EXHIBIT 10.41.1 AMENDED AND RESTATED MASTER LEASE AGREEMENT AMONG HEALTH CARE REIT, INC. HCRI NORTH CAROLINA PROPERTIES, LLC HCRI TENNESSEE PROPERTIES, INC. AND HCRI TEXAS PROPERTIES, LTD. AND ALTERRA HEALTHCARE CORPORATION JULY 1, 2001 TABLE OF CONTENTS

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EXHIBIT 10.41.1

AMENDED AND RESTATED MASTER LEASE AGREEMENT

AMONG

HEALTH CARE REIT, INC.

HCRI NORTH CAROLINA PROPERTIES, LLC

HCRI TENNESSEE PROPERTIES, INC. AND

HCRI TEXAS PROPERTIES, LTD.

AND

ALTERRA HEALTHCARE CORPORATION

JULY 1, 2001

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TABLE OF CONTENTS

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ARTICLE 1: LEASED PROPERTY, TERM AND DEFINITIONS.................................................... 1

1.1 Leased Property.......................................................................... 1

1.2 Indivisible Lease........................................................................ 1

1.3 Term..................................................................................... 2

1.4 Definitions.............................................................................. 2

1.5 Landlord As Agent........................................................................ 9

ARTICLE 2: RENT..................................................................................... 9

2.1 Base Rent................................................................................ 9

2.2 Increase of Lease Rate and Base Rent..................................................... 9

2.3 Additional Rent.......................................................................... 10

2.4 Place of Payment of Rent................................................................. 10

2.5 Net Lease................................................................................ 11

2.6 No Termination, Abatement, Etc........................................................... 11

2.7 Computational Method..................................................................... 11

ARTICLE 3: IMPOSITIONS AND UTILITIES................................................................ 11

3.1 Payment of Impositions................................................................... 11

3.2 Definition of Impositions................................................................ 12

3.3 Escrow of Impositions.................................................................... 13

3.4 Utilities................................................................................ 13

3.5 Discontinuance of Utilities.............................................................. 13

3.6 Business Expenses........................................................................ 13

3.7 Permitted Contests....................................................................... 14

ARTICLE 4: INSURANCE................................................................................ 14

4.1 Property Insurance....................................................................... 14

4.2 Liability Insurance...................................................................... 15

4.3 Builder's Risk Insurance................................................................. 16

4.4 Insurance Requirements................................................................... 16

4.5 Replacement Value........................................................................ 17

4.6 Blanket Policy........................................................................... 17

4.7 No Separate Insurance.................................................................... 17

4.8 Waiver of Subrogation.................................................................... 17

4.9 Mortgages................................................................................ 17

4.10 Escrows.................................................................................. 18

ARTICLE 5: INDEMNITY................................................................................ 18

5.1 Tenant's Indemnification................................................................. 18

5.1.1 Notice of Claim.............................................................. 18

5.1.2 Survival of Covenants........................................................ 18

5.1.3 Reimbursement of Expenses.................................................... 19

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5.2 Environmental Indemnity; Audits.......................................................... 19

5.3 Limitation of Landlord's Liability....................................................... 19

ARTICLE 6: USE AND ACCEPTANCE OF PREMISES........................................................... 19

6.1 Use of Leased Property................................................................... 19

6.2 Acceptance of Leased Property............................................................ 20

6.3 Conditions of Use and Occupancy.......................................................... 20

ARTICLE 7: MAINTENANCE AND MECHANICS' LIENS......................................................... 20

7.1 Maintenance.............................................................................. 20

7.2 Required Alterations..................................................................... 20

7.3 Mechanic's Liens......................................................................... 21

7.4 Replacements of Fixtures and Landlord's Personal Property................................ 21

ARTICLE 8: DEFAULTS AND REMEDIES.................................................................... 22

8.1 Events of Default........................................................................ 22

8.2 Remedies................................................................................. 24

8.3 Right of Set-Off......................................................................... 26

8.4 Performance of Tenant's Covenants........................................................ 26

8.5 Late Payment Charge...................................................................... 26

8.6 Interest................................................................................. 27

8.7 Litigation; Attorneys' Fees.............................................................. 27

8.8 Escrows and Application of Payments...................................................... 27

8.9 Remedies Cumulative...................................................................... 27

ARTICLE 9: DAMAGE AND DESTRUCTION................................................................... 28

9.1 Notice of Casualty....................................................................... 28

9.2 Substantial Destruction.................................................................. 28

9.3 Partial Destruction...................................................................... 29

9.4 Restoration.............................................................................. 29

9.5 Insufficient Proceeds.................................................................... 30

9.6 Not Trust Funds.......................................................................... 30

9.7 Landlord's Inspection.................................................................... 30

9.8 Landlord's Costs......................................................................... 30

9.9 No Rent Abatement........................................................................ 31

ARTICLE 10: CONDEMNATION............................................................................ 31

10.1 Total Taking............................................................................. 31

10.2 Partial Taking........................................................................... 31

10.3 Condemnation Proceeds Not Trust Funds.................................................... 31

ARTICLE 11: TENANT'S PROPERTY....................................................................... 32

11.1 Tenant's Property........................................................................ 32

11.2 Requirements for Tenant's Property....................................................... 32

ARTICLE 12: RENEWAL OPTIONS......................................................................... 33

12.1 Renewal Options.......................................................................... 33

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12.2 Effect of Renewal........................................................................ 33

12.3 Effect of Non-Renewal or Expiration of Lease............................................. 34

ARTICLE 13: OPTION TO PURCHASE...................................................................... 34

13.1 Option to Purchase....................................................................... 34

13.2 Option Price............................................................................. 34

13.3 Fair Market Value........................................................................ 35

13.4 Closing.................................................................................. 36

13.5 Failure to Close Option.................................................................. 36

13.6 Failure to Exercise Option to Purchase and Renewal Option................................ 37

ARTICLE 14: NEGATIVE COVENANTS...................................................................... 37

14.1 No Debt.................................................................................. 37

14.2 No Liens................................................................................. 37

14.3 No Guaranties............................................................................ 37

14.4 No Transfer.............................................................................. 37

14.5 No Dissolution........................................................................... 37

14.6 [INTENTIONALLY OMITTED].................................................................. 37

14.7 No Investments........................................................................... 37

14.8 Contracts................................................................................ 38

14.9 Subordination of Payments to Affiliates.................................................. 38

14.10 Change of Location or Name............................................................... 38

ARTICLE 15: AFFIRMATIVE COVENANTS................................................................... 38

15.1 Perform Obligations...................................................................... 38

15.2 Proceedings to Enjoin or Prevent Construction............................................ 38

15.3 Documents and Information................................................................ 38

15.3.1 Furnish Documents............................................................ 38

15.3.2 Furnish Information.......................................................... 39

15.3.3 Further Assurances and Information........................................... 39

15.3.4 Material Communications...................................................... 39

15.3.5 Requirements for Financial Statements........................................ 39

15.3.6 Confidentiality.............................................................. 39

15.4 Compliance With Laws..................................................................... 40

15.5 Broker's Commission...................................................................... 40

15.6 Existence and Change in Control.......................................................... 40

15.7 Financial Covenants...................................................................... 40

15.7.1 Definitions.................................................................. 40

15.7.2 Coverage Ratio............................................................... 40

15.7.3 Net Worth.................................................................... 41

15.7.4 Current Ratio................................................................ 41

15.7.5 Debt to Equity Ratio......................................................... 41

15.7.6 Working Capital.............................................................. 41

15.8 Transfer of License and Facility Operations.............................................. 41

15.9 Most Favored Lessor Provision............................................................ 41

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ARTICLE 16: ALTERATIONS, CAPITAL IMPROVEMENTS, AND SIGNS............................................ 41

16.1 Prohibition on Alterations and Improvements.............................................. 41

16.2 Approval of Alterations.................................................................. 41

16.3 Permitted Alterations.................................................................... 42

16.4 Requirements for Permitted Alterations................................................... 42

16.5 Ownership and Removal of Permitted Alterations........................................... 43

16.6 Signs.................................................................................... 43

ARTICLE 17: [RESERVED].............................................................................. 43

ARTICLE 18: ASSIGNMENT AND SALE OF LEASED PROPERTY.................................................. 43

18.1 Prohibition on Assignment and Subletting................................................. 43

18.2 Requests for Landlord's Consent to Assignment, Sublease or Management Agreement.......... 43

18.3 Agreements with Residents................................................................ 44

18.4 Sale of Leased Property.................................................................. 44

18.5 Assignment by Landlord................................................................... 45

ARTICLE 19: HOLDOVER AND SURRENDER.................................................................. 45

19.1 Holding Over............................................................................. 45

19.2 Surrender................................................................................ 45

ARTICLE 20: LETTER OF CREDIT........................................................................ 45

20.1 Terms of Letter of Credit................................................................ 45

20.2 Replacement Letter of Credit............................................................. 45

20.3 Draws.................................................................................... 46

20.4 Partial Draws............................................................................ 46

20.5 Substitute Letter of Credit.............................................................. 47

20.6 Retention of Letter of Credit............................................................ 47

20.7 Termination of Letter of Credit Amount................................................... 47

ARTICLE 21: QUIET ENJOYMENT, SUBORDINATION, ATTORNMENT AND ESTOPPEL CERTIFICATES.................... 47

21.1 Quiet Enjoyment.......................................................................... 47

21.2 Subordination............................................................................ 47

21.3 Attornment............................................................................... 48

21.4 Estoppel Certificates.................................................................... 48

ARTICLE 22: REPRESENTATIONS AND WARRANTIES.......................................................... 49

22.1 Organization and Good Standing........................................................... 49

22.2 Power and Authority...................................................................... 49

22.3 Enforceability........................................................................... 49

22.4 Government Authorizations................................................................ 49

22.5 Financial Statements..................................................................... 49

22.6 Condition of Facility.................................................................... 49

22.7 Compliance with Laws..................................................................... 50

22.8 No Litigation............................................................................ 50

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22.9 Consents................................................................................. 50

22.10 No Violation............................................................................. 50

22.11 Reports and Statements................................................................... 50

22.12 ERISA.................................................................................... 51

22.13 Chief Executive Office................................................................... 51

22.14 Other Name or Entities................................................................... 51

22.15 Parties in Possession.................................................................... 51

22.16 Access................................................................................... 51

22.17 Utilities................................................................................ 51

22.18 Condemnation and Assessments............................................................. 51

22.19 Zoning................................................................................... 51

22.20 Pro Forma Statement...................................................................... 52

22.21 Environmental Matters.................................................................... 52

22.22 Leases and Contracts..................................................................... 52

22.23 No Default............................................................................... 52

ARTICLE 23: FUTURE PROJECTS......................................................................... 52

23.1 Obligation for Future Projects........................................................... 52

23.2 Coterminous Transactions................................................................. 52

ARTICLE 24: SECURITY INTEREST....................................................................... 53

24.1 Collateral............................................................................... 53

24.2 Additional Documents..................................................................... 53

24.3 Notice of Sale........................................................................... 54

ARTICLE 25: MISCELLANEOUS........................................................................... 54

25.1 Notices.................................................................................. 54

25.2 Advertisement of Leased Property......................................................... 54

25.3 Entire Agreement......................................................................... 54

25.4 Severability............................................................................. 54

25.5 Captions and Headings.................................................................... 55

25.6 Governing Law............................................................................ 55

25.7 Memorandum of Lease...................................................................... 55

25.8 Waiver................................................................................... 55

25.9 Binding Effect........................................................................... 55

25.10 Power of Attorney........................................................................ 55

25.11 No Offer................................................................................. 56

25.12 Modification............................................................................. 56

25.13 Landlord's Modification.................................................................. 56

25.14 No Merger................................................................................ 56

25.15 Laches................................................................................... 56

25.16 Limitation on Tenant's Recourse.......................................................... 56

25.17 Construction of Lease.................................................................... 57

25.18 Counterparts............................................................................. 57

25.19 Custody of Escrow Funds.................................................................. 57

25.20 Landlord's Status as a REIT.............................................................. 57

25.21 Exhibits................................................................................. 57

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25.22 WAIVER OF JURY TRIAL..................................................................... 57

25.23 CONSENT TO JURISDICTION.................................................................. 57

25.24 Attorney's Fees and Expenses............................................................. 58

25.25 Survival................................................................................. 58

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EXHIBIT A: LEGAL DESCRIPTIONS

EXHIBIT B: PERMITTED EXCEPTIONS

EXHIBIT C: FACILITY INFORMATION

EXHIBIT D: LANDLORD'S PERSONAL PROPERTY

EXHIBIT E: DOCUMENTS TO BE DELIVERED

EXHIBIT F: TENANT'S CERTIFICATE AND FACILITY FINANCIAL REPORTS

EXHIBIT G: GOVERNMENT AUTHORIZATIONS TO BE OBTAINED; ZONING PERMITS

EXHIBIT H: PENDING LITIGATION

EXHIBIT I: LIST OF LEASES AND CONTRACTS

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AMENDED AND RESTATED MASTER LEASE AGREEMENT

This Amended and Restated Master Lease Agreement ("Lease") is made

effective as of July 1, 2001 (the "Effective Date") among HEALTH CARE REIT,

INC., a corporation organized under the laws of the State of Delaware ("HCRI"

and a "Landlord" as further defined in Section 1.4 below), HCRI NORTH CAROLINA

PROPERTIES, LLC, a limited liability company organized under the laws of the

State of Delaware ("HCRI-NC" and a "Landlord"), HCRI TENNESSEE PROPERTIES, INC.,

a corporation organized under the laws of the State of Delaware ("HCRI-TN" and a

"Landlord"), and HCRI TEXAS PROPERTIES, LTD., a limited partnership organized

under the laws of the State of Texas ("HCRI-TX" and a "Landlord"), each Landlord

having its principal office located at One SeaGate, Suite 1500, P.O. Box 1475,

Toledo, Ohio 43603-1475, and ALTERRA HEALTHCARE CORPORATION, a corporation

organized under the laws of the State of Delaware ("Tenant"), having its chief

executive office located at 10000 Innovation Drive, Milwaukee, Wisconsin 53226.

R E C I T A L S

A. Tenant is the tenant of the Leased Property (defined below)

pursuant to numerous Lease Agreements by and between Landlord and Tenant, or

Tenant's predecessor in interest, including a certain Lease Agreement between

Health Care REIT, Inc. and Alternative Living Services, Inc. d/b/a Alterra dated

May 19, 1999 for the facility known as Clare Bridge of Everett and located in

Everett, Washington ("Everett Lease").

B. Landlord and Tenant desire to consolidate all leases by and

between Landlord and Tenant into the Everett Lease and to amend and restate the

Everett Lease as set forth herein.

NOW, THEREFORE, Landlord and Tenant agree as follows:

ARTICLE 1: LEASED PROPERTY, TERM AND DEFINITIONS

1.1 Leased Property. Landlord hereby leases to Tenant and Tenant

hereby leases from Landlord the Leased Property, subject, however, to the

Permitted Exceptions and subject to the terms and conditions of this Lease.

1.2 Indivisible Lease. This Lease constitutes one indivisible lease

of the entire Leased Property. The Leased Property constitutes one economic unit

and the Base Rent and all other provisions have been negotiated and agreed to

based on a lease of all of the Leased Property as a single, composite,

inseparable transaction and would have been materially different had separate

leases or a divisible lease been intended. Except as expressly provided herein

for specific, isolated purposes (and then only to the extent expressly otherwise

stated), all provisions of this Lease shall apply equally and uniformly to all

the Leased Property as one unit and any Event of Default under this Lease is an

Event of Default as to the entire Leased Property. The parties intend that the

provisions of this Lease shall at all times be construed, interpreted and

applied so as to carry out their mutual objective to create a single indivisible

lease of all the Leased Property and, in particular but without limitation, that

for purposes of any assumption, rejection or assignment of this Lease under the

Bankruptcy Code, this is one indivisible and

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non-severable lease and executory contract dealing with one legal and economic

unit which must be assumed, rejected or assigned as a whole with respect to all

(and only all) the Leased Property covered hereby. The parties agree that the

existence of more than one Landlord under this Lease does not affect the

indivisible, non-severable nature of this Lease. The parties may amend this

Lease from time to time to include one or more additional Facility Properties as

part of the Leased Property and such future addition to the Leased Property

shall not in any way change the indivisible and non-severable nature of this

Lease and all of the foregoing provisions shall continue to apply in full force.

1.3 Term. The initial term ("Initial Term") of this Lease commences

on the Effective Date and expires at 12:00 Midnight Eastern Time on the

fifteenth anniversary of the Commencement Date (the "Expiration Date");

provided, however, that [i] Tenant has one or more options to renew the Lease

pursuant to Article 12, and [ii] that any addition to the Leased Property

pursuant to amendment of this Lease shall extend the Initial Term so that the

Initial Term shall expire on the fifteenth anniversary of the Amended

Commencement Date as set forth in such amendment.

1.4 Definitions. Except as otherwise expressly provided, [i] the

terms defined in this Section have the meanings assigned to them in this Section

and include the plural as well as the singular; [ii] all accounting terms not

otherwise defined herein have the meanings assigned to them in accordance with

generally accepted accounting principles as of the time applicable; and [iii]

the words "herein", "hereof", and "hereunder" and similar words refer to this

Lease as a whole and not to any particular Section .

"ADA" means the federal statute entitled Americans with Disabilities

Act, 42 U.S.C. Section 12101, et seq.

"Affiliate" means any person, corporation, partnership, limited

liability company, trust, or other legal entity that, directly or indirectly,

controls, or is controlled by, or is under common control with Tenant. "Control"

(and the correlative meanings of the terms "controlled by" and "under common

control with") means the possession, directly or indirectly, of the power to

direct or cause the direction of the management and policies of such entity.

"Allocated Lease Amount" means the portion of the Lease Amount

allocated to a specific Facility for certain specified purposes as set forth on

the attached Exhibit C, including any Lease Advance Amount designated by

Landlord as allocated to such specific Facility.

"Amended Commencement Date" means the Commencement Date as amended

pursuant to the most recent amendment of this Lease in effect at such time.

"Annual Facility Budget" means Tenant's projection of the Facility

Financial Statement for the next fiscal year (or the 12-month rolling forward

period, if applicable).

"Annual Financial Statements" means [i] for Tenant, an audited

balance sheet, statement of income, and statement of cash flows for the most

recent fiscal year on an individual facility and consolidated basis; and [ii]

for each Facility, an unaudited Facility Financial Statement for the most recent

fiscal year.

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"Bankruptcy Code" means the United State Bankruptcy Code set forth

in 11 U.S.C. Section 101 et. seq., as amended from time to time.

"Base Rent" has the meaning set forth in Section 2.1, as increased

from time to time pursuant to Section 2.2.

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

national holiday.

"CERCLA" means the Comprehensive Environmental Response,

Compensation and Liability Act of 1980, as amended from time to time.

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

Tenant.

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

"Commencement Date" means the Effective Date if such date is the

first day of a month, and if it is not, the first day of the first month

following the Effective Date.

"Commitment" means the Commitment Letter for the Lease dated June

26, 2001.

"Company Financial Model" means Tenant's projection of its financial

statement for the next five fiscal years, which shall include the balance sheet,

statement of income and statement of cash flow.

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

"Effective Date" means the date of this Lease as set forth in the

first paragraph hereof.

"Environmental Laws" means all federal, state, and local ecological,

wetlands, and other environmental laws and regulations, as amended from time to

time, including but not limited to [i] CERCLA; [ii] the Resource Conservation

and Recovery Act; [iii] the Hazardous Materials Transportation Act; [iv] the

Clean Air Act; [v] Clean Water Act; [vi] the Toxic Substances Control Act; and

[vii] the Safe Drinking Water Act.

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

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

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

"Facility" means each facility located on a portion of the Land,

including the Facility Property associated with such Facility. References in

this Lease to the "Facility" shall mean each Facility individually unless

expressly stated otherwise.

"Facility Financial Statement" means a financial statement for each

Facility which shall include the statement of income and expense, occupancy

census data (including payor mix

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to the extent presently provided by Affiliates) and a comparison of the actual

financial data versus the Annual Facility Budget for the applicable period.

"Facility Name" means the name under which a Facility has done

business during the Term. The Facility Name in use by each Facility on the

Effective Date is set forth on the attached Exhibit C.

"Facility Property" means the portion of the Land on which a

Facility is located, the legal description of which is set forth beneath the

applicable Facility Name on Exhibit A, the Improvements on such portion of the

Land, the Related Rights with respect to such portion of the Land, and

Landlord's Personal Property with respect to such Facility. References in this

Lease to the "Facility Property" shall mean the entire Facility Property unless

expressly stated otherwise.

"Facility Uses" means the uses relating to the operation of a

Facility as a facility of the type and operating the number of beds and units

set forth on Exhibit C with respect to such Facility.

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

"Financial Statements" means [i] the annual, quarterly and year to

date financial statements of Tenant; and [ii] all operating statements for each

Facility, that were submitted to Landlord prior to the Effective Date.

"Fixtures" means all permanently affixed equipment, machinery,

fixtures and other items of real and/or personal property (excluding Landlord's

Personal Property), including all components thereof, now and hereafter located

in, on or used in connection with, and permanently affixed to or incorporated

into the Improvements, including, without limitation, all furnaces, boilers,

heaters, electrical equipment, heating, plumbing, lighting, ventilating,

refrigerating, incineration, air and water pollution control, waste disposal,

air-cooling and air-conditioning systems and apparatus, sprinkler systems and

fire and theft protection equipment, built-in oxygen and vacuum systems, towers

and other devices for the transmission of radio, television and other signals,

all of which, to the greatest extent permitted by law, are hereby deemed by the

parties hereto to constitute real estate, together with all replacements,

modifications, alterations and additions thereto. References in this Lease to

the "Fixtures" shall mean all Fixtures unless expressly stated otherwise.

"Government Authorizations" means all permits, licenses, approvals,

consents, and authorizations required to comply with all Legal Requirements,

including, but not limited to, [i] zoning permits, variances, exceptions,

special use permits, conditional use permits, and consents; [ii] to the extent

applicable, the permits, licenses, provider agreements and approvals required

for licensure and operation of each Facility in accordance with its respective

Facility Uses and certified, if applicable, as a provider under the federal

Medicare and state Medicaid programs; [iii] environmental, ecological, coastal,

wetlands, air, and water permits, licenses, and consents; [iv] curb cut,

subdivision, land use, and planning permits, licenses, approvals and consents;

[v] building, sign, fire, health, and safety permits, licenses, approvals, and

consents; and [vi] architectural reviews, approvals, and consents required under

restrictive covenants.

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"Hazardous Materials" means any substance [i] the presence of which

poses a hazard to the health or safety of persons on or about the Land,

including, but not limited to, asbestos containing materials; [ii] which

requires removal or remediation under any Environmental Law, including, without

limitation, any substance which is toxic, explosive, flammable, radioactive, or

otherwise hazardous; or [iii] which is regulated under or classified under any

Environmental Law as hazardous or toxic, including, but not limited to, any

substance within the meaning of "hazardous substance", "hazardous material",

"hazardous waste", "toxic substance", "regulated substance", "solid waste", or

"pollutant" as defined in any Environmental Law.

"HCRI" means Health Care REIT, Inc., a corporation organized under

the laws of the State of Delaware.

"HCRI-NC" means HCRI North Carolina Properties, LLC, a limited

liability company organized under the laws of the State of Delaware.

"HCRI-TN" means HCRI Tennessee Properties, Inc., a corporation

organized under the laws of the State of Delaware.

"HCRI-TX" means HCRI Texas Properties, Ltd., a limited partnership

organized under the laws of the State of Texas.

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

"Improvements" means all buildings, structures, Fixtures and other

improvements of every kind on the Land, including, but not limited to, alleys,

sidewalks, utility pipes, conduits and lines (on-site and off-site), parking

areas and roadways appurtenant to such buildings and structures, now or

hereafter situated upon the Land. References in this Lease to the "Improvements"

shall mean all Improvements unless expressly stated otherwise.

"Initial Lease Advance" means $81,665,113.00.

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

"Issuer" means a financial institution satisfactory to Landlord

issuing the Letter of Credit and such Issuer's successors and assigns. Any

"Issuer" shall have a Lace Financial Service Rating of "C+" or higher (or

comparable rating from a comparable rating entity if Lace Financial Service

should cease providing such ratings) at all times throughout the Term. Landlord

agrees that Firstar N.A. is an acceptable Issuer as of the Effective Date.

"Land" means the real property described in Exhibit A attached

hereto. References in this Lease to the "Land" shall mean the entire Land unless

expressly stated otherwise.

"Landlord" means HCRI, HCRI-NC, HCRI-TN and HCRI-TX, individually

and collectively.

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"Landlord Affiliate" means any person, corporation, partnership,

limited liability company, trust, or other legal entity that, directly or

indirectly, controls, or is controlled by, or is under common control with

Landlord. "Control" (and the correlative meanings of the terms "controlled by"

and "under common control with") means the possession, directly or indirectly,

of the power to direct or cause the direction of the management and policies of

such entity. "Landlord Affiliate" includes, without limitation, HCRI

Pennsylvania Properties, Inc., HCRI Nevada Properties, Inc., HCRI Properties,

Inc. and HCRI Louisiana Properties, L.P.

"Landlord's Personal Property" means all Personal Property owned by

Landlord on the Effective Date, together with any and all replacements thereof,

and all Personal Property that pursuant to the terms of this Lease becomes the

property of Landlord during the Term. References in this Lease to "Landlord's

Personal Property" shall mean all Landlord's Personal Property unless expressly

stated otherwise. As of the Effective Date, Landlord's Personal Property

includes all Personal Property located at the Leased Property, except Personal

Property that is leased or financed by Tenant from an entity other than

Landlord.

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

"Lease" means this Master Lease Agreement, as amended from time to

time.

"Lease Advance" means any advance of funds by Landlord to Tenant

pursuant to the terms of this Lease including the Initial Lease Advance.

"Lease Advance Amount" means the amount of any Lease Advance. The

first Lease Advance Amount is the Lease Amount on the Effective Date.

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

Advance.

"Lease Amount" is an aggregate concept and means the sum of the

Lease Advance Amounts outstanding at the applicable time. As of the Effective

Date, the Lease Amount is $81,665,113.00.

"Lease Documents" means this Lease and all documents executed by

Landlord and Tenant relating to this Lease and the lease of the Facilities

pursuant to this Lease.

"Lease Payments" means the sum of the Base Rent payments (as

increased from time to time) for the applicable period.

"Lease Rate" means the annual rate used to determine Base Rent for

each Lease Advance. The Lease Rate for the Initial Lease Advance for the Initial

Term is 10.50%. On the Renewal Date, the Lease Rate will be the Renewal Rate.

"Lease Year" means each consecutive period of 365 or 366 days

throughout the Term. The first Lease Year commences on the Commencement Date and

expires on the day before the first anniversary of the Commencement Date.

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"Leased Property" means all of the Land, Improvements, Related

Rights and Landlord's Personal Property. References in this Lease to the "Leased

Property" shall mean the entire Leased Property unless expressly stated

otherwise.

"Legal Requirements" means all laws, regulations, rules, orders,

writs, injunctions, decrees, certificates, requirements, agreements, conditions

of participation and standards of any federal, state, county, municipal or other

governmental entity, administrative agency, insurance underwriting board,

architectural control board, private third-party payor, accreditation

organization, or any restrictive covenants applicable to the development,

construction, condition and operation of the Facility by Tenant, including, but

not limited to, [i] zoning, building, fire, health, safety, sign, and

subdivision regulations and codes; [ii] certificate of need laws, if applicable;

[iii] licensure to operate each Facility in accordance with its respective

Facility Uses; [iv] Medicare and Medicaid certification requirements, if

applicable, and if Tenant elects to participate in such programs; [v] the ADA;

[vi] any Environmental Laws; and [vii] requirements, conditions and standards

for participation in third-party payor insurance programs.

"Letter of Credit" means an irrevocable and transferable Letter of

Credit as required under Article 20 hereof, issued by Issuer in favor of

Landlord as security for the Lease and in form acceptable to Landlord, and any

amendments thereto or replacements or substitutions therefor.

"Material Obligation" means [i] any indebtedness secured by a

security interest in or a lien, deed of trust or mortgage on any of the Leased

Property and any agreement relating thereto; [ii] any obligation or agreement

that is material to the operation of the Facility; [iii] any indebtedness or

capital lease of Tenant that has an outstanding principal balance of at least

$1,000,000.00 in any one instance or at least $1,000,000.00 in the aggregate and

any agreement relating thereto; [iv] any obligation to or agreement with the

Issuer relating to the Letter of Credit; and [v] any sublease of the Leased

Property.

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

of North Carolina.

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

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

"Organizational Documents" means [i] for a corporation, its Articles

of Incorporation certified by the Secretary of State of the state of

organization, as amended to date, and its Bylaws certified by such entity, as

amended to date; [ii] for a partnership, its Partnership Agreement certified by

such entity, as amended to date, and the Partnership Certificate, certified by

the appropriate authority, as amended to date; and [iii] for a limited liability

company, its Articles of Organization certified by the Secretary of State of the

state of organization, as amended to date, and its Operating Agreement certified

by such entity, as amended to date.

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

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"Periodic Financial Statements" means [i] for Tenant, the unaudited

balance sheet and statement of income of Tenant for the most recent quarter; and

[ii] for the Facility, the unaudited Facility Financial Statement for the most

recent month.

"Permitted Exceptions" means all easements, liens, encumbrances,

restrictions, agreements and other title matters existing as of the Effective

Date, including, without limitation, the exceptions to title set forth on

Exhibit B attached hereto, and any sublease of any portion of the Leased

Property made in complete accordance with Article 18.

"Permitted Liens" means [i] liens granted to Landlord; [ii] liens

customarily incurred by Tenant in the ordinary course of business for items not

delinquent, including mechanic's liens and deposits and charges under worker's

compensation laws; [iii] liens for taxes and assessments not yet due and

payable; [iv] any lien, charge, or encumbrance which is being contested in good

faith pursuant to this Lease; [v] the Permitted Exceptions; and [vi] purchase

money financing and capitalized equipment leases for the acquisition of personal

property provided, however, that Landlord obtains a nondisturbance agreement

from the purchase money lender or equipment lessor in form and substance as may

be satisfactory to Landlord if the original cost of the equipment exceeds

$50,000.00.

"Personal Property" means all machinery, equipment, furniture,

furnishings, movable walls or partitions, computers (and all associated

software), trade fixtures and other personal property (but excluding consumable

inventory and supplies owned by Tenant) used in connection with the Leased

Property, together with all replacements and alterations thereof and additions

thereto, except items, if any, included within the definition of Fixtures or

Improvements. References in this Lease to the "Personal Property" shall mean all

Personal Property unless expressly stated otherwise.

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

"Portfolio Coverage Ratio" has the meaning set forth in Section

15.7.1.

"Pro Forma Statement" means a financial forecast for each Facility

for the next five-year period prepared in accordance with the standards for

forecasts established by the American Institute of Certified Public Accountants.

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

"Receivables" means [i] all of Tenant's rights to receive payment

for providing resident care and services at the Facility as set forth in any

accounts, contract rights, and instruments, and [ii] those documents, chattel

paper, inventory proceeds, provider agreements, participation agreements, ledger

sheets, files, records, computer programs, tapes, and agreements relating to

Tenant's rights to receive payment for providing resident care services at the

Facility. References in this Lease to the "Receivables" shall mean all

Receivables unless expressly stated otherwise.

"Related Lease" means any lease, now or hereafter existing, between

Landlord or any Landlord Affiliate and Tenant or any Affiliate.

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"Related Rights" means all easements, rights (including bed

operating rights) and appurtenances relating to the Land and the Improvements.

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

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

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

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

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

"Secured Obligations" means all payment and performance obligations

of Tenant under this Lease and all documents executed by Tenant in connection

with this Lease.

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

"States" means, collectively, the States in which the Leased

Property is located.

"Tenant" has the meaning set forth in the introductory paragraph of

this Lease.

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

Tennessee.

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

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

1.5 Landlord As Agent. With respect to each North Carolina Facility,

Tennessee Facility and Texas Facility, each of HCRI-NC, HCRI-TN and HCRI-TX,

respectively, appoints HCRI as its agent and lawful attorney-in-fact to act for

it for all purposes and actions of Landlord under this Lease. All notices,

consents, waivers and all other documents and instruments executed by HCRI

pursuant to this Lease from time to time and all other actions of HCRI as

Landlord under this Lease shall be binding upon HCRI-NC, HCRI-TN and HCRI-TX, as

applicable. All Rent payable under this Lease shall be paid to HCRI.

ARTICLE 2: RENT

2.1 Base Rent. Tenant shall pay Landlord base rent ("Base Rent") in

advance in consecutive monthly installments payable on the first day of each

month during the Term commencing on the Commencement Date. If the Effective Date

is not the first day of a month, Tenant shall pay Landlord Base Rent on the

Effective Date for the partial month, i.e., for the period commencing on the

Effective Date and ending on the day before the Commencement Date. The Base Rent

for the Initial Term will be computed monthly and will be equal to 1/12th of the

sum of the products of each Lease Advance times the Lease Rate for each Lease

Advance. The Base Rent for the Renewal Term will be computed in accordance with

Section 12.2.

2.2 Increase of Lease Rate and Base Rent. Commencing on the first

anniversary of the Commencement Date and on each anniversary thereafter during

the Term,

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including any Renewal Term and Extended Term, (each such date shall be herein

defined as "Rent Adjustment Date") the Base Rent shall increase to an amount

equal to the Base Rent for the prior Lease plus the lesser of (a) the Maximum

Rent Adjustment (defined below), or (b) an amount determined by multiplying the

Base Rent then in effect times a fraction, the numerator of which shall be the

CPI Index on the applicable Rent Adjustment Date and the denominator of which

shall be the CPI Index on the preceding Rent Adjustment Date (or on the

Effective Date in the case of the first Rent Adjustment Date).

If, for any Lease Year or any portion thereof, the Base Rent is

adjusted in accordance with clause (b) above, then the difference between the

Base Rent for such Lease Year, and the Base Rent for such Lease Year if adjusted

in accordance with clause (a) above shall be referred to herein as the "Rent

Shortfall". If, for any Lease Year, the Base Rent is adjusted in accordance with

clause (a), then the difference between the Base Rent for such Lease Year and

the Base Rent for such Lease Year if adjusted in accordance with clause (b),

shall be referred to herein as the "Rent Surplus".

Any Rent Surplus for a Lease Year shall be applied first to payment

of the unpaid balance of any Rent Shortfalls for any previous Lease Years.

As used herein, the "Maximum Rent Adjustment" shall be the Base Rent

in any applicable year, which would result solely by multiplying, in each year,

on the Rent Adjustment Date, the Base Rent then in effect (as adjusted pursuant

to this Section 2.2 only) by 1.025.

As used herein, the "CPI Index" shall mean and refer to the Consumer

Price Index for Urban Wage Earners and Clerical Workers, U.S. Cities Average.

All items (1982-84-100) published by the Bureau of Labor Statistics of the U.S.

Department of Labor; provided that if compilation of the CPI Index in its

present form and calculated on its present basis is discontinued or transferred

to any other governmental department or bureau, then the index most nearly the

same as the CPI Index published by the Bureau of Labor statistics shall be used.

If there is no such similar index, a substitute index which is then generally

recognized as being similar to the CPI Index shall be used, such substitute

index to be reasonably selected by Landlord. Until the CPI Index is established,

Tenant shall pay the Base Rent calculated in accordance with clause (a) above,

and once the CPI Index for the Rent Adjustment Date of such Lease Year is

published, the new Base Rent (as increased) shall be effective retroactively as

of the Rent Adjustment Date with the remaining payments to be adjusted ratably.

2.3 Additional Rent. In addition to Base Rent, Tenant shall pay all

other amounts, liabilities, obligations and Impositions which Tenant assumes or

agrees to pay under this Lease and any fine, penalty, interest, charge and cost

which may be added for nonpayment or late payment of such items (collectively

the "Additional Rent"). The Base Rent and Additional Rent are hereinafter

referred to as "Rent". Landlord shall have all legal, equitable and contractual

rights, powers and remedies provided either in this Lease or by statute or

otherwise in the case of nonpayment of the Rent.

2.4 Place of Payment of Rent. Tenant shall make all payments of Rent

at Landlord's address set forth in the first paragraph of this Lease or at such

other place as Landlord may designate from time to time.

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2.5 Net Lease. This Lease shall be deemed and construed to be an

"absolute net lease", and Tenant shall pay all Rent and other charges and

expenses in connection with the Leased Property throughout the Term, without

abatement, deduction, recoupment or set-off.

2.6 No Termination, Abatement, Etc. Except as otherwise specifically

provided in this Lease, Tenant shall remain bound by this Lease in accordance

with its terms. Tenant shall not, without the consent of Landlord, modify,

surrender or terminate the Lease, nor seek nor be entitled to any abatement,

deduction, recoupment, deferment or reduction of Rent, or set-off against the

Rent. Except as expressly provided in this Lease, the obligations of Landlord

and Tenant shall not be affected by reason of [i] any damage to, or destruction

of, the Leased Property or any part thereof from whatever cause or any Taking

(as hereinafter defined) of the Leased Property or any part thereof; [ii] the

lawful or unlawful prohibition of, or restriction upon, Tenant's use of the

Leased Property, or any part thereof, the interference with such use by any

person, corporation, partnership or other entity, or by reason of eviction by

paramount title (subject to the provisions of Article 10); [iii] any claim which

Tenant has or might have against Landlord or by reason of any default or breach

of any warranty by Landlord under this Lease or any other agreement between

Landlord and Tenant, or to which Landlord and Tenant are parties; [iv] any

bankruptcy, insolvency, reorganization, composition, readjustment, liquidation,

dissolution, winding up or other proceeding affecting Landlord or any assignee

or transferee of Landlord; or [v] any other cause, whether similar or dissimilar

to any of the foregoing, other than a discharge of Tenant from any such

obligations as a matter of law. Except as otherwise specifically provided in

this Lease, Tenant hereby specifically waives all rights, arising from any

occurrence whatsoever, which may now or hereafter be conferred upon it by law

[a] to modify, surrender or terminate this Lease or quit or surrender the Leased

Property or any portion thereof; or [b] entitling Tenant to any abatement,

reduction, suspension or deferment of the Rent or other sums payable by Tenant

hereunder. The obligations of Landlord and Tenant hereunder shall be separate

and independent covenants and agreements and the Rent and all other sums payable

by Tenant hereunder shall continue to be payable in all events unless the

obligations to pay the same shall be terminated pursuant to the express

provisions of this Lease or by termination of this Lease other than by reason of

an Event of Default.

2.7 Computational Method. Landlord and Tenant acknowledge that all

rates under this Lease will be computed based on the actual number of days

elapsed over a 360-day year (365/360 method).

ARTICLE 3: IMPOSITIONS AND UTILITIES

3.1 Payment of Impositions. Tenant shall pay, as Additional Rent,

all Impositions that may be levied or become a lien on the Leased Property or

any part thereof at any time (whether prior to or during the Term), without

regard to prior ownership of said Leased Property, before any fine, penalty,

interest, or cost is incurred; provided, however, Tenant may contest any

Imposition in accordance with Section 3.7. Tenant shall deliver to Landlord [i]

not more than five days after the due date of each Imposition, copies of the

invoice for such Imposition and the check delivered for payment thereof; and

[ii] not more than 15 business days after the due date of each Imposition, a

copy of the official receipt evidencing such payment or other proof of payment

satisfactory to Landlord. Tenant's obligation to pay such Impositions shall be

deemed absolutely fixed upon the date such Impositions become a lien upon the

Leased Property

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or any part thereof. Tenant, at its expense, shall prepare and file all tax

returns and reports in respect of any Imposition as may be required by

governmental authorities. Tenant shall be entitled to any refund due from any

taxing authority if no Event of Default shall have occurred hereunder and be

continuing. Landlord shall be entitled to any refund from any taxing authority

if an Event of Default has occurred and is continuing. Any refunds retained by

Landlord due to an Event of Default shall be applied as provided in Section 8.8.

Landlord and Tenant shall, upon request of the other, provide such data as is

maintained by the party to whom the request is made with respect to the Leased

Property as may be necessary to prepare any required returns and reports. In the

event governmental authorities classify any property covered by this Lease as

personal property, Tenant shall file all personal property tax returns in such

jurisdictions where it may legally so file. Landlord, to the extent it possesses

the same, and Tenant, to the extent it possesses the same, will provide the

other party, upon request, with cost and depreciation records necessary for

filing returns for any property so classified as personal property. Where

Landlord is legally required to file personal property tax returns, Tenant will

be provided with copies of assessment notices indicating a value in excess of

the reported value in sufficient time for Tenant to file a protest. Tenant may,

upon notice to Landlord, at Tenant's option and at Tenant's sole cost and

expense, protest, appeal, or institute such other proceedings as Tenant may deem

appropriate to effect a reduction of real estate or personal property

assessments and Landlord, at Tenant's expense as aforesaid, shall fully

cooperate with Tenant in such protest, appeal, or other action. Tenant shall

reimburse Landlord for all personal property taxes paid by Landlord within 30

days after receipt of billings accompanied by copies of a bill therefor and

payments thereof which identify the personal property with respect to which such

payments are made. Impositions imposed in respect to the tax-fiscal period

during which the Term terminates shall be adjusted and prorated between Landlord

and Tenant, whether or not such Imposition is imposed before or after such

termination, and Tenant's obligation to pay or Landlord's obligation to refund

its prorated share thereof shall survive such termination.

3.2 Definition of Impositions. "Impositions" means, collectively,

[i] taxes (including, without limitation, all capital stock and franchise taxes

of Landlord imposed by the State or any governmental entity in the State due to

this lease transaction or Landlord's ownership of the Leased Property and the

income arising therefrom, or due to Landlord being considered as doing business

in the State because of Landlord's ownership of the Leased Property or lease

thereof to Tenant), all real estate and personal property ad valorem, sales and

use, business or occupation, single business, gross receipts, transaction

privilege, rent or similar taxes; [ii] assessments (including, without

limitation, all assessments for public improvements or benefits, whether or not

commenced or completed prior to the date hereof and whether or not to be

completed with the Term); [iii] ground rents, water, sewer or other rents and

charges, excises, tax levies, and fees (including, without limitation, license,

permit, inspection, authorization and similar fees); [iv] all taxes imposed on

Tenant's operations of the Leased Property, including, without limitation,

employee withholding taxes, income taxes and intangible taxes; [v] all real

property conveyance taxes, transfer fees, deed stamps and similar charges

imposed by the State or any governmental entity in the State with respect to the

conveyance of the Leased Property from Seller to Landlord (if applicable) and

from Landlord to Tenant; and [vi] all other governmental charges, in each case

whether general or special, ordinary or extraordinary, or foreseen or

unforeseen, of every character in respect of the Leased Property or any part

thereof and/or the Rent (including all interest and penalties thereon due to any

failure in payment by Tenant), which at any time prior to, during or in respect

of the Term hereof may be assessed or

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imposed on or in respect of or be a lien upon [a] Landlord or Landlord's

interest in the Leased Property or any part thereof; [b] the Leased Property or

any part thereof or any rent therefrom or any estate, right, title or interest

therein; or [c] any occupancy, operation, use or possession of, or sales from,

or activity conducted on, or in connection with the Leased Property or the

leasing or use of the Leased Property or any part thereof. Tenant shall not,

however, be required to pay any tax based on net income (whether denominated as

a franchise or capital stock or other tax) imposed on Landlord by any

governmental entity other than as described in clause [i] above.

3.3 Escrow of Impositions. If an Event of Default occurs and while

it remains uncured, Tenant shall, at Landlord's election, deposit with Landlord

on the first day of each month a sum equal to 1/12th of the Impositions assessed

against the Leased Property for the preceding tax year, which sums shall be used

by Landlord toward prompt payment of such Impositions. Tenant, on demand, shall

pay to Landlord any additional funds necessary to pay and discharge the

obligations of Tenant pursuant to the provisions of this Section . The receipt

by Landlord of the payment of such Impositions by and from Tenant shall only be

as an accommodation to Tenant, the mortgagees, and the taxing authorities, and

shall not be construed as rent or income to Landlord, Landlord serving, if at

all, only as a conduit for delivery purposes.

3.4 Utilities. Tenant shall pay, or cause to be paid, as Additional

Rent, all taxes, assessments, charges, deposits, and bills for utilities,

including, without limitation, charges for water, gas, oil, sanitary and storm

sewer, electricity, telephone service, and trash collection, which may be

charged against the occupant of the Improvements during the Term. If an Event of

Default occurs and while it remains uncured, Tenant shall, at Landlord's

election, deposit with Landlord on the first day of each month a sum equal to

1/12th of the amount of the annual utility expenses for the preceding Lease

Year, which sums shall be used by Landlord to promptly pay such utilities.

Tenant shall, on demand, pay to Landlord any additional amount needed to pay

such utilities. Landlord's receipt of such payments shall only be an

accommodation to Tenant and the utility companies and shall not constitute rent

or income to Landlord. Tenant shall at all times maintain that amount of heat

necessary to ensure against the freezing of water lines. Tenant hereby agrees to

indemnify and hold Landlord harmless from and against any liability or damages

to the utility systems and the Leased Property that may result from Tenant's

failure to maintain sufficient heat in the Improvements unless the failure

arises from Landlord's failure to make prompt payment of utility expenses to the

extent that funds for such expenses have been deposited with Landlord under this

Section .

3.5 Discontinuance of Utilities. Landlord will not be liable for

damages to person or property or for injury to, or interruption of, business for

any discontinuance of utilities nor will such discontinuance in any way be

construed as an eviction of Tenant or cause an abatement of rent or operate to

release Tenant from any of Tenant's obligations under this Lease unless Landlord

has failed to make prompt payment of utility expenses to the extent that funds

for such expenses have been deposited with Landlord under Section 3.4 above.

3.6 Business Expenses. Tenant shall promptly pay all expenses and

costs incurred in connection with the operation of the Facility on the Leased

Property, including, without limitation, employee benefits, employee vacation

and sick pay, consulting fees, and expenses for inventory and supplies.

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3.7 Permitted Contests. Tenant, on its own or on Landlord's behalf

(or in Landlord's name), but at Tenant's expense, may contest, by appropriate

legal proceedings conducted in good faith and with due diligence, the amount or

validity or application, in whole or in part, of any Imposition or any Legal

Requirement or insurance requirement or any lien, attachment, levy, encumbrance,

charge or claim provided that [i] in the case of an unpaid Imposition, lien,

attachment, levy, encumbrance, charge or claim, the commencement and

continuation of such proceedings shall suspend the collection thereof from

Landlord and from the Leased Property; [ii] neither the Leased Property nor any

Rent therefrom nor any part thereof or interest therein would be in any

immediate danger of being sold, forfeited, attached or lost; [iii] in the case

of a Legal Requirement, Landlord would not be in any immediate danger of civil

or criminal liability for failure to comply therewith pending the outcome of

such proceedings; [iv] in the event that any such contest shall involve a sum of

money or potential loss in excess of $50,000.00, Tenant shall deliver to

Landlord and its counsel an opinion of Tenant's counsel to the effect set forth

in clauses [i], [ii] and [iii], to the extent applicable; [v] in the case of a

Legal Requirement and/or an Imposition, lien, encumbrance or charge, Tenant

shall give such reasonable security as may be demanded by Landlord to insure

ultimate payment of the same and to prevent any sale or forfeiture of the

affected Leased Property or the Rent by reason of such nonpayment or

noncompliance; provided, however, the provisions of this Section shall not be

construed to permit Tenant to contest the payment of Rent (except as to contests

concerning the method of computation or the basis of levy of any Imposition or

the basis for the assertion of any other claim) or any other sums payable by

Tenant to Landlord hereunder; [vi] in the case of an insurance requirement, the

coverage required by Article 4 shall be maintained; and [vii] if such contest be

finally resolved against Landlord or Tenant, Tenant shall, as Additional Rent

due hereunder, promptly pay the amount required to be paid, together with all

interest and penalties accrued thereon, or comply with the applicable Legal

Requirement or insurance requirement. Landlord, at Tenant's expense, shall

execute and deliver to Tenant such authorizations and other documents as may be

reasonably required in any such contest, and, if reasonably requested by Tenant

or if Landlord so desires, Landlord shall join as a party therein. Tenant hereby

agrees to indemnify and save Landlord harmless from and against any liability,

cost or expense of any kind that may be imposed upon Landlord in connection with

any such contest and any loss resulting therefrom.

ARTICLE 4: INSURANCE

4.1 Property Insurance. At Tenant's expense, Tenant shall maintain

in full force and effect a property insurance policy or policies insuring the

Leased Property against the following:

(a) Loss or damage commonly covered by a "Special Form" policy

insuring against physical loss or damage to the Improvements and Personal

Property, including, but not limited to, risk of loss from fire and other

hazards, collapse, transit coverage, vandalism, malicious mischief, theft,

earthquake (if the Leased Property is in earthquake zone 1 or 2 per the ISO

rating system) and sinkholes (if usually recommended in the area of the Leased

Property). The policy shall be in the amount of the full replacement value (as

defined in Section 4.5) of the Improvements and Personal Property and shall

contain a deductible amount acceptable to Landlord. Landlord shall be named as

an additional insured. The policy shall include a

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stipulated value endorsement or agreed amount endorsement and endorsements for

contingent liability for operations of building laws, demolition costs, and

increased cost of construction.

(b) If applicable, loss or damage by explosion of steam boilers,

pressure vessels, or similar apparatus, now or hereafter installed on the Leased

Property, in commercially reasonable amounts acceptable to Landlord.

(c) Consequential loss of rents and income coverage insuring

against all "Special Form" risk of physical loss or damage with limits and

deductible amounts acceptable to Landlord covering risk of loss during the first

nine months of reconstruction, and containing an endorsement for extended period

of indemnity of at least six months, and shall be written with a stipulated

amount of coverage if available at a reasonable premium.

(d) If the Leased Property is located, in whole or in part, in a

federally designated 100-year flood plain area, flood insurance for the

Improvements in an amount equal to the lesser of [i] the full replacement value

of the Improvements; or [ii] the maximum amount of insurance available for the

Improvements under all federal and private flood insurance programs.

(e) Loss or damage caused by the breakage of plate glass in

commercially reasonable amounts acceptable to Landlord.

(f) Loss or damage commonly covered by blanket crime insurance,

including employee dishonesty, loss of paper currency, depositor's forgery, and

loss of property of patients accepted by Tenant for safekeeping, in commercially

reasonable amounts acceptable to Landlord.

4.2 Liability Insurance. At Tenant's expense, Tenant shall maintain

liability insurance against the following:

(a) Claims for personal injury or property damage commonly

covered by comprehensive general liability insurance with endorsements for

incidental malpractice, contractual, personal injury, owner's protective

liability, voluntary medical payments, products and completed operations, broad

form property damage, and extended bodily injury, with commercially reasonable

amounts for bodily injury, property damage, and voluntary medical payments

acceptable to Landlord, but with a combined single limit of not less than

$5,000,000.00 per occurrence.

(b) Claims for personal injury and property damage commonly

covered by comprehensive automobile liability insurance, covering all owned and

non-owned automobiles, with commercially reasonable amounts for bodily injury,

property damage, and for automobile medical payments acceptable to Landlord, but

with a combined single limit of not less than $1,000,000.00 per occurrence.

(c) Claims for personal injury commonly covered by medical

malpractice insurance in commercially reasonable amounts acceptable to Landlord.

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(d) Claims commonly covered by worker's compensation insurance

for all persons employed by Tenant on the Leased Property. Such worker's

compensation insurance shall be in accordance with the requirements of all

applicable local, state, and federal law.

4.3 Builder's Risk Insurance. In connection with any construction,

Tenant shall maintain in full force and effect a builder's completed value risk

policy ("Builder's Risk Policy") of insurance in a nonreporting form insuring

against all "Special Form" risk of physical loss or damage to the Improvements,

including, but not limited to, risk of loss from fire and other hazards,

collapse, transit coverage, vandalism, malicious mischief, theft, earthquake (if

Leased Property is in earthquake zone 1 or 2) and sinkholes (if usually

recommended in the area of the Leased Property). The Builder's Risk Policy shall

include endorsements providing coverage for building materials and supplies and

temporary premises. The Builder's Risk Policy shall be in the amount of the full

replacement value of the Improvements and shall contain a deductible amount

acceptable to Landlord. Landlord shall be named as an additional insured. The

Builder's Risk Policy shall include an endorsement permitting initial occupancy.

4.4 Insurance Requirements. The following provisions shall apply to

all insurance coverages required hereunder:

(a) The form and substance of all policies shall be subject to

the approval of Landlord, which approval will not be unreasonably withheld.

(b) The carriers of all policies shall have a Best's Rating of

"A" or better and a Best's Financial Category of IX or higher and shall be

authorized to do insurance business in the State.

(c) Tenant shall be the "named insured" and Landlord shall be an

"additional insured" on each liability policy. On all property and casualty

policies, Landlord and Tenant shall be joint loss payees.

(d) Tenant shall deliver to Landlord certificates or policies

showing the required coverages and endorsements. The policies of insurance shall

provide that the policy may not be canceled or not renewed, and no material

change or reduction in coverage may be made, without at least 30 days' prior

written notice to Landlord.

(e) The policies shall contain a severability of interest and/or

cross-liability endorsement, provide that the acts or omissions of Tenant or

Landlord will not invalidate the coverage of the other party, and provide that

Landlord shall not be responsible for payment of premiums.

(f) All casualty loss adjustment shall require the written

consent of Landlord and Tenant, as their interests may appear.

(g) At least 30 days prior to the expiration of each insurance

policy, Tenant shall deliver to Landlord a certificate showing renewal of such

policy and payment of the annual premium therefor and a current Certificate of

Compliance (in the form delivered at the time of Closing) completed and signed

by Tenant's insurance agent.

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4.5 Replacement Value. The term "full replacement value" means the

actual replacement cost thereof from time to time, including increased cost of

construction endorsement, with no reductions or deductions. Tenant shall, in

connection with each annual policy renewal, deliver to Landlord a

redetermination of the full replacement value by the insurer or an endorsement

indicating that the Leased Property is insured for its full replacement value.

If Tenant makes any Permitted Alterations (as hereinafter defined) to the Leased

Property, Landlord may have such full replacement value redetermined at any time

after such Permitted Alterations are made, regardless of when the full

replacement value was last determined.

4.6 Blanket Policy. Notwithstanding anything to the contrary

contained in this Section , Tenant may carry the insurance required by this

Article under a blanket policy of insurance, provided that the coverage afforded

Tenant will not be reduced or diminished or otherwise be different from that

which would exist under a separate policy meeting all of the requirements of

this Lease.

4.7 No Separate Insurance. Tenant shall not take out separate

insurance concurrent in form or contributing in the event of loss with that

required in this Article, or increase the amounts of any then existing

insurance, by securing an additional policy or additional policies, unless all

parties having an insurable interest in the subject matter of the insurance,

including Landlord and any mortgagees, are included therein as additional

insureds or loss payees, the loss is payable under said insurance in the same

manner as losses are payable under this Lease, and such additional insurance is

not prohibited by the existing policies of insurance. Tenant shall immediately

notify Landlord of the taking out of such separate insurance or the increasing

of any of the amounts of the existing insurance by securing an additional policy

or additional policies.

4.8 Waiver of Subrogation. Each party hereto hereby waives any and

every claim which arises or may arise in its favor and against the other party

hereto during the Term for any and all loss of, or damage to, any of its

property located within or upon, or constituting a part of, the Leased Property,

which loss or damage is covered by valid and collectible insurance policies, to

the extent that such loss or damage is recoverable under such policies. Said

mutual waiver shall be in addition to, and not in limitation or derogation of,

any other waiver or release contained in this Lease with respect to any loss or

damage to property of the parties hereto. Inasmuch as the said waivers will

preclude the assignment of any aforesaid claim by way of subrogation (or

otherwise) to an insurance company (or any other person), each party hereto

agrees immediately to give each insurance company which has issued to it

policies of insurance, written notice of the terms of said mutual waivers, and

to have such insurance policies properly endorsed, if necessary, to prevent the

invalidation of said insurance coverage by reason of said waivers, so long as

such endorsement is available at a reasonable cost.

4.9 Mortgages. The following provisions shall apply if Landlord now

or hereafter places a mortgage on the Leased Property or any part thereof: [i]

Tenant shall obtain a standard form of lender's loss payable clause insuring the

interest of the mortgagee; [ii] Tenant shall deliver evidence of insurance to

such mortgagee; [iii] loss adjustment of claims in excess of $50,000.00 shall

require the consent of the mortgagee, which consent shall not be unreasonably

withheld; and [iv] Tenant shall provide such other information and documents as

may be reasonably required by the mortgagee.

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4.10 Escrows. After an Event of Default occurs hereunder and until

such Event of Default is cured, Tenant shall make such periodic payments of

insurance premiums in accordance with Landlord's requirements after receipt of

notice thereof from Landlord.

ARTICLE 5: INDEMNITY

5.1 Tenant's Indemnification. Tenant hereby indemnifies and agrees

to hold harmless Landlord, any successors or assigns of Landlord, and Landlord's

and such successor's and assign's directors, officers, employees and agents from

and against any and all demands, claims, causes of action, fines, penalties,

damages (including consequential damages), losses, liabilities (including strict

liability), judgments, and expenses (including, without limitation, reasonable

attorneys' fees, court costs, and the costs set forth in Section 8.7) incurred

in connection with or arising from: [i] the use or occupancy of the Leased

Property by Tenant or any persons claiming under Tenant; [ii] any activity,

work, or thing done, or permitted or suffered by Tenant in or about the Leased

Property; [iii] any acts, omissions, or negligence of Tenant or any person

claiming under Tenant, or the contractors, agents, employees, invitees, or

visitors of Tenant or any such person; [iv] any breach, violation, or

nonperformance by Tenant or any person claiming under Tenant or the employees,

agents, contractors, invitees, or visitors of Tenant or of any such person, of

any term, covenant, or provision of this Lease or any law, ordinance, or

governmental requirement of any kind, including, without limitation, any failure

to comply with any applicable requirements under the ADA; [v] any injury or

damage to the person, property or business of Tenant, its employees, agents,

contractors, invitees, visitors, or any other person entering upon the Leased

Property; and [vi] any construction, alterations, changes or demolition of the

Facility performed by or contracted for by Tenant or its employees, agents or

contractors. Provided, however, that Tenant shall have no indemnity obligation

with respect to matters, liabilities, obligations, claims, damages, penalties,

causes of actions, costs and expenses caused by Landlord's gross negligence or

willful misconduct. If any action or proceeding is brought against Landlord, its

employees, or agents by reason of any such claim, Tenant, upon notice from

Landlord, will defend the claim at Tenant's expense with counsel reasonably

satisfactory to Landlord. All amounts payable to Landlord under this Section

shall be payable on written demand and any such amounts which are not paid

within 10 days after demand therefor by Landlord shall bear interest at the

Overdue Rate. In case any action, suit or proceeding is brought against Tenant

by reason of any such occurrence, Tenant shall use its best efforts to defend

such action, suit or proceeding.

5.1.1 Notice of Claim. Landlord shall notify Tenant in writing of

any claim or action brought against Landlord in which indemnity may be sought

against Tenant pursuant to this Section . Such notice shall be given in

sufficient time to allow Tenant to defend or participate in such claim or

action, but the failure to give such notice in sufficient time shall not

constitute a defense hereunder nor in any way impair the obligations of Tenant

under this Section unless the failure to give such notice precludes or

materially prejudices Tenant's defense of any such action.

5.1.2 Survival of Covenants. The covenants of Tenant contained in

this Section shall remain in full force and effect after the termination of this

Lease until the expiration of the period stated in the applicable statute of

limitations during which a claim or cause of action may be brought and payment

in full or the satisfaction of such claim or cause of action and of all

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expenses and charges incurred by Landlord relating to the enforcement of the

provisions herein specified.

5.1.3 Reimbursement of Expenses. Unless prohibited by law, Tenant

hereby agrees to pay to Landlord all of the reasonable fees, charges and

reasonable out-of-pocket expenses related to the Facility and required hereby,

or incurred by Landlord in enforcing the provisions of this Lease.

5.2 Environmental Indemnity; Audits. Tenant hereby indemnifies and

agrees to hold harmless Landlord, any successors to Landlord's interest in this

Lease, and Landlord's and such successors' directors, officers, employees and

agents from and against any losses, claims, damages (including consequential

damages), penalties, fines, liabilities (including strict liability), costs

(including cleanup and recovery costs), and expenses (including expenses of

litigation and reasonable attorneys' fees) incurred by Landlord or any other

indemnitee or assessed against any portion of the Leased Property by virtue of

any claim or lien by any governmental or quasi-governmental unit, body, or

agency, or any third party, for cleanup costs or other costs pursuant to any

Environmental Law. Tenant's indemnity shall survive the termination of this

Lease. Provided, however, Tenant shall have no indemnity obligation with respect

to [i] Hazardous Materials first introduced to the Leased Property subsequent to

the date that Tenant's occupancy of the Leased Property shall have fully

terminated; or [ii] Hazardous Materials introduced to the Leased Property by

Landlord, its agent, employees, successors or assigns. If at any time during the

Term of this Lease any governmental authority notifies Landlord or Tenant of a

violation of any Environmental Law or Landlord reasonably believes that a

Facility may violate any Environmental Law, Landlord may require one or more

environmental audits of such portion of the Leased Property, in such form, scope

and substance as specified by Landlord, at Tenant's expense. Tenant shall,

within 30 days after receipt of an invoice from Landlord, reimburse Landlord for

all costs and expenses incurred in reviewing any environmental audit, including,

without limitation, reasonable attorneys' fees and costs.

5.3 Limitation of Landlord's Liability. Landlord, its agents, and

employees, will not be liable for any loss, injury, death, or damage (including

consequential damages) to persons, property, or Tenant's business occasioned by

theft, act of God, public enemy, injunction, riot, strike, insurrection, war,

court order, requisition, order of governmental body or authority, fire,

explosion, falling objects, steam, water, rain or snow, leak or flow of water

(including water from the elevator system), rain or snow from the Leased

Property or into the Leased Property or from the roof, street, subsurface or

from any other place, or by dampness or from the breakage, leakage, obstruction,

or other defects of the pipes, sprinklers, wires, appliances, plumbing, air

conditioning, or lighting fixtures of the Leased Property, or from construction,

repair, or alteration of the Leased Property or from any acts or omissions of

any other occupant or visitor of the Leased Property, or from any other cause

beyond Landlord's control. The foregoing limitation does not apply to loss,

injury, death or damage caused by Landlord's gross negligence or willful

misconduct.

ARTICLE 6: USE AND ACCEPTANCE OF PREMISES

6.1 Use of Leased Property. Tenant shall use and occupy the Leased

Property exclusively for the Facility Uses specified for each Facility and for

all lawful and licensed

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ancillary uses, and for no other purpose without the prior written consent of

Landlord which consent shall not be unreasonably withheld. Tenant shall obtain

and maintain all approvals, licenses, and consents needed to use and operate the

Leased Property as herein permitted. Tenant shall deliver to Landlord complete

copies of surveys, examinations, certification and licensure inspections,

compliance certificates, and other similar reports issued to Tenant by any

governmental agency within 10 days after Tenant's receipt of each item.

6.2 Acceptance of Leased Property. Tenant acknowledges that [i]

Tenant and its agents have had an opportunity to inspect the Leased Property;

[ii] Tenant has found the Leased Property fit for Tenant's use; [iii] Landlord

will deliver the Leased Property to Tenant in "as-is" condition; [iv] Landlord

is not obligated to make any improvements or repairs to the Leased Property; and

[v] the roof, walls, foundation, heating, ventilating, air conditioning,

telephone, sewer, electrical, mechanical, elevator, utility, plumbing, and other

portions of the Leased Property are in good working order. Tenant waives any

claim or action against Landlord with respect to the condition of the Leased

Property. LANDLORD MAKES NO WARRANTY OR REPRESENTATION, EXPRESS OR IMPLIED, IN

RESPECT OF THE LEASED PROPERTY OR ANY PART THEREOF, EITHER AS TO ITS FITNESS FOR

USE, DESIGN OR CONDITION FOR ANY PARTICULAR USE OR PURPOSE OR OTHERWISE, OR AS

TO QUALITY OF THE MATERIAL OR WORKMANSHIP THEREIN, LATENT OR PATENT, IT BEING

AGREED THAT ALL SUCH RISKS ARE TO BE BORNE BY TENANT.

6.3 Conditions of Use and Occupancy. Tenant agrees that during the

Term it shall use and keep the Leased Property in a careful, safe and proper

manner; not commit or suffer waste thereon; not use or occupy the Leased

Property for any unlawful purposes; not use or occupy the Leased Property or

permit the same to be used or occupied, for any purpose or business deemed

extrahazardous on account of fire or otherwise; keep the Leased Property in such

repair and condition as may be required by the Board of Health, or other city,

state or federal authorities, free of all cost to Landlord; not permit any acts

to be done which will cause the cancellation, invalidation, or suspension of any

insurance policy; and permit Landlord and its agents to enter upon the Leased

Property at all reasonable times to examine the condition thereof and

accompanied by a representative of Tenant to the extent such a representative is

available.

ARTICLE 7: MAINTENANCE AND MECHANICS' LIENS

7.1 Maintenance. Tenant shall maintain, repair, and replace the

Leased Property, including, without limitation, all structural and nonstructural

repairs and replacements to the roof, foundations, exterior walls, parking

areas, sidewalks, water, sewer and gas connections, pipes and mains. Tenant

shall pay, as Additional Rent, the full cost of maintenance, repairs, and

replacements. Tenant shall maintain all drives, sidewalks, parking areas, and

lawns on or about the Leased Property in a clean and orderly condition, free of

accumulations of dirt, rubbish, snow and ice. Tenant shall permit Landlord to

inspect the Leased Property at all reasonable times, and shall implement all

reasonable suggestions of the Landlord as to the maintenance and replacement of

the Leased Property.

7.2 Required Alterations. Tenant shall, at Tenant's sole cost and

expense, make any additions, changes, improvements or alterations to the Leased

Property, including

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structural alterations, which may be required by any governmental authorities,

including those required to maintain licensure or certification under the

Medicare and Medicaid programs (if so certified), whether such changes are

required by Tenant's use, changes in the law, ordinances, or governmental

regulations, defects existing as of the date of this Lease, or any other cause

whatever. All such additions, changes, improvements or alterations shall be

deemed to be Permitted Alterations and shall comply with all laws requiring such

alterations and with the provisions of Section 16.4.

7.3 Mechanic's Liens. Tenant shall have no authority to permit or

create a lien against Landlord's interest in the Leased Property, and, upon

Landlord's request, Tenant shall post notices during construction or file such

documents as may be required to protect Landlord's interest in the Leased

Property against liens. Tenant hereby agrees to defend, indemnify, and hold

Landlord harmless from and against any mechanic's liens against the Leased

Property by reason of work, labor, services or materials supplied or claimed to

have been supplied on or to the Leased Property. Tenant shall remove, bond-off,

or otherwise obtain the release of any mechanic's lien filed against the Leased

Property within 10 days after Tenant receives notice of the filing thereof;

provided, however, that Tenant shall have the right to contest in good faith and

with due diligence the validity of any such lien upon furnishing such security

or indemnity as may be reasonably required by Landlord. Tenant shall pay all

Landlord's expenses in connection therewith, including, without limitation,

damages, interest, court costs and reasonable attorneys' fees.

7.4 Replacements of Fixtures and Landlord's Personal Property.

Tenant shall not remove Fixtures and Landlord's Personal Property from the

Leased Property except to replace the Fixtures and Landlord's Personal Property

by other similar items of equal quality and value. Items being replaced by

Tenant may be removed and shall become the property of Tenant and items

replacing the same shall be and remain the property of Landlord. Tenant shall

execute, upon written request from Landlord, any and all documents necessary to

evidence Landlord's ownership of Landlord's Personal Property and replacements

therefor. Tenant may finance replacements for the Fixtures and Landlord's

Personal Property by equipment lease or by a security agreement and financing

statement and, if the original cost of the equipment exceeds $50,000.00, Tenant

must obtain the following: [i] Landlord's consent to the terms and conditions of

the equipment lease or security agreement; and [ii] a nondisturbance agreement

from the equipment lessor or lender upon terms and conditions reasonably

acceptable to Landlord, including without limitation, the following: [a]

Landlord shall have the right (but not the obligation) to assume such security

agreement or equipment lease upon the occurrence of an Event of Default under

this Lease; [b] the equipment lessor or lender shall notify Landlord of any

default by Tenant under the equipment lease or security agreement and give

Landlord a reasonable opportunity to cure such default; and [c] Landlord shall

have the right to assign its rights under the equipment lease, security

agreement, or nondisturbance agreement. Tenant shall, within 30 days after

receipt of an invoice from Landlord, reimburse Landlord for all costs and

expenses incurred in reviewing and approving the equipment lease, security

agreement, and nondisturbance agreement, including, without limitation,

reasonable attorneys' fees and costs.

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ARTICLE 8: DEFAULTS AND REMEDIES

8.1 Events of Default. The occurrence of any one or more of the

following shall be an event of default ("Event of Default") hereunder:

(a) Tenant fails to pay in full any installment of Rent or any

other monetary obligation payable by Tenant under this Lease (including the

Option Price) within three business days after Tenant is given written notice of

such failure, which written notice shall be given, at Landlord's option, at any

time after the expiration of 10 days from the date such payment is due;

provided, however, that, if Tenant receives two notices of default during any

one year period, regardless of any subsequent cure of such default, thereafter

Landlord shall not be obligated to give Tenant written notice of any failure to

make any such payments, and it shall be an Event of Default if Tenant fails to

pay any installment of Rent or any other monetary obligation payable by Tenant

under this Lease (including the Option Price) within 10 days after such payment

is due.

(b) Tenant fails to comply with any covenant set forth in Article

14, Section 15.6, Section 15.7, Section 15.8 or Article 20 of this Lease, to the

extent such covenant is applicable to such entity.

(c) Tenant fails to observe and perform any other covenant,

condition or agreement under this Lease to be performed by Tenant and [i] such

failure continues for a period of 30 days after written notice thereof is given

to Tenant by Landlord; or [ii] if, by reason of the nature of such default it

cannot be remedied within 30 days, Tenant fails to proceed with diligence

reasonably satisfactory to Landlord after receipt of the notice to cure the

default or, in any event, fails to cure such default within 90 days after

receipt of the notice. The foregoing notice and cure provisions do not apply to

any Event of Default otherwise specifically described in any other subSection of

Section 8.1.

(d) Tenant abandons or vacates any Facility Property or any

material part thereof or ceases to do business or ceases to exist for any reason

for any one or more days except as a result of condemnation or casualty.

(e) [i] The filing by Tenant of a petition under the Bankruptcy

Code or the commencement of a bankruptcy or similar proceeding by Tenant; [ii]

the failure by Tenant within 60 days to dismiss an involuntary bankruptcy

petition or other commencement of a bankruptcy, reorganization or similar

proceeding against Tenant, or to lift or stay any execution, garnishment or

attachment of such consequence as will impair its ability to carry on its

operation at the Leased Property; [iii] the entry of an order for relief under

the Bankruptcy Code in respect of Tenant; [iv] any assignment by Tenant for the

benefit of its creditors; [v] the entry by Tenant into an agreement of

composition with its creditors; [vi] the approval by a court of competent

jurisdiction of a petition applicable to Tenant in any proceeding for its

reorganization instituted under the provisions of any state or federal

bankruptcy, insolvency, or similar laws; [vii] appointment by final order,

judgment, or decree of a court of competent jurisdiction of a receiver of a

whole or any substantial part of the properties of Tenant (provided such

receiver shall not have been removed or discharged within 60 days of the date of

his qualification). Notwithstanding the foregoing, such an event shall not

constitute an Event of Default hereunder

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if (a) with respect to clauses [i] and [ii], such event occurs on or prior to

December 31, 2002 or (b) with respect to clauses [iii], [iv], [v], [vi] or [vii]

such event occurs at any time in connection with a bankruptcy action filed on or

prior to December 31, 2002.

(f) [i] Any receiver, administrator, custodian or other person

takes possession or control of any of the Leased Property and continues in

possession for 60 days; [ii] any writ against any of the Leased Property is not

released within 60 days; [iii] any judgment is rendered or proceedings are

instituted against the Leased Property or Tenant which affect the Leased

Property or any part thereof, which is not dismissed for 60 days (except as

otherwise provided in this Section ); [iv] all or a substantial part of the

assets of Tenant are attached, seized, subjected to a writ or distress warrant,

or are levied upon, or come into the possession of any receiver, trustee,

custodian, or assignee for the benefit of creditors occurring after December 31,

2002; [v] Tenant is enjoined, restrained, or in any way prevented by court order

(other than ex parte order) from conducting all or a substantial part of its

business or affairs at the Leased Property; or [vi] except as otherwise

permitted hereunder, a final notice of lien, levy or assessment is filed of

record with respect to all or any part of the Leased Property or any property of

Tenant located at the Leased Property and is not dismissed, discharged, or

bonded-off within 30 days or is not otherwise addressed pursuant to Section 7.3.

(g) Any material representation or warranty made by Tenant in

this Lease or any other document executed in connection with this Lease, any

guaranty of or other security for this Lease, or any report, certificate,

application, financial statement or other material instrument furnished by

Tenant pursuant hereto or thereto shall prove to be false, misleading or

incorrect in any material respect as of the date made.

(h) Tenant or any Affiliate defaults on any indebtedness or

obligation to Landlord or any Landlord Affiliate, including, without limitation,

any lease with Landlord or any Landlord Affiliate, or Tenant or any Affiliate

receives notice of acceleration of payment in connection with a default under

any Material Obligation unless Tenant can demonstrate to Landlord that such

acceleration will not cause Tenant to be in violation of Section 15.7, and any

applicable grace or cure period with respect to default under such indebtedness

or obligation expires without such default having been cured. This provision

applies to all such indebtedness and obligations as they may be amended,

modified, extended, or renewed from time to time. Notwithstanding the foregoing,

such an event shall not constitute an Event of Default hereunder if the event

occurs on or prior to December 31, 2002.

(i) Except as otherwise specifically permitted herein, the

assignment, sublease or the occurrence of any other change in Tenant's leasehold

interest in any of the Leased Property, which shall not include any change in

Tenant's stock ownership.

(j) The license to operate any Facility for the applicable

Facility Use, for the Facility or any other Government Authorization which is

material to the operation of such Facility, is canceled, suspended or otherwise

invalidated after expiration of any cure or appeal period, notice of impending

revocation proceedings is received and Tenant fails to diligently contest such

proceeding, or any reduction occurs in the number of licensed beds or units at

any Facility in excess of 3%.

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(k) Notwithstanding anything in this Section 8.1 to the contrary,

an Event of Default under [i] Section 8.1(b) (but only with respect to Section

15.7); [ii] Section 8.1(c); [iii] Section 8.1(d); [iv] Section 8.1(f) (but only

with respect to [v] thereof); or [v] Section 8.1(j) (each a "Potential Event of

Default") shall not constitute an Event of Default hereunder unless such

Potential Event of Default negatively effects 5% or more of the total beds at

the Leased Property. If the Potential Event of Default negatively effects less

than 5% of the total beds at the Leased Property, then Tenant shall have 90 days

(in addition to any cure period set forth above) after the occurrence of the

Potential Event of Default to cure such Potential Event of Default. If such

Potential Event of Default is not cured within said 90-day period, then Tenant

shall be obligated within 12 months thereafter to either [i] provide a

substitute property for that portion of the Leased Property that caused the

Potential Event of Default, which substitute property shall satisfy all of the

Landlord's underwriting requirements, in Landlord's sole discretion, or [ii]

acquire that portion of the Leased Property which caused the Potential Event of

Default at a price equal to the greater of Fair Market Value, as determined

pursuant to Section 13.3 hereof or the Allocated Lease Amount for the Facility

plus 10% of the Allocated Lease Amount. The terms and conditions set forth in

Section 13.4 hereof shall apply to any closing.

8.2 Remedies. Landlord may exercise any one or more of the following

remedies upon the occurrence of an Event of Default:

(a) Landlord may re-enter and take possession of the Leased

Property or any portion thereof without terminating this Lease, and lease such

Leased Property for the account of Tenant at a commercially reasonable rate,

holding Tenant liable for all costs of Landlord in reletting such Leased

Property and for the difference in the amount received by such reletting and the

amounts payable by Tenant under the Lease.

(b) Landlord may terminate this Lease by written notice to

Tenant, exclude Tenant from possession of the Leased Property and use efforts to

lease the Leased Property to others at a commercially reasonable rate, holding

Tenant liable for the difference in the amounts received from such reletting and

the amounts payable by Tenant under this Lease.

(c) Landlord may re-enter the Leased Property and have, repossess

and enjoy the Leased Property as if this Lease had not been made, and in such

event, Tenant and its successors and assigns shall remain liable for any

contingent or unliquidated obligations or sums owing at the time of such

repossession.

(d) Landlord may have access to and inspect, examine and make

copies of the books and records and any and all accounts, data and income tax

and other returns of Tenant insofar as they pertain to the Leased Property.

(e) Landlord may accelerate all of the unpaid Rent hereunder so

that the aggregate Rent for the unexpired term of this Lease becomes immediately

due and payable.

(f) Landlord may take whatever action at law or in equity as may

appear necessary or desirable to collect the Rent and other amounts payable

under this Lease then due and thereafter to become due, or to enforce

performance and observance of any

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obligations, agreements or covenants of Tenant under the Commitment and this

Lease, and may exercise all of Landlord's remedies set forth in the Commitment

and this Lease.

(g) With respect to the Collateral or any portion thereof and

Landlord's security interest therein, Landlord may exercise all of its rights as

secured party under Article 9 of the Uniform Commercial Code as adopted in the

State. Landlord may sell the Collateral by public or private sale upon 10 days

notice to Tenant. Tenant agrees that a commercially reasonable manner of

disposition of the Collateral shall include, without limitation and at the

option of Landlord, a sale of the Collateral, in whole or in part, concurrently

with the sale of the Leased Property.

(h) Landlord may obtain control over and collect the Receivables

and apply the proceeds of the collections to satisfaction of the Secured

Obligations unless prohibited by law. Tenant appoints Landlord or its designee

as attorney for Tenant with powers [i] to receive, to endorse, to sign and/or to

deliver, in Tenant's name or Landlord's name, any and all checks, drafts, and

other instruments for the payment of money relating to the Receivables, and to

waive demand, presentment, notice of dishonor, protest, and any other notice

with respect to any such instrument; [ii] to sign Tenant's name on any invoice

or bill of lading relating to any Receivable, drafts against account debtors,

assignments and verifications of Receivables, and notices to account debtors;

[iii] to send verifications of Receivables to any account debtor; and [iv] to do

all other acts and things necessary to carry out this Lease. Landlord shall not

be liable for any omissions, commissions, errors of judgment, or mistakes in

fact or law made in the exercise of any such powers provided Landlord's exercise

of such power is commercially reasonable. At Landlord's option, Tenant shall [i]

provide Landlord a full accounting of all amounts received on account of

Receivables with such frequency and in such form as Landlord may require, either

with or without applying all collections on Receivables in payment of the

Secured Obligations or [ii] deliver to Landlord on the day of receipt all such

collections in the form received and duly endorsed by Tenant. At Landlord's

request, Tenant shall institute any action or enter into any settlement

determined by Landlord to be necessary to obtain recovery or redress from any

account debtor in default of Receivables. Landlord may give notice of its

security interest in the Receivables to any or all account debtors with

instructions to make all payments on Receivables directly to Landlord, thereby

terminating Tenant's authority to collect Receivables. After terminating

Tenant's authority to enforce or collect Receivables, Landlord shall have the

right to take possession of any or all Receivables and records thereof and is

hereby authorized to do so, and only Landlord shall have the right to collect

and enforce the Receivables. Prior to the occurrence of an Event of Default, at

Tenant's cost and expense, but on behalf of Landlord and for Landlord's account,

Tenant shall collect or otherwise enforce all amounts unpaid on Receivables and

hold all such collections in trust for Landlord, but Tenant may commingle such

collections with Tenant's own funds, until Tenant's authority to do so has been

terminated, which may be done only after an Event of Default. Notwithstanding

any other provision hereof, Landlord does not assume any of Tenant's obligations

under any Receivable, and Landlord shall not be responsible in any way for the

performance of any of the terms and conditions thereof by Tenant.

(i) Without waiving any prior or subsequent Event of Default,

Landlord may waive any Event of Default or, with or without waiving any Event of

Default, remedy any default.

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(j) Landlord may terminate its obligation to disburse Lease

Advances.

(k) Landlord may enter and take possession of the Land or any

portion thereof and one or more Facilities without terminating the Lease and

complete renovation of the Improvements (or any part thereof) and perform the

obligations of Tenant under the Lease Documents. Without limiting the generality

of the foregoing and for the purposes aforesaid, Tenant hereby appoints Landlord

its lawful attorney-in-fact with full power to do any of the following: [i]

complete renovation and equipping of the Improvements in the name of Tenant;

[ii] use unadvanced funds remaining under the Lease Amount, or funds that may be

reserved, escrowed, or set aside for any purposes hereunder at any time, or to

advance funds in excess of the Lease Amount, to complete the Improvements; [iii]

make changes in the plans and specifications that shall be necessary or

desirable to complete the Improvements in substantially the manner contemplated

by the plans and specifications; [iv] retain or employ new general contractors,

subcontractors, architects, engineers, and inspectors as shall be required for

said purposes; [v] pay, settle, or compromise all existing bills and claims,

which may be liens or security interests, or to avoid such bills and claims

becoming liens against the Facility or security interest against fixtures or

equipment, or as may be necessary or desirable for the completion of the

construction and equipping of the Improvements or for the clearance of title;

[vi] do any and every act that Tenant might do in its own behalf, to prosecute

and defend all actions or proceedings in connection with the Improvements; and

[vii] to execute, deliver and file all applications and other documents and take

any and all actions necessary to transfer the operations of the Facility to

Landlord or Landlord's designee. This power of attorney is a power coupled with

an interest and cannot be revoked.

8.3 Right of Set-Off. After an Event of Default occurs hereunder and

is continuing, Landlord may, and is hereby authorized by Tenant to, at any time

and from time to time without advance notice to Tenant (any such notice being

expressly waived by Tenant), set-off or recoup and apply any and all sums held

by Landlord, any indebtedness of Landlord to Tenant, and any claims by Tenant

against Landlord, against any obligations of Tenant hereunder and against any

claims by Landlord against Tenant, whether or not such obligations or claims of

Tenant are matured and whether or not Landlord has exercised any other remedies

hereunder. The rights of Landlord under this Section are in addition to any

other rights and remedies Landlord may have against Tenant.

8.4 Performance of Tenant's Covenants. Landlord may perform any

obligation of Tenant which Tenant has failed to perform within 10 days after

Landlord has sent a written notice to Tenant informing it of its specific

failure. Tenant shall reimburse Landlord on demand, as Additional Rent, for any

expenditures thus incurred by Landlord and shall pay interest thereon at the

Overdue Rate (as defined in Section 8.6).

8.5 Late Payment Charge. Tenant acknowledges that any default in the

payment of any installment of Rent payable hereunder will result in loss and

additional expense to Landlord in servicing any indebtedness of Landlord secured

by the Leased Property, handling such delinquent payments, and meeting its other

financial obligations, and because such loss and additional expense is extremely

difficult and impractical to ascertain, Tenant agrees that in the event any Rent

payable to Landlord hereunder is not paid within 10 days after the due date,

Tenant shall pay a late charge of 5% of the amount of the overdue payment as a

reasonable

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estimate of such loss and expenses, unless applicable law requires a lesser

charge, in which event the maximum rate permitted by such law may be charged by

Landlord. The 10-day grace period set forth in this Section shall not extend the

time for payment of Rent or the period for curing any default or constitute a

waiver of such default.

8.6 Interest. In addition to the late payment charge, any payment

not made by Tenant within 10 days after the due date shall thereafter bear

interest at the rate (the "Overdue Rate") of the greater of [i] 18.5% per annum;

or [ii] 2.5% per annum above the Lease Rate then in effect (except that, to the

extent this Lease is governed by Texas law, the Overdue Rate shall be 18.0% per

annum); provided, however, that at no time will Tenant be required to pay

interest at a rate higher than the maximum legal rate and, provided further,

that if a court of competent jurisdiction determines that any other charges

payable under this Lease are deemed to be interest, the Overdue Rate shall be

adjusted to ensure that the aggregate interest payable under this Lease does not

accrue at a rate in excess of the maximum legal rate. Tenant shall not be

required to pay interest upon any late payment fees assessed pursuant to Section

8.5.

8.7 Litigation; Attorneys' Fees. Within five days after Tenant has

knowledge of any litigation or other proceeding that may be instituted against

Tenant that is material to the construction or operation of any Facility or that

is material to Tenant's business or financial condition, against all or any

portion of the Leased Property to secure or recover possession thereof, or that

may affect the title to or the interest of Landlord in all or any portion of the

Leased Property, Tenant shall give written notice thereof to Landlord. Tenant

shall pay all reasonable costs and expenses incurred by Landlord in enforcing or

preserving Landlord's rights under this Lease, whether or not an Event of

Default has actually occurred or has been declared and thereafter cured,

including, without limitation, [i] the fees, expenses, and costs of any

litigation, receivership, administrative, bankruptcy, insolvency or other

similar proceeding; [ii] reasonable attorney, paralegal, consulting and witness

fees and disbursements, whether in-house counsel or outside counsel; and [iii]

the expenses, including, without limitation, lodging, meals, and transportation,

of Landlord and its employees, agents, attorneys, and witnesses in preparing for

litigation, administrative, bankruptcy, insolvency or other similar proceedings

and attendance at hearings, depositions, and trials in connection therewith. All

such costs, charges and fees payable by Tenant shall be deemed to be Additional

Rent under this Lease.

8.8 Escrows and Application of Payments. As security for the

performance of the Secured Obligations, Tenant hereby assigns to Landlord all

its right, title, and interest in and to all monies escrowed with Landlord under

this Lease and all deposits with utility companies, taxing authorities and

insurance companies; provided, however, that Landlord shall not exercise its

rights hereunder until an Event of Default has occurred. Any payments received

by Landlord under any provisions of this Lease during the existence or

continuance of an Event of Default shall be applied to the Secured Obligations

in the order which Landlord may determine.

8.9 Remedies Cumulative. The remedies of Landlord herein are

cumulative to and not in lieu of any other remedies available to Landlord at law

or in equity. The use of any one remedy shall not be taken to exclude or waive

the right to use any other remedy.

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ARTICLE 9: DAMAGE AND DESTRUCTION

9.1 Notice of Casualty. If any Facility shall be destroyed, in whole

or in part, or damaged by fire, flood, windstorm or other casualty (a

"Casualty"), Tenant shall give written notice thereof to Landlord within three

Business Days after the occurrence of the Casualty ("Casualty Notice"). Within

15 days after the occurrence of the Casualty or as soon thereafter as such

information is reasonably available to Tenant, Tenant shall provide the

following information to Landlord: [i] the date of the Casualty; [ii] the nature

of the Casualty; [iii] a description of the damage or destruction caused by the

Casualty, including the type of Leased Property damaged and the area of the

Improvements damaged; [iv] a preliminary estimate of the cost to repair,

rebuild, restore or replace the Leased Property; [v] a preliminary estimate of

the schedule to complete the repair, rebuilding, restoration or replacement of

the Leased Property; [vi] a description of the anticipated property insurance

claim, including the name of the insurer, the insurance coverage limits, the

deductible amount, the expected settlement amount, and the expected settlement

date; and [vii] a description of the business interruption claim, including the

name of the insurer, the insurance coverage limits, the deductible amount, the

expected settlement amount, and the expected settlement date. Within five days

after request from Landlord, Tenant will provide Landlord with copies of all

correspondence to the insurer and any other information reasonably requested by

Landlord.

9.2 Substantial Destruction.

9.2.1 If any Facility's Improvements are substantially destroyed at

any time other than during the final 18 months of the Initial Term or any

Renewal Term, Tenant shall promptly rebuild and restore such Improvements in

accordance with Section 9.4 through Section 9.9 and Landlord shall make the

insurance proceeds available to Tenant for such restoration. The term

"substantially destroyed" means any casualty resulting in the loss of use of 35%

or more of the licensed beds or units at any one Facility.

9.2.2 If any Facility's Improvements are substantially destroyed

during the final 18 months of the Initial Term or any Renewal Term, Tenant shall

elect one of the following options: [i] to promptly rebuild in accordance with

Section 9.4 through Section 9.9; [ii] to renew this Lease in accordance with

Section 9.2.3 and promptly rebuild in accordance with Section 9.4 through

Section 9.9 (except that Tenant shall not have this option if the Casualty

occurs during the final 18 months of the final Renewal Term); or [iii] to

exercise its option to purchase the Leased Property in accordance with Section

9.2.4. Tenant shall give notice ("Election Notice") of its election of one of

the foregoing options within 30 days after the date of the Casualty Notice. If

Tenant fails to give Landlord the Election Notice within such 30 day period,

Tenant shall be deemed to have elected to rebuild the damaged Leased Property.

If Tenant elects to rebuild the damaged Leased Property but does not elect to

renew this Lease for a Renewal Term in accordance with Section 9.2.3, Tenant

shall provide to Landlord with the Election Notice an estimate of the schedule

to complete the restoration of the damaged Leased Property. If the estimate of

time for completion of the restoration extends beyond the expiration date of the

then current Term, Landlord and Tenant shall extend the current Term by mutual

agreement in order to allow Tenant sufficient time to complete the restoration

within the current Term. At the expiration of the extended current Term, Tenant

may exercise its Renewal Option under Article 12 (unless the extended current

Term was the final Renewal Term) or may exercise its Option to Purchase under

Article 13.

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9.2.3 If any Facility's Improvements are substantially destroyed

during the final 18 months of the Initial Term and Tenant elects to renew this

Lease in its entirety by delivery of an Election Notice to such effect, this

Section 9.2.3 shall apply. If Tenant so elects to renew, the Renewal Term will

be in effect for the balance of the then current Term plus a 15-year period. The

Renewal Term will commence on the third day following Landlord's receipt of

Tenant's Election Notice. All other terms of this Lease for the Renewal Term

shall be in accordance with Article 12. The damaged Improvements will be

restored by Tenant in accordance with the provisions of this Article 9 regarding

partial destruction.

9.2.4 If any Facility's Improvements are substantially destroyed

during the final 18 months of the Initial Term or the Renewal Term and Tenant

elects to purchase the Leased Property by delivery of any Election Notice to

such effect, this Section 9.2.4 shall apply. The Option Price will be determined

in accordance with Section 13.2 and the Fair Market Value will be determined in

accordance with Section 13.3 except as otherwise provided in this Section . For

purposes of determining the Fair Market Value, the Leased Property will be

valued as if it had been restored to be equal in value to the Leased Property

existing immediately prior to the occurrence of the damage. All other terms of

the option to purchase shall be in accordance with Article 13. Landlord shall

hold the insurance proceeds until the closing of the purchase of the Leased

Property and at closing shall deliver the proceeds to Tenant.

9.3 Partial Destruction. If any Facility's Improvements are not

substantially destroyed, then Tenant shall comply with the provisions of Section

9.4 and Landlord shall make the insurance proceeds available to Tenant for such

restoration.

9.4 Restoration. Tenant shall promptly repair, rebuild, or restore

the damaged Leased Property, at Tenant's expense, so as to make the Leased

Property at least equal in value to the Leased Property existing immediately

prior to such occurrence and as nearly similar to it in character as is

practicable and reasonable. Before beginning such repairs or rebuilding, or

letting any contracts in connection with such repairs or rebuilding, Tenant will

submit for Landlord's approval, which approval Landlord will not unreasonably

withhold or delay, plans and specifications meeting the requirements of Section

16.2 for such repairs or rebuilding. Promptly after receiving Landlord's

approval of the plans and specifications and receiving the proceeds of

insurance, Tenant will begin such repairs or rebuilding and will prosecute the

repairs and rebuilding to completion with diligence, subject, however, to

strikes, lockouts, acts of God, embargoes, governmental restrictions, and other

causes beyond Tenant's reasonable control. Landlord will make available to

Tenant the net proceeds of any fire or other casualty insurance paid to Landlord

for such repair or rebuilding as the same progresses, after deduction of any

costs of collection, including attorneys' fees. Payments will be made against

properly certified vouchers of a competent architect in charge of the work and

approved by Landlord. Payments for deposits for the repairing or rebuilding or

delivery of materials to the Facility will be made upon Landlord's receipt of

evidence satisfactory to Landlord that such payments are required in advance.

Prior to commencing the repairing or rebuilding, Tenant shall deliver to

Landlord for Landlord's approval a schedule setting forth the estimated monthly

draws for such work. Landlord will contribute to such payments out of the

insurance proceeds an amount equal to the proportion that the total net amount

received by Landlord from insurers bears to the total estimated cost of the

rebuilding or repairing, multiplied by the payment by Tenant on account of such

work. Landlord may, however, withhold 10% from each payment due subcontractors

until

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the work is completed and proof has been furnished to Landlord that no lien or

liability has attached or will attach to the Leased Property or to Landlord in

connection with such repairing or rebuilding. Upon the completion of rebuilding

and the furnishing of such proof, the balance of the net proceeds of such

insurance payable to Tenant on account of such repairing or rebuilding will be

paid to Tenant. Tenant will obtain and deliver to Landlord a temporary or final

certificate of occupancy before the damaged Leased Property is reoccupied for

any purpose. Tenant shall complete such repairs or rebuilding in accordance with

the building codes and all applicable laws, ordinances, regulations, or orders

of any state, municipal, or other public authority affecting the repairs or

rebuilding, and also in accordance with all requirements of the insurance rating

organization, or similar body. Any remaining proceeds of insurance after such

restoration will be Tenant's property.

9.5 Insufficient Proceeds. If the proceeds of any insurance

settlement are not sufficient to pay the costs of Tenant's repair, rebuilding or

restoration under Section 9.4 in full, Tenant shall deposit with Landlord at

Landlord's option, and within 20 days of Landlord's request, an amount

sufficient in Landlord's reasonable judgment to complete such repair, rebuilding

or restoration. Tenant shall not, by reason of the deposit or payment, be

entitled to any reimbursement from Landlord or diminution in or postponement of

the payment of the Rent.

9.6 Not Trust Funds. Notwithstanding anything herein or at law or

equity to the contrary, none of the insurance proceeds paid to Landlord as

herein provided shall be deemed trust funds, and Landlord shall be entitled to

dispose of such proceeds as provided in this Article 9. Tenant expressly assumes

all risk of loss, including a decrease in the use, enjoyment or value, of the

Leased Property from any casualty whatsoever, whether or not insurable or

insured against.

9.7 Landlord's Inspection. During the progress of such repairs or

rebuilding, Landlord and its architects and engineers may, from time to time,

inspect the Leased Property and will be furnished, if required by them, with

copies of all plans, shop drawings, and specifications relating to such repairs

or rebuilding. Tenant will keep all plans, shop drawings, and specifications at

the building, and Landlord and its architects and engineers may examine them at

all reasonable times. If, during such repairs or rebuilding, Landlord and its

architects and engineers determine that the repairs or rebuilding are not being

done in accordance with the approved plans and specifications, Landlord will

give prompt notice in writing to Tenant, specifying in detail the particular

deficiency, omission, or other respect in which Landlord claims such repairs or

rebuilding do not accord with the approved plans and specifications. Upon the

receipt of any such notice, Tenant will cause corrections to be made to any

deficiencies, omissions, or such other respect. Tenant's obligations to supply

insurance, according to Article 4, will be applicable to any repairs or

rebuilding under this Section .

9.8 Landlord's Costs. Tenant shall, within 30 days after receipt of

an invoice from Landlord, pay the reasonable costs, expenses, and fees of any

architect or engineer employed by Landlord to review any plans and

specifications and to supervise and approve any construction, or for any

services rendered by such architect or engineer to Landlord as contemplated by

any of the provisions of this Lease, or for any services performed by Landlord's

attorneys in connection therewith. With respect to any inspections by the

architect or engineer

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employed by Landlord, Tenant shall pay no more than $500.00 per day plus out of

pocket expenses for travel, lodging, food and transportation.

9.9 No Rent Abatement. Except to the extent that business

interruption insurance proceeds are received by Landlord, Rent will not abate

pending the repairs or rebuilding of the Leased Property.

ARTICLE 10: CONDEMNATION

10.1 Total Taking. If, by exercise of the right of eminent domain or

by conveyance made in response to the threat of the exercise of such right

("Taking"), any entire Facility Property is taken, or so much of any Facility

Property is taken that the Facility Property cannot be used by Tenant for the

purposes for which it was used immediately before the Taking, then this Lease

will terminate with respect to such Facility Property only on the earlier of the

vesting of title to the Facility Property in the condemning authority or the

taking of possession of the Facility Property by the condemning authority. Upon

such termination, the Lease Amount shall be reduced by the Allocated Lease

Amount for such Facility Property and Rent hereunder shall be reduced

accordingly unless there is only one Facility Property subject to this Lease in

which case the Lease will terminate. All damages awarded for such Taking under

the power of eminent domain shall be the property of Landlord, except for

damages awarded to Tenant as compensation for diminution in value of the

leasehold of the Leased Property provided the award to Landlord is not less than

the Allocated Lease Amount for the applicable Facility.

10.2 Partial Taking. If, after a Taking, so much of the Facility

Property remains that the Facility Property can be used for substantially the

same purposes for which it was used immediately before the Taking, then [i] this

Lease will terminate as to the part taken on the earlier of the vesting of title

to such Leased Property in the condemning authority or the taking of possession

of such Leased Property by the condemning authority and the Rent will be

adjusted accordingly; [ii] at its cost, Tenant shall restore so much of the

Facility Property as remains to a sound architectural unit substantially

suitable for the purposes for which it was used immediately before the Taking,

using good workmanship and new, first-class materials; [iii] upon completion of

the restoration, Landlord will pay Tenant the lesser of the net award made to

Landlord on the account of the Taking (after deducting from the total award,

attorneys', appraisers', and other reasonable fees and costs incurred in

connection with the obtaining of the award and amounts paid to the holders of

mortgages granted by Tenant, and consented to by Landlord, secured by the

Facility Property), or Tenant's actual out-of-pocket costs of restoring the

Facility Property; and [iv] Landlord shall be entitled to the balance of the net

award. The restoration shall be completed in accordance with Sections 9.4, 9.5,

9.7, 9.8 and 9.9 with such provisions deemed to apply to condemnation instead of

casualty.

10.3 Condemnation Proceeds Not Trust Funds. Notwithstanding anything

in this Lease or at law or equity to the contrary, none of the condemnation

award paid to Landlord shall be deemed trust funds, and Landlord shall be

entitled to dispose of such proceeds as provided in this Article 10. Tenant

expressly assumes all risk of loss, including a decrease in the use, enjoyment,

or value, of the Leased Property from any Condemnation.

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ARTICLE 11: TENANT'S PROPERTY

11.1 Tenant's Property. Tenant shall install, place, and use on the

Leased Property such fixtures, furniture, equipment, inventory and other

personal property in addition to Landlord's Personal Property as may be required

or as Tenant may, from time to time, deem necessary or useful to operate the

Leased Property for its permitted purposes. All fixtures, furniture, equipment,

inventory, and other personal property installed, placed, or used on the Leased

Property which is owned by Tenant or leased by Tenant from third parties is

hereinafter referred to as "Tenant's Property".

11.2 Requirements for Tenant's Property. Tenant shall comply with

all of the following requirements in connection with Tenant's Property:

(a) Tenant shall, at Tenant's sole cost and expense, maintain,

repair, and replace Tenant's Property.

(b) Tenant shall, at Tenant's sole cost and expense, keep

Tenant's Property insured against loss or damage by fire, vandalism and

malicious mischief, sprinkler leakage, earthquake, and other physical loss

perils commonly covered by fire and extended coverage, boiler and machinery, and

difference in conditions insurance in an amount not less than 90% of the then

full replacement cost thereof. Tenant shall use the proceeds from any such

policy for the repair and replacement of Tenant's Property.

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

(d) If Tenant's Property is damaged or destroyed by fire or any

other cause, Tenant shall promptly repair or replace Tenant's Property unless

Tenant elects to purchase Leased Property pursuant to Section 9.2.2.

(e) Unless an Event of Default or any event which, with the

giving of notice or lapse of time, or both, would constitute an Event of Default

has occurred, Tenant may remove Tenant's Property from the Leased Property from

time to time provided that [i] the items removed are not required to operate the

Leased Property for the Facility Uses (unless such items are being replaced by

Tenant); and [ii] Tenant repairs any damage to the Leased Property resulting

from the removal of Tenant's Property.

(f) Tenant shall not, without the prior written consent of

Landlord or as otherwise provided in this Lease, remove any Tenant's Property or

Leased Property. Tenant shall, at Landlord's option, remove Tenant's Property

upon the termination or expiration of this Lease and shall repair any damage to

the Leased Property resulting from the removal of Tenant's Property. If Tenant

fails to remove Tenant's Property within 30 days after request by Landlord, then

Tenant shall be deemed to have abandoned Tenant's Property, Tenant's Property

shall become the property of Landlord, and Landlord may remove, store and

dispose of Tenant's Property. In such event, Tenant shall have no claim or right

against Landlord for such property or the value thereof regardless of the

disposition thereof by Landlord. Tenant shall pay Landlord, upon demand, all

expenses incurred by Landlord in removing, storing, and disposing of Tenant's

Property and repairing any damage caused by such removal. Tenant's obligations

hereunder shall survive the termination or expiration of this Lease.

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(g) Tenant shall perform its obligations under any equipment

lease or security agreement for Tenant's Property. For equipment loans or leases

for equipment having an original cost in excess of $50,000.00, Tenant shall

cause such equipment lessor or lender to enter into a nondisturbance agreement

with Landlord upon terms and conditions acceptable to Landlord, including,

without limitation, the following: [i] Landlord shall have the right (but not

the obligation) to assume such equipment lease or security agreement upon the

occurrence of an Event of Default by Tenant hereunder; [ii] such equipment

lessor or lender shall notify Landlord of any default by Tenant under the

equipment lease or security agreement and give Landlord a reasonable opportunity

to cure such default; and [iii] Landlord shall have the right to assign its

interest in the equipment lease or security agreement and nondisturbance

agreement. Tenant shall, within 30 days after receipt of an invoice from

Landlord, reimburse Landlord for all costs and expenses incurred in reviewing

and approving the equipment lease, security agreement and nondisturbance

agreement, including, without limitation, reasonable attorneys' fees and costs.

ARTICLE 12: RENEWAL OPTIONS

12.1 Renewal Options. Tenant has the option to renew ("Renewal

Option") this Lease for one 15-year renewal term (each a "Renewal Term"). Tenant

can exercise each Renewal Option only upon satisfaction of the following

conditions:

(a) There shall be no uncured Event of Default, or any event

which with the passage of time or giving of notice would constitute an Event of

Default, at the time Tenant exercises its Renewal Option nor on the date the

Renewal Term is to commence.

(b) Tenant shall give Landlord irrevocable written notice of

renewal ("Renewal Notice") no later than the date which is [i] 90 days prior to

the expiration date of the then current Term; or [ii] if applicable, three days

after Tenant's delivery of the Election Notice as set forth in Section 9.2.2.

12.2 Effect of Renewal. The following terms and conditions will be

applicable if Tenant renews the Lease:

(a) Effective Date. Except