J. Andrews
	
 
	 	 

	 	 	Name: James J. Andrews

Title: President

SCHEDULE “A-1”

Facility Name: Rockdale Healthcare Center

Facility Address: 1510 Renaissance Drive, Conyers, Georgia

Legal Description:

ALL THAT TRACT OR PARCEL OF LAND lying and being in Land Lot 327 of the 16th Land District,
Rockdale County, City of Conyers, Georgia, containing 5.038 acres and being more particularly
described as follows:

TO FIND THE TRUE POINT OF BEGINNING, begin at a point formed by the intersection of the
northeasterly 100 foot right-of-way of Sigman Road, and the northwesterly 50 foot right-of-way of
Renaissance Drive; thence proceeding N 47°-09’-43” E along the right-of-way of Renaissance Drive, a
distance of 936.30 feet to a point; thence along a curve to the left an arc distance of 21.22 feet
and a radius of 20 feet to a point, said arc being subtended by a chord of N 16°-46’-17” E, 20.24
feet; thence N 13°-37’-09” W, a distance of 60.74 feet to a point; thence N 47°-09’-43 E, a
distance of 19.38 feet to a chisled hole in a catch basin lid, the TRUE POINT OF BEGINNING;

THENCE North 63 degrees 17 minutes 49 seconds West for a distance of 407.99 feet to a 1/2” iron pin
found,

THENCE North 14 degrees 50 minutes 59 seconds East for a distance of 20.00 feet to a 3/4” crimp top
pin found,

THENCE North 14 degrees 50 minutes 59 seconds East for a distance of 324.88 feet to a 1/2” re-bar
found,

THENCE North 08 degrees 12 minutes 01 seconds East for a distance of 20.00 feet to a 1/2” re-bar
found,

THENCE South 81 degrees 42 minutes 06 seconds East for a distance of 17.00 feet to a 1/2” iron pin
set,

THENCE North 19 degrees 40 minutes 14 seconds East for a distance of 138.10 feet to a 1” solid pin
found,

THENCE South 70 degrees 52 minutes 45 seconds East for a distance of 399.39 feet to a 1/2” iron pin
set,

THENCE South 16 degrees 33 minutes 39 seconds West for a distance of 507.63 feet to a 1/2” re-bar
set,

THENCE South 16 degrees 33 minutes 39 seconds West for a distance of 36.88 feet to a mag nail set,

THENCE South 47 degrees 09 minutes 43 seconds West for a distance of 16.66 feet to a chisled hole
in a catch basin lid, the TRUE POINT OF BEGINNING.

3

SCHEDULE “A-2”

Facility Name: Sea Breeze Health Care Center

Facility Address: 550 Congress Street, Mobile, AL

Legal Description:

Beginning at an iron marker at the northwest intersection of Congress Street and Martin Luther
King, Jr. Avenue, said point also being the southeast corner of Lot 3, Block 26-D, Third Unit,
Water Street Area, Urban Renewal Project, Alabama R-34 Subdivision, as per plat recorded in Map
Book 19, Page 134 of the Probate Records of Mobile County, Alabama; run thence South 67 degrees 19
minutes 47 seconds West along the north right-of-way line of Congress Street 366.27 feet to the
point of a curve to the right, said curve having a delta angle of 90 degrees 03 minutes 53 seconds,
radius of 20.0 feet, tangent of 20.02 feet; thence run along arc of said curve 31.44 feet to the
point of tangent thereof; thence North 22 degrees 36 minutes 20 seconds West along easterly
right-of-way line of Warren Street 276.42 feet to the point of a curve to the right, said curve
having a delta angle of 90 degrees 21 minutes 49 seconds, radius of 25.0 feet, tangent of 25.16
feet; thence along arc of said curve 39.43 feet to the point of tangent thereof; thence North 67
degrees 45 minutes 29 seconds East 25.06 feet to the point of a curve to the right, said curve
having a delta angle of 44 degrees 11 minutes 02 seconds, radius of 25.0 feet, tangent of 10.15
feet; thence along arc of said curve 19.28 feet to the point of tangent thereof; thence South 68
degrees 03 minutes 29 seconds East along southwest right-of-way line of Martin Luther King, Jr.
Avenue, 140.21 feet to the point of a curve to the right, said curve having a delta angle of 56
degrees 37 minutes 58 seconds, radius of 25.0 feet, tangent of 13.47 feet; thence along arc of said
curve 24.71 feet to the point of tangent thereof, said point also being the point of a curve to the
left, said curve having a radius of 75.0 feet from center-line of Martin Luther King, Jr. Avenue;
thence along arc of said curve 161.08 feet to a point; thence South 68 degrees 03 minutes 29
seconds East along southwest right-of-way line of Martin Luther King, Jr. Avenue 154.69 feet to the
POINT OF BEGINNING.

4

SCHEDULE “A-3”

Facility Name: Nurse Care of Buckhead

Facility Address: 2920 Pharr Court South, Atlanta, GA

Legal Description:

ALL THAT TRACT OR PARCEL OF LAND lying and being in Land Lot 100 of the 17th District,
Fulton County, Georgia and being more particularly described as follows:

To reach the POINT OF BEGINNING commence at a point formed by the westerly right-of-way of Pharr
Court South (50’ R/W) and the southerly right-of-way of Pharr Road (50’ R/W) and proceed in a
southwesterly direction along the westerly right-of-way of Pharr Court South (50’ R/W) the
following courses and distances: 1) South 05°41’26” West a distance of 40.54 feet to a point; 2)
thence 83.51 feet along the arc of a curve to the right, said curve having a radius of 265.00 feet
and being subtended by a chord of South 14°43’08” West, 83.17 feet to a point; 3) thence South
23°44’50” West a distance of 135.80 feet to a point; 4) thence 155.00 feet along the arc of a curve
to the left, said curve having a radius of 442.00 feet and being subtended by a chord of South
13°42’04” West, 154.21 feet to a point; 5) thence South 03°39’18” West a distance of 25.15 feet to
the POINT OF BEGINNING; from the POINT OF BEGINNING thus established, continue in a southwesterly
direction along the westerly right-of-way of Pharr Court South the following courses and distances:
1) South 03°39’18” West a distance of 47.40 feet to a point; 2) thence 131.68 feet along the arc
of a curve to the right, said curve having a radius of 350.00 feet and being subtended by a chord
of South 14°26’01” West, 130.91 feet to a point; 3) thence South 25°12’44” West a distance of 90.45
feet to a point; thence departing said right-of-way of Pharr Court South and run North 64°37’09”
West a distance of 298.19 feet to a point; thence North 25°22’51” East a distance of 209.25 feet to
an iron pin found (1/2” re-bar); thence North 66°58’00” East a distance of 186.32 feet to a
concrete monument found; thence South 31°37’30” East a distance of 157.20 feet to a point on the
westerly right-of-way of Pharr Court South and the POINT OF BEGINNING; said property containing
1.91557 acres or 83,442 square feet.

5

SCHEDULE “A-4”

Facility Name: Nursecare Nursing & Rehab Center (also referred to as Nurse Care of
Shreveport)

Facility Address: 1736 Irving Place, Shreveport, LA

Legal Description:

Lot 1, Texarkana Annex, Unit No. 2, a subdivision of the City of Shreveport, Caddo Parish,
Louisiana, as per plat thereof recorded in Book 7000, page 75 of the Conveyance Records of Caddo
Parish, Louisiana.

6

SCHEDULE “A-5”

Facility Name: Bell Minor Home

Facility Address: 2200 Old Hamilton Place, N.E., Gainesville, GA

Legal Description:

ALL THAT TRACT OR PARCEL OF LAND LYING AND BEING IN GMD DISTRICT 411, CITY OF GAINESVILLE, HALL
COUNTY, GEORGIA, AND BEING MORE PARTICULARLY DESCRIBED AS FOLLOWS:

BEGINNING AT A NAIL FOUND ON THE EASTERLY RIGHT OF WAY OF OLD HAMILTON PLACE (HAVING A 50 FOOT
RIGHT OF WAY WIDTH) LOCATED A DISTANCE OF 202.81 FEET AS MEASURED ALONG SAID RIGHT OF WAY FROM THE
INTERSECTION WITH THE NORTHERLY RIGHT OF WAY OF CORNELIA HIGHWAY; THENCE FROM SAID POINT OF
BEGINNING AS THUS ESTABLISHED FOLLOWING A COUNTERCLOCKWISE CURVE WITH AN ARC DISTANCE OF 26.13
FEET, HAVING A RADIUS OF 793.37 FEET, SUBTENDED BY A CHORD BEARING AND DISTANCE OF NORTH 55 DEGREES
06 MINUTES 59 SECONDS WEST, 26.13 FEET TO A POINT; THENCE NORTH 56 DEGREES 03 MINUTES 36 SECONDS
WEST, A DISTANCE OF 140.43 FEET TO A POINT; THENCE FOLLOWING A CLOCKWISE CURVE WITH AN ARC DISTANCE
OF 266.18 FEET, HAVING A RADIUS OF 325.08 FEET, SUBTENDED BY A CHORD BEARING AND DISTANCE OF NORTH
32 DEGREES 36 MINUTES 08 SECONDS WEST, 258.81 FEET TO A POINT; THENCE NORTH 09 DEGREES 08 MINUTES
40 SECONDS WEST, A DISTANCE OF 74.90 FEET TO A POINT; THENCE FOLLOWING A CLOCKWISE CURVE WITH AN
ARC DISTANCE OF 196.08 FEET, HAVING A RADIUS OF 125.08 FEET, SUBTENDED BY A CHORD BEARING AND
DISTANCE OF NORTH 35 DEGREES 45 MINUTES 55 SECONDS EAST, 176.61 FEET TO A POINT; THENCE NORTH 80
DEGREES 40 MINUTES 30 SECONDS EAST, A DISTANCE OF 240.49 FEET TO A 1/2 INCH REBAR FOUND; THENCE
SOUTH 86 DEGREES 34 MINUTES 10 SECONDS EAST, A DISTANCE OF 51.95 FEET TO A 1/2 INCH REBAR FOUND;
THENCE NORTH 78 DEGREES 21 MINUTES 11 SECONDS EAST, A DISTANCE OF 78.02 FEET TO A 1/2 INCH REBAR
FOUND; THENCE SOUTH 09 DEGREES 09 MINUTES 40 SECONDS EAST, A DISTANCE OF 508.69 FEET TO A 1/2 INCH
REBAR FOUND; THENCE SOUTH 80 DEGREES 50 MINUTES 20 SECONDS WEST, A DISTANCE OF 233.85 FEET TO A 1/2
INCH REBAR FOUND; THENCE SOUTH 35 DEGREES 59 MINUTES 39 SECONDS WEST, A DISTANCE OF 50.43 FEET TO A
NAIL FOUND ON THE EASTERLY RIGHT OF WAY OF OLD HAMILTON PLACE BEING THE POINT OF BEGINNING.

7

SCHEDULE “A-6”

Facility Name: Westminster Commons

Facility Address: 560 St. Charles Avenue NE, Atlanta, GA

Legal Description:

All that tract or parcel of land lying and being in Land Lot 48 of the 14th District of
Fulton County, Georgia, and being more particularly described as follows:

Beginning at a 1/2 inch rebar set on the northerly right-of-way of St. Charles Avenue (50’ R/W) said
1/2 inch rebar set being 575.00 feet from its intersection with the easterly right-of-way of Monroe
Drive (f/k/a Boulevard); thence departing said right-of-way North 00 degrees 15 minutes 09 seconds
East a distance of 200.16 feet to a 1/2 inch rebar set on the southerly side of St. Charles Way;
thence along said southerly side of St. Charles Way South 89 degrees 53 minutes 22 seconds East a
distance of 100.00 feet to a nail found; thence departing said St. Charles Way South 00 degrees 15
minutes 10 seconds West a distance of 199.88 feet to a 1 inch pipe found on said right-of-way of
St. Charles Avenue; thence along said right-of-way South 89 degrees 57 minutes 14 seconds West a
distance of 100.00 feet to said 1/2 inch rebar set on the POINT OF BEGINNING.

8

SCHEDULE “A-7”

Facility Name: Parkway Health and Rehabilitation Center

Facility Address: 200 South Parkway West, Memphis, TN

Legal Description:

The Tennessee Property Associates, LLC property as recorded in Instrument Number 05016884 in the
Shelby County Register’s Office being Lots 1, 2, 3 and 4, Block 3 in the Kansas Street Urban
Renewal Area Project No. Tennessee A-11-2 and being more particularly described as follows:

BEGINNING at a found chisel mark being a point of curvature in the east line of Louisiana Street
(68 R.O.W.) being 25.19 feet southwardly at the tangent intersection of the east line of Louisiana
Street and the south line of Rowe Avenue (50’ R.O.W.); thence eastwardly along a curve to the right
having a radius of 25.00 feet, a central angle of 90 degrees 26 minutes 35 seconds, a chord bearing
of North 48 degrees 38 minutes 40 seconds East, a chord distance of 35.49 feet, a distance along
its arc of 39.46 feet to a found iron pin being a point of tangency in the south line of Rowe
Avenue (50 R.O.W.); thence South 86 degrees 08 minutes 03 seconds East along said south line a
distance of 127.75 feet to a found iron pin being a point of curvature; thence southwardly along a
curve to the right having a radius of 25.00 feet, a central angle of 89 degrees 23 minutes 25
seconds, a chord bearing of South 41 degrees 26 minutes 20 seconds East, a chord distance of 35.17
feet, a distance along its arc of 39.00 feet to a found iron pin being a point of tangency in the
west line of Fairview Street (50’ R.O.W.); thence South 03 degrees 15 minutes 22 seconds West along
said west line a distance of 372.54 feet to a point of curvature; thence eastwardly along a curve
to the left having a radius of 100.00 feet, a central angle of 89 degrees 23 minutes 19 seconds, a
chord bearing of South 41 degrees 26 minutes 18 seconds East, a chord distance of 140.66 feet, a
distance along its arc of 156.01 feet to a point of tangency in the south line of Goodloe Avenue;
thence South 86 degrees 07 minutes 57 seconds East along said south line a distance of 165.44 feet
to a found iron pin being the northwest corner of the Memphis Housing Authority property (deed
reference not available); thence South 03 degrees 20 minutes 25 seconds West along the west line of
the Memphis Housing Authority property and the west line of the City of Memphis property (deed
reference not available) a distance of 200.02 feet to a set chisel mark in the north line of the
South Parkway West (100’ R.OW.); thence North 86 degrees 06 minutes 46 seconds West along said
north line a distance of 414.03 feet to a point of curvature; thence northwardly along a curve to
the right having a radius of 30.00 feet, a central angle of 89 degrees 32 minutes 08 seconds, a
chord bearing of North 41 degrees 20 minutes 42 seconds West, a chord distance of 42.25 feet, a
distance along its arc of 46.88 feet to a point of tangency in the east line of said Louisiana
Street; thence North 03 degrees 25 minutes 22 seconds East along said east line a distance of
641.11 feet to the POINT OF BEGINNING.

Being the same property conveyed by Deed of record at Instrument No. GM 0706, in the Register’s
Office of Shelby County, Tennessee.

9

SCHEDULE “A-8”

Facility Name: Millington Healthcare Center

Facility Address: 5081 Easley Street

Legal Description:

Land in the City of Millington, Shelby County, Tennessee, being Lot 2, Final Plan, Wesley of
Millington Subdivision, as shown on the plat of record in Plat Book 134, Page 73, Register’s Office
of Shelby County, Tennessee, to which reference is made for a more particular description.

Together with an easement for vehicular and pedestrian ingress and egress created by the
Ingress-Egress Easement Agreement of record in Instrument No. CZ-0434, said Register’s Office.
(Appurtenant Easement No. 1)

Together with an easement for ingress and egress created by the Easement of record in Instrument
No. K4-7441, said Register’s Office. (Appurtenant Easement No. 2)

Together with the ingress and egress easement created by and delineated on the Plan of Wesley of
Millington Subdivision of record in Plat Book 134, Page 73, said Register’s Office. (Appurtenant
Easement No. 3)

Being the same property conveyed to West Point Road Associates, L.P., formerly West Point Road
Associates, LLC, by deed from Easley Place, Inc. of record in Instrument No. 07109985, Register’s
Office of Shelby County, Tennessee.

10

SCHEDULE “A-9”

Facility Name: Riverside Health Care Center

Facility Address: 5100 West Street

Legal Description:

ALL THAT TRACT OR PARCEL OF LAND lying and being in Land Lot 267 of the 9th District of
Newton County, Georgia, City of Covington, as shown and delineated on that Survey for SouthTrust
Bank of Alabama, National Association and First American Title Insurance Company and Walnut Street
Investors, Inc. prepared by Tommy M. Donaldson, Jr., Georgia Registered Land Surveyor No. 1617 of
Tribble & Richardson, Inc., dated March 28, 1988, filed April 5, 1988, recorded in Plat Book 22,
Page 125, Newton County, Georgia Records; and being more particularly described as follows:

BEGINNING at the intersection of the easterly right-of-way line of West Street (50 foot
right-of-way) and the northerly right-of-way line of Herring Street (40 foot right-of-way) and
running along said easterly right-of-way line of West Street, N 00° 57’32” E, 580.70 feet to a
rebar found on the southerly right-of-way line of Echols Street (40 foot right-of-way); thence
leaving the easterly right-of-way line of West Street and running along the southerly right-of-way
line of Echols Street, S 88° 57’59” E, 240.75 feet to a rebar found; thence leaving the southerly
right-of-way line of Echols Street and running S 02° 39’07” E, 282.00 feet to a rebar found; thence
running S 88° 54’28” E, 39.98 feet to a rebar found; thence running S 10° 29’55” E, 351.03 feet to
a rebar found on the northerly right-of-way line of Herring Street (40 foot right-of-way); thence
running along the northerly right-of-way line of Herring Street N 83° 44’57” W, 105.52 feet to a
point; thence running N 81° 46’30” W, 99.50 feet to a point; thence running N 81° 07’10” W, 165.98
feet to a point located on the easterly right-of-way line of West Street and the POINT OF
BEGINNING.

11

SCHEDULE “A-10”

Facility Name: New London Health Center

Facility Address: 2020 McGee Road, Snellville, Georgia

Legal Description:

All that tract or parcel of land lying and being in Land Lot 8 of the 5th District, City
of Snellville, Gwinnett County, Georgia, and being more particularly described as follows:

To find the POINT OF BEGINNING commence at an iron pin placed (1/2” re-bar at the base of a bent ?
re-bar) at the intersection formed by the Southeasterly right-of-way line of Manor Court (50’R/W)
with the Northeasterly right-of-way line of McGee Road (80’R/W) and proceed in a Southeasterly
direction along the Northeasterly right-of-way line of McGee Road (80’R/W), South 63°28’47” East
for a distance of 402.47 feet to an iron pin found (?” re-bar) and the POINT OF BEGINNING:

From the POINT OF BEGINNING thus established, depart said Northeasterly right-of-way line of McGee
Road (80’R/W) and proceed North 62°14’45” East a distance of 184.80 feet to an iron pin placed (1/2”
re-bar); thence North 28°35’54” West for a distance of 210.20 feet to an iron pin placed (1/2”
re-bar); thence North 62°37’38” East for a distance of 1192.00 feet to an iron pin found (1-?” x 3/4”
steel rod); thence South 30°07’52” East for a distance of 153.21 feet to an iron pin found (?”
re-bar); thence South 50°57’47” West for a distance of 1250.24 feet to an iron pin placed (1/2”
re-bar) on the Northeasterly right-of-way line of McGee Road (80’R/W), thence in a Northwesterly
direction along the Northeasterly right-of-way line of McGee Road (80’R/W), North 65°58’53” West
for a distance of 248.80 feet to an iron pin found (?” re-bar) and the POINT OF BEGINNING. Said
tract or parcel containing 8.05777 acres or 350,997 square feet.

12EX-10.36

OPERATING LEASE

BETWEEN

G&E HC REIT II Snellville SNF, LLC

as Landlord

AND

England Associates, L.P.

as Tenant

Dated: as of January 10, 2012

TABLE OF CONTENTS

	 	 	 
	SCHEDULE “A”

SCHEDULE “B”

SCHEDULE “C”

SCHEDULE “D”

SCHEDULE “E”

SCHEDULE “F”

SCHEDULE “G”

SCHEDULE “H”

SCHEDULE “I”

	 	PREMISES

ENVIRONMENTAL REPORT

FORM OF LETTER OF CREDIT

DEFINITIONS

LICENSED BED CAPACITY

FORM OF GUARANTY

FORM OF SUBORDINATION, NON-DISTURBANCE AGREEMENT

FORM OF REPRESENTATION LETTER

FORM OF AUDIT LETTER

OPERATING LEASE

THIS OPERATING LEASE (the “Lease”) is made as of the 10th day of January, 2012, (the
“Effective Date”) between G&E HC REIT II Snellville SNF, LLC, a Delaware limited liability company
(“Landlord”), and England Associates, L.P., a Georgia limited partnership (“Tenant”).

RECITALS

WHEREAS, Landlord is the owner of the land described on Schedule A and the
improvements located thereon (the “Premises”) and certain personal property located thereon and
used in connection with the ownership and operation thereof and operation of the business conducted
thereon (the “Personal Property”);

WHEREAS, Tenant desires to lease the Premises and the Personal Property (collectively, the
“Property”) from Landlord, and Landlord agrees to so lease the Property upon the terms and
conditions set forth in this Lease.

NOW, THEREFORE, for good and valuable consideration, the receipt, sufficiency and fairness of
which are hereby acknowledged, Landlord and Tenant, for themselves, and their administrators, legal
representatives, successors and permitted assigns, hereby covenant as follows:

ARTICLE A

CERTAIN LEASE PROVISIONS

	 	 	 
	1. Address for the Premises:
	 	As set forth on Schedule “A”.

	 	 	 

	2. (a) “Term”:
	 	Fifteen (15) Lease Years, beginning on

the Commencement Date (as defined below)

and ending on the Expiration Date (as

defined below).

	(b) “Commencement

Date”
	 	The Effective Date of this Lease

	(c) “Expiration Date”
	 	The last day of the fifteenth

(15th) Lease Year, as may be

extended for an Extended Term pursuant to

Article 24 hereof, unless sooner

terminated pursuant to this Lease.

	 	 	 

	3. “Base Rent” for the Premises
	 	For the first Lease Year (as defined

below), Base Rent per annum shall be the

amount listed below and shall be paid in

advance in equal consecutive monthly

installments in the amount listed below

on the first day of each month (“Initial

Base Rent”):

	 	 	Initial Annual Base Rent: $2,365,580.00

	 	 	 

	 	 	Initial Monthly Base Rent: $197,131.67

	 	 	 

	4. Use of Premises:
	 	The operation of the Facility (as defined

herein) and other lawful uses incident

thereto.

	5. “Extended Term”:
	 	Two (2) options to extend the Term for

the additional periods and at the rental

as determined pursuant to the provisions

of Article 24. The extension periods

shall be ten (10) years each.

	 	 	 

	Address for Notice:
	 	

	For Landlord:
	 	c/o Grubb & Ellis Healthcare REIT II, Inc.

1551 N. Tustin Ave., Ste 300

Santa Ana, CA 92705

Attention: President and COO

	For Tenant:
	 	c/o Wellington Healthcare Services, L.P.

20 Mansell Court East

Suite 200

Roswell, GA 30076

Attention: General Counsel

	Address for Rent Payment:
	 	c/o Grubb & Ellis Healthcare REIT II, Inc.

3133 E Camelback Road, Ste 100

Phoenix AZ 85016

ARTICLE B

CERTAIN DEFINITIONS

This Lease utilizes capitalized terms that have specific meaning. These terms and their
definition (or references to the Section containing their definition) are set forth on
Schedule “D” attached to this Lease.

ARTICLE C

LANDLORD’S REPRESENTATIVE

Landlord hereby appoints Danny Prosky (the “Landlord’s Representative”) as the agent and
lawful attorney-in-fact of Landlord to act for Landlord for all purposes and actions of Landlord
under this Lease, and Tenant shall be entitled to conclusively rely on any action taken or notice
given by Landlord’s Representative as being by or from Landlord in respect of this Lease. All
notices, consents, waivers and all other documents and instruments executed by Landlord’s
Representative pursuant to the Lease from time to time and all other actions of Landlord’s
Representative on behalf of Landlord under the Lease shall be binding upon every entity comprising
Landlord. All notices or communications from Tenant to the Landlord’s Representative shall be
conclusively deemed to have been communicated or delivered to Landlord in accordance with the terms
of this Lease. Landlord may designate a different individual to serve as Landlord’s
Representative, provided that no such designation shall be effective as to Tenant unless and until
Landlord delivers written notice thereof to Tenant.

ARTICLE 1

PREMISES AND TERM; PERMITTED EXCEPTIONS

Section 1.1 During the Term, Landlord, in consideration of the Rents herein reserved and of
the terms, provisions, covenants and agreements on the part of Tenant to be kept, observed and
performed, does hereby lease and demise the Premises unto Tenant, and Tenant does hereby hire and
take the Premises from Landlord, subject to the Permitted Exceptions, any future easements, rights
of way, covenants, conditions and restrictions, encroachments, licenses, notices of pendency,
zoning laws, ordinances, regulations, building codes, Requirements and other Applicable Laws
affecting the Premises, the terms, provisions, covenants and agreements set forth herein and any
liens, encumbrances and charges arising by, through or under Tenant; provided, however, that the
foregoing shall not include any liens, encumbrances or charges arising by, through or under
Landlord unless Tenant has received the Non-Disturbance Agreement contemplated by
Section 10.1 or except as otherwise expressly permitted under the terms of this Agreement.

Section 1.2 Tenant shall lease the Premises for the Term, unless sooner terminated as
hereinafter provided or pursuant to Applicable Law.

Section 1.3 Title to the Premises shall be subject to those exceptions listed as “Permitted
Exceptions” on Schedule A (collectively, the “Permitted Exceptions”), and Tenant agrees
that its use and occupancy of the Premises shall be subject to the terms and conditions of said
Permitted Exceptions.

Section 1.4 Intentionally Omitted.

ARTICLE 2

BASE RENT; SUPPLEMENTARY RENT

Section 2.1

(a) Tenant shall pay to Landlord as Base Rent for the Premises during the Term the amounts
stated in Article A, Section 3 (“Base Rent”). Base Rent shall be payable in equal
monthly installments in advance on the first day of each and every month during the Term, without
previous demand, notice or presentment therefor and without abatement, offset or deduction of any
kind whatsoever, except for and only to the extent of any amounts owing to Landlord hereunder that
Mortgagee requires Tenant to pay directly to Mortgagee under the terms of the Mortgage Loan
Documents and which Tenant has timely and fully paid directly to Mortgagee. Notwithstanding the
foregoing, Tenant shall pay the partial month’s installment of Base Rent (with respect to the
remaining days of the month in which the Commencement Date occurs) upon the Commencement Date of
this Lease. If Tenant fails to pay any installment of Base Rent within five (5) Business Days of
when due hereunder, Tenant shall owe Landlord, in addition to the installment of Base Rent,
interest on such installment at the Default Rate.

(b) As used herein, the term “Lease Year” means a period of twelve (12) calendar months
commencing on the Commencement Date and ending on the day immediately preceding the first
(1st) anniversary of the Commencement Date (if the Commencement Date occurs on the first
(1st) day of a month) or the last day of the month during which the first
(1st) anniversary of the Commencement Date occurs (if the Commencement Date occurs on a
day other than the first (1st) day of a month), and each successive twelve (12) month
period thereafter during the Term until the Expiration Date.

(c) On the first day of the second Lease Year and on the first day of each Lease Year
thereafter during the Term, the annual Base Rent payable under this Lease shall increase by the
lesser of (i) two and nine-tenths percent (2.9%) and (ii) the annual average CPI for the
immediately preceding Lease Year; provided, however, that such annual Base Rent amount payable
hereunder shall increase by no less than two percent (2.0%) per Lease Year.

Section 2.2 Tenant shall also pay and discharge as supplementary rent (the “Supplementary
Rent”) all other amounts, liabilities and obligations of whatsoever nature relating to the
Premises, including, without limitation, all Impositions, those amounts, liabilities and
obligations arising under this Lease, any Applicable Laws or Requirements, easements, restrictions,
or other similar agreements affecting the Premises or any adjoining property thereto in effect on
the date hereof, and all interest and penalties that may accrue thereon in the event of Tenant’s
failure to pay such amounts when due, and all damages, costs and expenses which Landlord may incur
by reason of any Default of Tenant or failure on Tenant’s part to comply with the terms of this
Lease, all of which Tenant hereby agrees to pay within ten (10) days after written demand or such
greater period as is otherwise provided herein. Notwithstanding anything herein to the contrary,
Supplementary Rent shall not include any amounts owing under or in respect of any Mortgage or other
monetary lien or encumbrance arising by, through or under Landlord, except to the extent such
amounts arise as a result of (i) an Event of Default or (ii) an event of default by Tenant under
any Mortgage Loan Documents to which Tenant is a party. Upon any failure by Tenant to pay any of
the Supplementary Rent, such unpaid Supplementary Rent shall accrue interest at the Default Rate
and Landlord shall have all legal, equitable and contractual rights, powers and remedies provided
either in this Lease or by statute, at law, in equity or otherwise in the case of nonpayment of the
Base Rent. The term Supplementary Rent shall be deemed rent for all purposes hereunder other than
with respect to Tenant’s internal accounting procedures.

Section 2.3 All Base Rent and Supplementary Rent payable hereunder (collectively, “Rent”)
shall be made payable to Landlord and sent to Landlord’s address set forth in Article A or
to such other person or persons or at such other place as may be designated by written notice from
Landlord to Tenant, from time to time, at least thirty (30) days in advance, and shall be made in
United States currency which shall be legal tender for all debts, public and private. Tenant may
pay all Rent payable hereunder when due by wire transfer of immediately available funds to an
account designated from time to time by Landlord. Notwithstanding the foregoing, Impositions shall
be payable to the parties to whom they are due, except as otherwise provided herein. The terms and
conditions of this Section are subject to the terms and conditions of Section 2.5 until
Mortgagee otherwise notifies Tenant in writing.

Section 2.4 This Lease shall be deemed and construed to be a bond lease, absolutely net to
Landlord, and Tenant shall pay to Landlord, absolutely net throughout the Term, the Rent, free of
any charges, assessments, impositions or deductions of any kind and without abatement, deduction or
set-off whatsoever, except for and only to the extent of any amounts owing to Landlord hereunder
that Mortgagee requires Tenant to pay directly to Mortgagee under the terms of the Mortgage Loan
Documents and which Tenant has timely and fully paid directly to Mortgagee. Under no circumstances
or conditions, whether now existing or hereafter arising, or whether beyond the present
contemplation of the parties, shall Landlord be expected or required to make any payment of any
kind whatsoever or be under any other express or implied obligation or liability hereunder, except
as herein otherwise expressly set forth in Section 3.5 and Tenant hereby waives all
Applicable Laws and Requirements to the contrary. Tenant shall pay all costs, expenses and charges
of every kind and nature relating to the Premises from and after the Commencement Date, including,
without limitation, all taxes, costs of improvements, maintenance, repairs, alterations, additions,
replacements, and insurance and other Impositions, except debt service on any Mortgage or any other
indebtedness or other monetary lien or encumbrance arising by, through or under Landlord or any
rent or other charges under any Superior Lease, which may arise or become due or payable prior to,
during or after (but attributable to a period falling prior to or within) the Term.
Notwithstanding anything herein to the contrary, Tenant shall be responsible for (and shall
reimburse Landlord within thirty (30) days after written demand therefor) all costs, expenses and
charges owing under or in respect of any Mortgage, Mortgage Loan Document or other monetary lien or
encumbrance arising by, through or under Landlord to the extent such costs, expenses or charges
arise as a result of (i) an Event of Default or (ii) an event of default by Tenant under any
Mortgage Loan Documents to which Tenant is a party. Unless otherwise expressly provided in this
Lease, Tenant’s obligation to pay Rent hereunder shall not terminate prior to the actual date
contemplated by Landlord and Tenant and specifically set forth in Article A,
Section 2(c) for the expiration of the Term, notwithstanding the exercise by Landlord of
any or all of its rights under Article 12 hereof, and the obligations of Tenant hereunder
shall not be affected by reason of: any prohibition, interruption, limitation, restriction or
prevention of Tenant’s use, occupancy or enjoyment of the Premises or any part thereof, or any
interference with such use, occupancy or enjoyment by any person or for any reason, any matter
affecting title to the Premises, any eviction by paramount title or otherwise, any default by
Landlord hereunder, the impossibility, impracticability or illegality of performance by Landlord,
Tenant or both, any action of any Governmental Authority, Tenant’s acquisition of ownership of all
or part of the Premises (unless this Lease shall be terminated by a writing signed by all Persons,
including any Mortgagee, having an interest in the Premises), any breach of warranty or
misrepresentation, or any other cause whether similar or dissimilar to the foregoing and whether or
not Tenant shall have notice or knowledge thereof and whether or not such cause shall now be
foreseeable. The parties intend that the obligations of Tenant under this Lease shall be separate
and independent covenants and agreements and shall continue unaffected unless such obligations have
been modified or terminated pursuant to an express provision of this Lease.

Section 2.5 Tenant acknowledges that all of the interest of Landlord in and to this Lease may
be assigned to a present or future Mortgagee pursuant to a Mortgage and other loan documents in
connection therewith, and that under the terms thereof, all Rent under this Lease may be regained
to be paid directly to Mortgagee or its designee in accordance with the provisions contained
therein. Tenant hereby agrees, after notice, to so pay all such Rent directly to Mortgagee or its
designee as and when same are due and payable under this Lease by wire transfer pursuant to the
wire transfer instructions set forth in such notice. Landlord acknowledges that any such
disbursement of the appropriate amounts to Mortgagee shall satisfy Tenant’s Rent payment
obligations under this Lease.

Section 2.6 Tenant and Landlord agree and acknowledge that the parties intend the Lease to be
classified as a “true lease” for Federal income tax and all other proposes and that this Lease does
not represent a financing agreement. Each party shall reflect the transaction represented hereby in
all applicable books, records and reports (including income tax filings) in a manner consistent
with “true lease” treatment rather than “financing” treatment.

Section 2.7 If the aggregate fair market value of the personal property (for purposes of
Section 856(d)(1)(c) of the Code) leased to Tenant under this Lease equals an amount which, as
determined in the sole discretion of Landlord, (a) would cause any Rent otherwise payable to
Landlord under this Lease to be treated as other than “rents from real property” for purposes of
Section 856(c)(2) and (c)(3) of the Code, and/or (b) would subject Landlord to a material risk of
failing to satisfy the requirements of Section 856(c)(4) of the Code, Tenant and Landlord agree to
use their respective commercially reasonable efforts (at no cost to Tenant) to effect the
assignment of such personal property to an Affiliate of Landlord or a third party and the
subsequent lease by Tenant of such personal property from such Affiliate or third party; provided,
however, the aggregate rent payable by Tenant under this Lease and such lease of personal property
shall not exceed the rent which Tenant would have paid under this Lease absent the assignment of
such personal property to an Affiliate of Landlord or a third party.

ARTICLE 3

IMPOSITIONS

Section 3.1 From and after the Commencement Date and throughout the Term, Tenant shall pay and
discharge not later than the due date therefor and prior to the date any fine, penalty, interest or
cost may be added thereto for the non-payment thereof, all taxes, assessments, water rents, storm
and sewer rents and charges, duties, impositions, license and permit fees, regulatory application
fees, assessments payable to any owner’s association or similar entity, governmental levies and
charges, and charges for public utilities of any kind, together with any interest or penalties
imposed upon the late payment thereof (except to the extent resulting from Landlord’s negligence or
willful misconduct), which, pursuant to past, present or future Applicable Law, during, prior to or
after (but attributable to a period falling prior to or within) the Term, shall have been or shall
be levied, charged, assessed, imposed upon or grow or become due and payable out of or for or have
become a lien on the Premises or any part thereof, any Buildings or personal property (including,
without limitation, Tenant’s Personal Property) in or on the Premises, the Rents and income payable
by Tenant or on account of any use of the Premises and such franchises as may be appurtenant to the
use and occupation of the Premises as well as any sales, use, excise, commercial rent, tangible
personal property and similar taxes imposed by any Governmental Authority or improvement district
in connection with the use or operation by Tenant of the Premises, the Facility, and the Tenant’s
Personal Property, and any interest and penalties assessed in connection therewith as a result of
late payment or non-payment of any of the foregoing (except to the extent resulting from Landlord’s
negligence or willful misconduct) or late filing or non-filing of any tax returns or reports due in
connection therewith (each of the foregoing being an “Imposition” and collectively “Impositions”);
provided, however, that Tenant’s obligation to pay directly to the applicable Governmental
Authority all regularly assessed ad valorem real estate taxes and assessments (“Real Estate Taxes”)
shall be suspended at Landlord’s election, and in such event Tenant shall comply with the terms and
provisions of Section 3.5 hereof (in which case Landlord or Mortgagee shall make such
payments and shall be responsible for all fines, penalties, interest and costs arising out of the
late payment or nonpayment thereof, except to the extent such amounts arise as a result of (i) an
Event of Default or (ii) an event of default by Tenant under any Mortgage Loan Documents to which
Tenant is a party). Notwithstanding anything herein to the contrary, Tenant shall not be obligated
to pay (and Landlord or Mortgagee shall not pay from the Imposition Reserve Fund) any franchise,
excise, corporate, estate, inheritance, succession or capital levy or tax of Landlord, any
intangibles or transfer tax payable as a result of any financing, refinancing, transfer or exchange
of the Premises by Landlord (except for transfers to or from Tenant or any of their Affiliates), or
any income, profits or revenue tax upon the income of Landlord, and none of the foregoing shall
constitute an Imposition for purposes hereof. The foregoing exclusions shall not include any
nursing home privilege or similar taxes on the business operations at the Facility, which shall be
the responsibility of Tenant. Tenant, upon request from Landlord, shall submit to Landlord the
proper and sufficient receipts or other evidence of payment and discharge of the same; provided,
however, Tenant shall not be required to furnish such receipts or other evidence for payment with
respect to Real Estate Taxes or with respect to Impositions that are being contested in accordance
with this Section. If any Impositions are not paid when due from Tenant under this Lease (other
than Real Estate Taxes), Landlord shall have the right, but shall not be obligated, to pay the same
following written notice to Tenant of such payment, provided Tenant is not contesting the same
pursuant to a right to do so herein. If Landlord shall make such payment, Landlord shall thereupon
be entitled to repayment by Tenant on demand as Supplementary Rent hereunder.

Section 3.2 Tenant shall have the right to protest and contest any Impositions imposed against
the Premises or any part thereof. If Tenant so elects to contest, Tenant shall, prior to the
prosecution or defense of any such claim, notify Landlord in writing of its decision to pursue such
contest and, to the extent procedurally required, or to prevent jeopardizing any license, permit or
certification, including, without limitation, any Health Care License or Medicare and Medicaid
certifications under Titles XVIII and XIX of the Social Security Act of 1935, as amended, because
of nonpayment thereof, Tenant shall pay the amount in question prior to initiating the contest.
Tenant’s right to contest is conditioned upon the following: (i) such contest is done at Tenant’s
sole cost and expense, (ii) nonpayment will not subject the Premises or any part thereof to sale or
other liability by reason of such nonpayment, (iii) such contest shall not subject Landlord or any
Mortgagee to the risk of any criminal or civil liability, and (iv) Tenant shall provide such
security as may reasonably be required by Landlord or any Mortgagee or under the terms of any
Mortgage or any loan documents in connection therewith to ensure payment of such contested
Impositions. Upon request, Tenant shall keep Landlord advised as to the status of such contest.
Subject to the provisions of clauses (i) through (iv) above, Landlord agrees to execute and deliver
to Tenant any and all documents reasonably acceptable to Landlord and otherwise required for such
purpose and to cooperate with Tenant in every reasonable respect in such contest, but without any
cost or expense to Landlord. If Landlord should actually receive proceeds of any such contest, to
the extent that the same relate to the period of the Term, then Landlord shall remit the same to
Tenant.

Section 3.3 To the extent permitted by Applicable Law, Tenant shall have the right to apply
for the conversion of any Impositions to make the same payable in annual installments over a period
of years. Tenant shall pay all such deferred installments prior to the expiration or sooner
termination of the Term, notwithstanding that such installments shall not then be due and payable,
unless such installments relate in part to any fiscal period after the Expiration Date (and no
interest, penalties or other fees are imposed on Landlord as a result of such deferred
installments); provided, however, that all Impositions relating to a fiscal period of the taxing
authority, a part of which is included in a period of time after the Expiration Date, or relating
to any special assessment for physical improvements with a useful life that extends beyond the
expiration of the Term, shall (whether or not such Impositions shall be assessed, levied,
confirmed, imposed or become payable, during the Term) be prorated between Landlord and Tenant as
of the Expiration Date, so that Landlord shall pay at its own expense (and not from the Imposition
Reserve Fund) that portion of such Impositions which relate to that part of such fiscal period
included in the period of time after the Expiration Date, and Tenant shall pay the remainder
thereof (which amount Landlord shall be entitled to withdraw from the Imposition Reserve Fund to
the extent funds are available therein).

Section 3.4 Intentionally Omitted.

Section 3.5 Within thirty (30) days following receipt of written notice from Landlord at any
time following, but only during the continuation of, an Event of Default, or within sixty (60) days
following receipt of written notice from Landlord at such time as an Event of Default is not
continuing, Tenant shall: (i) deposit with Landlord or Mortgagee on the first day of each month
after the Commencement Date until thirty (30) days prior to the date when the next installment of
Real Estate Taxes is due to the authority or other Person to whom the same is paid, an amount equal
to said next installment of Real Estate Taxes divided by the number of months over which such
deposits are to be made; and (ii) thereafter during the Term deposit with Landlord or Mortgagee an
amount each month to create a fund (“Imposition Reserve Fund”) which, as each succeeding
installment of Real Estate Taxes becomes due, will be sufficient, thirty (30) days prior to such
due date, to pay such installment in full based on the then outstanding tax bills, as increased by
the amount of any reasonably foreseen increases. Landlord or Mortgagee shall use reasonable efforts
to cause the monthly deposits to be equal in amount, but neither of them shall be liable in the
event that such required deposits are unequal. If at any time the amount of any Real Estate Tax is
increased, said monthly deposits shall be increased within thirty (30) days after written demand by
Landlord or Mortgagee so that, thirty (30) days prior to the due date for each installment of Real
Estate Taxes, there will be deposits on hand with Landlord or Mortgagee sufficient to pay such
installments in full. To the extent permitted by Applicable Law, Landlord or Mortgagee shall not
be required to deposit any such amounts in an interest-bearing account. For the purpose of
determining whether Landlord or Mortgagee has on hand sufficient moneys to pay any particular Real
Estate Tax at least thirty (30) days prior to the due date therefor, deposits for each category of
Real Estate Tax shall be treated separately, it being the intention that Landlord shall not be
obligated to use moneys deposited for the payment of an item not yet due and payable to the payment
of an item that is due and payable. Notwithstanding the foregoing, it is understood and agreed that
(a) to the extent permitted by Applicable Law, deposits provided for hereunder may be held by
Landlord or its Affiliate or Mortgagee in a single bank account and commingled with other funds of
Landlord or Mortgagee, and (b) Landlord or Mortgagee, may, if Tenant fails to make any deposit
required hereunder, use deposits made for any one item for the payment of the same or any other
item of Rent. If this Lease shall be terminated by reason of any Event of Default, all deposits
then held by Landlord shall be applied by Landlord on account of any and all sums due under this
Lease; if there is a resulting deficiency, Tenant shall pay the same, and if there is a surplus, or
if this Lease expires on the Expiration Date and no Default or Event of Default is occurring,
Tenant shall be entitled to a refund of the surplus or remaining balance of the fund. Tenant
acknowledges and agrees that no deficiency or lack of funds in the Imposition Reserve Fund shall
relieve Tenant of its obligation to pay all Impositions as required under this Lease. Upon thirty
(30) days prior written request of Tenant, and provided the same is permitted by the Mortgage Loan
Documents, Landlord (if such funds are held by Landlord) or Mortgagee shall apply the funds in the
Imposition Reserve Fund to payments of Real Estate Taxes required to be made by Tenant pursuant to
Section 3.1 hereof. In making any payment relating to the Imposition Reserve Fund,
Landlord or Mortgagee may do so according to any bill, statement or estimate procured from the
appropriate public office or provided by Tenant without inquiry into the accuracy of such bill,
statement or estimate or into the validity of any tax, assessment, sale, forfeiture, tax lien or
title or claim thereof.

Section 3.6 If Landlord ceases to have any interest in the Premises, Landlord shall transfer
to the Person who owns or acquires such interest in the Premises from Landlord and is the
transferee of this Lease, the deposits made pursuant to Section 3.5 hereof relating to the
Premises covered by this Lease, subject, however, to the provisions thereof. Upon such transfer of
the Premises and the deposits, the transferee shall expressly accept such assignment of such funds
and agree to be bound hereby, whereupon Landlord shall be deemed to be released from all liability
with respect thereto and Tenant agrees to look to the transferee solely with respect thereto, and
the provisions hereof shall apply to each successive transfer of the said deposits.

Section 3.7 The provisions of this Article 3 shall survive the expiration or earlier
termination of this Lease.

ARTICLE 4

USE AND OPERATION OF PREMISES

Section 4.1 The Premises may be used and occupied only for the purposes set forth in
Article A, Section 4. If the Health Care Licenses permit operations of more or
other than licensed skilled nursing facilities, Tenant shall not be permitted to modify the use of
the Facility to such other use without the prior written consent of Landlord, which consent shall
not be unreasonably withheld, conditioned or delayed, and it shall be reasonable for Landlord to
condition its consent on Tenant executing and delivering and amendment to this Lease addressing the
regulatory and other issues associated with such different use, as reasonably determined by
Landlord. Tenant shall not create or suffer or permit to exist any public or private nuisance,
hazardous or illegal condition or waste on or with respect to the Premises. This Article 4
shall survive the expiration or earlier termination of this Lease.

Section 4.2

(a) Tenant acknowledges that a fair return to Landlord on its investment in the Premises is
dependent, in part, on the concentration of the Premises during the Term of the licensed skilled
nursing facility business of Tenant, Guarantor and their respective Affiliates in the geographical
area of each of the Premises. Tenant further acknowledges that the diversion of residents and/or
patient care activities from the Premises to other facilities owned or operated by Tenant,
Guarantor or their respective Affiliates during the Term at or near the end of the Term may have a
material adverse impact on the value and utility of the Premises.

(b) Therefore, Tenant agrees that during the Term, and for a period of one (1) year
thereafter, neither Tenant, Guarantor nor any of their respective Affiliates shall, without the
prior written consent of Landlord, operate, own, participate in or otherwise receive revenues from
any other skilled nursing facility located within a five (5) mile radius of the Facility.

(c) Except as required for medically appropriate reasons, or for other reasons which, in
Tenant’s reasonable judgment are in the best interests of the Facility, prior to and for a period
of one (1) year following Lease termination or expiration, neither Tenant, Guarantor nor any of
their respective Affiliates will recommend or solicit the removal or transfer of any resident or
patient from the Facility to any other skilled nursing facility located within a five (5) mile
radius of the Facility; provided, however, that the foregoing shall not prohibit any form of
general advertising or marketing of skilled nursing facilities located outside of the five (5) mile
radius of the Facility to the public at large by Tenant, Guarantor or any of their respective
Affiliates.

(d) Notwithstanding the foregoing, neither Tenant, Guarantor nor any of their respective
Affiliates shall be prohibited by this Section 4.2 from investing, directly or indirectly,
in (i) any Person or portfolio of Persons that owns, directly or indirectly, fifteen (15) or more
skilled nursing facilities or (ii) publicly traded or privately placed shares of stock or other
securities.

(e) Each of the Subleases shall contain the terms and conditions of this Section 4.2.

(f) Notwithstanding the foregoing, Tenant may request that Landlord waive some or all of the
foregoing provisions with respect to another facility that will benefit one of the Other
Facilities. Landlord shall have no obligation to approve such waiver and may approve or disapprove
such request in its reasonable discretion.

ARTICLE 5

CONDITION OF PREMISES; ALTERATIONS AND REPAIRS

Section 5.1 Landlord has not made and does not make any representations or warranties
whatsoever with respect to the Premises or otherwise with respect to this Lease, express or
implied, including any warranty regarding the merchantability or warranty regarding the suitability
of the Premises for their intended commercial purposes. Tenant assumes all risks resulting from
any defects (patent or latent) in the Premises or from any failure of the same to comply with any
Requirement, Applicable Law or the uses or purposes for which the same may be occupied and assumes
all responsibility for repair of any defect (patent or latent) in the Premises.

Section 5.2 At Tenant’s sole cost and expense, whether or not Tenant is in occupancy of all of
the Buildings, Tenant shall maintain and keep all of the Buildings on the Premises and the
adjoining sidewalks, curbs and common areas, if any, clean and in good condition and repair
(reasonable wear and tear and damage from condemnation and from Tenant’s election not to restore
after casualty excepted), free of accumulations of dirt, rubbish, snow and ice, and Tenant shall
make all repairs and replacements, structural and non-structural, ordinary and extraordinary,
foreseen and unforeseen, and shall perform all maintenance, necessary to maintain the Premises and
any sidewalks, curbs and common areas in good condition and repair (reasonable wear and tear and
damage from condemnation and from Tenant’s election not to restore after casualty excepted). When
used in this Section 5.2, the term “repairs” shall include all necessary alterations,
improvements, replacements, renewals and substitutions. All repairs made by or at the direction of
Tenant shall be made in compliance with all Requirements and Applicable Laws. Landlord shall not
be required to furnish any services or facilities or to maintain or make any repairs or alterations
to the Premises, and Tenant hereby assumes, subject to the terms and conditions set forth herein,
the full and sole responsibility for the condition, operation, repair, replacement, maintenance and
management of the Premises and all costs and expenses incidental thereto, including adequate
security for each of the Buildings, whether or not Tenant is then occupying each of the Buildings.
Tenant shall have the roof inspected with reasonable frequency (but not more frequently than once
per year) by an appropriate consultant reasonably acceptable to Landlord, at Tenant’s expense.
Tenant shall, at its sole cost and expense, repair, replace and maintain the roof in good condition
and repair (reasonable wear and tear and damage from condemnation and from Tenant’s election not to
restore after casualty excepted). Notwithstanding the foregoing standard of maintaining condition
and repair, if the Requirements or any Applicable Law mandate a higher standard required to be
implemented and under which the Premises are not legally grandfathered, then Tenant shall, at
Tenant’s expense, be obligated to cause the Premises to comply with such higher standard.

Section 5.3 Landlord shall not be responsible for the cost of any alterations or replacements
of or maintenance or repairs to, or Restoration of the Premises of any nature whatsoever,
structural or non-structural, ordinary or extraordinary, foreseen or unforeseen, whether or not now
in the contemplation of the parties. To the extent not prohibited by Applicable Law, Tenant hereby
waives and releases all rights now or hereinafter conferred by any Applicable Laws, Requirements or
otherwise which would have the effect of limiting or modifying any of the provisions of this
Article 5.

Section 5.4 Tenant shall have the right at any time and from time to time during the Term to
make, at its sole cost and expense, changes, alterations, additions or improvements (collectively,
“Alterations”) in or to the Premises or any part thereof, subject, however, in each case to all of
the following:

(a) No Alteration shall be undertaken except after prior written notice to Landlord and
Landlord’s approval thereof, provided that no such notice or approval shall be required with
respect to (i) any nonstructural Alteration involving an estimated cost of less than or equal to
the Threshold Amount (as reasonably estimated by a licensed third party architect or contractor
reasonably selected by Tenant and reasonably approved by Landlord), (ii) any Alteration made by
Tenant on an emergency basis (e.g., to protect health or welfare of persons or imminent loss or
damage to the Premises or any part thereof) in which case Tenant shall notify Landlord in writing
of such emergency Alteration as soon as practicable, or (iii) Alterations required by the
Requirements or Applicable Law.

(b) Other than an Alteration to comply with Applicable Laws, no material structural
Alteration, and no other Alteration involving an estimated cost of more than the Threshold Amount
(as reasonably estimated by a licensed third party architect or contractor reasonably selected by
Tenant and reasonably approved by Landlord), shall be made without the prior written consent of
Landlord, which consent may not be unreasonably withheld, conditioned or delayed.

(c) Any Alteration shall, when completed, be of such a character as not to be expected to
reduce the value of the Premises below its value immediately before such Alteration as determined
by Landlord in its reasonable discretion.

(d) Notwithstanding the provisions of Section 5.4(a)(i) and (ii) and
Section 5.4(b), if, under the provisions of any Mortgage or any loan documents in
connection therewith, any Work requiring Landlord’s consent hereunder also requires the consent of
the Mortgagee, the written consent of such Mortgagee must be obtained by Landlord before the
commencement of any such Work.

(e) Notwithstanding the provisions of Section 5.4(a) and Section 5.4(b), no
Alteration shall be made by Tenant without Landlord’s consent, which shall not be unreasonably
withheld, conditioned or delayed, if the same would reduce the number of licensed beds below the
Licensed Bed Capacity by up to five percent (5%) or weaken, temporarily or permanently, the
structure of the Building being altered or any part thereof, or enable Tenant to conduct activity
inconsistent with the limitations upon its use as stated in Article 4. No Alteration shall
be made by Tenant without Landlord’s consent, in its sole discretion, if the same would reduce the
number of licensed beds in the Facility below the Licensed Bed Capacity by more than five percent
(5%). Landlord shall not be required to give any such consent to the extent it would violate the
provisions of any Mortgage Loan Documents, and any consent by Landlord shall not be deemed a waiver
of Tenant’s obligation to comply with the Mortgage Loan Documents.

(g) The reasonable cost and expense of Landlord’s and Mortgagee’s review of any plans and
specifications for Alterations required to be furnished to Landlord and Mortgagee pursuant to
Section 5.5 hereof, including third party costs and expenses, shall be paid by Tenant to
Landlord within ten (10) days after written demand as Supplementary Rent.

(h) The provisions and conditions of Section 5.5 shall apply to any work performed by
Tenant under this Section 5.4.

(i) For purposes of Sections 5.4 and 5.5, the “Threshold Amount” shall mean,
for each applicable project in a Building, an amount equal to $100,000.00 per Lease Year.

(j) For purposes of Sections 5.4 and 5.5, notice of whether Landlord’s and
Mortgagee’s consent has been given or withheld shall be delivered to Tenant within fifteen (15)
Business Days following receipt of Tenant’s written request (as such time period shall be extended
for a reasonable period, in the event Landlord determines, in its reasonable discretion, that it is
prudent to engage a third party to review the plans and specifications, if any, pertaining to such
contemplated Alteration). Provided that no Mortgage encumbers the Premises and there is no
Superior Lease, except as provided in the immediately following sentence, if Landlord does not
respond within such fifteen (15) Business Day period, and should such failure to respond continue
for an additional five (5) business days after Landlord’s receipt of a second written notice
requesting such consent (which notice shall include the sentence “FAILURE TO RESPOND TO THIS NOTICE
WITHIN TEN (10) BUSINESS DAYS SHALL RESULT IN A DEEMED APPROVAL PURSUANT TO SECTION 5.4(j)OF THE
LEASE”), Landlord shall be deemed to have approved Tenant’s request. If a Mortgage encumbers the
Premises or if there is a Superior Lease, there shall be no such deemed approval, unless such
Mortgage or Superior Lease does not require, pursuant to its terms, the consent of the Mortgagee or
Superior Landlord for such contemplated Alteration.

Section 5.5 Tenant agrees that all Alterations, repairs, Restoration and other work which
Tenant shall be required or permitted to do under the provisions of this Lease (each hereinafter
called the “Work”) shall be at Tenant’s sole cost and expense and (i) performed in a good,
workmanlike manner, and in accordance with this Lease and all Requirements and Applicable Laws, as
well as any plans and specifications therefor which shall have been approved by Landlord (if such
approval is required hereunder), (ii) commenced and completed promptly and (iii) done in all cases
upon, in compliance with and subject to the terms of any Non-Disturbance Agreement and, to the
extent not inconsistent with any term thereof, all of the following terms and conditions:

(a) If the Work shall (i) involve any material structural Work, or (ii) cost more than the
Threshold Amount (as reasonably estimated in writing by a licensed third party architect or
contractor reasonably selected by Tenant), then the Work shall not be commenced until detailed
plans and specifications (including layout, architectural, mechanics and structural drawings),
prepared by a licensed architect reasonably satisfactory to Landlord together with a construction
budget shall have been submitted to and approved by Landlord, which approval may not be
unreasonably withheld, conditioned or delayed.

(b) No material structural Work or Work costing more than the Threshold Amount shall be
undertaken except under the supervision of a licensed third party architect or other appropriate
design professional reasonably satisfactory to Landlord.

(c) All Work shall be commenced only after all required permits, authorizations and approvals
shall have been obtained by Tenant from the applicable Governmental Authorities and other Persons,
at its own cost and expense, and complete copies thereof delivered to Landlord. Landlord will, on
Tenant’s written request, execute any documents necessary to be signed by Landlord to obtain any
such permits, authorizations and approvals, provided that no such documents shall cause Landlord to
incur any liability other than monetary liability associated with fees or costs charged in
connection with such permits, authorizations and approvals, and Tenant shall pay and discharge any
such expense or liability of Landlord in connection therewith.

(d) If the Work will cost more than $1,000,000.00 (as reasonably estimated in writing by a
licensed third party architect or contractor reasonably selected by Tenant), it shall not be
commenced until Tenant shall have obtained and delivered to Landlord, either (i) a performance bond
and a labor and materials payment bond (issued by a corporate surety licensed to do business in the
State in which the Premises are located and satisfactory to Landlord in its reasonable discretion),
each in an amount equal to the estimated cost of such Work and in form otherwise satisfactory to
Landlord in its reasonable discretion, or (ii) such other security or evidence of ability to pay
the estimated cost of such Work as shall be satisfactory to Landlord in its reasonable discretion.

(e) The cost of all Work shall be paid promptly, in cash, so that the Premises and Tenant’s
leasehold estate therein shall at all times be free from (i) liens for labor or materials supplied
or claimed to have been supplied to the Premises or Tenant, and (ii) chattel mortgages, conditional
sales contracts, title retention agreements, security interests and agreements, and financing
agreements and statements. Tenant shall, upon Landlord’s request, provide Landlord evidence of such
payment satisfactory to Landlord in Landlord’s reasonable discretion, which evidence may include
partial and final lien releases and waivers from any and all appropriate parties.

(f) At all times when any Work is in progress, Tenant shall maintain or cause to be maintained
with such companies and for such periods as Landlord may require (i) workers’ compensation
insurance covering all persons employed in connection with the Work, in an amount at least equal to
the minimum amount of such insurance required by Applicable Law (with a waiver of subrogation
satisfactory to Landlord in its sole and absolute discretion); and (ii) for the mutual protection
of Landlord, Tenant and any Mortgagee, (1) builder’s risk insurance, completed value form, covering
all physical loss, in an amount satisfactory to Landlord in its sole and absolute discretion, and
(2) commercial general liability insurance against all hazards, with limits for bodily injury or
death to any one person, for bodily injury or death to any number of persons in respect of any one
accident or occurrence, and for property damage in respect of one accident or occurrence in such
amounts as Landlord in its reasonable discretion may require. Such commercial general liability
insurance may be satisfied by the insurance required under Section 6.1(a), but may be
effected by an endorsement, if obtainable, upon the insurance policy referred to in said Section.
The provisions and conditions of Article 6 hereof shall apply to any insurance which Tenant
shall be required to maintain or cause to be maintained under this subsection. All contractors,
subcontractors, vendors, materialmen and others performing any Work on the Premises or providing
any supplies or materials in connection with Work on the Premises must be approved by Landlord
(which approval shall not be unreasonably withheld, conditioned or delayed, and which approval
shall not be required for a single project the aggregate cost of which does not exceed the
Threshold Amount), licensed and qualified to perform such services and/or provide such supplies and
shall be required to maintain insurance of each of the types set forth above in such amounts as
Landlord in its sole and absolute discretion requires, naming Landlord, and all Mortgagees as
additional named insureds and Tenant shall obtain and supply to Landlord evidence of such required
insurance.

(g) Upon completion of any Work, Tenant, at Tenant’s expense, shall obtain certificates of
final approval of such Work required by any Governmental Authority and shall furnish Landlord with
copies thereof, together with (i) “as-built” plans and specifications for such Work (if the cost of
such Work exceeds the Threshold Amount), and (ii) final lien waivers and releases from any and all
appropriate parties.

(h) The conditions of Section 5.4 shall have been complied with, to the extent
applicable to the Work.

Section 5.6 Following the delivery of prior reasonable notice, any Work shall be subject to
inspection at reasonable times during normal business hours and without disruption to the business
of Tenant, by Landlord, its architect and Mortgagee, or their duly authorized representatives, and
if Landlord’s architect or Mortgagee upon any such inspection shall reasonably believe that the
Work is not being performed substantially in accordance with the provisions of this
Article 5 or the plans and specifications, or that any of the materials or workmanship are
not of good quality or are unsound or improper, Tenant shall correct any such failure and shall
immediately replace any unsound or improper materials or workmanship.

Section 5.7 All fixtures, structures and other improvements (other than Tenant’s Personal
Property) shall become the property of Landlord and shall remain upon and be surrendered with the
Premises. All Tenant Personal Property required to be removed by Tenant at the end of the Term
remaining in the Premises for a period of thirty (30) days thereafter shall be deemed abandoned and
may, at the election of Landlord, either be retained as Landlord’s property or may be removed from
the Premises by Landlord at Tenant’s expense. Tenant shall be responsible for, and shall reimburse
Landlord within ten (10) days after written demand therefor, any damage to the Premises caused in
whole or in part by the removal or demolition of Tenant’s Personal Property (unless Landlord
purchases the owned Tenant’s Personal Property or takes an assignment of the leased Tenant’s
Personal Property pursuant to Section 16.5 below, in which event Tenant shall not be
obligated to remove same). The provisions of this Section 5.7 shall survive the expiration
or earlier termination of the Term.

Section 5.8 Notwithstanding any other provision of this Lease, Tenant shall at its own expense
determine and assure that the condition of the Premises and the Facility and all repairs,
Alterations Restoration and Work are in material compliance with all Requirements of Health Care
Licenses and Governmental Authorities and shall obtain any required or necessary approvals or
consents of Governmental Authorities in connection with any repairs, Alterations, Restoration or
Work.

Section 5.9

(a) Tenant shall be required to complete Capital Expenditures for the Facility in the
aggregate minimum amount of the Required Capital Expenditures Amount during each calendar year
(January 1 through December 31) as measured by a three (3) calendar year historical average (each a
“Measuring Period”) with the first reporting year being the calendar year in which the Effective
Date occurs. By way of illustration only, for purposes of determining whether Tenant has spent the
Required Capital Expenditures Amount during the calendar year 2012, Landlord and Tenant shall total
all Capital Expenditures expended by Tenant for the Facility during the 2010, 2011 and 2012
calendar years and divide such total Capital Expenditures by three (3) to determine the three (3)
calendar year average for Capital Expenditures. If the three (3) calendar year average is equal to
or greater than the Required Capital Expenditures Amount for such three (3) calendar year period,
Tenant shall have complied with Tenant’s Required Capital Expenditures Amount obligations with
respect to calendar year 2012.

(b) Within forty-five (45) days following the end of each calendar year, Tenant shall deliver
to Landlord a report (a “Capital Expenditures Report”), certified as true, correct and complete by
an officer of Tenant, summarizing and describing in reasonable detail all of the Capital
Expenditures made by Tenant during the immediately preceding calendar year (which amount may
include amounts expended under Section 5.5), and such receipts and other information as Landlord
may reasonably request relative to the Capital Expenditures made by Tenant during the applicable
calendar year. To the extent that the Capital Expenditures Report reflects that Tenant failed to
spend the Required Capital Expenditures Amount during the applicable Measuring Period for the
Facility, Tenant shall, within thirty (30) days after the due date of the Capital Expenditures
Report for such period, deposit (herein, a “Capital Expenditures Deposit”) with Landlord an amount
equal to the amount of such shortfall, if any, for the Facility. The Capital Expenditure Deposits
held by Landlord shall be held in a depository account selected by Landlord, shall not bear
interest for the benefit of Tenant and may be commingled with the other assets of Landlord.
Landlord shall not be obligated to return any Capital Expenditure Deposits held by Landlord until
such time as Tenant provides reasonably satisfactory evidence to Landlord that it has expended the
amount of the deficiency.

(c) If Landlord ceases to have any interest in the Premises, Landlord shall transfer to the
Person who owns or acquires such interest in the Premises from Landlord and is the transferee of
this Lease, the Capital Expenditures Deposits held by Landlord, subject, however, to the provisions
hereof. Upon such transfer of the Premises and the Capital Expenditures Deposits, the transferor
and its Affiliates shall expressly accept such assignment and agree to be bound hereby, whereupon
Landlord shall be deemed to be released from all liability with respect thereto, and Tenant agrees
to look to the transferee solely with respect thereto, and the provisions hereof shall apply to
each successive transfer of the Capital Expenditures Deposits.

(d) Tenant’s obligation to deliver the Capital Expenditures Report applicable to the last
Lease Year, together with Tenant’s obligation to deliver any Capital Expenditure Deposit associated
therewith, shall survive the expiration or termination of this Lease. All Capital Expenditure
Deposits held by Landlord (including, without limitation, any Capital Expenditure Deposits that are
required to be deposited by Tenant with respect to the last Lease Year) shall automatically and
without further action of the parties become the property of Landlord upon the expiration or
earlier termination of this Lease, without any obligation on Landlord’s part to credit Tenant in
any manner therefor.

ARTICLE 6

INSURANCE 

Section 6.1 Subject to the terms of Section 6.11, throughout the Term, Tenant shall,
at its own cost and expense, provide and keep in force for the benefit of Landlord, Tenant and any
Mortgagee:

(a) commercial general liability insurance and professional liability insurance (including
owner’s protective liability coverage on operations of Tenant and/or its independent contractors
engaged in construction, personal injury, and blanket contractual liability insurance), with a
limit for each occurrence not less than $1,000,000 and to have general aggregate limits of not less
than $3,000,000 for each policy year, protecting and indemnifying Landlord, Tenant and any
Mortgagee against all claims for damages to person or property or for loss of life or of property
occurring upon, in, or about the Premises, written on a claims made or occurrence basis. Such
coverage shall contain endorsements: (i) deleting any liquor liability exclusion (if alcohol is
sold on the Premises); (ii) including cross-liability; and (iii) waiving the insurer’s rights of
subrogation against Landlord for events of which Landlord is not, but Tenant is, covered; provided
however, that with regard to the requirements of waiver of subrogation against Landlord, Tenant
shall utilize its commercially reasonable efforts to obtain such waiver in any insurance policy
procured by Tenant, and if it cannot do so, Landlord shall have the right to procure, at Tenant’s
expense, an insurance policy containing such waiver if it can do so at the same or better price and
on substantially the same terms and conditions;

(b) property insurance on the Premises and all installations, additions and improvements which
may now or hereafter be erected thereon against “ALL RISK” (or equivalent) of loss or damage in an
amount sufficient to prevent Landlord, Tenant and any Mortgagee from becoming co-insurers, and in
any event, including loss or damage from windstorm and (if the Premises are located in an
earthquake fault zone for which coverage is customarily required, as determined by Landlord in its
reasonable discretion) earthquakes, and in any event, in an amount not less than one hundred
percent (100%) of the actual replacement value thereof (i.e., including the cost of debris removal)
as determined by Landlord in its reasonable discretion from time to time. Such coverage shall
contain an agreed amount endorsement reasonably acceptable to Landlord;

(c) business interruption insurance covering risk of loss due to the occurrence of any of the
hazards covered by the insurance to be maintained by Tenant described in Section 6.1(b)
with coverage in a face amount of not less than the aggregate amount, for a period of twelve (12)
months following the insured-against peril, of 100% of all Rent (which includes all Impositions and
other amounts specified in the definition of Rent) to be paid by Tenant under this Lease; such
coverage shall contain an agreed amount endorsement reasonably acceptable to Landlord;

(d) workers’ compensation insurance (including employers’ liability insurance), with a waiver
of subrogation satisfactory to Landlord in its reasonable discretion, covering all persons employed
at the Premises by Tenant to the extent required by the Applicable Laws and Requirements of the
state in which the Premises are located, including, without limitation, during the course of work
to the Premises;

(e) mechanical breakdown insurance, if applicable, in an amount not less than one hundred
percent (100%) of the actual replacement value thereof and of any improvements in which any such
boiler is located (including the cost of debris removal but excluding foundations and excavations)
as determined by Landlord in its reasonable discretion from time to time;

(f) if sprinkler systems are located in the Buildings, sprinkler leakage insurance in amounts
approved by Landlord in its reasonable discretion;

(g) flood insurance (if the Premises are located in whole or in part within a special flood
hazard area as designated by any department or agency of the United States Government having
jurisdiction);

(h) equipment coverage and elevator liability coverage, if applicable, in amounts approved by
Landlord in its reasonable discretion;

(i) any additional insurance as required by any Health Care Regulatory Agency; and

(j) if during the Term, Tenant or the Facility is covered by general liability, professional
liability, patient healthcare professional malpractice or other liability insurance on a “claims
made” basis, Tenant shall procure and maintain, at Tenant’s sole cost and expense, “tail” insurance
coverage, with such coverage limits and such deductible amounts as shall be reasonably acceptable
to Landlord for general liability, professional liability, patient healthcare professional
malpractice or other liability claims reported after the termination of this Lease or expiration of
the claims made policy, but concerning services provided during the Term of this Lease. Tenant
shall provide Landlord with a certificate evidencing that such insurance coverage is in effect for
a period of no less than two (2) years subsequent to the termination of this Lease no later than
thirty (30) days prior to the termination of this Lease.

Section 6.2 Whenever under the terms of this Lease Tenant is required to maintain insurance
for the benefit of Landlord, (i) Landlord, and any Mortgagee shall be an additional insured in all
such liability insurance policies, and (ii) either Landlord or Mortgagee, as specified in
Section 6.3, shall be named as loss payee in all such casualty insurance policies. In the
event that the Premises shall be subject to a Mortgage, the commercial general liability insurance
shall name the Mortgagee (together with any trustee or servicer therefor) as an additional insured
and all other insurance provided hereunder shall name the Mortgagee as an additional insured or, as
provided in Section 6.3, loss payee under a standard “non-contributory mortgagee”
endorsement or its equivalent. All policies of insurance shall provide that such coverage shall be
primary and that any insurance maintained separately by Landlord, or the Mortgagee shall be excess
insurance only. The original certificates (on ACORD Form 27 or its equivalent) and, if requested by
Landlord, certified true copies of the original policies (or binders thereof if the policies have
not yet been prepared) shall be delivered to Landlord.

Section 6.3 The loss under all insurance policies insuring against property damage to the
Buildings shall be payable to Mortgagee or, if there is none, to Landlord, subject to
Section 7.2. All property insurance policies required by this Lease shall provide that all
adjustments for claims with the insurers in excess of $100,000 (exclusive of any deductible) shall
be made with Landlord, Tenant and any Mortgagee. Subject to the terms of any Mortgage, any
adjustments for claims with the insurers involving sums of $100,000 (exclusive of any deductible)
or less shall be made with Landlord and Tenant.

Section 6.4 Certificates of the above-mentioned insurance policies shall be obtained by Tenant
and delivered to Landlord on or prior to the date hereof, and thereafter as provided for herein,
and shall be written by insurance companies: (i) rated “A-:VIII” or better in “Best’s Insurance
Guide” (or any substitute guide acceptable to Landlord); (ii) authorized to do business in the
state where the Premises are located; and (iii) of recognized responsibility and which are
reasonably satisfactory to Landlord and any Mortgagee. Any deductible amounts under any property
insurance policy hereunder shall not exceed $100,000 per occurrence and any deductible amounts
under any liability insurance policy hereunder shall not exceed $100,000 per occurrence.

Section 6.5 At least thirty (30) days prior to the expiration of any policy or policies of
such insurance, Tenant shall renew such insurance, and deliver to Landlord and any Mortgagee, by
said date insurance binders evidencing the coverage described in this Article 6, the
original certificates of insurance, endorsed in accordance with Section 6.2 hereof and the
original certificates of insurance prior to the expiration of any policy of insurance. All coverage
described in this Article 6 shall be endorsed to provide Landlord, and Mortgagee with
thirty (30) days’ notice of change in terms or for cancellation for any reason, except ten (10)
days in the event of cancellation for non-payment of premium. If Tenant shall fail to procure the
insurance required under this Article 6 in a timely fashion or to deliver such certificates
to Landlord, Landlord may, at its option and in addition to Landlord’s other remedies for a Default
by Tenant, upon written notice to Tenant, procure the same for the account of Tenant, and the cost
thereof shall be immediately paid to Landlord as Supplementary Rent.

Section 6.6 Tenant shall not violate in any material respect, any of the conditions of any of
the said policies of insurance.

Section 6.7 Tenant shall not carry separate or additional insurance affecting the coverage
described in this Article 6 concurrent in form and contributing in the event of any loss or
damage to the Premises with any insurance required to be obtained by Tenant under this Lease,
unless such separate or additional insurance shall comply with and conform to all of the provisions
and conditions of this Article 6. Tenant shall promptly give notice to Landlord of such
separate or additional insurance.

Section 6.8 The insurance required by this Lease, at the option of Tenant, may be effected by
blanket and/or umbrella policies issued to Tenant covering the Premises, provided that the policies
otherwise comply with the provisions of this Lease and allocate to the different properties
comprising the Premises the specified coverage, without possibility of reduction or coinsurance by
reason of, or damage to, any other premises named therein, and if the insurance required by this
Lease shall be effected by any such blanket or umbrella policies, Tenant shall furnish to Landlord
or Mortgagee certified copies or duplicate originals of such policies in place of the originals,
with schedules thereto attached showing the amount of insurance afforded by such policies
applicable to each of the properties comprising the Premises.

Section 6.9 In the event that Tenant fails to maintain the insurance required to be maintained
by Tenant under this Lease following at least two (2) Business Days written notice thereof from
Landlord, Landlord may thereafter, in its sole discretion, designate that with respect to property,
fire and related building insurance coverages as described in Sections 6.1(b),
6.1(e), 6.1(f) and 6.1(g) of this Lease, Landlord or Landlord’s Affiliates
may obtain some or all of such insurance coverages otherwise required to be obtained by Tenant
under this Lease at the expense of Tenant, and in such event, Tenant shall pay to Landlord, as
Supplementary Rent, the premiums and all other costs of such insurance, on a timely basis when and
as required to be paid by Landlord, including payment in advance of the date such costs become due
and payable, whether by payment of a single installment or in equal monthly installments. Such
insurance which is obtained by Landlord or Landlord’s Affiliates shall be at a cost and on terms no
less favorable than prevailing market terms for similar insurance available to Tenant, and shall
offer customer service which is at least at the level otherwise available to Tenant on the date of
this Lease.

Section 6.10 Tenant shall comply with the commercially reasonable insurance requirements of
any Mortgagee under the Mortgage or any other loan document in connection therewith if they
(a) require any insurance coverage not otherwise required under this Lease or (b) provide for more
stringent coverages, terms, conditions or provisions with respect to insurance coverage required
under this Lease.

Section 6.11 Tenant’s obligation to pay directly to the applicable insurance company the
premiums for the policies of insurance that Tenant is required by the terms of this Lease to
maintain (“Insurance Premiums”) shall be suspended at Landlord’s election following an Event of
Default upon written notice to Tenant and during the continuance of such Event of Default until
cured, and in such event Tenant shall comply with the terms and provisions of this
Section 6.11 (in which case Landlord or Mortgagee shall make such payments not later than
thirty (30) days before any fine, penalty, interest or cost may be added thereto for the
non-payment thereof and provide copies of paid bills to Tenant). Landlord or Mortgagee may apply
the full amount of the Insurance Premium Reserve Fund (as defined herein) to payments of Insurance
Premiums required to be made by Tenant pursuant to this Article 6. In making any payment
relating to the Insurance Premium Reserve Fund, Landlord or Mortgagee may do so according to any
bill, statement or estimate procured from the applicable insurance company or provided by Tenant
without inquiry into the accuracy of such bill, statement or estimate or into the validity of any
Insurance Premium. Following such election by Landlord, Tenant shall: (i) deposit with Landlord
or, if directed by Landlord, Mortgagee on the first day of each month thereafter until thirty (30)
days prior to the date when the next installment of Insurance Premiums is due to the Person to whom
the same is paid, an amount equal to said next installment of Insurance Premiums divided by the
number of months over which such deposits are to be made; and (ii) thereafter during the Term
deposit with Landlord or Mortgagee an amount each month reasonably estimated by Landlord or
Mortgagee, based on the prior year’s bills and known or reasonably anticipated premium increases,
to be adequate to create a fund (“Insurance Premium Reserve Fund”) which, as each succeeding
installment of Insurance Premiums becomes due, will be sufficient, thirty (30) days prior to such
due date, to pay such installment in full. Landlord or Mortgagee shall use reasonable efforts to
cause the monthly deposits to be equal in amount, but neither of them shall be liable in the event
that such required deposits are unequal. If at any time the amount of any Insurance Premium is
increased, said monthly deposits shall be increased within five (5) Business Days after written
demand by Landlord or Mortgagee so that, thirty (30) days prior to the due date for each
installment of Insurance Premiums, there will be deposits on hand with Landlord or Mortgagee
sufficient to pay such installments in full. To the extent permitted by Applicable Law, Landlord
or Mortgagee shall not be required to deposit any such amounts in an interest-bearing account. For
the purpose of determining whether Landlord or Mortgagee has on hand sufficient moneys to pay any
particular Insurance Premium at least thirty (30) days prior to the due date therefor, deposits for
each category of insurance shall be treated separately, it being the intention that Landlord shall
not be obligated to use moneys deposited for the payment of an item not yet due and payable to the
payment of an item that is due and payable. Notwithstanding the foregoing, it is understood and
agreed that (a) to the extent permitted by Applicable Law, deposits provided for hereunder may be
held by Landlord or its Affiliate or Mortgagee in a single bank account and commingled with other
funds of Landlord or Mortgagee, and (b) Landlord or Mortgagee, may, if Tenant fails to make any
deposit required hereunder, use deposits made for any one item for the payment of the same or any
other item of Rent. If this Lease shall be terminated by reason of any Event of Default, all
deposits then held by Landlord shall be applied by Landlord on account of any and all sums due
under this Lease; if there is a resulting deficiency, Tenant shall pay the same, and if there is a
surplus, Tenant shall be entitled to a refund of the surplus. Absent a Default or an Event of
Default, upon the expiration or earlier termination of this Lease, all such deposits then held by
Landlord shall be refunded to Tenant. Tenant acknowledges and agrees that no deficiency or lack of
funds in the Insurance Premium Reserve Fund, including without limitation a deficiency or lack of
funds resulting from the failure of Tenant to make a deposit, shall relieve Tenant of its
obligation to pay all Insurance Premiums as required under this Lease.

Section 6.12 Neither Landlord nor Tenant shall be liable to the other or to any insurance
company (by way of subrogation or otherwise) insuring the other party for any loss or damage to any
building, structure or other tangible property, or any resulting loss of income, or losses under
worker’s compensation laws and benefits, even though such loss or damage might have been occasioned
by the negligence of such party, its agents or employees if, and to the extent, that any such loss
or damage is covered by insurance benefiting the party suffering such loss or damage or was
required to be covered by insurance pursuant to this Section. The provisions of this Section shall
prevail over any conflicting provision in the Lease, it being the intention of Landlord and Tenant
that wherever applicable the waiver of subrogation contained in this Section shall take precedence
over any other provision providing for the liability of one party to the other.

Section 6.13 If, from time to time after the Commencement Date, Landlord determines in the
exercise of its commercially reasonable judgment that the limits of the insurance required to be
maintained by Tenant hereunder are no longer commensurate to the limits being regularly required by
institutional landlords of similar properties in the state in which the Facility is located or
their lenders or that a particular type of insurance coverage is being regularly required by
institutional landlords of similar properties in the in the state in which the Facility is located
or their lenders and is not then required hereunder, Landlord may notify Tenant of the same,
indicating the particular limit or type of coverage that Landlord has determined should be
increased or carried by Tenant, as applicable. Unless Tenant, in the exercise of its commercially
reasonable judgment, objects to Landlord’s determination, then within thirty (30) days after the
receipt of such notice, Tenant shall thereafter increase the particular limit or obtain the
particular coverage, as applicable, unless and until further modified pursuant to the provisions of
this Section 6.13. Notwithstanding anything herein to the contrary, Landlord shall not request a
modification of the insurance requirements of this Lease more frequently than once every three (3)
years (and not prior to the third anniversary of the Commencement Date). If Tenant, in the
exercise of its commercially reasonable judgment, objects to Landlord’s determination made under
this Section 6.13 or any other matter in this Article 6 requiring a determination of
commercial reasonableness, such determination shall be made by a reputable insurance company,
consultant or expert (an “Insurance Arbitrator”) with experience in the skilled nursing insurance
industry as identified by Landlord and Tenant in the exercise of their reasonable judgment. As a
condition to a determination of commercial reasonableness with respect to any particular matter,
the Insurance Arbitrator shall be capable of providing, procuring or identifying particular
policies or coverages that would be available to Tenant and would satisfy the requirement in issue.
The determinations made by any such experts shall be binding on Landlord and Tenant for purposes
of this Article 6, and the costs, fees and expenses of the same shall be borne equally by
Tenant and Landlord.

ARTICLE 7

DAMAGE OR DESTRUCTION

Section 7.1 If the Premises or any Building or any part thereof shall be damaged or destroyed
by fire or other casualty (including any casualty for which insurance was not obtained or
obtainable) of any kind or nature, ordinary or extraordinary, foreseen or unforeseen during the
Term, (a) Landlord shall pay over to Tenant, upon the terms set forth in Section 7.2 and
Section 7.3, any moneys which may be recovered by Landlord from property insurance procured
by Tenant as required by this Lease, (b) this Lease shall be unaffected thereby and shall continue
in full force and effect, and (c) Tenant shall, at Tenant’s sole cost and expense, expeditiously
and in a good and workmanlike manner, cause such damage or destruction to be remedied or repaired
(the “Restoration”) by restoring the Premises to substantially the same condition and configuration
as immediately prior to such damage or destruction. All Restoration work shall be performed in
accordance with the provisions of this Lease, including, without limitation, the provisions of
Section 5.4 and 5.5 hereof. Tenant hereby waives the provisions of any Applicable
Law to the contrary and agrees that the provisions of this Article 7 shall govern and
control in lieu thereof. If Tenant shall fail or neglect to restore the Premises with reasonable
diligence, or having so commenced such Restoration, shall fail to complete the same with reasonable
diligence, or if prior to the completion of any such Restoration by Tenant, this Lease shall expire
or be terminated for any reason, Landlord shall have the right, but not the obligation, to complete
such Restoration at Tenant’s cost and expense and the cost thereof shall be payable within five (5)
days after written demand as Supplementary Rent, together with interest thereon from the date of
demand until paid at the Default Rate. The obligations of Tenant under this Section 7.1
shall survive the expiration or earlier termination of this Lease.

Section 7.2 Subject to the provisions of this Article 7, Landlord, the insurance
carrier, or any Mortgagee may elect in their discretion to perform the Restoration (being under no
obligation to do so), subject to commercially reasonable measures that will enable Tenant to
control the cost of performing the Restoration, which measures the parties shall agree upon prior
to commencing the Restoration. Landlord shall pay over to Tenant from time to time, upon the
following terms, any moneys which may be received by Landlord from property insurance provided by
Tenant but, in no event, to any extent or in any sum exceeding the amount actually collected by
Landlord upon the loss; provided, however, that Landlord, before paying such moneys over to Tenant,
shall be entitled to reimburse or pay itself therefrom to the extent, if any, of (i) the reasonable
expenses paid or incurred by Landlord in the collection of such moneys, and (ii) any other amounts
then overdue and owing to Landlord under this Lease. Landlord shall pay to Tenant, as herein
provided, the aforesaid insurance proceeds which may be received by Landlord for the purpose of
Restoration to be made by Tenant to restore the Premises to a value which shall not be less than
the value of the Premises prior to such fire or other casualty. Prior to making any Restoration,
Tenant shall furnish Landlord with an estimate of the cost of such Restoration, prepared by a
licensed third party architect or contractor selected by Tenant and reasonably approved by
Landlord. Such insurance moneys shall be paid to Tenant (or, at Landlord’s option, directly to the
party to whom such payment is due) from time to time thereafter in installments as the Restoration
progresses, within thirty (30) days after application to be submitted by Tenant to Landlord showing
the cost of labor and material incorporated in the Restoration, or incorporated therein since the
last previous application (assuming such proceeds are available from the insurer). If any vendor’s,
mechanic’s, laborer’s, or materialman’s lien is filed against the Premises or any part thereof, or
if any public improvement lien is created or permitted to be created by Tenant and is filed against
Landlord, or any assets of, or funds appropriated to, Landlord, Tenant shall not be entitled to
receive any further installment until such lien is satisfied or otherwise discharged, unless such
lien is contested by Tenant in good faith and Tenant has obtained and delivered a bond issued by a
surety, in an amount and in form otherwise satisfactory to Landlord in its reasonable discretion.
The amount of any installment to be paid to Tenant shall be such proportion of the total insurance
moneys received by Landlord as the cost of labor and materials theretofore incorporated by Tenant
in the Restoration bears to the total estimated cost of the Restoration by Tenant, less (a) all
payments theretofore made to Tenant out of said insurance proceeds, and (b) ten percent (10%) of
the amount so determined (the “Retainage”). Notwithstanding the foregoing, Landlord shall not
withhold the Retainage from any installment, provided (i) such installment constitutes the final
payment due a contractor or materialman, or (ii) the contractor is bonded and Tenant furnishes to
Landlord payment and performance bonds and labor and material bonds of Tenant’s contractor
complying with the Requirements, Applicable Laws and otherwise satisfactory to Landlord in its
reasonable discretion, naming Landlord as co-obligee, in which event Landlord shall withhold from
such installment the same percentage withheld by Tenant pursuant to the construction contract. Upon
completion of and payment for the Restoration by Tenant, including reimbursement to Tenant of the
Retainage or other amount, as applicable, the balance of any and all insurance proceeds held by
Landlord shall be paid to Tenant so long as no Default (notice of which has been sent by Landlord
to Tenant) or Event of Default is continuing hereunder (other than a Default under
Section 12.1(m) hereof or otherwise resulting from the casualty or condemnation which is
the subject of the Restoration). In the event that the insurance proceeds are insufficient for the
purpose of paying for the Restoration, Tenant shall nevertheless be required to make the
Restoration and pay any additional sums required for the Restoration in accordance with the
provisions of Section 7.4 hereof. If the proceeds of insurance or other funding applicable
to the Restoration are in excess of those required to complete the Restoration, the full balance of
such funds shall be delivered, and belong exclusively, to Tenant. Notwithstanding the foregoing,
if Landlord or Mortgagee makes the Restoration at Tenant’s expense, as provided in
Section 7.1 hereof, then Landlord or Mortgagee shall use any amounts held by Landlord to
pay for the cost of such Restoration.

Section 7.3 The following shall be conditions precedent to each payment made to Tenant (or to
any other party) as provided in Section 7.2 above:

(a) there shall be submitted to Landlord the certificate of the aforesaid architect or
contractor stating (i) that the sum then requested to be withdrawn either has been paid by Tenant
and/or is justly due to contractors, subcontractors, materialmen, engineers, architects or other
persons (whose names and addresses shall be stated) who have rendered or furnished certain services
or materials for the work and giving a brief description of such services and materials and the
principal subdivisions or categories thereof and the several amounts so paid or due to each of such
persons in respect thereof, and stating in reasonable detail the progress of the work up to the
date of said certificate, (ii) that no part of such expenditures (A) has been or is being made the
basis, in any previous or then pending request, for the withdrawal of insurance money or (B) has
been made out of the proceeds of insurance received by Tenant, (iii) that the sum then requested
does not exceed the value of the services and materials described in the certificate, and (iv) that
the balance of any insurance proceeds held by Landlord, together with such other sums, if any,
which Tenant has made or will (for which evidence of Tenant’s intention and ability shall be to
Landlord’s reasonable satisfaction) make available for the Restoration in accordance with
Section 7.4 hereof and to reasonable Landlord’s satisfaction will be sufficient upon
completion of the Restoration to pay for the same in full, and stating in reasonable detail an
estimate of the cost of such completion;

(b) there shall be furnished to Landlord an official search, or a certificate of a title
insurance company satisfactory to Landlord in its reasonable discretion, or other evidence
reasonably satisfactory to Landlord, showing that there has not been filed any vendor’s,
mechanic’s, laborer’s or materialman’s statutory or other similar lien affecting the Premises or
any part thereof, or any public improvement lien created or permitted to be created by Tenant
affecting Landlord, or the assets of, or funds appropriated to, Landlord, which has not been
discharged of record, except such as will be discharged upon payment of the amount then requested
to be withdrawn, or unless any such lien is contested by Tenant in good faith and Tenant has
obtained and delivered a bond issued by a surety, in an amount and in form otherwise reasonably
satisfactory to Landlord;

(c) at the time of making such payment, no Default or Event of Default shall have occurred and
be continuing (excluding a Default under Section 12.1(m) hereof or any other Default
resulting from the casualty or condemnation which is the subject of the Restoration);

(d) Tenant shall have deposited the items required to be deposited under Section 7.4;
and

(e) if the amount due to any such Person to be paid from such payment exceeds $50,000 and the
failure to pay for the applicable underlying work or material could reasonably be expected to
result in a Lien, such payment request shall be accompanied by conditional lien waivers or other
evidence of payment from such Person reasonably satisfactory to Landlord.

Section 7.4 If the estimated cost of any Restoration determined as provided in
Section 7.2 hereof exceeds the net insurance proceeds, then, prior to the commencement of
any Restoration, Tenant hereby covenants to deposit with Landlord or, if directed by Landlord, its
Mortgagee, a bond, cash or other security satisfactory to Landlord (in its reasonable discretion)
in the amount of such excess, to be held and applied by Landlord (or its Mortgagee) in accordance
with the provisions of Section 7.2 hereof, as security for the completion of the work, free
of public improvement, vendors’, mechanics’, laborers’ or materialmen’s statutory or other similar
liens. If Landlord carries property insurance in addition to the insurance required to be carried
by Tenant hereunder, or if Landlord is entitled to any governmental grant, loan, tax abatement or
similar government funding which may be applied to the Restoration, such funds shall be added to
and applied on account of the restoration in accordance with Section 7.2 hereof.

Section 7.5 Subject to the first sentence of Section 7.1 hereof and the payment over
to Tenant by Mortgagee (or by Landlord on behalf of Mortgagee) of any moneys which may be recovered
by Mortgagee from property insurance procured by Tenant as required by this Lease (to the extent
any funds provided by Landlord under Section 7.1 are insufficient to cover the cost of completion
of such Restoration work), as material consideration to Landlord for its agreement to enter into
this Lease, (i) the parties agree that this Lease shall not terminate or be forfeited or be
affected in any manner, and there shall be no reduction or abatement of the Rent payable hereunder,
by reason of damage to or total, substantial or partial destruction of the Premises or any part
thereof or by reason of the untenantability of the same or any part thereof, for or due to any
damage or destruction of the Premises from any cause whatsoever, and, notwithstanding any
Applicable Law, present or future, Tenant waives any and all rights to quit or surrender the
Premises or any part thereof on account of any damage or destruction of the Premises, and
(ii) Tenant expressly agrees that its obligations hereunder, including the payment of Rent payable
by Tenant hereunder, shall continue as though the Premises had not been damaged or destroyed and
without abatement, suspension, diminution or reduction of any kind.

ARTICLE 8

CONDEMNATION

Section 8.1 Tenant, immediately upon obtaining knowledge of the institution of any proceeding
for a Taking, shall notify Landlord and Mortgagee thereof and Landlord and Mortgagee shall be
entitled to participate in any Taking proceeding. Subject to the provisions of this
Article 8. Tenant hereby irrevocably assigns to Mortgagee or to Landlord, in that order,
any award or payment to which Tenant is or may be entitled by reason of any Taking, whether the
same shall be paid or payable for Tenant’s leasehold interest hereunder or otherwise.

Section 8.2

(a) If the whole of the Premises shall be permanently taken by condemnation or other eminent
domain proceedings pursuant to any Applicable Law, general or special, or by conveyance made in
response to the threat of the exercise of such a right (a “Taking”), a substantial and material
portion of the Premises is taken such that Tenant is not able to operate the Facility in
substantially the same manner as it was operated prior to the Taking in Tenant’s reasonable
discretion, then on the earlier of the date of the vesting of title to the Premises or the date of
taking of possession of the Premises (the “Ending Date”): (i) this Lease shall terminate, (ii) all
Rent required to be paid by Tenant under this Lease shall be pro-rated up to such date,
(iii) Landlord shall be entitled to any and all awards in connection with such condemnation on
account of Landlord’s fee simple interest in the Land and the Buildings, with such proceeds going
first to pay any outstanding amounts owed to Mortgagee, and (iv) Tenant shall be entitled to
receive any and all awards on account of Tenant’s Personal Property, moving expenses and
interruption of or damage to Tenant’s business. Upon such termination, this Lease shall be of no
further force and effect, except that any obligation or liability of either party, actual or
contingent, under this Lease which has accrued on or prior to the Ending Date shall survive and any
prepayment of Rent shall be prorated between the parties. In the event of a partial Taking that
results in the reduction of the number of licensed beds at a Facility, the terms and conditions of
this Lease that are determined based upon the number of licensed beds shall be adjusted to the
lower number of licensed beds permitted as a result of such Taking, and such reduction shall not be
the basis for an Event of Default.

(b) If there shall be a Taking of the entire Premises or of a substantial and material portion
of the Premises such that Tenant is not able to operate the Facility in substantially the same
manner as it was operated prior to the Taking in Tenant’s reasonable discretion, then on the Ending
Date for the Facility: (i) the Premises shall no longer be leased by Landlord to Tenant under this
Lease and shall be removed from this Lease, (ii) Landlord shall be entitled to any and all awards
in connection with such condemnation on account of Landlord’s fee simple interest in the Land and
the Buildings associated with the Facility, with such proceeds going first to pay any outstanding
amounts owed to Mortgagee, and (iii) as between Landlord and Tenant, Tenant shall be entitled to
receive any and all awards on account of Tenant’s Personal Property used in connection with the
Facility, moving expenses and interruption of or damage to Tenant’s business associated with the
Facility. Upon such removal of the Premises from this Lease, (1) this Lease shall be of no further
force and affect with respect to such Premises, except that any obligation or liability of either
party, actual or contingent, under this Lease with respect to such Premises which has accrued on or
prior to such Ending Date, for the Facility shall survive, (2) any prepayment of Rent on account of
the condemned Facility shall be prorated between the parties and (3) effective as of the Ending
Date, the Base Rent payable hereunder shall no longer be due and payable.

Section 8.3 In the event of a permanent partial Taking of the Building, in which the portion
of the Premises taken is such that Tenant may continue to operate the Facility in substantially the
same manner as it was operated prior to the Taking in Tenant’s reasonable discretion, this Lease
shall be unaffected by such Taking, and Tenant shall, continue to pay the Base Rent and
Supplementary Rent pursuant to Article 2 and the following shall apply:

(i) Landlord shall be entitled to receive the entire award in any proceeding with
respect to such Taking without deduction therefrom for any estate vested in Tenant by this
Lease and Tenant shall receive no part of such award.

(ii) Notwithstanding the foregoing, in the event this Section 8.3 is
applicable, Landlord shall pay over to Tenant from time to time any moneys which may be
received by Landlord on account of the exercise of the power of eminent domain with respect
to the Premises, which (x) are necessary for Tenant to repair and restore the Building such
that the remaining portion of the Facility may continue to be operated and (y) represent an
award for the loss of Tenant’s Personal Property, moving expenses and interruption of or
damage to Tenant’s business; provided, however, that Landlord, before paying such moneys
over to Tenant, shall be entitled to reimburse or pay itself therefrom to the extent, if
any, of (i) the reasonable expenses paid or incurred by Landlord in the collection of such
moneys, and (ii) any other amounts then outstanding and owing to Landlord under this Lease.
Such moneys shall be paid over to Tenant on the terms and subject to the conditions set
forth in Article 7 as if, for this purpose, such moneys were insurance proceeds
resulting from casualty to the Premises, and subject to Tenant’s receipt of all such funds
(plus Tenant’s receipt of any moneys received instead by Mortgagee), Tenant agrees to
undertake such Restoration on such terms and subject to such conditions.

Section 8.4 If only unimproved land shall be the subject of a Taking and Sections 8.2
and 8.3 do not apply, this Lease shall be unaffected by such Taking, and Tenant shall
continue to pay the Base Rent and Supplementary Rent pursuant to Article 2 and Landlord
shall be entitled to receive the entire award in any proceeding with respect to such Taking without
deduction therefrom for any estate vested in Tenant by this Lease and Tenant shall receive no part
of such award.

Section 8.5 If the use or occupancy of all or any part of the Premises shall be the subject of
a temporary Taking during the Term of this Lease, Tenant shall be entitled, except as hereinafter
set forth, to receive that portion of the award for such temporary Taking which represents
compensation for the use and occupancy of the Premises and, if so awarded, for the temporary Taking
of Tenant’s Personal Property and for moving expenses, and that portion which represents
reimbursement for the cost of Restoration of the Premises. This Lease shall be and remain
unaffected by such temporary Taking and Tenant shall be responsible for all obligations hereunder
not affected by such temporary Taking and shall continue to pay in full when due the Base Rent and
Supplementary Rent and all other sums required to be paid by Tenant pursuant to the provisions of
this Lease. If the period of temporary use or occupancy shall extend beyond the Expiration Date,
that part of the award which represents compensation for the use or occupancy of the Premises (or a
part thereof) shall be divided between Landlord and Tenant so that Tenant shall receive so much
thereof as represents the period to and including the Expiration Date and Landlord shall receive so
much as represents the period subsequent to the Expiration Date and Landlord shall be entitled to
receive that portion which represents reimbursement for the cost of Restoration of the Premises.
All moneys received by Tenant as, or as part of, an award for temporary use and occupancy for a
period beyond the date to which the sums to be paid by Tenant hereunder have been paid by Tenant
shall be received, held and applied by Tenant as a trust fund for payment of all sums payable by
Tenant hereunder.

Section 8.6 Each party agrees to execute and deliver to each other and to applicable
Governmental Authorities all documents and instruments that may be required to effectuate the
provisions of this Article 8.

Section 8.7 Notwithstanding anything herein to the contrary, upon any permanent full or
partial Taking and during the period of any temporary Taking directly resulting in the reduction of
licensed beds at the Facility, the ratios set forth in Section 12.1(m) and
Section 25.3 shall be equitably adjusted by agreement of Landlord and Tenant to reflect
such loss of use of all or part of the Premises, and such agreed-upon adjustment shall not
constitute a default of Tenant’s obligations under this Lease.

ARTICLE 9

ASSIGNMENT AND SUBLETTING

Section 9.1 Tenant shall not directly or indirectly (i) sell, assign, mortgage, convey,
alienate, sublease or otherwise transfer, directly or indirectly, by operation of law or otherwise,
this Lease, all or any portion of Tenant’s estate or interest in this Lease or the Premises,
(ii) permit any assignment of this Lease or any estate or interest therein by operation of law,
(iii) grant any sublease, license, concession, or other right of occupancy of all or any portion of
the Premises, (iv) permit the use of the Premises or any part thereof by any parties other than
Tenant, (v) mortgage, encumber, pledge, grant a security interest in, collaterally assign or
conditionally transfer this Lease or any Subleases or any of the rents from a sublease operator or
any other commercial sublessee or Tenant’s estate or interest in the Premises, or (vi) sell, convey
or transfer, directly or indirectly, by operation of law or otherwise, any capital stock,
membership interests, partnership interests, trust units, or any other equity interest in Tenant
(each of the foregoing, a “Transfer”), without Landlord’s prior written consent, which consent may
not be unreasonably withheld, conditioned or delayed. For purposes of this Article 9, the
terms “control” or “controls” shall mean possession, direct or indirect, of the power to direct or
to cause the direction of, the management and policies of any person or entity, whether through the
ownership of voting securities, or partnership, membership or other equity interests, by contract
or otherwise. Any attempted Transfer in violation of the terms and covenants of this
Section 9.1 shall be void. However, Tenant or any direct or indirect parent of Tenant may
grant a security interest in or pledge, directly or indirectly, any capital stock, membership
interests, partnership interests, trust units or any other equity interests in Tenant to a
financial institution as collateral for a loan to Tenant or any Affiliate of Tenant (each an
“Equity Pledge”); provided that any foreclosure of or exercise of any other remedies with respect
to such collateral by such lender, if any, shall be subject to the terms and conditions of this
Lease, including, without limitation, the terms and conditions of this Section 9.1
regarding Transfers requiring the consent of Landlord and Mortgagee. If Landlord consents in
writing to a Transfer or if an Equity Pledge is made, or if there is a foreclosure of or exercise
of any other remedy with respect to the equity Pledge, then (1) Tenant shall nevertheless at all
times remain fully responsible and liable for payment of the Rent and for compliance with all of
Tenant’s other duties, obligations and covenants under this Lease (except in the case of a
permitted Transfer involving the assignment of all of Tenant’s rights and obligations under this
Lease or the sale of all of Tenant’s estate or interest therein, in which event, upon consummation
of such Transfer, Tenant shall be released from the further performance of any duties, obligations
or covenants arising under this Lease subsequent to the effectiveness of such Transfer, including,
without limitation, the payment of Rent), (2) the transferee shall be required to execute and
deliver an assumption of all obligations of Tenant hereunder that are applicable to such Transfer,
pursuant to an instrument satisfactory to Landlord, and (3) the Transfer shall be conditioned upon
obtaining and securing (A) all necessary Health Care Licenses and other approvals and consents of
Governmental Authorities at no expense to the Landlord and (B) the consent of any Mortgagee, which
consent may be withheld in Mortgagee’s sole discretion. Occupancy of individual rooms or beds by
bona fide residents of a Facility in the ordinary course of business shall not be considered a
“Sublease” for purposes of this Article 9. Notwithstanding any provision of this Lease to
the contrary, there shall be no assignment of this Lease with respect to less than the entire
Premises.

Notwithstanding anything herein to the contrary, the following Transfers shall be permitted
without the prior consent of Landlord: (i) Transfers of ownership interests in Tenant that do not
result in a change in control (as “control” is defined in this Section 9.1) of Tenant;
(ii) subleases or occupancy licenses for not more than 2,500 useable square feet in the Facility;
(iii) a change in the ownership of Tenant so long as thereafter less than twenty-five percent (25%)
of voting control of Tenant is held by any Person that did not have such ownership prior
thereto (the foregoing 25% limitation shall apply to any subsequent transfer to any such
Person pursuant to the following clause (iv)); and (iv) a change in the ownership or transfer of
ownership interests amongst the existing direct or indirect owners of Tenant. Notwithstanding the
foregoing or any other language to the contrary in this Agreement, no Transfer shall be permitted
without the prior written consent of Landlord, which consent may not be unreasonably, withheld,
conditioned or delayed, if such Transfer would result in James J. Andrews and/or Philip M. Rees
(“Tenant’s Principals”) having less of a direct or indirect ownership interest in any of Tenant
and/or Guarantor than Tenant’s Principals possess as of the Effective Date (the foregoing
restriction not to apply in the event of the death or legal incapacity of Tenant’s Principals).

Section 9.2 If Tenant requests Landlord’s or any Mortgagee’s consent to a Transfer, Landlord
and such Mortgagee shall be given not less than thirty (30) days’ advance written notice of the
proposed Transfer, which notice shall be delivered to Landlord and such Mortgagee together with
(i) an organization chart reflecting the proposed Transfer and (ii) such other information and
documents as Landlord may reasonably request. Tenant shall pay, on demand, Landlord’s and such
Mortgagee’s reasonable costs and expenses in connection with their consideration of whether to
grant any such consent to a Transfer. No Transfer may be consummated during the continuance of a
Default or an Event of Default without Landlord’s consent.

Section 9.3 Any consent by Landlord under this Article 9 shall apply only to the
specific transaction thereby authorized and shall not relieve Tenant from the requirement of
obtaining the prior written consent of Landlord to any further Transfer of this Lease. Except as
set forth below, no Transfer of all or a portion of this Lease shall release or relieve the
original named Tenant (or any previously approved transferee) from any obligations of Tenant
hereunder, and the original named Tenant (or any previously approved transferee) shall remain
liable for the performance of all obligations of Tenant hereunder.

Section 9.4 If Landlord consents in writing to a Transfer involving a sublease or Health Care
License holder with respect to the Premises or any part thereof, Tenant shall cause each permitted
subtenant or licensee (each a “Subtenant” and collectively, the “Subtenants”) to comply with its
obligations under its respective sublease or Health Care License, and Tenant shall diligently
enforce all of its rights thereunder in accordance with the terms of such sublease or Health Care
License and this Lease.

Section 9.5 The fact that a violation or breach of any of the terms, provisions or conditions
of this Lease results from or is caused by an act or omission by any of the Subtenants shall not
relieve Tenant of Tenant’s obligation to cure the same. Tenant shall take all necessary steps to
prevent any such violation or breach.

Section 9.6 If the Premises or any part thereof is subleased, licensed or occupied by anybody
other than Tenant, Landlord may, after an Event of Default by Tenant, and in addition to any other
remedies herein provided or provided by Applicable Law, collect all rent becoming due to Tenant
directly from the Subtenants, and apply the net amount collected to the Rent herein reserved and
all other sums due to Landlord by Tenant hereunder, but no such sublease, license, occupancy or
collection shall be deemed a waiver of this covenant, or the acceptance of the Subtenant as tenant,
or a release of Tenant from the further performance by Tenant of the terms, covenants, and
conditions on the part of Tenant to be observed or performed hereunder. Tenant hereby authorizes
and directs any such Subtenant to make such payments of rent directly to Landlord, or into any cash
management system required by any Mortgagee upon receipt of notice from Landlord, and each Sublease
will contain this provision. No direct collection by Landlord from any such Subtenant shall be
construed to constitute a novation or a release of Tenant from the further performance of its
obligations hereunder. Notwithstanding any language herein to the contrary, after any subletting,
Tenant’s liability hereunder shall continue notwithstanding any subsequent modification or
amendment hereof or the release of any subsequent tenant hereunder from any liability, to all of
which Tenant hereby consents in advance. The consent by Landlord to any Transfer shall not in any
way be construed to relieve Tenant from obtaining the express written consent of Landlord to any
further Transfer.

Section 9.7 To secure the prompt and full payment by Tenant of the Rent and the faithful
performance by Tenant of all the other terms and conditions herein contained on its part to be kept
and performed, Tenant hereby assigns, transfers and sets over unto Landlord, subject to the
conditions hereinafter set forth, all of Tenant’s right, title and interest in and to all permitted
subleases, assignments and licenses (each a “Sublease” and collectively, the “Subleases”) and
hereby confers upon Landlord, its agents and representatives, a right of entry (subject to prior
notice) in, and sufficient possession of, the Premises to permit and ensure the collection by
Landlord of the rentals and other sums payable under the Subleases, and further agrees that the
exercise of said right of entry and qualified possession by Landlord shall not constitute an
eviction of Tenant from the Premises or any portion thereof and that should said right of entry and
possession be denied Landlord, its agent or representative, Landlord, in the exercise of said
right, may use all requisite force to gain and enjoy the same without responsibility or liability
to Tenant, its servants, employees, guests or invitees, or any Person whomsoever; provided,
however, that such assignment shall become operative and effective only if (a) a Default shall
occur and be continuing or (b) this Lease and the Term shall be cancelled or terminated pursuant to
the terms, covenants and conditions hereof or (c) there occurs repossession under a dispossess
warrant or other re-entry or repossession by Landlord under the provisions hereof or (d) a receiver
for the Premises is appointed, and then only as to such of the subleases that Landlord may elect to
take over and assume. At any time and from time to time within ten (10) days after Landlord’s
written demand, Tenant promptly shall deliver to Landlord a schedule of all Subleases, setting
forth the names of all Subtenants, with a true, correct and complete copy of each of the Subleases.
Upon reasonable request of Landlord, Tenant shall permit Landlord and its agents and
representatives to inspect all Subleases affecting the Premises. Tenant covenants that each
Sublease shall provide that the Subtenant thereunder shall be required from time to time, upon
request of Landlord or Tenant, to execute, acknowledge and deliver, to and for the benefit of
Landlord, an estoppel certificate confirming with respect to such Sublease the information set
forth in Section 14.1 hereof.

Section 9.8 Tenant covenants and agrees that all Subleases hereafter entered into affecting
the Premises shall provide that (a) they are subject to this Lease and that the principals of the
Subtenant acknowledge that they have read this Lease and accept the terms hereof, (b)  the term
thereof shall not end less than one (1) day prior to the Expiration Date hereof, unless Landlord
shall consent otherwise, which consent may be withheld in Landlord’s sole and absolute discretion,
(c) the Subtenants will not do, authorize or execute any act, deed or thing whatsoever or fail to
take any such action which will or may cause Tenant to be in violation of any of its obligations
under this Lease, (d) the Subtenants will not pay rent or other sums under the Subleases with
Tenant for more than one (1) month in advance, (e) the Subtenants shall give to Landlord at the
address and otherwise in the manner specified in Section 21.8 hereof a copy of any notice
of default by Tenant as the landlord under the Subleases at the same time as, and whenever, any
such notice of default shall be given by the Subtenants to Tenant, (f) the Subtenants shall grant
to the landlords under the Subleases a security interest in all of their right, title and interest
in the Health Care Licenses and the Provider Agreements, such grant to be pursuant to a provision
that is substantially similar to Section 12.15 hereof, and (g) in the event of the
termination or expiration of this Lease prior to the Expiration Date hereof, any such Subtenant, at
Landlord’s election, shall be obligated to attorn to and recognize Landlord as the lessor under
such Sublease, in which event such Sublease shall continue in full force and effect as a direct
lease between Landlord and the Subtenant upon all the terms and conditions of such Sublease, except
as hereinafter provided. Any attornment required by Landlord of such Subtenant shall be affective
and self-operative as of the date of any such termination or expiration of this Lease without the
execution of any further instrument; provided, however, that such Subtenant shall agree, upon the
request of Landlord, to execute and deliver any such instruments in recordable form and otherwise
in form and substance reasonably satisfactory to Landlord to evidence such attornment. With respect
to any attornment required by Landlord of any Subtenant hereunder, (i) at the option of Landlord,
Landlord shall recognize all rights and obligations of Tenant as the lessor under such sublease and
the Subtenant thereunder shall be obligated to Landlord to perform all of the obligations of the
Subtenant under such Sublease and (ii) Landlord shall have no liability, prior to its becoming
lessor under such Sublease, to such Subtenant nor shall the performance by such Subtenant of its
obligations under the Sublease, whether prior to or after any such attornment, be subject to any
defense, counterclaim or setoff by reason of any default by Tenant in the performance of any
obligation to be performed by Tenant as lessor under such Sublease, nor shall Landlord be bound by
any prepayment of more than one (i) month’s rent unless such prepayment shall have been expressly
approved in writing by Landlord. The provisions of this Section 8 shall survive the
expiration or earlier termination of the Term.

Section 9.9 If Tenant assumes this Lease and proposes to assign the same pursuant to the
provisions of Title 11 of the United States Code or any statute of similar purpose or nature (the
“Bankruptcy Code’) to any person or entity who shall have made a bona fide offer to
accept an assignment of this Lease on terms acceptable to Tenant, then notice of such proposed
assignment shall be given to Landlord by Tenant no later than fifteen (15) days after receipt of
such offer by Tenant, but in any event no later than ten (10) days prior to the date that Tenant
shall file any application or motion with a court of competent jurisdiction for authority and
approval to enter into such assumption and assignment. Such notice shall set forth (a) the name and
address of the assignee, (b) all of the terms and conditions of such offer, and (c) the proposal
for providing adequate assurance of future performance by such person under the Lease, including,
without limitation, the assurance referred to in Section 365 of the Bankruptcy Code. Any person or
entity to which this Lease is assigned pursuant to the provisions of the Bankruptcy Code shall be
deemed without further act or deed to have assumed all of the obligations arising under this Lease
from and after the date of such assignment. Any such assignee shall execute and deliver to Landlord
upon demand an instrument confirming such assumption.

Section 9.10 The term “adequate assurance of future performance” as used in this Lease shall
mean (in addition to the assurances called for in Bankruptcy Code Section 365(1)) that any proposed
assignee shall, among other things, (a) deposit with Landlord on the assumption of this Lease an
amount equal to the greater of (i) two (2) times the then monthly Base Rent and Supplementary Rent
or (ii) such other amount deemed by the Bankruptcy Court to be reasonably necessary for the
adequate protection of Landlord under the circumstances, as security for the faithful performance
and observance by such assignee of the terms and obligations of this Lease, (b) furnish Landlord
with financial statements of such assignee for the prior three (3) fiscal years, as finally
determined after an audit and certified as correct by a certified public accountant, which
financial statements shall show a net worth at least equal to the amount of the deposit referenced
in (a) above, (c) if determined by the Bankruptcy Court to be appropriate under the circumstances,
grant to Landlord a security interest in such property of the proposed assignee as Landlord shall
deem necessary to secure such assignee future performance under this Lease, and (d) provide such
other information or take such action as Landlord, in its reasonable judgment, shall determine is
necessary to provide adequate assurance of the performance by such assignee of its obligations
under the Lease.

	 	 	 
	Section 9.11

Section 9.12

	 	Intentionally deleted.

(a) Licenses, certificates or permits, trade names, reservations or allocations held in the
name of Tenant, an agent or representative of Tenant, or a Facility, which relate to the operation
of the skilled nursing facility in the Premises, and the name of the Facility, as then known to the
general public, along with the responsibilities and obligations for the management and operation of
the Premises, and upon Landlord’s written request from and after termination of this Lease upon an
Event of Default, shall be assigned by Tenant to a replacement tenant and licensed operator of the
Facility and/or, or a subsequent lessee identified by Landlord, to the extent permitted by
Applicable Law, and Tenant agrees to use its commercially reasonable efforts to cooperate (and to
cause Subtenants to cooperate) with Landlord and such new tenant to accomplish the transfer of such
management and operation without interrupting the operation of the Premises. If Tenant fails to
provide such cooperation or to make or refuses to recognize the assignment of any licenses, permits
or certificates, trade names, reservations or allocations referred to herein, this provision of
this Lease shall constitute an act of assignment to the replacement licensed operator and/or lessee
identified by Landlord to the extent such assignment is permitted by Applicable Law.

(b) The number of licensed beds in the Premises as set forth on Schedule “E” shall not
be reduced or taken out of service or removed from any Third Party Payor Program by Tenant or
transferred to others or to other locations or among the Premises for the Facility, unless approved
in advance by Landlord in writing, which approval shall not be unreasonably withheld, conditioned
or delayed for up to five percent (5%) of such number but which approval may be withheld in
Landlord’s sole discretion for more than five percent (5%) of such number.

(c) Tenant shall not and shall not allow a Subtenant or any Person to abandon or surrender any
material licenses, permits, certificates or authorizations required for or which relate to the
operation of the Premises as a skilled nursing facility without prior notice to, and receipt of
written approval from, Landlord. Tenant shall not and shall not allow a Subtenant or any Person to
act or fail to act in any manner which will cause any material licenses, permits or certificates to
be revoked or not renewed by any Governmental Authority having jurisdiction thereof.

(d) Tenant shall not file bankruptcy, become insolvent, permit itself to become subject to any
action seeking the appointment of a trustee, receiver, liquidator, custodian or similar official of
Tenant or a substantial part of its assets, permit itself to become subject to any action of
involuntary receivership, fail to pay its debts as they become due, or take any corporate action to
authorize any of the foregoing without the prior written consent of Landlord.

Section 9.13 The provisions of Sections 9.7, 9.8, 9.9, 9.12
and 9.13 hereof shall survive the expiration or earlier termination of this Lease.

Section 9.14 Notwithstanding any of the foregoing, any assignee of Tenant’s interest in this
Lease must at all times be a Special-Purpose Entity.

Section 9.15 Anything contained in this Lease to the contrary notwithstanding, without the
prior specific written consent of the Landlord, Tenant shall not enter into (or permit any Manager
to enter into on its behalf) any sublease with respect to the Premises or any part or portion
thereof on any basis such that the rental to be paid by Tenant would be based (or considered to be
based), in whole or in part, on either (a) the income or profits derived by the business activities
of the sublessee or any other person, or (b) any other formula such that any portion of the rent
payable hereunder would or could fail to qualify as “rents from real property” within the meaning
of Section 856(d) of the Code, or any similar or successor provisions thereto. Any such sublease
automatically shall be void.

Section 9.16 Anything contained in this Lease to the contrary notwithstanding, without the
prior specific written consent of the Landlord, Tenant shall not sublease (or permit any Manager to
sublease on its behalf) the Premises or any part or portion thereof to any person or entity in
which Landlord or any Affiliate of Landlord owns, directly or indirectly, a ten percent (10%) or
greater interest, within the meaning of Section 856(d)(2)(B) of the Code, or any similar or
successor provisions thereto. Any such sublease automatically shall be void. Tenant shall take
reasonable precautions in connection with each sublease to ensure that such sublease will not
result in a violation of this Section.

Section 9.17 Anything contained in this Lease to the contrary notwithstanding, without the
prior specific written consent of the Landlord, Tenant shall not assign this Lease such that the
rental to be paid by the assignee thereunder would be based (or considered to be based), in whole
or in part, on either (a) the income or profits derived by the business activities of the assignee
or any other person, or (b) any other formula such that any portion of the rent payable hereunder
would or could fail to qualify as “rents from real property” within the meaning of Section 856(d)
of the Code, or any similar or successor provisions thereto. Any such assignment automatically
shall be void.

Section 9.18 Anything contained in this Lease to the contrary notwithstanding, without the
prior specific written consent of the Landlord, Tenant shall not assign the Lease to any person or
entity in which Landlord or any Affiliate of Landlord owns, directly or indirectly, a ten percent
(10%) or greater interest, within the meaning of Section 856(d)(2)(B) of the Code, or any similar
or successor provisions thereto. Tenant shall take reasonable precautions in connection with each
assignment to ensure that such assignment will not result in a violation of this Section.
Any such assignment automatically shall be void.

Section 9.19 Intentionally Omitted.

ARTICLE 10

SUBORDINATION

Section 10.1 This Lease shall be subject and subordinate to all Mortgages and each Superior
Lease hereinafter in effect and to all renewals, modifications, consolidations, replacements,
restatements, increases and extensions of any such Mortgages and/or Superior Lease; provided,
however, that (i) the subordination of this Lease to the Mortgage executed contemporaneously with
this Lease is conditioned upon the Mortgagee of such Mortgage executing and delivering to Tenant a
subordination, non-disturbance and attornment agreement in the form attached hereto as
Schedule “G”, and (ii) any subsequent subordination of this Lease is conditioned upon the
Mortgagee of such Mortgage and/or the Superior Landlord of such Superior Lease executing and
delivering to Tenant a commercially reasonable agreement to the effect that, if (x) there shall be
a foreclosure of its Mortgage, such Mortgagee will not make Tenant a party defendant to such
foreclosure, unless necessary under Applicable Law for the Mortgagee to foreclose, or if there
shall be a foreclosure of such Mortgage, such Mortgagee shall not evict Tenant, or disturb Tenant’s
leasehold estate or rights hereunder, or (y) such Superior Landlord shall exercise any of its
rights and remedies under such Superior Lease or at law or in equity to terminate such Superior
Lease or evict the tenant thereunder, such Superior Landlord shall not evict Tenant, or disturb
Tenant’s leasehold estate or rights hereunder, provided that, in all events, no Event of Default
then exists (any such agreement, or any agreement of similar import, in each case which shall be
reasonably acceptable to Tenant, from a Mortgagee or any Superior Landlord being hereinafter called
a “Non-Disturbance Agreement”), and Tenant shall attorn to the Mortgagee or any Superior Landlord,
or any successor-in-interest to Landlord, the Mortgagee or any Superior Landlord, including,
without limitation, any such party which takes title by foreclosure, power of sale, deed in lieu of
foreclosure, pursuant to a proceeding in bankruptcy or alternative procedure, or any right or
remedy under a Superior Lease or at law or in equity. The transfer of the title to the Premises,
any part thereof or any underlying lease to any Mortgagee or any Superior Landlord, or any
successor in interest to Landlord, Mortgagee or any Superior Landlord by foreclosure, power of
sale, deed in lieu of foreclosure, pursuant to a proceeding in bankruptcy or any alternative
procedure, or any right or remedy under a Superior Lease or at law or in equity shall not be
considered a default or breach by Landlord of this Lease. Provided that a fully executed
Non-Disturbance Agreement is delivered to Tenant in accordance with this Section 10.1, this
Section 10.1 shall be self-operative and no further instrument of subordination shall be
required to make the interest of any Mortgagee or Superior Landlord, as the case may be, superior
to the interest of Tenant hereunder. Notwithstanding the immediately preceding sentence, however,
Tenant shall, together with the Mortgagee or any Superior Landlord, as the case may be, execute and
deliver promptly any certificate or agreement that Landlord and any Mortgagee or Superior Landlord,
as the case may be, may reasonably request in confirmation of such subordination. Any
Non-Disturbance Agreement shall be made on the condition that the Mortgagee or Superior Landlord
(or any party claiming by, through or under such Mortgagee or Superior Landlord) shall assume all
of the obligations of Landlord under this Lease arising after the date on which said party acquires
the Premises and agrees to be bound by the terms hereof arising thereafter; provided that neither
the Mortgagee nor any Superior Landlord or anyone claiming by, through or under such Mortgagee or
Superior Landlord shall be:

(a) liable for any act or omission of any prior Landlord (including, without limitation, the
then defaulting Landlord), except for those capable of being cured by Mortgagee or Superior
Landlord, but only to the extent continuing after (i) notice to the Mortgagee or Superior Landlord,
and (ii) such Mortgagee or Superior Landlord or anyone claiming by, through or under such Mortgagee
or Superior Landlord acquired title to or control of the Premises;

(b) subject to any defense or offsets which Tenant may have against any prior Landlord
(including, without limitation, the then defaulting Landlord) which arise prior to the date such
Mortgagee (or someone acquiring at a foreclosure sale related to the Mortgagee’s Mortgage) or
Superior Landlord acquires title to the Premises or any part thereof or interest therein, except
for those capable of being cured by Mortgagee or Superior Landlord, but only to the extent
continuing after (i) notice to the Mortgagee or Superior Landlord, and (ii) such Mortgagee or
Superior Landlord or anyone claiming by, through or under such Mortgagee or Superior Landlord
acquired title to or control of the Premises;

(c) bound by any payment of Rent which Tenant might have paid for more than the current month
to any prior Landlord (including, without limitation, the then defaulting Landlord);

(d) bound by any obligation to make any payment to Tenant which was required to be made prior
to the time such Landlord succeeded to any prior Landlord’s interest;

(e) bound by any obligation to perform any work or to make improvements to the Premises; or

(f) bound by any modification, amendment or supplement to this Lease made without the prior
written consent of the Mortgagee and/or each Superior Landlord.

If required by any Mortgagee or Superior Landlord, Tenant promptly shall join in any
Non-Disturbance Agreement to indicate its concurrence with the provisions thereof and its
agreement, in the event of (x) a foreclosure of any Mortgage, or (y) such Superior Landlord’s
exercise any of its rights and remedies under such Superior Lease or at law or in equity to
terminate such Superior Lease or evict the tenant thereunder, to attorn to such Mortgagee or
Superior Landlord, as the case may be, as Tenant’s landlord hereunder. Tenant shall promptly so
accept, execute and deliver any Non-Disturbance Agreement proposed by any Mortgagee or Superior
Landlord which conforms with the provisions of this Section 10.1.

Section 10.2

(a) Tenant hereby agrees to give to any Mortgagee and Superior Landlord copies of all notices
given by Tenant of default by Landlord under this Lease at the same time and in the same manner as,
and whenever, Tenant shall give any such notice of default to Landlord. Except to the extent
provided to the contrary in the Non-Disturbance Agreement, such Mortgagee and Superior Landlord
shall have the right to remedy any default under this Lease, or to cause any default of Landlord
under this Lease to be remedied, and for such purpose Tenant hereby grants such Mortgagee and
Superior Landlord such period of time as may be reasonable (limited to ninety (90) days in the case
of a Landlord monetary default) to enable such Mortgagee or Superior Landlord to remedy, or cause
to be remedied, any such default in addition to the period given to Landlord for remedying, or
causing to be remedied, any such default (i) as long as such Mortgagee or Superior Landlord, in
good faith, shall have commenced to cure such default and shall be prosecuting the same to
completion with reasonable diligence, subject to Force Majeure, or (ii) if possession of the
Premises is required in order to cure such default as long as such Mortgagee or Superior Landlord,
in good faith, shall have notified Tenant that such Mortgagee or Superior Landlord intends to
institute proceedings under the Mortgage or the Superior Lease, as applicable, and, thereafter, as
long as such proceedings shall have been instituted and shall prosecute the same with reasonable
diligence and, after having obtained possession, prosecutes the cure to completion with reasonable
diligence. Tenant shall accept performance by such Mortgagee or the Superior Landlord of any term,
covenant, condition or agreement to be performed by Landlord under the Lease with the same force
and effect as though performed by Landlord. This Lease shall not be assigned (subject to the
provisions of Article 9) by Tenant or terminated, or modified or amended without such
Mortgagee’s and each Superior Landlord’s prior written consent in each instance, which consent
shall not be unreasonably withheld or delayed. In the event of the termination of this Lease by
reason of any default thereunder or for any other reason whatsoever except the expiration thereof,
upon such Mortgagee’s or Superior Landlord’s written request, given within thirty (30) days after
any such termination, Tenant, within fifteen (15) days after receipt of such request, shall execute
and deliver to such Mortgagee or Superior Landlord or its designee or nominee a new lease of the
Premises for the remainder of the Term of the Lease upon all of the terms, covenants and conditions
of this Lease. Neither such Mortgagee nor Superior Landlord or its designee or nominee shall become
liable under this Lease unless and until such Mortgagee, Superior Landlord or its designee or
nominee becomes, and then only for so long as such Mortgagee, Superior Landlord or its designee or
nominee remains, the fee owner of the Premises or the owner of the leasehold interest of Landlord
under this Lease. Such Mortgagee and Superior Landlord shall have the right, without Tenant’s
consent, to, as the case may be, foreclose the Mortgage or to accept a deed in lieu of foreclosure
of such Mortgage, or exercise its rights and remedies under such Superior Lease or at law or in
equity to terminate such Superior Lease or evict the tenant thereunder.

(b) In the event of any act or omission of Landlord which would give Tenant the right,
immediately or after lapse of a period of time, to cancel or terminate this Lease, or to claim a
partial or total eviction, Tenant shall not exercise such right (i) until it has given written
notice of such act or omission to each Mortgagee and Superior Landlord, and (ii) unless such act or
omission shall be one which is not capable of being remedied by Landlord or such Mortgagee or
Superior Landlord within a reasonable period of time, until a reasonable period for remedying such
act or omission shall have elapsed following the giving of such notice and following the time when
such Mortgagee or Superior Landlord shall have become entitled under the Mortgage or any other loan
documents in connection therewith or Superior Lease, as the case may be, to remedy the same (which
reasonable period shall in no event be more than thirty (30) days beyond the period to which
Landlord would be entitled under this Lease or otherwise, after similar notice, to effect such
remedy).

Section 10.3 Intentionally Omitted.

Section 10.4 If (x) a Superior Lease or Mortgage exists, and (y) Landlord gives Tenant notice
thereof to Tenant, then Tenant shall not seek to terminate this Lease by reason of Landlord’s
default hereunder until Tenant has given written notice of such default to the Superior Landlords
and the Mortgagees in either case at the addresses that have been furnished to Tenant. If any such
Superior Landlord or Mortgagee notifies Tenant, within ten (10) Business Days after the date that
such Superior Landlord or Mortgagee receives such notice from Tenant, that such Superior Landlord
or Mortgagee intends to remedy such act or omission of Landlord, then Tenant shall not have the
right to so terminate this Lease unless such Superior Landlord or Mortgagee fails to remedy such
act or omission of Landlord within a reasonable period of time after the date that such Superior
Landlord or Mortgagee gives such notice to Tenant (it being understood that such Superior Landlord
or Mortgagee shall not have any liability to Tenant for the failure of such Superior Landlord or
Mortgagee to so remedy such act or omission of Landlord during such period).

Section 10.5 Without the consent of Tenant, Landlord will have the right from time to time,
directly or indirectly, to create or grant a Facility Mortgage or any other type of lien or
encumbrance on the Premises, or any portion thereof or interest therein (including this Lease), to
secure any borrowing or other financing or refinancing. Tenant shall provide reasonable
cooperation to Landlord (at no cost to Tenant) in connection with Landlord’s efforts to obtain any
such financing, including, without limitation, any new HUD financing or any HUD refinancing (any of
the foregoing, “HUD Financing”). If required by Landlord or its mortgagee, Tenant shall execute an
amendment to this Lease modifying its terms to include commercially reasonable terms and provisions
required by such mortgagee, including, without limitation, those required by the Facility Mortgagee
or HUD in connection with a HUD Financing, provided such amendment or modification is reasonably
acceptable to Tenant and shall not materially increase the burden or materially reduce the rights
of Tenant under this Lease, and Tenant shall enter into such documents with HUD and/or the
Mortgagee as are reasonably required by HUD or Mortgagee under the HUD Financing, which may
include, without limitation, the types of documents required by HUD or Mortgagee to be executed by
the Operating Subtenants (as defined in the Master Lease) under the HUD financing for the Other
Facilities. Tenant will name Landlord’s Lender(s) as an additional insured promptly upon the
request of Landlord. If Landlord or any successor owner of the Premises conveys the Leased
Properties other than as security debt, including, without limitation, a Facility Mortgage,
Landlord or such successor owner, as the case may be, shall be released from all future liabilities
and obligations of Landlord under this Lease arising or accruing from and after the date of such
conveyance or other transfer, and all such future liabilities and obligations shall be binding upon
the new owner; provided, however, that such successor Landlord executes an assignment of lease or
other such document, reasonably agreeable to Tenant, assuming all of Landlord’s executory
liabilities and obligations under this Lease.

ARTICLE 11

OBLIGATIONS OF TENANT

Section 11.1 Whether or not Tenant is in occupancy of all of the Buildings, Tenant shall
promptly comply with all Applicable Laws with respect to the Premises (or any part thereof) and/or
the use and occupation thereof by Tenant, whether any of the same relate to or require
(i) structural changes to or in and about the Premises, or (ii) changes or requirements incident to
or as the result of any use or occupation thereof or otherwise (collectively, the “Requirements”),
and subject to Article 7, Tenant shall so perform and comply, whether or not such
Applicable Laws or Requirements shall now exist or shall hereafter be enacted or promulgated and
whether or not the same may be said to be within the present contemplation of the parties hereto.
The foregoing shall include, without limitation, present and future compliance with the provisions
of the Americans with Disabilities Act. In addition, Tenant will comply with the applicable
provisions of ERISA and of the regulations and published interpretations thereunder and shall
furnish to Landlord promptly after any officer of Tenant either knows, or has a reasonable basis to
know, notice that any violation or other reportable event (including the events set forth in
Section 4043(b) of ERISA) has occurred.

Section 11.2 Tenant agrees to give Landlord notice of any notice, assessment, claim, demand,
communication, violation, summons, complaint, investigation, sanction, termination, suspension, or
revocation made, issued or adopted by any of the governmental departments or agencies or
authorities hereinbefore mentioned having a material adverse effect on (i) the Premises,
(ii) Tenant’s use thereof or (iii) the financial condition of Tenant, a copy of which is served
upon or received by Tenant, or a copy of which is posted on, or fastened or attached to the
Premises, or otherwise brought to the attention of Tenant, by mailing within five (5) Business Days
after such service, receipt, posting, fastening or attaching or after the same otherwise comes to
the attention of Tenant, a copy of each and every one thereof to Landlord. At the same time,
Tenant will inform Landlord as to the Work or corrective measure which Tenant proposes to do or
take in order to comply therewith and reasonably satisfactory evidence of why the proposed Work or
corrective measure is legally required. Notwithstanding the foregoing, however, in all such
instances where such legally required Work or corrective measure would, as reasonably determined by
Landlord, reduce the value of the Premises or change the general character, design or use of any of
the Buildings or other improvements thereon, Tenant shall use commercially reasonable efforts to
minimize the negative impact of any such Work or corrective measure.

Section 11.3 Subject to the waiver of subrogation set forth herein, Tenant shall defend,
protect, indemnify and save harmless Landlord, Mortgagee, each Superior Landlord, each of their
respective Affiliates, any shareholders, partners, members or managers thereof, any shareholders,
partners, members or managers of any such shareholders, partners, members or managers, and any
partners, members, managers, officers, stock-holders, trustees, directors or employees of any of
the foregoing and any successors and/or assigns of any of the foregoing (each an “Indemnified
Party” and collectively, “Indemnified Parties”), from and against and shall reimburse such parties
for (a) any and all liabilities, obligations, losses, penalties, costs, charges, sanctions,
judgments, claims, causes of actions, suits, damages and expenses (collectively, “Claims”) (1)
arising from or under this Lease or Tenant’s use, occupancy and operations of, in or about the
Premises prior to or during the Term, (2) arising from the ownership, operation, maintenance,
management, use, regulation, development, expansion or construction of the Facility and/or
provision of health services from or at the Facility prior to or during the Term of this Lease,
(3) arising from working capital or other operating liabilities relating to the Facility covered by
this Lease on the date hereof, including, without limitation, Claims of Governmental Authorities
and Third Party Payors, accounts payable Claims, Recoupment Claims and similar retroactive
adjustments, Claims by or through patients, residents, customers of the Facility or services,
employee obligations Claims, payroll and payroll overhead Claims, benefit program Claims, and other
Claims relating to the liabilities of the Facility, (4) arising from a breach of this Lease by
Tenant or (5) which may be imposed upon or incurred or paid by or asserted against the Indemnified
Parties by reason of or in connection with (i) any accident, injury, death or damage to any Person
or property occurring in, on or about the Premises or any portion thereof or any adjacent street,
alley, sidewalk, curb, or passageway; (ii) any changes, alterations, repairs and anything done in,
on or about the Premises or any part thereof in connection with such changes, alterations and
repairs; (iii) the use, non-use, occupation, condition, operation, maintenance or management of the
Premises or any part thereof, or any adjacent street, alley, sidewalk, curb, or passageway;
(iv) any negligent act on the part of Tenant or any of its agents, contractors, servants,
employees, space tenants, licensees, assignees or subtenants; (v) the performance of any labor or
services or the furnishing of any materials or other property in respect of the Premises or any
part thereof; (vi) any violation by Tenant (or by any agent, contractor, or licensee then upon or
using the Premises) of any provision of this Lease (beyond the expiration of all applicable notice
and cure periods), including, but not limited to, Article VII hereof, or any breach of any
Applicable Law by Tenant or its agents, concessionaires, contractors, servants, vendors,
materialmen or suppliers; or (vii) the condition of the Premises, or of any buildings or other
structures now or hereafter situated thereon, or the fixtures or personal property thereon or
therein (excluding the presence or release of Hazardous Substances or other violations of
Environmental Law occurring or existing prior to the date of this Lease), to the extent such events
described in the foregoing clauses (i) through (vii) occur prior to or during the Term; and (b) all
costs, expenses and liabilities incurred, including actual and reasonable attorney’s fees and
disbursements through and including appellate proceedings, in or in connection with any of such
Claims; provided, however, that Tenant shall have no obligation or responsibility under this
Section 11.3 to any Indemnified Party for any Claim to the extent that such Claim results
from the gross negligence or willful misconduct of such Indemnified Party or any Affiliate of such
Indemnified Party. If any action or proceeding shall be brought against any of the Indemnified
Parties by reason of any such Claims, Tenant, upon notice from any of the Indemnified Parties,
shall resist and defend such action or proceeding, at its sole cost and expense by counsel to be
selected by Tenant but otherwise satisfactory to such Indemnified Party in its reasonable
discretion. Tenant or its counsel shall keep each Indemnified Party fully apprised at all times of
the status of such defense. If Tenant shall fail to defend such action or proceeding, such an
Indemnified Party may retain its own attorneys to defend or assist in defending any such claim,
action or proceeding, and Tenant shall pay the actual and reasonable fees and disbursements of such
attorneys. The terms and provisions of this Section 11.3 shall not in any way be affected
by the absence of insurance covering such occurrence or claim or by the failure or refusal of any
insurance company to perform any obligation on its part. The provisions of this
Section 11.3 shall survive the expiration or earlier termination of this Lease. Tenant
shall not enter into any settlement of a Claim which would impose a monetary liability on Landlord
without the written consent of Landlord. Any insurance proceeds actually received by an
Indemnified Party shall be credited against the indemnification otherwise to be provided herein.
An Indemnified Party shall give prompt written notice to Tenant of any Claim for which it seeks
indemnification hereunder, but delay in providing such notice shall not relieve Tenant of its
indemnification obligations, except to the extent such delay materially prejudiced Tenant’s ability
to defend such Claim. Nothing contained herein shall be construed to create a benefit for a third
party.

Section 11.4 If at any time prior to or during the Term (or within the statutory period
thereafter if attributable to Tenant), any mechanic’s or other lien or order for payment of money,
which shall have been either created by, caused (directly or indirectly) by, or suffered against
Tenant, shall be filed against the Premises or any part thereof, Tenant, at its sole cost and
expense, shall cause the same to be discharged by payment, bonding or otherwise, within thirty (30)
days after Tenant receives notice of the filing thereof unless such lien or order is contested by
Tenant in good faith and Tenant provides sufficient security or evidence of financial ability, in
each case to the satisfaction of Landlord (in its sole and absolute discretion), to pay the amount
of such lien or order. Tenant shall, upon notice and request in writing by Landlord, defend for
Landlord, at Tenant’s sole cost and expense, any action or proceeding which may be brought on or
for the enforcement of any such lien or order for payment of money, and will pay any damages and
satisfy and discharge any judgment entered in such action or proceeding and save harmless Landlord
from any liability, claim or damage resulting therefrom. In default of Tenant’s procuring the
discharge of any such lien as aforesaid Landlord may, without notice, and without prejudice to its
other remedies hereunder, procure the discharge thereof by bonding or payment or otherwise, and all
cost and expense which Landlord shall incur shall be paid by Tenant to Landlord as Supplementary
Rent forthwith.

Section 11.5 Landlord shall not under any circumstances be liable to pay for any work, labor
or services rendered or materials furnished to or for the account of Tenant upon or in connection
with the Premises, and no mechanic’s or other lien for such work, labor or services or material
furnished shall, under any circumstances, attach to or affect the reversionary interest of Landlord
in and to the Premises or any alterations, repairs, or improvements to be erected or made thereon.
Nothing contained in this Lease shall be deemed or construed in any way as constituting the request
or consent of Landlord, either express or implied, to any contractor, subcontractor, laborer or
materialman for the performance of any labor or the furnishing of any materials for any specific
improvement, alteration to or repair of the Premises or any part thereof, nor as giving Tenant any
right, power or authority to contract for or permit the rendering of any services or the furnishing
of any materials on behalf of Landlord that would give rise to the filing of any lien against the
Premises.

Section 11.6 Neither Landlord nor its agents shall be liable for any loss of or damage to the
property of Tenant or others by reason of casualty, theft or otherwise, or due to any interruption
or failure of any services or use or the operation or management of the Premises, or due to any
building on the Premises being defective or improperly constructed, or being or becoming out of
repair, or for any injury or damage to persons or property resulting from any cause of whatsoever
nature, except to the extent resulting from Landlord’s gross negligence or willful misconduct.

Section 11.7 Landlord shall not be required to furnish to Tenant any facilities or services of
any kind whatsoever, including, but not limited to, water, steam, heat, gas, oil, hot water, and/or
electricity, all of which Tenant represents and warrants that Tenant has obtained from the public
utility supplying the same, at Tenant’s sole cost and expense. Upon Tenant’s written request,
however, Landlord agrees to cooperate with Tenant (at no cost to Landlord) with respect to such
services.

Section 11.8 Tenant, from its formation has been, and at all times hereafter shall be a
Special-Purpose Entity.

Section 11.9

(a) Tenant acknowledges that: Landlord is not the manufacturer of Leased Personal Property nor
the manufacturer’s or supplier’s agent; Tenant is satisfied that the Leased Personal Property is
suitable and fit for its purposes; and TENANT ACKNOWLEDGES THAT LANDLORD HAS NOT MADE AND DOES NOT
MAKE ANY WARRANTY OR REPRESENTATION WHATSOEVER, EITHER EXPRESS OR IMPLIED, AS TO THE FITNESS,
CONDITION, MERCHANTABILITY, DESIGN OR OPERATION OF LEASED PERSONAL PROPERTY, ITS FITNESS FOR ANY
PARTICULAR PURPOSE, THE QUALITY OR CAPACITY OF THE MATERIALS IN LEASED PERSONAL PROPERTY OR
WORKMANSHIP IN LEASED PERSONAL PROPERTY, LANDLORD’S TITLE TO LEASED PERSONAL PROPERTY, NOR ANY
OTHER REPRESENTATION OR WARRANTY WHATSOEVER; Landlord shall not be liable to Tenant for any loss,
damage or expense of any kind or nature caused, directly or indirectly, by Leased Personal Property
or the use or maintenance thereof or the failure or operation thereof, or the repair, service or
adjustment thereof, or by any delay or failure to provide any such maintenance, repairs, service or
adjustment, or by any interruption of service or loss of use thereof or for any loss of business
however caused. Landlord shall not be liable for any consequential damages as that term is used in
the Uniform Commercial Code. No defect or unfitness of Leased Personal Property shall relieve
Tenant of the obligation to pay any installment of Rent or any other obligation under this Lease.

(b) Title to the Leased Personal Property shall at all times be vested in Landlord. Tenant
authorizes Landlord, at Tenant’s expense, to cause a statement or other instrument in respect of
this Lease showing the interest of Landlord in the Leased Personal Property, including Uniform
Commercial Code Financing Statements, to be filed or recorded, and appoints Landlord as Tenant’s
attorney-in-fact with the right and power to sign Tenant’s name thereto. Tenant agrees to execute
or procure for Landlord such estoppel certificates, landlord’s or mortgagee’s waivers or other
documents as Landlord may request to confirm or perfect Landlord’s right in the Leased Personal
Property or to otherwise effectuate the intents of this Lease. Tenant agrees to pay or reimburse
Landlord for any filing, recording or stamp fees or taxes arising from the filing or recording of
any such instrument or statement. Tenant shall, at its expense, protect and defend Landlord’s
title against all persons claiming against or through Tenant, keep the Leased Personal Property
free from legal process or encumbrance, give Landlord immediate notice thereof and shall indemnify
Landlord from any loss caused thereby. So long as Tenant is not in Default hereunder, Tenant shall
quietly use and enjoy the Leased Personal Property, subject to the terms hereof.

(c) Tenant shall: maintain the Leased Personal Property in good operating condition, repair
and appearance, normal wear and tear excepted, and protect it from deterioration other than normal
wear and tear, all in accordance with prudent industry practice; use the Leased Personal Property
in the regular course of its business, within its normal operating capacity, without abuse; comply
in all material respects with all laws, ordinances, regulations, requirements and rules with
respect to the use, maintenance and operation of the Leased Personal Property; use the Leased
Personal Property solely for the operation of the Facility; not make any modification, alteration
or addition to the Leased Personal Property without the written consent of Landlord; not affix the
Leased Personal Property (which shall remain personal property at all times regardless of how
attached or installed) to realty so as to change its nature to real property or a fixture; and keep
the Leased Personal Property at the Facility, and not remove Leased Personal Property (except in
the ordinary course of Tenant’s business, but then only if returned to the Premises or replaced
with an item of equal or greater value and functionality) without the written consent of Landlord.
Tenant, at its sole expense, shall enter into and maintain in force, for the Term of this Lease,
any maintenance contracts required by the manufacturer of the Leased Personal Property, and shall
provide to Landlord a copy of such contract and all supplements thereto.

(d) Tenant therefore covenants and agrees to pay and discharge on a timely basis, as
additional rental hereunder, all costs, expenses, and obligations of every kind and nature
whatsoever relating to the Leased Personal Property which may arise or become due during the Term
(or which arose or became due prior to the Term and were not paid as of the Effective Date),
including, without limitation, all Taxes and all interest or penalties related thereto. Tenant
will furnish to Landlord, promptly upon receipt of Landlord’s written request, proof of payment of
such amounts. If any such assessment may legally be paid in installments, Tenant may pay such
assessment in installments; in such event, Tenant shall be liable only for installments which
become due and payable with respect to any tax period occurring in whole or in part during the Term
hereof (or which became due prior to the Term).

(e) Tenant shall indemnify and hold Landlord harmless from and against all claims, losses,
liabilities (including negligence, tort and strict liability), damages, judgments, suits and all
legal proceedings, and any and all costs and expenses in connection therewith (including attorneys’
fees) arising out of or in any manner connected with the possession, use, storage, operation,
maintenance, repair, and disposition of the Leased Personal Property, including, without
limitation, (a) claims for injury to or death of persons and for damage to property, and (b) claims
relating to latent or other defects in the Leased Personal Property whether or not discoverable by
Landlord; provided, however, that Tenant shall have no liability under this Section 11.9(e)
for any such claim to the extent to the extent that such claim results from the gross negligence or
willful misconduct of Landlord or any of its Affiliates.

(f) All risks of loss, theft, damage or destruction of the Leased Personal Property from any
cause shall be borne by Tenant. The occurrence of such loss or damage shall not relieve Tenant of
any obligations hereunder. In the event of loss or damage, Tenant, at Tenant’s option, shall:
(a) place the damaged Leased Personal Property in good repair, condition and working order, or
(b) replace lost or damaged Leased Personal Property with new equipment of the same type and model,
or functionally equivalent new equipment. All replacements of the Leased Personal Property shall
constitute Tenant’s Personal Property and be subject to the rights, security interests and liens
granted to Landlord in this Lease.

(g) Tenant shall not assign, transfer, convey or grant a security interest in the Leased
Personal Property or any interest therein without the prior written consent of Landlord, which
consent Landlord may withhold in its sole discretion, except that Tenant may sublease the Leased
Personal Property for a Facility to an Affiliate subtenant of that Facility.

(h) Tenant shall, at Tenant’s sole cost and expense, keep the Leased Personal Property insured
against all risks of loss or damage from every cause whatsoever for not less than the full
replacement cost thereof. Tenant shall also obtain and maintain in effect throughout the term,
public liability insurance, covering both personal injury and property damage arising out of or in
connection with the use or operation of the Leased Personal Property. All insurance shall be in
such form and for such amounts, and issued by such companies, as shall be acceptable to Landlord
and shall name Landlord and Landlord’s assignee or secured party as loss payees with respect to the
casualty coverage and as additional insured with respect to public liability coverage and shall
provide that the insurance company will give Landlord and Landlord’s assignee or secured party at
least thirty (30) days’ prior written notice of the effective date of any alteration or
cancellation of such policy. Tenant shall, upon Landlord’s request, deliver to Landlord
satisfactory evidence of the required insurance coverage. Notwithstanding anything herein to the
contrary, this Section 11.9(h) shall not require Tenant to obtain any insurance not
otherwise required under Article 6 hereof.

(i) In order to secure the prompt payment of the Rent and all of the other amounts from time
to time outstanding hereunder, and the performance and observance by Tenant of all of the
provisions hereof, Tenant hereby collaterally assigns, grants, and conveys to Landlord, a security
interest in and lien on all of Tenant’s right, title and interest in and to all of the following
(whether now existing or hereafter created, and including any other collateral described on any
rider hereto): (1) (if contrary to the parties’ intentions a court determines that this Lease is
not a true “lease” under any applicable Uniform Commercial Code) the Leased Personal Property
(including all inventory, fixtures or other property comprising the Leased Personal Property),
together with all related software (embedded therein or otherwise) and general intangibles
(excluding accounts receivables), all additions, attachments, accessories and accessions thereto
whether or not furnished by the supplier; (2) all subleases of the Leased Personal Property and all
payments due thereunder, chattel paper, accounts, security deposits, and general intangibles
relating thereto, and any and all substitutions, replacements or exchanges for any such item of the
Leased Personal Property or other collateral, in each such case in which Tenant shall from time to
time acquire an interest; and (3) any and all insurance and/or other proceeds of the property and
other collateral in and against which a security interest is granted hereunder. The collateral
assignment, security interest and lien granted herein shall survive the termination, cancellation
or expiration of the Lease until such time as Tenant’s obligations hereunder are fully and
indefeasibly discharged. Tenant agrees that: (a) with respect to the Leased Personal Property, in
addition to all of the other rights and remedies available to Landlord hereunder upon the
occurrence of an Event of Default, Landlord shall have all of the rights and remedies of a secured
party under any applicable Uniform Commercial Code and all other applicable law; and (b) any
obligation to pay Rent or any other payment, to the extent constituting the payment of interest,
shall be at an interest rate that is equal to the lesser of the maximum lawful rate permitted by
applicable law or the effective interest rate used by Landlord in calculating such amounts.

Section 11.10 Tenant shall comply in all material respects with all Mortgage Loan Documents to
which Tenant is a party.

ARTICLE 12

DEFAULT BY TENANT; REMEDIES

Section 12.1 Each of the following shall be deemed an event of default (an “Event of Default”)
and a breach of this Lease by Tenant:

(a) The failure of Tenant to pay when due, any portion of any installment of Base Rent,
Supplementary Rent or any other monetary charge due from Tenant under this Lease where such failure
continues for a period of five (5) Business Days after Tenant’s receipt of Landlord’s written
notice of such failure, except that Landlord shall not be required to deliver such notice more
than twice in any twelve (12) month period.

(b) The failure of Tenant to comply with or observe any of the other provisions, agreements,
conditions, covenants or terms contained in this Lease, or if such failure is of such a nature that
it can be remedied, then if such failure shall continue for thirty (30) days after written notice
by Landlord to Tenant (or if such default is of such a nature that it cannot be completely remedied
within said thirty (30) day period, then if Tenant does not agree in writing within such thirty
(30) day period to cure the same, commence and thereafter diligently prosecute the cure and
complete the cure within one hundred twenty (120) days after such original written notice of
default by Landlord to Tenant).

(c) If Tenant shall Transfer all or any of its interest in the Premises or this Lease without
strict compliance with Article 9 of this Lease.

(d) The (i) initiation of any proceeding whereupon the estate or interest of Tenant in the
Premises, or any portion thereof, or in this Lease is levied upon or attached, or (ii) taking of
Tenant’s leasehold estate by execution or other process of law other than as provided in
Article 8, which proceeding or taking, as the case may be, is not vacated, discharged,
dismissed or otherwise reversed within ninety (90) days thereafter.

(e) An Event of Default under and as defined in any of the Subleases where such Event of
Default continues for an additional period of thirty (30) days following the date on which Landlord
delivers written notice to Tenant, except where such Event of Default constitutes a separately
enumerated default under this Section 12.1, in which event the other portion of this
Section 12.1 shall control; or an Event of Default under and as defined in the Master Lease
or any of the Operating Subleases (which automatically shall be an Event of Default hereunder for
which no additional notice and cure period shall be required).

(f) Tenant shall desert, vacate or fail, or fail to cause a Subtenant, to physically occupy
any material portion of the Premises (but this shall exclude a complete or partial destruction of
the Premises prior to completion of the Restoration, and a total or partial permanent or temporary
condemnation of the Premises).

(g) If (i) Tenant or Guarantor shall commence any case, proceeding or other action (A) under
any existing or future Applicable Law relating to bankruptcy, insolvency, reorganization or relief
of debtors, seeking to have an order for relief entered with respect to Tenant, or seeking to
adjudicate Tenant a bankrupt or insolvent, or seeking reorganization, arrangement, adjustment,
liquidation, dissolution, composition or other relief with respect to Tenant or Tenant’s debts, or
(B) seeking appointment of a receiver, trustee, custodian or other similar official for Tenant or
for all or any substantial part of Tenant’s property; or (ii) Tenant or Guarantor shall become
insolvent or make a general assignment for the benefit of Tenant’s creditors or shall make a
transfer in fraud of creditors; or (iii) there shall be commenced against Tenant or Guarantor any
case, proceeding or other action of a nature referred to in clause (i) above (including involuntary
bankruptcy) or seeking issuance of a warrant of attachment, execution, distraint or similar process
against all or any substantial part of Tenant’s property, which case, proceeding or other action
(A) results in the entry of an order for relief or (B) remains undismissed, undischarged or
unbonded for a period of ninety (90) days; or (iv) Tenant or Guarantor shall take any action
consenting to or approving of any of the acts set forth in clause (i) or (ii) above; or (v) Tenant
or Guarantor shall generally not, or shall be unable to, pay its debts as they become due or shall
admit in writing its inability to pay its debts.

(h) Tenant is a corporation (or partnership or limited liability company) and shall cease to
exist as a corporation (or partnership or limited liability company) in good standing in the state
of its incorporation (or formation) (unless Tenant simultaneously becomes incorporated (or formed)
and in good standing in another state) or if Tenant is a partnership or limited liability company
or other entity and Tenant shall be dissolved or otherwise liquidated, then, in the event of any of
the foregoing, if Tenant does not completely remedy such default within the thirty (30) day period
following its receipt of written notice of such default.

(i) Tenant fails or refuses to execute any certificate or agreement that Landlord or Mortgagee
may reasonably request confirming the subordination required pursuant to Article 10 or
estoppel certificate required pursuant to Article 14 within ten (10) Business Days after
Tenant’s receipt thereof.

(j) Any revocation, termination, suspension or other loss of any Health Care License relating
to the Facility or health care services provided at or from the Facility or the taking of any
action by a Governmental Authority, where any of the foregoing matters require the suspension,
closure or inability to operate the Facility as a skilled nursing facility or in the ordinary
course of business (provided, however, that in the case of a suspension or other action which is
temporary and not irrevocable and which does not require a closure of the Facility, Tenant shall
have failed to fully cure the applicable violations and restore full use of the Health Care License
within one hundred eighty (180) days after the action was initially taken or, if shorter, the time
for cure set by the Governmental Authority).

(k) Any debarment or disqualification of Tenant from being a health care provider, government
contractor, holder of any Health Care License or recipient of reimbursement from Medicare, Medicaid
or any other Third Party Payor that (in the case of such other Third Party Payor) constitutes a
material portion of Tenant’s business and would have a material adverse on the financial condition
of the Facility and Tenant’s ability to perform under the terms of this Agreement.

(l) If Tenant gives its consent or approval to a subtenant required by a Sublease without
first obtaining the prior written consent or approval of Landlord if such consent of Landlord is
required under the terms of this Lease.

(m) As provided in Section 25.3(e), if at any time the Rent Coverage Ratio is less
than 1.20:1.00 for a Test Period, then the occurrence of such event automatically shall constitute
an Event of Default upon written notice to Tenant, without a further opportunity for Tenant to cure
such Event of Default.

(n) A default or an event of default under any of the Mortgage Loan Documents resulting from
Tenant’s failure to comply with and/or observe the terms of this Lease and/or the Mortgage Loan
Documents to which such Tenant is a party or is otherwise bound; provided, however, that the
foregoing shall not apply to a default or an event of default under any of the Mortgage Loan
Documents arising solely as a result of Landlord’s failure to timely pay amounts due to Mortgagee
under the Mortgage Loan Documents (including reserve payments) if Tenant has satisfied its
obligations under this Lease to pay Rent.

Section 12.2 Upon the occurrence of an Event of Default, Landlord may, at any time thereafter,
without limiting Landlord in the exercise of any right or remedy at law or in equity that Landlord
may have by reason of such Event of Default, at its option pursue any one or more of the following
remedies without any further notice or demand whatsoever:

(a) Terminate this Lease and all of the Subleases by issuing written notice of termination to
Tenant, in which event Tenant shall immediately surrender the Premises to Landlord, but if Tenant
shall fail to do so, Landlord may without notice and without prejudice to any other remedy Landlord
may have, peaceably enter upon and take possession of the Premises and expel or remove Tenant and
its effects without being liable to prosecution or any claim for damages therefor, and upon any
such termination, Tenant agrees that in addition to its liability for the payment of arrearages of
Base Rent, Supplementary Rent and other sums due and owing by Tenant to Landlord under this Lease
upon such termination, Tenant shall be liable to Landlord for damages. Tenant shall pay to Landlord
as damages on the same days as Base Rent and other payments which are expressed to be due under the
provisions of this Lease, the total amount of such Base Rent and other payments plus a
reimbursement for all unamortized tenant allowances and concessions, less such part, if any, of
such payments that Landlord shall have been able to collect from a new tenant upon reletting;
provided, however, that Landlord shall have no obligation to Tenant to relet the Premises so as to
mitigate the amount for which Tenant is liable, except solely as follows: Following an Event of
Default, Landlord shall use commercially reasonable efforts to mitigate its direct damages;
provided, however, that the foregoing shall not be a condition precedent to an action by Landlord
against the Guarantor pursuant to the Guaranty. Landlord’s duty to mitigate by leasing the
Premises to another tenant (a “Replacement Tenant”) is subject to the following:

(i) Landlord shall have no obligation to solicit or entertain negotiations with any
prospective Replacement Tenants until Landlord obtains either (A) the final and unappealable
legal right to relet the Premises free of any claim of Tenant or (B) the written assurance
from Tenant, in form and substance reasonably acceptable to Landlord, by which Tenant waives
all claims against Landlord in connection with such mitigation efforts;

(ii) Landlord shall not be obligated to lease the Premises to a Replacement Tenant
except on the terms and conditions of this Lease;

(iii) Landlord shall not be obligated to lease the Premises to a Replacement Tenant
whose use would, in Landlord’s reasonable opinion, (a) violate any material restriction,
covenant or requirement contained in this Lease or document of another tenant or occupant of
the Building; (b) violate the Health Care Requirements or Health Care Licenses; or (c) be
incompatible with the operation of the Building;

(iv) Landlord shall not be obligated to lease the Premises to any proposed Replacement
Tenant that does not have, in Landlord’s reasonable discretion, sufficient financial
resources or operating experience to operate the Premises for the use required by this
Lease; and

(v) Landlord shall not be required to expend any amount of money to alter, remodel or
otherwise make the Premises suitable for use by a proposed Replacement Tenant, and all such
sums shall be paid by Tenant before Landlord shall be required to execute an agreement with
the Replacement Tenant.

In addition to the other remedies reserved to Landlord herein, and to the extent not
prohibited by law, if Landlord elects to terminate this Lease following an Event of Default,
Landlord shall be entitled to recover from Tenant the aggregate of: (i) the worth at the time of
award of the unpaid Rent earned as of the date of the termination hereof; (ii) the worth at the
time of award of the amount by which the unpaid Rent which would have been earned after the date of
termination hereof until the time of award exceeds the amount of such Rental loss that could have
been reasonably avoided; (iii) the worth at the time of award of the amount by which the unpaid
Rent for the balance of the Term after the time of award exceeds the amount of such Rental loss
that could have been reasonably avoided; (iv) any other amount necessary to compensate Landlord for
the detriment proximately caused by Tenant’s failure to perform its obligations under this Lease or
which, in the ordinary course of things, would be likely to result therefrom; and (v) any other
amount which Landlord may hereafter be permitted to recover from Tenant to compensate Landlord for
the detriment caused by Tenant’s Default. For the purposes hereof, “Rent” shall be deemed to be
and to mean all sums of every nature required to be paid by Tenant pursuant to the terms of this
Lease; the “time of award” shall mean the date upon which the judgment in any action brought by
Landlord against Tenant by reason of such Event of Default is entered or such earlier date as the
court may determine; the “worth at the time of award” of the amounts referred to in subclauses (i)
and (ii) of this paragraph shall be computed by allowing interest on such amounts at the Default
Rate; and the “worth at the time of award” of the amount referred to in subclause (iii) of this
paragraph shall be computed by discounting such amount at the discount rate of the Federal Reserve
Bank of New York at the time of award plus one percent (1%) per annum.

(b) Enter upon and take possession of the Premises without terminating this Lease and expel or
remove Tenant and its effects therefrom without being liable to prosecution or any claim for
damages therefor, and Landlord may relet the Premises for the account of Tenant. Tenant shall pay
to Landlord all arrearages of Base Rent, Supplementary Rent and other sums due and owing by Tenant
to Landlord, and Tenant shall also pay to Landlord during each month of the unexpired Term the
installments of Base Rent and other sums due hereunder, less such part, if any, that Landlord shall
have, been able to collect from a new tenant upon reletting; provided, however, that Landlord shall
have no obligation to Tenant to relet the Premises so as to mitigate the amount for which Tenant is
liable except as expressly provided above in this Lease. In the event Landlord exercises the rights
and remedies afforded to it under this Section 12.2(b) and then subsequently elects to
terminate this Lease, Tenant shall be liable to Landlord for damages as set forth in
Section 12.2(a) above and Landlord shall have the right at any time to demand final
settlement as provided therein.

(c) Cause the transfer of Health Care Licenses relating to the Facility and the operation and
management of the Facility and leasing of the Premises to any replacement operator, manager or
tenant of the Facility identified by Landlord, to the extent permitted by Applicable Law, and seek
the approval of Governmental Authorities in connection therewith, in which event Tenant shall
cooperate with Landlord to transfer all books and records relating to the Facility and transition
services to the replacement operator tenant in accordance with the provisions of
Section 16.1 so as to provide continuation of patient or resident care and minimize
disruption. Tenant shall cooperate with Landlord to complete the relevant application or transfer
process as expeditiously as possible. All fees and other expenses shall be the obligation of
Tenant.

(d) Enforce, by all legal suits and other means, its rights hereunder, including the
collection of Rent and other sums payable by Tenant hereunder, without re-entering or resuming
possession of the Premises and without terminating this Lease.

(e) Landlord may do whatever Tenant is obligated to do by the provisions of this Lease, may
peaceably enter the Premises in order to accomplish this purpose and may make any reasonable
expenditure or incur any reasonable obligation for the payment of money in connection therewith,
including, without limitation, reasonable attorneys’ fees and expenses. Tenant agrees to reimburse
Landlord immediately upon demand for any expenses which Landlord may incur in its actions pursuant
to this Section 12.2(e), with interest thereon at the Default Rate from the date of demand
until paid and such amount shall be deemed to be Supplementary Rent hereunder. Tenant further
agrees that Landlord shall not be liable for damages resulting to Tenant from such action.

(f) To the extent permitted by Applicable Law and in compliance with the requirements of
Health Care Licenses and Governmental Authorities, and in coordination with a transition to a
replacement facility operator or manager: Landlord may peaceably enter upon the Premises and
change, alter, or modify the door locks on all entry doors of the Premises, and permanently or
temporarily exclude Tenant, and its agents, employees, representatives and invitees, from the
Premises. In the event that Landlord either permanently excludes Tenant from the Premises or
terminates this Lease on account of Tenant’s Default, Landlord shall not be obligated thereafter to
provide Tenant with a key to the Premises at any time, regardless of any amounts subsequently paid
by Tenant. If Landlord elects to exclude Tenant from the Premises temporarily without permanently
repossessing the Premises or terminating this Lease, then Landlord shall not be obligated to
provide Tenant with a key to re-enter the Premises until such time as all delinquent rent and other
amounts due under this Lease have been paid in full and all other defaults, if any, have been cured
and Tenant shall have given Landlord evidence reasonably satisfactory to Landlord that Tenant has
the ability to comply with its remaining obligations under this Lease; and if Landlord temporarily
excludes Tenant from the Premises, Landlord shall have the right thereafter to permanently exclude
Tenant from the Premises or terminate this Lease at any time before Tenant pays all delinquent
rent, cures all other defaults and furnishes such evidence to Landlord. A key to the Premises will
be furnished to Tenant only during Landlord’s normal business hours. Landlord’s exclusion of Tenant
from the Premises shall not constitute a permanent exclusion of Tenant from the Premises or a
termination of this Lease unless Landlord so notifies Tenant in writing. Landlord shall not be
obligated to place a written notice on the Premises on the front door thereof explaining Landlord’s
action or stating the name, address or telephone number of any individual or company from which a
new key may be obtained. In the event Landlord permanently or temporarily excludes Tenant from the
Premises or terminates this Lease, and Tenant owns property that has been left in the Premises but
which is not subject to any statutory or contractual lien or security interest held by Landlord as
security for Tenant’s obligations, Tenant shall have the right to promptly so notify Landlord in
writing, specifying the items of property not covered by any such lien or security interest and
which Tenant desires to retrieve from the Premises. Landlord shall have the right to either
(i) escort Tenant to the Premises to allow Tenant to retrieve Tenant’s property not covered by any
such lien or security interest, or (ii) remove such property itself and make it available to Tenant
at a time and place designated by Landlord. In the event Landlord elects to remove such property
itself as provided in the immediately preceding clause (ii), Landlord shall not be obligated to
remove such property or deliver it to Tenant unless Tenant shall pay to Landlord, in advance, an
amount of cash equal to the amount that Landlord reasonably estimates Landlord will be required to
expend in order to remove such property and to repair any damage caused by such removal and to make
such property available to Tenant, including all moving or storage charges theretofore or
thereafter incurred by Landlord with respect to such property. If Tenant pays such estimated amount
to Landlord and the actual amount incurred by Landlord differs from the estimated amount, Tenant
shall pay any additional amounts to Landlord on demand or Landlord shall refund any excess amounts
paid by Tenant to Tenant on demand.

Pursuit of any of the foregoing remedies shall not preclude pursuit of any of the other
remedies herein provided or any other remedies provided by law or equity. Exercise of such remedies
shall be in compliance with the requirements of Health Care Licenses and Governmental Authorities,
and in coordination with a transition to a replacement facility operator or manager. Any entry by
Landlord upon the Premises may be by use of a master or duplicate key or electronic pass card or
any locksmith’s entry procedure or other means. Any reletting by Landlord shall be without notice
to Tenant, and if Landlord has not terminated this Lease, the reletting may be in the name of
Tenant or Landlord, as Landlord shall elect. Any reletting shall be for such term or terms (which
may be longer or shorter than the period which, in the absence of a termination of this Lease,
would otherwise constitute the balance of the Term) and on such terms and conditions (which may
include free rent, rental concessions or tenant inducements of any nature) as Landlord in its sole
and absolute discretion may determine, and Landlord may collect and receive any rents payable by
reason of such reletting. In the event of any reletting, Tenant shall pay to Landlord on demand the
cost of advertisements, brokerage fees, reasonable attorney’s fees and other costs and expenses
incurred by Landlord in connection with such reletting. In the event any rentals actually collected
by Landlord upon any such reletting for any calendar month are in excess of the amount of rental
payable by Tenant under this Lease for the same calendar month, the amount of such excess shall
belong solely to Landlord and Tenant shall have no right with respect thereto. In the event it is
necessary for Landlord to institute suit against Tenant in order to collect the rental due
hereunder or any deficiency between the rental provided for by this Lease for a calendar month and
the rental actually collected by Landlord for such calendar month, Landlord shall have the right to
allow such deficiency to accumulate and to bring an action upon several or all of such rental
deficiencies at one time. No suit shall prejudice in any way the right of Landlord to bring a
similar action for any subsequent rental deficiency or deficiencies.

Section 12.3 Subject to the terms of Section 12.2 above, upon the exercise by Landlord
of any of the remedies contained in this Lease, at law or in equity:

(a) Tenant shall pay to Landlord all Rent payable under this Lease by Tenant to Landlord to
the date upon which this Lease or Tenant’s right to possess the Premises shall have been terminated
or to the date of re-entry upon the Premises by Landlord, as the case may be. Additionally, Tenant
shall pay to Landlord all costs incurred by Landlord (including court costs and reasonable
attorneys’ fees and expenses) in (i) obtaining possession of the Premises, (ii) removing and
storing Tenant’s or any other occupant’s property, (iii) repairing any damage to the Premises, and
(iv) performing any of Tenant’s unperformed obligations.

(b) No re-entry or taking possession of the Premises by Landlord shall be construed as an
election on its part to terminate this Lease, unless written notice of such intention be given to
Tenant by Landlord. Notwithstanding any such reletting or re-entry to take possession, Landlord
may at any time thereafter elect to terminate this Lease for a previous then continuing uncured
default. No act or thing done by Landlord or its agents during the term hereby granted shall be
deemed an acceptance of a surrender of the Premises, and no agreement to accept a surrender of the
Premises shall be valid unless the same be made in writing by Landlord.

Section 12.4 No taking of possession of and/or reletting the Premises, or any part thereof,
shall relieve Tenant of its liabilities and obligations hereunder, all of which shall survive such
expiration, termination, repossession or reletting.

Section 12.5 To the extent not prohibited by Applicable Law, Tenant hereby waives and releases
all rights now or hereafter conferred by statute or otherwise which would have the effect of
limiting or modifying any of the provisions of this Article 12. Tenant shall execute,
acknowledge and deliver any instruments which Landlord may request, whether before or after the
occurrence of an Event of Default evidencing such waiver or release.

Section 12.6 The Rent payable by Tenant hereunder and each and every installment thereof, and
all costs, actual and reasonable attorneys’ fees and disbursements and other expenses which may be
incurred by Landlord in enforcing the provisions of this Lease on account of any delinquency of
Tenant in carrying out the provisions of this Lease shall be and they hereby are declared to
constitute a valid lien upon the interest of Tenant in this Lease and in the Premises.

Section 12.7 Suit or suits for the recovery of damages, or for a sum equal to any installment
or installments of Rent payable hereunder or any deficiencies or other sums payable by Tenant to
Landlord pursuant to this Article 12, may be brought by Landlord from time to time at
Landlord’s election, and nothing herein contained shall be deemed to require Landlord to await the
date whereon this Lease or the Term would have expired by limitation had there been no Event of
Default by Tenant and termination.

Section 12.8 Nothing contained in this Article 12 shall limit or prejudice the right
of Landlord to prove and obtain as liquidated damages in any bankruptcy, insolvency, receivership,
reorganization or dissolution proceeding an amount equal to the maximum allowed by Applicable Law
governing such proceeding and in effect at the time when such damages are to be proved, whether or
not such amount shall be greater than, equal to or less than the amount of the damages referred to
in any of the preceding Sections of this Article 12.

Section 12.9 Except as otherwise expressly provided herein or as prohibited by Applicable Law,
Tenant hereby expressly waives the service of any notice of intention to re-enter provided for in
any statute, or of the institution of legal proceedings to that end, and Tenant, for and on behalf
of itself and all persons claiming through or under Tenant, also waives any and all right of
redemption provided by any Applicable Law or statute now in force or hereafter enacted or
otherwise, or re-entry or repossession or to restore the operation of this Lease in case Tenant
shall be dispossessed by a judgment or by warrant of any court or judge or in case of re-entry or
repossession by Landlord or in case of any expiration or termination of this Lease.

Section 12.10 No failure by Landlord to insist upon the strict performance of any covenant,
agreement, term or condition of this Lease or to exercise any right or remedy consequent upon a
breach thereof, or receipt or acceptance of Rent with knowledge of or during the continuance of any
such breach, shall constitute a waiver or relinquishment of any such breach or of such covenant,
agreement, term or condition. No covenant, agreement, term or condition of this Lease to be
performed or complied with by Tenant, and no breach thereof, shall be waived, altered or modified
except by a written instrument executed by Landlord. No waiver of any breach shall affect or alter
this Lease, but each and every covenant, agreement, term and condition of this Lease shall continue
in full force and effect with respect to any other then existing or subsequent breach thereof.

Section 12.11 In the event of any breach by Tenant of any of the covenants, agreements, terms
or conditions contained in this Lease, Landlord shall be entitled to a decree compelling
performance of any of the provisions hereof and the restraint by injunction of the violation or
attempted or threatened violation of any of the terms, covenants and conditions of this Lease, and
shall have the right to invoke any rights and remedies allowed at law or in equity or by statute or
otherwise as though re-entry, summary proceedings, and other remedies were not provided for in this
Lease. The rights granted to Landlord in this Lease shall be cumulative of every other right or
remedy which Landlord may otherwise have at law, in equity or otherwise, and the exercise of one or
more rights or remedies shall not prejudice or impair the concurrent or subsequent exercise of
other rights or remedies.

Section 12.12 Tenant shall pay to Landlord all reasonable costs and expenses, including,
without limitation, reasonable attorneys’ fees and disbursements, incurred by Landlord in any
action or proceeding to which Landlord may be made a party by reason of any act or omission of
Tenant. Tenant also shall pay to Landlord all reasonable costs and expenses, including, without
limitation, actual and reasonable attorneys’ fees and disbursements, incurred by Landlord in
enforcing any of the covenants and provisions of this Lease and incurred in any action brought by
Landlord against Tenant on account of the provisions hereof, and all such costs, expenses and
attorneys’ fees and disbursements may be included in and form a part of any judgment entered in any
proceeding brought by Landlord against Tenant on or under this Lease. All of the sums paid or
obligations incurred by Landlord as aforesaid, with interest and costs, shall be paid by Tenant to
Landlord on demand.

Section 12.13 If Tenant shall fail to pay any installment of Base Rent or Supplementary Rent
within five (5) days of when such payment is due, Tenant shall pay to Landlord, in addition to such
payment of Base Rent or Supplementary Rent, as the case may be, interest on the amount unpaid at
the Default Rate, computed from the date such payment was due to and including the date of payment.

Section 12.14 To the extent that any provision of this Lease entitles Landlord to recover its
fees, costs, expenses or attorneys’ fees from Tenant, such fees, costs, expenses or attorneys’ fees
shall include Landlord’s reasonable allocable costs of in-house counsel, only to the extent that
Landlord’s right to recover such fees, costs, expenses or attorneys’ fees arises out of an Event of
Default by Tenant.

Section 12.15

(a) Subject to Section 12.15(b) and Section 12.15(c), as security for the
payment and performance of all of Tenant’s obligations and Landlord’s rights under this Lease,
Tenant hereby assigns, grants, delivers, sets over and transfers to Landlord and grants to
Landlord, its successors and assigns, (i) a continuing first priority security interest in all of
its right, title and interest, whether now owned or hereafter acquired, now existing or hereafter
arising, wherever located, in and to the Tenant Personal Property, and (ii) a continuing first
priority security interest in all of its right title and interest, whether now owned or hereafter
acquired, now existing or hereafter arising, in and to the Health Care Licenses and the Provider
Agreements, in each case subject to the terms and conditions of an Inter-Creditor Agreement
(defined below), to have and to hold the same, unto Landlord, such transfer and assignment to
automatically become a present, unconditional assignment upon the expiration or earlier termination
of this Lease to the extent permitted by Applicable Law. Tenant shall sign and deliver to
Landlord, or if Tenant’s signature is not required, Tenant hereby authorizes Landlord to file in
all necessary governmental offices, one or more financing statements to perfect the security
interest granted by Tenant to Landlord hereunder. Landlord shall have all rights and remedies
available to a secured party under the Uniform Commercial Code, as amended from time to time.
Tenant acknowledges that Landlord may assign its security interest in the Tenant Personal Property,
the Health Care Licenses and the Provider Agreements (collectively, the “Working Capital Loan
Collateral”) to Mortgagee and/or to a Superior Landlord and upon Landlord’s request, or at the
request of Mortgagee, Tenant shall confirm in writing the grant of such security interests to
Mortgagee and/or Superior Landlord. These provisions of this Lease shall be deemed to be a
Security Agreement. In connection with the expiration or earlier termination of this Lease, Tenant
shall use reasonable efforts to cause the Health Care Licenses and the Provider Agreements to be
reissued in the name of Landlord or its designee as of such date or as soon thereafter as is
practicable. Without limiting the foregoing, Tenant shall reasonably cooperate with Landlord in
obtaining such re-issuance, and Landlord shall be entitled to apply in its own name, its designee’s
name or Tenant’s name for the transfer of the Health Care Licenses and the Provider Agreements to
Landlord or its designee, and Tenant’s obligation to reasonably cooperate shall survive the
expiration or earlier termination of this Lease. Any grant of security interest in, or pledge or
collateral assignment of, the Working Capital Loan Collateral to any financial institution making a
loan to Tenant shall be expressly subject to this Lease, including, without limitation,
Section 12.15(b) and Section 12.15(c) below, and the foregoing rights of Landlord
and Landlord’s first priority security interest in the Tenant Personal Property and rights as a
collateral assignee of the Health Care Licenses, Provider Agreements and the Tenant’s Personal
Property under and as defined in the Subleases. Any foreclosure of or exercise of any other
remedies by Tenant’s lender, if any, shall be subject to the foregoing provisions and the other
terms and conditions of this Lease, including, without limitation, the terms and conditions of
Section 9.1 regarding Transfers requiring the consent of Landlord and Mortgagee. Tenant
shall provide, to Landlord copies of the documents evidencing the Working Capital Loan within five
(5) Business Days following receipt of Landlord’s written request.

(b) Notwithstanding any provision in this Lease to the contrary, Tenant is expressly
permitted, from time to time, directly or indirectly, to (i) enter into any one or more Working
Capital Loans and/or (ii) grant to a Working Capital Lender a security interest or create or
otherwise cause to exist a lien, encumbrance or pledge, in to or upon any and all of Tenant’s
right, title and interest in, to and under the Working Capital Loan Collateral, subject to the
terms of this Section 12.15, and provided that the Working Capital Lender executes an
Inter-Creditor Agreement with Landlord simultaneously with the occurrence of the foregoing and each
such Working Capital Loan is in compliance with all applicable HUD requirements and those of
Mortgagee. Landlord agrees to reasonably cooperate with Tenant in its efforts to obtain any such
Working Capital Loan and, upon the request of Tenant, to provide Landlord’s written consent, as may
be necessary, to any such Working Capital Loan. Nothing contained in this Section 12.15(b)
shall be deemed to permit Tenant to grant a security interest or create or otherwise cause to exist
a lien, encumbrance or pledge in any of Tenant’s right, title and interest in, to or under any
Rents paid or payable to Tenant under any Sublease of all or any portion of the Premises, it being
understood and agreed that in no event shall Tenant be permitted to so encumber such Rents.

(c) Landlord and Tenant acknowledge and agree that (1) Landlord will maintain a perfected
security interest in the Working Capital Loan Collateral and a current or future Working Capital
Lender may have a perfected security interest in some or all of the Working Capital Loan
Collateral, which shall include at the request of Tenant a first priority (or second or subsequent
priority to the extent any Mortgagees have greater priority) security interest in favor of such
Working Capital Lender in items of Working Capital Loan Collateral consisting of accounts
receivable and associated proceeds and records, in which event Landlord shall be behind such
Working Capital Lender and have a second priority (or third or subsequent priority to the extent
any Mortgagees have greater priority) security interest in such items of Working Capital Loan
Collateral; (2) with respect to a Working Capital Loan in effect as of the Effective Date,
simultaneously with the execution of this Lease, Landlord, Tenant, any Superior Landlord, any
Mortgagee and the Working Capital Lender shall execute a mutually acceptable inter-creditor
agreement containing commercially reasonable terms (an “Inter-Creditor Agreement”) with respect to
any security interest granted in the Working Capital Loan Collateral; (3) with respect to a future
Working Capital Loan, Landlord and Tenant shall execute a mutually acceptable Inter-Creditor
Agreement by and among Landlord, Tenant, each Superior Landlord, any Mortgagee and the Working
Capital Lender containing commercially reasonable terms; and (4) with respect to any future
acquired Working Capital Loan Collateral, Landlord and Tenant shall execute a mutually acceptable
Inter-Creditor Agreement by and among Landlord, Tenant, each Superior Landlord, any Mortgagee and
the Working Capital Lender containing commercially reasonable terms. Any Inter-Creditor Agreement
will include, without limitation, a provision that, following an event of default under such
Working Capital Loan (beyond any applicable notice and cure periods), the Working Capital Lender
will release its lien (i) in the Health Care Licenses and the Provider Agreements upon receipt of
the sum of $1.00 and (ii) in the Tenant’s Personal Property upon receipt of a sum equal to the fair
market value of the Tenant’s Personal Property, in each case without the payment of any termination
fee or other prepayment charges.

ARTICLE 13

NO WAIVER

Section 13.1 No receipt of moneys by Landlord from Tenant after the termination or
cancellation of this Lease or termination of Tenant’s right to possess the Premises (or after the
giving of any notice of the termination of this Lease or Tenant’s right to possess the Premises)
shall reinstate, continue or extend the Term, or affect any notice theretofore given to Tenant, or
affect or otherwise operate as a waiver of the right of Landlord to enforce the payment of Base
Rent or Supplementary Rent then due, or thereafter falling due, or operate as a waiver of the right
of Landlord to recover possession of the Premises by proper suit, action, proceeding or remedy; it
being agreed that, after the service of notice to terminate or cancel this Lease or Tenant’s right
to possess the Premises, or the commencement of suit, action or summary proceedings, or any other
remedy, or after a final order or judgment for the possession of the Premises, Landlord may demand,
receive and collect any moneys due, or thereafter falling due, without, in any manner whatsoever,
affecting such notice, proceeding, suit, action, order or judgment; and any and all such moneys
collected shall be deemed to be payments on account of the use and occupation of the Premises or,
at the election of Landlord, on account of Tenant’s liability hereunder. The acceptance of any
check or payment bearing or accompanied by any endorsement, legend or statements shall not, of
itself, constitute any change in or termination of this Lease.

Section 13.2 The failure of Landlord to enforce any agreement, condition, covenant or term, by
reason of its breach by Tenant shall not be deemed to void, waive or affect the right of Landlord
to enforce the same agreement, condition, covenant or term on the occasion of a subsequent default
or breach. No surrender of the Premises by Tenant (prior to any termination of this Lease) shall be
valid unless consented to in writing by Landlord.

ARTICLE 14

ESTOPPEL CERTIFICATE; CONSENT

Section 14.1 Tenant agrees that it shall, at any time and from time to time upon not less than
ten (10) days’ prior notice by Landlord, execute, acknowledge and deliver to Landlord a statement
in writing certifying that this Lease is unmodified and in full force and effect (or if there have
been any modifications, that the Lease is in full force and effect as modified and stating the
modifications), the Base Rent and Supplementary Rent payable and the dates to which the Base Rent
and Supplementary Rent have been paid, that the address for notices to be sent to Tenant is as set
forth in this Lease, stating whether or not Landlord is in default in keeping, observing or
performing any term, covenant, agreement, provision, condition or limitation contained in this
Lease and, if in default, specifying each such default, the Commencement Date and Expiration Date
for the current Term, that Tenant is in possession of the Premises, and any other customary matters
reasonably requested by Landlord, any Mortgagee, or any Superior Landlord; it being intended that
any such statement delivered pursuant to this Article 14 may be relied upon by Landlord or
any Superior Landlord or any prospective purchaser of the Premises or any Mortgagee thereof or any
assignee of any Mortgage upon the Premises. Tenant shall also cause any Subtenant to deliver a
statement as to the foregoing matters with respect to the applicable Sublease, and the same parties
shall be entitled to rely on such estoppel certificate.

Section 14.2 Landlord may secure financing of its interest in the Premises by, among other
things, assigning Landlord’s interest in this Lease and the sums payable hereunder to Mortgagee.
Tenant agrees, upon not less than ten (10) Business Days’ prior notice by Landlord, to execute,
acknowledge and deliver to Landlord such certificates and other documents as may be reasonably
requested by Landlord.

Section 14.3 Landlord agrees that it shall, at any time and from time to time upon not less
than ten (10) days’ prior notice by Tenant, execute, acknowledge and deliver to Tenant a statement
in writing certifying that this Lease is unmodified and in full force and effect (or if there have
been any modifications, that the Lease is in full force and effect as modified and stating the
modifications), the Base Rent and Supplementary Rent payable and the dates to which the Base Rent
and Supplementary Rent have been paid, that the address for notices to be sent to Landlord is as
set forth in this Lease, stating whether or not to the knowledge of Landlord that Tenant is in
default in keeping, observing or performing any term, covenant, agreement, provision, condition or
limitation contained in this Lease and, if in default, specifying each such default, the
Commencement Date and Expiration Date for the current Term, that Tenant is in possession of the
Premises, and any other matters requested by Tenant; it being intended that any such statement
delivered pursuant to this Article 14 may be relied upon by Tenant or any prospective
purchaser of the Premises.

ARTICLE 15

QUIET ENJOYMENT

Section 15.1 Tenant, upon payment of the Rents herein reserved and upon the due performance
and observance of all the covenants, conditions and agreements herein contained on Tenant’s part to
be performed and observed in all material respects, including, without limitation, the maintenance
by Tenant of all necessary Health Care Licenses for the Facility in good standing and the
compliance by Tenant with all Requirements of Governmental Authorities, shall and may at all times
during the Term peaceably and quietly have, hold and enjoy the Premises without any manner of suit,
trouble or hindrance of and from Landlord or any Person claiming by, through or under Landlord,
subject, nevertheless, to the terms and provisions of this Lease.

ARTICLE 16

SURRENDER

Section 16.1 Tenant shall, on the last day of the Term, or upon the sooner termination of the
Term, quit and surrender to Landlord the Premises vacant, free of all Tenant Personal Property
(subject to Landlord’s right to purchase the owned Tenant’s Personal Property or take an assignment
of the leased Tenant’s Personal Property pursuant to Section 16.5 hereof), and in good
condition and repair, reasonable wear and tear, and damage from condemnation and from Tenant’s
election not to restore after casualty, excepted, and Tenant shall remove or demolish all of the
fixtures, structures and other improvements which Landlord shall have elected to cause Tenant to
remove pursuant to and in accordance with Section 5.7 hereof; provided, however, that at
the termination of the Lease, Tenant shall allow the successor tenant to use Tenant’s Personal
Property for a reasonable period of time until such successor tenant is able to acquire
replacements for such Tenant’s Personal Property, as long as the successor tenant shall pay Tenant
the reasonable rental value for such use. Upon the expiration or earlier termination of this
Lease, Landlord may, to the extent permitted by Applicable Law, cause the transfer of Health Care
Licenses relating to the Facility and the operation and management of the Facility and leasing of
the Premises to any replacement operator, manager or tenant of the Facility designated by Landlord
and seek the approval of Health Care Regulatory Agencies in connection therewith. In connection
with such transfer, Tenant shall cooperate with Landlord (including, if required by Landlord, the
execution and delivery of a transfer agreement reasonably acceptable to the parties) and provide
for, at Landlord’s expense, (i) the transfer to the successor tenant of: (A) all federal, state or
municipal licenses, certifications, certificates, approvals, permits, variances, waivers, provider
agreements and other authorizations certificates that are related to the operation of the Facility
to the extent same are transferable; and (B) all names associated with the Facility as then known
to the general public (but excluding any names that are Tenant Personal Property), (ii) the
preparation and filing of all notices reasonably required by Applicable Law in connection with such
termination and transfer of operations, (iii) provided that such successor tenant executes an
agreement, in form and substance reasonably acceptable to such successor tenant and Tenant,
confirming the obligations to maintain such charts and records for a period equal to the longer of
the applicable statute of limitations or the period required by applicable laws, the delivery to
the successor tenant of all patient charts and resident records along with appropriate patient and
resident consents, if necessary, subject to applicable regulations, (iv) the delivery to the
successor tenant of such inventories and supplies at commercially reasonable operating levels, upon
Tenant’s receipt of payment therefor as otherwise provided in this Lease, and (v) the delivery of
copies of all of Tenant’s books and records relating to the Facility and its operations that are
necessary to transition the Facility to the successor tenant, to Landlord or the successor tenant,
within a reasonable time so as to provide continuation of patient or resident care and minimize
disruption. Tenant’s obligation to observe and perform this covenant shall survive the expiration
or earlier termination of the Term. In the event that Tenant fails to surrender the Premises as
aforesaid, in addition to the rights of Landlord under Section 16.3, Landlord shall have
the right to exercise the applicable remedies upon the occurrence of an Event of Default. Tenant
shall have the right, as long as no Event of Default has occurred and is continuing under this
Lease, upon the expiration of the Term (but subject to (a) the temporary use by the successor
tenant referred to above and (b) Landlord’s right to purchase the owned Tenant’s Personal Property
or takes an assignment of the leased Tenant’s Personal Property pursuant to Section 16.5
hereof), to remove from the Premises all of Tenant’s Personal Property, whether or not the same be
attached to the real estate, provided that Tenant shall at its own cost and expense reasonably
restore and repair any damage to the Premises caused by the removal of Tenant’s Personal Property.
Such removal shall be done upon reasonable advance notice, at a mutually convenient time approved
by Landlord and without disruption of the successor tenant’s business operations.

Section 16.2 Upon the expiration of the Term, all Base Rent and Supplementary Rent and other
items payable by Tenant under this Lease shall be apportioned to the date of termination.

Section 16.3 Tenant acknowledges that possession of the Premises must be surrendered to
Landlord at the expiration or sooner termination of the term of this Lease. The parties recognize
and agree that the damage to Landlord resulting from any failure by Tenant to timely surrender
possession of the Premises as aforesaid will be extremely substantial, will exceed the amount of
the Base Rent and Supplementary Rent theretofore payable hereunder, and will be impossible to
accurately measure. Tenant therefore agrees that, subject to Section 16.4, if possession of
the Premises is not surrendered to Landlord upon the expiration or sooner termination of the term
of this Lease, then, in addition to any other rights or remedies available to Landlord under this
Lease, Tenant shall pay to Landlord, as liquidated damages for each month and for each portion of
any month during which Tenant holds over in the Premises after the expiration or sooner termination
of the term of this Lease, a sum equal to 125% of the aggregate of the Base Rent and Supplementary
Rent which was payable under this Lease with respect to the last month of the term hereof. Nothing
herein contained shall be deemed to permit Tenant to retain possession of the Premises after the
expiration or sooner termination of the term of this Lease; and in the event of any unauthorized
holding over, Tenant shall indemnify each of the Indemnified Parties against all claims for damages
by any other lessee or prospective lessee to whom Landlord may have leased all or any part of the
Premises effective before or after the expiration or termination of the Term of this Lease;
provided, however, that Tenant shall not be responsible for any consequential damages if Tenant
surrenders the Premises within ninety (90) days after the expiration or sooner termination of the
term of this Lease. If Tenant holds over in possession after the expiration or termination of the
term of the Lease, such holding over shall not be deemed to extend the term or renew this Lease,
but the tenancy thereafter shall continue as a tenancy from month to month upon the terms and
conditions of this Lease at the Base Rent and Supplementary Rent as herein increased. Tenant hereby
waives the benefit of any Applicable Law which would contravene or limit the provisions set forth
in this Section 16.3. This provision shall survive the expiration or earlier termination of
this Lease.

Section 16.4 Notwithstanding anything to the contrary contained in this Lease, if pursuant to
Applicable Law, Tenant is required to continue to operate the Facility after the Expiration Date,
Tenant shall do so pursuant to Applicable Law, and Tenant shall continue to pay Landlord Base Rent
and Supplementary Rent at the rates then in effect under this Lease (subject to the annual Base
Rent increases set forth in Section 2.1(c) and Section 24.3). Landlord further
agrees that if Tenant is required to continue the operation of the Facility pursuant to this
Section 16.4, then at Tenant’s option, Tenant may continue to operate the balance of the
Facility until such time as Tenant is permitted to cease operations of all of the Facility. The
period of time pursuant to which Tenant continues to operate the Facility pursuant to this
Section 16.4 shall be referred to as the “Extended Operation Period”.

Section 16.5 At the expiration or earlier termination of the Lease, Landlord shall have the
right to (i) for no consideration, take an assignment of the lessee’s interest in all of the leased
Tenant’s Personal Property free and clear of all liens and encumbrances (other than said lease) and
(ii) purchase all of Tenant’s Personal Property free and clear of all liens and encumbrances for
the fair market value thereof, which right must be exercised by Landlord upon irrevocable written
notice to Tenant at least one hundred eighty (180) days prior to the expiration of the Term, or the
Extended Operation Period, as applicable. For purposes of determining the fair market value of the
owned Tenant’s Personal Property (“Personal Property Fair Market Value”), the following procedure
shall apply:

(a) If Landlord has timely delivered the aforementioned notice, Tenant shall within fifteen
(15) days deliver to Landlord a written notice of Tenant’s determination of the Personal Property
Fair Market Value (the “Value Notice”).

(b) Within fifteen (15) days after Landlord’s receipt of the Value Notice, Landlord shall give
Tenant a notice (“Landlord’s Value Response Notice”) electing either (i) to accept the Personal
Property Fair Market Value set forth in the Value Notice, in which case the Personal Property Fair
Market Value shall be as set forth in the Value Notice, or (ii) not to accept Tenant’s
determination of the Personal Property Fair Market Value set forth in the Value Notice in which
case Landlord’s Value Response Notice shall include Landlord’s determination of the Personal
Property Fair Market Value, whereupon Landlord and Tenant shall endeavor to agree upon the Personal
Property Fair Market Value on or before the date that is thirty (30) days after Tenant’s receipt of
Landlord’s Value Response Notice. If Landlord and Tenant are unable to agree upon the Personal
Property Fair Market Value within such 30-day period, then the Personal Property Fair Market Value
shall be determined in accordance with Section 16.5(c) below. If Landlord fails to deliver
Landlord’s Value Response Notice within the 15-day period following its receipt of Tenant’s Value
Notice, Landlord shall be conclusively deemed to have rejected Tenant’s determination of the
Personal Property Fair Market Value.

(c) If Landlord and Tenant shall fail to agree upon the Personal Property Fair Market Value
within thirty (30) days of the date of Tenant’s receipt of Landlord’s Value Response Notice, then,
within ten (10) Business Days thereafter, Landlord and Tenant each shall give notice to the other
setting forth the name and address of an independent appraiser or consultant having at least 10
years experience in the business of appraising or determining the value of personal property
comparable to Tenant’s Personal Property in the general location of the Premises. If either party
shall fail to give notice of such designation within such 10 Business Day period, then the
appraiser chosen shall make the determination alone. If two appraisers have been designated, such
two appraisers may consult with each other and shall, not later than the 60th day after Tenant’s
receipt of Landlord’s Value Response Notice choose either Landlord’s or Tenant’s determination of
the Personal Property Fair Market Value by simultaneously giving written notice thereof to each of
Landlord and Tenant, in which case the determination so chosen shall be final and binding upon
Landlord and Tenant and their respective Affiliates. If such two appraisers shall fail to concur
within such 30-day period, then such two appraisers shall, within the next ten (10) days, designate
a third appraiser meeting the above requirements. The third appraiser shall, within thirty (30)
days after its designation, choose either Landlord’s or Tenant’s determination (and no other) by
simultaneously delivering to Landlord and Tenant signed and acknowledged original counterparts of
his or her determination within 7 days thereof, which determination shall be final and binding upon
Landlord and Tenant and their respective Affiliates. The determination of the appraisers pursuant
to this Section 16.5(c) shall be deemed to be binding arbitration which may be confirmed by
court order at the request of either Landlord or Tenant. The parties shall thereafter execute and
deliver any instruments of conveyance required to transfer Tenant’s Personal Property pursuant to
such appraisers’ determination.

(d) The fees, costs and expenses of each party’s appraiser shall be paid by such party. The
fees, costs and expenses of the third appraiser shall be shared equally by Landlord and Tenant. If
a decision is rendered by a single appraiser due to the other party’s failure to designate an
appraiser, then the fees, costs and expenses of the appraiser so rendering the decision shall be
shared equally by Landlord and Tenant.

ARTICLE 17

ACCESS

Section 17.1 Landlord shall at all times during the Term have the right and privilege to enter
the Premises for the purpose of inspecting the same to ensure compliance by Tenant with all of the
provisions set forth in this Lease or for the purpose of showing the same to prospective purchasers
or Mortgagees thereof. Landlord shall also have the right and privilege at all times during the
Term to post notices of non-responsibility for work performed by or on behalf of Tenant and, during
the last one (1) year of the Term, Landlord shall have the right and privilege to enter the
Premises at reasonable times during business hours for the purpose of exhibiting the same to
prospective new tenants. Notwithstanding the foregoing, Landlord will not access patient or
medical information which is protected from such access by Federal or State privacy laws, including
the Health Insurance Portability and Accountability Act (“HIPAA”) and the Health Information
Technology for Economic and Clinical Health Act (“HITECH Act”) and the regulations promulgated
thereunder, as amended, and Landlord will respect patient’s rights to privacy of their own rooms
and possessions.

Section 17.2 Landlord shall at all times during the Term have the right to enter the Premises
or any part thereof for the purpose of making such repairs or Alterations therein as Landlord deems
reasonably necessary or advisable following the failure of Tenant to make any such repairs or
Alterations required by this Lease beyond any applicable notice and cure period which required
repairs or Alterations must be supported by an engineering report from an engineer reasonably
acceptable to Landlord and Tenant, and reasonably agreed to by both Landlord and Tenant, but such
right of access shall not be construed as obligating Landlord to make any repairs to or
replacements to the Premises or as obligating Landlord to make any inspection or examination of the
Buildings. Tenant shall pay to Landlord, on demand, as Supplementary Rent hereunder, all amounts
expended by Landlord pursuant to this Section 17.2 which amounts shall bear interest at the
Default Rate until paid, if Tenant shall have failed to make said repairs within fifteen (l5) days
of the receipt of said report. In the event of an emergency, Landlord shall have the right to
enter the Premises or any part thereof.

ARTICLE 18

ENVIRONMENTAL MATTERS

Section 18.1 Tenant will not use, generate, manufacture, produce, store, release, discharge or
dispose of in, on, under, from or about the Premises or transport to or from the Premises any
Hazardous Substance and will not allow or suffer any other person or entity to do so (except for
non-material quantities of Hazardous Substances that may be customarily used in the ordinary
operation of a skilled nursing facility and for which Tenant has obtained any necessary permits or
Governmental approvals (collectively, “Immaterial Use”)).

Section 18.2 Tenant shall keep and maintain the Premises in substantial compliance with, and
shall not cause, permit or suffer the Premises to be in material violation of, any Environmental
Law. Tenant shall, at its sole cost and expense, cause any Repairs or Alterations to the Premises
to be conducted and performed by qualified contractors and in compliance with all Environmental
Laws.

Section 18.3 Tenant shall give prompt written notice to Landlord of:

(a) any use, generation, manufacture, production, storage, release, discharge or disposal of
any Hazardous Substance in, on, under, from or about the Premises or the migration thereof to or
from other property, in each case, during the Term (other than Immaterial Use);

(b) knowledge of the commencement, institution or threat of any proceeding, inquiry or action
by or written notice from any local, state or federal governmental authority with respect to the
use or presence of any Hazardous Substance in, on, under, from or about the Premises or the
migration thereof from or to other property, in each case, during the Term;

(c) knowledge of all claims or demands made or threatened by any third party against Landlord,
Tenant or the Premises relating to any damage, contribution, cost recovery, compensation, loss or
injury resulting from any Hazardous Substance, in each case, during the Term;

(d) knowledge of any circumstances, occurrence or condition on, in, under, to or from the
Premises, in each case, during the Term, that reasonably could (A) cause the Premises or any part
thereof to be subject to any restrictions on the ownership, occupancy, transferability or use under
any Environmental Law, (B) give rise to a proceeding, inquiry, notice of violation, penalty or fine
by any local, state or federal governmental authority against Landlord or Tenant, or (C) give rise
to a claim or demand by any third party against Landlord or Tenant for damages, contribution, cost
recovery, compensation, loss or injury; and

(e) knowledge of any claims for the incurrence of expense by any governmental authority or
others in connection with the assessment, containment, remediation or removal of any Hazardous
Substance located on, under, from or about the Premises, in each case, during the Term.

Landlord shall give prompt written notice to Tenant of knowledge of any of the facts, events
or circumstances set forth in (a) — (e) above, including all claims under Environmental Laws
commenced or threatened against Landlord with respect to the Premises during the Term.

Section 18.4 Landlord shall have the right, but not the obligation, to join and participate
in, as a party if it so elects, any administrative or legal proceedings or actions initiated with
respect to the Premises in connection with any Environmental Law, with each party bearing its own
costs of such legal proceedings except as provided in Section 18.6.

Section 18.5 Without Landlord’s prior written consent, which consent shall not be unreasonably
withheld, conditioned or delayed, Tenant shall not take any remedial action in response to the
presence of any Hazardous Substance in, on, under, from or about the Premises, nor enter into any
settlement, consent or compromise which might reasonably impair the value of Landlord’s interest in
the Premises under this Lease; provided, however, that Landlord’s prior consent shall not be
necessary if the presence of Hazardous Substance in, on, under, from or about the Premises either
poses an immediate threat to the health, safety or welfare of any individual or is of such a nature
that an immediate remedial response is necessary and it is not reasonably practical or possible to
obtain Landlord’s consent before taking such action. In such event Tenant shall notify Landlord as
soon as practicable of any action so taken. Landlord agrees not to withhold its consent, where such
consent is required hereunder, if a particular remedial action is ordered by a court or any agency
of competent jurisdiction.

Section 18.6

(a) Tenant shall protect, indemnify and hold harmless each of the Indemnified Parties from and
against any and all claim, loss, damage, cost, expense, liability, fines, penalties, charges,
administrative and judicial proceedings and orders, judgments, remedial action requirements,
enforcement actions of any kind (including, without limitation, attorneys’ fees and costs) directly
or indirectly arising out of or attributable to (i) Tenant’s breach of any of the covenants,
representations and warranties of this Article 18 by Tenant, or (ii) the use, generation,
manufacture, production, storage, release, threatened release, discharge or disposal of a Hazardous
Substance in, on, under, from or about the Premises prior to or during the Term, (iii) [reserved],
or (iv) the violation or liability under any Environmental Law arising from any activity carried on
or undertaken on the Premises during the Term by Tenant or any employees, agents, contractors or
subcontractors of Tenant or any third persons occupying or present on the Premises during the Term,
including, without limitation: (i) the reasonable costs of any required or necessary response,
repair, cleanup or detoxification of the Premises and the preparation and implementation of any
closure, remedial or other required plans including, without limitation: (A) the costs of response,
removal or remedial action incurred by any Governmental Authority or reasonably by any other
Person, or damages from injury to, destruction of, or loss of natural resources, including the
costs of assessing such injury, destruction or loss, incurred pursuant to any Environmental Law;
(B) the clean-up costs, fines, damages or penalties incurred pursuant to the provisions of
Applicable Law; and (C) the cost and expenses of abatement, correction or clean-up, fines, damages,
response costs or penalties which arise from the provisions of any other Applicable Law; and
(ii) liability for damages, including damages assessed for the maintenance of the public or private
nuisance, response costs or for the carrying on of an abnormally dangerous activity. The
obligations arising under this Section 18.6 shall apply regardless of when the violation,
liability, loss, harm, damage or injury is discovered.

As used in this Lease, the term “Petroleum” shall mean any petroleum, petroleum product,
petroleum by-product, and any constituent derivative or by-product thereof, including methyl
tertiary butyl ether (MTBE).

This indemnity is intended to be operable under 42 U.S.C. Section 9607(e)(1) and any successor
section thereof and shall survive expiration or earlier termination of this Lease and any transfer
of all or a portion of the Premises by Tenant.

(b) The foregoing indemnity shall in no manner be construed to limit or adversely affect
Landlord’s rights under this Article 18, including, without limitation, Landlord’s rights
to approve any Remedial Work or the contractors and consulting engineers retained in connection
therewith.

Section 18.7

(a) In the event that any reporting, assessment, investigation, site monitoring, containment,
cleanup, removal, restoration or other remedial work of any kind or nature (the “Remedial Work”) is
required by any Applicable Law, or by any Governmental Authority or reasonably by other Person
because of, or in connection with, any Hazardous Substance threatened to be released, released,
discharged, or disposed of during the Term, Tenant shall within thirty (30) days after written
demand for performance thereof by Landlord (or such shorter period of time as may be required under
any Applicable Law or agreement), commence to perform, or cause to be commenced, and thereafter
diligently prosecute to completion within such period of time as may be required under any
Applicable Law or agreement (or as otherwise required by Landlord), all such Remedial Work at
Tenant’s sole expense in accordance with the requirements of any applicable Governmental Authority
or Environmental Law. All such Remedial Work shall be completed in accordance with Applicable Law
and performed by qualified contractors, and for an amount in excess of $50,000 shall be performed
by one or more qualified contractors, approved in advance in writing by Landlord, which approval
may be withheld by Landlord’s reasonable discretion, and under the supervision of a consulting
engineer approved in advance in writing by Landlord. The scope of work and schedule for any
Remedial Work shall be subject to Landlord’s prior approval, which approval shall not be
unreasonably withheld, conditioned or delayed. All reports, data, correspondence or any other
submittals to a Governmental Authority in connection with any Remedial Work shall be provided in
draft form to Landlord prior to submittal to the Governmental Authority, and shall be subject to
Landlord’s approval, which approval shall not be unreasonably withheld, conditioned or delayed.
All costs and expenses of such Remedial Work shall be paid by Tenant, including, without
limitation, the charges of such contractor(s) and/or the consulting engineer, and Landlord’s actual
and reasonable attorneys’ fees and costs incurred in connection with monitoring or review of such
Remedial Work. In the event Tenant shall fail to timely commence, or cause to be commenced, or fail
to complete such Remedial Work within the time required above, Landlord may, but shall not be
required to, cause such Remedial Work to be performed, and all reasonable costs and expenses
thereof, or incurred in connection therewith, shall become part of the indebtedness secured hereby.
The obligations under this Section 18.7 shall survive expiration or earlier termination of
this Lease, and any transfer of all or any portion of the Premises by Tenant or Landlord.

(b) Tenant shall maintain and comply with an Operation and Maintenance Plan reasonably
satisfactory to Landlord for the Facility containing asbestos containing materials.

Section 18.8 In the event that Landlord reasonably believes that there may be a violation or
threatened violation by Tenant of any Environmental Law or a violation or threatened violation by
Tenant of any covenant under this Article 18, Landlord is authorized, but not obligated, by
itself, its agents, employees or workmen to enter at any reasonable time following notice, so long
as such entry does not unduly interfere with Tenant’s normal conduct of business, upon any part of
the Premises for the purposes of inspecting the same for Hazardous Substances and Tenant’s
compliance with this Article 18, and such inspections may include, without limitation, soil
borings; provided, however, if Landlord reasonably believes that the violation or threatened
violation either poses an immediate threat to the health, safety or welfare of any individual or is
of such a nature that an immediate response may be necessary, Landlord may enter the Premises at
any time and Tenant’s prior consent shall not be necessary. In such event, Landlord shall notify
Tenant as soon as practicable of any action so taken. If such inspection reveals any violation of
Environmental Law or violation by Tenant of any covenant under this Article 18 or the
existence of any Hazardous Substance released, discharged, or disposed of during the Term (other
than an immaterial technical violation or liability), Tenant agrees to pay to Landlord, within ten
(10) days after Landlord’s written demand, all actual and reasonable expenses, costs or other
amounts incurred by Landlord in performing any inspection for the purposes set forth in this
Section 18.8.

Section 18.9 All costs and expenses incurred by Landlord under this Article 18 shall
be immediately due and payable as Supplementary Rent within ten (10) days after written demand and
shall bear interest at the Default Rate from the date of notice of such payment by Landlord and the
expiration of any grace period provided herein until repaid.

Section 18.10 “Environmental Law” and “Environmental Laws” shall mean, respectively, any one
or more Applicable Laws pertaining to health, industrial hygiene, hazardous waste or the
environmental conditions in, on, under, from or about the Premises or any part thereof, including,
without limitation, the laws listed in the definition of Hazardous Substances below, and the rules
and regulations promulgated thereunder; in each case as the same may have been and hereafter may be
supplemented, modified, amended, restated or replaced from time to time.

Section 18.11 “Hazardous Substance” and “Hazardous Substances” shall mean, respectively, any
waste or any one or more elements, compounds, chemical mixtures, contaminants, pollutants,
materials or other substances (a) which poses a threat to the public health, safety or welfare or
to the environment if released, or (b) which is defined, determined or identified as a “hazardous
substance”, “hazardous waste” or “hazardous material”, or is otherwise regulated under any
Applicable Law, including, without limitation, the following: (i) the Comprehensive Environmental
Response, Compensation and Liability Act of 1980 (codified in scattered sections of 26 U.S.C., 33
U.S.C., 42 U.S.C. and 42 U.S.C. § 9601 et seq.); (ii) the Resource Conservation and
Recovery Act of 1976 (42 U.S.C. § 6901 et. seq.); (iii) the Hazardous Materials
Transportation Act (49 U.S.C. § 1801 et. seq.); (vi) the Toxic Substances Control
Act (15 U.S.C. § 2601, et seq.); (v) the Clean Air Act (33 U.S.C. § 1251 et
seq..); (vi) the Clean Air Act (42 U.S.C. § 7401, et seq..); (vii) the Safe
Drinking Water Act (21 U.S.C. § 349; 42 (U.S.C. § 201 and § 300f et. seq.);
(viii) the National Environmental Policy Act of 1969 (42 U.S.C. § 3421); (ix) the Superfund
Amendment and Reauthorization Act of 1986 (codified in scattered sections of 10 U.S.C., 29 U.S.C.,
33 U.S.C. and 42 U.S.C.); and (x) Title III of the Superfund Amendment and Reauthorization Act (40
U.S.C. § 1101 et seq.).

Section 18.12 Landlord and Tenant shall cooperate (at Tenant’s sole cost) in the initiation of
claims and the enforcement of remedies against third parties which may be responsible for
environmental conditions at the Premises.

Section 18.13 Tenant shall be responsible for safe and secure storage, transport and off-site
disposal of medical waste materials, including, without limitation, biological or infectious waste
and radioactive materials, shall ensure the compliance with all Applicable Laws pertaining to such
storage, transport and disposal, and shall cause the promulgation and compliance by the Facility
and all personnel with protocols for storage and disposal of such waste and compliance with
Requirements relating thereto. Tenant shall be responsible for the safe and secure storage,
dispensation and disposal of pharmaceuticals, drugs and controlled substances at the Facility and
shall cause the promulgation and compliance by the Facility and all personnel with protocols for
storage, dispensation and disposal of such pharmaceuticals, drugs and controlled substances and
compliance with Requirements relating thereto.

Section 18.14 All representations, warranties, covenants and indemnities of Tenant and
Landlord in this Article 18 shall continue to be binding upon Tenant and Landlord, and
their respective successors and assigns, after the expiration or earlier termination of this Lease.

Section 18.15

(a) Tenant acknowledges and agrees that (i) it has reviewed and is aware of all environmental
conditions at, in, on, under, from or potentially affecting the Premises (the “Environmental
Conditions”), referenced in the documents and reports listed on Schedule “B” attached
hereto (the “Environmental Reports”), (ii) it takes possession of the premises with full knowledge
of the Environmental Conditions, and (iii) the “As Is” condition referenced in
Section 20.16 shall include the Environmental Conditions. Tenant acknowledges and agrees
that it hereby waives any claim or remedies against Landlord arising out of or in connection with
any of the Environmental Conditions, arising in law or equity, whether by statute, regulation,
common law or by agreement other than as specifically provided by this Lease, including, but
without limitation, for contribution, cost recovery, interference with quiet enjoyment of the
Premises, reduction or abatement of Rent, or other damages. The provisions contained in this
Section 18.15 shall survive expiration or earlier termination of this Lease, and any
transfer of all or a portion of the premises by Tenant or Landlord. Landlord acknowledges that it
has reviewed and is aware of all of the Environmental Conditions referenced in the Environmental
Reports.

(b) Notwithstanding any of the information, conclusions or determinations contained in the
Environmental Reports, Tenant hereby acknowledges that in the event Landlord determines in its
reasonable discretion that additional assessment, investigation, sampling, monitoring, remedial or
other response actions may be necessary to address Environmental Conditions at the Premises or any
portion thereof, Landlord shall have the right to conduct such actions following prior notice to
Tenant, and Tenant shall provide access to the Premises as needed to conduct and complete such
work.

ARTICLE 19

FINANCIAL AND REGULATORY REPORTING COVENANTS

Section 19.1 Tenant will furnish to Landlord:

(a) As soon as available, and in any event within one hundred twenty (120) days after the end
of each applicable fiscal year, beginning with the fiscal year ending December 31 of the calendar
year in which this Lease is executed, (i) copies of the annual consolidated audit reports for
Guarantor (or Tenant and Guarantor if Guarantor ceases to prepare consolidated reports covering the
financial condition of all such entities) containing balance sheets and statements of income,
retained earnings and cash flow as at the end of such fiscal year and for the fiscal year then
ended, setting forth in comparative form the figures for the immediately preceding fiscal year, all
in reasonable detail and audited and certified on an unqualified basis by an independent accounting
firm which is reasonably acceptable to Landlord, to the effect that such report has been prepared
in accordance with GAAP, and (ii) an individual operating statement for the Facility at the
Premises. As soon as available, and in any event within thirty (30) days after the end of each
applicable fiscal year, beginning with the fiscal year ending December 31 of the calendar year in
which this Lease is executed, Tenant will furnish to Landlord a copy of Projections for Tenant’s
and Guarantor’s fiscal year immediately following the fiscal year which is the subject of the
financial statements delivered pursuant to the immediately preceding clause (i). The foregoing
shall be complete in all material respects and shall include all footnotes, if any.

(b) As soon as available, and in any event within forty-five (45) days after the end of each
fiscal quarter beginning with the fiscal quarter ending March 31, 2012, (i) copies of unaudited
financial reports for Guarantor as of the end of such period and for the portion of the fiscal year
then ended containing balance sheets and statements of income and cash flow, setting forth in
comparative form the figures for the corresponding period of the immediately preceding fiscal year,
in reasonable detail certified by the chief executive officer, chief financial officer or chief
accounting officer of Guarantor to have been prepared in accordance with GAAP and to fairly present
the financial condition and results of operations of Guarantor at the date and for the periods
indicated therein, except for the absence of footnotes and subject to year-end audit adjustments,
and (ii) an individual operating statement for the Facility at the Premises, also subject to
year-end adjustments.

(c) As soon as available, and in any event within thirty (30) days after the end of each month
beginning with the month ending January 31, 2012, (i) copies of unaudited financial reports for
Tenant as of the end of such period and for the portion of the fiscal year then ended containing
balance sheets and statements of income and cash flow, setting forth in comparative form the
figures for the corresponding period of the immediately preceding fiscal year, in reasonable detail
certified by the chief executive officer, chief financial officer or chief accounting officer of
Tenant to have been prepared in accordance with GAAP and to fairly present the financial condition
and results of operations of Tenant at the date and for the periods indicated therein, except for
the absence of footnotes and subject to year-end audit adjustments, and (ii) an individual
operating statement for the Facility at the Premises, also subject to year-end adjustments.

(d) Promptly after receipt by Tenant of notice of the commencement thereof, notice of all
actions, suits and proceedings before any Governmental Authority or arbitrator materially adversely
affecting Tenant’s ability to perform its obligations under this Lease.

(e) Promptly after receipt by Tenant of the notice of commencement thereof, notice of (i) any
audit, investigation, claim (excluding immaterial adjustments, complaints, and corrective activity
in the ordinary course of business) (including, without limitation, Recoupment Claims), proceeding,
settlement, judgment, consent order or agreement, certificate of compliance agreement or corporate
integrity agreement by or imposed by any Health Care Regulatory Agency materially adversely
affecting the Facility, (ii) any actual or threatened suspension, debarment or disqualification of
Tenant or any of its Affiliates from being a health care provider, government contractor, holder of
any Health Care License or recipient of reimbursement from any Third Party Payor, (iii) any actual
or threatened suspension, termination, or revocation of any Health Care License of Tenant or any of
its Affiliates or (iv) any self or voluntary disclosure of any material overpayment to a Third
Party Payor by Tenant or any of its Affiliates.

(f) Tenant shall provide Landlord with reasonable notice of any and all settlement discussions
and/or negotiations materially adversely affecting Tenant (excluding immaterial adjustments,
complaints, and corrective activity in the ordinary course of business) between representatives of
Tenant and any Governmental Authority, provided that the Governmental Authority does not require
that such discussions and/or negotiations be kept confidential, including, without limitation
negotiations with respect to any Claim (including without limitation, Recoupment Claims),
settlement agreement, consent order or agreement, certificate of compliance agreement or corporate
integrity agreement between Tenant and its Affiliates and any Governmental Authority (“Settlement
Discussions”). In connection with Settlement Discussions, (i) Tenant shall timely provide Landlord
with copies of any and all documents that Tenant intends to submit, or that Tenant receives, in
connection with any Settlement Discussions, and (ii) Tenant shall advise Landlord as to the status
of the Settlement Discussions.

(g) Tenant shall provide Landlord and the Mortgagee with all documents, instruments, permits,
notices, statements and information reasonably required under the Mortgage and the other loan
documents in connection therewith to be provided with respect to the Premises and the operation of
the Facility.

(h) No receipts of any such notice under subsections (d), (e) and (f) above shall impose any
obligation on Landlord to take any action or to enforce its rights hereunder or otherwise remedy
the circumstances leading to such notice.

(i) Tenant will keep and maintain or will cause to be kept and maintained on a fiscal year
basis, in accordance with GAAP, proper and accurate books, records and accounts reflecting all of
the financial affairs of Tenant and all items of income and expense in connection with the
operation on an individual basis of the Premises. Landlord or Landlord’s designee shall have the
right from time to time (but not more than once in any calendar quarter unless Tenant shall be in
Default under this Lease), at all times during normal business hours upon reasonable advance
notice, to examine such books, records and accounts at the office of Tenant or any other Person
maintaining such books, records and accounts and to make such copies or extracts thereof as
Landlord shall desire, at Landlord’s expense.

(j) Tenant will furnish Landlord, (i) within thirty (30) Business Days after the end of each
calendar month, and (ii) upon Landlord’s request, within twenty (20) Business Days following
receipt of such request, with a true, complete and correct Occupancy Report for the Facility.

(k) Tenant shall furnish Landlord, within ten (10) days of the receipt by Tenant, any and all
notices (regardless of form) or charges issued relating to non-compliance from any Health Care
Regulatory Agency and/or any Third Party Payor that Tenant’s license, Medicare or Medicaid
certification, or accreditation or ranking by any Health Care Regulatory Agency or Third Party
Payor is being, or could be, downgraded, revoked, or suspended, that action is pending, being
considered or being, or could be, taken to downgrade, revoke, or suspend Tenant’s license or
certification or to fine, penalize or impose remedies upon Tenant, or that action is pending, being
considered, or being, or could be, taken, to discontinue, suspend, deny, decrease or recoup any
payments or reimbursements due, made or coming due to Tenant or related to the operation of the
Facility.

(l) Tenant shall file (or cause to be filed) all required Third Party Payor cost reports on or
prior to the date such reports are due (as such due date may have been extended by the Third Party
Payor without the imposition of any penalty, interest or violation of any revocation, termination,
suspension of a Health Care License or disbarment or disqualification from the Third Party Payor
program) and shall furnish Landlord, within thirty (30) days of the date of filing, a complete and
accurate copy of the annual Medicare or Medicaid cost report and other annual Third Party Payor
cost reports for Tenant, and promptly furnish Landlord any amendments filed with respect to such
reports and all notices, responses, audit reports or inquiries with aspect to such reports.

(m) Tenant shall furnish Landlord, within thirty (30) days of the receipt by Tenant, all
annual reimbursement rate sheets from all Third Party Payors, and promptly after receipt thereof by
Tenant, any new, revised or amended reimbursement rate sheets and other annual reimbursement rate
sheets from all Third Party Payors for Tenant which may be issued subsequent to the annual
reimbursement rate sheets.

(n) With respect to any deficiency cited, Tenant shall furnish Landlord, within thirty (30)
days of receipt but at least five (5) days prior to the earliest date on which Tenant is required
to take any action with respect thereto or would suffer any adverse consequence, a copy of any
Third Party Payor or other licensing or accreditation or ranking agency or entity survey, report,
warning letter, or notice, and any statement of deficiencies, and within the time period required
by the particular agency for furnishing a plan of correction also furnish or cause to be furnished
to Landlord a copy of the plan of correction generated from such survey, report, warning letter, or
notice for Tenant and by subsequent correspondence related thereto, and correct or cause to be
corrected any deficiency, the curing of which is a condition of continued licensure or of full
participation in any Third Party Payor program by the date required for cure by such agency or
entity (plus extensions granted by such agency or entity).

(o) Any reports, statements or other information required to be delivered under this Lease
shall be delivered in electronic form. Tenant agrees that Mortgagee may disclose information
regarding the Facility as provided to Mortgagee pursuant to this Section in connection with the
securitization of the Mortgage Loan to such parties requesting such information in connection with
such securitization.

(p) Tenant shall cause all residency agreements of the Facility to substantially comply with
any applicable Health Care Requirements.

Section 19.2 Intentionally Omitted.

Section 19.3 Tenant acknowledges that Landlord may be, or may be affiliated with, a publicly
registered company (“Registered Company”). Tenant acknowledges that it has been advised that if
the Landlord is or becomes, or is or becomes affiliated with a Registered Company, that the
Landlord or said affiliate may be required to make certain filings with the Securities and Exchange
Commission (the “SEC Filings”) that relate to the three (3) fiscal years immediately prior to the
fiscal year in which this Lease is dated and to the fiscal year in which this Lease is dated (the
“Audited Years”) through the first anniversary of the date of this Lease (the “stub period”) for
the Premises (calculated on a per Property basis). To assist Landlord and its affiliate in
preparing the SEC Filings, Tenant covenants and agrees that it shall cause Guarantor to provide
Landlord with the following: (i) access to bank statements for the Audited Years and stub periods;
(ii) rent roll as of the end of the Audited Years and stub periods; (iii) operating statements for
the Audited Years and stub periods; (iv) access to the general ledger for the Audited Years and
stub periods; (v) cash receipts schedule for each month in the Audited Years and stub periods;
(vi) access to invoices for expenses and capital improvements in the Audited Years and stub
periods; (vii) accounts payable ledger and accrued expense reconciliations; (viii) check register
for the Audited Years and stub periods and the three months thereafter; (ix) all leases and 5-year
lease schedules; (x) copies of all insurance documentation for the Audited Years and stub periods;
(xi) copies of accounts receivable aging as of the end of the Audited Years and stub periods along
with an explanation for all accounts over thirty (30) past due as of the end of the Audited Years
and stub periods; (xii) a signed representation letter in the form attached hereto as
Schedule “H”; (xiii) all organizational documents of Tenant and Guarantor;
(xiv) confirmation of all cash receivables and payables for the Audit Years and the stub periods;
(xv) all information related to financial statement footnotes; and (xvi) to the extent necessary,
the information set forth in the letter set forth in the form attached hereto as
Schedule “I”. Tenant also agrees to deliver to Landlord a signed representation letter in
the form provided in the foregoing clause (xii) as of the Effective Date. The foregoing shall be
subject to compliance with all Applicable Laws. Notwithstanding any language to the contrary set
forth herein, Landlord agrees to engage Landlord’s auditor at its sole cost and expense and to
reimburse Tenant and Gurantor for the fees and expenses actually charged by their auditor in
assisting Landlord’s auditor with the foregoing audit and SEC Filings (not to include the cost of
Tenant’s or Guarantor’s audited financial statements or other fees or expenses which any of them
would have incurred regardless of the foregoing audit and SEC filing requirements).

Section 19.4

(a) Landlord shall be permitted to rely upon the accuracy and completeness of the items
furnished pursuant to this Article and to disclose and publish the same as required by Applicable
Laws. Without limiting the generality of the foregoing, Tenant acknowledges that Landlord is a
subsidiary of a Real Estate Investment Trust and that, as such, it is subject to certain filing and
reporting requirements in accordance with federal laws and regulations, including, but not limited
to, regulations promulgated by the Securities and Exchange Commission. Accordingly, and
notwithstanding any provision of this Lease or the provisions of any other existing agreement
between the parties hereto to the contrary, Landlord may publicly file, disclose, report or publish
any and all information related to this Lease (including the information provided to Landlord
pursuant to this Article) that may be reasonably interpreted as being required by federal or state
law or regulation after Closing.

(b) Except as provided below, and except for disclosures of information permitted by
Section 19.4(a), Landlord shall use commercially reasonable efforts to keep confidential
the information provided to Landlord pursuant to this Article. Notwithstanding the foregoing,
Landlord may disclose such information (i) to its existing or potential lenders or purchasers of
the Premises, (ii) to Landlord’s and to said lenders’ and purchasers’ affiliates, directors,
officers, employees, and third party advisors (including, without limitation, financial advisors,
legal counsel and accountants), and (iii) as may be required by court order.

ARTICLE 20

LICENSED FACILITY OPERATION; ACCESS TO BOOKS AND RECORDS; MANAGEMENT

Section 20.1 The parties agree that if this Lease is determined to be governed by §1861(v)(1)
of the Social Security Act (§952 of the Omnibus Reconciliation Act of 1980) and the regulations
promulgated in implementation thereof at 42 C.F.R. Part 420, the parties each agree to make
available to the Comptroller General of the United States, the Department of Health and Human
Services (“HHS”) and their duly authorized representatives, the books, documents and records of
either of the parties and such other information as may be required by the Comptroller General or
Secretary of HHS to verify the nature and extent of the costs of services provided by either of the
parties. If either of the parties carry out the duties of this Lease through a subcontract worth
$10,000 or more over a twelve (12) month period with a related organization, the subcontract will
also contain an access clause to permit access by the Secretary, Comptroller General and their
representatives to the related organization’s books and records.

Section 20.2 During the Term of this Lease, Tenant shall (i) no less often than quarterly,
provide Landlord with a copy of Tenant’s most recent profit and loss statement and balance sheet,
(ii) provide Landlord with a copy of each cost report Tenant may submit to the State or any other
governmental agency or administrator of a public program, (iii) provide Landlord with a true,
correct and complete copy of each survey, study, investigatory report, etc. performed by or on
behalf of any federal, state or local governmental authority, (iv) provide Landlord with true,
correct and complete copies of all monthly census information and/or data, and (v) produce any
other financial information as may be reasonably requested by Landlord from time to time,
including, without limitation, census information and data.

Section 20.3 Tenant shall operate or cause the operation of the Facility consistent with its
current operation. Landlord is merely the lessor of the real property which is the subject of this
Lease and, except for Landlord’s gross negligence or willful misconduct as otherwise expressly set
forth herein, shall have no liability in connection with the operation of the Facility or the
provision of health care services from or at the Facility. Tenant shall, as the operator, licensee
and provider of the Facility and all health care services provided from or at the Facility,
independent and separate from Landlord, (i) secure and maintain in full force and effect all Health
Care Licenses relating to the Facility and services; (ii) comply with all Requirements including,
without limitation, all Requirements of Governmental Authorities and under Health Care Licenses;
(iii) maintain quality control of the Facility and services; and (iv) maintain all computer
systems, software, record keeping, data bases and privacy requirements relating to the Facility,
all of which shall be provided at Tenant’s own expense.

Section 20.4 For purposes of satisfying the requirements of any Mortgage, or any refinancing,
sale or appraisal process, Landlord shall have the right (but not the obligation) to conduct such
inspections, audits, visitations and quality control reviews, of the Facility and services provided
by Tenant from or at the Facility as Landlord may desire, and for such purposes Tenant shall
provide to Landlord and its representatives access to Tenant’s books and records relating to the
Facility and services during normal business hours upon reasonable notice. No such inspection,
audit, visitation or quality control review conducted by Landlord or its representatives or any
report resulting therefrom shall modify or reduce in any way Tenant’s obligations under this Lease
or as the parent of the exclusive operator, licensee and provider of the Facility and health care
services from or at the Facility.

Section 20.5 Landlord and Tenant shall be independent contractors, and nothing in this Lease
shall be construed as creating a partnership, joint venture, employment, agency, license or
franchise relationship. Tenant shall not have any authority to create any obligation binding upon
Landlord.

Section 20.6 All employees, contractors, consultants, professionals and providers relating to
the Facility and health care services provided from or at the Facility shall be deemed to be
employees or contractors of Tenant and not of Landlord.

Section 20.7 Tenant shall provide, at its own expense, all deposits, bonds, insurance, letters
of credit, working capital, cash collateral, reserves, patient trust fund accounts and other
financial requirements of Health Care Licenses to operate and provide health care services at the
Facility.

Section 20.8 Tenant shall assume, and shall have the exclusive responsibility for all Claims
of overpayment or recoupment made by Third Party Payors, including, without limitation, Medicaid
and Medicare, relating to the provision of health care services from or at the Facility
attributable to periods prior to, from and after the date of this Lease (collectively, “Recoupment
Claims”). Tenant shall continue to have such exclusive responsibility for Recoupment Claims
regardless of whether Tenant utilizes the Medicare/Medicaid provider numbers of the Facility in
existence prior to the date of this Lease or obtain new Medicare/Medicaid provider numbers for the
Facility.

Section 20.9 Tenant shall cause operations at the Facility to be conducted at all times, at a
minimum, in a manner consistent with or better than Governmental Authority requirements, and, in
connection therewith, Tenant shall:

(a) maintain the standard of care for the residents of the Facility at all times at a level
necessary to ensure a level of quality of care for the residents of the Facility in material
compliance with Health Care Law;

(b) maintain a standard of care in the storage, use, transportation and disposal of all
medical equipment, medical supplies, medical products or gases, and medical waste, of any kind and
in any form, that is in material compliance with all Applicable Laws;

(c) operate the Facility in a prudent manner in material compliance with Applicable Laws and
cause all Health Care Licenses, reimbursement or care contracts, and any other agreements necessary
for the certification, licensure, accreditation or operation of the Facility as may be necessary
for participation in each of the Third Party Payor reimbursement programs to remain in effect
without reduction in the number of licensed beds or beds authorized for use in each of the Third
Party Payor reimbursement programs, except as otherwise provided in this Lease;

(d) not knowingly or willingly take or permit action which will result in a reduction,
suspension, denial or elimination of reimbursement for services from, or material recoupment by,
any Third Party Payor that would materially adversely affect Tenant;

(e) not take any action to rescind, withdraw, revoke or otherwise adversely amend modify,
supplement or alter the nature, tenor, or scope of the Health Care Licenses or applicable Third
Party Payor reimbursement program participation;

(f) not knowingly or willingly take any action that will (i) adversely affect Tenant’s right
to receive any Third Party Payor payments or reimbursements; (ii) materially reduce the Third Party
Payor payments or reimbursements, or (iii) adversely affect the Health Care Licenses; and

(g) maintain all deposits, including deposits relating to residents or residency agreements.
If such deposits are in cash, Tenant shall deposit and hold such deposits in accordance with
Applicable Law. Tenant shall cause any bond or other instrument which Tenant is permitted to hold
in lieu of cash deposits under any Applicable Law or Governmental Authority requirements to be
maintained in full force and effect and to comply, in all material respects, with any Applicable
Law or Governmental Authority requirements. Tenant shall, upon request, provide Landlord with
evidence reasonably satisfactory to Landlord of Tenant’s material compliance with the forgoing.

Section 20.10 Subject to Section 12.15(c), Tenant shall not assign, transfer, or
pledge as collateral security any of its interest in any Health Care Licenses or Third Party Payor
payment or reimbursement contracts (including rights to payment thereunder) pertaining to Tenant or
the Facility, or assign, transfer, or remove or permit any other Person to assign, transfer, or
remove any records pertaining to the Facility, including, without limitation, resident records,
medical and clinical records (except for removal of such patient resident records as directed by
the patients or residents owning such records), without Landlord’s prior written consent, which
consent may be granted or refused in Landlord’s sole discretion; provided that Tenant may, to the
extent permitted by Applicable Law, store such records in a manner consistent with Tenant’s
standard policies and procedures. Tenant shall hold such Health Care Licenses free from
restrictions or known conflicts that would materially impair the use or operation of the Facility
as intended, and are not provisional, probationary or restrictive in any way.

Section 20.11 Tenant shall not enter into any transaction with any Affiliate other than in the
ordinary course of its business and on fair and commercially reasonable terms in material
compliance with Applicable Laws and Governmental Authority requirements.

Section 20.12 Tenant shall not participate in any federal, state or local program whereby any
Governmental Authority or other Person may have the right to recover funds with respect to the
Facility by reason of the advance of federal, state or local funds, including, without limitation,
those authorized under the Hill-Burton Act (42 U.S.C. 291, et seq.).

Section 20.13 Tenant shall deliver to Landlord evidence of material compliance with any
applicable post-transfer license requirements of Governmental Authorities.

Section 20.14 Tenant shall ensure that the number of licensed beds for residents of the
Facility is not decreased without the prior written consent of Landlord, which consent shall not be
unreasonably withheld, conditioned or delayed; provided, however, that notwithstanding the
foregoing, Landlord may grant or withhold its consent in its sole discretion if the number of
licensed beds for residents of the Facility is to be decreased by more than five percent (5%) of
the Licensed Bed Capacity.

Section 20.15 Tenant hereby represents, warrants and certifies to Landlord and Landlord’s
designee, as of the date hereof, as follows:

(a) Tenant is the tenant under this Lease.

(b) Tenant has accepted and is occupying or causing the occupancy of the entire Premises. All
improvements to the Premises required by this Lease to be made by Landlord have been completed by
Landlord in accordance with this Lease in all material respects.

(c) To Tenant’s knowledge, there are no defenses to or offsets against the enforcement of this
Lease or any provision thereof against Tenant.

(d) This Lease is in full force and effect without default thereunder by Tenant or, to the
knowledge of Tenant, Landlord.

(e) On the date of this Lease, there are no actions, whether voluntary or otherwise, pending
against Tenant under the Bankruptcy Code.

(f) As of the Effective Date, all Health Care Licenses required, necessary or desirable for
the legal use, occupancy and operation of the Facility as a licensed skilled nursing facility have
been obtained and are in full force and effect, including, without limitation, approved provider
status in all Third Party Payor payment or reimbursement programs. Tenant will own and/or possess
free from restrictions or conflicts with the rights of others all such Health Care Licenses and
operate the Facility in a manner such that such Health Care Licenses as a licensed skilled nursing
facility shall remain in force and effect.

(g) The Health Care Licenses may not be and have not been transferred to any location other
than the respective Facility, have not been pledged as collateral security (except in connection
with HUD Financing) and are held free from restrictions or known conflicts that would materially
impair the use or operation of the Facility as intended, and are not provisional, probationary or
restricted in any way.

(h) Tenant has not taken and will not take any action to rescind, withdraw, revoke or
otherwise adversely amend, modify, supplement or alter the nature, tenor, or scope of the Health
Care License or applicable Third Party Payor payment or reimbursement program participation.

(i) Neither this Lease nor Tenant’s performance hereunder will (i) adversely affect Tenant’s
right to receive Third Party Payor payments or reimbursements, (ii) materially reduce Third-Party
Payor payments or reimbursements, or (iii) adversely affect the Health Care License.

(j) The Facility is duly licensed as required under Applicable Laws of the state in which the
Facility is located. Except as otherwise disclosed to Landlord, the licensed bed capacity of the
Facility is as set forth on Schedule “E” (the “Licensed Bed Capacity”). Neither Tenant nor
the Facility has applied to reduce the number of licensed or certified beds of the Facility, to
move or transfer the right to any and all of the licensed or certified beds of the Facility to any
other location, or to amend or otherwise change the Facility’s authorized bed capacity and/or the
number of beds approved by the applicable Governmental Authority in the state where the Facility is
located, and there are no proceedings or actions pending or, to Tenant’s knowledge, contemplated to
reduce the number of licensed or certified beds of the Facility.

(k) To Tenant’s knowledge, Tenant and the operation of the Facility are in material compliance
with all Applicable Laws, Health Care Licenses and requirements of Health Care Regulatory Agencies
and other Governmental Authorities having jurisdiction over the operation of the Facility,
including (i) staffing requirements, (ii) health and fire safety codes and standards, including
quality and safety standards, (iii) accepted professional standards and principles that apply to
professionals providing services in the Facility, (iv) federal, state or local laws, rules,
regulations or published interpretations or policies relating to the prevention of fraud and abuse,
(v) insurance, reimbursement and cost reporting requirements, (vi) government payment program
requirements and disclosure of ownership and related information requirements, and
(vii) requirements of the applicable state department of health or equivalent and all other
federal, state, or focal governmental authorities, including, without limitation, those relating to
the Facility’s physical structure and environment, licensing, quality and adequacy of medical care,
distribution or pharmaceuticals, rate setting, equipment, personnel, operating policies, additions
to facilities and services and fee splitting, and any other applicable laws, regulations or
agreements for reimbursement for the type of care or services provided by Tenant with respect to
the Facility. Tenant will and will cause the operation of the Facility to be in material
compliance with the foregoing throughout the Term of this Lease.

(l) To Tenant’s knowledge, Tenant is in material compliance with the requirements for
participation in the Medicare and Medicaid Programs with respect to the Facility that currently
participates in such programs, including the Medicare and Medicaid Patient and Program Protection
Act of 1987, and has a current provider agreement under Title XVIII and/or XIX of the Social
Security Act, which is in full force and effect. To Tenant’s knowledge, the Facility did not have
any deficiencies at level G or above on its most recent survey (standard or complaint), nor was the
prior operator of the Facility cited with any substandard quality of care deficiencies (as that
term is defined in Part 488 of 42 C.F.R) for the past two consecutive surveys. Neither the
Facility nor any other health care facility owned or operated by Tenant, Guarantor or, except has
been disclosed in writing to Landlord, their respective Affiliates has been the subject of a
“double G” or “immediate jeopardy” determination for the last three years.

(m) To Tenant’s knowledge, no Facility has received a statement of charges or deficiencies and
no penalty enforcement actions have been undertaken against the Facility, or any other operator,
manager, officer or director by any governmental agency during the last three calendar years that
now has or could reasonably be expected to have hereafter a material adverse effect on Tenant, and
there have been no violations over the last three calendar years that resulted in the prior
operator of the Facility or any of the Facility’s decertification for participation in any other
Third Party Payor program.

(n) To Tenant’s knowledge, Tenant is not a target of, participant in, or subject to any
action, proceeding, suit, audit, investigation or sanction by any Governmental Authority or any
administrative or investigative body or entity or any other third party or any patient or resident
(including, without limitation, whistleblower suits, or suits brought pursuant to federal or state
False Claims Acts, and Medicaid/Medicare/State fraud/abuse laws) which may result, directly or
indirectly, or with the passage of time, in the imposition of a fine, penalty, alternative, interim
or final sanction, a lower rate certification, recoupment, recovery, suspension or discontinuance
of all or part of any reimbursement from any Governmental Authority or Third Party Payor, a lower
reimbursement rate for services rendered to eligible patients, or any other civil or criminal
remedy (excluding immaterial monetary penalties in the aggregate amount of $25,000 or less per
Facility, but including any monetary penalties relating to any Medicaid/Medicare/State fraud/abuse
laws), or which could reasonably be expected to have a material adverse effect on Tenant or the
operation of the Facility, including the Facility’s ability to accept or retain residents, or which
could result in the appointment of a receiver or manager, or in the modification, limitation,
annulment, revocation, transfer, surrender, suspension or other impairment of a Health Care
License, or affect Tenant or the Facility’s current participation in any Third Party Payor program,
as applicable, or any successor programs thereto, at current rate certification, nor to Tenant’s
knowledge has any such action, proceedings suit, investigation proceeding or audit been threatened.

(o) To Tenant’s knowledge, there is no threatened or pending revocation, suspension,
termination, probation, restriction, limitation, or non-renewal affecting Tenant or the Facility or
provider agreement with any Third Party Payor.

(p) To Tenant’s knowledge, there are no agreements with residents of the Facility, or with any
other persons or organizations, which deviate in any material adverse respect from, or which
conflict in any material respect with, any Applicable Laws. Tenant has in place policies and
procedures to maintain all resident records at the Facility, including patient and/or resident
account records, in material compliance with Applicable Laws and professional standards.

(q) To Tenant’s knowledge, other than the Medicare and Medicaid programs, Tenant is not a
participant in any federal, state or local program whereby any federal, state or local government
or quasi-governmental body, or any intermediary, agency, board or other authority or entity that
may have the right to recover funds with respect to the Facility by reason of the advance of
federal, state or local funds, including, without limitation, those authorized under the
Hill-Burton Act (42 U.S.C. 291, et seq.). Tenant has received no notice, and is
not aware, of any violation of applicable antitrust laws.

(r) To Tenant’s knowledge, all Third Party Payor insurance cost reports and financial reports
submitted by or on behalf of Tenant and/or the Facility are and will continue to be materially
accurate and complete and have not been and will not be misleading in any material respect. There
are no current, pending or outstanding Third Party Payor programs reimbursement audits or appeals
pending at the Facility, there are no cost report years that are subject to audits, no cost reports
remain “open” or unsettled, and there are no current or pending Third Party Payor programs
recoupment efforts at the Facility.

(s) Except as otherwise permitted in the Mortgage or any other loan document in connection
therewith or any receivable financing arrangement of Tenant, (i) Tenant’s Third Party Payor
accounts receivable are free and clear of Liens, and (ii) Tenant has no material indebtedness other
than the obligation to guaranty the repayment of any Working Capital Loan and unsecured amounts
owed to trade vendors of the Facility in the normal course of business which are no more than
thirty (30) days past due.

(t) To Tenant’s knowledge, (i) Tenant and its Affiliates are in compliance in all material
respects with the Mortgage Loan Documents, and (ii) no default or event of default by Tenant or any
Affiliate of Tenant exists thereunder.

(u) Tenant has instituted, and the Facility is operated in material compliance with, a
compliance plan which follows applicable guidelines established by Health Care Regulatory Agencies.

(v) Tenant is in material compliance with the Healthcare Insurance Portability and
Accountability Act of 1996, and the regulations promulgated thereunder.

(w) To Tenant’s knowledge, the Facility and the use thereof complies in all material respects
with all Applicable Laws, including, without limitation, local, state, and federal building codes,
fire codes, health care, and other similar regulatory requirements, and no waivers of such physical
plant standards exist at the Facility which would have a material adverse effect on Tenant.

(x) Any existing agreement relating to the management or operation of the Facility is in full
force and effect and, to Tenant’s knowledge, is not in default by any party.

(y) Neither Tenant nor the Facility has changed or will change, other than in the normal
course of business, the terms of any of the Third Party Payor programs or its normal billing
payment or reimbursement policies and related procedures, including the amount and timing of
finance charges, fees and write-offs.

(z) Tenant will cause to be delivered to Landlord, with a copy to any other individual or
entity as Landlord may direct, a true, correct and complete Occupancy Report for the Facility.

Section 20.16 The parties acknowledge that Tenant has conducted all of its own due diligence,
examination and inspection regarding the Facility and the business of providing health care
services from and at the Facility and is entirely familiar with all business, financial, liability,
physical premises, operational and regulatory aspects, and every other matter or thing affecting or
related to the health care business operated at the Facility, and that Tenant is leasing the same
in its “As Is” condition. Landlord has not made and does not make any representations or
warranties whatsoever with respect to the health care business conducted at and from the Facility
or otherwise with respect to this Lease, express or implied, and Tenant is not relying on Landlord
or its Affiliates in connection with any decision to enter into this Lease. Tenant assumes all
risks resulting from any defects (patent or latent) in the Premises or from any failure of the same
to comply with any Requirement or Applicable Law with respect to the Premises or the uses or
purposes for which the same may be occupied.

Section 20.17

(a) Throughout the Term, Tenant shall not enter into any Management Agreement without the
prior written approval of Landlord, in each instance, which approval may not be unreasonably
withheld, conditioned or delayed. Tenant shall not, without the prior written consent of Landlord,
which consent may not be unreasonably withheld, conditioned or delayed, agree to: (i) any change
in the Manager under any Management Agreement; (ii) any material change in any Management
Agreement; (iii) the termination of any Management Agreement; or (iv) the assignment of any
Management Agreement by any Manager. Each Management Agreement shall provide that Landlord shall
receive notice of any defaults thereunder and, at Landlord’s option, an opportunity to cure any
such defaults. If Landlord shall cure any of Tenant’s defaults under any Management Agreement, the
cost of any such cure shall be payable upon demand to Landlord by Tenant as Supplementary Rent.
Any manager shall be reputable and have experience in managing facilities similar in size, scope,
use and value as the Facility or any one of them for which they are assigned management
responsibilities. Notwithstanding the foregoing, Landlord hereby agrees that this
Section 20.17, and Tenant’s obligations hereunder, shall not apply to (1) any Management
Agreement entered into by Tenant with an Affiliate of Tenant, Guarantor or an Affiliate of
Guarantor, and/or (2) any back office service arrangement or agreement entered into by Tenant,
provided that James J. Andrews and Philip M. Rees continue to serve as principals and to exert
control (as such term is defined in Section 9.1) over any such Affiliate.

(b) All management fees, payments in connection with any extension of credit and fees for
services provided in connection with the operation of the Facility, and all other payments and
fees, payable by Tenant to any Affiliate of Tenant, shall be subordinated to the obligations of
Tenant under this Lease. Tenant shall deliver to Landlord any reasonable instrument requested by
Landlord to implement the intent of the foregoing provision.

ARTICLE 21

MISCELLANEOUS PROVISIONS

Section 21.1 IT IS MUTUALLY AGREED BY AND BETWEEN LANDLORD AND TENANT THAT THE RESPECTIVE
PARTIES SHALL AND THEY HEREBY DO WAIVE TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM
BROUGHT BY EITHER OF THE PARTIES HERETO AGAINST THE OTHER ON ANY MATTERS WHATSOEVER ARISING OUT OF
OR IN ANY WAY CONNECTED WITH THIS LEASE, TENANT’S USE OR OCCUPANCY OF THE PREMISES, AND/OR ANY
CLAIM OF INJURY OR DAMAGE EXCLUDING ANY CLAIM FOR PERSONAL INJURY OR PROPERTY DAMAGE.

Section 21.2 With the prior written consent of Landlord, which will not be unreasonably
withheld, conditioned or delayed, Tenant may place one or more signs on the Premises to indicate
the nature of the business of Tenant and such parties. Any sign shall be lawful under applicable
sign codes and subdivision covenants. Landlord hereby approves the signage currently placed on the
Premises.

Section 21.3

(a) The term “Landlord” as used herein shall mean only the owner or the mortgagee in
possession for the time being of the Premises, so that in the event of any sale, transfer or
conveyance of the Premises, Landlord shall be and hereby is entirely freed and relieved of all
agreements, covenants and obligations of Landlord thereafter accruing hereunder, and it shall be
deemed and construed without further agreement between the parties or their successors in interest
or between the parties and the purchaser, transferee or grantee at any such sale, transfer
conveyance that such purchaser, transferee or grantee has assumed and agreed to carry out any and
all agreements, covenants and obligations of Landlord hereunder.

(b) The term “Tenant” as used herein shall mean the tenant named herein, and from and after
any valid and approved Transfer in whole of said Tenant’s interest under this Lease pursuant to the
provisions of Article 9, shall mean only the assignee or transferee thereof; but the
foregoing shall not release the assignor or transferor from liability under this Lease.

(c) The words “enter”, “re-enter”, “entry” and “re-entry” as used in this Lease shall not be
restricted to their technical legal meaning.

(d) The use herein of the neuter pronoun in any reference to Landlord or Tenant shall be
deemed to include any individual Landlord or Tenant, and the use herein of the words “successor and
assign” or “successors or assigns” of Landlord or Tenant shall be deemed to include the heirs,
executors, administrators, representatives and assigns of any individual Landlord or Tenant.

Section 21.4 The headings herein are inserted only as a matter of convenience and for
reference and in no way define, limit or describe the scope or intent of this Lease nor in any way
affect this Lease.

Section 21.5 The parties hereto acknowledge and agree that, subject to approval by HUD, upon
and simultaneously with the consummation of HUD Financing by Capital Funding, LLC (or its
successor, designee or assignee) for the Property and provided that the Master Lease is in full
force and effect, this Lease shall be terminated, the Master Lease and the Guaranty (as such term
is defined in the Master Lease) shall be amended to add the Property (with Base Rent and any
additional Rent to be increased by the amounts required under this Lease), and the tenant under the
Master Lease and Tenant shall enter into an Operating Sublease in substantially the same form as
the other Operating Subleases.

Section 21.6

(a) This Lease contains the entire agreement between the parties regarding the subject matter
set forth herein and may not be extended, renewed, restated, terminated or otherwise modified in
any manner except by an instrument in writing executed by the party against whom enforcement of any
such modification is sought and with the consent of any Mortgagee. All prior understandings and
agreements between the parties and all prior working drafts of this Lease are merged in this Lease,
which alone expresses the agreement of the parties. The parties agree that no inferences shall be
drawn from matters deleted from any working drafts of this Lease.

(b) Tenant agrees that Tenant will not, without the prior written consent of Landlord,
(i) amend, restate, supplement or modify this Lease, (ii) terminate, cancel or surrender the term
of this Lease except as expressly permitted by the provisions of this Lease, or enter into any
agreement with Landlord to do so, or (iii) pay any installment of Base Rent more than one (1) month
in advance of the due date thereof or otherwise than in the manner provided for in this Lease.

Section 21.7 The agreements, terms, covenants and conditions herein shall bind and inure to
the benefit of Landlord and Tenant and, except as is otherwise provided herein, their permitted
successors and permitted assigns.

Section 21.8 Notice whenever provided for herein shall be in writing and shall be given either
by personal delivery, overnight express mail or by certified or registered mail, return receipt
requested, to Landlord at the address hereinabove set forth, and to Tenant at the address
hereinabove set forth, or to such other Persons or at such other addresses as may be designated
from time to time by written notice from either party to the other. Notices shall be deemed given
(i) when delivered personally if delivered on a Business Day (or if the same is not a Business Day,
then the next Business Day after delivery), (ii) three (3) Business Days after being deposited in
the United States mail, registered or certified mail, postage prepaid, return receipt requested or
(iii) if delivery is made by Federal Express or a similar, nationally recognized overnight courier
service for 9:00 am. delivery, then on the date of delivery (or if the same is not a Business Day,
then the next Business Day after delivery), if properly sent and addressed in accordance with the
terms of this Section 21.8.

Section 21.9

(a) If any provision of this Lease shall be invalid or unenforceable, the remainder of the
provisions of this Lease shall not be affected thereby, and each and every provision of this Lease
shall be enforceable to the fullest extent permitted by Applicable Law.

(b) The parties hereto intend that this Lease shall constitute a single, integrated and
indivisible contract under Applicable Law, and therefore, that in any bankruptcy or insolvency
proceeding commenced by or against Tenant, this Lease shall not be subject to assumption,
assignment or rejection in parts, or with respect to particular Facilities, Buildings or parcels of
land, but rather shall be subject to assumption, assignment or rejection, if at all, only in its
entirety as a single contract.

Section 21.10 Landlord and Tenant each represent and warrant to the other party that such
party has not dealt with any real estate broker in connection with this Lease, and Landlord and
Tenant agree to indemnify the other party and save the other party harmless from any and all claims
for brokerage commissions by any other Person claiming through such party to have brought about
this Lease transaction. The provisions of this Section 21.10 shall survive the expiration
or earlier termination of this Lease.

Section 21.11 Tenant is and shall be in exclusive control and possession of the Premises, and
Tenant shall operate the Facility on the Premises at Tenant’s sole and absolute discretion without
control, interference or direction from Landlord or agents of Landlord (except as expressly set
forth to the contrary in this Lease), and Landlord shall not, in any event whatsoever, be liable
for any injury or damage to any property or to any person happening in, on or about the Premises,
nor for any injury or damage to any property of Tenant, or of any other person or persons contained
therein unless the same is caused by Landlord’s gross negligence or willful misconduct. The
provisions hereof, including, without limitation Article 17, permitting Landlord to enter
and inspect the Premises are made for the purpose of enabling Landlord to be informed as to whether
Tenant is complying with the agreements, terms, covenants and conditions hereof, and if Landlord so
desires, to do such acts as Tenant shall fail to do. Tenant agrees to look solely to Landlord’s
interest in the Premises for recovery of any judgment from Landlord and in no event shall Landlord
or any of Landlord’s partners, shareholders, members, managers, officers, directors or Affiliates
ever be personally liable for any such judgment.

Section 21.12

(a) Tenant agrees, and agrees to cause each of its Affiliates, (i) not to transmit or disclose
provisions of this Lease to any Person (other than to Tenant’s advisors and officers on a
need-to-know basis or as otherwise may be required by law) without Landlord’s prior written
consent, (ii) to inform all Persons to whom provisions of this Lease are disclosed about the
confidential nature of the Lease and to direct them not to disclose the same to any other Person
and to direct each of them to adhere to the provisions of this Section. Tenant shall not, and
shall not permit any of its Affiliates to, use Landlord’s name (or the name of any of Landlord’s
Affiliates) in connection with any of its business operations, including, without limitation,
advertising, marketing or press releases or such other similar purposes, without Landlord’s prior
written consent. Nothing contained in this Lease is intended to permit or authorize Tenant or any
of their Affiliates to contract on behalf of Landlord. Tenant hereby agrees that Landlord or any
Affiliate of Landlord may (A) disclose a general description of transactions arising under this
Lease for advertising, marketing or other similar purposes, (B) use Tenant’s or Guarantor’s names,
logos or other indicia germane to such parties in connection with such advertising, marketing or
other similar purposes and (C) disclose any and all information concerning the Lease, as well as
any information regarding Tenant, the Guarantor and their respective operations, received by
Landlord in connection with the Lease to its lenders or funding or financing sources or otherwise
required by law.

(b) Notwithstanding anything to the contrary contained in Section 21.12(a), Tenant may
transmit or disclose this Lease or the provisions of this Lease to: (i) any of its Affiliates or
any of its or their officers, employees, directors, shareholders, partners, members, principals,
agents, lenders, investment bankers, consultant, attorneys, accountants and other professional
advisors that agrees to comply with the provisions of this Section 21.12 or substantially
equivalent provisions; (ii) any Governmental Authority having jurisdiction over it upon the request
or demand of such Governmental Authority; (iii) any Person in response to any order of any court or
other Governmental Authority or as may otherwise be required pursuant to any Applicable Law;
(iv) in connection with any litigation or similar proceeding; and (v) any Person if this Lease or
the provisions of this Lease has been publicly disclosed other than in breach of this
Section 21.12.

Section 21.13 The parties took equal part in drafting this Lease, and no rule of construction
that would cause any of the terms hereof to be construed against the drafter shall be applicable to
the interpretation of this Lease.

Section 21.14 Time is strictly of the essence with respect to each and every term and
provision of this Lease.

Section 21.15 “Force Majeure:” Except for the provisions of Article 7, the time
within which either party hereto shall be required to perform any act under this Lease, other than
the payment of money, shall be extended by a period of time equal to the number of days during
which performance of such act is delayed by strikes, lockouts, acts of God, governmental
restrictions, failure or inability to secure materials or labor by reason of priority or similar
regulation or order of any governmental or regulatory body, enemy action, civil disturbance or any
other cause beyond the reasonable control of either party hereto.

Section 21.16 Tenant hereby waives its statutory lien against rent under Applicable Law.

Section 21.17 Landlord and Tenant each waive any claim or defense based upon the
characterization of this Lease as anything other than a true lease and irrevocably waive any claim
or defense which asserts that the Lease is anything other than a true lease. Landlord and Tenant
covenant and agree that they will not assert that this Lease is anything but a true lease.
Landlord and Tenant each stipulate and agree not to challenge the validity, enforceability or
characterization of the lease of the Premises as a true lease and further stipulate and agree that
nothing contained in this Lease creates or is intended to create a joint venture, partnership
(either de jure or de facto), equitable mortgage, trust, financing device or arrangement, security
interest or the like. Landlord or Tenant each shall support the intent of the parties that the
lease of the Premises pursuant to this Lease is a true lease and does not create a joint venture,
partnership (either de jure or de facto), equitable mortgage, trust, financing device or
arrangement, security interest or the like, if, and to the extent that, any challenge occurs.

Section 21.18 Except as otherwise expressly set forth herein, Tenant acknowledges and agrees
that Tenant’s obligations to pay rent hereunder, and the rights of Landlord in and to such Rent,
shall be absolute, unconditional and irrevocable. Except as expressly provided for in
Section 8.2, Tenant shall not have any right to terminate this Lease or to be released,
relieved, or discharged from any obligations or liabilities hereunder (including, without
limitation, the payment of Rent) or entitled to any abatement, suspension, determent, reduction,
setoff, counterclaim or defense for any reason whatsoever, including, without limitation, any of
the following reasons:

(a) Any defect in, damage to, or destruction of, the Premises or any portion thereof;

(b) Any condemnation, confiscation, requisition, or other taking or sale of the possession,
use, occupancy, or title to the Premises or any portion thereof;

(c) Any limitation, restriction, deprivation, or prevention of, or any interference with, the
use, occupancy, or possession of the Premises or any portion thereof;

(d) Any set-off, abatement, counterclaim, suspension, recoupment, reduction, rescission,
defense or other right or claim that Tenant may have against Landlord, any vendor or manufacturer
of or contractor or subcontractor for the Premises or any part of any thereof, or any other person
for any reason whatsoever;

(e) The inadequacy, incorrectness, or failure of the description of the Premises or any
portion thereof;

(f) Intentionally Omitted;

(g) Force Majeure;

(h) Any title defect, lien or matter affecting title to the Premises or eviction by paramount
title or otherwise; or

(i) Any default by Landlord under this Lease or the impossibility or illegality of performance
by Landlord, Tenant or both.

Tenant hereby waives, to the fullest extent permitted by Applicable Law, any and all rights
that it may now have, or that at any time hereafter may be conferred upon it, by Applicable Law or
otherwise, to modify, terminate, cancel, quit or surrender this Lease or to effect or claim any
diminution or reduction of Rent payable by Tenant hereunder, except in accordance with the express
terms hereof. Tenant agrees that, if for any reason whatsoever this Lease shall be terminated in
whole or in part by operation of law or otherwise (except as expressly permitted under
Section 8.2) then Tenant shall pay, to the maximum extent permitted by Applicable Law, to
Landlord or any other person entitled thereto, an amount equal to each installment of Rent at the
time such payment would have become due and payable in accordance with the terms hereof had this
Lease not been terminated in whole or in part. Each payment of Rent made by Tenant hereunder
shall be final, and Tenant shall not seek or have any right to recover all or any part of such
payment from Landlord or any Person for any reason whatsoever. It is the intention of the parties
hereto that the obligations of Tenant hereunder shall be separate and independent covenants and
agreements, that the Rent or other sums payable by Tenant hereunder shall continue to be payable
in all events and that the obligations of Tenant hereunder shall continue unaffected, unless the
requirement to pay or perform the same shall have been abated, reduced or terminated pursuant to
Section 8.2.

Section 21.19 On the execution of this Lease, Tenant has delivered an Officer’s Certificate as
to the execution, delivery and authorization of this Lease, existence of Tenant and incumbency of
persons signing the Lease.

Section 21.20 Irrespective of the place of execution and/or delivery of this Lease or the
location of the Premises, this Lease shall be governed by, and shall be construed in accordance
with, the Applicable Laws of the state in which the Premises are located applicable to agreements
entered into without regarding to conflicts of law principles. Landlord and Tenant hereby consent
and submit to the exclusive jurisdiction of the state and Federal courts located in the state in
which the Premises are located with respect to any claim or litigation arising hereunder or any
alleged breach of the covenants or provisions contained herein, and acknowledge that proper venue
in any matter so claimed or litigated shall be in the state and Federal courts located in which the
Premises are located; provided, however, that (1) Landlord shall be permitted, in addition, if
required by Applicable Law in the jurisdiction where the Premises are located, to bring any action
against Tenant and/or to enforce this Lease in the jurisdiction where the Premises are located and
(2) Tenant shall be permitted, in addition, if required by Applicable Law in the jurisdiction where
the Premises are located to bring any action against Landlord and/or to enforce this Lease in the
jurisdiction where the Premises are located.

Section 21.21 The parties shall execute and record in the counties in which the Premises are
located a memorandum of lease giving notice of certain non-monetary terms, including Tenant’s right
of first refusal and option rights.

Section 21.22 This Lease may be executed in two or more counterparts (including by means of
facsimile), each of which shall constitute an original, and all of which taken together shall
constitute one instrument.

Section 21.23

(a) As consideration, in part, for Landlord’s willingness to execute this Lease, Landlord has
required Tenant to cause Parent Guarantor and Bombay Guarantor to deliver to Landlord the guaranty
of this Lease in the form attached hereto as the Schedule “F”. Tenant hereby represents
and warrants to Landlord that (a) as of the date of this Lease, Bombay Guarantor is the only
company providing administrative, supervisory or advisory services relating to the operation of the
Facility and the delivery of health care services at the Facility, (b) the owners of Parent
Guarantor are RIDC WCP GP LLC, RIDC WCP Healthcare LP, Andwell Investments, LLC and Rewell
Investments, LLC, and (c) the owners of Bombay Guarantor are Parent Guarantor and Elkins Road
Associates, LLC. Tenant hereby covenants that there shall not be a change of control (as “control”
is defined in Section 9.1) of either Guarantor without the prior written consent of
Landlord, which consent may not be unreasonably withheld, conditioned or delayed; provided,
however, that the prior consent of Landlord shall not be required with respect to (i) a change in
the ownership of either Guarantor so long as thereafter less than twenty-five percent (25%) of
voting control of either Guarantor is held by any Person that did not have such ownership prior
thereto (the foregoing 25% limitation shall apply to any subsequent transfer to any such
Person pursuant to the following clause (ii)), or (ii) transfers of ownership interests in either
Guarantor amongst the existing direct or indirect owners of such Guarantor. Notwithstanding the
foregoing or any other language to the contrary in this Agreement, no such change in ownership or
transfer shall be permitted without the prior written consent of Landlord, which consent may not be
unreasonably, withheld, conditioned or delayed, if such change in ownership or transfer would
result in Tenant’s Principals having less of a direct or indirect ownership interest in any of
Tenant and/or Guarantor than Tenant’s Principals possess as of the Effective Date (the foregoing
restriction not to apply in the event of the death or legal incapacity of Tenant’s Principals). On
the Commencement Date and within ten (10) Business Days after receipt of written request therefor
from Landlord, Tenant shall deliver a written statement certified by an officer of Tenant
confirming the name and responsibilities of each Person providing management, advisory or other
services with respect to the Facility.

ARTICLE 22

INTENTIONALLY OMITTED

ARTICLE 23

INTENTIONALLY OMITTED

ARTICLE 24

RENEWAL

Section 24.1 This Section 24.1 is subject to the terms of Section 24.6.
Provided no Event of Default has occurred which remains uncured either as of the date of Tenant’s
notice as set forth below or as of the first day of the applicable Extended Term (as hereinafter
defined), Tenant shall have the right to extend the term of this Lease for two (2) additional,
consecutive periods (each, an each “Extended Term”). Each Extended Term (if exercised) shall be
for a period of ten (10) years. Each Extended Term shall be with respect to all (but not less than
all) of the then current Premises, upon all of the terms and conditions of this Section.

Section 24.2 Tenant must provide Landlord notice of its exercise of the option for the
applicable Extended Term not less than nine (9) full months prior, but not more than fifteen (15)
months prior, to the expiration date of the Term or the first or second Extended Term, as the case
may be. Time is of the essence with respect to the foregoing. Tenant may not exercise the option
for the second Extended Term unless it exercised the option for, and occupied for the Premises for,
the first Extended Term.

Section 24.3 The Base Rent for the first Lease Year of each of the first and second Extended
Terms shall be the greater of (i) the prevailing Market Rental Rate as of the first day of the
applicable Extended Term and (ii) the Base Rent for the last Lease Year of the then-current Term or
Extended Term (as escalated each Lease Year during the Term or prior Extended Term as required by
Section 2.1 and as further escalated for such first Lease Year of the then-current Extended
Term). The Base Rent for each subsequent Lease Year of each of the first and second Extended Terms
shall increase in the same manner as Base Rent increased during the initial Term as provided in
Section 2.1(c). As used herein, the term “Market Rental Rate” shall be defined as the then
fair market rental value of the Premises determined in accordance with the provisions set forth
below. The fair market rental value of the Premises shall mean the base rental rate that would be
agreed upon by Landlord and a comparable tenant at a comparable building, each of whom is willing,
but neither of whom is compelled, to enter into a lease transaction. The fair market rental value
shall be projected into the commencement date of the applicable term and shall take into account
all existing improvements and special uses or rights afforded to Tenant, and also shall take into
account the following factors, amongst others: (i) rental for comparable premises in comparable
existing buildings (taking into consideration but not limited to annual escalations, quality, age,
parking ratios, power capabilities, ceiling height, loading capabilities, and location of
applicable buildings); (ii) the length of the pertinent rental term; (iv) the creditworthiness of
Tenant, and (iv) the fair market rental value of the Leased Personal Property at the commencement
of the first and second of the Extended Term in question. The fair market rental value of the
Premises shall be determined in accordance with the Uniform Standards of Professional Appraisal
Practice (including the Competency Provision) adopted by the Appraisal Institute using the
Comparative Rental Analysis approach (and not the Cost Approach, Sales Comparison Approach or
Income Capitalization Approach). All appraisal reports shall be written by the designated MAI
appraiser and not by an associate.

Section 24.4 If Tenant exercises its option for the first or second Extended Term as provided
above, Landlord and Tenant shall meet promptly and shall negotiate, in good faith, to reach
agreement on the Market Rental Rate within fifteen (15) Business Days following the Notice Date.
If Landlord and Tenant are unable to reach agreement within such 15 Business Day period, then
either (i) Tenant may withdraw its renewal election, whereupon this Lease shall terminate at the
natural expiration of the then-current term, or (ii) the Market Rental Rate shall be determined as
follows:

(a) Within thirty (30) days after the end of said 15-day period, Landlord and Tenant shall
mutually agree upon a MAI appraiser involved with the ownership, leasing or management of real
estate and who has at least ten (10) years experience, immediately prior to the date in question,
evaluating Market Rental Rates for similar properties in comparable markets (the “Expert”). The
Expert and the firm with whom he or she is employed shall have no current or, during the prior five
(5) years, prior business relationship with a party or any of such party’s Affiliates. If the
parties are unable to timely agree on the Expert, then Market Rental Rate shall be determined by a
panel of three (3) Experts, each of whom shall meet the qualifications set forth above, and who
shall be selected in accordance with the following procedure. Within ten (10) Business Days
following the earlier of (i) a party’s election to appoint a panel of Experts or (ii) the
expiration of said 15-day period, each party shall deliver to the other written notice specifying
the name and address of the person to act as the Expert on the party’s behalf. Within ten (10)
Business Days after the parties have appointed their respective Experts, the two Experts shall
appoint a third Expert, who shall have the same qualifications as those required of the first two
Experts. If the two Experts are unable to timely agree upon such appointment, then either party,
on behalf of both, may require appointment of such a qualified person by the then president of the
commercial real estate board of the American Arbitration Association for the county in which the
Building is located. Each party shall pay the fees and expenses of its respective Expert and both
shall equally share the fees and expenses of the third Expert. Attorney’s fees and expenses of
counsel for the respective parties shall be paid by the respective party engaging such counsel.
Market Rental Rate shall be fixed in accordance with the following procedures. Within ten (10)
Business Days following the appointment of the third Expert, each of the two Experts selected by
the parties shall state, in writing, his or her determination of the Market Rental Rate based on
the criteria set forth in Section 24.3 above and supported by the reasons therefor. If the
determination of Market Rental Rate by the two Experts are within 5% of each other, the Market
Rental Rate shall be the average of the two determinations. If the determination of Market Rental
Rate by the two Experts are not within 5% of each other, then the third Expert shall have the right
to consult exerts and competent authorities for factual information or evidence pertaining to a
determination of Market Rental Rate. The third Expert shall conduct investigations as he or she
deems appropriate and shall, within thirty (30) days after being appointed, select which of the two
proposed determinations most closely approximates his or her determination of Market Rental Rate
based on the standards described above. The third Expert shall have no right to propose a middle
ground or modification of either of the two proposed determinations. The determination he or she
chooses as that most closely approximating his or her determination of the Market Rental Rate shall
constitute the decision of the third Expert. The third Expert shall render the decision in writing
with counterpart copies to each party. The third Expert shall have no power to add to or modify
the provisions of this Lease. Promptly following receipt of the decision, the parties shall
promptly enter into an amendment to this Lease evidencing the extension of the Term for the
applicable terms.

(b) The determination of the Market Rental Rate as provided above shall be final, binding and
conclusive on both Landlord and Tenant, shall be considered a final award pursuant to the rules of
the American Arbitration Association and any applicable state or federal law and judgment may be
had on the award in any court of competent jurisdiction.

(c) All of the terms and conditions of this Lease shall remain the same and shall remain in
full force and effect throughout the first and second Extended Term(s), except that Base Rent shall
be at the new rate determined as provided above (with annual increases as set forth in
Section 24.3).

ARTICLE 25

LETTER OF CREDIT

Section 25.1 Tenant shall deposit a security deposit (the “Security Deposit”) with Landlord as
security for the prompt, full and faithful performance by Tenant of each and every provision of the
Lease and of all obligations of Tenant hereunder in the Security Deposit Amount (as defined below).
The Security Deposit shall be in the form of a Letter of Credit (as defined below). The Security
Deposit shall be delivered in the initial Security Deposit Amount on the Commencement Date.

Section 25.2 The term “Letter of Credit” as used herein shall mean an irrevocable,
unconditional standby letter of credit substantially in the form attached hereto as
Schedule “C” and made a part hereof, with either an initial expiration date no earlier than
ninety (90) days after the Expiration Date or an automatic renewal provision as described below,
issued by a national banking association reasonably acceptable to Landlord, which Letter of Credit
shall be payable to Landlord upon demand following the occurrence and during the continuance of an
Event of Default hereunder, at a bank located in at least one of the forty-eight states of the
continental United States pursuant to presentation of an unconditional sight draft with a statement
by Landlord that Landlord is entitled to draw thereunder pursuant to the terms of this Lease.

Section 25.3 The term “Security Deposit Amount” as used herein shall mean:

(a) as of the Effective Date, an amount equal to three (3) times the then-current monthly Base
Rent payable hereunder on the Effective Date, subject to further adjustment as provided in this
Section;

(b) if at any time after the Effective Date the Rent Coverage Ratio is less than 1.30:1.00 for
two (2) consecutive Test Periods, then the Security Deposit Amount shall be increased to six (6)
times the then-current monthly Base Rent;

(c) if at any time after the Security Deposit Amount has been increased pursuant to
Section 25.3(b) the Rent Coverage Ratio is greater than 1.35:1.00 but less than 1.50:1.00
for two (2) consecutive Test Periods, then the Security Deposit Amount shall be reduced to three
(3) times the then-current monthly Base Rent;

(d) if at any time after the Effective Date the Rent Coverage Ratio is 1.50:1.00 or more for
two (2) consecutive Test Periods, then the Security Deposit Amount shall be reduced to one and
one-half (1.5) times the then-current monthly Base Rent; and

(e) if at any time the Rent Coverage Ratio is less than 1.20:1.00 for a Test Period, then the
occurrence of such event automatically shall constitute an Event of Default upon written notice to
Tenant, without any further opportunity for Tenant to cure such Event of Default.

With respect to the changes in the Security Deposit Amount, Landlord shall accept an amendment to
or replacement of the Letter of Credit reflecting such change within ten (10) Business Days after
the applicable date, provided all conditions to any decrease in the Security Deposit Amount have
been satisfied. Upon the delivery of a replacement Letter of Credit, Landlord shall return a prior
Letter of Credit to Tenant.

Section 25.4 Unless the stated expiration date of the Letter of Credit is at least ninety (90)
days after the Expiration Date, the Letter of Credit shall be automatically renewed unless the
issuing bank delivers to Landlord a notice of non-renewal no later than thirty (30) days prior to
the expiration of the Letter of Credit. In the event that the issuing bank has not timely renewed
the Letter of Credit, Landlord shall be entitled to draw the full amount of the Letter of Credit
and hold the same as a cash security deposit, subject to the same terms and conditions of this
Article 25.

Section 25.5 If an Event of Default by Tenant then exists under the Lease, Landlord may use,
apply or retain the whole or any part of the Security Deposit which is necessary for the payment
of: (i) any Rent or other sums of money which Tenant has not paid when due after any applicable
notice and cure period; (ii) any sum expended by Landlord on behalf of Tenant in accordance with
the provisions of the Lease; or (iii) any sum which Landlord may expend or be required to expend by
reason of any Event of Default under the Lease by Tenant, including, without limitation, any damage
or deficiency in or from the reletting of the Premises as provided in the Lease. The use,
application or retention of the Security Deposit, or any portion thereof, by Landlord shall not
prevent Landlord from exercising any other right or remedy provided by the Lease or by law (it
being intended that Landlord shall not first be required to proceed against the Security Deposit)
and shall not operate as a limitation on any recovery to which Landlord may otherwise be entitled.
If any portion of the Security Deposit is used, applied or retained by Landlord for the purposes
set forth above, Tenant agrees, within ten (10) days after the receipt of written demand therefor
from Landlord, to either deposit cash security with Landlord or reinstate the aggregate amount of
the Letter of Credit, as the case may be, in an amount sufficient to restore the then-current
required Security Deposit Amount.

Section 25.6 Intentionally Omitted.

Section 25.7 Tenant acknowledges that Landlord has the right to transfer its interest in the
Premises and in the Lease as to the extent set forth herein and Tenant agrees that if such a
transfer occurs, Landlord shall have the right to transfer or assign the Security Deposit to the
transferee. Upon such transfer or assignment and delivery of the Security Deposit to the
transferee and such transferee’s written assumption of responsibility for the return of the
Security Deposit to Tenant, Landlord shall thereby be released by Tenant from all liability or
obligation for the return of such Security Deposit and Tenant shall look solely to such transferee
for the return of the Security Deposit.

Section 25.8 Additional Loan Provisions. Tenant agrees to pay as Supplementary Rent, any
Mortgagee or HUD-mandated deposits to reserves for the repair and/or replacement of the Leased
Premises (“Replacement Reserves”), insurance premiums (excluding mortgage insurance premiums (MIP),
which shall be Landlords’ responsibility), water rates, taxes and assessments, and any other
impounds relating to the Premises securing the Loan and required by Lender and/or HUD
(collectively, the “Required Deposits”). Tenant shall pay the Required Deposits in advance on the
first day of each and every month during the Term, without previous demand, notice or presentment
therefor and without abatement, offset or deduction of any kind whatsoever, except for and only to
the extent of any amounts owing to Landlord hereunder that Landlord or Lender requires Tenant to
pay directly to Lender and which Tenant has timely and fully paid directly to Lender.
Notwithstanding any other language to the contrary, Landlord acknowledges and agrees that Tenant
shall not be obligated by Landlord to deposit funds into any reserves, escrows or other deposits
required under the Lease for any expenditure or obligation for which a Required Deposit is also
required to the extent the cost of such expenditure or obligation has been funded by Tenant into
the Required Deposit.

Landlord agrees to reimburse, or to permit Mortgagee to reimburse, Tenant out of, as
applicable, the Replacement Reserve and the property insurance escrow maintained with respect to
the Facility (the “Facility RR” and the “Facility PIE”) for the actual, out-of-pocket costs of
repairs and replacements to and property insurance premiums for the Facility paid for by Tenant.
Tenant’s reimbursement rights are subject to the conditions that (i) each such reimbursement is
permissible under, and is paid in accordance with, applicable Mortgagee’s policies and requirements
and HUD rules and regulations, (ii) Landlord and/or Mortgagee actually receives the reimbursement
funds out of the Facility RR or Facility PIE, (iii) Tenant has complied with the terms of the Lease
relating to Alterations and repairs or insurance, as applicable, (iv) no Event of Default or
default otherwise exists under the Lease (including this Addendum), and (v) Landlord receives a
copy of the reimbursement request, reimbursement payment receipt and related documentation
regardless of whether the reimbursement request is made directly to Landlord or Mortgagee. Further
and notwithstanding any other language to the contrary, Landlord shall be reimbursed for any funds
in the Facility RR that Landlord paid for at the closing (the “Closing”) of the acquisition of the
Premises by Landlord on the Effective Date (in the form of a credit to Tenant or its affiliates on
any closing statement or otherwise) prior to Tenant’s reimbursement of any funds out of the
Facility RR even though Tenant will have performed the reimbursable work with respect to such
Facility. Therefore, for purposes of the immediately preceding sentence, as between Landlord and
Tenant, any withdrawals from the Facility RR shall be accounted for on a FIFO (first in, first out)
basis.

[SIGNATURES FOLLOW]

1

IN WITNESS WHEREOF, the undersigned have executed this instrument the day and year first
written above.

“LANDLORD”

	 	 	 
	G&E HC REIT II SNELLVILLE SNF, LLC
	By:

	 	/s/ Danny Prosky
	
 
	 	 

Name: Danny Prosky

Title: Authorized Signatory

“TENANT”

	 	 	 
	ENGLAND ASSOCIATES, L.P.
	By:
	 	/s/ James J. Andrews

	 	 	 

	 	 	James J. Andrews, President

2

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