FIRST AMENDMENT TO MASTER LEASE AGREEMENT

EXHIBIT 10.61

FIRST AMENDMENT TO MASTER LEASE AGREEMENT

THIS FIRST AMENDMENT TO MASTER LEASE AGREEMENT (“Amendment”) is dated as of July 25, 2007 (“Amendment Effective Date”) among HCRI MASSACHUSETTS PROPERTIES TRUST , a Massachusetts business trust organized under the laws of the Commonwealth of Massachusetts (“HCN-MA” and a “Landlord”), having its principal office located at One SeaGate, Suite 1500, P. 0. Box 1475, Toledo, Ohio 43603-1475, HCRI MASSACHUSETTS PROPERTIES TRUST II , a Massachusetts business trust organized under the laws of the Commonwealth of Massachusetts (“HCN-MA II” and a “Landlord”), having its principal office located at One SeaGate, Suite 1500, P. O. Box 1475, Toledo, Ohio 43603-1475, and KINDRED HOSPITALS EAST, L.L.C , a Delaware limited liability company organized under the laws of the State of Delaware (“Tenant”), having its chief executive office located at 680 South Fourth Avenue, Louisville, Kentucky 40202.

R E C I T A L S

A. Landlord has leased to Tenant property located in Massachusetts (collectively called “Property”) pursuant to a Master Lease Agreement dated as of February 28, 2006, as amended from time to time (“Lease”).

B. As of the Amendment Effective Date of this Amendment, HCN-MA II is acquiring an unimproved parcel of property located in Leicester, Massachusetts (“Leicester Unimproved Property”).

C. Landlord desires to lease the Leicester Unimproved Property to Tenant and Tenant desires to lease the Leicester Unimproved Property from Landlord upon the terms set forth in the Lease.

D. Landlord and Tenant desire to amend the Lease to include the Leicester Unimproved Property and to modify certain terms and conditions.

NOW, THEREFORE, in consideration of the foregoing recitals and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows.

1. Definitions . Any capitalized terms not defined in this Amendment shall have the meaning set forth in the Lease.

2. Amended Definitions . The definitions of “Closing Certificate”, “Commitment”, “Option Amount”, and “Rent Schedule” in §1.4 of the Lease are hereby amended to read in their entireties as follows (added language in italics):

“Closing Certificate” means the Closing Certificate of even date from Tenant and Affiliate Subtenant in favor of Landlord and any Closing Certificate executed in connection with an amendment of this Lease.

“Commitment” means the Amended and Restated Term Sheet for the Lease dated February 21, 2006, as amended and the Project Approval Letter dated November 16, 2006.

“Option Amount” means the Investment Amount.

“Rent Schedule” means the schedule issued by Landlord to Tenant showing the Base Rent to be paid by Tenant pursuant to the terms of this Lease, as such schedule is amended from time to time by Landlord. The initial Rent Schedule is attached to this Lease as Schedule 1 or will be attached following Closing if the Rent Schedule cannot be determined until the day of Closing. The Rent Schedule to be in effect upon the Amendment Effective Date of the First Amendment to Master Lease Agreement is attached as Schedule 1-A.

3. Base Rent . Section 2.1 of the Lease is hereby amended to read in its entirety as follows (added language in italics):

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 payable for the first Lease Year is as shown on the Rent Schedule, subject to adjustment pursuant to §2.2.2 if applicable. For the second and each subsequent Lease Year of the Initial Term, the Base Rent shall be paid in accordance with the most recent revised Rent Schedule provided by Landlord pursuant to §2.2, as applicable. The Base Rent for each Renewal Term will be determined in accordance with §12.2. Notwithstanding the foregoing, the Base Rent may also be adjusted if Landlord makes a payment to acquire additional Leased Property. In such cases, Landlord shall issue, and Tenant shall pay Base Rent according to, a revised Rent Schedule. The increase in Base Rent shall be based on the applicable rate of return to Landlord as set forth in the Commitment and shall be effective as of the date that Landlord makes the payment to acquire the additional Leased Property.

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4. Early Option to Purchase . Section 13.7 of the Lease is hereby amended to read in its entirety as follows (added language in italics):

13.7 Early Option to Purchase . Notwithstanding any provision to the contrary contained in this Article 13, Tenant may exercise the Option to Purchase all of the Leased Property by giving notice of such exercise within 24 months after the Effective Date (“Early Option Period”) subject to the same terms and conditions of this Article 13 except for §13.3 and except that [i] the required Purchase Notice may be given at any time during the Early Option Period; [ii] the Option Price for the Leased Property shall be $72,225,000.00; [iii] the purchase of the Leased Property shall close no later than 90 days after Landlord’s receipt of the Purchase Notice; and [iv] no Event of Default shall have occurred and be continuing. The Option to Purchase pursuant to this §13.7 shall be referred to as the “Early Option”.

5. Parking Lot Improvements . Article 15 of the Lease is hereby amended to add a new Section 15.12 as follows:

15.12 Parking Lot Improvements . Tenant shall improve the Land as a parking lot to provide additional parking for Kindred Hospital Parkview Central Mass. The parking lot shall be constructed according to plans and specifications approved by Landlord (such approval not to be unreasonably withheld), prior to commencement of construction and in accordance with all applicable legal requirements, including but not limited to requirements of the Massachusetts Wetlands Protection Act. Tenant shall use diligent, commercially reasonable efforts to complete construction of the parking lot on or before December 31, 2007.

6. Amendment Rent Schedule . The Lease is hereby amended to add a new Schedule 1-A in the form of Schedule 1-A attached hereto and made a part hereof.

7. Legal Description . Exhibit A-4 of the Lease is hereby amended to read in its entirety as set forth on Exhibit A-4 attached hereto and made a part hereof.

8. Permitted Exceptions . Exhibit B-4 of the Lease is hereby amended to read in its entirety as set forth on Exhibit B-4 attached hereto and made a part hereof.

9. Affirmation . Except as specifically modified by this Amendment, the terms and provisions of the Lease are hereby affirmed and shall remain in full force and effect.

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10. Binding Effect . This Amendment will be binding upon and inure to the benefit of the successors and permitted assigns of Landlord and Tenant.

11. Further Modification . The Lease may be further modified only by writing signed by Landlord and Tenant.

12. Counterparts . This Amendment may be executed in multiple counterparts, each of which shall be deemed an original hereof, but all of which will constitute one and the same document.

13. Consent of Guarantor . This Amendment shall have no force or effect unless and until each Guarantor has executed the Consent of Guarantor set forth below.

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IN WITNESS WHEREOF, Landlord and Tenant have executed this Amendment as of the date first set forth above.