Document:

ex10_1.htm

    
 

     

      
        

      

    

    
 

    THIRD
AMENDMENT AND CONSENT TO CREDIT AGREEMENT

    

    THIS THIRD AMENDMENT AND CONSENT TO
CREDIT AGREEMENT (this “Amendment”), dated as
of February 8, 2008, is entered into by and among OHI ASSET, LLC, a Delaware
limited liability company, OHI
ASSET (ID), LLC, a Delaware limited liability company, OHI ASSET (LA), LLC, a
Delaware limited liability company, OHI ASSET (TX), LLC, a
Delaware limited liability company, OHI ASSET (CA), LLC, a
Delaware limited liability company, DELTA INVESTORS I, LLC, a
Maryland limited liability company, DELTA INVESTORS II, LLC, a
Maryland limited liability company and TEXAS LESSOR - STONEGATE, LP,
a Maryland limited partnership (each of the foregoing entities shall be
hereinafter referred to individually as a “Borrower” and
collectively as the “Borrowers”), the
Lenders (as defined below) and BANK OF AMERICA, N.A., as
Administrative Agent (in such capacity, the “Administrative
Agent”), Swing Line Lender and L/C Issuer.

    

    RECITALS

    

    WHEREAS, the Borrowers, the
lenders from time to time party thereto (the “Lenders”) and the
Administrative Agent, are party to that certain Credit Agreement dated as of
March 31, 2006, as amended by that certain First Amendment to Credit Agreement
dated as of June 30, 2006, as amended by that certain Second Amendment, Waiver
and Consent to Credit Agreement dated as of October 23, 2006 (as amended,
restated, supplemented or otherwise modified from time to time, the “Existing Credit
Agreement”);

    

    WHEREAS, the Borrowers and
Omega Healthcare Investors, Inc. (the “Parent”) have
informed the Administrative Agent that Schedule 5.12 and
Schedule 5.13
to the Existing Credit Agreement were incorrect as of the Closing Date with
respect to the Facility Leases covering the Borrowing Base Assets known as the
Idaho Falls Care Center and the Twin Falls Care Center (collectively, the “Peak
Properties”);

    

    WHEREAS, the Borrowers and the
Parent have also informed the Administrative Agent that the Parent is in the
process of amending and restating the Amended and Restated Master Lease
Agreement, made and entered into March 1, 2004 to be effective as of December 1,
2003 as amended by and among the Parent, Sun Healthcare Group, Inc. and its
Affiliates (“Sun”) and the
respective lessor and lessee entities identified on the signature page thereto
(the “Sun Master
Lease”) to, among other things, add approximately ten (10) additional
properties indirectly owned by the Parent and currently leased by Sun (the
“Additional Sun
Properties”) to the amended and restated Sun Master Lease (the “Amended and Restated Sun
Lease”);

    

    WHEREAS, the Borrowers and the
Parent have further informed the Administrative Agent that the Borrowers intend
to (i) qualify approximately four (4) of the Additional Sun Properties (set
forth in Part 3 of this Amendment) as Borrowing Base Assets under the Existing
Credit Agreement (the “New Borrowing Base
Assets”) and (ii) thereafter, release two (2) existing Borrowing Base
Properties known as SunHealth Robert H. Ballard Rehab Hospital and Continental
Rehab Hospital currently subject to the Sun Master Lease (the “Rehab Properties”) as
Borrowing Base Properties;

    

    WHEREAS, with respect to the
Parent’s desire to enter into the Amended and Restated Sun Lease, Section
7.08(b) provides that the “Borrowers shall not, without the prior written
consent of the Required Lenders enter into any material amendment or
modification ... any Material Contract”, the Parent has requested that the Lenders
consent to the amendment and modifications and otherwise approve the Amended and
Restated Sun Lease (the “Sun Master Lease
Modification”);

    

    WHEREAS, with respect to the
Parent’s desire to release the Rehab Properties, Section 7.12(a)(iii) provides
that the “the appraised value of the Borrowing Base Assets released ... in any
fiscal year pursuant to this Section 7.12, shall
not exceed $25,000,000 in the aggregate and the appraised value of the Borrowing
Base Assets released ... during the entire term hereof shall not, in any case ...
exceed $75,000,000 in the aggregate” and as a result of the release of the
SunBridge – Humble, Texas and SunBridge – Katy, Texas, Borrowing Base Properties
on or about October, 2007, the Borrowers do not have the ability under Section
7.12(a)(iii) to also release the Rehab Properties, and as a result, the
Borrowers have requested that (i) the Lenders consent to the additional release
of the Rehab Properties, notwithstanding the limitation imposed by Section
7.12(a)(iii) (the “Rehab Properties
Release”) and (ii) amend Section 7.12(a)(iii) to amend the limitations
imposed by such section;

    

    WHEREAS, the Parent has
requested, and the Lenders have agreed, to (i) consent to the Sun Master Lease
Modification, (ii) consent to the Rehab Properties Release and (iii) amend
certain provisions of the Existing Credit Agreement as set forth
hereinbelow.

    

    NOW, THEREFORE, in
consideration of the premises and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:

    

    

    PART
1

    DEFINITIONS

    

    SUBPART 1.1  Certain
Definitions.  Unless otherwise defined herein or the context
otherwise requires, the following terms used in this Amendment, including its
preamble and recitals, have the following meanings:

    

    “Amended Credit
Agreement” means the Existing Credit Agreement as amended
hereby.

    

    
      	
               
      

            	
              “Amendment No. 3
      Effective Date” is defined in Subpart
      5.1.

            

    

    

    SUBPART 1.2  Other
Definitions.  Unless otherwise defined herein or the context
otherwise requires, terms used in this Amendment, including its preamble and
recitals, have the meanings provided in the Existing Credit
Agreement.

    

    

    PART
2

    CONSENT
TO SUN LEASE MODIFICATION AND REHAB PROPERTY RELEASE

    

    In
connection with the Sun Master Lease Modification, the Lenders hereby consent to
and approve the Amended and Restated Sun Lease in the form attached hereto as
Exhibit
A.

    

    Additionally,
in connection with the Rehab Property Release, the Lenders hereby consent to the
release of the Rehab Properties to the extent that the Borrowers shall comply
with each of the other requirements set forth in Section 7.12,
including, without limitation, delivery of the certificate(s) described in Section
7.12(a)(ii).

    

    The
consents set forth in this Part 2 are limited to the extent described herein and
shall not be construed to be a consent to the modification of any other terms of
the Existing Credit Agreement or of the other Credit Documents, except as
required to implement the consents set forth in this Part 2.

    

    

    PART
3

    CONSENT
TO ADDITIONAL BORROWING BASE ASSETS

    

    The
Borrowers have been working to qualify the following four (4) Real Property
Assets (collectively, the “Additional Borrowing Base
Assets”) as Borrowing Base Assets under the Existing Credit
Agreement:

    

    
      	
              No.

            	
              Property
      Name

            	
              Operator

            	
              Beds/Unit

            	
              Occupancy

            	
              Structure

            	
              City/State

            
	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
              1.

            	
              Falmouth
      Nursing & Rehab Center

            	
              Sun

            	
              120

            	
              84.20%

            	
              Lease

            	
              Falmouth,
      MA

            
	
              2.

            	
              Mashpee
      Nursing & Rehab Center

            	
              Sun

            	
              98

            	
              89.8%

            	
              Lease

            	
              Mashpee,
      MA

            
	
              3.

            	
              Wakefield
      Nursing & Rehab Center

            	
              Sun

            	
              149

            	
              69.8%

            	
              Lease

            	
              Wakefield,
      MA

            
	
              4.

            	
              Westfield
      Nursing & Rehab Center

            	
              Sun

            	
              98

            	
              95.9%

            	
              Lease

            	
              Westfield,
      MA

            

    

    

    Section 7.12(a)(i) of
the Credit Agreement provides that the Borrowers may at any time include
additional Real Property Assets as Borrowing Base Assets so long as: (a) such
Real Property Assets satisfy the requirements set forth in the definition of
Borrowing Base Assets (including without limitation, delivery of each of the
Borrowing Base Asset Deliverables with respect thereto) and the (b) the
Administrative Agent and the Required Lenders have approved such additional Real
Property Assets as Borrowing Base Assets.

    

    With
respect to each of the Additional Borrowing Base Assets, the Administrative
Agent and the Borrowers are in the process of receiving each of the items set
forth in the definition of Borrowing Base Asset Deliverables.  The
Borrowers and the Administrative Agent anticipate the completion of these
requirements by February 15, 2008 and the relevant Borrowing Base Asset
Deliverables (such as appraisals, leases, financial information and
environmental reports) with respect to the Additional Borrowing Base Assets will
be posted to Intralinks for Lender review as they are received.

    

    For
purposes of satisfying the consent requirements under the Credit Agreement,
(including, without limitation, those consent requirements set forth in the
definition of Borrowing Base Asset and in Section 7.12(a)(i)),
effective as of the date upon which the Administrative Agent has satisfactorily
received, reviewed and/or approved each of the items set forth in the definition
of Borrowing Base Asset Deliverables and as otherwise required by applicable
provisions of the Credit Agreement, the Lenders hereby consent to the inclusion
of the Additional Borrowing Base Assets as Borrowing Base Assets under the
Credit Agreement.

    

    Notwithstanding
the foregoing, with respect to the proposed Additional Borrowing Base Assets,
since similar mortgages were filed in Massachusetts and legal opinions from
local counsel were received in connection with the closing of the Credit
Agreement on March 31, 2006 (and the title insurance to be received in
connection with the Additional Borrowing Base Assets will insure that such
mortgages are in a recordable form), the Lenders hereby consent to the
waiver of the requirement in clause (a) of the definition of Borrowing Base
Asset Deliverables which requires that the Lenders shall have received “a
related legal opinion from special local counsel to the Borrowers opining as to
the propriety of the form of such documents for recording in the applicable
jurisdiction and such other matters as may be required by the Administrative
Agent.” 

    

    The
consents set forth in this Part 3 are limited to the extent described herein and
shall not be construed to be a consent to the modification of any other terms of
the Existing Credit Agreement or of the other Credit Documents, except as
required to implement the consents set forth in this Part 3.

    

    

    PART
4

    AMENDMENTS TO EXISTING CREDIT
AGREEMENT

    

    Effective on (and subject to the
occurrence of) the Amendment No. 3 Effective Date, the Existing Credit Agreement
is hereby amended in accordance with this Part 4.

    

    SUBPART 4.1  Section 1.01 of the
Existing Credit Agreement is hereby amended to add the following new definitions
in appropriate alphabetical order:

     

    “Rehab Properties”
means those certain Borrowing Base Assets as of the Third Amendment Effective
Date known as SunHealth Robert H. Ballard Rehab Hospital and Continental Rehab
Hospital.

    

    “Third Amendment”
means the Third Amendment and Consent to Credit Agreement, dated as of February
8, 2008, among the Borrowers, the Lenders and the Administrative
Agent.

    

    “Third Amendment Effective
Date” means February 1, 2008.

    

    SUBPART 4.2 Section 7.12(a)(iii)
of the Existing Credit Agreement is hereby amended in its entirety to read as
follows:

     

    (iii)            Notwithstanding
anything herein to the contrary, other than with respect to the Rehab
Properties, following the Third Amendment Effective Date, the appraised value of
the Borrowing Base Assets released (whether or not substituted therefore) in any
fiscal year pursuant to this Section 7.12
shall not exceed $40,000,000 in the aggregate and the appraised value of the
Borrowing Base Assets released (whether or not substituted therefore) during the
entire term hereof shall not, in any case (and regardless of whether the
$40,000,000/year limitation is met during any given year), exceed $100,000,000
in the aggregate; provided that to the
extent the fair market value of the Rehab Properties exceeds $29,000,000 at the
time of release, such excess amount shall be included in the limitation set
forth in this Section
7.12(a)(iii)

    

    SUBPART 4.3 Schedule 5.12, and
Schedule 5.13
of the Existing Credit Agreement are hereby amended in their entireties to read
as set forth on Schedule 5.12 and
Schedule 5.13
attached hereto.

     

    SUBPART 4.4 Schedule 10.02 to the
Existing Credit Agreement is hereby amended to update the address of Borrowers’
counsel to the following:

    

    Dewey
& LeBoeuf LLP

    1301
Avenue of the Americas

    New York,
New York 10019

    Attention:  John
R. Fallon, Jr., Esq.

    

    

    PART
5

    CONDITIONS TO
EFFECTIVENESS

    

    SUBPART 5.1  Amendment No. 3 Effective
Date.  This Amendment shall be and become effective as of
February 1, 2008 (the “Amendment No. 3 Effective
Date”) when all of the conditions set forth in this Part 5 shall have
been satisfied.

    

    SUBPART 5.2 Execution of Counterparts of
Amendment.  The Administrative Agent shall have received
counterparts of this Amendment, which collectively shall have been duly executed
on behalf of (a) the Borrowers, (b) the Required Lenders and (c) the
Administrative Agent.

    

    SUBPART 5.3  Execution of Guarantor
Consent.  The Administrative Agent shall have received an
acknowledgement and consent from each of the Guarantors.

    

    SUBPART 5.4  Amended and Restated SUN
SNDA.  The Administrative Agent shall have received an Amended
and Restated Subordination, Non-Disturbance and Attornment Agreement from SUN
with respect to the Peak Properties and the Additional Borrowing Base Assets as
required by Section
6.16 of the Existing Credit Agreement.

    

    SUBPART 5.5  Execution of Borrower
Joinder Agreement.  The Administrative Agent shall have
received an executed Borrower Joinder Agreement from OHIMA, Inc.

    

    SUBPART 5.6  Other
Items.  The Administrative Agent shall have received such other
documents, agreements or information which may be reasonably requested by the
Administrative Agent.

    

    PART
6

    MISCELLANEOUS

    

    SUBPART 6.1 Construction.  This
Amendment is a Credit Document executed pursuant to the Existing Credit
Agreement and shall (unless otherwise expressly indicated therein) be construed,
administered and applied in accordance with the terms and provisions of the
Amended Credit Agreement.

    

    SUBPART 6.2 Representations and
Warranties.  Each Borrower hereby represents and warrants that
it:  (a) has the requisite corporate power and authority to execute,
deliver and perform this Amendment, as applicable and (b) is duly authorized to,
and has been authorized by all necessary corporate action, to execute, deliver
and perform this Amendment, (c) after giving effect to this Amendment, the
representations and warranties contained in Section 6 of the Amended Credit
Agreement are true and correct in all material respects on and as of the date
hereof upon giving effect to this Amendment as though made on and as of such
date (except for those which expressly relate to an earlier date) and (d) no
Default or Event of Default exists under the Existing Credit Agreement on and as
of the date hereof upon giving effect to this Amendment.

    

    SUBPART 6.3 Counterparts.  This
Amendment may be executed by the parties hereto in several counterparts, each of
which shall be deemed to be an original and all of which shall constitute
together but one and the same agreement.  Delivery of an executed
counterpart of a signature page of this Amendment by facsimile or other
electronic means shall be effective as delivery of a manually executed original
counterpart of this Amendment.

    

    SUBPART 6.4 Binding
Effect.  This Amendment, the Amended Credit Agreement and the
other Credit Documents embody the entire agreement between the parties and
supersede all prior agreements and understandings, if any, relating to the
subject matter hereof.  These Credit Documents represent the final
agreement between the parties and may not be contradicted by evidence of prior,
contemporaneous or subsequent oral agreements of the parties.  Except
as expressly modified and amended in this Amendment, all the terms, provisions
and conditions of the Credit Documents shall remain unchanged and shall continue
in full force and effect.

    

    SUBPART 6.5 GOVERNING
LAW.  THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

    

    SUBPART 6.6 Severability.  If
any provision of this Amendment is determined to be illegal, invalid or
unenforceable, such provision shall be fully severable and the remaining
provisions shall remain in full force and effect and shall be construed without
giving effect to the illegal, invalid or unenforceable provisions.

    

    SUBPART 6.7 Affirmation.  The
Credit Documents (and all covenants, terms, conditions and agreements therein),
shall remain in full force and effect, and are hereby ratified and confirmed in
all respects by each Borrower.  Each Borrower covenants and agrees to
comply with all of the terms, covenants and conditions of the Existing Credit
Agreement, as otherwise waived, consented to and amended hereby, notwithstanding
any prior course of conduct, waivers, releases or other actions or inactions on
Lenders’ part which might otherwise constitute or be construed as a waiver of or
amendment to such terms, covenants and conditions.

    

    SUBPART 6.8 No
Waiver.  The execution, delivery and effectiveness of this
Amendment shall not, except as expressly provided in this Amendment, operate as
a waiver of any right, power or remedy of Lenders, nor constitute a waiver of
any provision of any Credit Document or any other documents, instruments and
agreements executed or delivered in connection with any of the
foregoing.  Except as otherwise provided for in this Amendment,
nothing herein is intended or shall be construed as a waiver of any existing
Defaults or Events of Default under the Credit Documents or any of Lenders’
rights and remedies in respect of such Defaults or Events of
Default.

    

    SIGNATURE
PAGES FOLLOW

    
      
        
           

        

         

      

      
         

        
          

        

      

      
         

      

    

    IN WITNESS WHEREOF, each of
the parties hereto has caused a counterpart of this Third Amendment and Consent
to Credit Agreement to be duly executed and delivered as of the date first above
written.

     

    
      	
              BORROWERS:

            	
              OHI
      ASSET, LLC

            

    

     

    
      	
               
      

            	
              OHI
      ASSET (ID), LLC

            

    

     

    
      	
               
      

            	
              OHI
      ASSET (LA), LLC

            

    

     

    
      	
               
      

            	
              OHI
      ASSET (TX), LLC

            

    

     

    
      	
               
      

            	
              OHI
      ASSET (CA), LLC

            

    

     

    
      	
               
      

            	
              DELTA
      INVESTORS I, LLC

            

    

     

    
      	
               
      

            	
              DELTA
      INVESTORS II, LLC

            

    

     

    
      	
               
      

            	
              By:

            	
              Omega
      Healthcare Investors, Inc.,

            

    

     

    
      	
               
      

            	
              the
      Sole Member of each such Company

            

    

     

    

     

    
      	
               
      

            	
              By:

            	 /s/ Daniel
      J. Booth

    

     

    
      	
               
      

            	
              Name:

            	
              Daniel
      J. Booth

            

    

     

    
      	
               
      

            	
              Title:

            	
              Chief
      Operating Officer

            

    

     

    

     

    TEXAS
LESSOR - STONEGATE, LP

     

    
      	
               
      

            	
              By:

            	
              Texas
      Lessor – Stonegate GP, Inc.,

            

    

     

    
      	
               
      

            	
              Its
      General Partner

            

    

     

    

     

    
      	
               
      

            	
              By:

            	 /s/ Daniel
      J. Booth

    

     

    
      	
               
      

            	
              Name:

            	
              Daniel
      J. Booth

            

    

     

    
      	
               
      

            	
              Title:

            	
              Chief
      Operating Officer

            

    

     

    

    
      
        
           

           

        

         

      

      
         

        
          

        

      

      
         

      

    

    
      	
              LENDERS:

            	
              BANK
      OF AMERICA, N.A.,

            

    

     

    
      	
               
      

            	
              as
      Administrative Agent

            

    

     

    
      	
               

            	 By:/s/ Gabriela
  Millhorn

    

     

    
      	
               

            	 Name: Gabriela
      Millhorn

    

     

    
      	
               

            	 Title: Senior Vice
      President

    

     

    BANK OF
AMERICA, N.A., as L/C Issuer, Swing Line Lender and as a Lender

     

    

     

    By:   /s/ Gabriela
Millhorn                                                                       

     

    Name:   Gabriela
Millhorn                                                                        

     

    Title:    Senior
Vice
President                                                                       

     

    

    
      
        
           

        

         

      

      
         

        
          

        

      

      
         

      

    

    UBS LOAN
FINANCE LLC

                                    as a
Lender

     

    By:  /s/ Richard L.
Tavrow 

                                                                    

                                    Name:    Richard L.Tavrow                                                                                                                                                                      

     

                                    Title: 
Director

     

     

     

    By:  /s/ Mary E.
Evans                                                                         

     

    Name:  Mary
E. Evans
                                                                         

     

    Title:     Associate
Director                                                                      

     

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    DEUTSCHE
BANK TRUST COMPANY AMERICAS, as a Lender

     

    By:  /s/ Carin
Keegan                                                                         

     

    Name:   Carin
Keegan                                                                        

     

    Title:      Director                                                                     

     

     

     

    By: /s/ Evelyn
Thierry                                                                           

     

    Name:   Evelyn
Thierry                                                                      

     

    Title:     Vice
President                                                                    

     

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    GENERAL
ELECTRIC CAPITAL CORPORATION,

                                    as a
Lender

     

    By:    /s/ Nicholas A.
Aponte                                                                       

     

    Name:     Nicholas
A.
Aponte                                                                     

     

    Title:    Duly
Authorized
Signatory                                                                       

     

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    LASALLE
BANK, N.A.,

                                    as a
Lender

    
 

    By:   /s/ Gabriela
Millhorn                                                                       

     

    Name:   Gabriela
Millhorn                                                                       

     

    Title:      Senior
vice
President                                                                    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    CITICORP
NORTH AMERICA, INC.,

     

    as a
Lender

    
 

    By:  /s/ Ricardo
James                                                                         

     

    Name:   Ricardo
James                                                                        

     

    Title:      Vice-President                                                                   

     

    

    
      
        
           

        

         

      

      
         

        
          

        

      

      
         

      

    

    CONSENT
OF GUARANTORS

     

    Each of
the undersigned Guarantors, as a guarantor under the Guaranty, dated as of March
31, 2006, as amended (the “Guaranty”), hereby
acknowledges and consents to the terms of the Third Amendment and Consent to
Credit Agreement (the “Amendment”) to which
this Consent of Guarantors is attached, and agrees that the Amendment does not
operate to reduce or discharge such Guarantor’s obligations under the Guaranty
or the other Credit Documents.  Each Guarantor further confirms that
the Guaranty remains in full force and effect after giving effect thereto and
represents and warrants that there is no defense, counterclaim or offset of any
type or nature under the Guaranty.

     

    Dated as
of February [__], 2008

     

    
      	
              PARENT:

            	
              OMEGA
      HEALTHCARE INVESTORS, INC.,

            

    

     

    
      	
               
      

            	
              a
      Maryland Corporation

            

    

     

    

    
 

     

    
      	
              By:

            	
              /s/ Daniel
      J. Booth

            	 

    

     

    
      	
              Name:

            	
              Daniel
      J. Booth

            

    

     

    
      	
              Title:

            	
              Chief
      Operating Officer

            

    

     

    
      	
              SUBSIDIARY
      GUARANTORS:

            	
              ARIZONA
      LESSOR – INFINIA, INC.

            

    

     

    
      	
               
      

            	
              BALDWIN
      HEALTH CENTER, INC.

            

    

     

    
      	
               
      

            	
              BAYSIDE
      STREET II, INC.

            

    

     

    
      	
               
      

            	
              CANTON
      HEALTH CARE LAND, INC.

            

    

     

    
      	
               
      

            	
              COLORADO
      LESSOR – CONIFER, INC.

            

    

     

    
      	
               
      

            	
              COPLEY
      HEALTH CENTER, INC.

            

    

     

    
      	
               
      

            	
              DIXON
      HEALTH CARE CENTER, INC.

            

    

     

    
      	
               
      

            	
              FLORIDA
      LESSOR – EMERALD, INC.

            

    

     

    
      	
               
      

            	
              FLORIDA
      LESSOR – MEADOWVIEW, INC.

            

    

     

    
      	
               
      

            	
              GEORGIA
      LESSOR – BONTERRA/

            

    

     

    
      	
               
      

            	
              PARKVIEW,
      INC.

            

    

     

    
      	
               
      

            	
              HANOVER
      HOUSE, INC.

            

    

     

    
      	
               
      

            	
              HUTTON
      I LAND, INC.

            

    

     

    
      	
               
      

            	
              HUTTON
      II LAND, INC.

            

    

     

    
      	
               
      

            	
              HUTTON
      III LAND, INC.

            

    

     

    
      	
               
      

            	
              INDIANA
      LESSOR – JEFFERSONVILLE, INC.

            

    

     

    
      	
               
      

            	
              INDIANA
      LESSOR – WELLINGTON
MANOR, INC.

            

    

     

    
      	
               
      

            	
              LEATHERMAN
      PARTNERSHIP 89-1, INC.

            

    

     

    
      	
               
      

            	
              LEATHERMAN
      PARTNERSHIP 89-2, INC.

            

    

     

    
      	
               
      

            	
              LEATHERMAN
      PARTNERSHIP 90-1, INC.

            

    

     

    
      	
               
      

            	
              LONG
      TERM CARE ASSOCIATES –
TEXAS, INC.

            

    

     

    
      	
               
      

            	
              MERIDIAN
      ARMS LAND, INC.

            

    

     

    
      	
               
      

            	
              OHI
      (CONNECTICUT), INC.

            

    

     

    
      	
               
      

            	
              OHI
      (FLORIDA), INC.

            

    

     

    
      	
               
      

            	
              OHI
      (ILLINOIS), INC.

            

    

     

    
      	
               
      

            	
              OHI
      (INDIANA), INC.

            

    

     

    
      	
               
      

            	
              OHI
      (IOWA), INC.

            

    

     

    
      	
               
      

            	
              OHIMA,
      INC.

            

    

     

    
      	
               
      

            	
              ORANGE
      VILLAGE CARE CENTER, INC.

            

    

     

    
      	
               
      

            	
              PAVILLION
      NORTH PARTNERS, INC.

            

    

     

    
      	
               
      

            	
              PAVILLION
      NURSING CENTER NORTH, INC.

            

    

     

    
      	
               
      

            	
              ST.
      MARY’S PROPERTIES, INC.

            

    

     

    
      	
               
      

            	
              STERLING
      ACQUISITION CORP.

            

    

     

    
      	
               
      

            	
              THE
      SUBURBAN PAVILION, INC.

            

    

     

    
      	
               
      

            	
              TEXAS
      LESSOR – STONEGATE, LIMITED, INC.

            

    

     

    
      	
               
      

            	
              TEXAS
      LESSOR – STONEGATE GP, INC.

            

    

     

    
      	
               
      

            	
              WASHINGTON
      LESSOR - SILVERDALE, INC.

            

    

     

     

    
      	
              By:

            	
              /s/ Daniel
      J. Booth

            	 

    

     

    
      	
              Name:

            	
              Daniel
      J. Booth

            

    

     

    
      	
              Title:

            	
              Chief
      Operating Officer

            

    

     

     

     

    COLONIAL
GARDENS, LLC

     

    NRS
VENTURES, L.L.C.

     

    OHI ASSET
(CO), LLC

     

    OHI ASSET
(CT) LENDER, LLC

     

    OHI ASSET
(FL), LLC

     

    OHI ASSET
(IL), LLC

     

    OHI ASSET
(OH), LLC

     

    OHI ASSET
(OH) LENDER, LLC

     

    OHI ASSET
(OH) NEW PHILADELPHIA, LLC

     

    OHI ASSET
(PA), LLC

     

    OHI ASSET
II (CA), LLC

     

    OHI ASSET
II (OH), LLC

     

    OHI ASSET
II (TX), LLC

     

    OHI ASSET
ESSEX (OH), LLC

     

    WILCARE,
LLC

     

    
      	
               
      

            	
              By:

            	
              Omega
      Healthcare Investors, Inc., as the Sole Member of each of the
      Companies

            

    

     

    By:  /s/ Daniel J.
Booth                                                              

     

    Name:    Daniel
J. Booth

     

    Title:     Chief
Operating Officer

     

    
      
        
           

           

        

         

      

      
         

        
          

        

      

      
         

      

    

    HOUSE OF
HANOVER, LTD.

     

    
      	
               
      

            	
              By:

            	
              OHI
      Asset (OH), LLC, as the

            

    

     

    
      	
               
      

            	
              Sole
      Member of the Company

            

    

     

    
      	
               
      

            	
              By:

            	
              Omega
      Healthcare Investors, Inc., as the Sole Member of the
    Company

            

    

     

    By: /s/ Daniel J.
Booth                                                              

     

    Name:  Daniel
J. Booth

     

    Title:    Chief
Operating Officer

     

    

     

    PAVILLION
NORTH, LLP

     

    
      	
               
      

            	
              By:

            	
              Pavillion
      Nursing Center North, Inc. as its

            

    

     

    
      	
               
      

            	
              General
      Partner

            

    

     

    By:   /s/ Daniel J.
Booth                                                            

     

    Name:   Daniel
J. Booth

     

    Title:     Chief
Operating Officer

     

    

     

    OHI ASSET
(PA) TRUST

     

    OHI ASSET
II (PA) TRUST

     

    OHI ASSET
III (PA) TRUST

     

    
      	
               
      

            	
              By:

            	
              OHI
      Asset (PA), LLC, as the

            

    

     

    
      	
               
      

            	
              Sole
      Trustee of the Trusts

            

    

     

    
      	
               
      

            	
              By:

            	
              Omega
      Healthcare Investors, Inc., as the Sole
Member

            

    

     

    By:  /s/ Daniel J.
Booth                                                               

     

    Name:   Daniel
J. Booth

     

    Title:     Chief
Operating Officer

     

    
      
        
           

           

        

         

      

      
         

        
          

        

      

      
         

      

    

    EXHIBIT
A

     

    

     

    AMENDED AND RESTATED SUN
LEASE

     

    

     

    

     

    

     

    

     

    SEE
ATTACHED

     

    
      
        
           

        

         

      

      
         

        
          

        

      

      
         

      

    

    Schedule
5.12

     

    

     

    REAL PROPERTY ASSET
MATTERS

     

    Part I –
Borrowing Base Assets

     

    

     

    SEE
ATTACHED

     

    Part II –
Other Real Property Assets

     

    

     

    NONE

     

    Part III
– Delinquent Tenants

     

    

     

    NONE

     

    Part IV –
Facility Leases

     

    

     

    SEE
LIST ON SCHEDULE 5.13

     

    Part V –
Material Subleases

     

    

     

    NONE

     

    
      
        
           

        

         

      

      
         

        
          

        

      

      
         

      

    

    Collateral
for the Bank of America Credit Facility

     

    

    
      	
              No.

            	
              No.

            	
              Property
      Name

            	
              Operator

            	
              Beds/Unit

            	
              Omega’s
      Structure

            	
              Address

            	
              City

            	
              State

            	
              Zip

            
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	
              The Ensign Group

            	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
              1.

            	
              1.

            	
              Claremont
      Care Center

            	
              Ensign

            	
              99

            	
              Lease

            	
              219
      East Foothill Boulevard

            	
              Pomona

            	
              CA

            	
              92767

            
	
              2.

            	
              2.

            	
              Arroyo
      Vista Nursing Center

            	
              Ensign

            	
              53

            	
              Lease

            	
              3022
      45th Street

            	
              San
      Diego

            	
              CA

            	
              92105

            
	
              3.

            	
              3.

            	
              Vista
      Knoll Specialized Care Center

            	
              Ensign

            	
              119

            	
              Lease

            	
              2000
      Westwood Road

            	
              Vista

            	
              CA

            	
              92083

            
	 
      	 
      	
              Subtotal

            	 
      	
              271

            	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	
              Nexion Health, Inc.

            	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
              4.

            	
              1.

            	
              Patterson
      Healthcare Center

            	
              Nexion

            	
              131

            	
              Lease

            	
              910
      Lia Street

            	
              Patterson

            	
              LA

            	
              70392

            
	
              5.

            	
              2.

            	
              Village
      Creek Rehabilitation and Nursing Center

            	
              Nexion

            	
              120

            	
              Lease

            	
              705
      North Main Street

            	
              Lumberton

            	
              TX

            	
              77657

            
	
              6.

            	
              3.

            	
              Southwood
      Nursing and Rehabilitation Center

            	
              Nexion

            	
              160

            	
              Lease

            	
              200
      Southwood Drive

            	
              Henderson

            	
              TX

            	
              75652

            
	
              7.

            	
              4.

            	
              Truman
      W. Smith Children’s Care Center

            	
              Nexion

            	
              120

            	
              Lease

            	
              2200
      West Upshur Avenue

            	
              Gladewater

            	
              TX

            	
              75647

            
	
              8.

            	
              5.

            	
              Claiborne
      Healthcare Center

            	
              Nexion

            	
              86

            	
              Lease

            	
              1536
      Claiborne Avenue

            	
              Shreveport

            	
              LA

            	
              71103

            
	
              9.

            	
              6.

            	
              Gonzales
      Healthcare Center

            	
              Nexion

            	
              124

            	
              Lease

            	
              905
      W. Cornerview Road

            	
              Gonzales

            	
              LA

            	
              70737

            
	
              10.

            	
              7.

            	
              New
      Iberia Manor South

            	
              Nexion

            	
              100

            	
              Lease

            	
              600
      Bayard Street

            	
              New
      Iberia

            	
              LA

            	
              70560

            
	
              11.

            	
              8.

            	
              New
      Iberia Manor North

            	
              Nexion

            	
              121

            	
              Lease

            	
              1803
      Jane Street

            	
              New
      Iberia

            	
              LA

            	
              70562

            
	
              12.

            	
              9.

            	
              Kaplan
      Healthcare Center

            	
              Nexion

            	
              120

            	
              Lease

            	
              1300
      West 8th Street

            	
              Kaplan

            	
              LA

            	
              70548

            
	
              13.

            	
              10.

            	
              Lafayette
      Healthcare Center

            	
              Nexion

            	
              60

            	
              Lease

            	
              325
      Bacque Crescent Drive

            	
              Lafayette

            	
              LA

            	
              70503

            
	
              14.

            	
              11.

            	
              Many
      Healthcare North

            	
              Nexion

            	
              128

            	
              Lease

            	
              120
      Natchitoches Highway 6 East

            	
              Many

            	
              LA

            	
              71449

            
	
              15.

            	
              12.

            	
              Many
      Healthcare South

            	
              Nexion

            	
              60

            	
              Lease

            	
              255
      Middle Creek Road

            	
              Many

            	
              LA

            	
              71449

            
	
              16.

            	
              13.

            	
              Marrero
      Healthcare Center

            	
              Nexion

            	
              134

            	
              Lease

            	
              5301
      August Lane

            	
              Marrero

            	
              LA

            	
              70072

            
	
              17.

            	
              14.

            	
              Meadowview
      Healthcare Center

            	
              Nexion

            	
              230

            	
              Lease

            	
              400
      Meadowview Drive

            	
              Minden

            	
              LA

            	
              71055

            
	
              18.

            	
              15.

            	
              Pierremont
      Healthcare Center

            	
              Nexion

            	
              196

            	
              Lease

            	
              725
      Mitchell Lane

            	
              Shreveport

            	
              LA

            	
              71106

            
	
              19.

            	
              16.

            	
              Terrell
      Healthcare Center

            	
              Nexion

            	
              94

            	
              Lease

            	
              204
      West Nash Street

            	
              Terrell

            	
              TX

            	
              75160

            
	
              20.

            	
              17.

            	
              Thibodaux
      Healthcare Center

            	
              Nexion

            	
              78

            	
              Lease

            	
              1300
      LaFourche Drive

            	
              Thibodaux

            	
              LA

            	
              70301

            
	
              21.

            	
              18.

            	
              Vivian
      Healthcare Center

            	
              Nexion

            	
              100

            	
              Lease

            	
              912
      S. Pecan Street

            	
              Vivian

            	
              LA

            	
              71082

            
	
              22.

            	
              19.

            	
              Midwestern
      Healthcare Center

            	
              Nexion

            	
              121

            	
              Lease

            	
              601
      Midwestern Parkway

            	
              Wichita
      Falls

            	
              TX

            	
              76302

            
	 
      	 
      	
              Subtotal

            	 
      	
              2,283

            	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	
              StoneGate SNF Properties,
LP

            	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
              23.

            	
              1.

            	
              Colonial
      Pines Healthcare Center

            	
              Stonegate

            	
              107

            	
              Lease

            	
              1277
      Farm Market Road

            	
              San
      Augustine

            	
              TX

            	
              75972

            
	
              24.

            	
              2.

            	
              Heritage
      Plaza Nursing Center

            	
              Stonegate

            	
              95

            	
              Lease

            	
              600
      West 52nd Street

            	
              Texarkana

            	
              TX

            	
              75503

            
	
              25.

            	
              3.

            	
              Pine
      Grove Nursing Center

            	
              Stonegate

            	
              120

            	
              Lease

            	
              246
      Haley Drive

            	
              Center

            	
              TX

            	
              75935

            
	
              26.

            	
              4.

            	
              Reunion
      Plaza Senior Care and Rehabilitation Center

            	
              Stonegate

            	
              102

            	
              Lease

            	
              1401
      Hampton Road

            	
              Texarkana

            	
              TX

            	
              75503

            
	
              27.

            	
              5.

            	
              South
      Place Nursing Center

            	
              Stonegate

            	
              120

            	
              Lease

            	
              150
      Gibson Road

            	
              Athens

            	
              TX

            	
              75751

            
	
              28.

            	
              6.

            	
              West
      Place Nursing Center

            	
              Stonegate

            	
              120

            	
              Lease

            	
              8579
      State Highway 31

            	
              Athens

            	
              TX

            	
              75751

            
	 
      	 
      	
              Subtotal

            	 
      	
              664

            	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	
              Sun Healthcare Group

            	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
              29.

            	
              1.

            	
              SunBridge
      Care and Rehabilitation of Alleghany

            	
              Sun

            	
              112

            	
              Lease

            	
              179
      Combs Street

            	
              Sparta

            	
              NC

            	
              28675

            
	
              30.

            	
              2.

            	
              SunBridge
      Care and Rehabilitation for Circleville

            	
              Sun

            	
              100

            	
              Lease

            	
              1155
      Atwater Avenue

            	
              Circleville

            	
              OH

            	
              43113

            
	
              31.

            	
              3.

            	
              SunBridge
      Care and Rehabilitation for Decatur

            	
              Sun

            	
              183

            	
              Lease

            	
              1350
      14th Avenue SE

            	
              Decatur

            	
              AL

            	
              35601

            
	
              32.

            	
              4.

            	
              SunBridge
      Care and Rehabilitation for Dunbar

            	
              Sun

            	
              120

            	
              Lease

            	
              501
      Caldwell Lane

            	
              Dunbar

            	
              WV

            	
              25064

            
	
              33.

            	
              5.

            	
              SunBridge
      at Merry Wood

            	
              Sun

            	
              124

            	
              Lease

            	
              280
      Mount Hebron Road

            	
              Elmore

            	
              AL

            	
              36025

            
	
              34.

            	
              6.

            	
              SunBridge
      Care and Rehabilitation for Emmett

            	
              Sun

            	
              40

            	
              Lease

            	
              501
      West Idaho Boulevard

            	
              Emmett

            	
              ID

            	
              83617

            
	
              35.

            	
              7.

            	
              SunBridge
      Care and Rehabilitation - Homestead

            	
              Sun

            	
              102

            	
              Lease

            	
              1900
      East Main Street

            	
              Lancaster

            	
              OH

            	
              43130

            
	
              36.

            	
              8.

            	
              SunBridge
      Care and Rehabilitation for LaFollette

            	
              Sun

            	
              178

            	
              Lease

            	
              155
      Davis Road

            	
              LaFollette

            	
              TN

            	
              37766

            
	
              37.

            	
              9.

            	
              Laurel
      Park

            	
              Sun

            	
              43

            	
              Lease

            	
              1425
      West Laurel Avenue

            	
              Pomona

            	
              CA

            	
              91768

            
	
              38.

            	
              10.

            	
              SunBridge
      Care and Rehabilitation for Lexington

            	
              Sun

            	
              86

            	
              Lease

            	
              877
      Hill Everhart Road

            	
              Lexington

            	
              NC

            	
              27295

            
	
              39.

            	
              11.

            	
              SunBridge
      Care and Rehabilitation for Marion

            	
              Sun

            	
              100

            	
              Lease

            	
              524
      James Way

            	
              Marion

            	
              OH

            	
              43302

            
	
              40.

            	
              12.

            	
              SunBridge
      Care & Rehabilitation for Maynardville

            	
              Sun

            	
              77

            	
              Lease

            	
              215
      Richardson Way

            	
              Maynardville

            	
              TN

            	
              37807

            
	
              41.

            	
              13.

            	
              Meadowbrook
      Manor

            	
              Sun

            	
              77

            	
              Lease

            	
              3951
      East Boulevard

            	
              Los
      Angeles

            	
              CA

            	
              90066

            
	
              42.

            	
              14.

            	
              SunBridge
      Care and Rehabilitation for Milford

            	
              Sun

            	
              135

            	
              Lease

            	
              10
      Veterans Memorial Drive

            	
              Milford

            	
              MA

            	
              01757

            
	
              43.

            	
              15.

            	
              SunBridge
      Care and Rehabilitation for Mount Olive

            	
              Sun

            	
              150

            	
              Lease

            	
              228
      Smith Chapel Road

            	
              Mount
      Olive

            	
              NC

            	
              28365

            
	
              44.

            	
              16.

            	
              SunBridge
      Care and Rehabilitation for Muscle Shoals

            	
              Sun

            	
              90

            	
              Lease

            	
              200
      Alabama Avenue

            	
              Muscle
      Shoals

            	
              AL

            	
              35661

            
	
              45.

            	
              17.

            	
              Olive
      Vista

            	
              Sun

            	
              120

            	
              Lease

            	
              2335
      South Towne Avenue

            	
              Pomona

            	
              CA

            	
              91766

            
	
              46.

            	
              18.

            	
              SunBridge
      Care and Rehabilitation for Parkersburg

            	
              Sun

            	
              66

            	
              Lease

            	
              1716
      Gihon Road

            	
              Parkersburg

            	
              WV

            	
              26101

            
	
              47.

            	
              19.

            	
              SunBridge
      Pine Lodge Care and Rehabilitation

            	
              Sun

            	
              120

            	
              Lease

            	
              405
      Stanaford Road

            	
              Beckley

            	
              WV

            	
              25801

            
	
              48.

            	
              20.

            	
              SunBridge
      Care and Rehabilitation for Putnam

            	
              Sun

            	
              120

            	
              Lease

            	
              300
      Seville Road

            	
              Hurricane

            	
              WV

            	
              25526

            
	
              49.

            	
              21.

            	
              SunBridge
      Care and Rehabilitation for Salem

            	
              Sun

            	
              112

            	
              Lease

            	
              146
      Water Street

            	
              Salem

            	
              WV

            	
              26426

            
	
              50.

            	
              22.

            	
              Shandin
      Hills Behavior Therapy Center

            	
              Sun

            	
              78

            	
              Lease

            	
              4164
      North 4th Avenue

            	
              San
      Bernardino

            	
              CA

            	
              92407

            
	
              51.

            	
              23.

            	
              SunBridge
      Care and Rehabilitation - Shoals

            	
              Sun

            	
              103

            	
              Lease

            	
              500
      John Aldridge Drive

            	
              Tuscumbia

            	
              AL

            	
              35674

            
	
              52.

            	
              24.

            	
              Sierra
      Vista

            	
              Sun

            	
              116

            	
              Lease

            	
              3455
      East Highland Avenue

            	
              Highland

            	
              CA

            	
              92346

            
	
              53.

            	
              25.

            	
              SunBridge
      Care and Rehabilitation for Siler City

            	
              Sun

            	
              160

            	
              Lease

            	
              900
      West Dolphin Street

            	
              Siler
      City

            	
              NC

            	
              27344

            
	
              54.

            	
              26.

            	
              SunBridge
      Care and Rehabilitation for the Triad

            	
              Sun

            	
              199

            	
              Lease

            	
              707
      North Elm Street

            	
              Highpoint

            	
              NC

            	
              27262

            
	
              55.

            	
              27.

            	
              SunBridge
      Care and Rehabilitation - Tuscumbia

            	
              Sun

            	
              109

            	
              Lease

            	
              813
      Keller Lane

            	
              Tuscumbia

            	
              AL

            	
              35674

            
	
              56.

            	
              28.

            	
              Whittier
      Care and Rehabilitation

            	
              Sun

            	
              142

            	
              Lease

            	
              820
      NW 95th Street

            	
              Seattle

            	
              WA

            	
              98117

            
	
              57.

            	
              29.

            	
              Falmouth
      Nursing & Rehab Center

            	
              Sun

            	
              120

            	
              Lease

            	
              359
      Jones Road

            	
              Falmouth

            	
              MA

            	
              02540

            
	
              58.

            	
              30.

            	
              Mashpee
      Nursing & Rehab Center

            	
              Sun

            	
              98

            	
              Lease

            	
              161
      Falmouth Road, Rte 128

            	
              Mashpee

            	
              MA

            	
              02649

            
	
              59.

            	
              31.

            	
              Wakefield
      Nursing & Rehab Center

            	
              Sun

            	
              149

            	
              Lease

            	
              1
      Bathol Street

            	
              Wakefield

            	
              MA

            	
              01880

            
	
              60.

            	
              32.

            	
              Westfield
      Nursing & Rehab Center

            	
              Sun

            	
              98

            	
              Lease

            	
              60
      East Silver Street

            	
              Westfield

            	
              MA

            	
              01085

            
	
              61.

            	
              33.

            	
              Idaho
      Falls Care Center

            	
              Sun

            	
              108

            	
              Lease

            	
              3111
      Channing Way

            	
              Idaho
      Falls

            	
              ID

            	
              83404

            
	
              62.

            	
              34.

            	
              Twin
      Falls Care Center

            	
              Sun

            	
              116

            	
              Lease

            	
              674
      Eastland Drive

            	
              Twin
      Falls

            	
              ID

            	
              83301

            
	
              63.

            	
              35.

            	
              Robert
      H. Ballard Rehabilitation Hospital

            	
              Sun

            	
              60

            	
              Lease

            	
              1760
      West 16th Street

            	
              San
      Bernardino

            	
              CA

            	
              92411

            
	
              64.

            	
              36.

            	
              Continental
      Rehabilitation Hospital of San Diego

            	
              Sun

            	
              110

            	
              Lease

            	
              555
      Washington Street

            	
              San
      Diego

            	
              CA

            	
              92103

            
	 
      	 
      	
              Subtotal

            	 
      	
              4,021

            	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	
              Grand
      Total

            	 
      	
              7,239

            	 
      	 
      	 
      	 
      	 
      

    

    

    

     

    

    

     

    
      
        
           

        

         

      

      
         

        
          

        

      

      
         

      

    

    Schedule
5.13

     

    

     

    MATERIAL CONTRACTS;
CONTRACTS SUBJECT TO

     

    ASSIGNMENT OF CLAIMS
ACT

     

    1.           Second
Amended and Restated Master Lease Agreement, entered into as of February 1,
2008, by and among (a) the lessor entities identified on the signature page
thereto, as Lessor, (b) the lessee entities listed on the signature page
thereto, as Lessee, (c) Omega Healthcare Investors, Inc., and (d) the guarantor
entities identified on the signature page thereto, as guarantors.

     

    2.           Master
Lease, dated as of September 30, 2003, between OHI Asset (CA), LLC, as Lessor,
and Permunitum LLC, as Lessee.

     

    3.           Amended
and Restated Master Lease, dated as of June 9, 2006, between OHI Asset (LA),
LLC, as Lessor, and Nexion Health of OHI, Inc., as Lessee.

     

    4.           Master
Lease, dated as of November 1, 2001, between Bayside Street, Inc., as Lessor,
and Stonegate SNF Properties, LP, as Lessee.ex10_3.htm

     

    
      
        

      

    

    SECOND
CONSOLIDATED AMENDED AND RESTATED MASTER LEASE

    (with Lessee Option to Purchase and
Maryland Option to Purchase)

    

    MULTIPLE
FACILITIES

    

    OHI ASSET
III (PA) TRUST

    

    AND

    

    OMG MSTR
LSCO, LLC

    OMG LS
LEASING CO., LLC

    

    AND
JOINED IN BY

    

    THE
MARYLAND BORROWERS

    

    DATED:
April 18, 2008

    

    FACILITIES:

    

    
      	
              Aristocrat
      Berea

              Candlewood
      Park

              Falling
      Water

              Grande
      Pointe Health Care

              Greenbrier
      RC

              Greenbrier
      HC

              Ohio
      Extended Care Facility

              Pebble
      Creek

              Pine
      Grove

              Pine
      Valley Care Center

              Wyant
      Woods

              Waterford
      Commons

              Crestwood
      Care Center

              Baldwin
      Health Center

               

            	
              Copley
      Health Center

              Hanover
      House

              Suburban
      Pavilion

              Wexford
      House

              Advanced
      Specialty Rehab of Toledo

              Commons
      at Greenbriar

              Greenbriar
      Center (a/k/a Greenbriar North)

              Greenbriar
      Rehabilitation Hospital

              Chardon
      Healthcare Center

              Northwestern
      Center

              Columbus
      Center

              Golden
      Years Healthcare Center

              Oak
      Grove Center

              Kent
      Care Center

               

            

    

    

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    TABLE
OF CONTENTS

     

    Page

     

    

      
        	
                ARTICLE
      I

              	 
      	
                2

              	 
      
	
                1.1

              	
                LEASE

              	
                2

              	 
      
	
                1.2

              	
                TERM

              	
                3

              	 
      
	
                1.3

              	
                OPTION
      TO RENEW

              	
                3

              	 
      
	
                ARTICLE
      II

              	 
      	
                3

              	 
      
	
                2.1

              	
                DEFINITIONS

              	
                3

              	 
      
	
                ARTICLE
      III

              	 
      	
                28

              	 
      
	
                3.1

              	
                BASE
      RENT; MONTHLY INSTALLMENTS

              	
                28

              	 
      
	
                3.2

              	
                ADDITIONAL
      CHARGES

              	
                28

              	 
      
	
                3.3

              	
                LATE
      CHARGE; INTEREST.

              	
                28

              	 
      
	
                3.4

              	
                NET
      LEASE.

              	
                28

              	 
      
	
                ARTICLE
      IV

              	 
      	
                29

              	 
      
	
                4.1

              	
                PAYMENT
      OF IMPOSITIONS

              	
                29

              	 
      
	
                4.2

              	
                ADJUSTMENT
      OF IMPOSITIONS

              	
                30

              	 
      
	
                4.3

              	
                UTILITY
      CHARGES

              	
                30

              	 
      
	
                4.4

              	
                INSURANCE
      PREMIUMS

              	
                30

              	 
      
	
                ARTICLE
      V

              	 
      	
                30

              	 
      
	
                5.1

              	
                NO
      TERMINATION, ABATEMENT, ETC

              	
                30

              	 
      
	
                ARTICLE
      VI

              	 
      	
                31

              	 
      
	
                6.1

              	
                OWNERSHIP
      OF THE LEASED PROPERTIES

              	
                31

              	 
      
	
                6.2

              	
                LESSOR’S
      PERSONAL PROPERTY

              	
                31

              	 
      
	
                6.3

              	
                LESSEE’S
      PERSONAL PROPERTY

              	
                31

              	 
      
	
                6.4

              	
                GRANT
      OF SECURITY INTEREST IN LESSEE’S PERSONAL PROPERTY AND
      ACCOUNTS

              	
                32

              	 
      
	
                ARTICLE
      VII

              	 
      	
                33

              	 
      
	
                7.1

              	
                CONDITION
      OF THE LEASED PROPERTIES

              	
                33

              	 
      
	
                7.2

              	
                USE
      OF THE LEASED PROPERTIES

              	
                33

              	 
      
	
                7.3

              	
                CERTAIN
      ENVIRONMENTAL MATTERS

              	
                28

              	 
      
	
                ARTICLE
      VIII

              	 
      	
                33

              	 
      
	
                8.1

              	
                COMPLIANCE
      WITH LEGAL AND INSURANCE REQUIREMENTS

              	
                33

              	 
      
	
                8.3

              	
                MINIMUM
      QUALIFIED CAPITAL EXPENDITURES

              	
                40

              	 
      
	
                8.4

              	
                MANAGEMENT
      AGREEMENTS AND CONSULTING AGREEMENTS

              	
                40

              	 
      
	
                8.5

              	
                OTHER
      FACILITIES

              	
                40

              	 
      
	
                8.6

              	
                NO
      OTHER BUSINESS

              	
                40

              	 
      
	
                ARTICLE
      IX

              	 
      	
                42

              	 
      
	
                9.1

              	
                MAINTENANCE
      AND REPAIR

              	
                42

              	 
      
	
                9.2

              	
                ENCROACHMENTS,
      RESTRICTIONS, ETC.

              	
                43

              	 
      
	
                ARTICLE
      XI

              	 
      	
                46

              	 
      
	
                11.1

              	
                LIENS

              	
                46

              	 
      
	
                ARTICLE
      XII

              	 
      	
                46

              	 
      
	
                12.1

              	
                PERMITTED
      CONTESTS

              	
                46

              	 
      
	
                12.2

              	
                LESSOR’S
      REQUIREMENT FOR DEPOSITS

              	
                47

              	 
      
	
                ARTICLE
      XIII

              	 
      	
                47

              	 
      
	
                13.1

              	
                GENERAL
      INSURANCE REQUIREMENTS

              	
                47

              	 
      
	
                13.2

              	
                RISKS
      TO BE INSURED

              	
                48

              	 
      
	
                13.3

              	
                PAYMENT
      OF PREMIUMS; COPIES OF POLICIES; CERTIFICATES.

              	
                49

              	 
      
	
                13.4

              	
                UMBRELLA
      POLICIES

              	
                49

              	 
      
	
                13.5

              	
                ADDITIONAL
      INSURANCE

              	
                49

              	 
      
	
                13.6

              	
                NO
      LIABILITY; WAIVER OF SUBROGATION

              	
                50

              	 
      
	
                13.7

              	
                INCREASE
      IN LIMITS

              	
                50

              	 
      
	
                13.8

              	
                BLANKET
      POLICY

              	
                50

              	 
      
	
                ARTICLE
      XIV

              	 
      	
                51

              	 
      
	
                14.1

              	
                INSURANCE
      PROCEEDS

              	
                51

              	 
      
	
                14.2

              	
                RESTORATION
      IN THE EVENT OF DAMAGE OR DESTRUCTION

              	
                51

              	 
      
	
                14.3

              	
                RESTORATION
      OF LESSEE’S PROPERTY

              	
                51

              	 
      
	
                14.4

              	
                NO
      ABATEMENT OF RENT

              	
                51

              	 
      
	
                14.5

              	
                WAIVER

              	
                52

              	 
      
	
                14.6

              	
                DISBURSEMENT
      OF INSURANCE PROCEEDS EQUAL TO OR GREATER THAN THE APPROVAL
      THRESHOLD

              	
                52

              	 
      
	
                14.7

              	
                NET
      PROCEEDS PAID TO FACILITY MORTGAGEE

              	
                53

              	 
      
	
                ARTICLE
      XV

              	 
      	
                53

              	 
      
	
                15.1

              	
                TOTAL
      TAKING OR OTHER TAKING WITH LEASED PROPERTY RENDERED UNSUITABLE FOR ITS
      PRIMARY INTENDED USE

              	
                53

              	 
      
	
                15.2

              	
                ALLOCATION
      OF AWARD

              	
                53

              	 
      
	
                15.3

              	
                PARTIAL
      TAKING

              	
                54

              	 
      
	
                15.4

              	
                TEMPORARY
      TAKING

              	
                54

              	 
      
	
                15.5

              	
                AWARDS
      PAID TO FACILITY MORTGAGEE

              	
                54

              	 
      
	
                ARTICLE
      XVI

              	 
      	
                55

              	 
      
	
                16.1

              	
                LESSOR’S
      RIGHTS UPON AN EVENT OF DEFAULT

              	
                55

              	 
      
	
                16.2

              	
                CERTAIN
      REMEDIES

              	
                55

              	 
      
	
                16.3

              	
                DAMAGES

              	
                55

              	 
      
	
                16.4

              	
                WAIVER

              	
                56

              	 
      
	
                16.5

              	
                APPLICATION
      OF FUNDS

              	
                56

              	 
      
	
                ARTICLE
      XVII

              	 
      	
                57

              	 
      
	
                17.1

              	
                LESSOR’S
      RIGHT TO CURE LESSEE’S DEFAULT

              	
                57

              	 
      
	
                17.2

              	
                LESSEE’S
      AFFILIATES RIGHT TO CURE

              	
                57

              	 
      
	
                ARTICLE
      XVIII

              	 
      	
                57

              	 
      
	
                18.1

              	
                HOLDING
      OVER

              	
                57

              	 
      
	
                18.2

              	
                INDEMNITY

              	
                58

              	 
      
	
                ARTICLE
      XIX

              	 
      	
                58

              	 
      
	
                19.1

              	
                SUBORDINATION

              	
                58

              	 
      
	
                19.2

              	
                ATTORNMENT

              	
                58

              	 
      
	
                19.3

              	
                LESSEE’S
      CERTIFICATE

              	
                59

              	 
      
	
                19.4

              	
                NOTICE
      AND CURE

              	
                59

              	 
      
	
                ARTICLE
      XX

              	 
      	
                59

              	 
      
	
                20.1

              	
                RISK
      OF LOSS

              	
                59

              	 
      
	
                ARTICLE
      XXI

              	 
      	
                60

              	 
      
	
                21.1

              	
                INDEMNIFICATION

              	
                60

              	 
      
	
                21.2

              	
                SURVIVAL
      OF INDEMNIFICATION

              	
                60

              	 
      
	
                ARTICLE
      XXII

              	 
      	
                60

              	 
      
	
                22.1

              	
                GENERAL
      PROHIBITION AGAINST TRANSFERS

              	
                60

              	 
      
	
                22.2

              	
                SUBORDINATION
      AND ATTORNMENT

              	
                62

              	 
      
	
                22.3

              	
                SUBLEASE
      LIMITATION

              	
                62

              	 
      
	
                ARTICLE
      XXIII

              	 
      	
                63

              	 
      
	
                23.1

              	
                FINANCIAL
      STATEMENTS AND OTHER REPORTS AND MATERIALS REQUIRED BY
    LESSOR

              	
                63

              	 
      
	
                23.2

              	
                PUBLIC
      OFFERING INFORMATION

              	
                64

              	 
      
	
                ARTICLE
      XXIV

              	 
      	
                65

              	 
      
	
                24.1

              	
                LESSOR’S
      RIGHT TO INSPECT

              	
                65

              	 
      
	
                ARTICLE
      XXV

              	 
      	
                65

              	 
      
	
                25.1

              	
                NO
      WAIVER

              	
                65

              	 
      
	
                ARTICLE
      XXVI

              	 
      	
                65

              	 
      
	
                26.1

              	
                REMEDIES
      CUMULATIVE

              	
                65

              	 
      
	
                ARTICLE
      XXVII

              	 
      	
                65

              	 
      
	
                27.1

              	
                ACCEPTANCE
      OF SURRENDER

              	
                65

              	 
      
	
                ARTICLE
      XXVIII

              	 
      	
                65

              	 
      
	
                28.1

              	
                NO
      MERGER OF TITLE

              	
                65

              	 
      
	
                28.2

              	
                NO
      PARTNERSHIP

              	
                66

              	 
      
	
                ARTICLE
      XXIX

              	 
      	
                66

              	 
      
	
                29.1

              	
                CONVEYANCE
      BY LESSOR

              	
                66

              	 
      
	
                ARTICLE
      XXX

              	 
      	
                66

              	 
      
	
                30.1

              	
                QUIET
      ENJOYMENT

              	
                66

              	 
      
	
                ARTICLE
      XXXI

              	 
      	
                66

              	 
      
	
                31.1

              	
                NOTICES

              	
                66

              	 
      
	
                ARTICLE
      XXXII

              	 
      	
                67

              	 
      
	
                32.1

              	
                FAIR
      MARKET RENT

              	
                67

              	 
      
	
                ARTICLE
      XXXIII

              	 
      	
                68

              	 
      
	
                33.1

              	
                LESSOR’S
      OPTION TO PURCHASE LESSEE’S PERSONAL PROPERTY

              	
                68

              	 
      
	
                33.2

              	
                FACILITY
      TRADE NAMES

              	
                68

              	 
      
	
                33.3

              	
                TRANSFER
      OF OPERATIONAL CONTROL OF THE FACILITIES

              	
                69

              	 
      
	
                33.4

              	
                INTANGIBLES
      AND PERSONAL PROPERTY

              	
                69

              	 
      
	
                ARTICLE
      XXXIV

              	 
      	
                70

              	 
      
	
                34.1

              	
                ARBITRATION

              	
                70

              	 
      
	
                ARTICLE
      XXXV

              	 
      	
                70

              	 
      
	
                35.1

              	
                COMMISSIONS

              	
                70

              	 
      
	
                ARTICLE
      XXXVI

              	 
      	
                70

              	 
      
	
                36.1

              	
                MEMORANDUM
      OR SHORT FORM OF LEASE

              	
                70

              	 
      
	
                ARTICLE
      XXXVII

              	 
      	
                70

              	 
      
	
                37.1

              	
                SECURITY
      DEPOSIT

              	
                70

              	 
      
	
                37.2

              	
                APPLICATION
      OF SECURITY DEPOSIT

              	
                71

              	 
      
	
                37.3

              	
                TRANSFER
      OF SECURITY DEPOSIT

              	
                71

              	 
      
	
                ARTICLE
      XXXVIII

              	 
      	
                81

              	 
      
	
                38.1

              	
                MISCELLANEOUS

              	
                81

              	 
      
	 
      	 
      	 
      	 
      

      

    
      
        
           

          
             

        

         

      

      
         

        
          

        

      

      
         

      

    

    SECOND
CONSOLIDATED AMENDED AND RESTATED MASTER LEASE

    (with Lessee Option to Purchase and
Maryland Option to Purchase)

    Multiple
Facilities

    

    THIS
SECOND CONSOLIDATED AMENDED AND RESTATED MASTER LEASE (“Lease”) is executed
and delivered as of this __ day of April, 2008 and is entered into by OHI ASSET
III (PA) TRUST, a Maryland business trust (“Lessor”), the
successor by merger to OHI Asset II (OH), LLC, a Delaware limited liability
company, and Ohio Lessor – Waterford & Crestwood, Inc., a Maryland
corporation, the address of which is 9690 Deereco Road, Suite 100, Timonium, MD
21093, OMG MSTR LSCO, LLC, an Ohio limited liability company (“Lessee One”), the
successor by merger to CSC MSTR LSCO, LLC, and OMG LS LEASING CO., LLC, an Ohio
limited liability company (“Lessee Two”, and
collectively with Lessee One, “Lessee”), the address
of which is 4700 Ashwood Drive, Suite 200, Cincinnati, OH 45241.

     

    RECITALS

     

    The
circumstances underlying the execution and delivery of this Lease are as
follows:

     

    A. Capitalized
terms used and not otherwise defined herein have the respective meanings given
them in Article II below.

     

    B. Lessor is
the owner of the Leased Properties.

     

    C. Lessor
and Lessee One are parties to that certain Consolidated Amended and Restated
Master Lease dated February 1, 2007 (as amended, the “Existing
Lease”).

     

    D. In
connection with the Existing Lease, the parties entered into the following
agreements (collectively, the “Related
Documents”):

     

    (1)           The
OHI Working Capital Loan Agreement; and

     

    (2)           The
OHI Working Capital Note.

     

    E. Concurrently
with the execution of this Lease, Lessor is entering into the Maryland Loan
Agreement with the Maryland Borrowers and Maryland Parent
Guarantors.  As an inducement to, and a condition of, entering the
Maryland Loan Agreement and this Lease, the Maryland Borrowers are joining the
execution of this Lease for purposes of granting to Lessor the Maryland Option,
on the terms and conditions of ARTICLE
XXXIX below.

     

    F. Lessor,
Lessee One and Lessee Two desire to consolidate, amend and restate the Existing
Lease as set forth in this Lease, with this Lease being the substitute and
replacement for the Existing Lease.

     

    NOW,
THEREFORE, Lessor and Lessee agree to consolidate, amend and restate the
Existing Lease in its entirety as follows:

     

    
      
        
        

      

      
        -1-

        
          

        

      

      
        
        

      

    

    ARTICLE
I                                

     

    1.1 Lease.  Upon
and subject to the terms and conditions set forth in this Lease, Lessor leases
to Lessee, and Lessee leases from Lessor, the Leased Properties. The Leased
Properties are leased subject to all covenants, conditions, restrictions,
easements and other matters affecting the Leased Property, whether or not of
record, including the Permitted Encumbrances and other matters which would be
disclosed by an inspection or accurate survey of the Leased
Properties.

     

    1.1.1 Subleases.  On
the Commencement Date, with the approval of Lessor, the Leased Properties are
subleased to the Sublessees pursuant to the Subleases. Lessee has assigned the
Subleases to Lessor and each Sublessee has jointly and severally with the other
Sublessee guaranteed the obligations of Lessee hereunder, and to secure its
guaranty each Sublessee has granted Lessor a security interest in the Collateral
with respect to the Facility subleased by it. Lessee shall not amend or modify
the terms of any Sublease without the prior written consent of Lessor, which
Lessor may in its sole discretion grant, withhold or condition.  Each
Sublessee under an Sublease has agreed in the Sublease that it assumes and
agrees to be bound by and perform each and every obligation of the Lessee under
this Lease; provided, however, that obligations of a Sublessee related to the
operation, maintenance and repair of a Facility are assumed only with respect to
the Facility being operated by such Sublessee.  Lessee agrees that a
default by a Sublessee under a Sublease shall be deemed a default by Lessee
under this Lease which, if not cured within any applicable cure or grace period
shall constitute an Event of Default and entitle Lessor to exercise any and all
remedies provided by this Lease or by law. Any Notice given by Lessor to Lessee
shall be deemed a Notice given to each Sublessee of a Leased
Property.

     

    1.1.2 Single, Indivisible
Lease.  Notwithstanding
Lessor’s approval of the Subleases of the Leased Properties, this Lease
constitutes one indivisible lease of the Leased Properties and not separate
leases governed by similar terms. The Leased Properties constitute one economic
unit, and the Base Rent and all other provisions have been negotiated and agreed
to based on a demise of all of the Leased Properties to Lessee as a single,
composite, inseparable transaction and would have been substantially different
had separate leases or a divisible lease been intended. Except as expressly
provided in this Lease for specific, isolated purposes (and then only to the
extent expressly otherwise stated), all provisions of this Lease apply equally
and uniformly to all of the Leased Properties as one unit. An Event of Default
with respect to any Leased Property is an Event of Default as to all of the
Leased Properties. The parties intend that the provisions of this Lease shall at
all times be construed, interpreted and applied so as to carry out their mutual
objective to create an indivisible lease of all of the Leased Properties and, in
particular but without limitation, that, for purposes of any assumption,
rejection or assignment of this Lease under 11 U.S.C. 365, this is one
indivisible and non-severable lease and executory contract dealing with one
legal and economic unit and that this Lease must be assumed, rejected or
assigned as a whole with respect to all (and only as to all) of the Leased
Properties.

     

    
      
        
        

      

      
        -2-

        
          

        

      

      
        
        

      

    

    1.2 Term.  The
initial term of this Lease (“Initial Term”) shall
be November 7, 2003 through January 31, 2007.

     

    1.3 Option to
Renew.  Lessee is hereby granted three (3) successive options
to renew this Lease.  The first option to renew has been exercised and
is for the period of February 1, 2007 thru April 30, 2018.  Two
additional options to renew shall be for a period of ten (10) Lease Years each,
for a maximum Term if such options are exercised of approximately thirty-four
(34) Lease Years.  Lessee’s exercise of the second and third options
to renew this Lease are subject to the following terms and conditions (which
conditions may be waived by Lessor in its sole discretion):

     

    (a) An option
to renew is exercisable only by Notice to Lessor at least one hundred and eighty
(180) days, and not more than three hundred sixty (360) days, prior to the
expiration of the Initial Term (or prior to the expiration of the preceding
Renewal Term, as the case may be);

     

    (b) No Event
of Default or Unmatured Event of Default shall have occurred and be continuing
either at the time a renewal option is exercised or at the commencement of a
Renewal Term;

     

    (c) During a
Renewal Term, all of the terms and conditions of this Lease shall remain in full
force and effect;

     

    (d) Lessee
may exercise its options to renew with respect to all (and no fewer than all) of
the Leased Properties; and

     

    (e) Lessee
may only exercise an option to renew if the Option to Extend (as defined in the
Maryland Loan Agreement) for a corresponding period of years is also exercised
such that the Maturity Date (as defined in the Maryland Loan Agreement) and the
Expiration Date are the same date.

     

    1.4 LTACH
Facility.  The renovation of the LTACH Facility shall be
governed by the provisions of Exhibit H to this
Lease.

     

    ARTICLE
II                                

     

    2.1 Definitions.  For
all purposes of this Lease, except as otherwise expressly provided or unless the
context otherwise requires, (a) the terms defined in this Article have the
meanings assigned to them in this Article and include the plural as well as the
singular; (b) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with GAAP as at the time applicable; (c)
all references in this Lease to designated “Articles,” “Sections” and other
subdivisions are to the designated Articles, Sections and other subdivisions of
this Lease; and (d) the words “herein,” “hereof” and “hereunder” and other words
of similar import refer to this Lease as a whole and not to any particular
Article, Section or other subdivision.

     

    
      
        
        

      

      
        -3-

        
          

        

      

      
        
        

      

    

    Actual
Cost: means the actual cost of completing the Approved Improvements,
excluding financing costs, which amount does not include any amounts paid to
Lessee or any Affiliate of Lessee without the written consent of
Lessor.

     

    Acquired
Facilities: means the CSC Acquired Facilities, the Emery Acquired
Facilities, and the OHI THI Facilities.

     

    Acquisition
Agreements: means (i) the Stock Purchase Agreement dated as of June 10,
2005, (ii) the Agreement of Purchase and Sale dated December 16, 2006, (iii) the
THI Acquisition Agreements, and (iv) all related documents, pursuant to which
Lessor or an Affiliate of Lessor acquired the Facilities.

     

    Additional
Charges:  All Impositions and other amounts, liabilities and
obligations that Lessee assumes or agrees to pay under this
Lease.

     

    Affiliate:  Any
Person who, directly or indirectly, Controls or is Controlled by or is under
common Control with another Person.

     

    Agreement to
Lease: means the Agreement to Enter into Amended and Restated Master
Lease dated as of June 10, 2005 and the Agreement to Enter into Master Lease and
Working Capital Loan among Lessor, Lessee, the Sublessees, the Guarantors, the
Consultants, and the Managers.

     

    AO:
means OMG ASSET OWNERSHIP, LLC, an Ohio limited liability
company.

     

    Approval
Threshold: One Hundred Thousand Dollars ($100,000).

     

    Approved
Improvements: means (i) the Emery Improvements, (ii) the Escrow
Improvements, and (iii) the Non-Escrow Improvements.

     

    Assessment:  Any
governmental assessment on the Leased Properties or any part of any of them for
public or private improvements or benefits, whether or not commenced or
completed prior to the date hereof and whether or not to be completed within the
Term.

     

    Assumed
Indebtedness:  Any indebtedness or other obligations expressly
assumed in writing by Lessor and secured by a mortgage, deed of trust or other
security agreement to which Lessor’s title to the Leased Properties is
subject.

     

    Award:  All
compensation, sums or anything of value awarded, paid or received in connection
with a Taking or Partial Taking.

     

    Base
Rent:   During the Term, the Base Rent shall be as
follows:

     

    (1)           During
the Initial Term, the Base Rent as set forth in the Existing Lease;

     

    
      
        
        

      

      
        -4-

        
          

        

      

      
        
        

      

    

    (2)           For
the period of date of this Lease thru December 31, 2018, Base Rent shall be the
sum of the monthly amounts set forth on Exhibit G, and the
LTACH Base Rent;

     

    (3)           For
the Lease Year commencing January 1, 2019 and each succeeding Lease Year during
the Term, the Base Rent for the previous Lease Year, plus an amount equal to (a)
the Base Rent in the previous Lease Year multiplied by (b) the lesser of (i) two (2) times
the change in CPI and (ii) two and one half percent (2.5%).

     

    Subject to the provisions of Section 1.1.2, the Base
Rent shall be allocated among the Facilities as set forth on attached Exhibit
G.

     

    Business
Day:  Each Monday, Tuesday, Wednesday, Thursday and Friday that
is not a day on which national banks in the City of New York, New York are
authorized or obligated, by law or executive order, to
close.

     

    Capitalization
Rate:  Ten percent (10%).

     

    Cash Flow to
Rent Ratio: For any fiscal period, the ratio of (i) Lessee Cash Flow plus
Cityview EBITDA, to (ii) Base Rent plus Cityview Debt
Service.

     

    Combined Cash
Flow Coverage Ratio: For any fiscal period, the ratio of (i) Lessee Cash
Flow plus Maryland Cash Flow plus City View EBITDA to (ii) Base Rent plus City
View Debt Service plus Maryland Debt Service.

     

    Citation: Any
operational or physical plant deficiency set forth in writing with respect to a
Facility by any governmental body or agency, or Medicare intermediary, having
regulatory oversight over a Facility, Lessee, any Sublessee or Manager, with
respect to which the scope and severity of the potential penalty for such
deficiency is one or more of the following: loss of licensure, decertification
of a Facility from participation in the Medicare and/or Medicaid programs,
appointment of a temporary manager or denial of payment for new admissions which
lasts for thirty (30) days or more.

     

    Cityview Debt
Service: means Debt Service (as defined in the Cityview Loan Agreement)
for the Borrowers (as defined in the Cityview Loan
Agreement).

     

    Cityview
EBITDA: means EBITDA (as defined in the Cityview Loan Agreement) for the
Borrowers (as defined in the Cityview Loan Agreement).

     

    Cityview Loan
Agreement: The Loan Agreement dated November 1, 2004, as amended by a
First Amendment to Loan Agreement dated as of March 1, 2005, an Assumption and
Joinder Agreement and Second Amendment to Loan Agreement dated as of June 30,
2006, a Third Amendment to Loan Agreement dated as of February 1, 2007, and a
Fourth Amendment to Loan Agreement dated as of the date of this Agreement, among
City View Operator, City View Owner, and OMG RE HOLDINGS, LLC, an Ohio limited
liability company, as borrowers, RESIDENT CARE CONSULTING, LLC, an Ohio limited
liability company, and HEALTH CARE FACILITY MANAGEMENT, LLC, an Ohio limited
liability company, as guarantors, and OHI ASSET (OH) LENDER, LLC, a Delaware
limited liability company, as lender.

    

    
      
        
        

      

      
        -5-

        
          

        

      

      
        
        

      

    

    City View
Operator: means City View Nursing & Rehab, LLC, an Ohio limited
liability company.

    

    City View
Owner: means City View Cleveland NH Asset, LLC, an Ohio limited liability
company.

    

    Clean-Up:  The
investigation, removal, restoration, remediation and/or elimination of, or other
response to, Contamination, in each case to the satisfaction of all governmental
agencies having jurisdiction, in compliance with or as may be required by
Environmental Laws.

     

    Code:  The
Internal Revenue Code of 1986, as amended.

     

    Combined
Transaction Documents: means the “Loan Documents” as defined in the City
View Loan Agreement, the “Loan Documents” as defined in the Maryland Loan
Agreement, and the Transaction Documents.

     

    Commencement
Date:  For the Waterford Facility and Crestwood Facility,
November 7, 2003, for the Emery Acquired Facilities, June 28, 2005, for the CSC
Acquired Facilities, December 16, 2005, for the LTACH Facility, the LTACH
Closing Date, and for the OHI THI Facilities, April 19,
2008.

     

    Condemnor:  Any
public or quasi-public authority, or private corporation or individual, having
the power of condemnation.

     

    Consulting
Agreement:  Any agreement pursuant to which financial services
for a Facility is delegated by Lessee or Sublessee to any person not an employee
of Lessee or a Sublessee, or to any other related or unrelated
party.

     

    Consultants:  The
Person to whom the financial services of a Facility is delegated pursuant to a
Consulting Agreement.  As of the date of this Lease, the Consultants
are BELMORE CONSULTING CO., LLC, an Ohio limited liability company, WYANT
CONSULTING CO., LLC, an Ohio limited liability company, BRECKSVILLE CONSULTING
CO., LLC, an Ohio limited liability company, JARVIS CONSULTING CO., LLC, an Ohio
limited liability company, KOLBE CONSULTING CO., LLC, an Ohio limited liability
company, PEARL CONSULTING CO., LLC, an Ohio limited liability company, PEARL II
CONSULTING CO., LLC, an Ohio limited liability company, PEARL III CONSULTING
CO., LLC, an Ohio limited liability company, MERIT CONSULTING CO., LLC, an Ohio
limited liability company, FALLING CONSULTING CO., LLC, an Ohio limited
liability company, FRONT CONSULTING CO., LLC, an Ohio limited liability company,
Midland Consulting Co., LLC, an Ohio limited liability company, Garden
Consulting Co., LLC, an Ohio limited liability company, Skyline (PA) Consulting
Co., LLC, an Ohio limited liability company, Heritage (Ohio) Consulting Co.,
LLC, an Ohio limited liability company, Avis (Ohio) Consulting Co., LLC, an Ohio
limited liability company, Suburban (Ohio) Consulting Co., LLC, an Ohio limited
liability company, Old Consulting Co., LLC, an Ohio limited liability company,
and Resident Care Consulting, LLC, an Ohio limited liability
company.

     

    
      
        
        

      

      
        -6-

        
          

        

      

      
        
        

      

    

    Construction
Funds:  The Net Proceeds and such additional funds as may be
deposited with Lessor by Lessee pursuant to Section 14.6 for restoration or
repair work pursuant to this Lease.

     

    Contamination:  The
presence, Release or threatened Release of any Hazardous Substance at the Leased
Properties in violation of any Environmental Law, or in a quantity that would
give rise to any affirmative Clean-Up obligations under an Environmental Law,
including, but not limited to, the existence of any injury or potential injury
to public health, safety, natural resources or the environment associated
therewith, or any other environmental condition at, in, about, under or
migrating from or to the Leased Properties.

     

    Control
(and its corollaries “Controlled by” and “under common Control
with”):  Possession, directly or indirectly, of the power to direct or
cause the direction of the management and policies of a Person, through the
ownership of voting securities, partnership interests or other equity
interests.

     

    CPI:  The
United States Department of Labor, Bureau of Labor Statistics Revised Consumer
Price Index for All Urban Consumers (1982-84=100), U.S. City Average, All Items,
or, if that index is not available at the time in question, the index designated
by such Department as the successor to such index, and if there is no index so
designated, an index for an area in the United States that most closely
corresponds to the entire United States, published by such Department, or if
none, by any other instrumentality of the United States.

     

    Crestwood
Facility: means the Facility commonly known as Crestwood Care Center, 225
W. Main Street, Shelby, Ohio 44875.

     

    Cross Default
and Cross Collateralization Agreement: means the Amended and Restated
Cross Default and Cross Collateralization Agreement dated as of the date of this
Lease by Lessee, Guarantors, Sublessees, Consultants, Managers, PARTNERS OF CITY
VIEW, LLC, an Ohio limited liability company, and PARTNERS OF CITY VIEW REAL
ESTATE, LLC, an Ohio limited liability company, and the Maryland Obligors, in
favor of Lessor and OHI Asset (OH) Lender, LLC, a Delaware limited liability
company.

     

    CSC Acquired
Facilities: means the Facilities commonly known as:

     

    
      	
              Facility Name

            	
              Street

            	
              City

            	
              State

            	 	
              Zip

            	 	
              County

            
	
              Aristocrat
      Berea

            	
              255
      Front Street

            	
              Berea

            	
              OH

            	 	 	44017	 	
              Cuyahoga

            
	
              Candlewood
      Park

            	
              1835
      Belmore Ave

            	
              Cleveland

            	
              OH

            	 	 	44112	 	
              Cuyahoga

            
	
              Falling
      Water

            	
              18840
      Falling Water

            	
              Strongsville

            	
              OH

            	 	 	44136	 	
              Cuyahoga

            
	
              Grande
      Pointe Health Care

            	
              3
      Merit Drive

            	
              Richmond
      Heights

            	
              OH

            	 	 	44143	 	
              Cuyahoga

            
	
              Greenbrier

            	
              6455
      Pearl Road

            	
              Parma
      Heights

            	
              OH

            	 	 	44130	 	
              Cuyahoga

            
	
              Greenbrier
      HCC

            	
              6455
      Pearl Road

            	
              Parma
      Heights

            	
              OH

            	 	 	44130	 	
              Cuyahoga

            
	
              Ohio
      Extended Care Facility

            	
              3364
      Kolbe Road

            	
              Lorain

            	
              OH

            	 	 	44053	 	
              Lorain

            
	
              Pebble
      Creek

            	
              670
      Jarvis Road

            	
              Akron

            	
              OH

            	 	 	44319	 	
              Summit

            
	
              Pine
      Grove

            	
              5608
      Pearl Road

            	
              Parma

            	
              OH

            	 	 	44129	 	
              Cuyahoga

            
	
              Pine
      Valley Care Center

            	
              4360
      Brecksville Road

            	
              Richfield

            	
              OH

            	 	 	44286	 	
              Summit

            
	
              Wyant
      Woods

            	
              200
      Wyant Road

            	
              Akron

            	
              OH

            	 	 	44313	 	
              Summit

            

    

    

    
      
        
        

      

      
        -7-

        
          

        

      

      
        
        

      

    

    Date of
Taking:  The date on which the Condemnor has the right to
possession of the Leased Property that is the subject of the Taking or Partial
Taking.

     

    Distribution: Any
payment or distribution of cash or any assets of Lessee to one or more holders
of an equity interest in Lessee or to any Affiliate of Lessee, whether in the
form of a dividend, a fee for management in excess of the fee required by the
terms of a Management Agreement (but in any event not to exceed five percent
(5%) of net revenues of the Facilities), a payment for services rendered, a
reimbursement for expenditures or overhead incurred on behalf of Lessee or a
payment on any debt required by this Lease to be subordinated to the rights of
Lessor.

     

    Emery Acquired
Facilities:  means the Facilities commonly known as Baldwin
Health Center, 1717 Skyline Drive, Pittsburgh, PA 15227, Copley Health Center,
155 Heritage Woods Drive, Copley, OH 44321, Hanover House, 435 Avis Avenue NW,
Massillon, OH 44646, Suburban Pavilion, 20265 Emery Road, Cleveland, OH 44128,
and Wexford House, 9850 Old Perry Highway, Wexford, PA
15090.

     

    Emery
Improvements: means (i) the capital improvements to the Emery Acquired
Facilities which (1) are shown as either “immediate” or recommended to be
completed during the first two Lease Years in the Property Condition Reports for
the Emery Acquired Facilities acquired by Lessor in connection with the
Acquisition Agreements, which include, among other things, the replacements of
the roofs at certain of the Emery Acquired Facilities, or (2) are approved in
writing by Lessor, which approval shall not be unreasonably withheld, and (ii)
the remediation of certain environmental conditions identified in the
environmental reports acquired by Lessor in connection with the Acquisition
Agreements, which include, among other things, the removal of one or more
underground storage tanks.

     

    Encumbrance:  Any
mortgage, deed of trust, lien, encumbrance or other matter affecting title to
the Leased Properties, or any portion thereof or interest therein, securing any
borrowing or other means of financing or refinancing.

     

    Environmental
Audit: A written certificate that (a) is in form and substance
satisfactory to Lessor, (b) is from an environmental consulting or engineering
firm acceptable to Lessor and (c) states that there is no Contamination on the
Leased Properties and that the Leased Properties are otherwise in strict
compliance with Environmental Laws.

     

    Environmental
Documents:  Each and every (a) document received by Lessee or
any Affiliate from, or submitted by Lessee or any Affiliate to, the United
States Environmental Protection Agency and/or any other federal, state, county
or municipal agency responsible for enforcing or implementing Environmental Laws
with respect to the condition of the Leased Properties, or Lessee’s operations
at the Leased Properties; and (b) review, audit, report, or other analysis data
pertaining to environmental conditions, including, but not limited to, the
presence or absence of Contamination, at, in, under or with respect to the
Leased Properties that have been prepared by, for or on behalf of
Lessee.

     

    
      
        
        

      

      
        -8-

        
          

        

      

      
        
        

      

    

    Environmental
Laws: All federal, state and local laws (including, without limitation,
common law), statutes, codes, ordinances, regulations, rules, orders, permits or
decrees now or at any time in effect and relating to (a) the introduction,
emission, discharge or release of Hazardous Substances into the indoor or
outdoor environment (including without limitation, air, surface water,
groundwater, land or soil), (b) the manufacture, processing, distribution, use,
treatment, storage, transportation or disposal of Hazardous Substances or (c)
the Clean-Up of Contamination.

     

    Escrow
Improvements: means the capital improvements to the Facilities (i) in the
amounts for each Facility set forth on the Improvements Schedule as being paid
from the aggregate of $3,000,000 to be escrowed with the Title Company pursuant
to this Lease and the Maryland Loan Agreement, and (ii) approved in writing by
Lessor.

     

    Escrowed Capex
Funds: means the funds escrowed with the Title Company pursuant to
Section 9.3.3 in the amount set forth on the Improvements Schedule for the Leased
Properties.

     

    Event of
Default:  The occurrence of any of the
following:

     

    (a) Lessee
fails to pay or cause to be paid the Rent when due and
payable;

     

    (b) Lessee,
any Sublessee or any Guarantor, on a petition in bankruptcy filed against it, is
adjudicated a bankrupt or has an order for relief thereunder entered against it,
or a court of competent jurisdiction enters an order or decree appointing a
receiver of Lessee, a Sublessee or any Guarantor or of the whole or
substantially all of its property, or approving a petition filed against Lessee,
a Sublessee or any Guarantor seeking reorganization or arrangement of Lessee, a
Sublessee or such Guarantor under the federal bankruptcy laws or any other
applicable law or statute of the United States of America or any state thereof,
and such judgment, order or decree is not vacated or set aside or stayed within
sixty (60) days from the date of the entry thereof, subject to the applicable
provisions of the Bankruptcy Code (11 USC § 101 et. seq.) and to the provisions
of Section 16.6 below;

     

    (c) Lessee, a
Sublessee or any Guarantor:  (i) Admits in writing its inability to
pay its debts generally as they become due; (ii) files a petition in bankruptcy
or a petition to take advantage of any insolvency law; (iii) makes a general
assignment for the benefit of its creditors; (iv) consents to the appointment of
a receiver of itself or of the whole or any substantial part of its property; or
(v) files a petition or answer seeking reorganization or arrangement under the
Federal bankruptcy laws or any other applicable law or statute of the United
States of America or any state thereof, subject to the applicable provisions of
the Bankruptcy Code (11 USC § 101 et. seq.) and to the provisions of Section
16.6 below;

     

    
      
        
        

      

      
        -9-

        
          

        

      

      
        
        

      

    

    (d) Lessee, a
Sublessee or any Guarantor is liquidated or dissolved, or begins proceedings
toward liquidation or dissolution, or has filed against it a petition or other
proceeding to cause it to be liquidated or dissolved and the proceeding is not
dismissed within thirty (30) days thereafter, or Lessee, a Sublessee or any
Guarantor in any manner permits the sale or divestiture of all or substantially
all of its assets;

     

    (e) The
estate or interest of Lessee or any Sublessee in the Leased Properties or any
part thereof is levied upon or attached in any proceeding and the same is not
vacated or discharged within thirty (30) days thereafter (unless Lessee is in
the process of contesting such lien or attachment in good faith in accordance
with Article XII hereof);

     

    (f) Lessee
ceases operation of any Facility for a period in excess of five (5) Business
Days except upon prior Notice to, and with the express prior written consent of,
Lessor (which consent Lessor may withhold in its absolute discretion), or as the
unavoidable consequence of damage or destruction as a result of a casualty, or a
Partial or total Taking;

     

    (g) Any
representation or warranty made by Lessee, a Sublessee, a Guarantor or any
Affiliate of Lessee in the Lease, any Transaction Document or in any
certificates delivered in connection with this Lease or the Transaction
Documents proves to be untrue when made in any material respect, Lessor is
materially and adversely affected thereby and Lessee, a Sublessee, a Guarantor
or any Affiliate, as the case may be, fails within twenty (20) days after Notice
from Lessor or Omega, as the case may be,  to cure such condition by
terminating such adverse effect and making Lessor or Omega, as the case may be,
whole for any damage suffered therefrom, or, if with due diligence such cure
cannot be effected within twenty (20) days, if Lessee, a Sublessee, a Guarantor
or any Affiliate, as the case may be, has failed to commence to cure the same
within the twenty (20) days or failed thereafter to proceed promptly and with
due diligence to cure such condition and complete such cure prior to the time
that such condition causes a default in any Facility Mortgage and prior to the
time that the same results in civil or criminal penalties to Lessor, Lessee, a
Sublessee, a Guarantor, any Affiliates of any of them or the Leased
Properties;

     

    (h) Lessee
(or, if applicable, any Sublessee or Manager):

     

    (i) has any
license, permit, approval, certificate of need, certificate of reimbursement or
other authorization necessary to operate any Facility as a provider of health
care services in accordance with its Primary Intended Use suspended or revoked,
or its right to so operate a Facility or to accept patients suspended for a
period in excess of thirty (30) days, and Lessee fails to remedy any condition
causing such revocation or suspension within any cure period allowed therefor by
the applicable agency or authority or, if no such cure period is allowed or
specified by the applicable agency or authority, Lessee fails to remedy the
condition promptly and diligently following Lessee’s receipt of notice of such
condition and, in any event, prior to the final, nonappealable revocation or
suspension of any such license, permit, approval, certificate of need,
certificate of reimbursement, other authorization or right to operate the
Facility in question or to accept patients at the Facility in question;
or

     

    
      
        
        

      

      
        -10-

        
          

        

      

      
        
        

      

    

    (ii) receives
a Citation with respect to a Facility and fails to cure the condition that is
the subject of the Citation within the period of time required for such cure by
the issuer of the Citation or, but in any event prior to the final,
nonappealable revocation or suspension of any license, permit, approval,
certificate of need, certificate of reimbursement or other authorization
necessary to operate a Facility as a provider of health care services in
accordance with its Primary Intended Use or to receive Medicare or Medicaid
payments with respect to residents of any Facility, or prior to the appointment
of a temporary manager, as the case may be; or

     

    (iii) fails to
give Lessor Notice that any event set forth in clauses (i) and (ii) above has
occurred, as required pursuant to Section 23.1(h) below.

     

    (i) A
Transfer occurs without the prior written consent of Lessor;

     

    (j) A default
occurs under any Combined Transaction Document and such default is not cured
within any applicable cure period provided in such Combined Transaction
Document;

     

    (k) A default
occurs under any other material contract affecting any Facility, Lessee, or any
Affiliate of Lessee;

     

    (l) Intentionally
omitted;

     

    (m) Lessee
breaches any of the financial covenants set forth in Article VIII hereof, the
breach is capable of cure and the breach is not cured within a period of the
shorter of (i) forty-five (45) days after the Notice thereof from Lessor, and
(ii) twenty (20) days following the date of delivery of a certificate pursuant
to Section 23.1(i) or 23.1(ii);

     

    (n) Lessee or
an Affiliate of Lessee defaults beyond any applicable grace period in the
payment of any amount or the performance of any material act required of Lessee
or such Affiliate by the terms of any other lease or other agreement between
Lessee or such Affiliate and Lessor or any Affiliate of Lessor;
or

     

    (o) Lessee
fails to observe or perform any other term, covenant or condition of this Lease
or any other Transaction Document and the failure is not cured by Lessee within
a period of thirty (30) days after Notice thereof from Lessor, unless the
failure cannot with due diligence be cured within a period of thirty (30) days,
in which case such failure shall not be deemed an Event of Default if and for so
long as Lessee proceeds promptly and with due diligence to cure the failure and
completes the cure prior to the time that the same causes a Material Adverse
Effect, a default in any Facility Mortgage and prior to the time that the same
results in civil or criminal penalties to Lessor, Lessee, any Affiliates of
either or to the Leased Properties.

     

    
      
        
        

      

      
        -11-

        
          

        

      

      
        
        

      

    

    Executive
Officer:  The President, the Chief Executive Officer, the Chief
Operating Officer, and the Chief Financial Officer (or the holder of the
responsibilities ordinarily held by such the persons holding such titles) of
Lessee, Manager, Consultant or Guarantor.

     

    Expiration
Date: means April 30, 2018 if the second Renewal Option has not been
exercised, or April 30, 2028, if the second Renewal Option has been exercised
but not the third Renewal Option, or April 30, 2038, if the third Renewal Option
has been exercised.

     

    Facilit(y)(ies): Each
health care facility on the Land, including the Leased Property associated with
such Facility, and together, all such facilities on the Leased
Properties.

     

    Facility
Mortgage: Any mortgage, deed of trust or other security agreement that
with the express, prior, written consent of Lessor is a lien upon any or all of
the Leased Properties, whether such lien secures an Assumed Indebtedness or
another obligation or obligations.

     

    Facility
Mortgagee: The secured party to a Facility Mortgage, its successors and
assigns, any servicer acting on behalf of a Facility Mortgagee with respect to a
Facility Mortgage and, if any Facility Mortgage is deposited with a trust, then
the trustee acting on behalf of the certificate holders of such
trust.

     

    Facility Trade
Names: The name(s) under which the Facilities have done business during
the Term. The Facility Trade Names in use by the Facilities on the Commencement
Date are set forth on attached Exhibit
A.

     

    Fair Market
Rent:  The rent that, at the relevant time, a Facility would
most probably command in the open market, under a lease on substantially the
same terms and conditions as are set forth in this Lease with a lessee unrelated
to Lessor having experience and a reputation in the health care industry and a
credit standing reasonably equivalent to that of Lessee, and, if this Lease is
guaranteed, with such lease being guaranteed by guarantors having a net worth at
least equal to that of Guarantors, with evidence of such rent being the rent
that is being asked and agreed to at such time under any leases of facilities
comparable to such Facility being entered into at such time in which the lessees
and lease guarantors meet the qualifications set forth in this sentence. Fair
Market Rent shall be determined in accordance with the appraisal procedure set
forth in Article XXXII or in such other manner as may be mutually acceptable to
Lessor and Lessee.

     

    Financial
Statement:

     

    (A)           For
each quarter during Lessee’s fiscal year, on a consolidated basis for Lessee,
(i) a statement of earnings for the current period and fiscal year to the end of
such period, with a comparison to the corresponding figures for the
corresponding period in the preceding fiscal year from the beginning of the
fiscal year to the end of such period, and (ii) a balance sheet as of the end of
the period, and after the first Lease Year, with a comparison to the
corresponding figures for the corresponding period in the preceding fiscal year
from the beginning of the fiscal year to the end of such period;
and

     

    
      
        
        

      

      
        -12-

        
          

        

      

      
        
        

      

    

    (B)           For
each Lessee’s and each Guarantor’s fiscal year, a financial report on a
consolidated basis, prepared and reviewed by an accounting firm or any other
firm of independent certified public accountants reasonably acceptable to
Lessor, containing such Person’s balance sheet as of the end of that year, its
related profit and loss, a statement of shareholder’s equity for that year, a
statement of cash flows for that year, any management letter prepared by the
certified public accountants, such comments and financial details as customarily
are included in reports of like character.

     

    (C)           For
each of HCREH’s and HCH’s fiscal year, a financial report on a consolidated
basis (for avoidance of doubt, HCREH will not be consolidated with HCH and HCH
will not be consolidated with HCREH), prepared and reviewed by an accounting
firm or any other firm of independent certified public accountants reasonably
acceptable to Lender, containing, as applicable, HCREH’s or HCH’s balance sheet
as of the end of that year, its related profit and loss, a statement of owner’s
equity for that year, a statement of cash flows for that year, any management
letter prepared by the certified public accountants, such comments and financial
details as customarily are included in reports of like character.

     

    (D)           Lessor
may, at its own expense, cause any Financial Statement to be audited by a
certified public accountant selected by Lessor and reasonably acceptable to
Lessee.  Lessor consents to the use of the firm of Mellott &
Mellott,  P.L.L. (Cincinnati, Ohio) to prepare such
reports.

     

    Fixtures:
Collectively, all permanently affixed equipment, machinery, fixtures, and other
items of real and/or personal property (excluding Lessor’s Personal Property),
including all components thereof, now and hereafter located in, on or used in
connection with, and permanently affixed to or incorporated into the Leased
Improvements, including, without limitation, all furnaces, boilers, heaters,
electrical equipment, heating, plumbing, lighting, ventilating, refrigerating,
incineration, air and water pollution control, waste disposal, air-cooling and
air-conditioning systems and apparatus (other than individual units), sprinkler
systems and fire and theft protection equipment, built-in oxygen and vacuum
systems, towers and other devices for the transmission of radio, television and
other signals, all of which, to the greatest extent permitted by law, are hereby
deemed by the parties hereto to constitute real estate, together with all
replacements, modifications, alterations and additions
thereto.

     

    Force
Majeure: An event or condition beyond the control of a Person, including
without limitation a flood, earthquake, or other Act of God; a fire or other
casualty resulting in a complete or partial destruction of the Facility in
question; a war, revolution, riot, civil insurrection or commotion, terrorism,
or vandalism; unusual governmental action, delay, restriction or regulation not
reasonably to be expected; a contractor or supplier delay or failure in
performance (not arising from a failure to pay any undisputed amount due), or a
delay in the delivery of essential equipment or materials; bankruptcy or other
insolvency of a contractor, subcontractor or construction manager (not an
Affiliate of the party claiming Force Majeure); a strike, slowdown or other
similar labor action; or any other similar event or condition beyond the
reasonable control of the party claiming that Force Majeure is delaying or
preventing such party from timely and fully performing its obligations under
this Lease; provided that in any such event, the party claiming the existence of
Force Majeure shall have given the other party Notice of such claim within
fifteen (15) days after becoming aware thereof, and if the party claiming Force
Majeure shall fail to give such Notice, then the event or condition shall not be
considered Force Majeure for any period preceding the date such Notice shall be
given.  No lack of funds shall be construed as Force
Majeure.

     

    
      
        
        

      

      
        -13-

        
          

        

      

      
        
        

      

    

    GAAP:  Generally
accepted accounting principles in effect at the time in
question.

     

    Ground
Lease:  Any lease of any of the Leased Properties pursuant to
which Lessor is the lessee.

     

    Ground
Lessor:  The lessor under any Ground Lease.

     

    Guarantors: Resident
Care Consulting Co., LLC, an Ohio limited liability company, Health Care
Facility Management, LLC, an Ohio limited liability company, RE Holdings, AO, RE
Leasing, and any other party who executes and delivers a guaranty of this
Lease.

     

    Guaranties: means
each Lease Guaranty from a Guarantor and each Sublessee.

     

    Hazardous
Substance:  Dangerous, toxic or hazardous material, substance,
pollutant, contaminant, chemical, waste (including medical waste), including
petroleum products, asbestos and PCBs defined, listed or described as such under
any Environmental Law.

     

    HCH:
means Health Care Holdings, LLC, an Ohio limited liability
company.

     

    HCREH:
means HC Real Estate Holdings, LLC, an Ohio limited liability
company.

     

    Impositions:  Collectively,
all taxes (excluding all income taxes, but including, without limitation, all
capital stock and franchise taxes of Lessor and all ad valorem, sales and use,
single business, gross receipts, business privilege, transaction privilege, rent
or similar taxes to the extent the same are assessed against Lessor in whole or
in part on the basis of the value of the Leased Properties, the privilege of
doing business in the State or States or any political subdivision or
subdivisions of the State or States, or any combination thereof), assessments
(including Assessments), ground rents, water, sewer or other rents and charges,
excises, tax levies, fees (including, without limitation, license, permit,
inspection, authorization and similar fees), and all other governmental charges,
in each case whether general or special, ordinary or extraordinary, or foreseen
or unforeseen, of every character that at any time prior to, during or in
respect of the Term are assessed or imposed on or in respect of, or constitute a
lien upon (a) Lessor or Lessor’s interest in the Leased Properties; (b) the
Leased Properties or any part thereof or any rent therefrom or any estate,
right, title or interest therein; (c) any occupancy, operation, use or
possession of, or sales from, or activity conducted on or in connection with the
Leased Properties or the leasing or use of the Leased Properties or any part
thereof; or (d) Rent, but excluding any transfer or other tax imposed with
respect to the sale, exchange or other disposition by Lessor of the Leased
Properties or any part thereof or the proceeds thereof (other than with respect
to the transactions contemplated by the Acquisition
Agreements).

     

    
      
        
        

      

      
        -14-

        
          

        

      

      
        
        

      

    

    Improvements
Schedule: means Schedule 9.3 to this
Lease.

     

    Indebtedness: of a
Person means such Person’s (i) obligations for borrowed money, (ii) obligations
representing the deferred purchase price of property or services (other than
accounts payable arising in the ordinary course of such Person’s business
payable on terms customary in the trade), (iii) obligations, whether or not
assumed, secured by liens or payable out of the proceeds or production from
property now or hereafter owned or acquired by such Person, (iv) obligations
which are evidenced by notes, acceptances, or other instruments, (v) obligations
of such Person to purchase securities or other property arising out of or in
connection with the sale of the same or substantially similar securities or
property, (vi) leases that in accordance with GAAP are required to be
capitalized for financial reporting purposes, and (vii) any other obligation for
borrowed money or other financial accommodation which in accordance with GAAP
would be shown as a liability on the consolidated balance sheet of such
Person.

     

    Indemnity
Agreements: means the Indemnity and Guaranty Agreements from HCREH and
HCH in favor of Lessor.

     

    Initial
Term:  As defined in Section 1.2.

     

    Insurance
Requirements:  All terms of any insurance policy required by
this Lease and all requirements of the issuer of any such
policy.

     

    Intangible
Assets: The amount of (a) unamortized debt discounts and expenses,
unamortized deferred charges, goodwill, patents, trademarks, service marks,
trade names, copyrights, organizational and developmental expenses, unamortized
operating rights, unamortized licenses, unamortized leasehold rights, computer
software development costs, start-up costs, pre-opening costs, prepaid pension
costs and other intangible assets, including (a) any write-up resulting from a
reversal of a reserve for bad debts or depreciation and any write-up resulting
from a change in methods of accounting or inventory and (b) the amount of any
investment in any Affiliate.

     

    Investigation: Soil
and chemical tests or any other environmental investigations, examinations or
analyses.

     

    Investments: of a
Person means any loan, advance (other than commission, travel and similar
advances to officers and employees made in the ordinary course of business),
extension of credit (other than accounts receivable arising in the ordinary
course of business on terms customary in the trade) or contribution of capital
by such Person; stocks, bonds, mutual funds, partnership interests, notes,
debentures or other securities owned by such Person; and structured notes,
derivative financial instruments and other similar instruments or contracts
owned by such Person.

     

    
      
        
        

      

      
        -15-

        
          

        

      

      
        
        

      

    

    Judgment
Date:  The date on which a judgment is entered against Lessee
that establishes, without the possibility of appeal, the amount of liquidated
damages to which Lessor is entitled under this Lease.

     

    Land:                      The
real property described in attached Exhibits B-1 through
B-17.

     

    Lease:  As
defined in the Preamble.

     

    Lease
Rate: 9.875% multiplied by 1.025 (compounding) on May 1, 2009 and each
May 1 thereafter.  As illustration, on May 1, 2010, the Lease Rate
would be 10.3749% (i.e., (9.875% x 1.025) x 1.025) =
10.3749%).

     

    Lease
Year:  Each period from and including January 1 through
December 31 during the Term of this Lease.  If this Lease is
terminated before the end of any Lease Year, the final Lease Year shall be
January 1 through the date of termination.

     

    Leased
Improvements: Collectively, all buildings, structures, Fixtures and other
improvements of every kind on the Land, including, but not limited to, alleyways
and connecting tunnels, sidewalks, utility pipes, conduits and lines (on-site
and off-site), parking areas and roadways appurtenant to such buildings and
structures.

     

    Leased
Property:  The parcel of the Land on which a Facility is
located, the Leased Improvements on such parcel of the Land, the Related Rights
with respect to such parcel of the Land, and Lessor’s Personal Property with
respect to such Facility.

     

    Leased
Properties:  All of the Land, Leased Improvements, Related
Rights and Lessor’s Personal Property.

     

    Legal
Requirements:  All federal, state, county, municipal and other
governmental statutes, laws, rules, orders, waivers, regulations, ordinances,
judgments, decrees and injunctions affecting the Leased Properties or any
portion thereof, Lessee’s Personal Property or the construction, use or
alteration of the Leased Properties (including but not limited to the Americans
with Disabilities Act), whether enacted and in force before, after or on the
Commencement Date, and including any that may (a) require repairs,
modifications, alterations or additions in or to any portion or all of the
Facilities, or (b) in any way adversely affect the use and enjoyment thereof,
and all permits, licenses and authorizations and regulations relating thereto,
including, but not limited to, (i) those relating to existing health care
licenses, (ii) those authorizing the current number of licensed beds and the
level of services delivered from the Leased Properties and (iii) all covenants,
agreements, restrictions and encumbrances contained in any instruments, either
of record or known to Lessee (other than encumbrances created by Lessor without
the consent of Lessee) and in force at any time during the
Term.

     

    Lessee Cash
Flow:  For any period, an amount equal to (a) Net Income of
Lessee arising solely from the operation of the Facilities for the applicable
period; plus (b) the amounts deducted in computing Lessee’s Net Income for the
period for (i) depreciation, (ii) amortization, (iii) Base Rent, (iv) interest
(including payments in the nature of interest under Capitalized Leases and
interest on any Purchase Money Financing), (v) income taxes (or, if greater,
income tax actually paid during the period) and (vi) actual management fees
paid; less (c) an imputed management fee equal to 5% of net
revenues.

     

    
      
        
        

      

      
        -16-

        
          

        

      

      
        
        

      

    

    Lessee:
is defined in the introductory paragraph to this Agreement.

     

    Lessee
Closing: is defined in Section 38.5.

     

    Lessee Closing
Date: is defined in Section 38.5.

     

    Lessee
One: is defined in the introductory paragraph to this
Agreement.

     

    Lessee
Option: is defined in Section 38.1.

     

    Lessee Option
Deposit: is defined in Section 38.3.

     

    Lessee Option
Facilities: means the Facilities commonly known as:

     

    
      	
              Northwestern
      Center

              570
      North Rocky River Drive

              Berea
      OH 44017

               

            	
              Golden
      Years Healthcare Center

              2125
      Royce Street

              Portsmouth
      OH 45662

               

            
	
              Columbus
      Center

              4301
      Clime Road, North

              Columbus
      OH 43228

               

            	
              Oak
      Grove Center

              620
      East Water Street

              Deshler
      OH 43516

               

            

    

    Lessee Option
Period: is defined in Section 38.3.

     

    Lessee Option
Property: is defined in Section  38.2.

     

    Lessee
Purchase Price: is defined in Section 38.4.

     

    Lessee’s
Certificate:  A statement in writing in substantially the form
of Exhibit C
attached hereto (with such changes thereto as may reasonably be requested by the
person relying on such certificate).

     

    Lessee’s
Personal Property:  Personal Property owned or leased by Lessee
that is not included within the definition of the term “Lessor’s Personal
Property” but is used by Lessee in the operation of the Facilities, including
Personal Property provided by Lessee in compliance with Section 6.3
hereof.

     

    Lessee Title
Commitments: is defined in Section 38.7.

     

    Lessee Title
Policies: is defined in Section 38.7.

     

    Lessee
Two: is defined in the introductory paragraph to this
Agreement.

     

    Lessor:
is defined in the introductory paragraph to this Agreement.

     

    
      
        
        

      

      
        -17-

        
          

        

      

      
        
        

      

    

    Lessor’s
Future Rent Loss:  An amount equal to the Rent that would have
been payable by Lessee from and after the Judgment Date through the Expiration
Date had the Lease not been terminated, plus such additional amount as may be
necessary in order to compensate Lessor for all other damages that are
proximately caused by, and in the ordinary course of things would be likely to
result from, Lessee’s failure to perform its obligations under this
Lease.

     

    Lessor’s
Interim Rent Loss:  An amount equal to the Rent that would have
been payable by Lessee from the Termination Date through the Judgment Date had
the Lease not been terminated (including interest and late charges determined on
the basis of the date or dates on which Lessor’s Interim Rent Loss is actually
paid by Lessee), plus such additional amount as may be necessary in order to
compensate Lessor for all other damages that are proximately caused by, and in
the ordinary course of things would be likely to result from, Lessee’s failure
to perform its obligations under this Lease.

     

    Lessor’s
Monthly Rent Loss:  For any month, an amount equal to the
installment of Rent that would have been due in such month under the Lease if it
had not been terminated, plus, if such amount is not paid on or before the day
of the month on which such installment of Rent would have been due, the amount
of interest and late charges thereon that also would have been due under the
Lease, plus such additional amount as may be necessary in order to compensate
Lessor for all other damages that are proximately caused by, and in the ordinary
course of things would be likely to result from, Lessee’s failure to perform its
obligations under this Lease.

     

    Lessor’s
Personal Property:  All Personal Property and intangibles, if
any, owned by Lessor and leased to Lessee on the Commencement Date, together
with any and all replacements thereof, and all Personal Property that pursuant
to the terms of the Lease becomes the property of Lessor during the
Term.  Notwithstanding any other provision of this Lease, Lessor’s
Personal Property shall not include goodwill nor shall it include any other
intangible personal property that is severable from Lessor’s “interests in real
property” within the meaning of Section 856(d) of the Code, or any similar or
successor provision thereto.

     

    Letter of
Credit Agreement:  An agreement between Lessor and Lessee
providing for a letter of credit to be delivered to Lessor as the Security
Deposit.

     

    Letter of
Credit Facility: means a credit facility established for the sole purpose
of providing the letters of credit constituting the Liquidity Reserve, the
Security Deposit (as defined in the Master Lease), and the Liquidity Reserve (as
defined in the City View Loan Agreement.

     

    LTACH Base
Rent: is defined in, and effective as set forth in, Exhibit H to this
Lease.

     

    LTACH Closing
Date: means the Closing Date as defined in Exhibit H to this
Lease.

     

    LTACH
Facility: means the long term acute care hospital to be located at 10
Garden Lake Parkway, Toledo, Ohio 43614.

     

    
      
        
        

      

      
        -18-

        
          

        

      

      
        
        

      

    

    LTACH
Sublease: is defined Exhibit H to this
Lease.

     

    Management
Agreement:  Any agreement pursuant to which management of a
Facility is delegated by Lessee to any person not an employee of Lessee or to
any other related or unrelated party.

     

    Manager:  The
Person to whom management of the operation of a Facility is delegated pursuant
to a Management Agreement.  As of the date of this Lease, the Managers
are BELMORE MGT CO., LLC, an Ohio limited liability company, WYANT MGT CO., LLC,
an Ohio limited liability company, BRECKSVILLE MGT CO., LLC, an Ohio limited
liability company, JARVIS MGT CO., LLC, an Ohio limited liability company, KOLBE
MGT CO., LLC, an Ohio limited liability company, PEARL (OHIO) MGT CO., LLC, an
Ohio limited liability company, PEARL II MGT CO., LLC, an Ohio limited liability
company, PEARL III MGT CO., LLC, an Ohio limited liability company, MERIT (OHIO)
MGT CO., LLC, an Ohio limited liability company, FALLING MGT CO., LLC, an Ohio
limited liability company, FRONT MGT CO., LLC, an Ohio limited liability
company, Midland (Ohio) Management Co., LLC, an Ohio limited liability company,
Garden Management Co., LLC, an Ohio limited liability company, Skyline (PA) Mgmt
Co., LLC, an Ohio limited liability company, Heritage (Ohio) Mgmt Co., LLC, an
Ohio limited liability company, Avis (Ohio) Mgmt Co., LLC, an Ohio limited
liability company, Suburban (Ohio) Mgmt Co., LLC, an Ohio limited liability
company, Old Mgmt Co., LLC, an Ohio limited liability company, Water Mgmt. Co.,
LLC, an Ohio limited liability company, South II Mgmt. Co., LLC, an Ohio limited
liability company, South I Mgmt. Co., LLC, an Ohio limited liability company,
South III Mgmt. Co., LLC, an Ohio limited liability company, Fairchild Mgmt.
Co., LLC, an Ohio limited liability company, Rocky River Mgmt. Co., LLC, an Ohio
limited liability company, Clime Mgmt. Co., LLC, an Ohio limited liability
company, Royce Mgmt. Co., LLC, an Ohio limited liability company, and East Water
Mgmt. Co., LLC.

     

    Maryland
Borrowers: means BEL PRE LEASING CO., LLC, an Ohio limited liability
company, RIDGE (MD) LEASING CO., LLC, an Ohio limited liability company,
MARLBORO LEASING CO., LLC, an Ohio limited liability company, FAYETTE LEASING
CO., LLC, an Ohio limited liability company, LIBERTY LEASING CO., LLC, an Ohio
limited liability company, HOWARD LEASING CO., LLC, an Ohio limited liability
company, PALL MALL LEASING CO., LLC, an Ohio limited liability company, WASHINGTON (MD) LEASING
CO., LLC, an Ohio limited liability company, SILVER SPRING NH ASSET, LLC, an
Ohio limited liability company, ELLICOTT CITY NH ASSET, LLC, an Ohio limited
liability company, FORESTVILLE NH ASSET, LLC, an Ohio limited liability company,
BALTIMORE NH ASSET I, LLC, an Ohio limited liability company, BALTIMORE NH ASSET
II, LLC, an Ohio limited liability company, GLEN BURNIE NH ASSET, LLC, an Ohio
limited liability company, BALTIMORE NH ASSET III, LLC, an Ohio limited
liability company, and EDGEWATER NH ASSET, LLC, an Ohio limited liability
company.

     

    Maryland Debt
Service: means Debt Service (as defined in the Maryland Loan Agreement)
for the Borrowers (as defined in the Maryland Loan
Agreement).

     

    
      
        
        

      

      
        -19-

        
          

        

      

      
        
        

      

    

    Maryland Cash
Flow: means Cash Flow (as defined in the Maryland Loan Agreement) for the
Borrowers (as defined in the Maryland Loan Agreement).

     

    Maryland
Closing: as defined in Section 39.9.

    

    Maryland Deeds
of Trust: means the “Deeds of Trust” as defined in the Maryland Loan
Agreement.

    

    Maryland
Facilities: means the “Facilities” as defined in the Maryland Loan
Agreement.

    

    Maryland
Loan: means the “Loan” as defined in the Maryland Loan
Agreement.

    

    Maryland Loan
Agreement: The Loan Agreement dated as of the date of this Lease from the
Maryland Borrowers, as borrowers, Maryland Parent Guarantors, as parent
guarantors, and Lessor, as lender.

    

    Maryland Loan
Documents: means the “Loan Documents” as defined in the Maryland Loan
Agreement.

    

    Maryland
Obligors: means the Maryland Borrowers, Maryland Parent Guarantors, and
all of their affiliates which have granted security or credit support for the
obligations of the Maryland Borrowers under the Maryland Loan
Documents.

     

    Maryland
Operators: means the “Operators” as defined in the Maryland Loan
Agreement.

    

    Maryland
Option: as defined in Section 39.1.

    

    Maryland
Option Commencement Date: as defined in Section 39.2.

    

    Maryland
Option Notice: as defined in Section 39.5.

    

    Maryland
Option Period: as defined in Section 39.2.

    

    Maryland
Option Property:  The land described in the Maryland Deeds of
Trust, the buildings and fixtures thereon, all of the other improvements
thereto, all strips, gores, riparian rights, air rights, mineral rights,
easements, rights-of-way and other appurtenances thereto; all personal property,
tangible and intangible, located on or used in connection with the Maryland
Facilities, including, without limitation, (i) fixtures, equipment, machinery,
and other tangible personal property, (ii) all surveys, maps, engineering
reports, plans, drawings, specifications and other technical descriptions
relating to the Maryland Facilities, (iii) all warranties, guarantees, rights,
claims and causes of action, licenses and permits relating to the Maryland
Facilities, and (iv) the rights, title and interests of Maryland Borrowers under
all of the leases, licenses and occupancy agreements, written or oral, relating
to the Maryland Facilities.

    

    
      
        
        

      

      
        -20-

        
          

        

      

      
        
        

      

    

    Maryland
Parent Guarantors: means RE Holdings, RE Leasing, AO, HEALTH CARE
FACILITY MANAGEMENT, LLC, an Ohio limited liability company, and RESIDENT CARE
CONSULTING, LLC, an Ohio limited liability company.

     

    Maryland
Permitted Encumbrances: mean the “Permitted Encumbrances” as defined in
the Maryland Deed of Trusts.

     

    Maryland Title
Commitments: as defined in Section 39.7(a).

     

    Maryland Title
Company: as defined in Section 39.7(a).

     

    Maryland Title
Insurance Policies: as defined in Section 39.7(a).

     

    Material
Adverse Effect: means any material adverse effect whatsoever upon (a) the
validity, performance or enforceability of any Transaction Document, (b) the
properties, contracts, business operations, profits or condition (financial or
otherwise) of Lessee, a Sublessee or any Guarantor, or (c) the ability of
Lessee, a Sublessee, any Guarantor or any of their Affiliates to fulfill its
obligations under the Transaction Documents.

     

    Maximum
Principal Amount: means Thirty Five Million Dollars
($35,000,000).

     

    Net
Income:  For any period, Lessee’s net income (or loss) for such
period attributable to the operation of the Facilities, determined in accordance
with GAAP; provided, however, that Lessee’s Net Income shall not include any
extraordinary gains (or losses) or nonrecurring gains (or
losses).

     

    Net
Proceeds:  All proceeds, net of any costs incurred by Lessor in
obtaining such proceeds, payable under any policy of insurance required by
Article XIII of this Lease (including any proceeds with respect to Lessee’s
Personal Property that Lessee is required or elects to restore or replace
pursuant to Section 14.3) or paid by a Condemnor for a Taking or Partial Taking
of a Leased Property.

     

    Net Reletting
Proceeds: Proceeds of the reletting of any portion of the Leased Property
received by Lessor, net of Reletting Costs.

     

    Non-Escrow
Improvements: means the capital improvements to the Facilities other than
Lessee Option Facilities approved in writing by Lessor.

     

    Notice:  A
notice given in accordance with Article XXXI hereof.

     

    Notice of
Termination:  A Notice from Lessor that it is terminating this
Lease by reason of an Event of Default.

     

    Off-Balance
Sheet Liability: of a Person means (i) any repurchase obligation or
liability of such Person with respect to accounts or notes receivable sold by
such Person, (ii) any liability under any Sale and Leaseback Transaction which
is not a Capitalized Lease, (iii) any liability under any so-called “synthetic
lease” transaction entered into by such Person, or (iv) any obligation arising
with respect to any other transaction which is the functional equivalent of or
takes the place of borrowing but which does not constitute a liability on the
balance sheets of such Person.

     

    
      
        
        

      

      
        -21-

        
          

        

      

      
        
        

      

    

    Officer’s
Certificate: A certificate signed by an Executive
Officer.

     

    OHI
Facilities: means the Facilities, together with the skilled nursing
facilities subject to liens in favor of Lessor and its Affiliates pursuant to
the City View Loan Agreement and the Maryland Loan
Agreement.

     

    OHI THI
Facilities: means the Facilities commonly known as:

     

    
      	
              Northwestern
      Center

              570
      North Rocky River Drive

              Berea
      OH 44017

               

            	
              Oak
      Grove Center

              620
      East Water Street

              Deshler
      OH 43516

               

            	
              Greenbriar
      Center (a/k/a Greenbriar North)

              8064
      South Avenue

              Boardman
      OH 44512

               

            
	
              Columbus
      Center

              4301
      Clime Road, North

              Columbus
      OH 43228

               

            	
              Chardon
      Healthcare Center

              620
      Water Street

              Chardon
      OH 44024

               

            	
              Greenbriar
      Rehabilitation Hospital

              8064
      South Avenue, Ste. One

              Boardman
      OH 44512

               

            
	
              Golden
      Years Healthcare Center

              (P.O.
      Box 1148) 2125 Royce Street

              Portsmouth
      OH 45662

               

            	
              Commons
      at Greenbriar

              8060
      South Avenue

              Boardman
      OH 44512

               

            	
              Kent
      Care Center

              1290
      Fairchild Avenue

              Kent
      OH 44240

               

            

    

    OHI Working
Capital Loan Agreement: means the Working Capital Loan Agreement dated as
of November 7, 2003 between Lessee and certain of the Sublessees, as borrowers,
and Lessor, as lender.

     

    OHI Working
Capital Note: means the Secured Working Capital Promissory Note dated as
of November 7, 2003 in the state principal amount of $1,000,000 from Lessee and
certain of the Sublessees in favor of Lessor.

     

    Omega:  Omega
Healthcare Investors, Inc., a Maryland corporation.

     

    Objections: is
defined in Section 38.7.

     

    Other
Permitted Indebtedness:  means the Letter of Credit Facility
and the indebtedness and contingent obligations listed on Schedule 8.2.5,
together with renewals, refinancings and replacements of such indebtedness and
contingent obligations by indebtedness or contingent obligations of like kind
and of equal or lesser amount of credit exposure.

     

    Overdue
Rate:  The rate of twelve percent (12%).

     

    Partial
Taking:  A taking of less than the entire fee of a Leased
Property that either (a) does not render the Leased Property Unsuitable for its
Primary Use, or (b) renders a Leased Property Unsuitable for its Primary
Intended Use, but neither Lessor nor Lessee elects pursuant to Section 15.1
hereof to terminate this Lease.

     

    
      
        
        

      

      
        -22-

        
          

        

      

      
        
        

      

    

    Payment
Date:  Any due date for the payment of the installments of Base
Rent or for the payment of Additional Charges or any other amount required to be
paid by Lessee hereunder.

     

    Permitted
Encumbrances: Encumbrances listed on attached Exhibit
D.

     

    Permitted
Investments: the Investments listed on Schedule
8.8.

     

    Person:  Any
natural person, trust, partnership, corporation, joint venture, limited
liability company or other legal entity.

     

    Personal
Property:  All machinery, equipment, furniture, furnishings,
movable walls or partitions, computers (and all associated software), trade
fixtures and other tangible personal property (but excluding consumable
inventory and supplies owned by Lessee) used in connection with the Leased
Properties, together with all replacements  and alterations thereof
and additions thereto, except items, if any, included within the definition of
Fixtures or Leased Improvements.

     

    Pledge
Agreement: The Pledge Agreements between Lessor, as creditor, and Lessee,
certain of the Parent Guarantors, HCREH, and HCH, as
pledgors.

     

    Pre-Existing
Hazardous Substances: means Hazardous Substances located on, under about
or with respect to the Waterford Facility, the Crestwood Facility or an Emory
Acquired Facility prior to the Commencement Date for such
Facility.

     

    Pre-Existing
Environmental Conditions: means any Contamination or other environmental
condition on, under, about or with respect to the Waterford Facility, the
Crestwood Facility or an Emory Acquired Facility prior to the Commencement Date
for such Facility.

     

    Present
Value: The value of future payments, determined by discounting each such
payment at a rate equal to the yield on the specified date on securities issued
by the United States Treasury (bills, notes and bonds) maturing on the date
closest to December 31 in the year in which such future payment would have been
due.

     

    Primary
Intended Use: Licensed skilled nursing facilities and, in the case of the
LTACH Facility, long term acute care hospital.

     

    Prime
Rate:  On any date, an interest rate equal to the prime rate
published by the Wall Street Journal, but in no event greater than the maximum
rate then permitted under applicable law. If the Wall Street Journal ceases to
be in existence, or for any reason no longer publishes such prime rate, the
Prime Rate shall be the rate announced as its prime rate by Fleet Bank or other
financial institution that is the agent for the banks under Omega’s revolving
credit agreement, and if such bank no longer exists or does not announce a prime
rate at such time, the Prime Rate shall be the rate of interest announced as its
prime rate by a national bank selected by Lessor.

     

    
      
        
        

      

      
        -23-

        
          

        

      

      
        
        

      

    

    Proceeding: Any
action, proposal or investigation by any agency or entity, or any complaint to
such agency or entity.

     

    Purchase Money
Financing:                                                                Any
financing provided by a Person to Lessee or a Sublessee in connection with the
acquisition of Personal Property used in connection with the operation of a
Facility, whether by way of installment sale or otherwise.

     

    Qualified
Capital Expenditures:  Expenditures capitalized on the books of
Lessee for alterations, renovations, repairs and replacements to the Facilities,
including without limitation any of the following:   Replacement
of furniture, fixtures and equipment, including refrigerators, ranges, major
appliances, bathroom fixtures, doors (exterior and interior), central air
conditioning and heating systems (including cooling towers, water chilling
units, furnaces, boilers and fuel storage tanks) and major replacement of
siding; major roof replacements, including major replacements of gutters,
downspouts, eaves and soffits; major repairs and replacements of plumbing and
sanitary systems; overhaul of elevator systems; major repaving, resurfacing and
sealcoating of sidewalks, parking lots and driveways; repainting of entire
building exterior; but excluding major alterations, renovations, additions
(consisting of expansions of any Facility, including construction of a new wing
or a new story on any Facility), normal maintenance and
repairs.

     

    RE
Holdings: means OMG RE Holdings, LLC, an Ohio limited liability
company.

     

    RE
Leasing: means OMG RE LEASING CO., LLC, an Ohio limited liability
company.

     

    Regulatory
Actions:  Any claim, demand, notice, action or proceeding
brought, threatened or initiated by any governmental authority in connection
with any Environmental Law, including, without limitation, civil, criminal and
administrative proceedings, whether or not the remedy sought is costs, damages,
equitable remedies, penalties or expenses.

     

    Related
Rights:  All easements, rights and appurtenances relating to
the Land and the Leased Improvements.

     

    Release:  The
intentional or unintentional spilling, leaking, dumping, pouring, emptying,
seeping, disposing, discharging, emitting, depositing, injecting, leaching,
escaping, abandoning, or any other release or threatened release, however
defined, of any Hazardous Substance.

     

    Reletting
Costs: Expenses incurred by Lessor in connection with the reletting of
the Leased Properties in whole or in part after an Event of Default, including
without limitation attorneys’ fees and expenses, brokerage fees and expenses,
marketing expenses and the cost of repairs and renovations reasonably required
for such reletting.

     

    Renewal
Term: A period for which the Term is renewed in accordance with Section
1.3.

     

    Rent:  Collectively,
Base Rent and Additional Charges.

     

    
      
        
        

      

      
        -24-

        
          

        

      

      
        
        

      

    

    Replacement
Cost:  The actual replacement cost of the Leased Properties,
including an increased cost of construction endorsement, less exclusions
provided in the standard form of fire insurance policy.  In all events
Replacement Cost shall be an amount sufficient that neither Lessor nor Lessee is
deemed to be a co-insurer of the Leased Property in
question.

     

    Sale and
Leaseback Transaction: means any sale or other transfer of real or
personal property by any Person with the intent to lease such property as
lessee.

     

    SEC:  Securities
and Exchange Commission.

     

    Security
Agreements: The Security Agreements between Lessor, as secured party, and
Lessee, each Sublessee, each Manager, each Consultant, and each Guarantor, as
debtors.

     

    Security
Deposit: As defined in ARTICLE XXXVII hereof.

     

    Special
Default: The occurrence of any of the following: (a) Lessee fails to pay
or cause to be paid the Rent when due and payable; (b) Lessee or any of its
Affiliates fails to pay when due any amount required to be paid pursuant to any
of the other Transaction Documents; or (c) at any time, Lessee and the
Sublessees on a consolidated basis fail to maintain a Cash Flow to Rent Ratio of
1.0 or more as determined quarterly on a cumulative basis for each calendar
year.

     

    Special Risk
Insurance:  The insurance that Lessee is required to maintain
pursuant to Section 13.2.1 of this Lease.

     

    State:
The State in which the Leased Properties are located.

     

    Subleases:  The
subleases dated as of the date of this Lease with the following subsidiaries of
Lessee: (1) Midland Leasing Co, LLC, an Ohio limited liability company; (2)
Garden Leasing Co, LLC, an Ohio limited liability company; (3) Skyline (PA)
Leasing Co, LLC, an Ohio limited liability company; (4) Old Leasing Co, LLC, an
Ohio limited liability company; (5) Emery Leasing Co., LLC, an Ohio limited
liability company; (6) Avis Leasing Co., LLC, an Ohio limited liability company;
(7) Heritage (Ohio) Leasing Co., LLC, an Ohio limited liability company; (8)
WYANT LEASING CO., LLC, an Ohio limited liability company; (9) BRECKSVILLE
LEASING CO., LLC, an Ohio limited liability company; (10) JARVIS LEASING CO.,
LLC, an Ohio limited liability company; (11) KOLBE LEASING CO., LLC, an Ohio
limited liability company; (12) PEARL LEASING CO., LLC, an Ohio limited
liability company; (13) PEARL II LEASING CO., LLC, an Ohio limited liability
company; (14) PEARL III LEASING CO., LLC, an Ohio limited liability company;
(15) MERIT LEASING CO., LLC, an Ohio limited liability company; (16) FALLING
LEASING CO., LLC, an Ohio limited liability company; (17) FRONT LEASING CO.,
LLC, an Ohio limited liability company; (18) BELMORE LEASING CO., LLC, an Ohio
limited liability company, (19) LTACH Facility Sublease; (20) Water Leasing Co.,
LLC, an Ohio limited liability company; (21) South II Leasing Co., LLC, an Ohio
limited liability company; (22) South I Leasing Co., LLC, an Ohio limited
liability company; (23) South III Leasing Co., LLC, an Ohio limited liability
company; (24) Fairchild (MD) Leasing Co., LLC, an Ohio limited liability
company; (25) Rocky River Leasing Co., LLC, an Ohio limited liability company;
(26) Clime Leasing Co., LLC, an Ohio limited liability company; (27) Royce
Leasing Co., LLC, an Ohio limited liability company; (28) East Water Leasing
Co., LLC, an Ohio limited liability company, and such other Subleases expressly
approved in writing by Lessor prior to execution by Lessee.

    

    
      
        
        

      

      
        -25-

        
          

        

      

      
        
        

      

    

    Sublessees:  The
sublessees under the Subleases.

     

    Subordination
Agreement: The Subordination Agreement from Lessee, the Sublessees, and
Guarantor in favor of Lessor, the Subordination of Management Agreement from
Lessee, the Sublessees, and Managers, and the Subordination of Financial
Services Agreement from Lessee, the Sublessees and Consultants in favor of
Lessor.

     

    Subsidiary: of a
Person means (i) any corporation more than 50% of the outstanding securities
having ordinary voting power of which shall at the time be owned or controlled,
directly or indirectly, by such Person or by one or more of its Subsidiaries or
by such Person and one or more of its Subsidiaries, or (ii) any partnership,
limited liability company, association, joint venture or similar business
organization more than 50% of the ownership interests having ordinary voting
power of which shall at the time be so owned or controlled.  Unless
otherwise expressly provided, all references herein to a “Subsidiary” shall mean
a Subsidiary of Lessee, a Sublessee, a Guarantor, HCH or
HCREH.

     

    Taken:
Conveyed pursuant to a Taking or Partial Taking.

     

    Taking:  A
taking or voluntary conveyance during the Term of all of a Leased Property, or
any interest therein or right accruing thereto or use thereof, as the result of,
or in settlement of any condemnation or other eminent domain proceeding
affecting the Leased Property, whether or not the proceeding actually has been
commenced.

     

    Tangible Net
Worth: At any date, the net worth of a Person as determined in conformity
with GAAP, less Intangible Assets, as determined as of such
date.

     

    Tax
Distributions: A distribution by Lessee to the equity owners of Lessee in
an amount not in excess of the actual income tax liability of each such equity
owner attributable to such equity owner’s allocated share of the taxable income
of Lessee.

     

    Term:  Collectively,
the Initial Term plus the Renewal Term or Renewal Terms, if
any.

     

    Termination
Date:  The date on which a Notice of Termination is
given.

     

    THI
Acquisition Agreements: means (i) that certain Purchase and Sale
Agreement dated as of February 6, 2008 among OHI Acquisition Co. I, LLC, a
Delaware limited liability company, and Trans Healthcare, Inc., a Delaware
corporation, and certain of its Affiliates, as sellers, and (ii) that certain
Purchase and Sale Agreement dated as of February 6, 2008 between OHI Acquisition
Co. I, LLC, a Delaware limited liability company and Ventas Realty, Limited
Partnership, a Delaware limited partnership.

     

    Third Party
Claims:  Any claims, actions, demands or proceedings (other
than Regulatory Actions) howsoever based (including without limitation those
based on negligence, trespass, strict liability, nuisance, toxic tort or
detriment to health welfare or property) due to Contamination, whether or not
the remedy sought is costs, damages, penalties or expenses, brought by any
person or entity other than a governmental agency.

     

    
      
        
        

      

      
        -26-

        
          

        

      

      
        
        

      

    

    Title
Company: means First American Title Insurance
Company.

     

    Transaction
Documents: means the following documents: this Lease, the Guaranties, the
Letter of Credit Agreement, the Security Agreements, the Pledge Agreements, the
Subordination Agreements, the OHI Working Capital Loan Agreement, the OHI
Working Capital Note, the Cross Default and Cross Collateralization Agreement,
the Agreement to Lease, Indemnity Agreements, and any security agreements,
pledge agreements, letter of credit agreements, guarantees, notes or other
documents which evidence, secure or otherwise relate to this Lease, the OHI
Working Capital Loan Agreement, the Agreement to Lease or the transactions
contemplated by this Lease, the Agreement to Lease, or the OHI Working Capital
Loan Agreement; and any and all amendments, modifications, extensions and
renewals of any of the foregoing documents.

     

    Transfer:  The
(a) assignment, mortgaging or other encumbering of all or any part of Lessee’s
or any Sublessee’s interest in this Lease or in the Leased Properties; (b)
subletting of the whole or any part of any Leased Property (except to Sublessees
pursuant to the Subleases); (c) entering into of any Management Agreement or
Consulting Agreement or other arrangement under which any Facility is operated
by or licensed to be operated by an entity other than Lessee or a Sublessee; (d)
merger, consolidation or reorganization of a corporate Lessee, corporate
Guarantor, corporate Sublessee or corporate Manager, or corporate Consultant, or
the sale, issuance, transfer and/or redemption, cumulatively or in one
transaction, of any voting stock by Lessee, any Guarantor, any Sublessee or
Manager or Consultant or by Persons who are stockholders (whether beneficially
or of record) of Lessee, any Guarantor, any Sublessee or Manager or Consultant,
if such event or events result(s) in a change of Control of Lessee, any
Guarantor, any Sublessee or Manager or Consultant; (e) sale, issuance, transfer
or redemption, cumulatively or in one transaction, of any interest, or the
termination of any interest (in each case, whether held directly or indirectly),
in Lessee, any Guarantor, any Sublessee or Manager or Consultant, if Lessee,
such Guarantor, such Sublessee or such Manager or such Consultant is a joint
venture, partnership, limited liability company or other association and such
sale, issuance, transfer, redemption or termination of interest results in a
change of Control of such joint venture, partnership, limited liability company
or other association; or (f) a change in the individuals holding the Executive
Officer’s position of Lessee, Guarantors, Consultants, Managers or
Sublessees.

     

    Transferee: An
assignee, subtenant or other occupant of a Leased Property pursuant to a
Transfer.

     

    Unmatured
Event of Default: means the occurrence of an event which upon its
occurrence, or with the giving of notice, the passage of time, or both, would
constitute an Event of Default.

     

    Unsuitable for
Its Primary Intended Use:  A state or condition of a Facility
such that by reason of a Partial Taking, the Facility cannot be operated on a
commercially practicable basis for its Primary Intended Use, taking into
account, among other relevant factors, the number of usable beds permitted by
applicable law and regulation in the Facility after the Partial Taking, the
square footage Taken and the estimated revenue impact of such Partial
Taking.

     

    
      
        
        

      

      
        -27-

        
          

        

      

      
        
        

      

    

    Waterford
Facility: means Waterford Commons, 955 Garden Lake Parkway, Toledo, Ohio
43614.

     

    ARTICLE
III                                

     

    3.1 Base Rent; Monthly
Installments. In addition to all other payments to be made by Lessee
under this Lease, Lessee shall pay Lessor the Base Rent in lawful money of the
United States of America which is legal tender for the payment of public and
private debts, Lessee shall pay the Base Rent in advance.  Base Rent
shall be paid in equal, consecutive monthly installments, each of which shall be
in an amount equal to one-twelfth (1/12) of the Base Rent payable for the Lease
Year in which such installment is payable; provided, however, that if the
Commencement Date is not the first day of the month, then the first month’s
payment of Base Rent shall be prorated based upon the number of days in the
month from and after the Commencement Date.  Thereafter, installments
of Base Rent shall be payable on the fifteenth (15th) day of
each calendar month.  Base Rent shall be paid to Lessor, or to such
other Person as Lessor from time to time may designate by Notice to Lessee, by
wire transfer of immediately available federal funds to the bank account
designated in writing by Lessor. If Lessor directs Lessee to pay any Base Rent
or Additional Charges to any Person other than Lessor, Lessee shall send to
Lessor, simultaneously with payment of the Base Rent or Additional Charges, a
copy of the transmittal letter or invoice and check evidencing such, or such
other evidence of payment as Lessor requires.

     

    3.2 Additional
Charges.   In addition to the Base Rent, Lessee also will
pay as and when due all Additional Charges.

     

    3.3 Late Charge;
Interest.  If any Rent payable to Lessor is not paid when due,
Lessee shall pay Lessor on demand, as an Additional Charge, a late charge equal
to the greater of (a) five percent (5%) of the amount not paid when due and (b)
any and all charges, expenses, fees or penalties imposed on Lessor by a Facility
Mortgagee for late payment, and, in addition, if such Rent (including the late
charge) is not paid within thirty (30) days of the date on which such Rent was
due, interest thereon at the Overdue Rate from the date when due until such Rent
(including the late charge and interest) is paid in full.

     

    3.4            Net
Lease.

     

    3.4.1 The Rent
shall be paid absolutely net to Lessor, so that this Lease shall yield to Lessor
the full amount of the Rent payable to Lessor under this Lease throughout the
Term.

     

    3.4.2 If Lessor
commences any proceedings for non-payment of Rent, Lessee will not interpose any
counterclaim or cross complaint or similar pleading of any nature or description
in such proceedings unless Lessee would lose or waive such claim by the failure
to assert it, but Lessee does not waive any rights to assert such claim in a
separate action brought by Lessee.  The covenants to pay Rent are
independent covenants, and Lessee shall have no right to hold back, offset or
fail to pay any Rent because of any alleged default by Lessor or for any other
reason.

     

    
      
        
        

      

      
        -28-

        
          

        

      

      
        
        

      

    

    3.5 Payments In The Event of a
Rent Adjustment.

     

    3.5.1 Upon the
adjustment, pursuant to Section (A)(4) or Section (B) of the definition of the
term “Base Rent,” in the Base Rent payable pursuant to this Lease with respect
to any Lease Year, the adjustment shall be effective as of the first payment of
Base Rent due in the Lease Year as to which such adjustment
pertains.  Because it may not be possible to determine the adjusted
Base Rent prior to the effective date of such adjustment, Lessee shall continue
to pay the Base Rent at the rate in effect prior to the adjustment until Lessor
gives Lessee Notice of its determination of the adjusted Base Rent. Upon such
determination, the Base Rent shall be adjusted retroactively as of the effective
date of such adjustment On or before the second (2nd)
payment date for Base Rent following receipt by Lessee of Lessor’s Notice of the
adjustment, Lessee shall make an additional payment of Base Rent in such amount
as will bring the Base Rent, as adjusted, current on or before such second
(2nd)
payment date, and thereafter Lessee shall pay the adjusted Base Rent in
correspondingly adjusted monthly installments until the Base Rent is next
adjusted or reset as required under this Lease.

     

    3.5.2 This
Section 3.5 shall survive the expiration or earlier termination of this Lease
with respect to any adjustment or reset that is not known or fully paid as of
the date of expiration or earlier termination of this Lease.

     

    ARTICLE
IV                                

     

    4.1 Payment of
Impositions.  Subject to Section 12.1 and Section 12.2, Lessee
will pay all Impositions before any fine, penalty, interest or cost is added for
non-payment, and will promptly, upon request, furnish to Lessor copies of
official receipts or other satisfactory proof evidencing such
payments.  Subject to Section 12.2, if at the option of the taxpayer
any Imposition may be paid in installments, Lessee may pay the same in the
required installments provided it also pays any and all interest due thereon as
and when due.

     

    Lessee
shall prepare and file as and when required all tax returns and reports required
by governmental authorities with respect to all Impositions.  Lessor
and Lessee shall each, upon request, provide the other with such data, including
without limitation cost and depreciation records, as is maintained by the party
to whom the request is made as is necessary to prepare any required returns and
reports.

     

    Lessee
shall be entitled to receive and retain any refund from a taxing authority in
respect of an Imposition paid by Lessee if at the time of the refund no Event of
Default has occurred, but if an Event of Default has occurred at the time of the
refund, Lessee shall not be entitled to receive or retain such refund, and if
and when received by Lessor such refund shall be applied as provided in Article
XVI.

     

    
      
        
        

      

      
        -29-

        
          

        

      

      
        
        

      

    

    Lessee
may, upon Notice to and with the consent of Lessor (which consent shall not be
withheld unreasonably), at Lessee’s sole cost and expense, protest, appeal or
institute such other proceedings as Lessee deems appropriate to effect a
reduction of real estate or personal property assessments and Lessor, at
Lessee’s expense as aforesaid, shall cooperate with Lessee in such protest,
appeal or other action.  Lessee shall reimburse Lessor for Lessor’s
direct costs of cooperating with Lessee for such protest, appeal or other
action.

     

    4.2 Adjustment of
Impositions.  Impositions imposed in respect of the tax fiscal
period during which the Term ends shall be adjusted and prorated between Lessor
and Lessee, whether or not imposed before or after the expiration or earlier
termination of the Term, and Lessee’s obligation to pay its prorated share
thereof shall survive the expiration or earlier termination of the
Term.

     

    4.3 Utility
Charges.  Lessee will pay or cause to be paid when due all
charges for electricity, power, gas, oil, water and other utilities imposed upon
the Leased Properties or upon Lessor or Lessee with respect to the Leased
Properties.

     

    4.4 Insurance Premiums.
Lessee shall pay or cause to be paid when due all premiums for the insurance
coverage required to be maintained pursuant to Article XIII during the
Term.  Lessee shall deposit with Lessor the premiums for such
insurance in accordance with the provisions of Section 12.2 of this
Lease.

     

    ARTICLE
V                                

     

    5.1 No Termination, Abatement,
etc.  Lessee shall not take any action without the consent of
Lessor and any Facility Mortgagee to modify, surrender or terminate this Lease,
and shall not seek or be entitled to any abatement, deduction, deferment or
reduction of Rent, or setoff against Rent.  The respective obligations
of Lessor and Lessee shall not be affected by reason of (a) any damage to, or
destruction of, the Leased Properties or any portion thereof from whatever cause
or any Taking or Partial Taking of the Leased Properties, except as expressly
set forth herein; (b) the lawful or unlawful prohibition of, or restriction
upon, Lessee’s use of the Leased Properties, or any portion thereof, or the
interference with such use by any Person or by reason of eviction by paramount
title; (c) any claim that Lessee has or might have against Lessor or by reason
of any default or breach of any warranty by Lessor under this Lease or any other
agreement between Lessor and Lessee, or to which Lessor and Lessee are parties;
(d) any bankruptcy, insolvency, reorganization, composition, readjustment,
liquidation, dissolution, winding up or other proceedings affecting Lessor or
any assignee or transferee of Lessor; or (e) any other cause, whether similar or
dissimilar to any of the foregoing, other than a discharge of Lessee from any
such obligations as a matter of law.  Lessee hereby specifically
waives all rights, arising from any occurrence whatsoever, that now or hereafter
may be conferred upon it by law to (a) modify, surrender or terminate this Lease
or quit or surrender the Leased Properties or any portion thereof, or (b)
entitle Lessee to any abatement, reduction, suspension or deferment of the Rent
or other sums payable by Lessee hereunder.

     

    
      
        
        

      

      
        -30-

        
          

        

      

      
        
        

      

    

    ARTICLE
VI                                

     

    6.1 Ownership of the Leased
Properties.  Lessee acknowledges that the Leased Properties are
the property of Lessor and that Lessee has only the right to the possession and
use of the Leased Properties upon the terms and conditions of this
Lease.  Lessee will not (a) file any income tax return or other
associated documents, (b) file any other document with or submit any document to
any governmental body or authority, (c) enter into any written contractual
arrangement with any Person or (d) release any financial statements of Lessee,
in any case that take any position other than that throughout the Term Lessor is
the owner of the Leased Properties for federal, state and local income tax
purposes and this Lease is a “true lease,” and an “operating lease” and not a
“capital lease.”

     

    6.2 Lessor’s Personal
Property.  Lessee shall, during the entire Term, maintain all
of Lessor’s Personal Property in good order, condition and repair as shall be
necessary in order to operate the Facilities for the Primary Intended Use in
compliance with all applicable licensure and certification requirements, all
applicable Legal Requirements and Insurance Requirements, and customary industry
practice for the Primary Intended Use.  If any of Lessor’s Personal
Property requires replacement in order to comply with the foregoing, Lessee
shall replace it with similar property of the same or better quality at Lessee’s
sole cost and expense, and it shall become Lessor’s Personal Property without
payment of additional consideration at the expiration or earlier termination of
the Lease.  Lessee shall not permit or suffer Lessor’s Personal
Property to be subject to any lien, charge, encumbrance, financing statement,
contract of sale, equipment lessor’s interest or the like, except for any
purchase money security interest or equipment lessor’s interest expressly
approved in advance, in writing, by Lessor.  At the expiration or
earlier termination of this Lease, all of Lessor’s Personal Property shall be
surrendered to Lessor with the Leased Properties at or before the time of the
surrender of the Leased Property in at least as good a condition as at the
Commencement Date (or, as to replacements, in at least as good a condition as
when placed in service at the Facilities) except for ordinary wear and
tear.

     

    6.3 Lessee’s Personal
Property.  Lessee shall provide and maintain during the Term
such Personal Property, in addition to Lessor’s Personal Property, as shall be
necessary and appropriate in order to operate the Facilities for the Primary
Intended Use in compliance with all licensure and certification requirements, in
compliance with all applicable Legal Requirements and Insurance Requirements and
otherwise in accordance with customary practice in the industry for the Primary
Intended Use.  Without the prior written consent of Lessor, except as
permitted under Section 8.2.7, Lessee shall not
permit or suffer Lessee’s Personal Property to be subject to any lien, charge,
encumbrance, financing statement or contract of sale or the like. Upon the
expiration of the Term or the earlier termination of this Lease, without the
payment of any additional consideration by Lessor, Lessee shall be deemed to
have sold, assigned, transferred and conveyed to Lessor all of Lessee’s right,
title and interest in and to any of Lessee’s Personal Property that, in Lessor’s
reasonable judgment, is integral to the Primary Intended Use of the Facilities
(or if some other use thereof has been approved by Lessor as required herein,
such other use as is then being made by Lessee) and, as provided in Section 33.1 hereof, Lessor shall have the option to purchase
any of Lessee’s Personal Property that is not then integral to such
use.  Without Lessor’s prior written consent, Lessee shall not remove
Lessee’s Personal Property that is in use at the expiration or earlier
termination of the Term from the Leased Properties until such option to purchase
has expired or been waived in writing by Lessor.  Any of Lessee’s
Personal Property that is not integral to the use of the Facilities being made
by Lessee and is not purchased by Lessor pursuant to Section 33.1 may be removed by Lessee upon the expiration or
earlier termination of this Lease, and, if not removed within twenty (20) days
following the expiration or earlier termination of this Lease, shall be
considered abandoned by Lessee and may be appropriated, sold, destroyed or
otherwise disposed of by Lessor without giving notice thereof to Lessee and
without any payment to Lessee or any obligation to account
therefor.  Lessee shall reimburse Lessor for any and all expense
incurred by Lessor in disposing of any of Lessee’s Personal Property that Lessee
may remove but within such twenty (20) day period fails to remove, and shall
either at its own expense restore the Leased Properties to the condition
required by Section 9.1.5, including repair of all damage to the Leased
Properties caused by the removal of any of Lessee’s Personal Property, or
reimburse Lessor for any and all expense incurred by Lessor for such restoration
and repair.

     

    
      
        
        

      

      
        -31-

        
          

        

      

      
        
        

      

    

    6.4 Grant of Security Interest
in Lessee’s Personal Property and Accounts.  Lessee has
concurrently granted to Lessor a security interest in the Collateral as defined
in the Security Agreement, which includes, without limitation, the Personal
Property as defined herein and Lessee’s and Sublessee’s Accounts as defined in
the Security Agreement.  If Lessee and/or the Sublessees obtain,
concurrently with or after the Commencement Date, a working capital line of
credit (the “Working
Capital Loan”) from a third-party working capital lender that requires
that, in order to secure the working capital line of credit, Lessee and/or the
Sublessees must grant to the working capital lender a first priority security
interest in the accounts receivable from the Facilities accruing during the
Term, if applicable, then such lien shall be
permitted under this Lease and Lessor will subordinate its security interest in
the accounts receivable and related collateral from the Facilities accruing
during the Term, provided in
each case that:

     

    (a)           The
working capital lender executes and delivers to Lessor an intercreditor
agreement in form and substance reasonably satisfactory to Lessor;
and

     

    (b)           The
lien of Lessor in accounts receivable and related collateral from each Facility
shall be subordinated to the lien of the working capital lender therein only to
the extent of amounts advanced from time to time by the working capital lender
to Lessee and/or the Sublessees with respect to the Facilities and only in the
maximum principal amount of the Maximum Principal Amount, plus interest,
penalties and other charges under the loan documents with respect to principal
amounts advanced; and

     

    (c)           The
Working Capital Loan is not secured by any collateral other than accounts
receivable and related collateral, which Lessor agrees may secure the Working
Capital Loan; and

     

    

     

    (d)           No
Event of Default has occurred and is continuing at the time of such request and
entry into an intercreditor agreement.

     

    
      
        
        

      

      
        -32-

        
          

        

      

      
        
        

      

    

    ARTICLE
VII                                

     

    7.1 Condition of the Leased
Properties.  Lessee acknowledges that it has inspected and
otherwise has knowledge of the condition of the Leased Properties prior to the
execution and delivery of this Lease and has found the same to be in good order
and repair and satisfactory for its purposes hereunder.  Lessee is
leasing the Leased Properties “as is” in their condition on the Commencement
Date.  Lessee waives any claim or action against Lessor in respect of
the condition of the Leased Properties.  LESSOR MAKES NO WARRANTY OR
REPRESENTATION, EXPRESS OR IMPLIED, IN RESPECT OF ANY LEASED PROPERTY OR ANY
PART THEREOF, EITHER AS TO ITS FITNESS FOR USE, DESIGN OR CONDITION FOR ANY
PARTICULAR USE OR PURPOSE OR OTHERWISE AS TO THE QUALITY OF THE MATERIAL OR
WORKMANSHIP THEREIN, LATENT OR PATENT, IT BEING AGREED THAT ALL SUCH RISKS ARE
TO BE BORNE BY LESSEE.  Lessee further acknowledges that throughout
the Term Lessee is solely responsible for the condition of the Leased
Properties.

     

    7.2 Use of the Leased
Properties.  Throughout the Term Lessee shall use the Leased
Properties continuously for the Primary Intended Use and uses incidental
thereto. Lessee shall not use the Leased Properties or any portion thereof for
any other use without the prior written consent of Lessor.  No use
shall be made or permitted to be made of, or allowed in, the Leased Properties,
and no acts shall be done, which will cause the cancellation of, or be
prohibited by, any insurance policy covering the Leased Properties or any part
thereof, nor shall the Leased Properties or Lessee’s Personal Property be used
for any unlawful purpose. Lessee shall not commit or suffer to be committed any
waste on the Leased Properties, or cause or permit any nuisance thereon, or
suffer or permit the Leased Properties or any portion thereof, or Lessee’s
Personal Property, to be used in such a manner as (a) might reasonably tend to
impair Lessor’s (or Lessee’s, as the case may be) title thereto or to any
portion thereof, or (b) may reasonably make possible a claim or claims of
adverse usage or adverse possession by the public, as such, or of implied
dedication of the Leased Properties or any portion thereof.

     

    7.3 Certain Environmental
Matters.

     

    (a) Prohibition Against Use of
Hazardous Substances.  Lessee shall not permit, conduct or
allow the generation, introduction, presence, maintenance, use, receipt,
acceptance, treatment, manufacture, production, installation, management,
storage, disposal or release of any Hazardous Substance on the Leased
Properties, except for those types and quantities of Hazardous Substances
necessary for and ordinarily associated with the conduct of Lessee’s business
and used in full compliance with all Environmental Laws.

     

    (b) Notice of Environmental
Claims, Actions or Contaminations.  Lessee shall notify Lessor,
in writing, immediately upon learning of any existing, pending or threatened:
(i) investigation, inquiry, claim or action by any governmental authority in
connection with any Environmental Laws, (ii) Third Party Claims, (iii)
Regulatory Actions, and/or (iv) Contamination of any portion of the Leased
Properties

     

    
      
        
        

      

      
        -33-

        
          

        

      

      
        
        

      

    

    (c) Costs of Remedial Actions
with Respect to Environmental Matters.  If any investigation
and/or Clean-Up of any Hazardous Substance or other environmental condition on,
under, about or with respect to a Leased Property is required by any
Environmental Law (other than Pre-Existing Hazardous Substances or Pre-Existing
Environmental Conditions), Lessee shall complete, at its own expense, such
investigation and/or Clean-Up or cause any other Person who may be legally
responsible to complete such investigation and/or Clean-Up.

     

    (d) Delivery of Environmental
Documents.  Lessee shall deliver to Lessor complete copies of
any and all Environmental Documents that may now be in, or at any time hereafter
come into, the possession of Lessee.

     

    (e) Environmental
Audit.  At Lessee’s expense, Lessee shall, upon and within
thirty (30) days of a written request therefor from Lessor or any Facility
Mortgagee, deliver an Environmental Audit to Lessor and the Facility Mortgagee,
if any.  All tests and samplings shall be conducted using generally
accepted and scientifically valid technology and
methodologies.  Lessee shall give the engineer or environmental
consultant conducting the Environmental Audit reasonable and complete access to
the Leased Properties and to all records in the possession of Lessee that may
indicate the presence (whether current or past) of a Release or threatened
Release of any Hazardous Substances on, in, under, about and adjacent to any
Leased Property.  Lessee also shall provide the engineer or
environmental consultant full access to and the opportunity to interview such
persons as may be employed in connection with the Leased Properties as the
engineer or consultant deems appropriate.  However, neither Lessor nor
any Facility Mortgagee shall be entitled to request an Environmental Audit from
Lessee unless (i) after the Commencement Date there have been changes,
modifications or additions to Environmental Laws as applied to or affecting any
of the Leased Properties; (ii) Lessor has a reasonable belief that there has
been a significant change in the condition of any of the Leased Properties; or
(iii) there are fewer than six (6) months remaining in the Term.  If
the Environmental Audit discloses the presence of Contamination or any
noncompliance with Environmental Laws, Lessee shall immediately perform all of
Lessee’s obligations under this Lease with respect to such Hazardous Substances
or noncompliance.

     

    (f) Entry onto Leased Properties
for Environmental Matters.  If Lessee fails to provide an
Environmental Audit as and when required by Subparagraph (e) above, in addition
to Lessor’s other remedies Lessee shall permit Lessor and any Facility Mortgagee
from time to time, by its employees, agents, contractors or representatives, to
enter upon the Leased Properties for the purpose of conducting such
Investigations as Lessor may desire, the expense of which shall be paid or
reimbursed promptly by Lessee as an Additional Charge.  Lessor, any
Facility Mortgagee exercising such right of entry and the employees, agents,
contractors, consultants and/or representatives thereof, shall conduct any such
Investigation in a manner that does not unreasonably interfere with Lessee’s use
of and operations on the Leased Properties (however, reasonable temporary
interference with such use and operations is permissible if the investigation
cannot otherwise be reasonably and inexpensively conducted).  Other
than in an emergency, Lessor and any Facility Mortgagee exercising such right of
entry shall provide Lessee with prior notice before entering any of the Leased
Properties to conduct such Investigation, and shall provide copies of any
reports or results to Lessee, and Lessee shall cooperate fully in such
Investigation.

     

    
      
        
        

      

      
        -34-

        
          

        

      

      
        
        

      

    

    (g) Environmental Matters Upon
Termination of the Lease or Expiration of Term.  Upon the
expiration or earlier termination of the Term, Lessee shall cause the Leased
Properties to be delivered free of any and all Regulatory Actions and Third
Party Claims and otherwise in compliance with all Environmental Laws with
respect thereto, and in a manner and condition that is reasonably required to
ensure that the then present use, operation, leasing, development, construction,
alteration, refinancing or sale of the Leased Property shall not be restricted
by any environmental condition existing as of the date of such expiration or
earlier termination of the Term; provided, that Lessee shall not be required to
take any of the foregoing actions with respect to Pre-Existing Hazardous
Substances or Pre-Existing Environmental Conditions.

     

    (h) Compliance with
Environmental Laws.  Lessee shall comply with, and cause its
agents, servants and employees to comply with, and shall use reasonable efforts
to cause each occupant and user of any of the Leased Properties, and the agents,
servants and employees of such occupants and users to comply with, each and
every Environmental Law applicable to Lessee, the Leased Properties and each
such occupant or user with respect to the Leased
Properties.  Specifically, but without limitation:

     

    (i) Maintenance of Licenses and
Permits.  Lessee shall obtain and maintain (and Lessee shall
use reasonable efforts to cause each tenant, occupant and user to obtain and
maintain) all permits, certificates, licenses and other consents and approvals
required by any applicable Environmental Law from time to time with respect to
Lessee, each and every part of the Leased Properties and/or the conduct of any
business at a Facility or related thereto;

     

    (ii) Contamination.  Lessee
shall not cause, suffer or permit any Contamination (other than Pre-Existing
Environmental Conditions);

     

    (iii) Clean-Up.  If
a Contamination occurs (other than one arising solely out of Pre-Existing
Hazardous Substances or Pre-Existing Environmental Conditions), Lessee promptly
shall Clean-Up and remove any Hazardous Substance or cause the Clean-Up and the
removal of any Hazardous Substance and in any such case such Clean-Up and
removal of the Hazardous Substance shall be effected to Lessor’s reasonable
satisfaction and in any event in strict compliance with applicable Environmental
Laws;

     

    (iv) Discharge of
Lien.  Within twenty (20) days of the date any lien is imposed
against the Leased Properties or any part thereof under any Environmental Law
(other than a lien arising solely out of Pre-Existing Hazardous Substances or
Pre-Existing Environmental Conditions), Lessee shall cause such lien to be
discharged (by payment, by bond or otherwise to Lessor’s absolute
satisfaction);

     

    
      
        
        

      

      
        -35-

        
          

        

      

      
        
        

      

    

    (v) Notification of
Lessor.  Within three (3) Business Days after receipt by Lessee
of Notice or discovery by Lessee of any fact or circumstance that might result
in a breach or violation of any covenant or agreement, Lessee shall give Lessor
Notice of such fact or circumstance; and

     

    (vi) Requests, Orders and
Notices.  Within three (3) Business Days after receipt of any
request, order or other notice relating to the Leased Properties under any
Environmental Law, Lessee shall forward a copy thereof to
Lessor.

     

    (i) Environmental Related
Remedies.  In the event of a breach by Lessee beyond any
applicable notice and/or grace period of its covenants with respect to
environmental matters, Lessor may, in its sole discretion, do any one or more of
the following (the exercise of one right or remedy hereunder not precluding the
simultaneous or subsequent exercise of any other right or remedy
hereunder):

     

    (i) Cause a
Clean-Up.  Cause the Clean-Up of any Hazardous Substance or
other environmental condition on or under the Leased Properties, or both (except
to the extent such Clean-Up relates to Pre-Existing Hazardous Substances or
Pre-Existing Environmental Conditions), at Lessee’s cost and expense;
or

     

    (ii) Payment of Regulatory
Damages.  Pay on behalf of Lessee any damages, costs, fines or
penalties imposed on Lessee or Lessor as a result of any Regulatory Actions;
or

     

    (iii) Payments to Discharge
Liens.  On behalf of Lessee, make any payment or perform any
other act or cause any act to be performed that will prevent a lien in favor of
any federal, state or local governmental authority from attaching to the Leased
Properties or that will cause the discharge of any lien then attached to the
Leased Properties; or

     

    (iv) Payment of Third Party
Damages.  Pay, on behalf of Lessee, any damages, cost, fines or
penalties imposed on Lessee as a result of any Third Party Claims;
or

     

    (v) Demand of
Payment.  Demand that Lessee make immediate payment of all of
the costs of such Clean-Up and/or exercise of the remedies set forth in this
Section 7.2 incurred by Lessor and not paid by Lessee as of the date of such
demand.

     

    (j) Environmental
Indemnification.  Lessee shall and does hereby indemnify, and
shall defend and hold harmless, Lessor, each Facility Mortgagee and the
principals, officers, directors, agents and employees of Lessor and each
Facility Mortgagee, from each and every incurred and potential claim, cause of
action, damage, demand, obligation, fine, laboratory fee, liability, loss,
penalty, imposition settlement, levy, lien removal, litigation, judgment,
proceeding, disbursement, expense and/or cost (including without limitation the
cost of each and every Clean-Up), however defined and of whatever kind or
nature, known or unknown, foreseeable or unforeseeable, contingent, incidental,
consequential or otherwise (including, but not limited to, attorneys’ fees,
consultants’ fees, experts’ fees and related expenses, capital, operating and
maintenance costs, incurred in connection with (i) any Investigation or
monitoring of site conditions, and (ii) any Clean-Up required or performed by
any federal, state or local governmental entity or performed by any other entity
or person because of the presence of any Hazardous Substance, Release,
threatened Release or any Contamination on, in, under or about any of the Leased
Properties) that may be asserted against, imposed on, suffered or incurred by,
each and every indemnitee arising out of or in any way related to, or allegedly
arising out of or due to any environmental matter (except to the extent it
arises  out of Pre-Existing Hazardous Substances or Pre-Existing
Environmental Conditions) including, but not limited to, any one or more of the
following:

     

    
      
        
        

      

      
        -36-

        
          

        

      

      
        
        

      

    

    (i) Release Damage or
Liability.  The presence of Contamination in, on, at, under or
near a Leased Property or migrating to a Leased Property from another
location;

     

    (ii) Injuries.  All
injuries to health or safety (including wrongful death), or to the environment,
by reason of environmental matters relating to the condition of or activities
past or present on, at, in or under a Leased Property, other than with respect
to or resulting solely from Pre-Existing Hazardous Substances or Pre-Existing
Environmental Conditions;

     

    (iii) Violations of
Law.  All violations, and alleged violations, of any
Environmental Law relating to a Leased Property or any activity on, in, at or
under a Leased Property, other than with respect to or resulting solely from
Pre-Existing Hazardous Substances or Pre-Existing Environmental
Conditions;

     

    (iv) Misrepresentation.  All
material misrepresentations relating to environmental matters in any documents
or materials furnished by Lessee to Lessor and/or its representatives in
connection with the Lease;

     

    (v) Event of
Default.  Each and every Event of Default relating to
environmental matters;

     

    (vi) Lawsuits.  Any
and all lawsuits brought or threatened, settlements reached and governmental
orders relating to any Hazardous Substances at, on, in or under a Leased
Property, and all demands of governmental authorities, and all policies and
requirements of Lessor’s, based upon or in any way related to any Hazardous
Substances at, on, in or under a Leased Property, other than with respect to or
resulting solely from Pre-Existing Hazardous Substances or Pre-Existing
Environmental Conditions; and

     

    (vii) Presence of
Liens.  All liens imposed upon any of the Leased Properties in
favor of any governmental entity or any person as a result of the presence,
disposal, release or threat of release of Hazardous Substances at, on, in, from
or under a Leased Property.

     

    
      
        
        

      

      
        -37-

        
          

        

      

      
        
        

      

    

    (k) Rights Cumulative and
Survival.  The rights granted Lessor under this Section are in
addition to and not in limitation of any other rights or remedies available to
Lessor under this Lease or allowed at law or in equity or rights of
indemnification provided to Lessor in any agreement pursuant to which Lessor
purchased any of the Leased Property.  The payment and indemnification
obligations set forth in this Section 7.3 shall survive the expiration or
earlier termination of the Term.

     

    (l) Exculpation.  Notwithstanding
anything to the contrary in this Lease, Lessee shall not be liable for any
costs, loss, liability, damage or expense arising from or in connection with the
Clean-Up of any Pre-Existing Hazardous Substances or Pre-Existing Environmental
Conditions.

     

    ARTICLE
VIII

     

    8.1 Compliance with Legal and
Insurance Requirements.  In its use, maintenance, operation and
any alteration of the Leased Properties, Lessee, at its expense, promptly will
(a) comply with all Legal Requirements and Insurance Requirements, whether or
not compliance with them requires structural changes in any of the Leased
Improvements (which structural changes shall be subject to Lessor’s prior
written approval, which Lessor shall not unreasonably withhold or delay) or
interferes with or prevents the use and enjoyment of the Leased Properties, and
(b) procure, maintain and comply with all licenses, certificates of need,
provider agreements and other authorizations required for the use of the Leased
Properties and Lessee’s Personal Property for the Primary Intended Use, and for
the proper erection, installation, operation and maintenance of the Leased
Properties or any part thereof. The judgment of any court of competent
jurisdiction, or the admission of Lessee in any action or proceeding against
Lessee, whether or not Lessor is a party thereto, that Lessee has violated any
such Legal Requirements or Insurance Requirements shall be conclusive of that
fact as between Lessor and Lessee.

     

    8.2 Certain
Covenants.

     

    8.2.1 Tangible Net
Worth.  At all times during the Term, Lessee One and RE
Holdings shall maintain a Tangible Net Worth of at least Three Million Dollars
($3,000,000), and if at any time Lessee One’s or RE Holdings’ Tangible Net Worth
is less than such amount, within thirty (30) days Lessee shall cause the equity
holders of Lessee One or RE Holdings, as applicable, to contribute to Lessee
sufficient equity capital in the form of cash to cause Lessee One’s and RE
Holdings’ Tangible Net Worth to exceed such amount.  For purposes of
this Section, Tangible Net Worth includes the amount of any cash Security
Deposit.

     

    8.2.2 Cash Flow to Rent
Ratio. Lessee, the City View Operator and City View Owner on a
consolidated basis (but excluding from such calculation the Net Income and Base
Rent attributable to the OHI THI Facilities until July 1, 2009) shall maintain a
Cash Flow to Rent Ratio as determined quarterly on a cumulative basis for the
preceding four (4) calendar quarters during the Term of 1.25 or
more.   As illustration of the foregoing, the calculation of Cash
Flow to Rent Ratio shall (i) at the end of the current quarter and the first
through fourth quarters thereafter (which tests the period from date of this
Lease thru June 30, 2009), exclude the Net Income and Base Rent attributable to
the OHI THI Facilities, and (ii) at the end of the fifth quarter (which tests
the second thru fifth quarters after the date of this Lease, i.e., October 1,
2008 thru September 30, 2009),  exclude the Net Income and Base Rent
attributable to the OHI THI Facilities prior to July 1, 2009, but include the
period of July 1, 2009 thru September 30, 2009 for the OHI THI
Facilities.

     

    
      
        
        

      

      
        -38-

        
          

        

      

      
        
        

      

    

    8.2.3 Combined Cash Flow to Rent
Ratio.  Commencing with the quarter ending September 30, 2009,
Lessee, the City View Borrowers and the Maryland Borrowers on a consolidated
basis shall maintain a Combined Cash Flow to Rent Ratio as determined quarterly
on a cumulative basis for the preceding four (4) calendar quarters during the
Term of 1.25 or more.   As illustration of the foregoing, the
calculation of Combined Cash Flow to Rent Ratio shall at the end of the fifth
quarter (which tests the second thru fifth quarters after the date of this
Lease, i.e., October 1, 2008 thru September 30, 2009) exclude the Net Income and
Base attributable to the OHI THI Facilities prior to July 1, 2009, but include
the period of July 1, 2009 thru September 30, 2009 for the OHI THI
Facilities.  For purposes of clarification, this Section applies to RE
Holdings and it's subsidiaries, and Lessee One, and its
subsidiaries.

     

    8.2.4 Limitation of
Distributions.  At any time during the Term, none of Lessee or
any Guarantor shall make any Distributions to the holders of its equity
securities or any Affiliate if, as of the date of such Distribution or upon
giving effect to such Distribution, (a) an Event of Default has occurred and is
continuing or (b) an Unmatured Event of Default has occurred and is continuing;
provided, however, that so long as, as of the date of such Distribution or upon
giving effect to such Distribution, no Special Default has occurred and is
continuing, Lessee may make Tax Distributions.

     

    8.2.5 Indebtedness.  None
of Lessee, any Sublessee, HCREH, HCH and RE Holdings will create, incur or
suffer to exist any Indebtedness, except:

     

    (i) The
equipment financing permitted under Section 8.2.7;

     

    (ii) The
Working Capital Loan permitted under Section 6.4;
and

     

    (iii) The Other
Permitted Indebtedness.

     

    8.2.6 Guarantees
Prohibited. Except for guaranties of the Indebtedness permitted under
Section 8.2.5 and guaranties and assumption of
obligations in favor of Lessor and its Affiliates, neither Lessee nor any
Sublessee shall guarantee any Indebtedness of any Affiliate or other third
party.   Except for guaranties of Other Permitted Indebtedness
and guaranties and assumption of obligations in favor of Lessor and its
Affiliates, none of HCREH, HCH or any Guarantor shall guarantee any Indebtedness
of any Affiliate or other third party.

     

    8.2.7 Equipment
Financing.  The annual aggregate amount of principal, interest
and lease payments due from Lessee on any equipment financing at any Facility
shall not exceed an amount equal to Fifty Thousand Dollars ($50,000) per
Facility.

     

    
      
        
        

      

      
        -39-

        
          

        

      

      
        
        

      

    

    8.2.8 Loans from
Affiliates. Neither Lessee nor any Sublessee shall borrow money from any
Affiliate unless the obligations of Lessee or such Sublessee and the rights of
its Affiliates with respect to any such loan are subordinated to the rights of
Lessor pursuant to a written subordination agreement in form and substance
acceptable to Lessor.

     

    8.3 Minimum Qualified Capital
Expenditures.  Each Lease Year Lessee shall expend with respect
to each Facility at least Three Hundred Dollars ($300) per-licensed-bed for
Qualified Capital Expenditures to improve the Facilities, which amount shall be
increased each Lease Year, beginning with the second Lease Year, by the lesser
of (i) the proportionate to increases in the CPI (expressed as a percentage) or
(ii) two and one half percent (2.5%).

     

    8.4 Management Agreements and
Consulting Agreements.  Neither Lessee nor any Sublessee shall
enter into or terminate any Management Agreement or Consulting Agreement without
the prior written consent of Lessor and any Facility Mortgagee as to the
identity of the Manager or Consultant, as applicable, and the terms of such
agreement, and shall not amend, modify, or otherwise change the terms of any
Management Agreement or Consulting Agreement without the prior written consent
of Lessor and, in addition, as to any amendment, modification or other change
that directly or indirectly increases the compensation of the Manager or
Consultant or allows a change in the identity of the Manager or Consultant,
without the consent of any Facility Mortgagee, which consent Lessor and such
Facility Mortgagee may withhold in its or their sole discretion, and in no event
without the execution by Lessee, Manager or Consultant and Lessor of an
agreement, in form and substance satisfactory to Lessor and any Facility
Mortgagee, pursuant to which Manager’s or Consultant’s right to receive its
management or consulting fee is subordinated to the obligation of Lessee to pay
the Rent as and when required under this Lease.  Notwithstanding the
foregoing, Lessee or any Sublessee may enter into a Management Agreement or
Consulting Agreement with an Affiliate of Lessee without the written consent of
Lessor provided that: (1) such Management Agreement or Consulting Agreement is
subordinated to the rights of Lessor as provided for in this Section; and (2)
Lessee provides Lessor prior Notice of the entry into such Management Agreement
or Consulting Agreement and a copy of such agreement; provided, however, that if
such entity ceases to be an Affiliate of Lessee, then Lessee must acquire
Lessor’s written consent to such Management Agreement or Consulting Agreement
(which consent may then be withheld in Lessor’s sole
discretion).

     

    8.5 Other
Facilities.  Except for the City View Nursing and
Rehabilitation Center, 6606 Carnegie Avenue, Cleveland, Ohio 44103, neither
Lessee nor any Affiliate shall own, operate or manage any nursing home, rest
home, assisted living facility, subacute facility, retirement center or similar
health care facility within (i) one half mile radius of the Waterford Facility
and the LTACH Facility, (ii) ten (10) mile radius of the Crestwood Facility, and
(iii) within a two (2) mile radius of any of the other
Facilities.

     

    8.6 No Other
Business.  Lessee and the Sublessees only (but not any of their
Affiliates) shall not engage in any business other than the operation of the
Facilities.

     

    
      
        
        

      

      
        -40-

        
          

        

      

      
        
        

      

    

    8.7 Existence; No Fundamental
Change.  Lessee, the Sublessees, HCREH, HCH, AO, RE Leasing and
RE Holdings shall preserve and maintain their legal existence and such of their
rights, licenses and privileges as are material to their business and
operations; and qualify and remain qualified to do business in each jurisdiction
in which such qualification is material to their business and operations or the
ownership of their properties.  Except with the prior written approval
of Lessor, which may be withheld in Lessor’s sole and absolute discretion, none
of Lessee, the Sublessees, HCREH, HCH, AO, RE Leasing and RE Holdings will
fundamentally change the nature of its business, enter into any amalgamation,
merger, consolidation, reorganization or recapitalization, or reclassify its
capital stock or liquidate, wind up or dissolve itself (or suffer any
liquidation or dissolution), or convey, sell, assign, lease, transfer or
otherwise dispose of, in one transaction or a series of transactions, all or
substantially all of its business, property or assets, whether now owned or
hereafter acquired, or acquire by purchase or otherwise all or substantially all
the business, property or assets, of any Person or any shares of stock or other
equity securities of any Person.

     

    8.8 No
Investments.  Without the prior written consent of Lessor,
except for the Permitted Investments, none of Lessee, Sublessees, HCREH, HCH,
AO, RE Leasing and RE Holdings will, or will they permit any Subsidiary to, make
or suffer to exist any Investments (including without limitation, loans and
advances to, and other Investments in, Subsidiaries), or commitments therefor,
or to create any Subsidiary or to become or remain a partner in any partnership
or joint venture, or to make any Acquisition of any Person.

     

    8.9 Off-Balance Sheet
Liabilities.  Without the prior written consent of
Lessor,  Lessee, Sublessees, HCREH, HCH, AO, RE Leasing and RE
Holdings will not, nor will any of them permit any Subsidiary to, enter into or
suffer to exist any (i) Sale and Leaseback Transaction or (ii) any other
transaction pursuant to which it incurs or has incurred Off-Balance Sheet
Liabilities.

     

    8.10 Bank
Accounts.  Lessee and the Sublessees shall maintain separate
bank accounts from any other Person.  None of Lessee and the
Sublessees shall permit its or their assets, including cash, cash equivalents,
and the cash proceeds arising out of the operation of the Facilities, to be
commingled with the assets of any Person (other than Lessee and the Sublessees);
provided, however, that the personal allowance accounts of the residents of the
Facilities need not be maintained separately and may be commingled so long as
Lessee and the Sublessees maintain adequate written records with respect to such
personal allowance accounts.

     

    8.11 Liens.  Subject
to the provisions of Section 12.1 relating to
permitted contests, Lessee, the Sublessees, HCREH, HCH, AO, RE Leasing and RE
Holdings, shall not directly or indirectly create or allow to remain, and shall
promptly discharge at their expense, any lien, encumbrance, attachment, title
retention agreement or claim upon any assets of Lessee, the Sublessees, HCREH,
HCH, AO, RE Leasing and RE Holdings, excluding, however, (a) the liens and
security interests in favor of Lessor and its Affiliates, (b) intentionally
omitted, (c) liens for Impositions or for sums resulting from noncompliance with
Legal Requirements so long as (i) the same are not yet payable, or (ii) such
liens are in the process of being contested as permitted by Section 12.1, (e) liens of mechanics, laborers, materialmen,
suppliers or vendors for sums either disputed or not yet due, provided that any
such liens are in the process of being contested as permitted by Section 12.1, (f) liens permitted under Section 6.4 of this Agreement, and (g) liens or security
interests in assets (not including assets subject to the lien of the Pledge
Agreements) of HCREH, HCH and RE Holdings which secure Other Permitted
Indebtedness.

     

    
      
        
        

      

      
        -41-

        
          

        

      

      
        
        

      

    

    ARTICLE
IX                                

     

    9.1 Maintenance and
Repair.

     

    9.1.1 Lessee,
at its expense, will keep the Leased Properties, and all appurtenant
landscaping, private roadways, sidewalks and curbs that are under Lessee’s
control and Lessee’s Personal Property in good order and repair, whether or not
the need for such repairs arises out of Lessee’s use, any prior use, the
elements or the age of the Leased Property or any portion thereof, or any cause
whatsoever except the act or negligence of Lessor, and with reasonable
promptness shall make all necessary and appropriate repairs thereto of every
kind and nature, whether interior or exterior, structural or non-structural,
ordinary or extraordinary, foreseen or unforeseen, or arising by reason of a
condition existing prior to the Commencement Date (concealed or otherwise).
Lessee shall maintain, operate and otherwise manage the Leased Properties at all
times on a basis and in a manner consistent with the standards of competing
facilities of comparable age in the market areas served by the Leased
Properties.  All repairs shall, to the extent reasonably achievable,
be at least equivalent in quality to the original work or the property to be
repaired shall be replaced.  Lessee will not take or omit to take any
action the taking or omission of which might materially impair the value or the
usefulness of the Leased Properties or any parts thereof for the Primary
Intended Use.

     

    9.1.2 Lessor
shall not under any circumstances be required to maintain, build or rebuild any
improvements on the Leased Properties (or any private roadways, sidewalks or
curbs appurtenant thereto), or to make any repairs, replacements, alterations,
restorations or renewals of any nature or description to the Leased Properties,
whether ordinary or extraordinary, structural or non-structural, foreseen or
unforeseen, or upon any adjoining property, whether to provide lateral or other
support or abate a nuisance, or otherwise, or to make any expenditure whatsoever
with respect thereto, in connection with this Lease.  Lessee hereby
waives, to the extent permitted by law, the right to make repairs at the expense
of Lessor pursuant to any law in effect at the time of the execution of this
Lease or hereafter enacted.

     

    9.1.3 Nothing
contained in this Lease shall be construed as (a) constituting the consent or
request of Lessor, expressed or implied, to any contractor, subcontractor,
laborer, materialmen or vendor to or for the performance of any labor or
services or the furnishing of any materials or other property for the
construction, alteration, addition, repair or demolition of or to any Leased
Property or any part thereof, or (b) giving Lessee any right, power or
permission to contract for or permit the performance of any labor or services or
the furnishing of any materials or other property in such fashion as would
permit the making of any claim against Lessor in respect thereof or to make any
agreement that may create, or in any way be the basis for, any right, title,
interest, lien, claim or other encumbrance upon the estate of Lessor in the
Leased Properties or any portion thereof.  Lessor shall have the right
to give, record and post, as appropriate, notices of non-responsibility under
any mechanics’ and construction lien laws now or hereafter
existing.

     

    
      
        
        

      

      
        -42-

        
          

        

      

      
        
        

      

    

    9.1.4 Lessee
promptly shall replace any of the Leased Improvements or Lessor’s Personal
Property that becomes worn out, obsolete or unusable or unavailable for the
purpose for which intended. All replacements shall have a value and utility at
least equal to that of the items replaced and shall become part of the Leased
Properties immediately upon their acquisition by Lessee. Upon Lessor’s request,
Lessee promptly shall execute and deliver to Lessor a bill of sale or other
instrument establishing Lessor’s lien-free ownership of such replacements.
Lessee promptly shall repair all damage to a Leased Property incurred in the
course of such replacement.

     

    9.1.5 Lessee
will, upon the expiration or earlier termination of the Term, vacate and
surrender the Leased Properties to Lessor in the condition in which they were
originally received from Lessor, in good operating condition, ordinary wear and
tear excepted, except as repaired, rebuilt, restored, altered or added to as
permitted or required by the provisions of this Lease.

     

    9.2 Encroachments, Restrictions,
etc. If, at any time, any of the Leased Improvements are alleged to
encroach upon any property, street or right of way adjacent to a Leased
Property, or to violate any restrictive covenant, or to impair the rights of
others under any easement or right of way, Lessee promptly shall settle such
allegations or take such other lawful action as may be necessary in order to be
able to continue the use of a Leased Property for the Primary Intended Use
substantially in the manner and to the extent such Leased Property was being
used at the time of the assertion of such violation, impairment or encroachment;
provided, however, that no such action shall violate any other provision of this
Lease, and any alteration of a Leased Property must be made in conformity with
the applicable requirements of Article X.  Lessee shall not have any
claim against Lessor or offset against any of Lessee’s obligations under this
Lease with respect to any such violation, impairment or
encroachment.

     

    9.3 Lessor funding of Approved
Improvements.

     

    9.3.1 Prior to
the date of this Lease, Lessee has completed each Emory Improvement and Lessor
has reimbursed Lessee to the extent required on the Existing Lease for each
Emory Improvement.

     

    9.3.2 At any
time prior to December 31, 2009, upon written certification from Lessee to
Lessor that an Non-Escrow Improvement has been completed, in whole or in part, and upon
compliance with the procedures set forth in Section 9.3.4 below, so long as no Event of Default has
occurred and is continuing, Lessor shall reimburse Lessee an amount equal to the
Actual Cost of such Non-Escrow Improvement; provided, however, that Lessor’s
aggregate obligation to reimburse Lessee with respect to all Non-Escrow
Improvements shall not exceed Two Million Dollars ($2,000,000) in the
aggregate.  Any amounts so paid to Lessee by Lessor shall be used
solely to pay the costs of the Non-Escrow Improvements for which payment is
being made.

     

    
      
        
        

      

      
        -43-

        
          

        

      

      
        
        

      

    

    9.3.3 At
Closing, Lessor shall escrow with the Title Company the Escrowed Capex Funds
pursuant to an escrow agreement in form and substance acceptable to Lessor and
Lessee.   After the date of this Lease, Lessee shall propose the
specific Escrow Improvements for Lessor’s approval, which approval shall not be
unreasonably withheld, conditioned or delayed.  After receipt of
approval as to any specific Escrow Improvement, Lessee shall promptly undertake,
and complete each such Escrow Improvement on or before December 31,
2009.  Upon written certification from Lessee to Lender that an Escrow
Improvement has been completed, in whole or in part, and upon compliance with
the procedures set forth in Section 9.3.4, so long
as no Event of Default or Unmatured Event of Default has occurred and is
continuing, Lessee may withdraw an amount of Escrowed Capex Funds equal to the
amount agreed for such improvement.  Any amounts so paid to Lessee
shall be used first to pay the costs of the Escrow Improvements.  To
the extent the actual cost of all Escrow Improvement exceeds the amount of
Escrowed Capex Funds, then Lessee shall pay such cost
itself.

     

    9.3.4 Funds to
be disbursed by Lessor or from escrow for Approved Improvements shall be
disbursed in accordance with the following procedures:

     

    (1)           Lessee
may not request reimbursement more than once per month;

    

    (2)           With
each request for reimbursement, Lessee shall deliver a certification from an
officer of Lessee that (A) no Event of Default exists, and (B) no event has
occurred or condition exists that with the giving of notice or the passage of
time, or both, would constitute an Event of Default;

    

    (3)           Lessee
may not request reimbursement for less than Twenty Five Thousand ($25,000);
provided, however, that if all Approved Improvements are completed and the
amount remaining to be reimbursed is less than Twenty Five Thousand ($25,000)
then Lessee may request such lesser amount;

    

    (4)           The
Approved Improvements shall be done pursuant to plans and specifications and a
cost statement approved by Lessor;

    

    (5)           After
the first disbursement to Lessee, sworn statements and lien waivers in an amount
at least equal to the amount of funds previously paid to Lessee (or lien
subordination agreements pursuant to Ohio law) or such other adequate evidence
of payment shall be delivered to Lessor from all contractors, subcontractors and
material suppliers covering all labor and materials invoiced prior to the date
of the previous disbursement;

    

    (6)           Lessee
shall deliver to Lessor such other evidence as Lessor reasonably may request,
from time to time during the course of the work on the Approved Improvements, of
compliance with the approved plans and specifications, of the cost of work and
of the total amount needed to complete the Approved Improvements, and showing
that there are no liens against the Leased Properties arising in connection with
the work with respect to which the cost statement delivered to, and approved by,
Lessor does not provide for their payment; and

    

    
      
        
        

      

      
        -44-

        
          

        

      

      
        
        

      

    

    (7)           The
funds may be disbursed by Lessor or the Escrow Agent to Lessee or to the persons
entitled to receive payment thereof from Lessee.

    

    ARTICLE
X                                

     

    10.1 Construction of Alterations
and Additions to the Leased Properties.

     

    10.1.1 Lessee
shall not (a) make or permit to be made any structural alterations, improvements
or additions of or to the Leased Properties or any part thereof, or (b)
materially alter the plumbing, HVAC or electrical systems thereon or (c) make
any other alterations, improvements or additions the cost of which exceeds (i)
One Hundred Thousand ($100,000.00) Dollars per alteration, improvement or
addition, or (ii) One Hundred Thousand ($100,000.00) Dollars  at a
given Facility in any Lease Year, unless and until Lessee has (x) caused
complete plans and specifications therefor to have been prepared and submitted
to Lessor at least thirty (30) days before the planned start of construction
thereof, (y) obtained Lessor’s written approval thereof and the approval of any
Facility Mortgagee and (z), if required to do so by Lessor, provided Lessor with
reasonable assurance of the payment of the cost of any such alterations,
improvements or additions, in the form of a bond, letter of credit, cash deposit
or adequate evidence of financing for the alteration, improvement or addition.
If Lessor requires a deposit, Lessor shall retain and disburse the amount
deposited in the same manner as is provided for insurance proceeds in Section
14.6.  If the deposit is reasonably determined by Lessor at any time
to be insufficient for the completion of the alteration, improvement or
addition, Lessee immediately shall increase the deposit to the amount reasonably
required by Lessor. Lessee shall be responsible for the completion of such
improvements in accordance with the plans and specifications approved by Lessor,
and promptly shall correct any failure with respect thereto.

     

    10.1.2 Alterations
and improvements not falling within the categories described in the first
sentence of Section 10.1.1 may be made by Lessee without the prior approval of
Lessor, but Lessee shall give Lessor at least thirty (30) days prior written
Notice of any such alterations and improvements.

     

    10.1.3 All
alterations, improvements and additions shall (a) be constructed in a first
class, workmanlike, manner, in compliance with all Insurance Requirements and
Legal Requirements, (b) be in keeping with the character of the Leased
Properties and the area in which the Leased Property in question is located and
(c) be designed and constructed so that the value of the Leased Properties will
not be diminished and the Primary Intended Use of the Leased Properties will not
be changed.  All improvements, alterations and additions immediately
shall become a part of the Leased Properties.

     

    10.1.4 Lessee
shall have no claim against Lessor at any time in respect of the cost or value
of any improvement, alteration or addition.  There shall be no
adjustment in the Rent by reason of any such improvement, alteration or
addition.  With Lessor’s consent, expenditures made by Lessee pursuant
to this Article X may be included as capital expenditures for purposes of
inclusion in the capital expenditures budget for the Facilities and for
measuring compliance with the obligations of Lessee set forth in Section 8.3 of
this Lease.

     

    
      
        
        

      

      
        -45-

        
          

        

      

      
        
        

      

    

    10.1.5 In
connection with any alteration that involves the removal, demolition or
disturbance of any asbestos-containing material, Lessee shall cause to be
prepared at its expense a full asbestos assessment applicable to such alteration
and shall carry out such asbestos monitoring and maintenance program as
reasonably shall be required thereafter in light of the results of such
assessment.

     

    ARTICLE
XI                                

     

    11.1 Liens.  Without
the consent of Lessor or as expressly permitted elsewhere herein, Lessee will
not directly or indirectly create or allow to remain and will promptly discharge
at its expense any lien, encumbrance, attachment, title retention agreement or
claim upon the Leased Properties, and any attachment, levy, claim or encumbrance
in respect of the Rent, except for (a) Permitted Encumbrances, (b) liens of
mechanics, laborers, materialmen, suppliers or vendors for sums not yet due, and
(c) liens created by the malfeasance or negligence of
Lessor.

     

    ARTICLE
XII                                

     

    12.1 Permitted
Contests.  Lessee, on its own or on Lessor’s behalf (or in
Lessor’s name), but at Lessee’s sole cost and expense, shall have the right to
contest, by appropriate legal proceedings conducted in good faith and with due
diligence, the amount or validity of any real or personal property assessment,
Imposition, Legal Requirement or Insurance Requirement, or any lien, attachment,
levy, encumbrance, charge or claim or any encroachment or restriction burdening
the Leased Property, provided: (a) prior Notice of such contest is given to
Lessor; (b) the Leased Properties would not be in any danger of being sold,
forfeited or attached as a result of such contest, and there is no risk to
Lessor of a loss of or interruption in the payment of Rent; (c) in the case of
an unpaid Imposition or other lien, attachment, levy, encumbrance, charge or
claim, collection thereof is suspended during the pendency of such contest; (d)
in the case of a contest of a Legal Requirement, compliance may legally be
delayed pending such contest and pending such contest no license, permit,
approval, certificate of need, certificate of reimbursement or other
authorization necessary to operate any Facility as a provider of health care
services in accordance with its Primary Intended Use may be irrevocably
suspended or revoked, or its right to so operate a Facility or to accept
patients irrevocably suspended. Upon request of Lessor, after the occurrence of
an Event of Default or Unmatured Event of Default, and while it continues,
Lessee shall deposit funds or assure Lessor in some other manner reasonably
satisfactory to Lessor that the amount to be paid by Lessee that is the subject
of a contested Imposition, Legal Requirement, Insurance Requirement or Claim,
together with interest and penalties, if any, thereon, and any and all costs for
which Lessee is responsible will be paid if and when required upon the
conclusion of such contest. Lessee shall defend, indemnify and save harmless
Lessor from all costs or expenses arising out of or in connection with any such
contest, including but not limited to attorneys’ fees. If at any time Lessor
reasonably determines that payment of any Imposition or other lien, attachment,
levy, encumbrance, charge or claim, or compliance with any Legal or Insurance
Requirement being contested by Lessee is necessary in order to prevent loss of
any of the Leased Properties or Rent or civil or criminal penalties or other
damage (including revocation or suspension of any license, permit, approval,
certificate of need, certificate of reimbursement or other authorization
necessary to operate any Facility as a provider of health care services in
accordance with its Primary Intended Use or suspension of any right to accept
patients), upon such prior Notice to Lessee as is reasonable in the
circumstances Lessor may pay such amount, require Lessee to comply with such
Legal or Insurance Requirement or take such other action as it may deem
necessary to prevent such loss or damage. If reasonably necessary, upon Lessee’s
written request, Lessor, at Lessee’s expense, shall cooperate with Lessee in a
permitted contest, provided Lessee upon demand makes arrangements satisfactory
to Lessor to assure the reimbursement of any and all Lessor’s costs incurred in
cooperating with Lessee in such contest.

     

    
      
        
        

      

      
        -46-

        
          

        

      

      
        
        

      

    

    12.2 Lessor’s Requirement for
Deposits.  After an Event of Default or Unmatured Event of
Default and while it continues, Lessee shall deposit with Lessor monthly, at the
time of its payments of Base Rent, a pro rata portion of the amounts required to
comply with Insurance Requirements, Impositions, Legal Requirements and Lessee’s
obligations under Section 8.3 of this Lease, and when such obligations become
due, Lessor shall pay them (to the extent of the deposit) upon Notice from
Lessee requesting such payment.  If sufficient funds have not been
deposited to cover the amount of the obligations due at least thirty (30) days
in advance of the due date, Lessee immediately shall deposit the same with
Lessor upon Notice from Lessor. Lessor shall not be obligated to segregate such
deposited funds from its other funds or to pay Lessee any interest on any
deposit held by Lessor.  Upon an Event of Default, any of the funds
remaining on deposit may be applied under this Lease in any manner and in such
priority as Lessor may determine in its sole discretion.

     

    ARTICLE
XIII                                

     

    13.1 General Insurance
Requirements.  Lessee shall keep the Leased Properties, and all
property located in or on the Leased Properties, including Lessor’s Personal
Property and Lessee’s Personal Property, insured with insurance meeting the
following requirements: (a) all insurance shall be written by companies
authorized to do insurance business in the applicable States and having a rating
classification of not less than A- and a financial size category of “Class X”,
according to the then most recent issue of Best’s Key Rating Guide; (b) all
policies must name Lessor as an additional insured, and name as an additional
insured any Facility Mortgagee by way of a standard form of mortgagee’s loss
payable endorsement in use in the applicable States and in accordance with any
such other requirements as may be established by such Facility
Mortgagee.  However, if requested by Lessor and available on a
commercially reasonable basis, all public liability and property damage
insurance shall contain a provision that Lessor, although named as an insured,
nevertheless shall be entitled to recovery for loss, damage or injury to Lessor,
its servants, agents and employees by reason of the negligence of Lessee or
Lessor; (c) losses must be payable to Lessor or Lessee as provided in Article
XIV, and loss adjustments shall require the written consent of Lessor, any
Facility Mortgagee and, provided it is not then in default, Lessee, which
consent shall not be unreasonably withheld by either Lessor or Lessee; (d) each
insurer must agree that it will give Lessor and any Facility Mortgagee at least
sixty (60) days’ written Notice before its policy shall be altered, allowed to
expire or canceled; (e) the amount of any deductible or retention must be
approved by Lessor prior to the issuance of any policy; and (f) the form of all
policies shall be approved by Lessor, whose approval shall not unreasonably be
withheld, and by any Facility Mortgagee.

     

    
      
        
        

      

      
        -47-

        
          

        

      

      
        
        

      

    

    13.2 Risks to be
Insured.  The policies covering the Leased Properties and
Lessee’s Personal Property shall insure against the following
risks:

     

    13.2.1 Loss or
damage by fire, vandalism and malicious mischief, earthquake, extended coverage
perils commonly known as “Special Risk,” and all physical loss perils normally
included in such Special Risk insurance, including but not limited to sprinkler
leakage, in an amount not less than one hundred percent (100%) of Replacement
Cost (provided that Lessor shall have the right from time to time, but no more
frequently than once in any period of three (3) consecutive Lease Years, to have
Replacement Cost reasonably redetermined by the fire insurance company then
carrying the largest amount of fire insurance on the Leased Properties (Lessee
hereby agreeing to pay the fee, if any, for such insurer), which determination
shall be final and binding on the parties hereto, and upon such determination
Lessee immediately shall increase, but not decrease, the amount of the insurance
carried pursuant to this Section 13.2.1 to the amount so determined, subject to
the approval of any Facility Mortgagee;

     

    13.2.2 Broad
form comprehensive boiler and machinery insurance on a blanket repair and
replace basis, with limits for each accident in an amount not less than one
hundred percent (100%) of Replacement Cost;

     

    13.2.3 Loss of
rental under a rental value insurance policy covering risk of loss during
reconstruction necessitated by the occurrence of any of the hazards described in
Sections 13.2.1 or 13.2.2 (but in no event for a period less than twelve (12)
months) in an amount sufficient to prevent Lessor and Lessee from becoming a
co-insurer;

     

    13.2.4 Claims
for bodily injury (including resulting death), personal injury or property
damage under a policy of commercial general public liability insurance with a
combined single limit per occurrence in respect of bodily injury and death and
property damage of One Million Dollars ($1,000,000), and an aggregate limitation
of Seven Million Dollars ($7,000,000), which insurance shall insure Lessee’s
contractual liability to Lessor under the indemnity provisions of this Lease
and, if written on a “claims-made” basis, Lessee also shall provide continuous
liability coverage for claims arising during the Term either by obtaining an
endorsement providing for an extended reporting period reasonably acceptable to
Lessor in the event such policy is canceled or not renewed for any reason
whatsoever, or by obtaining “tail” insurance coverage converting the policies to
“occurrence” basis policies providing coverage for a period of at least three
(3) years beyond the expiration of the Term;

     

    13.2.5 Claims
arising out of malpractice in an amount not less than One Million Dollars
($1,000,000) for each person and for each occurrence, and with an aggregate
limitation of Five Million Five Hundred Thousand Dollars ($5,500,000), and, if
written on a “claims-made” basis, Lessee also shall provide continuous liability
coverage for claims arising during the Term either by obtaining an endorsement
providing for an extended reporting period reasonably acceptable to Lessor in
the event such policy is canceled or not renewed for any reason whatsoever, or
by obtaining “tail” insurance coverage converting the policies to “occurrence”
basis policies providing coverage for a period of at least three (3) years
beyond the expiration of the Term;

     

    
      
        
        

      

      
        -48-

        
          

        

      

      
        
        

      

    

    13.2.6 Flood
(with respect to any portions of the Leased Properties located in whole or in
part within a designated flood plain area) and such other hazards and in such
amounts as may be customary for comparable properties in the
area;

     

    13.2.7 During
such time as Lessee is constructing any improvements, (a) worker’s compensation
insurance and employers’ liability insurance covering all persons employed in
connection with the improvements in statutory limits, (b) a completed operations
endorsement to the commercial general liability and property damage insurance
policies referred to above, (c) builder’s risk insurance, completed value form,
covering all physical loss, in an amount satisfactory to Lessor, and (d) such
other insurance, in such amounts, as Lessor deems necessary to protect Lessor’s
interest in the Leased Properties from any act or omission of Lessee’s
contractors or subcontractors, and certificates of insurance evidencing such
coverage, in form satisfactory to Lessor, shall be presented to Lessor prior to
the commencement of construction of such improvements;

     

    13.2.8 Primary
automobile liability insurance with limits of One Million Dollars
($1,000,000.00) per occurrence each for owned and non-owned and hired
vehicles;

     

    13.2.9 Loss or
damage commonly covered by blanket crime insurance including dishonesty, loss of
money orders or paper currency and depositor’s forgery, with a limit of not less
than Five Hundred Thousand Dollars ($500,000.00).

     

    13.3 Payment of Premiums; Copies
of Policies; Certificates. Subject to Section 12.2 of this Lease, Lessee
shall pay when due all of the premiums for the insurance required by this Lease,
and shall deliver to Lessor and to any Facility Mortgagee requesting such
evidence, certificates of insurance in form satisfactory to Lessor and such
Facility Mortgagee. Copies of the policies of insurance required by this Lease
shall be delivered to Lessor within sixty (60) days of their effective date and certificates thereof
shall be delivered to Lessor on or before their effective date (and, with
respect to any renewal policy prior to the expiration of the existing policy),
and in the event of the failure of Lessee either to carry the required insurance
or pay the premiums therefor, or to deliver copies of policies or certificates
to Lessor as required, Lessor shall be entitled, but shall have no obligation,
to obtain such insurance and pay the premiums therefor when due, in which event
Lessee shall repay to Lessor the premiums upon written demand therefor as
Additional Charges.

     

    13.4 Umbrella Policies. If
Lessee chooses to carry umbrella liability coverage to obtain the limits of
liability required under this Lease, the umbrella policies must provide coverage
in the same manner as the primary commercial general liability policy and must
contain no exclusions in addition to, or limitations materially different than,
those of the primary policy.

     

    13.5 Additional
Insurance.  In addition to the insurance described above,
Lessee shall maintain such insurance as may be required from time to time by any
Facility Mortgagee and shall at all times comply with all Legal Requirements
with respect to worker’s compensation insurance coverage.

     

    
      
        
        

      

      
        -49-

        
          

        

      

      
        
        

      

    

    13.6 No Liability; Waiver of
Subrogation.  Lessor shall have no liability to Lessee, and,
provided Lessee provides the insurance required of it by this Lease, Lessee
shall have no liability to Lessor, regardless of the cause, for any loss or
expense resulting from or in connection with damage to or the destruction or
other loss of any Leased Property or Lessee’s Personal Property, and neither
party will have any right or claim against the other for any such loss or
expense by way of subrogation. Each insurance policy carried by either party
covering any of the Leased Properties and Lessee’s Personal Property, including
without limitation, contents, fire and casualty insurance, shall contain an
express waiver of any right of subrogation on the part of the insurer against
the other party.  Lessee shall pay any additional costs or charges for
obtaining such waiver.

     

    13.7 Increase in
Limits.  If an independent study prepared by a third party with
a knowledge of the long term care insurance industry in the State of Ohio or
Pennsylvania which is reasonably acceptable to Lessor and Lessee determines that
the limits of the personal injury or property damage - public liability
insurance in such state then being carried are insufficient, and that such
increased coverages are available in the marketplace at commercially reasonable
rates, then upon Notice from Lessor, Lessee shall cause such limits to be
increased to the level specified in such Notice until further increase pursuant
to the provisions of this Section.  Any such independent study shall
be paid for by Lessor.

     

    13.8 Blanket
Policy.  Any insurance required by this Lease may be provided
by so-called blanket policies of insurance carried by Lessee; provided, however,
that the coverage afforded Lessor thereby may not be less than or materially
different from that which would be provided by separate policies meeting the
requirements of this Lease, and provided further that such policies meet the
requirements of all Facility Mortgages.

     

    13.9 No Separate
Insurance.

     

    13.9.1 Lessee
shall not, on its own initiative or pursuant to the request or requirement of
any third party, take out separate insurance concurrent in form or contributing
in the event of loss with that required by this Lease, to be furnished by, or
that may reasonably be required to be furnished by, Lessee, or increase the
amount of any then existing insurance by securing an additional policy or
additional policies, unless all parties having an insurable interest in the
subject matter of the insurance, including in all cases Lessor and all Facility
Mortgagees, are named therein as additional insureds, and losses are payable
thereunder in the same manner as losses are payable under this
Lease.

     

    13.9.2 Nothing
herein shall prohibit Lessee, upon Notice to Lessor, from (a) securing insurance
required to be carried hereby with higher limits of liability than required in
this Lease, or (b) securing insurance against risks not required to be insured
pursuant to this Lease, and as to such insurance, Lessor and any Facility
Mortgagee need not be included therein as additional insureds, nor must losses
thereunder be payable in the same manner as losses are payable under this Lease,
except to the extent required to avoid a default under a Facility Mortgage or
any other encumbrance.

     

    
      
        
        

      

      
        -50-

        
          

        

      

      
        
        

      

    

    13.10 Captive
Insurance.  Lessor consents to Lessee insuring the coverages
required by Sections 13.2.4 and 13.2.5 through a “segregated cell” captive under
common control with Lessee, which may not meet the AmBest rating requirement set
forth in Section 13.1, provided that (a) such
captive will be licensed in any state in which such captive does business to the
extent required by law, (b) the organization and capitalization of such captive
is reasonably acceptable to Lessor, and (c) the insurance coverages otherwise
comply with this Article.   If at any time Lessee is providing
the coverages required by Sections 13.2.4 and 13.2.5 through a captive insurance company, Lessor
shall be entitled (but not required) to appoint one member to the advisory board
of such captive insurance company.

     

    ARTICLE
XIV                                           

     

    14.1 Insurance
Proceeds.  Net Proceeds shall be paid to Lessor and held,
disbursed or retained by Lessor as provided herein. If the Net Proceeds are less
than the Approval Threshold, and no Event of Default has occurred and is
continuing, Lessor shall pay the Net Proceeds to Lessee promptly upon Lessee’s
completion of the restoration of the damaged or destroyed Leased
Property.  If the Net Proceeds equal or exceed the Approval Threshold,
and no Event of Default has occurred and is continuing, the Net Proceeds shall
be made available for restoration or repair as provided in Section 14.6. Within
fifteen (15) days of the receipt of the Net Proceeds of Special Risk Insurance,
Lessor and Lessee shall agree as to the portion thereof, if any, attributable to
the Lessee’s Personal Property that Lessee is not required and does not elect to
restore or replace, and if they cannot agree they shall submit the matter to
arbitration pursuant to Article XXXV hereof, and the portion of the proceeds of
such Special Risk Insurance agreed or determined by arbitration to be
attributable to the Lessee’s Personal Property that Lessee is not required and
does not elect to restore or replace shall be paid to
Lessee.

     

    14.2 Restoration in the Event of
Damage or
Destruction.                                                                                                           If
all or any portion of a Leased Property is damaged by fire or other casualty,
Lessee shall: (a) give Lessor Notice of such damage or destruction within five
(5) Business Days of the occurrence thereof; (b) within thirty (30) Business
Days of the occurrence commence the restoration of such Leased Property; and (c)
thereafter proceed diligently to complete such restoration as quickly as
reasonably possible, but in any event within one hundred eighty (180) days of
the occurrence, to the end that the Leased Property is in substantially the same
(or better) condition as the Leased Property was in immediately prior to the
damage or destruction. Regardless of the anticipated cost thereof, if the
restoration of a Leased Property requires any modification of structural
elements, prior to commencing such modification Lessee shall obtain Lessor’s
written approval of the plans and specifications therefor.

     

    14.3 Restoration of Lessee’s
Property.  If Lessee is required to restore a Leased Property,
Lessee also concurrently shall restore any of Lessee’s Personal Property that is
integral to the Primary Intended Use of such Leased Property at the time of the
damage or destruction.

     

    14.4 No Abatement of
Rent.  There shall be no abatement of Rent by reason of any
damage to or the partial or total destruction of any Leased
Property.

     

    
      
        
        

      

      
        -51-

        
          

        

      

      
        
        

      

    

    14.5 Waiver.  Except
as provided elsewhere in this Lease, Lessee hereby waives any statutory or
common law rights of termination that may arise by reason of any damage to or
destruction of a Leased Property.

     

    14.6 Disbursement of Insurance
Proceeds Equal to or Greater Than The Approval Threshold.  If
Lessee restores or repairs a Leased Property pursuant to this Article XIV, and
if the Net Proceeds equal or exceed the Approval Threshold, the restoration or
repair and disbursement of funds to Lessee shall be in accordance with the
following procedures:

     

    (a) The
restoration or repair work shall be done pursuant to plans and specifications
approved by Lessor and a certified construction cost statement, to be obtained
by Lessee from a contractor reasonably acceptable to Lessor, showing the total
cost of the restoration or repair; to the extent the cost exceeds the Net
Proceeds, Lessee shall deposit with Lessor the amount of the excess cost, and
Lessor shall disburse the funds so deposited in payment of the costs of
restoration or repair before any disbursement of Net
Proceeds.

     

    (b) Construction
Funds shall be made available, subject to a ten percent (10%) holdback, to
Lessee upon request, but no more frequently than monthly, as the restoration and
repair work progresses pursuant to certificates, in form and substance
reasonably acceptable to Lessor, of an architect selected by Lessee and
reasonably acceptable to Lessor (such architect to be, in the reasonable
judgment of Lessor, highly qualified in the design and construction of the type
of facility being repaired).

     

    (c) After the
first disbursement to Lessee, sworn statements and lien waivers in an amount at
least equal to the amount of Construction Funds previously paid to Lessee shall
be delivered to Lessor from all contractors, subcontractors and material
suppliers covering all labor and materials furnished through the date of the
previous disbursement.

     

    (d) Lessee
shall deliver to Lessor such other evidence as Lessor reasonably may request,
from time to time during the course of the restoration and repair, as to the
progress of the work, compliance with the approved plans and specifications, the
cost of restoration and repair and the total amount needed to complete the
restoration and repair, and showing that there are no liens against the Leased
Property arising in connection with the restoration and repair and that the cost
of the restoration and repair at least equals the total amount of Construction
Funds then disbursed to Lessee hereunder.

     

    (e) If the
Construction Funds are at any time determined by Lessor to be inadequate for
payment in full of all labor and materials for the restoration and repair,
Lessee immediately shall pay the amount of the deficiency to Lessor to be held
and disbursed as Construction Funds prior to the disbursement of any other
Construction Funds then held by Lessor.

     

    (f) The
Construction Funds may be disbursed by Lessor to Lessee or to the persons
entitled to receive payment thereof from Lessee, and such disbursement in either
case may be made directly or through a third party escrow agent, such as, but
not limited to, a title insurance company, or its agent, all as Lessor may
determine in its sole discretion.  Provided Lessee is not in default
hereunder, any excess Construction Funds shall be paid to Lessee upon completion
of the restoration or repair.

     

    
      
        
        

      

      
        -52-

        
          

        

      

      
        
        

      

    

    (g) If Lessee
at any time fails to perform promptly and fully the conditions and covenants set
forth in subparagraphs (a) through (f) above, and the failure is not corrected
within ten (10) days of written Notice thereof, or if during the restoration or
repair an Event of Default occurs, Lessor may, at its option, immediately cease
making any further payments to Lessee for the restoration and
repair.

     

    (h) Lessor
may reimburse itself out of the Construction Funds for its reasonable expenses
incurred in administering the Construction Funds and inspecting the restoration
and repair work, including without limitation attorneys’ and other professional
fees and escrow fees and expenses.

     

    14.7 Net Proceeds Paid to
Facility Mortgagee.  Notwithstanding anything in this Lease to
the contrary, if any Facility Mortgagee is entitled to any Net Proceeds or any
portion thereof under the terms of any Facility Mortgage, the Net Proceeds shall
be applied, held and/or disbursed in accordance with the terms of the Facility
Mortgage. Lessor shall make commercially reasonable efforts to cause the Net
Proceeds to be applied to the restoration of the Leased
Property.

     

    ARTICLE
XV                                

     

    15.1 Total Taking or Other Taking
with Leased Property Rendered Unsuitable for Its Primary Intended
Use.  If title to the fee of the whole of a Leased Property is
Taken, this Lease shall cease and terminate as to the Leased Property Taken as
of the Date of Taking by the Condemnor, and Rent shall be apportioned as of the
termination date. If title to the fee of less than the whole of a Leased
Property is Taken, but such Leased Property is rendered Unsuitable for Its
Primary Intended Use as a result of the Partial Taking, each of Lessee and
Lessor shall have the option, which shall be exercisable by written Notice to
the other at any time prior to the first to occur of the taking of possession
by, or the date of vesting of title in, the Condemnor, to terminate this Lease
with respect to such Leased Property as of the date so determined, in which
event this Lease shall so cease and terminate with respect to that Leased
Property as of the earlier of the date specified in the Notice or the date on
which possession is taken by the Condemnor.  If this Lease is so
terminated as to a Leased Property, Rent shall be apportioned as of the
termination date.

     

    15.2 Allocation of
Award.  The total Award made with respect to all or any portion
of a Leased Property or for loss of Rent, or for loss of business, shall be
solely the property of and payable to Lessor or, if so provided in a Facility
Mortgage, to the Facility Mortgagee.  Nothing contained in this lease
will be deemed to create any additional interest in Lessee, or entitle Lessee to
any payment based on the value of the unexpired term or so-called “bonus value”
to Lessee of this Lease.  Any Award made for the taking of Lessee’s
Personal Property or for removal and relocation expenses of Lessee in any such
proceedings, shall be payable to Lessee. In any proceedings with respect to an
Award, each of Lessor and Lessee shall seek its own Award in conformity
herewith, at its own expense.  Notwithstanding the foregoing, Lessee
may pursue a claim for loss of its business, provided that under the laws of the
State, such claim will not diminish the Award to Lessor.

     

    
      
        
        

      

      
        -53-

        
          

        

      

      
        
        

      

    

    15.3 Partial
Taking.  In the event of a Partial Taking, Lessee, at its own
cost and expense, shall, within sixty (60) days of the first to occur of the
taking of possession by, or the date of vesting of title in, the Condemnor,
commence the restoration of the affected Leased Property to a complete
architectural unit of the same general character and condition (as nearly as may
be possible under the circumstances) as existed immediately prior to the Partial
Taking, and complete such restoration with all reasonable dispatch, but in any
event within one hundred eighty (180) days of the date on which such Notice is
given.  Lessor shall contribute to the cost of restoration only such
portion of the Award as is made therefor.  As long as no Event of
Default has occurred and is continuing, if such portion of the Award is in an
amount less than the Approval Threshold, Lessor shall pay the same to Lessee
upon completion of such restoration.  As long as no Event of Default
has occurred and is continuing, if such portion of the Award is in an amount
equal to or greater than the Approval Threshold, Lessor shall make such portion
of the Award available to Lessee in the manner provided in Section 14.6 with
respect to Net Proceeds in excess of the Approval
Threshold.  Notwithstanding anything to the contrary in this Lease, if
the Fair Market Rent of the affected Leased Property is reduced by reason of the
Partial Taking, from and after the date on which possession is taken by the
Condemnor the annualized Base Rent shall be reduced by an amount determined by
dividing the portion of the Award made to Lessor expressly for such reduction in
Fair Market Rent by the Capitalization Rate.

     

    15.4 Temporary
Taking.  If there is a Partial Taking of possession or the use
of all or part of a Leased Property, but the fee of such Leased Property is not
Taken in whole or in part, until such Partial Taking of possession or use
continues for more than six (6) months, all the provisions of this Lease shall
remain in full force and effect and the entire amount of any Award made for such
Partial Taking shall be paid to Lessee provided there is then no Event of
Default. Upon the termination of any such period of temporary use or occupancy,
Lessee at its sole cost and expense shall restore the affected Leased Property,
as nearly as may be reasonably possible, to the condition existing immediately
prior to such Partial Taking.  If any such Partial Taking continues
for longer than six (6) months, and fifty percent (50%) or more of the patient
capacity of the affected Facility is thereby rendered Unsuitable for Its Primary
Use, this Lease shall cease and terminate as to the affected Leased Property
only as of the last day of the sixth (6th) month,
but if less than fifty percent (50%) of the patient capacity of such Facility is
thereby rendered Unsuitable for Its Primary Use, each of Lessee and Lessor shall
have the option, which shall be exercisable by giving written Notice to the
other at least sixty (60) days prior written Notice to the other, at any time
prior to the end of the temporary Partial Taking, to terminate this Lease as to
the affected Leased Property of the date set forth in such Notice, and Lessee
shall be entitled to any Award made for the period of such temporary Partial
Taking prior to the date of termination of the Lease. Rent shall not abate
during the period of any temporary Partial Taking.

     

    15.5 Awards Paid to Facility
Mortgagee.  Notwithstanding anything herein to the contrary, if
any Facility Mortgagee is entitled to any Award or any portion thereof under the
terms of any Facility Mortgage, such Award shall be applied, held and/or
disbursed in accordance with the terms of the Facility Mortgage.  If
the Facility Mortgagee elects to apply the Award to the indebtedness secured by
the Facility Mortgage and the Award represents an Award for Partial Taking as
described in Section 15.3 above, Lessee shall restore the affected Facility as
nearly as possible under the circumstances to a complete architectural unit of
the same general character and condition as that of the Facility existing
immediately prior to such Taking.  In any such restoration, Lessee
shall receive full credit for any portion of any award retained by Lessor and
the Facility Mortgagee.

     

    
      
        
        

      

      
        -54-

        
          

        

      

      
        
        

      

    

    ARTICLE
XVI                                           

     

    16.1 Lessor’s Rights Upon an
Event of Default. If an Event of Default occurs and while it continues,
Lessor may terminate this Lease by giving Lessee a Notice of Termination, and in
such event the Term shall end and all rights of Lessee under this Lease shall
cease on the Termination Date.  The Notice of Termination shall be in
lieu of and not in addition to any notice required by the laws of any State as a
condition to bringing an action for possession of the Leased Premises or to
recover damages under this Lease.  In addition to Lessor’s right to
terminate this Lease, Lessor shall have all other rights set forth in this Lease
and all remedies available at law and in equity.

     

    Lessee
shall, to the extent permitted by law, pay as Additional Charges all costs and
expenses incurred by or on behalf of Lessor, including, without limitation,
reasonable attorneys’ fees and expenses (whether or not litigation is commenced,
and if litigation is commenced, including fees and expenses incurred in appeals
and post-judgment proceedings) as a result of any default of Lessee
hereunder.

     

    No Event
of Default (other than a failure to make payment of money) shall be deemed to
exist if and for so long as Lessee is unable to prevent such Event of Default
because of Force Majeure, provided that, upon the cessation of the Force
Majeure, Lessee immediately shall proceed to remedy the action or condition
giving rise to the Event of Default within the applicable cure period as
extended by the Force Majeure.

     

    16.2 Certain
Remedies.  If an Event of Default occurs, whether or not this
Lease has been terminated pursuant to Section 16.1, if required to do so by
Lessor Lessee immediately shall surrender the Leased Properties to Lessor in the
condition required by Section 9.1.5 and quit the same, and Lessor may enter upon
and repossess the Leased Properties by reasonable force, summary proceedings,
ejectment or otherwise, and may remove Lessee and all other persons and any and
all personal properties from the Leased Properties, subject to rights of any
residents or patients and to any Legal Requirements. In addition to all other
remedies set forth or referred to in this Article XVI, Lessor shall have the
right to suspend any Management Agreement as to one or more or all Facilities
and to retain a manager of the affected Facility or all Facilities at the
expense of Lessee, such manager to serve for such term and at such compensation
as Lessor reasonably determines is necessary under the
circumstances.

     

    16.3 Damages.  None
of (a) the termination of this Lease pursuant to Section 16.1, (b) the
repossession of the Leased Properties, (c) the failure of Lessor to relet the
Leased Properties, (d) the reletting of all or any portion thereof, or (v) the
failure of Lessor to collect or receive any rentals due upon such any reletting,
shall relieve Lessee of its liability and obligations hereunder, all of which
shall survive any such termination, repossession or reletting.  If
this Lease is terminated by Lessor, Lessee immediately shall pay to Lessor all
Rent due and payable with respect to the Leased Properties to and including the
Termination Date, including without limitation all interest and late charges
payable under Section 3.3 hereof with respect to any late payment of such
Rent.  Lessee also shall pay to Lessor, as liquidated damages, at
Lessor’s option, either:

     

    
      
        
        

      

      
        -55-

        
          

        

      

      
        
        

      

    

    (A)           The
sum of:

     

    (i) Lessor’s
Interim Rent Loss, minus Net Reletting Proceeds for such period, and minus the
portion of Lessor’s Interim Rent Loss, if any, that Lessee proves reasonably
could have been mitigated by Lessor, plus

     

    (ii) the
Present Value on the Judgment Date of Lessor’s Future Rent Loss, assuming the
CPI were to increase two and one half (2.5) percentage points per Lease Year
from the Judgment Date through the Expiration Date, minus the Present Value on
the Termination Date of the portion of  Lessor’s Future Rent Loss that
Lessee proves reasonably could be mitigated by Lessor;

     

    or

     

    (B)           Each
month between the Termination Date and the Expiration Date, Lessor’s Monthly
Rent Loss, minus the Net Reletting Proceeds for such month, and minus the
portion, if any, of Lessor’s Monthly Rent Loss that Lessee proves reasonably
could have been avoided. Any suit brought to recover liquidated damages payable
under this subsection (B) shall not prejudice Lessor’s right to collect
liquidated damages for subsequent months in a similar proceeding.

     

    16.4 Waiver.  If
this Lease is terminated pursuant to Section 16.1, Lessee waives, to the extent
permitted by applicable law, (a) any right of reentry, repossession or
redesignation, (b) any right to a trial by jury in the event of summary
proceedings to enforce the remedies set forth in this Article XVI, and (c) the
benefit of any laws now or hereafter in force exempting property from liability
for rent or for debt.  Acceptance of Rent at any time does not
prejudice or remove any right of Lessor as to any right or remedy.  No
course of conduct shall be held to bar Lessor from literal enforcement of the
terms of this Lease.

     

    16.5 Application of
Funds.  Any payments received by Lessor under any of the
provisions of this Lease during the existence or continuance of any Event of
Default shall be applied to Lessee’s obligations in the order that Lessor
determines in its sole discretion or as may be prescribed by
law.

     

    16.6 Bankruptcy.

     

    (a) None of
Lessee’s interest in this Lease, any estate hereby created in Lessee’s interest
or any interest herein or therein shall pass to any trustee or receiver or
assignee for the benefit of creditors or otherwise by operation of law, except
as specifically may be provided pursuant to the Bankruptcy Code (11 USC § 101
et. seq.), as the same may be amended from time to time.

     

    
      
        
        

      

      
        -56-

        
          

        

      

      
        
        

      

    

    (b) Rights
and Obligations Under the Bankruptcy Code.

     

    (i) Upon
filing of a petition by or against Lessee under the Bankruptcy Code, Lessee, as
debtor and as debtor-in-possession, and any trustee who may be appointed with
respect to the assets of or estate in bankruptcy of Lessee, agree to pay monthly
in advance, on the first day of each month, as reasonable compensation for the
use and occupancy of the Leased Premises, an amount equal to all Rent due
pursuant to this Lease.

     

    (ii) Included
within and in addition to any other conditions or obligations imposed upon
Lessee or its successor in the event of the assumption and/or assignment of the
Lease are the following: (A) the cure of any monetary defaults and reimbursement
of pecuniary loss within not more than thirty (30) days of the assumption and/or
assignment; (B) the deposit of an additional amount equal to not less than three
(3) months’ Base Rent, which amount is agreed to be a necessary and appropriate
deposit to secure the future performance under the Lease of Lessee or its
assignee; (C) the continued use of the Leased Premises for the Primary Intended
Use; and (D) the prior written consent of any Facility
Mortgagee.

     

    ARTICLE
XVII                                           

     

    17.1 Lessor’s Right to Cure
Lessee’s Default.  If Lessee fails to make any payment or
perform any act required to be made or performed under this Lease, and fails to
cure the same within any grace or cure period applicable thereto, upon such
Notice as may be expressly required herein (or, if Lessor reasonably determines
that the giving of Notice would risk loss to the Leased Properties or cause
damage to Lessor, upon such Notice as is practical under the circumstances), and
without waiving or releasing any obligation of Lessee, Lessor may make such
payment or perform such act for the account and at the expense of Lessee, and
may, to the extent permitted by law, enter upon the Leased Properties for such
purpose and take all such action thereon as, in Lessor’s sole opinion, may be
necessary or appropriate.  No such entry shall be deemed an eviction
of Lessee.  All amounts so paid by Lessor and all costs and expenses
(including, without limitation, reasonable attorneys’ fees and expenses) so
incurred, together with the late charge and interest provided for in Section 3.3
thereon, shall be paid by Lessee to Lessor on demand.  The obligations
of Lessee and rights of Lessor contained in this Article shall survive the
expiration or earlier termination of this Lease.

     

    17.2 Lessee’s Affiliates Right to
Cure.  If Lessee fails to perform any acts or obligation
required to be made or performed under this Lease, and fails to cure the same
within any applicable grace period set forth in this Lease, then Lessor shall
grant to Guarantor or any Guarantor Affiliate the right to cure such failure by
Lessee under this Lease and, at Guarantor’s option, become a substitute Lessee
pursuant to Section 22.1.

     

    ARTICLE
XVIII                                           

     

    18.1 Holding
Over.  If Lessee remains in possession of all or any of the
Leased Properties after the expiration of the Term or earlier termination of
this Lease, such possession shall be as a month-to-month tenant, and throughout
the period of such possession Lessee shall pay as Rent for each month one and
one half (1.5) times the sum of: (a) one-twelfth (1/12th) of the
Base Rent payable during the Lease Year in which such expiration or termination
occurs, plus (b) all Additional Charges accruing during the month, plus (c) any
and all other sums payable by Lessee pursuant to this Lease.  During
such period of month-to-month tenancy, Lessee shall be obligated to perform and
observe all of the terms, covenants and conditions of this Lease, but shall have
no rights hereunder other than the right, to the extent given by applicable law
to month-to-month tenancies, to continue its occupancy and use of the Leased
Properties until the month-to-month tenancy is terminated.  Nothing
contained herein shall constitute the consent, express or implied, of Lessor to
the holding over of Lessee after the expiration or earlier termination of this
Lease.

     

    
      
        
        

      

      
        -57-

        
          

        

      

      
        
        

      

    

    18.2 Indemnity.  If
Lessee fails to surrender the Leased Properties in a timely manner and in
accordance with the provisions of Section 9.1.5 upon the expiration or
termination of this Lease, in addition to any other liabilities to Lessor
accruing therefrom, Lessee shall defend, indemnify and hold Lessor, its
principals, officers, directors, agents and employees harmless from loss or
liability resulting from such failure, including, without limiting the
generality of the foregoing, loss of rental with respect to any new lease in
which the rental payable thereunder exceeds the Rent paid by Lessee pursuant to
this Lease during Lessee’s hold-over and any claims by any proposed new tenant
founded on such failure.  The provisions of this Section 18.2 shall
survive the expiration or earlier termination of the Term.

     

    ARTICLE
XIX                                           

     

    19.1 Subordination.  This
Lease is subject and subordinate to any Facility Mortgage and to any Ground
Lease, to all advances made or hereafter to be made thereunder and to all
renewals, modifications, consolidations, replacements and extensions thereof and
substitutions therefore. This clause shall be self-operative and no further
instrument of subordination need be required by any Facility Mortgagee or Ground
Lessor; provided, however, that Lessor or any Facility Mortgagee may elect to
make this Lease superior to a Facility Mortgage at any time by Notice to Lessee.
As to any Facility Mortgage or Ground Lease to which this Lease is subordinate,
Lessor shall provide Lessee with a “non-disturbance agreement” reasonably
acceptable to Lessee and such Facility Mortgagee or Ground Lessor providing
that, if such Facility Mortgagee acquires the Leased Properties by way of
foreclosure or deed in lieu of foreclosure, or if the Ground Lease is
terminated, such Facility Mortgagee or Ground Lessor will not disturb Lessee’s
possession under this Lease and will recognize Lessee’s rights hereunder if and
for so long as no Event of Default has occurred under this Lease and is
continuing.  Lessee agrees that it shall not withhold or delay its
consent unreasonably to any amendment of this Lease reasonably required by a
Facility Mortgagee or Ground Lessor, and Lessee shall be deemed to have withheld
or delayed its consent unreasonably if Lessee has received the non-disturbance
agreement provided for above and the requested amendment does not materially (a)
alter the economic terms of this Lease, (b) diminish the rights of Lessee under
this Lease or (c) increase the obligations of Lessee under this
Lease.

     

    19.2 Attornment.  If
a Facility Mortgagee or Ground Lessor enforces the remedies provided for by law
or by a Facility Mortgage or Ground Lease, Lessee shall, at the option of the
party succeeding to the interest of Lessor as a result of such enforcement or as
a result of a deed or delivery of possession of the Leased Properties in lieu of
such enforcement, attorn to such successor and recognize such successor as
Lessor under this Lease; provided, however, that such successor in interest
shall not (a) be bound by any payment of Rent for more than one (1) month in
advance, except for any such advance payments as may be expressly required by
this Lease; (b) be bound by any modification of this Lease made without the
written consent of the Facility Mortgagee or Ground Lessor or successor in
interest; (c) be liable for any act or omission of Lessor; or (d) be subject to
any offset or defense arising prior to the date such successor in interest
acquired title to the Leased Properties or, in the case of a Ground Lessor, the
date on which the Ground Lessor recovered or was given possession of the Leased
Properties. Upon request, Lessee shall execute and deliver an instrument or
instruments confirming the attornment provided for herein.

     

    
      
        
        

      

      
        -58-

        
          

        

      

      
        
        

      

    

    19.3 Lessee’s
Certificate.  Lessee shall, upon not less than ten (10) days
prior Notice from Lessor, execute, acknowledge and deliver to Lessor Lessee’s
Certificate containing then-current facts.  It is intended that any
Lessee’s Certificate delivered pursuant hereto may be relied upon by Lessor, any
prospective tenant or purchaser of the Leased Properties, any mortgagee or
prospective mortgagee and any other party who reasonably may rely on such
statement.  Lessee’s failure to deliver the Lessee’s Certificate
within such time shall constitute an Event of Default.  In addition,
if Lessee fails to deliver the Lessee’s Certificate within the ten (10) day
period referred to above, Lessee hereby authorizes Lessor to execute and deliver
a certificate to the effect (if true) that Lessee represents and warrants that
(a) this Lease is in full force and effect without modification, and (b) Lessor
is not in breach or default of any of its obligations under this
Lease.

     

    19.4 Notice and
Cure.  If a Facility Mortgagee acquires title to one or more of
the Leased Properties by way of foreclosure or deed in lieu of foreclosure, then
commencing on the date the Facility Mortgagee acquires title, the Facility
Mortgagee shall have thirty (30) days within which to cure any default by Lessor
under this Lease existing on such date.  If the defaults by Lessor are
cured during such period, then this Lease shall remain in full force and effect
and Lessee shall have no right to terminate this Lease so long as the Facility
Mortgagee performs all of the Lessor’s subsequent obligations under this
Lease.  The foregoing rights to cure a Lessor default shall be
exercisable in the sole discretion of the Facility Mortgagee, and, the Facility
Mortgagee shall have no obligation to cure any default by
Lessor.

     

    ARTICLE
XX                                

     

    20.1 Risk of
Loss.  During the Term, the risk of loss or of decrease in the
enjoyment and beneficial use of the Leased Properties in consequence of the
damage or destruction thereof by fire, the elements, casualties, thefts, riots,
wars or otherwise, or in consequence of foreclosures, attachments, levies or
executions (other than those caused by Lessor and those claiming from, through
or under Lessor) is assumed by Lessee, and, in the absence of gross negligence,
willful misconduct or material breach of this Lease by Lessor, Lessor in no
event shall be answerable or accountable therefor nor shall any of the events
mentioned in this Section entitle Lessee to any abatement of
Rent.

     

    
      
        
        

      

      
        -59-

        
          

        

      

      
        
        

      

    

    ARTICLE
XXI                                           

     

    21.1 Indemnification.  Notwithstanding
the existence of any insurance or self-insurance provided for in Article XIII,
and without regard to the policy limits of any such insurance or self-insurance,
Lessee shall protect, indemnify, save harmless and defend Lessor and any
Facility Mortgagee, and the principals, officers, directors and agents and
employees of Lessor and of any Facility Mortgagee, from and against all
liabilities, obligations, claims, damages, penalties, causes of action, costs
and expenses (including, without limitation, reasonable attorneys’ fees and
expenses) (collectively, “Losses”), to the
extent permitted by law, imposed upon or incurred by or asserted against Lessor
or any Facility Mortgagee by reason of: (a) any accident, injury to or death of
persons or loss of or damage to property occurring on or about the Leased
Properties or adjoining sidewalks, including without limitation any claims of
malpractice; (b) any use, misuse, non-use, condition, maintenance or repair by
Lessee of the Leased Properties; (c) the failure to pay any Impositions; (d) any
failure on the part of Lessee to perform or comply with any of the terms of this
Lease; (e) the management and operation of the Facilities from and after
November 1, 1999 in the case of the CSC Acquired Facilities, and, in the case of
the Waterford Facility, the Crestwood Facility, and the Emory Acquired
Facilities, the Commencement Date; (f) the management and operation of the OHI
THI Facilities whether before or after the Commencement Date for such
Facilities; and (g) the nonperformance of any contractual obligation, express or
implied, assumed or undertaken by Lessee or any party in privity with Lessee
with respect to the Leased Properties or any business or other activity carried
on with respect to the Leased Properties during the Term or thereafter during
any time in which Lessee or any such other party is in possession of the Leased
Properties or thereafter to the extent that any conduct by Lessee or any such
person (or failure of such conduct thereby if the same should have been
undertaken during such time of possession and leads to such damage or loss)
causes such loss or claim.  Any amounts that become payable by Lessee
under this Section shall be paid within ten (10) days after liability therefor
on the part of Lessee is determined by litigation or otherwise, and, if not
timely paid, shall bear interest (to the extent permitted by law) at the Overdue
Rate from the date of such determination to the date of
payment.  Nothing herein shall be construed as indemnifying either
Lessor or any Facility Mortgagee against its own grossly negligent acts or
omissions or willful misconduct.  At the request and expense of
Lessee, Lessor agrees to use commercially reasonable efforts to pursue any claim
it may have against the sellers under the Acquisition Agreements the successful
pursuit of which may result, directly or indirectly, in a financial benefit to
Lessee.  At the request and expense of Lessor, Lessee agrees to use
commercially reasonable efforts to assist Lessor in pursuing any claim it may
have against the sellers under the Acquisition Agreements.

     

    21.2 Survival of
Indemnification.  Lessee’s liability under this Article shall
survive the expiration or any earlier termination of this
Lease.

     

    ARTICLE
XXII                                           

     

    22.1 General Prohibition against
Transfers.  Lessee acknowledges that a significant inducement
to Lessor to enter into this Lease with Lessee on the terms set forth herein is
the combination of financial strength, experience, skill and reputation
possessed by Lessee, the Executive Officers of Lessee, Guarantors, the
Consultants and the Managers on the date of this Lease, together with Lessee’s
assurance that, except as otherwise set forth in this Section, Lessor shall have
the unrestricted right to approve or disapprove any proposed Transfer.
Therefore, there shall be no Transfer except as specifically permitted by this
Lease or consented to in advance by Lessor in writing. Lessee agrees that Lessor
shall have the right to withhold its consent to any proposed Transfer on the
basis of Lessor’s judgment as to the effect the proposed Transfer may have on
the Facilities and the future performance of the obligations of the Lessee under
this Lease, whether or not Lessee agrees with such judgment.  Any
attempted Transfer that is not specifically permitted by this Lease or consented
to by Lessor in advance in writing shall be null and void and of no force and
effect whatsoever.  In the event of a Transfer, Lessor may collect
Rent and other charges from the Transferee and apply the amounts collected to
the Rent and other charges herein reserved, but no Transfer or collection of
Rent and other charges shall be deemed to be a waiver of Lessor’s rights to
enforce Lessee’s covenants or an acceptance of the Transferee as Lessee, or a
release of the Lessee named herein from the performance of its covenants.
Notwithstanding any Transfer, Lessee shall remain fully liable for the
performance of all terms, covenants and provisions of this Lease.  Any
violation of this Lease by any Transferee shall be deemed to be a violation of
this Lease by Lessee.  Notwithstanding the
foregoing, the following transfers are permitted and will not require the
consent of Lessor and are permitted under this Lease:

     

    
      
        
        

      

      
        -60-

        
          

        

      

      
        
        

      

    

    (a)           a
Transfer to an Affiliate of Lessee provided that: (a) such transferee assumes
all obligations under this Lease in writing and grants (and its equity owners
grant) equivalent (in both assets covered and priority of lien) security
interests in the assets and equity of such transferee concurrently with such
Transfer; and (b) each of the other Transaction Documents are ratified and
affirmed by the applicable Lessee Affiliates as being in full force and effect
after giving effect to the proposed Transfer;

     

    (b)           
a Transfer upon the death of any equity owner of Lessee to his or her spouse,
children, parents, heirs, lineal descendents or relatives through marriage or
otherwise (or to any one or more of them);

     

    (c)           the
transfer, by gift or sale for estate planning purposes, by an equity owner of
Lessee of all or any portion of his or her equity interest in Lessee to (i) his
or her spouse, children, parents or other heirs (or to any one or more of them)
upon such equity owner’s death, or (ii) a revocable grantor trust of which such
equity owner is the sole trustee and settlor, (iii) a “Mallinckrodt” trust, (iv)
any trust where such equity owner or his or her spouse is the beneficiary during
his or her lifetime, or either of their descendents or some combination thereof
are the beneficiaries of such trust after such equity owner’s death, (v) a trust
where such equity owner is the trustee of such trust, (vi) a trust where the
trust assets will revert back to such equity owner, (vii) a trust where such
equity owner, as permitted by the trust document, may regain ownership of the
assets in such trust, (viii) a trust where the ownership of such trust may be
transferred to such equity owner or his or her spouse (or widow) or either of
their descendents, (ix) to a trust where such ownership in the trust may be
transferred into a corporation or limited liability company of which such trust
is a controlling owner of such entity, (x) a corporation or limited liability
company of which a person set forth above is a controlling owner of such entity,
shall be deemed a permitted Transfer under this Agreement, or (xi) to a
“defective grantor trust”; provided, however, that Lessee shall provide Lessor
with Notice of such Transfer and such information about such Transfer as Lessor
may reasonably request; and

     

    
      
        
        

      

      
        -61-

        
          

        

      

      
        
        

      

    

    (d)           the
appointment of a new Executive Officer provided that such new Executive
Officer:

     

    (i)           either:

     

    (1)           has
previously held for a period of at least two years a similar position with a
comparably sized (or larger) operator of skilled nursing facilities which
operator has a good reputation in the industry, or has reasonably comparable
experience in the health care industry; or

     

    (2)           has
worked previously as an employee of Borrower, Guarantor, Manager or Financial
Services Provider in a capacity such that a promotion to an Executive Officer
position would be reasonably consistent with the career experiences and within
the abilities of the individual; and

     

    (ii)           has
not, or was not affiliated with any entity which (1) failed to perform in full
its obligations under a lease, loan agreement or other credit extension with
Omega or any of its Affiliates, or (2) had a license, permit or certificate of
need rescinded or revoked and not reinstated.

     

    22.2 Subordination and
Attornment.  Lessee shall insert in any sublease permitted by
Lessor provisions to the effect that (a) such sublease is subject and
subordinate to all of the terms and provisions of this Lease and to the rights
of Lessor hereunder, (b) if this Lease terminates before the expiration of such
sublease, the sublessee thereunder will, at Lessor’s option, attorn to Lessor
and waive any right the sublessee may have to terminate the sublease or to
surrender possession thereunder, as a result of the termination of this Lease,
and (c) if the sublessee receives a written Notice from Lessor or Lessor’s
assignee, if any, stating that Lessee is in default under this Lease, the
sublessee thereafter shall be obligated to pay all rentals accruing under the
sublease directly to the party giving such Notice, or as such party may direct,
and such payments shall be credited against the amounts owing by Lessee under
this Lease.

     

    22.3 Sublease
Limitation.  Anything contained in this Lease to the contrary
notwithstanding, even if a sublease of a Leased Property is permitted, Lessee
shall not sublet such Leased Property on any basis such that the rental to be
paid by the sublessee thereunder would be based, in whole or in part, on either
(a) the income or profits derived by the business activities of the sublessee,
or (b) any other formula such that any portion of the sublease rental received
by Lessor would fail to qualify as “rents from real property” within the meaning
of Section 856(d) of the Code, or any similar or successor provision
thereto.  The parties agree that this Section shall not be deemed
waived or modified by implication, but may be waived or modified only by an
instrument in writing explicitly referring to this Section by number. direct,
and such payments shall be credited against the amounts owing by Lessee under
this Lease.

     

    
      
        
        

      

      
        -62-

        
          

        

      

      
        
        

      

    

    ARTICLE
XXIII                                           

     

    23.1 Financial Statements and
Other Reports and Materials Required by Lessor.  Lessee shall
furnish to Lessor, in paper form and by electronic means satisfactory to
Lessor:

     

    (a) Within
one hundred twenty (120) days after the end of each of Lessee’s fiscal
years:  (i) Lessee’s Financial Statements; (ii) separate financial
statements for each of the Facilities that are prepared in accordance with GAAP,
except for principles of consolidation; (iii) a variance report comparing actual
items of income and expenses to such items as budgeted, together with an
explanation of the reason or reasons for each variance of more than five percent
(5%); and (iv) an Officer’s Certificate stating that Lessee is not in default in
the performance or observance of any of the terms of this Lease, or if Lessee is
in default, specifying all such defaults, the nature thereof, and the steps
being taken to remedy the same;

     

    (b) within
one hundred twenty (120) days after the end of the fiscal year for each of RE
Holdings, HCREH and HCH, a copy of that Person’s Financial Statements, in each
case certified by an executive officer of the pertinent
Person;

     

    (c) Within
thirty five (35) days after the end of each of Lessee’s quarters, quarterly
consolidated Financial Statements of Lessee, together with an Officer’s
Certificate stating that (i) Lessee is not in default of any covenant set forth
in Section 8 of this Lease, or if Lessee is in default, specifying all such
defaults, the nature thereof, and the steps being taken to remedy the same; (ii)
each Facility that participates in the Medicare program is in compliance with
the terms of its Medicare provider agreement and in good standing with the
Medicare program; (iii) each Facility that participates in the Medicaid program
is in compliance with the terms of its Medicaid provider agreement and in good
standing with the Medicaid program; and (iv) the then-current number of licensed
and operating beds at each Facility;

     

    (d) Within
thirty (30) days after the end of each month, monthly financial reports for each
Facility, including detailed statements of income and
expense;

     

    (e) Within
fifteen (15) days of filing a copy of each cost report filed with a governmental
agency for any Facility;

     

    (f) Within
fifteen (15) days of Lessee’s or Manager’s receipt thereof, copies of Medicare
and Medicaid Rate Letters and correspondence;

     

    (g) Within
fifteen (15) days after they are required to be filed with the SEC, copies of
any annual or quarterly report and of information, documents and other reports
(or copies of such portions of any of the foregoing as the SEC may by rules and
regulations prescribe) that Lessee or Manager is required to file with the SEC
pursuant to Section 13 or 15(d) of the Securities Exchange Act of
1934;

     

    (h) Within
thirty (30) days of Lessee’s or Manager’s receipt thereof, copies of surveys
performed by the appropriate governmental agencies for licensing or
certification purposes, including, without limitation, annual surveys, revisits
and complaint surveys, copies of any plans of correction and all related
correspondence;

     

    
      
        
        

      

      
        -63-

        
          

        

      

      
        
        

      

    

    (i) Immediate
Notice to Lessor of any action, proposal or investigation by any agency or
entity, or complaint to such agency or entity, known to Lessee, the result of
which could be to (i) modify in a way adverse to Lessee or revoke or suspend or
terminate, or fail to renew or fully continue in effect, any license or
certificate or operating authority pursuant to which Lessee carries on any part
of the Primary Intended Use of the Facilities, or (ii) suspend, terminate,
adversely modify, or fail to renew or fully continue in effect any cost
reimbursement or cost sharing program by any state or federal governmental
agency, including but not limited to Medicaid or Medicare or any successor or
substitute therefor, or seek return of or reimbursement for any funds previously
advanced or paid pursuant to any such program, or (iii) impose any bed hold,
limitation on patient admission or similar restriction on any Leased Property,
or (iv) prosecute any party with respect to the operation of any activity on the
Facilities or enjoin any party or seek any civil penalty in excess of One
Thousand Dollars ($1,000.00) in respect thereof;

     

    (j) As soon
as it is prepared in each Lease Year, but not later than the last day of the
second (2nd) month
in each Lease Year (i) a capital and operating budget for the Facilities for
that Lease Year, which budget shall be subject to Lessor’s reasonable approval;
and (ii) a marketing plan for that Lease Year;

     

    (k) With
reasonable promptness, such other information respecting the financial condition
and affairs of Lessee and the Facilities as Lessor reasonably may request from
time to time, including, without limitation, any such other information as may
be available to the administration of the Leased Properties;

     

    (l) Upon
Lessor’s request from time to time, such additional information and unaudited
quarterly financial information concerning the Leased Properties and Lessee as
Lessor may require for its on-going filings with the Securities and Exchange
Commission, under both the Securities Act of 1933, as amended, and the
Securities Exchange Act of 1934, as amended, including, but not limited to, 10-Q
Quarterly Reports, 10-K Annual Reports and registration statements to be filed
by Lessor during the Term of this Lease; and

     

    (m) At least
fifteen (15) Business Days after the expiration of each license and permit
required for the operation of the Facilities for the Primary Intended Use,
evidence satisfactory to Lessor that such license or permit has been
unconditionally renewed by the issuer thereof.

     

    23.2 Public Offering
Information.  Lessee specifically agrees that Lessor may
include financial information and information concerning the operation of the
Facilities that does not violate the confidentiality of the facility-patient
relationship and the physician-patient privilege under applicable laws, in
offering memoranda or prospectus, or similar publications in connection with
syndications or public offerings of Lessor’s securities or interests, and any
other reporting requirements under applicable Federal and State Laws, including
those of any successor to Lessor.  Lessee agrees to provide such other
reasonable information necessary with respect to Lessee and the Leased
Properties to facilitate a public offering or to satisfy SEC or regulatory
disclosure requirements. Upon request of Lessor, Lessee shall notify Lessor of
any necessary corrections to information Lessor proposes to publish within a
reasonable period of time (not to exceed three (3) days) after being informed
thereof by Lessor.

     

    
      
        
        

      

      
        -64-

        
          

        

      

      
        
        

      

    

    ARTICLE
XXIV                                           

     

    24.1 Lessor’s Right to
Inspect.  Lessee shall permit Lessor and its authorized
representatives to inspect the Leased Properties and Lessee’s books and records
pertaining thereto during normal business hours upon twenty-four hours
Notice.

     

    ARTICLE
XXV                                           

     

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

     

    ARTICLE
XXVI                                           

     

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

     

    ARTICLE
XXVII                                           

     

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

     

    ARTICLE
XXVIII                                           

     

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

     

    
      
        
        

      

      
        -65-

        
          

        

      

      
        
        

      

    

    28.2 No
Partnership.  Nothing contained in this Lease will be deemed or
construed to create a partnership or joint venture between Lessor and Lessee or
to cause either party to be responsible in any way for the debts or obligations
of the other or any other party, it being the intention of the parties that the
only relationship hereunder is that of Lessor and Lessee.

     

    ARTICLE
XXIX                                           

     

    29.1 Conveyance by
Lessor.  If Lessor or any successor owner of the Leased
Properties conveys the Leased Properties other than as security for a debt,
Lessor or such successor owner, as the case may be, shall be released from all
future liabilities and obligations of Lessor under this Lease arising or
accruing from and after the date of such conveyance or other transfer, and all
such future liabilities and obligations shall be binding upon the new
owner.

     

    ARTICLE
XXX                                           

     

    30.1 Quiet
Enjoyment.  So long as Lessee pays all Rent as it becomes due
and complies with all of the terms of this Lease and performs its obligations
hereunder, Lessee shall peaceably and quietly have, hold and enjoy the Leased
Properties for the Term, free of any claim or other action by Lessor or anyone
claiming by, through or under Lessor, but subject to all liens and encumbrances
of record as of the date hereof or hereafter provided for in this Lease or
consented to by Lessee.  Except as otherwise provided in this Lease,
no failure by Lessor to comply with the foregoing covenant will give Lessee any
right to cancel or terminate this Lease or abate, reduce or make a deduction
from or offset against the Rent or any other sum payable under this Lease, or to
fail to perform any other obligation of Lessee.  Lessee shall,
however, have the right, by separate and independent action, to pursue any claim
it may have against Lessor as a result of a breach by Lessor of the covenant of
quiet enjoyment contained in this Section.

     

    ARTICLE
XXXI                                           

     

    31.1 Notices.  Any
notice, request or other communication to be given by any party hereunder shall
be in writing and shall be sent by registered or certified mail, postage
prepaid, or by hand delivery or facsimile transmission to the following
address:

     

    To Lessee
or                                           CommuniCare
Family of Companies

    Maryland
Borrowers:                            4700
Ashwood Drive, Suite 200

                  Cincinnati,
OH 45241

                
Attn: Stephen L. Rosedale

                    
Telephone No.:  (513) 489 - 7100

                    
Facsimile No.:  (513) 489-7199

     

    With copy
to                                          Benesch,
Friedlander, Coplan & Aronoff LLP

    (which
shall
not                                      2300
BP Tower

    constitute
notice):                                  200
Public Square

                     
Cleveland, OH 44114-2378

                    
Attn:  Harry M. Brown

                    
Phone: (216) 363-4606

                    
Fax: (216) 363-4588

     

    
      
        
        

      

      
        -66-

        
          

        

      

      
        
        

      

    

    To
Lessor:                                              OHI
ASSET III (PA) TRUST

                                    
c/o Omega Healthcare Investors, Inc.

               
     9690 Deereco Road,  Suite 100

                
   Timonium, MD 21093

                
   Attn.: Daniel J. Booth

             
      Telephone No.: (410) 427-1700

             
      Facsimile No.:  (410) 427-8800

     

    And with
copy
to                               Doran
Derwent, PLLC

    
      	
                                            
      (which shall not

            	
              125
      Ottawa Ave., N.W., Suite 420

            

    

    
      	
               
      

            	
                              
      constitute notice):

            	
              Grand
      Rapids, Michigan 49503

            

    

    
      	
               
      

            	
              Attn:
      Mark E. Derwent

            

    

                  
Telephone No.: (616) 451-8690

                  
Facsimile No.: (616) 451-8697

     

    or to
such other address as either party may hereafter designate. Notice shall be
deemed to have been given on the date of delivery if such delivery is made on a
Business Day, or if not, on the first Business Day after delivery. If delivery
is refused, Notice shall be deemed to have been given on the date delivery was
first attempted. Notice sent by facsimile transmission shall be deemed given
upon confirmation that such Notice was received at the number specified above or
in a Notice to the sender.  If Lessee has vacated the Leased
Properties, Lessor’s Notice may be posted on the door of a Leased
Property.

     

    ARTICLE
XXXII                                           

     

    32.1 Fair Market
Rent.  If it becomes necessary to determine Fair Market Rent
for any purpose under this Lease, the party required or permitted to give Notice
of such required determination shall include in the Notice the name of a person
selected to act as appraiser on its behalf.  Within ten (10) days
after such Notice, the party receiving such Notice shall give Notice to the
other party of its selection of a person to act as appraiser on its
behalf.  The appraisers thus appointed, each of whom must be a member
of the Appraisal Institute (or any successor organization thereto) and
experienced in appraising facilities used for purposes similar to the Primary
Intended Use of the Facilities, shall, within forty-five (45) days after the
date of the Notice appointing the first appraiser, proceed to appraise the
Leased Property or Leased Properties, as the case may be, to determine the Fair
Market Rent thereof as of the relevant date (giving effect to the impact, if
any, of inflation between the date of their decision and the relevant date);
provided, however, that if only one appraiser has been so appointed, or if two
appraisers have been so appointed but only one such appraiser has made such
determination within fifty (50) days after the date of the Notice appointing the
first appraiser, then the determination of such appraiser shall be final and
binding upon the parties.  To the extent consistent with sound
appraisal practice at the time of any such appraisal, such appraisal shall be
made on a basis consistent with the basis on which the Leased Property or Leased
Properties were appraised for purposes of determining its fair market value at
the time of Lessor’s acquisition thereof.  If two appraisers have been
appointed and have made their determinations within the respective requisite
periods set forth above, and if the difference between the amounts so determined
does not exceed ten percent (10%) of the lesser of such amounts, then the Fair
Market Rent shall be an amount equal to fifty percent (50%) of the sum of the
amounts so determined.  If the difference between the amounts so
determined exceeds ten percent (10%) of the lesser of such amounts, then such
two appraisers shall within twenty (20) days appoint a third
appraiser.  If no such appraiser is appointed within such twenty (20)
days or within ninety (90) days of the date of the Notice appointing the first
appraiser, whichever is earlier, either Lessor or Lessee may apply to any court
having jurisdiction to have such appointment made by such court.  Any
appraiser appointed by the original appraisers or by such court shall be
instructed to determine the Fair Market Rent within forty-five (45) days after
appointment of such appraiser.  The determination of the appraiser
which differs most in terms of dollar amount from the determinations of the
other two appraisers shall be excluded, and the average of the remaining two
determinations shall be final and binding upon Lessor and Lessee as the Fair
Market Rent of the Leased Property or Leased Properties, as the case may be. If
the Fair Market Rent is being determined for more than one year, the Fair Market
Rent may include such annual increases, if any, as the appraisers determine to
be in accordance with the terms of this Lease.

     

    
      
        
        

      

      
        -67-

        
          

        

      

      
        
        

      

    

    ARTICLE
XXXIII                                           

     

    33.1 Lessor’s Option to Purchase
Lessee’s Personal Property.  At the expiration or termination
of this Lease, at Lessor’s option Lessee shall be deemed to have sold, assigned,
transferred and conveyed all of Lessee’s Personal Property not integral to the
Primary Intended Use, or such portion thereof as may be designated by Lessor in
its exercise of its option, to Lessor pursuant to Section 6.3 hereof for an
amount equal to the fair market value of such Personal Property as determined
pursuant to an appraisal, subject to, and with appropriate credits for, any
obligations owing from Lessee to Lessor and for the then outstanding balances
owing on all equipment leases, conditional sale contracts and any other
encumbrances to which such Personal Property is subject. Lessor’s option shall
be exercised by Notice to Lessee no more than one hundred eighty (180) days, nor
less than ninety (90) days, before the expiration of the Initial Term or, if the
Term is renewed as provided herein, before the expiration of the last Renewal
Term, unless this Lease is terminated prior to its expiration date by reason of
an Event of Default, in which event Lessor’s option shall be exercised not more
than ninety (90) days after the Termination Date. If Lessee does not receive
Lessor’s Notice exercising its option before the expiration of the relevant time
period, Lessee shall give Lessor Notice thereof, and Lessor’s option shall
continue in full force and effect for a period of thirty (30) days after such
Notice from Lessee. If Lessor exercises its option, Lessee shall, in exchange
for Lessor’s payment of the purchase price, deliver the purchased Lessee’s
Personal Property to Lessor, together with a bill of sale and such other
documents as Lessor reasonably may request in order to carry out the purchase,
and the purchase shall be closed by such delivery and such payment on the date
set by Lessor in its Notice of exercise. 

     

    33.2 Facility Trade
Names.  If this Lease is terminated pursuant to Section 16.1 or
Lessor exercises its option to purchase Lessee’s Personal Property pursuant to
Section 34.1, Lessee shall be deemed to have assigned to Lessor the exclusive
right to use the Facility Trade Names (except for the names “CommuniCare”, any
variants thereof, and any trade name which is commonly used as part of a long
term marketing program among multiple facilities by Affiliates of Lessee) in
perpetuity in the markets in which the Facilities are located, and Lessee shall
not after any such termination use the Facility Trade Names in any business that
competes with the Facilities.

     

    
      
        
        

      

      
        -68-

        
          

        

      

      
        
        

      

    

    33.3 Transfer of Operational
Control of the Facilities.

     

    33.3.1 Lessee
acknowledges and agrees that, subject to applicable law, the certificates of
need and licenses necessary to operate the Leased Properties for the Primary
Intended Use are appurtenant to the Leased Properties, both during and following
the expiration or earlier termination of the Term.  If the
certificates of need or licenses to operate the Leased Properties for the
Primary Intended Use are issued to Lessee, the Sublessees or the Manager, Lessee
agrees that it will cooperate with Lessor to turn over to Lessor or its
designee, upon the expiration or earlier termination of the Term, all of
Lessee’s rights in connection with the certificate of need and/or
licenses.

     

    33.3.2 Upon the
expiration or earlier termination of the Term, Lessee shall cooperate fully in
transferring operational control of the Facilities to Lessor or Lessor’s nominee
and shall use its best efforts to cause the business conducted at the Facilities
to continue without interruption.  To that end, pending completion of
the transfer of the operational control of the Facilities to Lessor or its
nominee:

     

    (a) Lessee
will not terminate the employment of any employees without just cause, or change
any salaries; provided, however, that without the advance written consent of
Lessor Lessee may grant pre-announced wage increases of which Lessor has
knowledge, increases required by written employment agreements and normal raises
to non-officers at regular review dates; and Lessee will not hire any additional
employees except in good faith in the ordinary course of business;
and

     

    (b) Lessee
will provide all necessary information requested by Lessor or its nominee for
the preparation and filing of any and all necessary applications or
notifications of any federal or state governmental authority having jurisdiction
over a change in the operational control of the Facilities, and any other
information reasonably required to effect an orderly transfer of the Facilities,
and Lessee will use its best efforts to cause all operating health care licenses
to be transferred to Lessor or to Lessor’s nominee; and

     

    (c) Lessee,
Lessor and any new operator will enter into an operations transfer agreement
substantially in the form of Exhibit E to this
Lease.

     

    33.4 Intangibles and Personal
Property.  Notwithstanding any other provision of this Lease,
but subject to Section 6.4 relating to the security interest in favor of Lessor,
Lessor’s Personal Property shall not include goodwill nor shall it include any
other intangible personal property that is severable from Lessor’s “interests in
real property” within the meaning of Section 856(d) of the Code, or any similar
or successor provision thereto.

     

    
      
        
        

      

      
        -69-

        
          

        

      

      
        
        

      

    

    ARTICLE
XXXIV                                           

     

    34.1 Arbitration.  Except
with respect to the payment of Rent under this Lease, the determination of Fair
Market Rent (which shall be determined solely in accordance with Section 32.1), and any proceedings to recover possession of one
or more of the Leased Properties, if any controversy arises between the parties
hereto as to any of the provisions of this Lease or the performance thereof, and
if the parties are unable to settle the controversy by agreement or as otherwise
provided herein, the controversy shall be decided by arbitration.  The
arbitration shall be conducted by three arbitrators selected in accordance with
the rules and procedures of the American Arbitration Association.  The
decision of the arbitrators shall be final and binding, and judgment may be
entered thereon in any court of competent jurisdiction.  The decision
shall set forth in writing the basis for the decision.  In rendering
the decision and award, the arbitrators shall not add to, subtract from or
otherwise modify the provisions of this Lease.  The expense of the
arbitration shall be divided between Lessor and Lessee unless otherwise
specified in the award.  Each party in interest shall pay the fees and
expenses of its own counsel. The arbitration shall be conducted in Cleveland,
Ohio.  In any arbitration, the parties shall be entitled to conduct
discovery in the same manner as permitted under Federal Rules of Civil Procedure
26 through 37, as amended.  No provision in this Article shall limit
the right of any party to this Agreement to obtain provisional or ancillary
remedies from a court of competent jurisdiction before, after or during the
pendency of any arbitration, and the exercise of such remedies does not
constitute a waiver of the right of either party to
arbitration.

     

    ARTICLE
XXXV                                           

     

    35.1 Commissions.  Lessee
represents and warrants to Lessor that no real estate commission, finder’s fee
or the like is due and owing to any person in connection with this
Lease.  Lessee agrees to save, indemnify and hold Lessor harmless from
and against any and all claims, liabilities or obligations for brokerage,
finder’s fees or the like in connection with this Lease or the transactions
contemplated hereby, asserted by any person on the basis of any statement or act
alleged to have been made or taken by Lessee.

     

    ARTICLE
XXXVI                                           

     

    36.1 Memorandum or Short Form of
Lease.  Lessor and Lessee shall, promptly upon the request of
either, enter into a Memorandum or Short Form of this Lease, substantially in
the form of attached Exhibit F, with such
modifications as may be appropriate under the laws and customs of the States and
in the customary form suitable for recording under the laws of each of the
States.  Lessee shall pay all costs and expenses of recording such
memorandum or short form of this Lease.

     

    ARTICLE
XXXVII                                           

     

    37.1 Security Deposit.
Pursuant to the Existing Lease, Lessee has delivered to Lessor a security
deposit in the amount of Four Million Six Hundred Fifteen Thousand Dollars
($4,615,000) in the form of one or more absolute, unconditional site draft
letters of credit for a term of one (1) year (renewable automatically) issued by
an “A” rated financial institution (“Security Deposit”),
which Lessor shall hold as security for the full and faithful performance by
Lessee of each and every term, provision, covenant and condition of this Lease
in accordance with, and subject to, the terms and conditions of the Letter of
Credit Agreement.  Concurrently with Lessee’s
execution of this Lease, Lessee shall increase the Security Deposit by One
Million One Hundred Thousand Dollars ($1,100,000), such that the Security
Deposit shall equal Five Million Seven Hundred Fifteen Thousand Dollars
($5,715,000).  On the September 1, 2008, Lessee shall increase the
Security Deposit by One Million One Hundred Thousand Dollars ($1,100,000), such
that the Security Deposit shall equal Six Million Eight Hundred Fifteen Thousand
Dollars ($6,815,000).   On the April 1, 2009, Lessee shall
increase the Security Deposit by One Million One Hundred Thousand Dollars
($1,100,000), such that the Security Deposit shall equal Seven Million Nine
Hundred Fifteen Thousand Dollars ($7,915,000).  If at any time the
Security Deposit is in the form of cash, it shall be deposited by Lessor into an
interest-bearing account and the account will be identified as consisting of the
Security Deposit under this Lease, and the interest shall be added to and become
part of the Security Deposit.  The Security Deposit shall not be
considered an advance payment of Rent (or of any other sum payable to Lessee
under this Lease) or a measure of Lessor’s damages in case of a default by
Lessee.  The Security Deposit shall not be considered a trust fund,
and Lessee expressly acknowledges and agrees that Lessor is not acting as a
trustee or in any fiduciary capacity in controlling or using the Security
Deposit.  Lessor shall have no obligation to maintain the Security
Deposit separate and apart from Lessor’s general and/or other
funds.  The Security Deposit, less any portion thereof applied as
provided in the Letter of Credit Agreement or Section 37.2, shall be returned to
Lessee within sixty (60) days following the expiration of the
Term.

     

    
      
        
        

      

      
        -70-

        
          

        

      

      
        
        

      

    

    37.2 Application of Security
Deposit.  If Lessee defaults in respect of any of the terms,
provisions, covenants and conditions of this Lease or of any agreement or
instrument with which this Lease is cross-defaulted), including, but not limited
to, payment of any Rent and other sums of money payable by Lessee, Lessor may,
but shall not be required to, in addition to and not in lieu of any other rights
and remedies available to Lessor, apply all or any part of the Security Deposit
to the payment of any sum in default, or any other sum that Lessor may expend or
be required to expend by reason of Lessee’s default, including but not limited
to, any damages or deficiency in reletting the Leased
Properties,.  Whenever, and as often as, Lessor has applied any
portion of the Security Deposit to cure Lessee’s default hereunder or under any
agreement with which this Lease is cross-defaulted, Lessee shall, within ten
(10) days after Notice from Lessor, deliver a new letter of credit meeting the
requirements of the Letter of Credit Agreement to Lessor (or, at Lessor’s
option, deposit additional money with Lessor) sufficient to restore the Security
Deposit to the full amount then required to be deposited with Lessor pursuant to
Section 37.1 above, and Lessee’s failure to do so shall constitute an Event of
Default without any further Notice.

     

    37.3 Transfer of Security
Deposit.  If Lessor transfers its interest under this Lease,
Lessor shall assign the Security Deposit to the new lessor and thereafter Lessor
shall have no further liability for the return of the Security Deposit, and
Lessee agrees to look solely to the new lessor for the return of the Security
Deposit.  The provisions of the preceding sentence shall apply to
every transfer or assignment of Lessor’s interest under this
Lease.  Lessee agrees that it will not assign or encumber or attempt
to assign or encumber the Security Deposit and that Lessor, its successors and
assigns may return the Security Deposit to the last Lessee in possession at the
last address for which Notice has given by such Lessee and that Lessor
thereafter shall be relieved of any liability therefor, regardless of one or
more assignments of this Lease or any such actual or attempted assignment or
encumbrances of the Security Deposit.

     

    
      
        
        

      

      
        -71-

        
          

        

      

      
        
        

      

    

    37.4 Security Deposit under
Maryland Loan Agreement.  In connection with the Maryland Loan,
the Maryland Borrowers are obligated pursuant to the Maryland Loan Agreement to
deliver to Lessor, as lender under the Maryland Loan Agreement, the “Security
Deposit”.  Lessee, the Maryland Borrowers and Lessor agree that the
Security Deposit under this Lease and the “Security Deposit” under the Maryland
Loan Agreement are the same deposit (i.e., there are not separate security
deposits under each agreement).

     

    ARTICLE
XXXVIII

     

    38.1 Lessee Option to
Purchase
Certain Facilities.  In consideration of the execution of this
Lease, subject to the terms and conditions set forth below, Lessor hereby grants
to Lessee the option (the “Lessee Option”) to
buy the Lessee Option Property (as that term is defined below) in accordance
with, and subject to the terms and conditions of, this Article.  The
Lessee Option may be exercised only with respect to all of the Lessee Option
Property, and may not be exercised in part or with respect to less than all the
Lessee Option Property.

     

    38.2 Option Property. The
“Lessee Option
Property” means all of Lessor’s right, title and interest in the Lessee
Option Facilities, excluding the following items:

     

    (a) all
tradenames and trademarks related to the corporate name of Lessor and related
tradenames and trademarks;

     

    (b) cash,
general intangibles (other than (i) permits, licenses, approvals, certificates
of need, and authorizations issued, granted or given for the benefit of the
Facilities by or under the authority of any federal, state or local governmental
or quasi-governmental agency, authority, official or tribunal that may be
assigned without cost or consent and (ii) rights to payments, reimbursements, or
refunds from the United States, any State, any insurer, municipality, public
utility or other agency, individual or entity, including without limitation,
real estate and personal property tax refunds, payments, reimbursements and
deposits with respect to the Lessee Option Facilities, each to the extent that
such rights to payments, reimbursements, refunds or deposits relate to expenses
paid or services rendered by Lessee, a Sublessee or Manager during the Term),
accounts, accounts receivable, deposits (including, without limitation, bank and
demand deposit accounts), insurance policies, and contract rights of Lessor,
other than any accounts, accounts receivable, deposits, policies or rights
relating to expenses paid or services rendered by Lessee, a Sublessee or Manager
during the Term;

     

    (c) books,
records and financial statements of Lessor;

     

    (d) rights to
payments, reimbursements or refunds from the United States of America, any
State, or municipality relating to income taxes paid by Lessor and not
reimbursed by Lessee;

     

    
      
        
        

      

      
        -72-

        
          

        

      

      
        
        

      

    

    (e) all
permits, licenses, approvals and authorizations issued, granted or given by or
under the authority of any federal, state or local governmental or
quasi-governmental agency, authority, official or tribunal which are not
assignable, for which consent to assignment is not obtained, or for which an
assignment will cause Lessor to incur costs (unless Lessee agrees to bear such
costs on Lessor’s behalf); and

     

    (f) actions,
suits, claims, rights and choses in action, instruments, promissory notes, and
documents owned by Lessor;

     

    (g) Any of
property that is located at, or used in connection with, any Facilities other
than the Lessee Option Facilities; and

     

    (h) Any
Personal Property in which Seller has no interest, including all Personal
Property owned by the Existing Lessee or Existing Operators or by any patient or
tenant of the Facilities.

     

    38.3 Exercise of
Option.  During the Term, Lessee may exercise the Option only
during (the “Lessee
Option Period”) the period beginning on May 1, 2015 and ending on April
30, 2016; provided, however, that Lessee may not exercise the Lessee Option at
any time when an Event of Default or Unmatured Event of Default has occurred and
is continuing.  Lessee shall exercise the Lessee Option by delivering
Notice thereof to Lessor during the Lessee Option Period, together with a
non-refundable deposit in the amount of equal to Nine Hundred Fifty Thousand
Dollars ($950,000) (the “Lessee Option
Deposit”).  The Lessee Option Deposit shall be deemed to be
fully earned by Lessor upon Lessor’s receipt thereof, and shall only be returned
to Lessee under certain circumstances as more particularly set forth
below.

     

    38.4 Option
Price.  If Lessee exercises its option to purchase the Lessee
Option Property as set forth in this Lease, the purchase price for the Lessee
Option Property (the “Lessee Purchase Price”) to
be paid by Lessee shall be equal to the greater of (i) the Minimum
Purchase Price (listed below), and (ii) the Allocated Purchase Price (listed
below) plus 50% of the amount, if any, that (A) the Fair Market Value of the
Lessee Option Facilities on the date of exercise of the option exceeds (B) the
Allocated Purchase Price.

     

    
      	
              Facility

            	 	
              Allocated Purchase Price

            	 	 	
              Minimum Purchase Price

            	 
	
              Northwestern
      Center

            	 	$	5,328,350.46	 	 	$	6,333,734.29	 
	
              Columbus
      Center

            	 	$	5,375,043.01	 	 	$	6,389,237.05	 
	
              Golden
      Years Healthcare Center

            	 	$	3,249,706.84	 	 	$	3,862,880.23	 
	
              Oak
      Grove Center

            	 	$	2,334,560.33	 	 	$	2,775,058.61	 
	
              Total

            	 	$	16,287,660.65	 	 	$	19,360,910	 

    

     

    The
Lessee Purchase Price shall be payable by Lessee in immediately available funds
at closing.  The Lessee Option Deposit shall be applied against the
Lessee Purchase Price at closing. Lessee shall also pay the cost of any revenue
or transfer stamps required to be affixed to the deeds, and all reasonable
expenses, disbursements and reasonable attorneys’ fees incurred by Lessor in the
sale transaction.

     

    
      
        
        

      

      
        -73-

        
          

        

      

      
        
        

      

    

    38.5 Closing.  The
consummation of the transaction contemplated by the Lessee Option
(the “Lessee
Closing”) shall occur within ninety (90) days of the exercise of the
Lessee Option, or such other date mutually as is acceptable to Lessor and Lessee
(the “Lessee Closing
Date”).  The Lessee Closing shall take place at the offices of
the title company issuing the Lessee Title Policies, or at such other place as
is mutually acceptable to Lessor and Lessee.   Notwithstanding
anything in this Lease to the contrary, the obligation of Lessor to consummate
the Lessee Option and convey the Lessee Option Property is conditioned upon (i)
the receipt at the Lessee Closing of the Seventh Year Release Payment (as
defined in the Maryland Loan Agreement) and (ii) no Event of Default or
Unmatured Event of Default existing as of the Lessee Closing
Date.

     

    38.6 Amendment to this
Lease.  Effective as of the Lessee Closing, the Lessee Option
Property is deleted from the real and personal property leased by Lessee from
Lessor pursuant to this Lease (including from the definitions of Land, Lessor’s
Personal Property, the Facilities, and the Leased Properties), the annual Base
Rent will be reduced to the amounts set forth on Exhibit I, and the
Security Deposit will be reduced by Four Hundred Thousand Dollars
($400,000).

     

    38.7 Conveyance(s); State of
Title; Title Insurance.  On the Lessee Closing Date, Lessor
shall, upon receipt from Lessee of the Lessee Purchase Price, together with full
payment of any unpaid Rent due and payable with respect to any period (prorated
on a per diem basis, if appropriate) ending on or before the Closing Date,
deliver to Lessee: (1) deeds conveying the Land underlying the Lessee Option
Facilities and warranting only that Lessor has committed no act by which the
Land has been encumbered except as set forth in instruments recorded in the real
estate records of the applicable recording office, and (2) a bill of sale for
that portion of the Lessee Option Property that is personal property, which bill
of sale shall be delivered without warranty or recourse of any
kind.  The deed, assignment and bill of sale shall in any event be
subject to the following:

     

    (a) All real
estate taxes, assessments, water charges, requirements of municipal or other
governmental authorities, or other covenants, agreements, matters or things
which are the obligation of Lessee to pay, comply with, conform to or discharge
under the provisions of this Lease;

     

    (b) All
liens, encumbrances, violations, charges or conditions that are due to any act
or omission of Lessee or any of its Affiliates;

     

    (c) The
Permitted Encumbrances for the Lessee Option Facilities; and

     

    (d) Such
other exceptions to title set forth in the Lessee Title
Policies.

     

    
      
        
        

      

      
        -74-

        
          

        

      

      
        
        

      

    

    Within fourteen (14) days after the exercise of the Lessee Option by
Lessee, Lessee shall order  title commitments (the “Lessee Title
Commitments”) for the real estate portion of the Lessee Option
Property.  If, within ten (10) days of the receipt of the Lessee Title
Commitments, Lessee determines that the matters listed in the Lessee Title
Commitments are not acceptable to Lessee, then Lessee shall provide Lessor with
a written list of Lessee’s objection to title (the “Objections”);
provided, however, that Lessee shall have no right to object to any of the
matters listed in paragraphs (a), (b) and (c) above.   If Lessor is unable
or unwilling to eliminate one or more of the Objections, then Lessee may either
(1) proceed to close and, by doing so, waive any such Objections that Lessor is
unable or unwilling to eliminate; or (2) terminate the Lessee Option by written
notice to Lessor, in which case Lessee shall be entitled to a return of the
Lessee Option Deposit; provided, however, that Lessor shall be obligated to
remove any financial encumbrances voluntarily placed on the Lessee Option
Property by Lessor.  At closing, Lessor shall deliver to Lessee
standard owner’s policies of title insurance (the “Lessee Title
Policies”) with respect to the real estate in the amount of the Purchase
Price.  The cost of the Lessee Title Policies and any endorsements to
it shall be paid by Lessee.

     

    38.8 Lessee
Acknowledgment. LESSEE ACKNOWLEDGES AND AGREES THAT, EXCEPT AS
SPECIFICALLY PROVIDED IN THIS ARTICLE, LESSOR HAS NOT MADE, DOES NOT MAKE AND
SPECIFICALLY NEGATES AND DISCLAIMS ANY REPRESENTATIONS, WARRANTIES, PROMISES,
COVENANTS, AGREEMENTS OR GUARANTIES OF ANY KIND OR CHARACTER WHATSOEVER, WHETHER
EXPRESS OR IMPLIED, ORAL OR WRITTEN, PAST, PRESENT OR FUTURE, OF, AS TO,
CONCERNING OR WITH RESPECT TO: (I) VALUE; (II) THE INCOME TO BE DERIVED FROM THE
LESSEE OPTION PROPERTY; (III) THE SUITABILITY OF THE LESSEE OPTION PROPERTY FOR
ANY AND ALL ACTIVITIES AND USES WHICH LESSEE MAY CONDUCT THEREON, INCLUDING THE
POSSIBILITIES FOR FUTURE DEVELOPMENT; (IV) THE HABITABILITY, MERCHANTABILITY,
MARKETABILITY, PROFITABILITY OR FITNESS FOR A PARTICULAR PURPOSE OF THE LESSEE
OPTION PROPERTY; (V) THE MANNER, QUALITY, STATE OF REPAIR OR LACK OF REPAIR OF
THE LESSEE OPTION PROPERTY; (VI) THE NATURE, QUALITY OR CONDITION OF THE LESSEE
OPTION PROPERTY, INCLUDING, WITHOUT LIMITATION, THE WATER, SOIL AND GEOLOGY;
(VII) THE COMPLIANCE OF OR BY THE LESSEE OPTION PROPERTY OR THEIR OPERATION WITH
ANY LAWS, RULES, ORDINANCES OR REGULATIONS OF ANY APPLICABLE GOVERNMENTAL
AUTHORITY OR BODY; (VIII) THE MANNER OR QUALITY OF THE CONSTRUCTION OR
MATERIALS, IF ANY, INCORPORATED INTO THE PROPERTY; (IX) COMPLIANCE WITH ANY
ENVIRONMENTAL PROTECTION, POLLUTION OR LAND USE LAWS, RULES, REGULATION, ORDERS
OR REQUIREMENTS, INCLUDING BUT NOT LIMITED TO, TITLE III OF THE AMERICANS WITH
DISABILITIES ACT OF 1990, THE FEDERAL WATER POLLUTION CONTROL ACT, THE FEDERAL
RESOURCE CONSERVATION AND RECOVERY ACT, THE U. S. ENVIRONMENTAL PROTECTION
AGENCY REGULATIONS AT 40 C. F. R., PART 261, THE COMPREHENSIVE ENVIRONMENTAL
RESPONSE, COMPENSATION AND LIABILITY ACT OF 1980, AS AMENDED, THE RESOURCE
CONSERVATION AND RECOVERY ACT OF 1976, THE CLEAN WATER ACT, THE SAFE DRINKING
WATER ACT, THE HAZARDOUS MATERIALS TRANSPORTATION ACT, THE TOXIC SUBSTANCE
CONTROL ACT, AND REGULATIONS PROMULGATED UNDER ANY OF THE FOREGOING; (X) THE
PRESENCE OR ABSENCE OF HAZARDOUS MATERIALS AT, ON, UNDER, OR ADJACENT TO THE
LESSEE OPTION PROPERTY; (XI) THE CONTENT, 

     

    
      
        
        

      

      
        -75-

        
          

        

      

      
        
        

      

    

    COMPLETENESS
OR ACCURACY OF THE DUE DILIGENCE MATERIALS OR PRELIMINARY REPORT REGARDING
TITLE; (XII) THE CONFORMITY OF THE IMPROVEMENTS TO ANY PLANS OR SPECIFICATIONS
FOR THE LESSEE OPTION PROPERTY, INCLUDING ANY PLANS AND SPECIFICATIONS THAT MAY
HAVE BEEN OR MAY BE PROVIDED TO LESSEE; (XIII) THE CONFORMITY OF THE LESSEE
OPTION PROPERTY TO PAST, CURRENT OR FUTURE APPLICABLE ZONING OR BUILDING
REQUIREMENTS; (XIV) DEFICIENCY OF ANY UNDERSHORING; (XV) DEFICIENCY OF ANY
DRAINAGE; (XVI) THE EXISTENCE OF VESTED LAND USE, ZONING OR BUILDING
ENTITLEMENTS AFFECTING THE LESSEE OPTION PROPERTY; OR (XVII) WITH RESPECT TO ANY
OTHER MATTER.  LESSEE FURTHER ACKNOWLEDGES AND AGREES THAT HAVING BEEN
GIVEN THE OPPORTUNITY TO OCCUPY AND INSPECT THE LESSEE OPTION PROPERTY AND
REVIEW INFORMATION AND DOCUMENTATION AFFECTING IT, LESSEE IS RELYING SOLELY ON
ITS OWN INVESTIGATION OF THE LESSEE OPTION PROPERTY AND REVIEW OF SUCH
INFORMATION AND DOCUMENTATION, AND NOT ON ANY INFORMATION PROVIDED OR TO BE
PROVIDED BY LESSOR. LESSEE FURTHER ACKNOWLEDGES AND AGREES THAT ANY INFORMATION
MADE AVAILABLE TO LESSEE OR PROVIDED OR TO BE PROVIDED BY OR ON BEHALF OF LESSOR
WITH RESPECT TO THE LESSEE OPTION PROPERTY WAS OBTAINED FROM A VARIETY OF
SOURCES AND THAT LESSOR HAS NOT MADE ANY INDEPENDENT INVESTIGATION OR
VERIFICATION OF SUCH INFORMATION AND MAKES NO REPRESENTATIONS AS TO THE ACCURACY
OR COMPLETENESS OF SUCH INFORMATION. LESSOR IS NOT LIABLE OR BOUND IN ANY MANNER
BY ANY ORAL OR WRITTEN STATEMENTS, REPRESENTATIONS OR INFORMATION PERTAINING TO
THE LESSEE OPTION PROPERTY, OR THE OPERATION THEREOF, FURNISHED BY ANY REAL
ESTATE BROKER, AGENT, EMPLOYEE, SERVANT OR OTHER PERSON. LESSEE FURTHER
ACKNOWLEDGES AND AGREES THAT TO THE MAXIMUM EXTENT PERMITTED BY LAW, THE SALE OF
THE LESSEE OPTION PROPERTY AND AS PROVIDED FOR HEREIN IS MADE ON AN "AS IS" CONDITION AND BASIS
WITH ALL FAULTS, AND THAT LESSOR HAS NO OBLIGATIONS TO MAKE REPAIRS,
REPLACEMENTS OR IMPROVEMENTS EXCEPT AS MAY OTHERWISE BE EXPRESSLY STATED HEREIN.
LESSEE REPRESENTS, WARRANTS AND COVENANTS TO LESSOR THAT, EXCEPT FOR LESSOR'S
EXPRESS REPRESENTATIONS AND WARRANTIES SPECIFIED IN THIS AGREEMENT AND IN THE
INSTRUMENTS TO BE DELIVERED AT CLOSING, LESSEE IS RELYING SOLELY UPON LESSEE’S
OWN INVESTIGATIONS.

     

    
       

    

    38.9 Default;
Remedies.  In the event that either party hereunder fails to
perform their respective duties or obligations under this Article, the other
party shall give Notice thereof and, if the non-performing Party fails to remedy
such default within a ten (10) day period, the performing party’s remedies shall
be as follows: (i) Lessor’s sole and exclusive remedy shall be to retain the
Lessee Option Deposit as full liquidated damages, and not as a penalty, the
parties hereby acknowledging Lessor’s actual damages will be difficult, if not
impossible, to calculate under the circumstances, and Lessor hereby waiving and
releasing any right to pursue any other remedy hereunder, at law, in equity or
otherwise, including without limitation the remedies of specific performance and
damages, and (ii) Lessee’s sole and exclusive remedies shall be (a) receive a
return of the Lessee Option Deposit or (b) to pursue an action for specific
performance and to recover its reasonable costs and expenses in pursuing such
remedy, and Lessee hereby waiving and releasing any right to pursue any other
remedy hereunder, at law, in equity or otherwise, including without limitation
the remedy of damages.  In no event will any default hereunder result
in the termination of the Lease.

     

    
      
        
        

      

      
        -76-

        
          

        

      

      
        
        

      

    

    38.10 Assignments.  Lessee
shall have no right to assign the Lessee Option, or any interest therein,
without Lessor’s consent, which may be withheld in Lessor’s sole discretion;
provided, however, that Lessee may assign the Lessee Option at the Lessee
Closing to an Affiliate of Lessee.

     

    38.11 Limited
Release.  Concurrently with the Lessee Closing, the ownership
of the applicable Sublessees which are the licensed operators of the Lessee
Option Facilities will be transferred such that HCREH and/or HCH no longer own
or control such Sublessees.  Upon such transfer, Lessor will release
such Sublessees from their obligations with respect to their guaranty of the
Master Lease and the Maryland Acquisition Loan and will cause such Sublessees to
be released from their guaranty of the City View Loan.

     

    ARTICLE
XXXIX                                           

     

    39.1 Maryland Option to
Purchase.  In consideration of the entry by Lessor into this
Lease and the Maryland Loan Agreement, the sufficiency of which is acknowledged
by Lessee and the Maryland Borrowers, Maryland Borrowers hereby grant to Lessor
an option (the “Maryland Option”),
pursuant to which Lessor shall have the exclusive right to purchase the Maryland
Option Property on the terms and conditions set forth in this
Agreement.

     

    39.2 Option
Period.  The “Maryland Option
Period” refers to the period that begins on the Maryland Option
Commencement Date, as that term is defined below, and ends at 5:00 p.m. (all
references to time mean the time in Maryland on the pertinent date) on the later of (i) the Maturity
Date (as defined in the Maryland Loan Agreement), or (ii) the date all of the
Maryland Borrowers’ (as identified in the Maryland Loan Agreement) obligations
under the Maryland Loan Agreement and related documents are fully paid and
satisfied.  The first to occur of the following is the “Maryland Option Commencement
Date”:

     

    (i) The date
which is one hundred eighty (180) days prior to the Maturity
Date;

     

    (j) The date
of the first Event of Default under this Lease, the Maryland Loan Agreement, the
City View Loan Agreement or any of the Combined Transaction
Documents.

     

    39.3 Option
Price.  The purchase price for the Maryland Option Property
will be the outstanding principal balance of the Maryland Loan as of the
Maryland Closing (the “Maryland Option
Price”).  The Maryland Option Price shall be paid at closing in
the form of credit against the outstanding balance of the Maryland
Loan.  Maryland Borrowers will be responsible to pay at closing any
other outstanding indebtedness secured by any Maryland Option Property,
including, without limitation, any unpaid principal, interest, fees and other
charges on the Maryland Loan.

     

    
      
        
        

      

      
        -77-

        
          

        

      

      
        
        

      

    

    39.4 If Lease Still in
Effect.  If Lessor exercises the Maryland Option, and if, as of
the Maryland Closing, this Lease remains in full force and effect, at the
Maryland Closing, then, at the election of Lessor:

     

    (a) Lessee
shall be obligated to enter into an amendment to this Lease to (1) include the
Maryland Option Facilities as “OHI THI Facilities” and “Facilities”, and (2)
increase the annual Base Rent under the Lease by an amount equal to the Maryland
Option Price multiplied by the Lease Rate in effect as of the Maryland
Closing;

     

    (b) Lessee
shall be obligated to sublease the Facilities to the Maryland Operators (or such
other sublessees as are approved by Lessor in its sole
discretion);

     

    (c) the
Maryland Operators shall be obligated to become parties as guarantors, debtors
or pledgors or otherwise under all the documents that secure this Lease in the
same capacity as the other Sublessees;

     

    (d) the
Guarantors shall be obligated to affirm their Guaranties;

     

    (e) RE
Leasing, as the equity owner of the Maryland Operators, shall pledge its equity
ownership in the Maryland Operators to secure this Lease;

     

    (f) RE
Holdings, as the equity owner of RE Leasing, shall pledge its equity ownership
in RE Leasing to secure this Lease; and

     

    (g) Lessee,
the Maryland Operators, the Guarantors, the Sublessees, and their Affiliates
shall ratify and affirm all of the Transaction Documents.

     

    39.5 Option
Exercise.  The Maryland Option may be exercised by Lessor at
any time during the Option Period by furnishing notice of such exercise in
writing to Maryland Borrowers (an “Maryland Option
Notice”).

     

    39.6 Closing Costs, Taxes and
Assessments.  The Maryland Borrowers shall pay all costs and
expenses of Maryland Borrowers and Lessor in connection with the purchase of the
Maryland Facilities pursuant to the Maryland Option, including, but not limited
to, all transfer taxes, recording fees, title insurance policy premiums, the
costs of any surveys, environmental reports, or appraisals Lessor elects to
obtain, and the reasonable legal fees and expenses of Maryland Borrower and
Lessor.  Maryland Borrowers shall be responsible to pay, at closing,
without proration, all real and personal property taxes and assessments levied
against the Maryland Option Property or any part thereof.

     

    39.7 Title Insurance;
etc.

     

    (a) Maryland
Borrowers shall deliver title to the Maryland Option Property free of all liens,
claims and encumbrances, except for Maryland Permitted
Encumbrances.  Maryland Borrowers shall deliver to Lessor, within 30
days after Maryland Borrowers’ receipt of a Maryland Option Notice, a commitment
for an ALTA Owner’s Title Policies for the real property issued by a title
company licensed to do business in the state where the Maryland Option Property
is located (the “Maryland Title Company”) in
the amount of the Maryland Option Price and bearing a date later than the date
of the Maryland Option Notice, with standard commercial endorsements, including,
coverage over general exceptions, and deletions of survey exceptions (the “Maryland Title
Commitments”).  Copies of all documents and other items listed
in the Maryland Title Commitment as encumbrances or exceptions shall be
delivered to Lessor with the Maryland Title Commitment. Maryland Borrowers shall
pay the premium for the title insurance policy or policies (the “Maryland Title Insurance
Policies”) issued pursuant to the Maryland Title
Commitments.

     

    
      
        
        

      

      
        -78-

        
          

        

      

      
        
        

      

    

    (b) Maryland
Borrowers shall, within 45 business days after Maryland Borrowers’ receipt of a
Maryland Option Notice deliver to Lessor an ALTA staked boundary survey of each
facility comprising the Maryland Option Property, certified to Lessor and the
Maryland Title Company.

     

    (c) Maryland
Borrowers shall deliver to Lessor, within 20 days after Maryland Borrowers’
receipt of a Maryland Option Notice, Uniform Commercial Code liens searches
(county and state) with respect to each of the Maryland
Borrowers.

     

    (d) During
the period that begins on Maryland Borrowers’ receipt of a Maryland Option
Notice and ends at closing, Lessor shall have the right to conduct all
reasonable inspections, investigations, appraisals, surveys and tests on the
Maryland Option Property as Lessor may elect to conduct in order to satisfy
itself as to the suitability of the physical conditions and characteristics of
the Maryland Option Property. To that end, Lessor and its agents and/or
representatives shall have the right to enter upon the real property and the
buildings located thereon upon reasonable notice at all reasonable times for the
purposes of inspecting the same, examining all books and records of the business
conducted thereon and making such soil tests, surveys, environmental studies or
tests, feasibility studies, architectural and engineering studies, surface water
and ground water sampling, wetlands audit and such other tests and
investigations as Lessor deems appropriate.

     

    (e) If for
any reason Lessor is not satisfied with the results of its investigations,
Lessor may, without releasing any of Maryland Borrowers’ obligations under the
Maryland Loan Agreement or related documents, revoke its election to exercise
the Maryland Option by giving written notice of revocation to Maryland Borrowers
at any time prior to closing.

     

    (f) The
Maryland Borrowers acknowledge and agree that to the extent any outstanding
indebtedness of the Maryland Borrowers under the Maryland Loan Agreement and
related loan documents is not paid in full upon consummation of the transactions
contemplated by this Article, (i) the Maryland Borrowers shall remain fully
liable for such obligations under Maryland Loan Agreement and related loan
documents and (ii) the Maryland Loan Agreement and the related loan documents
shall continue to be secured by any collateral covered by the Combined
Transaction Documents and not acquired by Maryland Borrower (or its designee)
pursuant to this Article.

     

    
      
        
        

      

      
        -79-

        
          

        

      

      
        
        

      

    

    39.8 Conveyance to
Lessor.  At closing, Maryland Borrowers shall convey the
Maryland Option Property to Lessor by warranty deeds, subject only to the
Maryland Permitted Encumbrances, and by bill of sale and assignment warranting
that Maryland Borrowers own the personal property free and clear of all liens
and claims.   Maryland Borrowers agree to execute any other
documents or instruments requested by Lessor or the Maryland Title Company to
effect the conveyances or close the transactions contemplated by this
Agreement.  Unless Lessor has made its election pursuant to Section 39.4 for Lessee to lease the Maryland Facilities
pursuant to this Lease, the Maryland Operators shall execute and deliver to the
new operators one or more operations transfer agreements substantially in the
form of Exhibit
E to this Lease at the Maryland Closing.

     

    39.9 Closing.  The
consummation of the transaction contemplated by this Agreement (the “Maryland Closing”)
shall occur on a date mutually acceptable to Maryland Borrowers and Lessor, but
in any event on a date not more than ninety (90) days after the date Lessor
exercises the Maryland Option.  In the event the Closing is to take
place on a date after the scheduled Maturity Date, then, unless otherwise agreed
in writing by Lender, the Maturity Date shall be extended until the earlier of (i) the Closing
Date, (ii) the date Lessor terminates its exercise of the Maryland Option, or
(iii) the date which is ninety (90) days after the original Maturity Date. The
Closing shall take place at the offices of the Maryland Title Company, or at
such other place as is mutually acceptable to Maryland Borrowers and Lessor, and
either party may deliver any documents or instruments necessary to effect the
Closing to the Maryland Title Company via Federal Express or other overnight
courier in a timely manner.

     

    39.10 Breach by Maryland
Borrowers.  If any of the Maryland Borrowers breach any of
their obligations under this Agreement, Lessor shall have, in addition to all
other remedies available at law or in equity, the following
remedies:  (a) Lessor may compel specific performance of this Article
in all respects and recover all damages incurred by Lessor as a result of such
breach, or (c) Lessor may terminate the Maryland Option Notice (but not the
Maryland Option itself, which shall remain in full force and effect) and recover
all damages incurred by Lessor as result of such breach.

     

    39.11 Notices.  Notices
to Maryland Borrowers shall be in manner and to the addresses set forth in
Section 31.1.

     

    39.12 Recording.  Maryland
Borrowers shall, upon Lessor’s request, execute and deliver a memorandum
evidencing the Maryland Option, which memorandum shall be in recordable form and
otherwise in form and substance acceptable to Lessor.

     

    39.13 Assignment.  No
Maryland Borrower may assign or transfer its interest under this Article without
Lessor’s prior written consent, which Lessor may withhold in its sole
discretion.  Lessor may assign or transfer its interest under this
Article to any person, firm or entity whatsoever; provided that (a) Lessor shall
promptly notify Lessee in writing of the name and address of such transferee,
(b) the transferee shall assume and agree to observe and perform all of Lessor’s
obligations under this Article, and (c) the Lessor has assigned, and transferee
has assumed, all of Lessor’s right, title, interests and obligations in and to
the Maryland Loan.  Upon an assignment by Lessor, Lessor shall be
relieved of its obligations under this Article.

     

    
      
        
        

      

      
        -80-

        
          

        

      

      
        
        

      

    

    ARTICLE
XL                                

     

    40.1 Miscellaneous.

     

    40.1.1 Survival, Choice of
law.  Anything contained in this Lease to the contrary
notwithstanding, all claims against, and liabilities of, Lessee or Lessor
arising prior to the date of expiration or termination of this Lease shall
survive such expiration or termination.  If any term or provision of
this Lease or any application thereof is held invalid or unenforceable, the
remainder of this Lease and any other application of such term or provisions
shall not be affected thereby. Neither this Lease nor any provision hereof may
be changed, waived, discharged or terminated except by an instrument in writing
and in recordable form signed by Lessor, any Facility Mortgagee and
Lessee.  All the terms and provisions of this Lease shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and assigns.  The headings in this Lease are for
convenience of reference only and shall not limit or otherwise affect the
meaning hereof. This Lease shall be governed by and construed in accordance with
the laws of the state of Ohio, except as to matters which, under applicable
procedural conflicts of laws rules require the application of laws of another
State.

     

    LESSEE
CONSENTS TO IN PERSONAM JURISDICTION BEFORE THE STATE AND FEDERAL COURTS OF THE
STATES OF MARYLAND, OHIO, AND PENNSYLVANIA AND AGREES THAT ALL DISPUTES
CONCERNING THIS AGREEMENT BE HEARD IN THE STATE AND FEDERAL COURTS LOCATED IN
THE STATES OF MARYLAND OR EACH STATE IN WHICH A FACILITY IS
LOCATED.  LESSEE AGREES THAT SERVICE OF PROCESS MAY BE EFFECTED UPON
IT UNDER ANY METHOD PERMISSIBLE UNDER THE LAWS OF THE STATES OF MARYLAND, OHIO,
AND PENNSYLVANIA AND IRREVOCABLY WAIVES ANY OBJECTION TO VENUE IN THE STATE AND
FEDERAL COURTS OF THE STATES OF MARYLAND, OHIO, OR PENNSYLVANIA.

     

    40.1.2 Limitation on
Recovery.  Lessee specifically agrees to look solely to
Lessor’s interest in the Leased Properties for recovery of any judgment from
Lessor, it being specifically agreed that no constituent shareholder, officer or
director of Lessor shall ever be personally liable for any such judgment or for
the payment of any monetary obligation to Lessee.  Furthermore, Lessor
(original or successor) shall never be liable to Lessee for any indirect or
consequential damages suffered by Lessee from whatever
cause.

     

    40.1.3 Waivers.  Lessee
waives any defense by reason of any disability of Lessee, and waives any other
defense based on the termination of Lessee’s (including Lessee’s successor’s)
liability from any cause.

     

    
      
        
        

      

      
        -81-

        
          

        

      

      
        
        

      

    

    40.1.4 Consents.  Whenever
the consent or approval of Lessor is required hereunder, Lessor may in its sole
discretion and without reason withhold that consent or approval unless otherwise
specifically provided.

     

    40.1.5 Counterparts.  This
Lease may be executed in separate counterparts, each of which shall be
considered an original when each party has executed and delivered to the other
one or more copies of this Lease.

     

    40.1.6 Options
Personal.  The renewal options granted to Lessee in this Lease
are granted solely to Lessee and are not assignable or transferable except in
connection with a Transfer permitted in Article XXII.

     

    40.1.7 Rights
Cumulative.  Except as provided herein to the contrary, the
respective rights and remedies of the parties specified in this Lease shall be
cumulative and in addition to any rights and remedies not specified in this
Lease.

     

    40.1.8 Entire
Agreement.  There are no oral or written agreements or
representations between the parties hereto affecting this Lease.  This
Lease supersedes and cancels any and all previous negotiations, arrangements,
representations, brochures, agreements and understandings, if any, between
Lessor and Lessee.

     

    40.1.9 Amendments in
Writing.  No provision of this Lease may be amended except by
an agreement in writing signed by Lessor, any Facility Mortgagee and
Lessee.

     

    40.1.10 Lessee to Pay Reasonable
Expenses.  Lessee shall pay or reimburse Lessor for all
reasonable out-of-pocket costs and expenses incurred by Lessor in connection
with or relating in any way to the administration of this Lease, including
without limitation, search costs, audit fees, appraisal fees, attorneys’ fees,
and other costs paid or incurred by Lessor in the analysis, administration and
enforcement of this Lease and the other Transaction Documents, the protection
and defense of the rights of Lessor in and to the Leased Properties, the
Collateral and the other Transaction Documents, or as otherwise referred to in
this Lease or in the other Transaction Documents, and all costs and expenses
relating to extensions, amendments, waivers, or consents requested by Lessee,
pursuant to this Lease or any other Transaction Document or any agreements with
other parties or termination of this Lease (collectively, “Reasonable
Expenses”); provided, however that shall Lessee not be liable for payment
or reimbursement of Reasonable Expenses incurred in connection with the initial
documentation and closing of the THI Acquisition Agreements and this Lease to
the extent such expenses are included in the amount funded by Lessor in
connection with the acquisition of the OHI THI Facilities used in the
calculation of the Base Rent.  All such Reasonable Expenses shall be
due on demand; provided, however, that so long as no Event of Default has
occurred hereunder, Reasonable Expenses incurred after the date of this Lease
which are unrelated to the closing on the Acquired Facilities shall be paid on
or before the earlier of (i) 30 days following written notice thereof to Lessee
or (ii) the date of expiration or earlier termination of this
Lease.  Any Reasonable Expenses not paid when due shall bear interest
at the Overdue Rate.  Notwithstanding the foregoing, unless Lessor has
a reasonable basis to conclude that the value of one or more of the Facilities
has diminished in any material respect, Lessee shall not be obligated to pay:
(i) any appraisal fees incurred in connection with Lessor’s financing activities
or corporate compliance requirements, or (ii) for more than one appraisal per
Facility during any four year period.

     

    
      
        
        

      

      
        -82-

        
          

        

      

      
        
        

      

    

    40.1.11 Severability.  If
any provision of this Lease or the application of such provision to any person,
entity or circumstance is found invalid or unenforceable by a court of competent
jurisdiction, such determination shall not affect the other provisions of this
Lease and all other provisions of this Lease shall be deemed valid and
enforceable.

     

    40.1.12 Time of the
Essence.  Except for the delivery of possession of the
Facilities to Lessee, time is of the essence with respect to all provisions of
this Lease of which time is an element.

     

    40.1.13 Joint and Several
Liability.  Each of Lessee One and Lessee Two are jointly and
several liable for obligations of Lessee under this Lease.

     

    SIGNATURE
PAGES FOLLOW

     

    
      
        
           

           

           

          

        

         

      

      
        -83- 

        
          

        

      

      
         

        
          Signature
Page to

          SECOND
CONSOLIDATED AMENDED AND RESTATED MASTER LEASE

          (with Lessee Option to Purchase and
Maryland Option to Purchase)

          Multiple
Facilities

          

        

      

    

    

     

    LESSOR:

     

    OHI ASSET
III (PA) TRUST

    

    
      	
               
      

            	
              By:

            	
              OHI
      Asset (PA), LLC, a Delaware limited liability company, its sole
      trustee

            

    

    

    By:      Omega
Healthcare Investors, a Maryland

    corporation,
its sole member

    

     

    By:          /s/ Daniel J.
Booth

         
Name:          Daniel J.
Booth

    Title:             Chief
Operating Officer

     

    

     

    THE STATE
OF
MARYLAND                                                                           )

                                                
)

    COUNTY
OF  BALTIMORE                                                                      
        )

     

    This
instrument was acknowledged before me on the ______ day of April, 2008, by
Daniel J. Booth, the Chief Operating Officer of Omega Healthcare Investors,
Inc., a Maryland corporation, the sole member of OHI Asset (PA), LLC, a Delaware
limited liability company, the sole trustee of OHI Asset III (PA) Trust, a
Maryland business trust, on behalf of said business trust.

     

    Notary
Public

     

    

     

    
      
        
                                                                 
Signature Page   1of 3

          

        

         

      

      
         

        
          

        

      

      
         

        
          Signature
Page to

          SECOND
CONSOLIDATED AMENDED AND RESTATED MASTER LEASE

          (with Lessee Option to Purchase and
Maryland Option to Purchase)

          Multiple
Facilities

          

        

      

    

    

     

    LESSEE:

     

    OMG MSTR
LSCO, LLC

    

    By:           HEALTH
CARE HOLDINGS, LLC,

    its Sole
Member

    

     

    By:           /s/ Charles R.
Stoltz

    Name:           Charles
R. Stoltz

    Title:              Treasurer

     

    

     

    OMG LS
LEASING CO., LLC

    

    By:           OMG
RE HOLDINGS, LLC,

    its Sole
Member

    

     

    By:           /s/ Charles R.
Stoltz

    Name:           Charles
R. Stoltz

    Title:              Treasurer

     

    

    THE STATE
OF
MARYLAND                                                                           )

                                                
)

    COUNTY OF
BALTIMORE                                                                            
   )

     

    This
instrument was acknowledged before me on the _____ day of April, 2008, by
Charles R. Stoltz, the Treasurer of HEALTH CARE HOLDINGS, LLC, an Ohio limited
liability company, the sole member of OMG MSTR LSCO, LLC, an Ohio limited
liability company, and of OMG RE HOLDINGS, LLC, an Ohio limited liability
company, the sole member of OMG LS LEASING CO., LLC, an Ohio limited liability
company, on behalf of said companies.

     

    Notary
Public

     

    
      
        
                                                                 
Signature Page  2 of 3

          

        

         

      

      
         

        
          

        

      

      
         

        
          Signature
Page to

          SECOND
CONSOLIDATED AMENDED AND RESTATED MASTER LEASE

          (with Lessee Option to Purchase and
Maryland Option to Purchase)

          Multiple
Facilities

          

        

      

    

    The Maryland Borrowers
hereby join in the execution of this Lease for the purposes
of  Section 37.4 and ARTICLE XXXIX.

    

    MARYLAND
BORROWERS:

    

    BEL PRE
LEASING CO., LLC

    RIDGE
(MD) LEASING CO., LLC

    MARLBORO
LEASING CO., LLC

    FAYETTE
LEASING CO., LLC

    LIBERTY
LEASING CO., LLC

    HOWARD
LEASING CO., LLC

    PALL MALL
LEASING CO., LLC

    WASHINGTON
(MD) LEASING CO., LLC

    MARYLAND
NH ASSET, LLC

    

    

    By:          /s/ Charles R.
Stoltz

    Name:               Charles
R. Stoltz

    Title:                 Treasurer

     

    

    

    

    THE STATE
OF
MARYLAND                                                                           )

                                                
)

    COUNTY OF
BALTIMORE                                                                                )

     

    This
instrument was acknowledged before me on the _____ day of April, 2008, by
Charles R. Stoltz, the Treasurer of HEALTH CARE HOLDINGS, LLC, an Ohio limited
liability company, the sole member of OMG MSTR LSCO, LLC, an Ohio limited
liability company, and of OMG RE HOLDINGS, LLC, an Ohio limited liability
company, the sole member of OMG LS LEASING CO., LLC, an Ohio limited liability
company, on behalf of said companies.

     

    Notary
Public

     

    
      
        
                                                                                                                   
 Signature Page 3 of 3

          

        

         

      

      
         

        
          

        

      

      
         

      

    

    LIST
OF EXHIBITS TO LEASE

     

    

     

    Exhibits A
–                                                                Facility
Trade Names

     

    Exhibits B-1 through
B-25
–                                     
Description of Land

     

    Exhibit C
–                                                               
 Form of Lessee’s Certificate

     

    Exhibit D
–                                                                
Permitted Encumbrances

     

    Exhibit E
-                                                                 
Form of Operations Transfer Agreement

     

    Exhibit F
-                                                                 
Form of Memorandum and Short Form of Lease

     

    Exhibit G
-                                                                
Allocation of Base Rent

     

    Exhibit I
-                                                                  
Base Rent after Lessee Option Exercise

     

    Schedule 8.2.5
-                                                        Other
Permitted Indebtedness

     

    Schedule 8.8
-                                                            Permitted
Investments

     

    Schedule 9.3
-                                                             Improvements
Schedule

     

    

     

    

     

    

     

    

     

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    EXHIBIT
A

     

    FACILITY
TRADE NAMES

    

    

    
      	
              Aristocrat
      Berea

              Candlewood
      Park

              Falling
      Water

              Grande
      Pointe Health Care

              Greenbrier
      RC

              Greenbrier
      HC

              Ohio
      Extended Care Facility

              Pebble
      Creek

              Pine
      Grove

              Pine
      Valley Care Center

              Wyant
      Woods

              Waterford
      Commons

              Crestwood
      Care Center

              Baldwin
      Health Center

               

            	
              Copley
      Health Center

              Hanover
      House

              Suburban
      Pavilion

              Wexford
      House

              Advanced
      Specialty Rehab of Toledo

              Commons
      at Greenbriar

              Greenbriar
      Center (a/k/a Greenbriar North)

              Greenbriar
      Rehabilitation Hospital

              Chardon
      Healthcare Center

              Northwestern
      Center

              Columbus
      Center

              Golden
      Years Healthcare Center

              Oak
      Grove Center

              Kent
      Care Center

               

            

    

    
      
        
          A-
1

        

         

      

      
         

        
          

        

      

      
         

      

    

    
    

    

      

       

      Exhibits
B1 – B26 Legal description of the real property for the following
properties:

       

       

      B-1
Grande Pointe

       

       

      B-2
Aristocrat Berea

       

       

      B-3
Aristocrat South – 6455 Pearl

       

       

      B-4
Aristocrat South – 6457 Pearl

       

       

      B-5
Candlewood Park

       

       

      B-6
Falling Water

       

       

      B-7 Pine
Grove

       

       

      B-8 Wyant
Woods

       

       

      B-9 Pine
Valley

       

       

      B-10
Pebble Creek

       

       

      B-11Ohio
Extended Care

       

       

      B-12
Crestwood Care Center

       

       

      B-13
Waterford Commons

       

       

      B-14
Wexford House/Pavillion North Limited

       

       

      B-15
Baldwin Health Center

       

       

      B-16
Copley Health Center, Inc.

       

       

      B-17
Sururban Pavilion, Inc.

       

       

      B-18
House of Hanover, LTD.

       

       

      B-19
LTACH Facility

       

       

      B-20
Northwestern Center

       

       

      B-21
Columbus Center

       

       

      B-22
Golden Years Healthcare Center

       

       

      B-23 Oak
Grove Center

       

       

      B-24
Chardon Healthcare Center

       

       

      B-25
Commons at Greenbriar; Greenbriar Center (a/k/a Greenbriar North); Greenbriar
Rehabilitation Hospital

       

       

      B-26 Kent
Care Center

       

    
      
        
        

      

      
        B - Page 1 of 1

        
          

        

      

      
        
        

      

    

    EXHIBIT
C

     

    FORM
OF LESSEE’S CERTIFICATE

     

    The
undersigned                                                                                          (“Lessee”)
under that certain Lease (the “Lease”)
dated                         ,
20     and made with,
a             (“Lessor”),
hereby certifies:

     

    1. That it
is Lessee under the Lease; that attached hereto as Exhibit “A” is a true
and correct copy of the Lease; that the Lease is now in full force and effect
and has not been amended, modified or assigned except as disclosed or included
in Exhibit “A”;
and that the Lease constitutes the entire agreement between Lessor and
Lessee.

     

    2. That
there exist no defenses or offsets to enforcement of the Lease; that there are,
as of the date hereof, no breaches or uncured defaults on the part of Lessee or
Lessor thereunder; and that Lessee has no notice or knowledge of any prior
assignment, hypothecation, subletting or other transfer of Lessor’s interest in
the Lease.

     

    3. That the
Base Rent for the first Lease Year under this Lease is $_____________.  All
Rent which is due has been paid, and there are no unpaid Additional Charges
owing by Lessee under the Lease as of the date hereof.  No Base Rent
or other items (including without limitation security deposit and any impound
account or funds) have been paid by Lessee in advance under the Lease except for
the security deposit held by Lessor [in the form of an irrevocable letter of
credit] in the amount of $ and the monthly installment of Base Rent that became
due on .

     

    4. That
Lessee has no claim against Lessor for any security deposit, impound account or
prepaid Rent except as provided in paragraph 3 of this
Certificate.

     

    5. That
there are no actions, whether voluntary or otherwise, pending against the
undersigned under the bankruptcy laws of the United States or any state thereof,
nor has Lessee nor, to the best of Lessee’s knowledge has Lessor begun any
action, or given or received any notice for the purpose of termination of the
Lease.

     

    6. That
there are, as of the date hereof, no breaches or uncured defaults on the part of
Lessee under any other agreement executed in connection with the
Lease.

     

    7. This
Certificate has been requested by Lessor pursuant to Section 19.3 of this Lease
and for the benefit of __________________________________(“Relying
Party”).  The Relying Party is entitled to rely on the statements of
Lessee contained in this certificate.

     

    8. All
capitalized terms used herein and not defined herein shall have the meanings for
such terms set forth in the Lease.

     

    Dated:                      _____,
20__                                                      LESSEE:

     

                                 
By:

    
      
        
          C-
1

        

         

      

      
         

        
          

        

      

      
         

      

    

     

     

    
      Exhibit
D Permitted Encumbrances (Permitted Exceptions) for the following
properties:

       

      
        
          
            	
                    ·  

                  	
                    Aristocrat
      Berea

                  

          

          
            	
                    ·  

                  	
                    Aristocrat
      South – 6455 Pearl

                  

          

          
            	
                    ·  

                  	
                    Aristocrat
      South – 6457 Pearl

                  

          

          
            	
                    ·  

                  	
                    Candlewood
      Park

                  

          

          
            	
                    ·  

                  	
                    Falling
      Water

                  

          

          
            	
                    ·  

                  	
                    Grande
      Pointe

                  

          

          
            	
                    ·  

                  	
                    Ohio
      Extended Care

                  

          

          
            	
                    ·  

                  	
                    Pebble
      Creek

                  

          

          
            	
                    ·  

                  	
                    Pine
      Grove

                  

          

          
            	
                    ·  

                  	
                    Pine
      Valley

                  

          

          
            	
                    ·  

                  	
                    Wyant
      Woods

                  

          

          
            	
                    ·  

                  	
                    Crestwood
      Care Center

                  

          

          
            	
                    ·  

                  	
                    Waterford
      Commons

                  

          

          
            	
                    ·  

                  	
                    Copley
      Health Care Center

                  

          

          
            	
                    ·  

                  	
                    House
      of Hanover

                  

          

          
            	
                    ·  

                  	
                    Suburban
      Pavillion

                  

          

          
            	
                    ·  

                  	
                    Baldwin
      Health Center

                  

          

          
            	
                    ·  

                  	
                    Pavillion
      North/Wexford House

                  

          

          
            	
                    ·  

                  	
                    LTACH
      Facility

                  

          

          
            	
                    ·  

                  	
                    Northwestern
      Center

                  

          

          
            	
                    ·  

                  	
                    Columbus
      Center

                  

          

          
            	
                    ·  

                  	
                    Golden
      Years Healthcare Center

                  

          

          
            	
                    ·  

                  	
                    Oak
      Grove Center

                  

          

          
            	
                    ·  

                  	
                    Chardon
      Healthcare Center

                  

          

          
            	
                    ·  

                  	
                    Commons
      at Greenbriar; Greenbriar Center (a/k/a Greenbriar North); Greenbriar
      Rehabilitation Hospital

                  

          

          
            	
                    ·  

                  	
                    Kent
      Care Center

                  

          

      

    

    

 

    
      
        
          D-
Page  1 of 1

        

         

      

      
         

        
          

        

      

      
         

      

    

    EXHIBIT
E

     

    FORM
OF OPERATIONS TRANSFER AGREEMENT

     

    An
Operations Transfer Agreement substantially in the form of the MASTER LEASE
AMENDMENT, SUBLEASE TERMINATION AND OPERATIONS TRANSFER
AGREEMENT  made and entered into as of November 7, 2003, among OMEGA
HEALTHCARE INVESTORS, INC., a Maryland corporation, CLAREMONT HEALTH CARE
HOLDINGS, INC., a Delaware corporation, IHS ACQUISITION NO. 123, INC., a
Delaware corporation, INTEGRATED HEALTH OF WATERFORD COMMONS, INC., a
Pennsylvania corporation, OMG MSTR LSCO, LLC, an Ohio limited liability company,
MIDLAND LEASING CO., LLC, an Ohio limited liability company, and GARDEN LEASING
CO., LLC, an Ohio limited liability company.

     

    
      
        
          E
-1

        

         

      

      
         

        
          

        

      

      
         

      

    

    EXHIBIT
F

     

    MEMORANDUM
OR SHORT FORM OF LEASE

     

    THIS
INSTRUMENT PREPARED BY:

    Mark E.
Derwent

    Doran
Derwent PLLC

    125
Ottawa Ave., N.W., Suite 420

    Grand
Rapids, Michigan 49503

    Telephone:
616.233.9640

    

    

    

    

    THIS
LEASE, made and entered into as of _____________, 20__, by and between
___________ __________________________________, having its principal office at
9690 Deereco Road, Suite 100, Timonium, MD 21093, as Lessor, and
__________________ Inc., a ___________________, having its
principal  office at ___________________________, as Lessee with
respect to the real property identified in Exhibit(s)
“  “  attached hereto and located in
________________________________________.

     

    WITNESSETH:

     

    1. For and
in consideration of the rents reserved and the other covenants contained in that
certain Lease made by and between the parties hereto and dated the date hereof
(“Lease”), Lessor has and does hereby lease to Lessee, and Lessee has and does
hereby take and rent from Lessor, all of Lessor’s rights and interest in and to
the parcel of real property described in Exhibit(s)
“   “ and all fixtures and improvements thereto, and
certain personal and other property as set forth in the
Lease.

     

    2. The
Initial Term of the Lease is approximately ____________ (_____) years,
commencing _____________, 200__ and ending on _________________,
200__.

     

    3. As more
particularly provided in the Lease, Lessee may elect to renew the original term
for ___ (_) ___ (_) year optional renewal periods for a maximum term, if
exercised, of_______ (__) years after the Commencement Date.

     

    4. This
instrument is executed and recorded for the purpose of giving notice of Lessee’s
interest in the property covered by the Lease and giving notice of the existence
of the Lease, to which reference is made for a full statement of the terms and
conditions thereof.  The respective addresses of the parties hereto
are:

     

    Lessee:

     

    Attn:

     

    
      
        
        

      

      
        F -
1

        
          

        

      

      
        
        

      

    

    Lessor:

     

    Attn:

     

    IN
WITNESS WHEREOF, the parties have caused this instrument to be executed by their
duly authorized [officer or officers] and [general partners] [managing
partners], as applicable, all as of the day and date first above
written.

     

    LESSOR:

     

    ___________________________,

    a

     

    By:           

     

    Name:

     

    Title:

     

    LESSEE:

     

    ______________________________

    a

     

    Name:                                                      

     

    Title:                                                      

    

    
      	
              STATE
      OF MARYLAND

            	
              )

            
	 
      	
              )
      SS

            
	
              COUNTY
      OF_______________

            	
              )

            

    

    

    This
instrument was acknowledged before me on the ____ day of _____________, 200__,
by ___ __________________________, the ________________ of ___________________,
a __________________________, on behalf of said _______________.

     

    Notary
Public

     

    
      
        
        

      

      
        F
-2

        
          

        

      

      
        
        

      

    

    

    
      	
              STATE
      OF MARYLAND

            	
              )

            
	 
      	
              )
      SS

            
	
              COUNTY
      OF_______________

            	
              )

            

    

    

    This
instrument was acknowledged before me on the ____ day of _____________, 200__,
by ___ __________________________, the ________________ of ___________________,
a __________________________, on behalf of said _______________.

     

    Notary
Public

    

    
      
        
          F
-3

        

         

      

      
         

        
          

        

      

      
         

      

    

    EXHIBIT
G

    

    MONTHLY
BASE RENT

    

    

    
      	
              Month

            	 	
              Total

            	 
	
              4/1/2008

            	 	 	1,945,380.03	 
	
              5/1/2008

            	 	 	1,945,380.03	 
	
              6/1/2008

            	 	 	1,945,380.03	 
	
              7/1/2008

            	 	 	1,945,380.03	 
	
              8/1/2008

            	 	 	1,945,380.03	 
	
              9/1/2008

            	 	 	1,945,380.03	 
	
              10/1/2008

            	 	 	1,945,380.03	 
	
              11/1/2008

            	 	 	1,959,145.40	 
	
              12/1/2008

            	 	 	1,984,426.07	 
	
              1/1/2009

            	 	 	1,984,463.73	 
	
              2/1/2009

            	 	 	1,984,463.73	 
	
              3/1/2009

            	 	 	1,984,463.73	 
	
              4/1/2009

            	 	 	1,984,463.73	 
	
              5/1/2009

            	 	 	1,994,320.97	 
	
              6/1/2009

            	 	 	1,994,320.97	 
	
              7/1/2009

            	 	 	1,994,320.97	 
	
              8/1/2009

            	 	 	1,994,320.97	 
	
              9/1/2009

            	 	 	1,994,320.97	 
	
              10/1/2009

            	 	 	1,994,320.97	 
	
              11/1/2009

            	 	 	2,008,430.47	 
	
              12/1/2009

            	 	 	2,034,343.15	 
	
              1/1/2010

            	 	 	2,034,381.76	 
	
              2/1/2010

            	 	 	2,034,381.76	 
	
              3/1/2010

            	 	 	2,034,381.76	 
	
              4/1/2010

            	 	 	2,034,381.76	 
	
              5/1/2010

            	 	 	2,044,485.43	 
	
              6/1/2010

            	 	 	2,044,485.43	 
	
              7/1/2010

            	 	 	2,044,485.43	 
	
              8/1/2010

            	 	 	2,044,485.43	 
	
              9/1/2010

            	 	 	2,044,485.43	 
	
              10/1/2010

            	 	 	2,044,485.43	 
	
              11/1/2010

            	 	 	2,058,947.66	 
	
              12/1/2010

            	 	 	2,085,508.16	 
	
              1/1/2011

            	 	 	2,085,547.74	 
	
              2/1/2011

            	 	 	2,085,547.74	 

    

    *Rent for
April, 2008 to be pro-rated based upon the date of this Lease

    

    
      
        
        

      

      
        G - 1 of
3

        
          

        

      

      
        
        

      

    

    

    
      	
              Month

            	 	
              Total

            	 
	
              3/1/2011

            	 	$	2,085,547.74	 
	
              4/1/2011

            	 	 	2,085,547.74	 
	
              5/1/2011

            	 	 	2,095,904.00	 
	
              6/1/2011

            	 	 	2,095,904.00	 
	
              7/1/2011

            	 	 	2,095,904.00	 
	
              8/1/2011

            	 	 	2,095,904.00	 
	
              9/1/2011

            	 	 	2,095,904.00	 
	
              10/1/2011

            	 	 	2,095,904.00	 
	
              11/1/2011

            	 	 	2,110,727.78	 
	
              12/1/2011

            	 	 	2,137,952.29	 
	
              1/1/2012

            	 	 	2,137,992.86	 
	
              2/1/2012

            	 	 	2,137,992.86	 
	
              3/1/2012

            	 	 	2,137,992.86	 
	
              4/1/2012

            	 	 	2,137,992.86	 
	
              5/1/2012

            	 	 	2,148,608.03	 
	
              6/1/2012

            	 	 	2,148,608.03	 
	
              7/1/2012

            	 	 	2,148,608.03	 
	
              8/1/2012

            	 	 	2,148,608.03	 
	
              9/1/2012

            	 	 	2,148,608.03	 
	
              10/1/2012

            	 	 	2,148,608.03	 
	
              11/1/2012

            	 	 	2,163,802.49	 
	
              12/1/2012

            	 	 	2,191,707.62	 
	
              1/1/2013

            	 	 	2,191,749.19	 
	
              2/1/2013

            	 	 	2,191,749.19	 
	
              3/1/2013

            	 	 	2,191,749.19	 
	
              4/1/2013

            	 	 	2,191,749.19	 
	
              5/1/2013

            	 	 	2,202,629.74	 
	
              6/1/2013

            	 	 	2,202,629.74	 
	
              7/1/2013

            	 	 	2,202,629.74	 
	
              8/1/2013

            	 	 	2,202,629.74	 
	
              9/1/2013

            	 	 	2,202,629.74	 
	
              10/1/2013

            	 	 	2,202,629.74	 
	
              11/1/2013

            	 	 	2,217,897.55	 
	
              12/1/2013

            	 	 	2,246,500.30	 
	
              1/1/2014

            	 	 	2,246,542.92	 

    

    

    
      
        
          G-  2of
3

        

         

      

      
         

        
          

        

      

      
         

      

    

    

    

    
      	
              Month

            	 	
              Total

            	 
	
              2/1/2014

            	 	$	2,246,542.92	 
	
              3/1/2014

            	 	 	2,246,542.92	 
	
              4/1/2014

            	 	 	2,246,542.92	 
	
              5/1/2014

            	 	 	2,257,695.48	 
	
              6/1/2014

            	 	 	2,257,695.48	 
	
              7/1/2014

            	 	 	2,257,695.48	 
	
              8/1/2014

            	 	 	2,257,695.48	 
	
              9/1/2014

            	 	 	2,257,695.48	 
	
              10/1/2014

            	 	 	2,257,695.48	 
	
              11/1/2014

            	 	 	2,273,344.99	 
	
              12/1/2014

            	 	 	2,302,662.81	 
	
              1/1/2015

            	 	 	2,302,706.50	 
	
              2/1/2015

            	 	 	2,302,706.50	 
	
              3/1/2015

            	 	 	2,302,706.50	 
	
              4/1/2015

            	 	 	2,302,706.50	 
	
              5/1/2015

            	 	 	2,314,137.87	 
	
              6/1/2015

            	 	 	2,314,137.87	 
	
              7/1/2015

            	 	 	2,314,137.87	 
	
              8/1/2015

            	 	 	2,314,137.87	 
	
              9/1/2015

            	 	 	2,314,137.87	 
	
              10/1/2015

            	 	 	2,314,137.87	 
	
              11/1/2015

            	 	 	2,330,178.61	 
	
              12/1/2015

            	 	 	2,360,229.38	 
	
              1/1/2016

            	 	 	2,360,274.16	 
	
              2/1/2016

            	 	 	2,360,274.16	 
	
              3/1/2016

            	 	 	2,360,274.16	 
	
              4/1/2016

            	 	 	2,360,274.16	 
	
              5/1/2016

            	 	 	2,371,991.32	 
	
              6/1/2016

            	 	 	2,371,991.32	 
	
              7/1/2016

            	 	 	2,371,991.32	 
	
              8/1/2016

            	 	 	2,371,991.32	 
	
              9/1/2016

            	 	 	2,371,991.32	 
	
              10/1/2016

            	 	 	2,371,991.32	 
	
              11/1/2016

            	 	 	2,388,433.08	 
	
              12/1/2016

            	 	 	2,419,235.11	 

    

    

    
      	
              Month

            	 	
              Total

            	 
	
              1/1/2017

            	 	$	2,419,281.00	 
	
              2/1/2017

            	 	 	2,419,281.00	 
	
              3/1/2017

            	 	 	2,419,281.00	 
	
              4/1/2017

            	 	 	2,419,281.00	 
	
              5/1/2017

            	 	 	2,431,291.10	 
	
              6/1/2017

            	 	 	2,431,291.10	 
	
              7/1/2017

            	 	 	2,431,291.10	 
	
              8/1/2017

            	 	 	2,431,291.10	 
	
              9/1/2017

            	 	 	2,431,291.10	 
	
              10/1/2017

            	 	 	2,431,291.10	 
	
              11/1/2017

            	 	 	2,448,143.91	 
	
              12/1/2017

            	 	 	2,479,716.00	 
	
              1/1/2018

            	 	 	2,479,763.04	 
	
              2/1/2018

            	 	 	2,479,763.04	 
	
              3/1/2018

            	 	 	2,479,763.04	 
	
              4/1/2018

            	 	 	2,479,763.04	 
	
              5/1/2018

            	 	 	2,492,073.38	 
	
              6/1/2018

            	 	 	2,492,073.38	 
	
              7/1/2018

            	 	 	2,492,073.38	 
	
              8/1/2018

            	 	 	2,492,073.38	 
	
              9/1/2018

            	 	 	2,492,073.38	 
	
              10/1/2018

            	 	 	2,492,073.38	 
	
              11/1/2018

            	 	 	2,509,347.51	 
	
              12/1/2018

            	 	 	2,541,708.89	 

    

    

    

     

    
      
        
                                                              G-  2
of
3

        

         

      

      
         

        
          

        

      

      
         

      

    

    

    ALLOCATION
OF BASE RENT BEFORE THI

    

    
      	
              CSC
      Facilities

            	 	
              Allocation
      of Base Rent as of December 16, 2005

            	 
	 
      	 	 	 
	
              Aristocrat
      Berea Nursing Home

            	 	$	1,260,450	 
	
              Aristocrat
      Berea Resp. Care

            	 	$	160,304	 
	
              Candlewood
      Park

            	 	$	1,089,670	 
	
              Falling
      Water

            	 	$	1,228,901	 
	
              Grande
      Pointe

            	 	$	1,271,420	 
	
              Greenbriar

            	 	$	1,327,185	 
	
              Greenbriar
      Res Care

            	 	$	323,079	 
	
              Ohio
      Extended Care

            	 	$	1,290,111	 
	
              Pebble
      Creek

            	 	$	1,330,017	 
	
              Pine
      Grove

            	 	$	166,967	 
	
              Pine
      Valley

            	 	$	749,831	 
	
              Wyant
      Woods

            	 	$	1,352,066	 
	 
      	 	 	 	 
	 
      	 	$	11,550,000	 

    

    

    
      	
              Emery
      Facilities

            	 	
              Allocation
      of Base Rent as of June 24, 2005

            	 
	
              Baldwin
      Health Center

            	 	$	703,800	 
	
              Copley
      Health Center

            	 	$	981,940	 
	
              Hanover
      House

            	 	$	1,351,940	 
	
              Suburban
      Pavilion

            	 	$	1,406,940	 
	
              Wexford
      House

            	 	$	676,200	 
	 
      	 	$	5,120,820	 

    

     

    Balance
to Waterford & Crestwood Care

    
      
        
          G- 3 of
3

        

         

      

      
         

        
          

        

      

      
         

      

    

    EXHIBIT
H

     

    LTACH FACILITY –
RENOVATION

     

    1. Definitions.  All
capitalized terms not defined in this Exhibit H shall have
the meaning given to them in the Lease.  For purposes of this Exhibit H, the
following terms shall have the respective meanings given them
below:

     

    “Base Rent Commencement
Date” shall be the earlier of (i) the ninth (9th) full month after the In
Service Date or (ii) November 1, 2008.

     

    “Closing Date” means
the date that Lessor acquires the LTACH Facility, or the date Lessor is entitled
to possession of the LTACH Facility under a lease.

     

    “Construction
Budgets” means the detailed budget for the construction of the LTACH
Facility attached as Schedule 1,
which sets forth Lessee’s good faith estimate of the Project Costs on an
itemized basis and designates each item by amount, whether such item constitutes
an item of Hard Costs or Soft Costs and the amount of proceeds, if any, of the
Maximum Funded Amount allocable to each item of Hard Costs and Soft
Costs.

     

    “Developer's Fees”
means the fees and commissions, including Developer's Overhead, payable to
Lessee or any Affiliate of Lessee for services rendered in connection with the
development, construction management or leasing of the LTACH Facility, as set
forth on the Construction Budget.

     

    “Developer's Overhead”
means costs incurred by Lessee and set forth on the Construction Budget for
developer's overhead and profit.

     

    “Event of Force
Majeure” is any event or condition, not existing as of the Closing Date,
not reasonably foreseeable as of such date and not reasonably within the control
of Lessee, that prevents in whole or in material part the performance by Lessee
of its obligations under this Exhibit or that renders the performance of such
obligations so difficult as to make such performance commercially
unreasonable.  Without limiting the foregoing, Events of Force Majeure
shall include acts of state, riots, war, prolonged shortage of energy supplies,
epidemics, fire, flood, hurricane, typhoon, earthquake, or
explosion.

     

    “Financing Costs
Maximum” means Nine Hundred Sixty Four Thousand Five Hundred Thirty One
($964,531).

     

    “Funded Amount” means
the amount actually expended for completion of the LTACH Facility as of a given
date.

     

    “Hard Costs” means
costs paid to renovate and complete the LTACH Facility, including without
limitation, demolition costs, site preparation costs, contractor's fees, and
costs of labor and material paid or necessarily incurred by Lessee in connection
with the renovation of the LTACH Facility, but excluding Developer's Fees,
Developer's Overhead and Contractor's Overhead, and the contingency reserve, if
any, set forth on the Construction Budget.

    

    
      
        
        

      

      
        H -1 of
10

        
          

        

      

      
        
        

      

    

    “In Service Date”
shall be the date of completion of construction and licensing of the LTACH
Facility for its intended use as a long term acute care hospital.

     

     “LTACH Base Rent”
means the Base Rent shall be:

     

    (1)           During
the first Lease Year (i.e., the Lease Year in which the Closing Date occurs),
the Monthly LTAC Base Rent;

     

    (2)           For
the second Lease Year, the product of (A) twelve (12) times the Monthly LTACH
Base Rent as of the last month (including in such calculation of Monthly LTACH
Base Rent any amounts advanced during such last month) of the first Lease Year,
multiplied by (i) one hundred percent (100%) plus (ii) the lesser of (a) two (2) times
the increase in the CPI (expressed as a percentage) and (b) two and one half
percent (2.5%) (the “Second Year Base
Amount”), plus (B) the Monthly LTAC Base Rent payable during the second
Lease Year; and

    

    (3)           For
the third Lease Year, the product of (A) the Second Year Base Amount plus twelve
(12) times the Monthly LTACH Base Rent as of the last month (including in such
calculation of Monthly LTACH Base Rent any amounts advanced during such last
month) of the second Lease Year multiplied by (i) one hundred percent (100%)
plus (ii) the lesser of
(a) two (2) times the increase in the CPI (expressed as a percentage) and (b)
two and one half percent (2.5%); and

    

    (4)           For
each succeeding Lease Year in the Term, the LTACH Base Rent for the previous
Lease Year, multiplied by (i) one hundred percent (100%) plus (ii) the lesser of (a) two (2) times
the increase in the CPI (expressed as a percentage) and (b) two and one half
percent (2.5%).

     

    “Maximum Funded
Amount” means Nine Million Four Hundred Thirty Five Thousand One Hundred
Thirty One Dollars ($9,435,131).

     

    “Monthly LTAC Base
Rent” means an amount equal to (i) the Actual Funded Amount as of the
first day of the applicable month during the applicable Lease Year multiplied by (ii)
0.0083333.

     

    “Plans and
Specifications” means the written plans and specification for the
renovation of the LTACH Facility previously submitted by Lessee and approved by
Lessor, as such plans and specifications may be amended as set forth in this
Exhibit.

     

    “Project Costs” means
all Hard Costs, Soft Costs, Developer's Fees, Contractor's Overhead and other
costs and fees associated with the construction of the Construction
Facilities.

     

    “Soft Costs” means
premiums for title, casualty and other insurance required by Lessor under the
LTACH Purchase Agreement or this Lease; the cost of recording and filing the
closing documents under the LTACH Purchase Agreement and any tax levied upon
such filing; real estate taxes and other assessments that Lessee is obligated to
pay; fees and disbursements of the Lessor’s attorneys, architects and engineers,
appraisers, environmental engineers and surveyors; architectural design and
monitoring fees; permit fees; marketing expenses; leasing and sales commissions;
property management fees; and interest (including any reserve for interest set
forth on the Construction Budgets), fees and miscellaneous transaction closing
costs and charges payable by Lessee to Lessor as they become due and
payable.

     

    
      
        
        

      

      
        H -2 of
10

        
          

        

      

      
        
        

      

    

    “Target Completion
Date” means April 30, 2008.

     

    “Title Company” means
a title company selected by Lessor and reasonably acceptable to
Lessee.

     

    2. LTACH Base
Rent.   Commencing as of the Base Rent Commencement Date,
Lessee shall pay the LTACH Base Rent pursuant to the terms and conditions of
Article III of the Lease.  Notwithstanding anything in this Exhibit to
the contrary, Lessor shall have no obligation to make further advances of the
Funded Amount on or after the Base Rent Commencement Date.

     

    3. Accrual of Financing
Costs.  During the period from the Closing Date until the Base
Rent Commencement Date, financing costs on the Funded Amount shall be
capitalized monthly at the rate of eleven percent (11%) per annum.  In
the month such financing costs accrues, such financing costs shall be deemed to
have been advanced as part of the Funded Amount for all purposes under this
Exhibit; provided, however that to the extent that such interest in the
aggregate exceeds the Financing Costs Maximum, then Lessee shall pay such amount
monthly on the fifteenth day of the month and such amount shall not be deemed to
be have been advanced as part of the Funded Amount.  Any amounts
payable under this Section shall constitute “Rent” under this
Lease.

     

    4. Sublease.  Lessee
shall initially sublease the LTACH Facility to an entity which is acceptable to
Lessor in its reasonable discretion (“LTACH Sublessee”);
provided, however, that Lessee must at all times own at least 87% of all
outstanding equity interests in the LTACH Sublessee.  After the
initial sublease of the LTACH Facility, all future subleases of the LTACH
Facility shall constitute Transfers and be subject to the provisions of this
Lease.  The LTACH Sublessee shall guaranty this Lease and provide the
same collateral to secure this Lease as are provided by all other Sublessees
under this Lease.  The form of sublease between Lessee and the LTACH
Sublessee (the “LTACH
Sublease”) shall be subject to Lessor’s reasonable approval; provided
that the LTACH Sublease shall (a) provide that Base Rent shall be at least equal
to the LTACH Base Rent and (b) have covenants, terms and conditions
substantially the same as this Lease.  All equity owners of the LTACH
Sublessee (other than Lessee) shall (i) pledge their interests in the Sublessee
to secure the LTACH Sublease, and (ii) subordinate any management, consulting or
other agreements between the LTACH Sublessee and such equity owners (or any of
their affiliates) to the LTACH Sublease, this Lease and the other Transaction
Documents.   Lessee shall pledge its interest in the LTACH
Sublessee to secure its obligations under this Lease and the other Transaction
Documents.   The LTACH Sublease shall be terminable at the option
of Lessor at any time that an Event of Default under this Lease
exists.

     

    
      
        
        

      

      
        H -3 of
10

        
          

        

      

      
        
        

      

    

    5. Regulatory Approvals.
Lessee will be required to, or to cause Sublessee to, apply for, and to
diligently pursue at its own expense, all licenses and regulatory approvals to
operate the LTACH Facility as a long term acute care hospital (the “Licenses”). Lessee
represents and warrants that it knows of no facts or circumstances that would
make it unlikely that the Licenses will be issued.

     

    6. Renovation of the LTACH
Facility.

     

    (a) Commencement and Completion
of Renovations.  Lessee shall commence substantial on-site
development of the LTACH Facility within sixty (60) days of the Closing Date
and, subject to a temporary suspension of performance pursuant to Section 16 below, will continue diligently to complete the
LTACH Facility on or before the Target Completion Date (or as soon thereafter as
reasonably possible) and will supply such moneys and perform such duties as may
be necessary in connection therewith.  The LTACH Facility will be
complete for purposes of this Section only at such time as (i) all improvements
to the LTACH Facility called for in the Plans and Specifications have been
installed or completed in a manner satisfactory to Lessor and (ii) the local
public authority has issued a final certificate of occupancy for the LTACH
Facility subject only to such conditions as may be acceptable to
Lessor.

     

    (b) Lessor’s
Architect.  Lessor may retain the services of architects and
engineers, including architects and engineers employed by Lessor (the “Lessor’s Architect”),
to act as Lessor’s agent in reviewing the Plans and Specifications and the
progress of construction and in making such certifications and performing such
other tasks and duties as Lessor deems appropriate.  Lessee will pay
all reasonable fees, costs and expenses of the Lessor’s Architect within ten
(10) days after demand by Lessor.

     

    (c) Plans and
Specifications.  Lessee represents and warrants that (i) it has
delivered to Lessor accurate and complete copies of the Plans and Specifications
and all other contract documents requested by Lessor, including all
modifications thereof; and (ii) the Plans and Specifications and construction
pursuant thereto and the use of the LTACH Facility contemplated thereby comply
and will comply with all applicable governmental laws and regulations and
requirements, zoning and subdivision ordinances, and standards and regulations
of all governmental bodies exercising jurisdiction over the LTACH Facility,
including health care licensing, environmental protection, energy, equal
employment regulations and appropriate supervising boards of fire underwriters
and similar agencies.  Lessee agrees to provide to Lessor a
certification of Lessee’s architect to such effect as well as the approvals of
any governmental body or agency exercising jurisdiction of the LTACH
Facility.  Lessor acknowledges its approval of the Plans and
Specifications.  Except as provided below, Lessee will not make, or
cause or permit to be made, any change to the Plans and Specifications unless a
request for the change has been submitted in writing to Lessor and approved in
writing by the construction manager or general contractor, as the case may be,
any tenants whose approval is required, Lessor and such other parties as Lessor
may require.  Lessor's approval may be subject to such terms and
conditions as Lessor reasonably may prescribe.  Under no circumstances
will any failure by Lessor to respond to a request for approval of a change in
the Plans and Specifications be deemed to constitute approval of the
request.  Lessee will deliver promptly to Lessor copies of all
bulletins, addenda, change orders and modifications to the Plans and
Specifications.  Lessor has the right at all times to require strict
compliance with the original Plans and Specifications, but Lessee may effect
changes in the Plans and Specifications from time to time, without first
obtaining Lessor's approval, if (i) the changes do not impair the structural
integrity, design concept or architectural appearance of the LTACH Facility or
change the useable area of the LTACH Facility in any way, (ii) the changes will
not result in a default in any other obligation to any other party or authority
and (iii) the changes will not result in a net increase or decrease in the total
Project Costs of ONE HUNDRED THOUSAND DOLLARS ($100,000) Dollars or more in the
aggregate for all changes.  Notwithstanding the foregoing, to the
extent that the cost to complete the LTACH Facility exceeds the Maximum Funded
Amount (whether or not as a result of any such changes in the Plans and
Specifications), Lessee will be responsible for payment of the
excess.

     

    
      
        
        

      

      
        H -4 of
10

        
          

        

      

      
        
        

      

    

    (d) Character of
Construction.  All construction will be in accordance with the
Plans and Specifications, of sound materials, in good and workmanlike manner,
free and clear of all liens, claims and encumbrances (other than the liens and
security interests securing the obligations of the Lessee under this Lease), and
in compliance with all laws, ordinances, regulations and restrictions affecting
the LTACH Facility and all requirements of all governmental authorities having
jurisdiction over the LTACH Facility and of the appropriate board of fire
underwriters or other similar body, if any, and any applicable health care
authority related to the Licenses.  Lessee will furnish Lessor with
evidence of such compliance as Lessor requires from time to
time.

     

    (e) Construction Contract and
Architectural/Engineering Agreement.

     

    (i) A list of
the construction manager(s) or general contractor(s), as the case may be, and
the architect and/or engineer, and the contracts under which each is retained in
connection with the LTACH Facility is attached as Schedule 6(e)(i).  Any
change to the construction manager(s) or general contractor(s), as the case may
be, and the architect and/or engineer in connection with the LTACH Facility must
be approved by Lessor in writing.  Upon request of Lessor, Lessee will
promptly furnish to Lessor executed copies of the construction management
agreement or general contract(s) between Lessee and the construction manager or
general contractor(s) covering all work to be done in connection with the LTACH
Facility and executed copies of all subcontracts between the construction
manager or general contractor(s) and all of their subcontractors and
suppliers.  Upon request of Lessor, Lessee will promptly furnish to
Lessor any amendments or modifications (including change orders) to any of the
foregoing.  Lessee will not modify or amend or permit to be modified
or amended (including by way of change order) any construction management
agreement, construction contract or construction subcontract without Lessor's
prior written approval; provided, however, that Lessor's prior approval need not
be obtained with respect to any change order that results from a change in the
Plans and Specifications with respect to which Lessor's consent is not required
pursuant to Section 6(c) above.  Upon
request of Lessor, Lessee will also furnish to Lessor an executed copy of the
architectural and/or engineering agreement between Lessee and the architect
and/or engineer with respect to the LTACH Facility.

     

    
      
        
        

      

      
        H -5 of
10

        
          

        

      

      
        
        

      

    

    (ii) Lessee
will perform its obligations under the contracts described in subparagraph (i)
above, and will use reasonable best efforts to cause each other party to such
contracts to perform its obligations under such contracts.

     

    (iii) Lessee
will enforce or cause to be enforced the prompt performance of the contracts
described in subparagraph (i) above and will allow Lessor to take advantage of
all rights and benefits of such contracts.  In addition, Lessee hereby
assigns to Lessor all warranties given to Lessee under the contracts described
in subparagraph (i) above.

     

    (f) Records and Reports.
Lessee will keep accurate and complete books and records relating to the
construction of the LTACH Facility, and Lessor will have access thereto during
usual business hours upon 24 hours advance notice.  Lessee will
furnish or cause to be furnished to Lessor from time to time, promptly upon
request, (i) copies and lists of all paid and unpaid bills for labor and
materials with respect to the LTACH Facility, (ii) Construction Budgets and
revisions thereof showing the estimated cost of the LTACH Facility and the
source of the funds required at any given time to complete and pay for the same,
(iii) receipted bills or other evidence of payment with respect to the cost of
the LTACH Facility, and (iv) such reports as to other matters relating to the
LTACH Facility as Lessor may request.  This paragraph will supplement
any similar provision in this Lease.

     

    (g) Access.  Notwithstanding
anything to the contrary contained in this Lease, Lessee will, and will cause
the LTACH Sublessee to, permit Lessor's representatives to have access to the
LTACH Facility at all reasonable times and to conduct such investigations and
inspections thereof as Lessor shall determine necessary, including without
limitation in connection with inspecting the LTACH Facility and all work done,
labor performed and materials furnished in connection with the construction
thereof.  Lessee will, and will cause the LTACH Sublessee to,
cooperate and cause the construction manager or general contractor, as the case
may be, to cooperate with Lessor and its representatives and agents during such
inspections.  Notwithstanding the foregoing, Lessee will, and will
cause the LTACH Sublessee to, be responsible for making inspections as to the
LTACH Facility during the course of construction and will determine to their own
satisfaction that the work done or materials supplied by the contractors and
subcontractors has been properly supplied or done in accordance with applicable
contracts.  All inspections that may be performed by Lessor and its
agents will be exclusively for the benefit of Lessor and will impose no
obligation whatever upon Lessor for the benefit of any person. Lessee will, and
will cause the LTACH Sublessee to, hold Lessor harmless from, and Lessor will
have no liability or obligation of any kind to Lessee, the LTACH Sublessee or
creditors of any of them in connection with, any defective, improper or
inadequate workmanship or materials brought in or related to the LTACH Facility,
or any construction lien arising as a result of such workmanship or
materials.  No inspection by Lessor will create any obligation on
Lessor or relieve Lessee or the LTACH Sublessee of any
obligation.

     

    
      
        
        

      

      
        H -6 of
10

        
          

        

      

      
        
        

      

    

    (h) Damage by Fire or Other
Casualty.  If the LTACH Facility is partially or totally
damaged or destroyed by fire or other casualty or taken under the power of
eminent domain, proceeds of such event will be applied as provided in this
Lease.

     

    (i) Payment of
Costs.  Lessee will pay when due all obligations incurred by
Lessee, or the LTACH Sublessee for the LTACH Facility, including any cost for
restoration.

     

    7. Disbursements of Funded
Amount.  Upon satisfaction of the conditions set forth in
subparagraphs (a) and (b) below, Lessor will disburse from time to time (but no
more frequently than once per month) to Lessee advances of the Funded Amount,
subject to the limitations set forth in Section 8
below.  Lessor may, in its sole discretion, elect not to advance up to
ten percent (10%) of each advance Request (the “Retainage”).  The
Retainage shall be disbursed as part of the final payment of the Funded
Amount.  The Retainage shall not accrue financing costs under Section
3 and shall not constitute part of the Funded
Amount for purposes of calculation of LTACH Base Rent until such time as it is
disbursed.

     

    (a) Lessor
has received:

     

    (i) a request
for disbursement, in the form of AIA 706 (the “Request”), executed
by an executive officer of Lessee and setting forth, among other things, the
portion of the Funded Amount that Lessee then is requesting be disbursed, the
amount that Lessee in good faith believes to be the cost to complete
construction (after disbursement of the portion of the Funded Amount then being
requested), a detailed breakdown of the costs and expenses incurred in the
construction of the LTACH Facility to the date of Request, a detailed cost
breakdown of the percentage of completion of the construction of the LTACH
Facility (including both Hard Costs and Soft Costs) to the date of the Request,
the amounts then due and unpaid with respect to such construction, such other
information or documentation as may be required by the Title Company and the
date upon which the disbursement is desired, provided that the date of the
payment must not be less than seven (7) Business Days after the date upon which
the Lessor receives the Request and the other items set forth in clauses (ii)
through (vi) below;

     

    (ii) A
certification from Lessee that, as of the date of the Request, no Event of
Default exists under this Agreement or any of the Transaction Documents, all
representations and warranties set forth in this Agreement and all of the other
Transaction Documents are accurate and complete, and there are no actions, suits
or proceedings pending, or to the knowledge of the person making the
certification, threatened or involving (or that could involve) Lessee, the LTACH
Sublessee or all or any part of the Facilities and that could impair the
Facilities or the ability of Lessee and the Sublessees to perform under this
Lease or any of the other Transaction Documents;

     

    (iii) Certificates
of Lessee’s architect and/or engineer, Lessor’s Architect, if any, and Lessee,
certified to Lessor and Lessee and certifying that (a) the Request is correct
and, to the best of its knowledge, all work on the LTACH Facility up to the date
thereof has been done in substantial compliance with the Plans and
Specifications therefor; (b) to the date thereof, there has been no material
deviation from the budgeted cost of the LTACH Facility or construction progress
schedule, except as authorized by Lessee and approved by Lessor; and (c) the
undisbursed portion of the Funded Amount will be sufficient to meet all known
costs to complete the work covered by the Plans and Specifications, after giving
effect to all amounts previously disbursed, plus the amount then requested;
and

     

    
      
        
        

      

      
        H -7 of
10

        
          

        

      

      
        
        

      

    

    (iv) Evidence
that Lessee have delivered the items described in (i) – (iii) above to
Lessor.

     

    (b) Upon the
request of Lessor, the Title Company is prepared, without condition, to issue to
Lessor a date-down endorsement, dated as of the date of the disbursement,
insuring Lessor’s title to the LTACH Facility subject to no other exceptions
than are set forth on the Title Policies delivered to Lessor at
closing.

     

    8. Limitation on
Disbursements.  In no event will Lessor pay amounts in excess
of (i) the amounts actually paid out by Lessee for services or materials
incorporated into the LTACH Facility; or (ii) the Maximum Funded
Amount.

     

    9. Sufficiency of Funded
Amount.  Lessor shall be entitled to not make a disbursement,
or to make a disbursement in an amount less than the amount requested, if Lessor
is not satisfied in its sole discretion that following the requested
disbursement the undisbursed proceeds of the Funded Amount budgeted for the
construction of the LTACH Facility will be at least equal to the sum of 110% of
the estimated Project Costs to complete the LTACH Facility in accordance with
the Plans and Specifications (including all costs incurred in connection with
changes in the Plans and Specifications).  If at any time it appears
to Lessor that the undisbursed balance of the Funded Amount is less than the
amount required by this Section, Lessor may give written notice to Lessee
specifying the amount of the deficiency and Lessee immediately will deposit with
Lessor the amount of the deficiency, which will be expended first in the same
manner as the Funded Amount before any further payment of the Funded Amount will
be made by Lessor.  Lessor may reasonably determine the cost of
construction of the LTACH Facility and Lessee will be obligated to pay any sums
so determined in excess of the Funded Amount prior to any payment under this
Exhibit.

     

    10. Payments to Contractor,
Subcontractors and Suppliers.   In order to induce the
Title Company to insure Lessor’s title to the LTACH Facility without exception
for the construction or mechanics’ liens, Lessor may make payments either
through the Title Company or directly to any contractor, subcontractor or
supplier furnishing labor or materials to the LTACH
Facility.

     

    11. Lessor's Right to
Cure.  If Lessee fails to perform any of Lessee’s undertakings
set forth in this Agreement or in any other Transaction Document, Lessor may,
but will not be required to, perform the same, and Lessee will reimburse Lessor
any amounts expended by Lessor in so doing.

     

    
      
        
        

      

      
        H -8 of
10

        
          

        

      

      
        
        

      

    

    12. Application of
Advances.  Lessee will apply each payment of Funded Amount
against amounts due and payable for construction of the LTACH Facility or
obligations in connection therewith as set forth in each
Request.  Nothing contained in this Agreement will impose upon Lessor
any obligation to see to the proper application of the advances by Lessee or any
other party.

     

    13. Construction or Other
Liens.  In the event any construction or other lien or
encumbrance is filed or attached against the LTACH Facility or any part thereof
without the prior written consent of Lessor, Lessor may, at its option and
without regard to the priority of such construction or other lien or
encumbrance, and without regard to any defenses that Lessee may have with
respect to the lien or encumbrance, pay the same, and Lessee will reimburse all
amounts expended by Lessor for such purpose within ten (10) days of written
notice thereof.

     

    14. Conditions to Final
Payment.  Lessor shall be entitled to withhold the final
payment of the Funded Amount (including any Retainage) unless and until all of
the following conditions have been fulfilled to Lessor's
satisfaction:

     

    (a) All
conditions for all previous disbursements have been, and, as of the date of the
final disbursement continue to be, fulfilled.

     

    (b) Lessor
have received, at least seven (7) Business Days prior to the final payment, the
following items, all of which Lessee agree to obtain and submit to Lessor at
Lessee’ sole expense:

     

    (i) A final
“as built” survey prepared and certified in accordance with the Survey
Requirements;

     

    (ii) Certificates
of Lessee’ architect and/or engineer, Lessor's Architect, if any, and Lessee
certified to both Lessor and Lessee and certifying that (a) to the best of its
knowledge, the LTACH Facility are complete in accordance with the Plans and
Specifications therefor; (b) to the date thereof, there has been no material
deviation from the budgeted cost of the LTACH Facility or construction progress
schedule, except as authorized by Lessee and approved by Lessor; and (c) the
amount of the final payment will be sufficient to meet all known costs to
complete the work covered by the Plans and Specifications;
and

     

    (iii) A final,
unconditional certificate of occupancy for the LTACH
Facility.

     

    15. Guaranty of
Completion.   Subject to a temporary suspension of
performance pursuant to Section 16, but regardless
of whether the cost thereof exceeds the amount of the Funded Amount, Lessee will
diligently and continuously carry out or cause to be carried out the
construction of the LTACH Facility so as to insure the completion of
construction of the LTACH Facility, the opening of the LTACH Facility and the
acquisition of all Licenses for the LTACH Facility, all by the applicable Target
Completion Date.  Regardless of whether the cost thereof exceeds the
amount of the Funded Amount, Lessee will be responsible for payment of all costs
of completing, opening and licensing the LTACH Facility, including the payment
of all costs in excess of the Construction Budgets.  Lessee promptly
will correct any structural defects in the LTACH Facility or any departure from
the Plans and Specifications not previously approved by Lessor.  The
approval or absence of disapproval by Lessor of any payment of Funded Amount
shall not constitute a waiver of Lessor’s right to require compliance with this
Section.

     

    
      
        
        

      

      
        H - 9 of
10

        
          

        

      

      
        
        

      

    

    16. Force
Majeure.  Upon the occurrence and during the continuance of an
Event of Force Majeure and the giving of written notice thereof to Lessor,
Lessee shall be temporarily released without any liability on their part from
the performance of their obligations to renovate the LTACH Facility under this
Exhibit, except for the obligation to pay any amounts due and owing thereunder,
but only to the extent and only for the period that their performance of each
such obligation is prevented by the Event of Force Majeure.  Such
notice shall include a description of the nature of the Event of Force Majeure,
and its cause and possible consequences.  Lessee shall promptly notify
Lessor of the termination of such event.  Upon the request of Lessor,
Lessee shall provide confirmation of the existence of the circumstances
constituting an Event of Force Majeure.  Such evidence may consist of
a statement of an appropriate governmental department or agency where available,
or a statement describing in detail the facts claimed to constitute an Event of
Force Majeure.  During the period that the performance by Lessee has
been suspended by reason of an Event of Force Majeure, Lessor may likewise
suspend the performance of all or part of its obligations under this Exhibit to
the extent that such suspension is commercially reasonable and, notwithstanding
anything in this Agreement to the contrary, Lessor shall have no obligation to
make disbursements of the Funded Amount.

     

    17. Expenses of
Lessor.  Lessee shall pay (or reimburse Lessor) for all costs
incurred by Lessor in connection with the renovations of the LTACH Facility and
this Exhibit H,
including, but not limited to, Lessor’s legal counsel and due diligence costs,
title insurance, survey, appraisal, UCC searches and filing fees, environmental
and building assessments, consulting fees and brokers’ fees, if
any.

     

    End of
Exhibit H

     

    

     

    
      
        
                                                                H
-  10 of 10

        

         

      

      
         

        
          

        

      

      
         

      

    

    EXHIBIT
I

     

    
      	
              Month

            	
               Total
      Monthly Base Rent before THI

            	
              THI
      Rent

            	
               Total

            	 
      	 
      
	
              5/1/2015

            	
                           1,845,451.36

            	
                    309,765.71

            	
                    2,155,217.07

            	 
      	 
      
	
              6/1/2015

            	
                           1,845,451.36

            	
                    309,765.71

            	
                    2,155,217.07

            	 
      	 
      
	
              7/1/2015

            	
                           1,845,451.36

            	
                    309,765.71

            	
                    2,155,217.07

            	 
      	 
      
	
              8/1/2015

            	
                           1,845,451.36

            	
                    309,765.71

            	
                    2,155,217.07

            	 
      	 
      
	
              9/1/2015

            	
                           1,845,451.36

            	
                    309,765.71

            	
                    2,155,217.07

            	 
      	 
      
	
              10/1/2015

            	
                           1,845,451.36

            	
                    309,765.71

            	
                    2,155,217.07

            	 
      	 
      
	
              11/1/2015

            	
                           1,861,492.10

            	
                    309,765.71

            	
                    2,171,257.81

            	 
      	 
      
	
              12/1/2015

            	
                           1,891,542.87

            	
                    309,765.71

            	
                    2,201,308.58

            	 
      	 
      
	
              1/1/2016

            	
                           1,891,587.65

            	
                    309,765.71

            	
                    2,201,353.35

            	 
      	 
      
	
              2/1/2016

            	
                           1,891,587.65

            	
                    309,765.71

            	
                    2,201,353.35

            	 
      	 
      
	
              3/1/2016

            	
                           1,891,587.65

            	
                    309,765.71

            	
                    2,201,353.35

            	 
      	 
      
	
              4/1/2016

            	
                           1,891,587.65

            	
                    309,765.71

            	
                    2,201,353.35

            	 
      	 
      
	
              5/1/2016

            	
                           1,891,587.65

            	
                    317,509.85

            	
                    2,209,097.50

            	 
      	 
      
	
              6/1/2016

            	
                           1,891,587.65

            	
                    317,509.85

            	
                    2,209,097.50

            	 
      	 
      
	
              7/1/2016

            	
                           1,891,587.65

            	
                    317,509.85

            	
                    2,209,097.50

            	 
      	 
      
	
              8/1/2016

            	
                           1,891,587.65

            	
                    317,509.85

            	
                    2,209,097.50

            	 
      	 
      
	
              9/1/2016

            	
                           1,891,587.65

            	
                    317,509.85

            	
                    2,209,097.50

            	 
      	 
      
	
              10/1/2016

            	
                           1,891,587.65

            	
                    317,509.85

            	
                    2,209,097.50

            	 
      	 
      
	
              11/1/2016

            	
                           1,908,029.41

            	
                    317,509.85

            	
                    2,225,539.26

            	 
      	 
      
	
              12/1/2016

            	
                           1,938,831.44

            	
                    317,509.85

            	
                    2,256,341.29

            	 
      	 
      
	
              1/1/2017

            	
                           1,938,877.33

            	
                    317,509.85

            	
                    2,256,387.18

            	 
      	 
      
	
              2/1/2017

            	
                           1,938,877.33

            	
                    317,509.85

            	
                    2,256,387.18

            	 
      	 
      
	
              3/1/2017

            	
                           1,938,877.33

            	
                    317,509.85

            	
                    2,256,387.18

            	 
      	 
      
	
              4/1/2017

            	
                           1,938,877.33

            	
                    317,509.85

            	
                    2,256,387.18

            	 
      	 
      
	
              5/1/2017

            	
                           1,938,877.33

            	
                    325,447.60

            	
                    2,264,324.93

            	 
      	 
      
	
              6/1/2017

            	
                           1,938,877.33

            	
                    325,447.60

            	
                    2,264,324.93

            	 
      	 
      
	
              7/1/2017

            	
                           1,938,877.33

            	
                    325,447.60

            	
                    2,264,324.93

            	 
      	 
      
	
              8/1/2017

            	
                           1,938,877.33

            	
                    325,447.60

            	
                    2,264,324.93

            	 
      	 
      
	
              9/1/2017

            	
                           1,938,877.33

            	
                    325,447.60

            	
                    2,264,324.93

            	 
      	 
      
	
              10/1/2017

            	
                           1,938,877.33

            	
                    325,447.60

            	
                    2,264,324.93

            	 
      	 
      
	
              11/1/2017

            	
                           1,955,730.14

            	
                    325,447.60

            	
                    2,281,177.74

            	 
      	 
      
	
              12/1/2017

            	
                           1,987,302.23

            	
                    325,447.60

            	
                    2,312,749.83

            	 
      	 
      
	
              1/1/2018

            	
                           1,987,349.27

            	
                    325,447.60

            	
                    2,312,796.87

            	 
      	 
      
	
              2/1/2018

            	
                           1,987,349.27

            	
                    325,447.60

            	
                    2,312,796.87

            	 
      	 
      
	
              3/1/2018

            	
                           1,987,349.27

            	
                    325,447.60

            	
                    2,312,796.87

            	 
      	 
      
	
              4/1/2018

            	
                           1,987,349.27

            	
                    325,447.60

            	
                    2,312,796.87

            	 
      	 
      
	
              5/1/2018

            	
                           1,987,349.27

            	
                    333,583.79

            	
                    2,320,933.06

            	 
      	 
      
	
              6/1/2018

            	
                           1,987,349.27

            	
                    333,583.79

            	
                    2,320,933.06

            	 
      	 
      
	
              7/1/2018

            	
                           1,987,349.27

            	
                    333,583.79

            	
                    2,320,933.06

            	 
      	 
      
	
              8/1/2018

            	
                           1,987,349.27

            	
                    333,583.79

            	
                    2,320,933.06

            	 
      	 
      
	
              9/1/2018

            	
                           1,987,349.27

            	
                    333,583.79

            	
                    2,320,933.06

            	 
      	 
      
	
              10/1/2018

            	
                           1,987,349.27

            	
                    333,583.79

            	
                    2,320,933.06

            	 
      	 
      
	
              11/1/2018

            	
                           2,004,623.40

            	
                    333,583.79

            	
                    2,338,207.18

            	 
      	 
      
	
              12/1/2018

            	
                           2,036,984.78

            	
                    333,583.79

            	
                    2,370,568.57

            	 
      	 
      

    

    
      
        
                                                              I - 1 of
1

        

         

      

      
         

        
          

        

      

      
         

      

    

    Schedule
8.2.5

     

    Other
Permitted Indebtedness

     

    

    Health
Care Holdings, LLC

    Borrowings/Guarantee
Schedule

    

    
      	
              1.  

            	
              Fifth
      Third Bank – Guaranty of outstanding debt of Value Care Pharmacy -
      $4,400,000

            

    

    
      	
              2.  

            	
              Cuyahoga
      County – Guaranty of outstanding debt of Value Care Pharmacy -
      $200,000

            

    

    
      	
              3.  

            	
              Ray
      Fogg, Inc. – Guaranty of lease (Value Care) – total maximum exposure
      approx $700,000

            

    

    
      	
              4.  

            	
              Fifth
      Third Bank – Borrower on Letter of Credit in favor of Omega -
      $4,310,000

            

    

    
      	
              5.  

            	
              Fifth
      Third Bank – Borrower on Letter of Credit in favor of Lasalle Bank (St.
      Louis Facilities) - $700,000

            

    

    
      	
              6.  

            	
              Commerce
      Bank – guaranty of depository relationship for returned
    checks

            

    

    
      	
              7.  

            	
              Commissioner
      – Ohio Bureau of Worker’s Compensation – guaranty of claims obligations of
      Health Care Facilities Staffing, LLC (in connection with self insured
      worker’s compensation relationship in
Ohio)

            

    

    
      	
              8.  

            	
              Fifth
      Third Bank – Borrower on Letter of Credit (to be issued in Apr 2008) in
      favor of Omega (LTACH) - $152,500

            

    

    
      	
              9.  

            	
              Fifth
      Third Bank – Borrower on Letter of Credit (to be issued in 2008 or 2009)
      in favor of DMH-Dayton, Inc. (Dayton Facilities) of
    $550,000

            

    

    
      	
              10.  

            	
              Fifth
      Third Bank – Guaranty of outstanding debt of CommuniCare of Clifton, Inc.
      - $1,000,000

            

    

    
      	
              11.  

            	
              Lasalle
      Bank – “Bad Boy” guarantee in connection with the St. Louis
      Facilities

            

    

    
      	
              12.  

            	
              Omega
      Healthcare Investors – “Bad Boy” guarantee in connection with leased and
      owned centers.

            

    

    

    HC Real
Estate Holdings, LLC

    Borrowings/Guarantee
Schedule

    

    
      	
              1.  

            	
              Fifth
      Third Bank – Borrower on Letter of Credit in favor of Omega -
      $1,100,000

            

    

    
      	
              2.  

            	
              Fifth
      Third Bank – Borrower on yet to be issued LC’s in favor of Omega (to be
      issued in 2008 and 2009)-
$2,200,000

            

    

    
      	
              3.  

            	
              Fifth
      Third Bank – Borrower on Letter of Credit in favor of Fort Washington
      Partners - $157,250

            

    

    
      	
              4.  

            	
              Omega
      Healthcare Investors – “Bad Boy” guarantee in connection with leased and
      owned centers.

            

    

    
      
        
          Schedule 8.2.5
- 1 of 1

        

         

      

      
         

        
          

        

      

      
         

      

    

    Schedule
8.8

    

    PERMITTED
INVESTMENTS

    

    

    1.           The
ownership and operation of :

    

    City View
Nursing and Rehabilitation Center

    6606
Carnegie Avenue, Cleveland, Ohio 44103

    

    by the
following Subsidiaries of Health Care Holdings, LLC, an Ohio limited liability
company:

    

    CITY VIEW
NURSING & REHAB, LLC, an Ohio limited liability company

    CLEVELAND
NH ASSET, LLC, an Ohio limited liability company

    OMG RE
HOLDINGS, LLC, an Ohio limited liability company

    

    2.           The
ownership and operation of:

    

    Green
Park Nursing Home

    Green
Park Resident Center

    Park
Terrace Resident Center

    Northgate
Park Nursing Home

    (all
located in the St. Louis, Missouri area)

    

    by the
following Subsidiaries of HC Real Estate Holdings, LLC, an Ohio limited
liability company:

    

    LaSalle
RE Assets, LLC, an Ohio limited liability company

    LaSalle
Holdings, LLC, an Ohio limited liability company

    Green
Park Leasing Co., LLC, an Ohio limited liability company

    Flo-GP
Leasing Co., LLC, an Ohio limited liability company

    Health
Care Holdings, LLC, an Ohio limited liability company

    

    3.           The
ownership and operation of:

    

    Nursing
home located at 2222 Springdale Road, Cincinnati, Ohio 45231

    Nursing
home located at 2000 Regency Manor Circle, Columbus, Ohio 43201

    

    by the
following Subsidiaries of Health Care Holdings, LLC, an Ohio limited liability
company:

    

    PC MSTR LSCO,
LLC

    Springdale Leasing Co.,
LLC

    Regency Leasing Co.,
LLC

    

    4.           The
ownership and operation of:

    

    Wood Glen
Nursing Center

    The
Riverside Nursing Center

    

    
      
        
        

      

      
        Schedule
8.8 - 1of 2

        
          

        

      

      
        
        

      

    

    by the
following Subsidiaries of Health Care Holdings, LLC, an Ohio limited liability
company:

    

    DMH MSTR LSCO,
LLC

    Summit (Ohio) Leasing
Co., LLC

    King Tree Leasing Co.,
LLC

    

    The
leasing and operation of:

    

    Fort
Washington Health & Rehabilitation Center

    Berea
Center for Specialized Care

    

    by the
following Subsidiaries of HC Real Estate Holdings, LLC, an Ohio limited
liability company:

    

    Health
Care Lease Facilities, LLC

    Livingston
Leasing Co, LLC

    Sheldon
Leasing Co, LLC

    

    

    In
connection with the foregoing Permitted Investments, HCH or HCREH, as
applicable, may make loans or advance funds to such Subsidiaries provided that
(i) no Event of Default or Unmatured Event of Default has occurred and is
continuing, and (ii) such loans or advances are made from unencumbered funds
otherwise available for distribution to the equity owners of
HCH.

    
      
        
                                  Schedule 8.8
-  2 of 2

        

         

      

      
         

        
          

        

      

      
         

      

    

    Schedule
9.3

    

    Improvements
Schedule

    

    Funds
will be allocated per Facility as follows:

    

    
      	
              Facility

            	
              Address

            	
              City

            	
              ST

            	 	
              Allocation
      of $3.0M CAP-EX (1)

            	 
	
              Chardon
      Healthcare Center

            	
              620
      Water Street

            	
              Chardon

            	
              OH

            	 	 	125,000.00	 
	
              Commons
      at Greenbriar (ALF)

            	
              8060
      South Avenue

            	
              Boardman

            	
              OH

            	 	 	25,000.00	 
	
              Greenbriar
      Center (a/k/a Greenbriar North)

            	
              8064
      South Avenue

            	
              Boardman

            	
              OH

            	 	 	75,000.00	 
	
              Greenbriar
      Rehabilitation Hospital

            	
              8064
      South Avenue, Ste. One

            	
              Boardman

            	
              OH

            	 	 	25,000.00	 
	
              Kent
      Care Center

            	
              1290
      Fairchild Avenue

            	
              Kent

            	
              OH

            	 	 	100,000.00	 
	
              Northwestern
      Center

            	
              570
      North Rocky River Drive

            	
              Berea

            	
              OH

            	 	 	75,000.00	 
	
              Columbus
      Center

            	
              4301
      Clime Road, North

            	
              Columbus

            	
              OH

            	 	 	125,000.00	 
	
              Golden
      Years Healthcare Center

            	
              (P.O.
      Box 1148) 2125 Royce Street

            	
              Portsmouth

            	
              OH

            	 	 	75,000.00	 
	
              Oak
      Grove Center

            	
              620
      East Water Street

            	
              Deshler

            	
              OH

            	 	 	-	 
	 
      	 
      	
               

              Total

            	 
      	 	$	625,000	 

    

    

    Specific improvements,
budgets, and plans must be approved prior to the commencement of any
improvement.

    
      
        
          Schedule 9.3
-1 of 1

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00141-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00141-of-00352.parquet"}]]