UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

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FORM 8-K

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CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(D) OF THE 
SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): April 18, 2019 (April 15, 2019)

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Global Medical REIT Inc.
(Exact name of registrant as specified in its charter)

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Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).

Emerging growth company ¨

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

On April 15, 2019, Global Medical REIT Inc. (the “Company”), through a wholly-owned subsidiary of Global Medical REIT L.P., the Company’s operating partnership (the “OP”), closed on the acquisition of an aggregate 207,204 square-foot portfolio of four in-patient rehabilitation facilities (the “CNL Portfolio”). The aggregate purchase price of the CNL Portfolio is $94 million (subject to an additional $1 million earn-out payment to the CNL Seller, as defined below). The facilities are located in Las Vegas, Nevada; Surprise, Arizona; Oklahoma City, Oklahoma and Mishawaka, Indiana. The Company previously reported on a Current Report on Form 8-K filed with the U.S. Securities and Exchange Commission (the “SEC”) on March 13, 2019 that it had entered into a purchase and sale agreement, effective March 12, 2019 (the “CNL Purchase Agreement”) with CHP Surprise AZ Rehab Owner, LLC; CHP Las Vegas NV Rehab Owner, LLC; CHP Oklahoma City OK Rehab Owner, LLC; and CHP Mishawaka IN Rehab Owner, LLC (collectively, the “CNL Seller”), to acquire the CNL Portfolio.

Upon the closing of the acquisition of the CNL Portfolio, the Company, through wholly-owned subsidiaries of the OP, assumed the CNL Seller’s interest, as lessor, in four triple-net leases (collectively, the “CNL Portfolio Leases”) with (i) Encompass Health (Las Vegas, Nevada facility); (ii) a joint venture between Cobalt Rehabilitation and Tenet Healthcare (the Surprise, Arizona facility); (iii) a joint venture between Mercy Health and Kindred Healthcare (the Oklahoma City, Oklahoma facility); and (iv) St. Joseph’s Health System (the Mishawaka, Indiana facility). The CNL Portfolio Leases have a weighted average remaining lease term of approximately 8.3 years, with the Las Vegas, Nevada facility lease containing four, five-year renewal options; the Surprise, Arizona facility lease containing two, five-year renewal options; the Oklahoma City, Oklahoma facility lease containing three, 10-year renewal options and the Mishawaka, Indiana facility lease containing two, five-year renewal options. The aggregate initial annual rent for the CNL Portfolio is approximately $6.9 million, broken down as follows:

The above description of the terms and conditions of the CNL Portfolio Leases is only a summary and is not intended to be a complete description of their terms and conditions. All of the terms and conditions of the CNL Portfolio Leases are set forth in the CNL Portfolio Leases that are filed as Exhibits 10.1, 10.2, 10.3 and 10.4 to this Current Report on Form 8-K and are incorporated herein by reference. 

The information disclosed above in Item 1.01 is incorporated herein by reference.

Exercise of Accordion Feature on Credit Facility

On April 15, 2019, the Company exercised $75 million of the $150 million accordion feature (the “Accordion”) of its credit facility (the “Credit Facility”). The partial exercise of the Accordion increases the term loan component of the Credit Facility from $100 million to $175 million and the total borrowing capacity under the Credit Facility to $425 million. The Credit Facility is an agreement by and among the Company, as guarantor, the OP, as borrower, and certain subsidiaries of the OP, as guarantors (such subsidiaries, the “Subsidiary Guarantors”) and BMO Harris Bank, N.A., as Administrative Agent, the terms of which were previously disclosed in Item 5 of the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 2018, as filed with the SEC on August 8, 2018 and are herein incorporated by reference. The Subsidiary Guarantors and the Company are guarantors of the obligations under the Accordion. The amount available to borrow from time to time under the Accordion is limited according to a quarterly borrowing base valuation of certain properties owned by the Subsidiary Guarantors.

Closing of the CNL Portfolio

In connection with the closing of the acquisition of the CNL Portfolio, the OP incurred approximately $89.6 million of additional indebtedness under the Credit Facility. As of April 15, 2019, the outstanding balance under the Credit Facility was approximately $320.2 million.

The Company issued a press release on April 18, 2019, announcing the closing of the acquisition of the CNL Portfolio before this Current Report on Form 8-K was filed. A copy of the press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K.

The information in Exhibit 99.1 referenced in Item 9.01 below is being “furnished” and, as such, shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that Section and shall not be incorporated by reference into any registration statement or other document filed by the Company pursuant to the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such filing.

The financial statements that are required to be filed pursuant to this item will be filed by amendment not later than 71 days after the date on which this initial Current Report on Form 8-K is required to be filed.

The pro forma financial information that is required to be filed pursuant to this item will be filed by amendment not later than 71 days after the date on which this initial Current Report on Form 8-K is required to be filed.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Dated: April 18, 2019

Exhibit 10.1

LEASE ASSIGNMENT AND AMENDMENT

THIS LEASE ASSIGNMENT AND AMENDMENT TO LEASE AGREEMENT (this “Amendment”) is made as of June 1, 2010 by and among LVRH Properties LLC, a Nevada limited-liability company (“Landlord”), Las Vegas Rehabilitation Hospital LLC, a Nevada limited-liability company (“Original Tenant”), and HealthSouth Rehabilitation Hospital of Desert Canyon, LLC, a Delaware limited-liability company (“New Tenant”).

RECITALS:

A.       Landlord and Original Tenant entered into that Lease Agreement (Triple-Net/Single-Tenant), dated January 30, 2006, as amended by Amendment No. 1 dated January 30, 2009, Amendment No. 2 dated on or about April 2, 2009, Amendment No. 3 dated March 12, 2009, and Amendment No. 4 dated June 30, 2009 (collectively, the “Lease”), providing for the lease by Original Tenant from Landlord of the building and other real property located at 9175 W. Oquendo Road, Las Vegas, Nevada (the “Demised Premises”).

B.       Original Tenant owns and operates a 50 bed rehabilitation hospital at the Demised Premises known as Desert Canyon Rehabilitation Hospital (the “Hospital”),

C.       New Tenant (as successor in interest to HealthSouth Corporation, a Delaware corporation) and Original Tenant entered into that Asset Purchase Agreement (the “Purchase Agreement”), dated as of April 21, 2010 and amended May 5, 2010, providing for the purchase by New Tenant from Original Tenant of substantially all of the assets owned or leased by Original Tenant in relation to the Hospital.

D.       In connection with the Closing, as defined in the Purchase Agreement, Original Tenant has agreed to assign to New Tenant all of Original Tenant's rights under the Lease accruing from and after the Closing Effective Time, as defined in the Purchase Agreement, and New Tenant has agreed to assume all of Original Tenant's obligations and liabilities under the Lease accruing from and after the Closing Effective Time.

E.        Also in connection with the Closing, Landlord and New Tenant have agreed to amend the Lease as set forth herein.

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

1.       Capitalized terms used herein but not defined herein shall have the meanings given in the Lease. Capitalized terms used in this Amendment but not defined in the Lease shall have the meanings given in this Amendment.

2.        Landlord and Original Tenant make the following representations and warranties to New Tenant:

(a)        To Landlord's and Original Tenant's knowledge, the Demised Premises, as currently used by Original Tenant, is not in violation of any Applicable Law, as defined in the Purchase Agreement (including without limitation, building, public health, zoning or environmental laws), or any covenant, condition, restriction or easement, affecting the Demised Premises.

(b)       The Demised Premises is the only real property used in the operation of the Hospital by Original Tenant.

(c)        Landlord and Original Tenant have no knowledge of any pending or threatened condemnation proceedings, lawsuits, or administrative actions relating to the Demised Premises.

(d)       Except for the Lease, there are no leases, subleases, licenses, concessions, or other similar agreements, written or oral, granting to any party or parties the right of use or occupancy of any portion of the Demised Premises.

(e)       There are no outstanding options or rights of first refusal to purchase the Demised Premises, or any portion thereof or interest therein.

(f)        There are no parties (other than Original Tenant) in possession of the Demised Premises.

(g)       Landlord and Original Tenant have no knowledge of any intended public improvement which may involve any charge being levied or assessed or which may result in the creation of any lien upon the Demised Premises; or any suit, action, claim or legal, administrative, arbitration or other proceeding or governmental investigation pending, threatened or contemplated against or affecting the Demised Premises.

(h)       The Lease is valid, binding and enforceable in accordance with its terms and is in full force and effect.

(i)         The Lease demises and leases to Original Tenant all of the Demised Premises, and as amended and assigned pursuant hereto, will demise and lease to New Tenant all of the Demised Premises,

(j)         There have been no modifications to the Lease.

(k)       There are no outstanding payments due to Landlord required to be paid by Original Tenant under the terms and provisions of the Lease. There are no outstanding payments due to any third party required to be paid by Original Tenant under the terms and provisions of the Lease with respect to any period prior to the Closing Effective Time for which New Tenant shall be responsible or liable. Landlord and Original Tenant have no knowledge of any default under the Lease by either Landlord or Original Tenant.

(l)         Landlord is not holding, and Original Tenant has not made, any security deposit or pre-payments of rent under the Lease.

(m)       No notice of violation of any Applicable Law, or of any covenant, condition, restriction or easement affecting the Real Property, has been given to Original Tenant or Landlord by any Governmental Entity having jurisdiction over the Demised Premises or by any other person or entity entitled to enforce the same. As used herein, “Governmental Entity” means any government, or any agency, bureau, board, directorate, commission, court, department, official, political subdivision, tribunal or other instrumentality of any government, whether federal, state or local.

(n)       The execution and delivery of this Amendment has been duly and validly authorized by all necessary action on the part of Landlord and Original Tenant. This Amendment is, and will be, a valid and legally binding obligation of Landlord, enforceable in accordance with its terms.

Landlord and Original Tenant will be deemed to have “knowledge” of a particular fact or other matter only if a Principal, as defined in the Purchase Agreement, has actual knowledge of such fact or other matter.

3.         New Tenant makes the following representations and warranties to Landlord and Original Tenant:

(a)       The execution and delivery of this Amendment has been duly and validly authorized by all necessary action on the part of New Tenant. This Amendment is, and will be, a valid and legally binding obligation of New Tenant, enforceable in accordance with its terms.

(b)       New Tenant does not, and will not during the term of the Lease, as amended by this Amendment, operate under any corporate integrity or similar agreement that would be binding upon any successor tenant or occupant of the Demised Premises other than New Tenant.

4.         Upon execution of this Amendment, Landlord shall deliver the following to New Tenant:

(a)       Copies of resolutions duly adopted by the Manager of Landlord authorizing and approving Landlord's performance under the Lease and the execution, delivery and performance of this Amendment, certified as true and of full force as of the date hereof by a manager of Landlord.

(b)       Certificates of incumbency for the respective managers of Landlord executing this Amendment.

(c)       Certificates of existence and good standing of Landlord from the State of Nevada, dated not more than 30 days prior to the date hereof.

5.        Original Tenant hereby assigns to New Tenant all of Original Tenant's right, title and interest in and to the Lease. New Tenant hereby accepts such assignment and assumes and agrees to perform all of the obligations and liabilities of Original Tenant arising or accruing under the Lease from and after the Closing Effective Time. Landlord hereby fully consents, in accordance with the Lease, to such assignment and agrees to recognize New Tenant as the Tenant under the Lease from and after the Closing Effective Time. Further, Landlord hereby releases Original Tenant from all such obligations and liabilities assumed by New Tenant from and after the Closing Effective Time. Original Tenant shall indemnify, defend and hold harmless New Tenant and each of the shareholders, members, directors, officers, owners, employees, affiliates, and agents of the New Tenant, against any and all losses, costs, claims, liabilities, fees, penalties, damages, obligations or expenses (including reasonable costs of investigation, court costs and legal fees) of any nature, including any interest charged thereon, resulting from or arising under the Lease prior to the Closing Effective Time. New Tenant shall indemnify, defend and hold harmless Original Tenant and each of the shareholders, members, directors, officers, owners, employees, affiliates, and agents of the Original Tenant, against any and all losses, costs, claims, liabilities, fees, penalties, damages, obligations or expenses (including reasonable costs of investigation, court costs and legal fees) of any nature, including any interest charged thereon, resulting from or arising under the Lease, as amended by this Amendment, from and after the Closing Effective Time.

6.        Amendment No. 1, Amendment No. 2, Amendment No. 3 and Amendment No. 4 to the Lease are hereby deleted from the Lease in their entirety.

7.        Exhibit A to the Lease is hereby replaced by Exhibit A attached hereto.

8.        Section 2 of the Lease is hereby amended to read in its entirety as follows:

Demised Premises. Landlord has constructed on the Demised Premises a building containing approximately 53,260 square feet of space (the “Building”). There shall be no deduction or exclusion for any square feet of the Building included within the Demised Premises by reason of corridors, interior partitions or any other interior construction improvements or equipment.

9.        The end of the Base Term set forth in Section 3(a) of the Lease is hereby extended to May 31, 2025.

10.      Section 3(b) of the Lease is hereby amended to read in its entirety as follows:

Extension Options. So long as no “Event of Default' (as hereinbelow defined) is in effect at the time of such exercise by Tenant, Tenant shall have four (4) consecutive rights to extend the Term by a period of five (5) years per each such extension option (each an “Extension Period”); provided, however, that upon any such extension of the Term all of the remaining terms and conditions hereof shall remain in force and effect (except that the Base Rent payable during such extension of the Term shall be calculated in accordance with Section 4(b) below); provided further, that to exercise any such option Tenant must give Landlord written notice of such exercise, in accordance with the provisions hereof, not less than six (6) months prior to the date that the Term would otherwise expire.

11.      Section 4(a) of the Lease is hereby amended to read in its entirety as follows:

Initial Term Base Rent. Subject to adjustment as hereinafter provided, Tenant shall pay Landlord as base rent (“Base Rent”) the sum of One Hundred Fifteen Thousand Dollars ($115,000) per month in advance on the first day of each month during the Term beginning on the Closing Effective Time. If the Closing Effective Time is not on the first day of a calendar month then (i) Base Rent for the fractional month that includes the Closing Effective Time shall be due on the Closing Effective Time, and (ii) the Base Rent due for such fractional month shall be prorated based upon the actual number of days in such fractional month, On June 1, 2015, and on June 1, 2020, the Base Rent shall be increased by a percentage equal to the lesser of (i) the percentage increase in the CPI-U during the preceding five (5) year period (based upon the CPI-U for the months of May, 2010 and May, 2015 for the June 1, 2015 adjustment date and May, 2015 and May, 2020 for the June 1, 2020 adjustment date), or (ii) fifteen percent (15%); provided, however, that in no event shall the Base Rent be decreased. As used herein, “CPI-U” means the U.S. Department of Labor, Bureau of Labor Statistics, Consumers Price Index for all Urban Consumers, All Cities Average, Subgroup “all items” (base reference period 1982-84=100). If during the Term the U.S. Department of Labor, Bureau of Labor Statistics, ceases to publish the CPI-U, such other index or standard as will most nearly accomplish the aim and purpose of the CPI-U and the use thereof herein shall be selected by Landlord and Tenant.

12.      Section 4(b) of the Lease is hereby amended to read in its entirety as follows:

Extension Period Base Rent. The Base Rent for the first Extension Period shall be the greater of (i) the Fair Market Rent, or (ii) eighty percent (80%) of the Base Rent during the last five (5) years of the initial Term. The Base Rent for the second Extension Period shall be the greater of (i) the Fair Market Rent, or (ii) ninety percent (90%) of the Base Rent during the first Extension Period; provided, however that if the Base Rent during the first Extension Period was equal to or less than ninety percent (90%) of the Base Rent during the last five (5) years of the initial Term, then the Base Rent for the second Extension Period shall not be less than one hundred percent (100%) of the Base Rent during the first Extension Period. The Base Rent for the third Extension Period shall be the greater of (i) the Fair Market Rent, or (ii) ninety percent (90%) of the Base Rent during the second Extension Period; provided, however that if the Base Rent during the second Extension Period was ninety percent (90%) of the Base Rent during the first Extension Period, then the Base Rent for the third Extension Period shall not be less than one hundred percent (100%) of the Base Rent during the second Extension Period. The Base Rent for the fourth Extension Period shall be the greater of (i) the Fair Market Rent, or (ii) ninety percent (90%) of the Base Rent during the third Extension Period; provided, however that if the Base Rent during the third Extension Period was ninety percent (90%) of the Base Rent during the second Extension Period, then the Base Rent for the fourth Extension Period shall not be less than one hundred percent ( 100%) of the Base Rent during the third Extension Period.

As used herein, “Fair Market Rent” shall mean the fair market rental rate for the Demised Premises at the time Tenant notifies Landlord of Tenant’s election to exercise its option to extend the Term under Section 3(b) above. Within thirty (30) days of Landlord's receipt of such notice, Landlord shall notify Tenant of Landlord's determination of the Fair Market Rent. Tenant shall have fifteen (15) days from its receipt of such notice from Landlord to notify Landlord that Tenant does not agree with Landlord's determination of the Fair Market Rent. If Tenant fails to so notify Landlord, Tenant shall be deemed conclusively to have accepted Landlord's determination. If Tenant does not agree with Landlord's proposed Fair Market Rent, and Landlord and Tenant cannot agree upon the Fair Market Rent within ten (10) days of Tenant's notice to Landlord of Tenant's disagreement, then Landlord and Tenant shall each submit a new determination of the Fair Market Rent to the appraisers appointed as follows. Landlord and Tenant shall each, within twenty (20) days of Tenant's notice to Landlord of Tenant's disagreement, appoint one (1) independent appraiser who shall by profession be an MAI appraiser with experience appraising property similar in nature to the Demised Premises in the Las Vegas, Nevada metropolitan area. Within thirty (30) days of the date of appointment of the last appointed appraiser each party shall present their respective appraiser's results. If the results of the two appraisers are within 10% of the results of the lower of the two appraisals, then the Fair Market Rent shall be the average of the results of the two appraisals. If the results of the two appraisals are not within 10% of the lower of the two appraisals, then the two (2) appraisers shall within fifteen (15) days agree upon and appoint a third appraiser who shall be qualified under the same criteria set forth above for qualification of the initial two (2) appraisers. The third appraiser shall within thirty (30) days present its opinion of the Fair Market Rent. The Fair Market Rent shall be the average of the results of the third appraiser and the results of the other appraiser closest to that of the third appraiser. The cost of the third appraisal shall be shared equally by the parties.

13.      Section 4(d) of the Lease is hereby amended to read in its entirety as follows:

Property Taxes. Tenant shall in respect of all periods of the Term pay all real property taxes and general and special assessments on the Demised Premises, and shall pay all taxes charged against trade fixtures, utility installations, furnishings, equipment or any other personal property belonging to Tenant. Landlord shall forward to Tenant in a timely manner all bills and notices with respect to such real property taxes and assessments as are received by Landlord from third parties, and within five (5) days after request by Landlord (and in no event less than quarterly), Tenant shall provide Landlord with written evidence of each such payment. Tenant shall be deemed to have complied with the covenants of this Section 4(d) if payment of such taxes or assessments shall have been made within any period allowed by law or by the governmental authority imposing the same during which payment is permitted without penalty or interest. Tenant or its designees shall have the right to contest or review all such taxes by legal proceedings, or in such other manner as Tenant may deem suitable. If instituted, Tenant or its designees shall conduct such review or contest promptly at its own expense, and free of any expense to Landlord, and, if necessary, in the name of and with the cooperation of Landlord and Landlord shall execute all documents reasonably necessary to accomplish the foregoing. Notwithstanding the foregoing, Tenant shall promptly pay all such taxes if at any time the Demised Premises or any part of the Demised Premises shall be subject to the commencement of any forfeiture proceeding, or if Landlord shall be subject to any civil or criminal liability arising out of the nonpayment thereof, or if nonpayment would result in any default under any loan or other obligation of Landlord secured by any deed of trust or other lien on the Demised Premises. If there shall be any refunds or rebates on account of the taxes paid by Tenant under the provisions of this Lease, such refund or rebate shall belong to Tenant. Tenant shall be solely responsible for payment of any penalties or interest charged with respect to taxes and assessments for which Tenant is responsible, except that Landlord shall be responsible for any such penalties or interest resulting from any failure by Landlord to timely forward to Tenant any bill or notice of such taxes or assessments received by Landlord.

14.      Section 4(f) of the Lease is hereby deleted in its entirety.

15.      The initial paragraph of Section 6 of the Lease is hereby amended to read in its entirety as follows:

Use of Demised Premises. The Demised Premises are leased to Tenant solely for the operation of a rehabilitation hospital and uses incidental thereto. Tenant shall use the Demised Premises solely for this purpose and shall not use or allow to be used the Demised Premises, or any portion thereof, for any other purpose or purposes whatsoever without Landlord's prior written consent.

16.      Section 6(c) of the Lease is hereby amended to read in its entirety as follows:

Compliance with Rules and Regulations. Tenant hereby covenants and agrees that it, its agents, employees, servants, contractors, subtenants and licensees shall abide by the rules and regulations set forth above and such additional rules and regulations hereafter adopted and amendments and modifications of any of the foregoing as Landlord may, from time to time, reasonably adopt for the safety, care and cleanliness of the Demised Premises, for the preservation of good order thereon; provided the same are customary, in compliance with applicable law and do not materially interfere with Tenant's use of the Demised Premises as a rehabilitation hospital, and copies of the same are furnished to Tenant.

17.       Section 6(g) of the Lease is hereby amended to read in its entirety as follows:

Insurance. Tenant shall, at Tenant's expense, maintain property insurance on the Demised Premises and appurtenant structures in the amount of 100% of the replacement cost of the Demised Premises. In addition, Tenant shall, at Tenant's expense, obtain and keep in force at all times during the Term of the Lease, a policy or policies of insurance covering loss or damage to all of the improvements, betterments, Tenant's personal property, utility installations, trade fixtures, furnishings, and Tenant's business contents located within the Demised Premises, in the amount of one hundred percent (100%) of the full replacement value thereof as reasonably ascertained by the Tenant's insurance carrier against risks of direct physical loss or damage, normally covered in an “all risk” policy (including the perils of flood and surface waters), as such term is used in the insurance industry; provided, however, that Tenant shall have no obligation to insure against earthquakes or against acts of terror. The proceeds of such insurance shall be used for the repair or replacement of the property so insured (including, without limitation, any repair or replacement of such property in accordance with Section 16 below).

Tenant shall, at Tenant's expense, maintain a policy of Commercial General Liability insurance insuring Tenant and as additional insureds, Landlord and any of Landlord's mortgagees, against liability arising out of the ownership, use, occupancy or maintenance of the Demised Premises. Such insurance shall be on an occurrence basis providing single-limit coverage in an amount not less than Two Million Dollars ($2,000,000) per occurrence. The amount of such insurance shall be subject to periodic increase requests by Landlord based upon inflation, increased liability awards, recommendation of professional insurance advisers, and other relevant factors. If Landlord requests a change to said limit, Tenant shall review the request but shall not be obligated to change said limit unless such change is necessary to increase said limit to a commercially reasonable amount, in which case such amount shall be mutually agreed upon by Landlord and Tenant. However, the limits of such insurance shall not limit Tenant's liability nor relieve Tenant of any obligation hereunder.

Insurance required to be maintained by Tenant hereunder shall be in companies holding a “General Policyholders' Rating” of B-plus or better and a “financial rating” of 10 or better, as a set forth in the most current issue of “Best's Insurance Guide”, or such comparable ratings as Landlord and Tenant shall agree. Tenant shall promptly deliver to Landlord, within thirty (30) days of the Commencement Date, original certificates evidencing the existence and amounts of such insurance. No such policy shall be cancelable or subject to reduction of coverage except after thirty (30) days prior written notice to Landlord. Tenant shall use its best efforts to furnish Landlord with renewal certificates thereof within thirty (30) days prior to the expiration, cancellation or reduction of such policies, but in any event shall furnish Landlord with such renewal certificates as soon as they are available to Tenant. Tenant shall not do or permit to be done anything which shall invalidate the insurance policies required under this Lease.

Tenant shall obtain from the issuers of the insurance policies referred to in this Lease a waiver of subrogation provision in said policies (with respect to Landlord) and Tenant hereby releases and relieves Landlord, and waives any and all rights of recovery against Landlord, or against the employees, officers, agents and representatives of Landlord, for loss or damage arising out of or incident to the perils required to be insured against under this Lease which perils occur in, on or about the Demised Premises, whether due to the negligence of Landlord or Landlord's agents, employees, contractors, subcontractors or invitees (but not if due to the intentional misconduct of Landlord or Landlord's agents or employees).

18.       Section 7 of the Lease is hereby amended to delete the next to last sentence of Section 7 and replace the next to last sentence with the following:

Throughout the performance of improvements, Tenant, at its expense, shall carry, or cause to be carried, workers' compensation insurance in statutory limits, and general liability insurance for any occurrence in or about the Demised Premises, insuring Tenant and as additional insureds, Landlord and any of Landlord's mortgagees, in such limits as agreed upon by Landlord and Tenant.

19.       Section 10 of the Lease is hereby amended to read in its entirety as follows:

Indemnification. Tenant hereby covenants and agrees to indemnify, save and hold Landlord harmless from liability, loss, expenses (including reasonable attorney's fees, judgments, claims, liens and demands) in connection with, (i) Tenant's use of the Demised Premises, or (ii) the conduct of Tenant's business, or (iii) any activity, work or things done in the Demised Premises, or (iv) any default in the performances of any obligation on Tenant's part to be performed under the terms of the Lease, or (v) any negligence of Tenant, or any of Tenant's agents, contractors, or employees. Notwithstanding the foregoing, Tenant shall not be required to defend, save harmless or indemnify Landlord, and Landlord shall indemnify, save and hold harmless Tenant, from any liability for injury, loss, accident or damage to any person or property resulting from Landlord's negligence or willful acts or omissions, or those of Landlord's agents, contractors or employees.

20.       Section 16(b) of the Lease is hereby amended to read in its entirety as follows:

Insurance Proceeds. All insurance proceeds payable under any fire and extended coverage risk insurance required to be maintained by Tenant pursuant to this Lease shall be payable solely to Landlord or any mortgagee under a mortgage or beneficiary under a deed of trust holding a lien encumbering the Demised Premises (as their respective interests shall appear) to be held and applied to the cost of restoring the Demised Premises, and Tenant shall have no interest therein, except that Tenant shall be entitled to all insurance proceeds payable for the destruction of Tenant's personal property (in no event, however, shall Tenant be entitled to insurance proceeds with respect to destruction of any improvements, betterments or fixtures on the Demised Premises). Tenant shall also be responsible for the amount of any deductible required under any insurance policy covering fire or other casualty. If for any reason any portion of the cost to restore the Demised Premises is not covered by insurance, then Tenant shall pay to Landlord, upon demand, any cost or expense that is not so covered. Such repair and restoration shall be performed by properly insured

and licensed contractors, in accordance with plans and specifications approved by Landlord, and shall comply with the requirements of this Lease and all applicable laws, codes and regulations. In the event Landlord is required to pay any portion of such restoration or repair costs, Tenant shall reimburse Landlord therefore, together with interest at twelve percent (12%) per year, within ten (10) days after receiving demand therefor from Landlord. Tenant shall in no case be entitled to compensation for damages on account of any annoyance or inconvenience in making repairs under any provision of this Lease. Neither the rent payable by Tenant nor any of Tenant's other obligations under any provisions of this Lease shall be affected by any damage to or destruction of the Demised Premises or any portion thereof by any cause whatsoever. Notwithstanding anything to the contrary set forth above, if such damage or destruction shall occur during the last two (2) years of the Lease, Tenant shall not be required to repair or restore the Demised Premises, provided that all insurance proceeds required to be paid to Landlord above are paid to Landlord, Tenant shall pay to Landlord the amount, if any, by which the cost to repair such damage or destruction exceeds the amount of such insurance proceeds received by Landlord, and Tenant shall pay to Landlord all rent and all other sums due under this Lease for the remainder of the Term of this Lease.

21.       Section 18(c) of the Lease is hereby amended to read in its entirety as follows:

c.         Tenant should vacate or abandon the Demised Premises during the Term of this Lease without continuing to pay the rent due hereunder;

22.       Landlord's address for purposes of Section 23(a) of the Lease is hereby changed to 9115 West Russell Road, Suite 210, Las Vegas, Nevada 89148, Attn: Edward M. Nigro.

23.       New Tenant's address for purposes of Section 23(b) of the Lease is hereby changed to c/o HealthSouth Corporation 3660 Grandview Parkway, Suite 200, Birmingham, Alabama 35243, Attn: Real Estate Department.

24.       Landlord hereby grants to New Tenant a right of first refusal (the “First Refusal Right”) to purchase the Demised Premises in the event that Landlord shall desire to sell the Demised Premises. If Landlord receives an offer to purchase the Demised Premises that Landlord desires to accept (a “Purchase Offer”), then Landlord shall notify New Tenant in writing of such Purchase Offer and provide New Tenant with a copy of the same. New Tenant shall have twenty (20) days (the “Right Period”) after receiving such notice and copy within which to exercise the First Refusal Right; provided, however that if the Purchase Offer is from a party associated with an inpatient rehabilitation hospital, long term acute care hospital or skilled nursing facility located or to be located within Clark County, Nevada, then the Right Period shall be thirty (30) days from New Tenant's receipt of such notice and copy. If New Tenant elects to so exercises the First Refusal Right, then New Tenant shall purchase the Demised Premises at the same price and otherwise on the same terms and conditions as are specified in the Purchase Offer. If New Tenant does not exercise the First Refusal Right with respect to such Purchase Offer within the Right Period, then the First Refusal Right shall terminate with respect to such Purchase Offer and Landlord may proceed with the sale of the Demised Premises in accordance with the Purchase Offer. The First Refusal Right shall terminate upon the earlier of (a) the expiration or sooner termination of the Lease, or (b) the sale of the Demised Premises pursuant to a Purchase Offer with respect to which New Tenant does not elect to exercise the First Refusal Right.

25.      Concurrently with the execution of this Amendment, Landlord and New Tenant agree to execute a Memorandum of Lease in the form attached hereto as Exhibit B and Landlord shall record such Memorandum of Lease in the public records of the county in which the Demised Premises are located within five (5) days of the date of this Amendment. Landlord shall provide New Tenant with a copy of the recorded Memorandum of Lease within thirty (30) days of the date of this Amendment. Landlord and Tenant shall each pay one-half of the costs associated with the recording of the Memorandum of Lease.

26.      During the term of the Lease Agreement and upon request from Tenant, Landlord shall use commercially reasonable efforts to obtain a Subordination, Non-Disturbance and Attornment Agreement from any holder or future holder of a mortgage covering the Demised Premises or the Building in a form reasonably satisfactory to Tenant, but in no event shall Landlord be required to pay any amount to obtain any such agreement from any such mortgage holder.

27.       The payment and performance obligations of New Tenant under the Lease, as amended by this Amendment, have been guaranteed by HealthSouth Corporation, a Delaware corporation, pursuant to a Guaranty of Lease in the form attached hereto as Exhibit C.

28.       Save and except as amended hereby, the Lease Agreement shall remain unmodified and in full force and effect.

29.       The laws of the State of Nevada shall govern the validity, construction, performance and effect of this Amendment.

30.       This Amendment may be executed in any number of counterparts, each of which when executed and delivered shall be an original, but all such counterparts shall constitute one and the same amendment.

[SIGNATURE PAGE FOLLOWS]

IN WITNESS WHEREOF, the parties have executed this Amendment as of the date first above written.

EXHIBIT A

SITE PLAN

[See Attached]

EXHIBIT B

APN: 163-32-201-006

RECORDING REQUESTED BY AND

WHEN RECORDED RETURN TO:

MEMORANDUM OF LEASE

(For recording purposes)

THIS MEMORANDUM OF LEASE is made as of ______, 2010, by and between LVRH Properties LLC, a Nevada limited-liability company (“Landlord”), and ___ ___________, a Delaware limited-liability company (“Tenant”), who agree as follows:

l.        Premises. Landlord has leased to Tenant and Tenant has leased from Landlord, for the consideration and upon and subject to the terms and conditions of the unrecorded Lease Agreement, dated January 30, 2006, between Landlord and Las Vegas Rehabilitation Hospital LLC, a Nevada limited liability company (''LVRH”), as amended by that certain Lease Assignment and Amendment, dated _____ __, 2010, among Landlord, LVRH and Tenant (collectively the “Lease”) (all of the terms and conditions of which are hereby incorporated into this Memorandum of Lease by reference as though set forth in full herein), that certain real property located at 9175 W. Oquendo Road, Las Vegas, Nevada and more particularly described on Exhibit A attached hereto and incorporated herein by reference (the “Demised Premises”).

2.       Initial Term. The initial term of the Lease expires May 31, 2025.

3.       Renewal Terms. Landlord has granted Tenant four (4) successive options to extend the term of the Lease by five (5) years each upon and subject to the terms and conditions of the Lease.

4.       Right of First Refusal. In the Lease, Landlord grants to Tenant a right of first refusal to purchase the Demised Premises on the terms and conditions set forth therein.

5.       No Modification. This Memorandum of Lease has been executed for the purposes of recordation only and shall not modify the provisions of the Lease, including the terms and conditions of any options contained therein. In the event of any inconsistency or conflict between the provisions of this Memorandum of Lease and the provisions of the Lease, the provisions of the Lease shall govern and control.

IN WITNESS WHEREOF, the parties have executed this Memorandum of Lease as of the day and year first above written.

This instrument was acknowledged before me on ______, 2010 by __________ as Manager of LVRH Properties Management LLC, a Nevada limited-liability company and the Manager of LVRH Properties LLC, a Nevada limited-liability company.

This instrument was acknowledged before me on ______________, by ______________________ as ______________________ of ______________________.

EXHIBIT A

LEGAL DESCRIPTION OF DEMISED PREMISES

All that land situated in the County of Clark, State of Nevada, more particularly described as follows:

The West Half (W ½) of the Northwest Quarter (NW ¼) of the Southeast Quarter (SE ¼) of the Northwest Quarter (NW ¼) of Section 32, Township 21 South, Range 60 East, M.D.M., Clark County, Nevada.

Excepting Therefrom the North 30 feet and the West 30 feet together with that certain spandrel area in the Northwest corner thereof as conveyed to the County of Clark by Grant, Bargain, Sale Deed, Recorded December 05, 2005 in Book 20051205 as Document No. 05274, of Official Records, Clark County Nevada.

APN: 163-32-201-006

EXHIBIT C

GUARANTY OF LEASE

THIS GUARANTY OF LEASE (this “Guaranty”) is made as of ________, 2010 by HealthSouth Corporation, a Delaware corporation (“Guarantor”), in favor of LVRH Properties LLC, a Nevada limited-liability company (“Landlord”).

FOR VALUABLE CONSIDERATION, the receipt and sufficiency of which are hereby acknowledged, Guarantor hereby unconditionally and irrevocably guarantees the full and faithful performance by _______________________, a _________ (“Tenant”), of all the terms, covenants and conditions of that certain Lease Agreement, dated January 30, 2006, between Landlord and Las Vegas Rehabilitation Hospital LLC, a Nevada limited liability company (“LVRH”), as amended by that certain Lease Assignment and Amendment, dated _______, 2010, among Landlord, LVRH and Tenant (collectively, the “Lease”). This Guaranty shall remain in full force and effect regardless of any amendment, modification, extension, compromise or release of any term, covenant or condition of the Lease or of any party thereto, as the case may be.

The undersigned agrees to indemnify Landlord against any and all liability, loss, costs, charges, penalties, obligations, expenses, attorney fees, litigation, judgments, damages, claims and demands of any kind whatsoever in connection with, arising out of or by reason of the failure by Tenant to perform its obligations under the Lease. Guarantor waives any right or claim of rights to cause a marshalling of Tenant's assets or to proceed against Guarantor or Tenant or any security for the Lease or this Guaranty in any particular order and Guarantor agrees that any payments or performance required to be made hereunder shall become due upon demand in accordance with the terms hereof immediately upon the happening of a default under the Lease, whether or not Guarantor has been given notice of such default, and Guarantor hereby expressly waives and relinquishes all rights and remedies accorded by applicable law to guarantors, including, but not limited to, notice of demand, notice of default, any failure to pursue Tenant or its property, or any defense arising out of the absence, impairment or loss of any right of reimbursement or subrogation.

The obligations of Guarantor hereunder are independent of the obligations of Tenant and, in the event of any default hereunder, a separate action or actions may be brought and prosecuted against Guarantor whether or not Tenant is joined therein or a separate action or actions is or are brought against Tenant. Landlord's rights hereunder shall not be exhausted by its exercise of any of its rights or remedies or by any action or by any number of successive actions until and unless all obligations hereby guaranteed have been paid and fully performed.

No delay on Landlord's part in exercising any right, power or privilege under this Guaranty or any other document executed in connection herewith shall operate as a waiver of any such privilege, power or right.

Guarantor agrees that any judgment rendered against Tenant for monies or performance due Landlord shall in every and all respects bind and be conclusive against Guarantor to the same extent as if Guarantor had appeared in any such proceedings and judgment therein had been rendered against Guarantor.

Any circumstance which operates to toll any statute of limitations as to Tenant shall also toll the statute of limitations as to Guarantor.

In the event any action is commenced by Landlord against Guarantor in connection with this Guaranty, including any bankruptcy proceeding, Landlord shall be entitled to its costs and expenses, including reasonable attorney fees.

The terms, covenants and conditions contained in this Guaranty shall inure to the benefit of the successors and assigns of Landlord.

If any term, covenant or condition of this Guaranty, or any application thereof, should be held by a court of competent jurisdiction to be invalid, void or unenforceable, all terms, covenants and conditions of this Guaranty, and all applications thereof, not held invalid, void or unenforceable shall continue in full force and effect and shall in no way be affected, impaired or invalidated thereby,

In this Guaranty, whenever the context so requires, the masculine gender includes the feminine and/or neuter, and the singular number includes the plural.

This Guaranty shall be construed in accordance with its intent and without regard to any presumption or other rule requiring construction against the party causing the same to be drafted.

The laws of the State of Nevada shall govern the validity, construction, performance and effect of this Guaranty and any legal suit, action or proceeding against Guarantor arising out of or relating to this Guaranty shall be instituted in any federal or state court in Clark County, Nevada, and Guarantor waives any objection which it may now or hereafter have to the laying of venue of any such suit, action or proceeding, and Guarantor hereby irrevocably submits to the jurisdiction of any such court in any suit, action or proceeding.

Should Guarantor consist of more than one person or entity, then, in such event, all such persons and entities shall be jointly and severally liable as Guarantor hereunder.

[Signature Page Follows)

IN WITNESS WHEREOF, Guarantor has executed this Guaranty as of the date first above written.

AMENDMENT NO. 4

THIRD AMENDMENT TO THE LEASE dated JANUARY 30, 2006 by and between LVRH PROPERTIES LLC, a Nevada limited-liability company ( “Landlord”) and LAS VEGAS REHABILITATION HOSPITAL, a Nevada limited-liability company (“Tenant”) with respect to the demise by Landlord to Tenant of that certain premises described as 9175 W. Oquendo Road, Las Vegas, Nevada and shown on the Site Plan attached as Exhibit A hereto, (all of such premises collectively, the “Demised Premises”).

Landlord has agreed to the following changes:

Attachment (1)

Lease Discount Periods

Lease Discount Periods

At end of 1st Term (2017) additional rent is terminated

*Note - Additional rent only payable from hospital quarterly cash flow greater than 1.5 times lease payments.

-Additional rent not subject to 3% increase.

Attachment (2)

Investor Proforma

* increase rent by $10,759 per month per lease modification * rate change each April

AMENDMENT NO. 3

THIRD AMENDMENT TO THE LEASE dated JANUARY 30, 2006 by and between LVRH PROPERTIES LLC, a Nevada limited-liability company (“Landlord”) and LAS VEGAS REHABILITATION HOSPITAL, a Nevada limited-liability company (“Tenant”) with respect to the demise by Landlord to Tenant of that certain premises described as 9175 W. Oquendo Road, Las Vegas, Nevada and shown on the Site Plan attached as Exhibit A hereto, (all of such premises collectively, the “Demised Premises”).

Landlord has agreed to the following changes:

AMENDMENT NO. 2

SECOND AMENDMENT TO THE LEASE dated JANUARY 30, 2006 by and between LVRH PROPERTIES LLC, .a Nevada limited-liability company (“Landlord”) and LAS VEGAS REHABILITATION HOSPITAL, a Nevada limited-liability company (“Tenant”) with respect to the demise by Landlord to Tenant of that certain premises described as 9175 W. Oquendo Road, Las Vegas, Nevada and shown on the Site Plan attached as Exhibit A hereto, (all of such premises collectively, the “Demised Premises”).

Landlord has agreed to the following changes:

AMENDMENT NO. 1

FIRST AMENDMENT TO THE LEASE dated JANUARY 30, 3006 by and between LVRH PROPERTIES LLC, a Nevada limited-liability company ( “Landlord”) and LAS VEGAS REHABILITATION HOSPITAL, a Nevada limited-liability company (“Tenant”) with respect to the demise by Landlord to Tenant of that certain premises described as 9175 W. Oquendo Road, Las Vegas, Nevada and shown on the Site Plan attached as Exhibit A hereto, (all of such premises collectively, the “Demised Premises”).

Landlord has agreed to the following changes:

LEASE AGREEMENT

(Triple-Net/Single-Tenant)

THIS LEASE AGREEMENT (Triple-Net/Single-Tenant) (this “Agreement”) is made this 30^th day of January, 2006, by and between LVRH PROPERTIES LLC, a Nevada limited-liability company (“Landlord”) and LAS VEGAS REHABILITATION HOSPITAL, a Nevada limited-liability company (“Tenant”) with respect to the demise by Landlord to Tenant of that certain premises described as 9175 W, Oquendo Road, Las Vegas, Nevada and shown on the Site Plan attached as Exhibit A hereto, (all of such premises collectively, the “Demised Premises”),

NOW, THEREFORE, for and in consideration of the covenants and agreements set forth herein, Landlord arid Tenant agree as follows:

2.         Demised Premises. Landlord shall construct upon the Demised Premises a shell building containing approximately fifty thousand (50,000) square feet as provided in Exhibit B (attached) (the “Building’”). There shall be no deduction or exclusion for any square feet of the Building included within the Demised Premises by reason of corridors, interior partitions or any other interior construction, improvements or equipment. The actual number of square feet of the Building shall be deemed to be equal to the aforementioned approximation.

3.         Term.

a.           Base Term. Unless terminated earlier as provided herein, the term of this Lease (as extended from time to time and until the term hereof expires or is terminated hereunder, the “Term “) shall be for a period of ten (10) years, beginning at 1:00 A.M. on the earlier of the following dates: (i) the day after Landlord receives a Certificate of Occupancy or Temporary Certificate of Occupancy for the Demised Premises, issued by the applicable building department in the municipality in which the Demised Premises is located, upon completion of Landlord’s Work (as hereinafter defined); or (ii) the date Tenant commences to do business in, upon or from the Demised Premises (the “Commencement Date”), Lessee shall execute, within seven (7) days of Landlord’s request, a Memorandum of Lease in form acceptable to Landlord, reflecting the existence and duration of the Lease, the location of the Demised Premises, and such other information as Landlord may reasonably request, which Memorandum may be placed of record by Landlord.

b.         Extension Options. So long as no “Event of Default” (as hereinbelow defined) is in effect at the time of such exercise by Tenant, Tenant shall have two consecutive rights to extend the Term of this Lease by a period of ten (10) years per each such extension option; provided, however, that upon any such extension of the Term all of the remaining terms and conditions hereof (including, without limitation, the cost of living adjustments to Base Rent set forth in Section 4(a) below) shall remain in force and effect; provided further, that to exercise any such option Tenant must give Landlord written notice of such exercise, in accordance with the provisions hereof, not less than six (6) months prior to the date that the Term would otherwise expire.

c.        Holdover. Tenant shall vacate the Demised Premises on the expiration or earlier termination of this Lease. Tenant shall reimburse Landlord for and indemnify and hold Landlord harmless against all damages, claims, losses, penalties, charges, and expenses (including reasonable attorneys’ fees) incurred by Landlord resulting from any delay by Tenant in vacating the Demised Premises. If Tenant does not vacate the Demised Premises upon the expiration or earlier termination of the Lease, Tenant’s occupancy of the Demised Premises shall be a tenancy at sufferance, subject to all the terms of this Lease applicable to a tenancy at sufferance, except that the “Base Rent” (as hereinafter defined) then in effect shall be equal to one hundred fifty percent (150%) of the Base Rent in effect immediately prior to the expiration or earlier termination of this Lease. Nothing contained in this paragraph shall be construed as consent by Landlord to any holding over by Tenant of the Demised Premises, and Landlord expressly reserves the right to require Tenant to surrender possession of the Demised Premises to Landlord upon the expiration or earlier termination of the Lease.

4.         Rent.

a.          Base Rent. Subject to adjustment as hereinafter provided, Tenant shall pay Landlord as base rent (“Base Rent”) for the Term of this Lease the sum of TWO DOLLARS FIFTY CENTS ($2.50) per square foot of the Demised Premises (i.e., $225,000) per month in advance on the first day of each month during the Term of this Lease beginning on the Commencement Date. If the Commencement Date is not the first day of a calendar month then: (i) Base Rent for such fractional portion of the first month shall be due on the Commencement Date, and (ii) the Base Rent due for such fractional month shall be prorated based upon the actual number of days in such fractional month.

b.        Cost of Living Adjustment. Cost of Living Adjustment. The Base Rent shall be increased from the amount then in effect on the first day of the thirteenth (13th) full calendar month following the Commencement Date and on each annual anniversary thereof (each, an “Adjustment Date “) during the Term of the Lease (including any extension option periods) in the amount of three percent (3%) per year of the Base Rent amount then in effect. Landlord shall notify Tenant of each increase by delivering a written statement setting forth the new amount of the Base Rent. Tenant shall pay the new Base Rent from its effective date until the next annual increase,

c.         Utilities. Tenant shall in respect of all periods of the Term pay all costs and charges of any kind (including all usage charges) for the provision of all utilities and services at the Demised Premises, including without limitation water, gas, heat, electricity, power, garbage service, air conditioning, telephone service, sewer service charges and sewer rentals charged or attributable to the Demised Premises, cleaning of the Demised Premises and all other services or utilities used in, upon or about the Demised Premises by Tenant or any of its subtenants, licensees, or concessionaires during the term hereof (collectively “Utilities and Services”). Tenant shall contract with, and pay directly to the appropriate supplier the cost of all Utilities and Services supplied to the Demised Premises.

d.        Property Taxes. Tenant shall in respect of all periods of the Term pay all real property taxes and general and special assessments on the Demised Premises, and shall pay all taxes charged against trade fixtures, utility installations, furnishings, equipment or any other personal properly belonging to Tenant. Except to the extent Landlord elects to bill for any taxes and/or assessments under Section 4(f) below, Landlord shall forward to Tenant in a timely manner all bills and notices with respect to such real property taxes and assessments as are received by Landlord from third parties, and within five (5) days after request by Landlord (and in no event less than quarterly), Tenant shall provide Landlord with written evidence of each such payment,

e.         Other Costs. The parties acknowledge that this Lease is intended to be a fully net lease to the Landlord and that Tenant shall be responsible for all costs and expenses of any kind or nature incurred in connection with the ownership or operation of the Demised Premises including, without limitation; those set forth in Sections 4(c) and 4(d) hereinabove; all repairs required to be made to the Demised Premises, except to the extent of such roof or structural repairs as are expressly required to be made by Landlord pursuant to Section 9 hereinbelow; all costs of landscaping, parking, sweeping, maintenance and repairs, power, water, other utilities, decorative features, wages for on-site cleaning, parking, and/or security personnel, management fees, insurance premiums and deductibles, license and permit fees and associated costs, professional fees, waste disposal (except as set forth below), heating, ventilation and air conditioning costs and repairs, and materials and supplies. Tenant shall be solely responsible (and at its sole cost and expense) for all waste disposal including all medical, special, infectious, and other waste disposal and for all Hazardous Waste disposal and Tenant shall in all respects indemnify, defend (with counsel designated by Landlord) and hold Landlord harmless with respect thereto.

f.            Monthly and Other Payment of Non-Base Rent Charges. Landlord may in its discretion from time to time estimate the aggregate amount of all charges to be paid by Tenant hereunder other than for Base Rent and bill Tenant for one-twelfth of such amount on a monthly rental invoice, in which event such billed amount must be paid punctually together with the Base Rent due (it being understood that such additional amount shall for all purposes be treated as “Rent” hereunder). Promptly after each anniversary of the Commencement Date, Landlord shall calculate the actual sum that would be due under this Lease (i.e., for all charges from Tenant other than for Base Rent) in respect of the 12-month period immediately prior to such anniversary and refund any overpaid amount resulting from Tenant’s prior monthly payments or bill Tenant for any underpaid amount resulting notwithstanding Tenant’s prior monthly payments (with any underpaid sum to be due promptly upon billing). In addition to the foregoing, Landlord may from time to time in its discretion establish such further procedures with respect to payment of non- Base Rent sums due under this Lease as Landlord may from time to time reasonably designate.

g.            Payment. Each payment of rent or any other obligation of the Tenant shall be paid in lawful money of the United States of America without prior demand or notice and without any deduction, set off or counterclaim whatsoever by delivering the rent payment including all adjustments thereto to the office of the Landlord or at such other place or places as may from time to time be designated in writing by the Landlord. All sums to be paid under this Lease by Tenant, including, without limitation, all Base Rent, and all other charges required to be paid under this Section 4, shall for all purposes be deemed to be “Rent.”

5.         Possession and Surrender of Demised Premises.

a.           Acceptance of Demised Premises. Tenant shall by entering upon and occupying the Demised Premises be deemed to have accepted the Demised Premises in its “as is” condition as of the Commencement Date, subject to all recorded matters and laws. Tenant acknowledges that neither Landlord nor its agents have made any representations or warranties as to the suitability or fitness of the Demised Premises for the conduct of Tenant’s business or for any other purpose, nor has Landlord or its agents or employees agreed to undertake any alterations or construct any further tenant improvements to the Demised Premises except as expressly provided in this Lease. Notwithstanding anything to the contrary, upon Landlord’s request Tenant shall hereafter execute and deliver such Memorandum of Commencement Date, in form reasonably designated by Landlord, certifying the date that is the Commencement Date, Tenant’s acceptance and approval of the Demised Premises without reservation, and such other matters as Landlord may reasonably request.

b.           Removal of Tenant’s Property. Upon the expiration or sooner termination of the term of this Lease, Tenant shall, at its sole cost and expense, remove all personal property and trade fixtures which Tenant has installed or placed on the Demised Premises (all of which are hereinafter referred to as “Tenant’s property”) from the Demised Premises and repair all damage thereto resulting from such removal and Tenant shall thereupon surrender the Demised Premises in the same condition as on the date when the Demised Premises was ready for occupancy, reasonable wear and tear excepted. In the event Tenant shall fail to remove any of Tenant’s property as provided herein, Landlord may, but is not obligated to, at Tenant’s expense, remove all of such property not so removed and repair all damage to the Demised Premises resulting from such removal, and Landlord shall have no responsibility to Tenant for any loss or damage to said property caused by or resulting from such removal or otherwise.

6.          Use of Demised Premises. The Demised Premises are leased to Tenant solely for the operation of a rehabilitation hospital and uses incidental thereto. Tenant shall continuously use the Demised Premises for this purpose and shall not use or allow to be used the Demised Premises, or any portion thereof, for any other purpose or purposes whatsoever without Landlord’s prior written consent. Tenant shall conduct business under the trade name of “DESERT CANYON REHABILITATION HOSPITAL” and no other without prior written consent of Landlord.

a.        Tenant’s Duty to Keep Demised Premises Repaired and in Good Order. Tenant shall keep and maintain in good order, condition, and repair (including any such replacement and restoration as is required for that purpose) the Demised Premises and every part thereof and any and all appurtenances thereto wherever located, including, but not limited to, the exterior and interior portion of all doors, door checks, windows, plate glass, store front, all plumbing and sewage facilities within the Demised Premises, fixtures, heating and air conditioning and electrical systems, sprinkler system, if any, and walls, floors and ceilings, and any work performed by or on behalf of Tenant after the Commencement Date. Tenant shall also keep and maintain in good order, condition and repair (including any such replacement and restoration as is required for that purpose) any special equipment, fixtures or facilities other than the usual and ordinary plumbing and utility facilities, which special facilities shall include but not be limited to grease traps, located outside the Demised Premises. Tenant shall contract with a service company for the maintenance of air-conditioning equipment, with a copy of the service contract to be furnished to the Landlord within ten (10) days after opening for business, and a copy of any subsequent contracts to be furnished from time to time during the Term of this Lease. Landlord agrees to assign to Tenant any warranties Landlord may have pertaining to those parts of the Demised Premises Tenant is responsible for maintaining hereunder. Tenant shall store all trash and garbage in metal containers located where designated by Landlord and so as not to be visible or create a nuisance to customers and business invitees in the Demised Premises, and so as not to create or permit any health or fire hazard and arrange for the prompt and regular removal thereof. If Tenant fails to maintain or repair the Demised Premises as required hereunder, Landlord may, upon ten (10) days prior notice to Tenant (except that no notice shall be required in the case of an emergency), enter the Demised Premises and perform such maintenance or repair on behalf of Tenant, In such case, Tenant shall reimburse Landlord for all costs incurred in performing such maintenance or repair, immediately upon demand.

b.        Compliance with Law; Due Licensure of Medical Personnel. Tenant will not use the Demised Premises or any portion thereof: (i) in violation of any law, ordinance, rule, regulation, certificate of occupancy, or (ii) for any business or purpose that creates risks of fire or other hazards that would in any way increase, suspend or void the rate or amount of insurance of any type to the Landlord on any part of the Demised Premises. Tenant shall at all times during the Term of this Lease, and at Tenant’s sole cost and expense, comply with all governmental rules, regulations, ordinances, statutes and laws, (including, without limitation, the Americans with Disabilities Act of 1990 (and all rules and regulations promulgated thereunder)), and the orders and regulations of the National Board of Fire Underwriters or any other body now or hereafter exercising similar functions, now or hereafter in effect pertaining to the use, occupancy, condition or alteration of the Demised Premises, Landlord makes no representation or warranty as to the condition of the Demised Premises with respect to any law or the suitability of the Demised Premises for Tenant’s intended use or whether such use complies with any or all laws. Tenant covenants that all persons who furnish medical services or related activities of any kind at the Demised Premises shall be and remain appropriately licensed and in good standing with the applicable state licensing board(s) and any applicable federal, state or local certification or licensing agency or office.

c.        Compliance with Rules and Regulations. Tenant hereby covenants and agrees that it, its agents, employees, servants, contractors, subtenants and licensees shall abide by the rules and regulations set forth above and such additional rules and regulations hereafter adopted and amendments and modifications of any of the foregoing as Landlord may, from time to time, adopt for the safety, care and cleanliness of the Demised Premises, for the preservation of good order thereon,

d.        Use of Plumbing. The plumbing facilities in the Demised Premises shall not be used for any other purpose than that for which they are constructed, and no foreign substance of any kind shall be thrown therein, and the expense of any breakage, stoppage or damage resulting from a violation of this provision shall be borne by Tenant who shall, or whose employees, agents, servants, customers or invitees shall have caused it.

e.        Pest Control. Tenant shall keep the Demised Premises free from pests and vermin.

f.        Trash. Tenant shall not burn any trash or garbage of any kind in or about the Demised Premises.

g.        Insurance. Tenant shall, at Tenant’s expense, maintain property insurance on the Demised Premises and appurtenant structures in such amount as Landlord and any mortgagees may deem necessary or appropriate. In addition, Tenant shall, at Tenant’s expense, obtain and keep in force at all times during the Term of the Lease, a policy or policies of insurance covering loss or damage to all of the improvements, betterments, personal property, utility installations, trade fixtures, furnishings, and business contents located within the Demised Premises, in the amount of one hundred percent (100%) of the full replacement value thereof as reasonably ascertained by the Tenant’s insurance carrier against risks of direct physical loss or damage, normally covered in an “all risk” policy (including the perils of flood and surface waters), as such term is used in the insurance industry; provided, however, that Tenant shall have no obligation to insure against earthquakes or against acts of terror. The proceeds of such insurance shall be used for the repair or replacement of the property so insured (including, without limitation, any repair or replacement of such property in accordance with Section 16 below).

Tenant shall, at Tenant’s expense, maintain a policy of Commercial General Liability insurance insuring Tenant and as additional insureds, Landlord and any of Landlord’s mortgagees, against liability arising out of the ownership, use, occupancy or maintenance of the Premises, Such insurance shall be on an occurrence basis providing single-limit coverage in an amount not less than Two Million Dollars ($2,000,000) per occurrence. The initial amount of such insurance shall be subject to periodic increases upon reasonable demand by Landlord based upon inflation, increased liability awards, recommendation of professional insurance advisers, and other relevant factors. However, the limits of such insurance shall not limit Tenant’s liability nor relieve Tenant of any obligation hereunder.

Insurance required to be maintained by Tenant hereunder shall be in companies holding a “General Policyholders’ Rating” of B-plus or better and a “financial rating” of 10 or better, as set forth in the most current issue of “Best’s Insurance Guide,” or such comparable ratings as Landlord shall approve, in its sole discretion. Tenant shall promptly deliver to Landlord, within thirty (30) days of the Commencement Date, original certificates evidencing the existence and amounts of such insurance. No such policy shall be cancelable or subject to reduction of coverage except after thirty (30) days prior written notice to Landlord. Tenant shall, within thirty (30) days prior to the expiration, cancellation or reduction of such policies, furnish Landlord with renewals or “binders” thereof. Tenant shall not do or permit to be done anything which shall invalidate the insurance policies required under this Lease.

Tenant shall obtain from the issuers of the insurance policies referred to in this Lease a waiver of subrogation provision in said policies (with respect to Landlord) and Tenant hereby releases and relieves Landlord, and waives any and all rights of recovery against Landlord, or against the employees, officers, agents and representatives of Landlord, for loss or damage arising out of or incident to the perils required to be insured against under this Lease which perils occur in, on or about the Demised Premises, whether due to the negligence of Landlord or Landlord’s or their agents, employees, contractors or invitees.

h.        Signs. Tenant shall not place any signs on the exterior of the Demised Premises without Landlord’s consent, which consent shall not be unreasonably withheld.

i.         Hazardous Substances, Including Medical, Special, and Infectious Waste. The term “Hazardous Substance” as used in this Lease shall mean any product, substance, chemical, material or waste (i.e., whether medical, special, infectious, or otherwise), whose presence, nature, quantity and/or intensity of existence, use, manufacture, disposal, transportation, spill, release or effect, either by itself or in combination with other materials expected to be on the Demised Premises, is: (i) potentially injurious to the public health, safety or welfare, the environment, or the Demised Premises; (ii) regulated or monitored by any governmental authority; or (iii) a basis for potential liability of Landlord to any governmental agency or third party under any applicable statute or common law theory. Hazardous Substance shall include, but not be limited to, hydrocarbons, petroleum, gasoline, crude oil or any products or by-products thereof, or any hazardous or toxic substance, material or waste, regulated or listed pursuant to any federal, state or local environmental law, including without limitation, the Clean Air Act, the Clean Water Act, the Toxic Substances Control Act, the Comprehensive Environmental Response Compensation and Liability Act, the Resource Conservation and Recovery Act, the Federal Insecticide, Fungicide, Rodenticide Act, the Safe Drinking Water Act, and the Occupational Safety and Health Act., Tenant shall not engage in any activity in or about the Demised Premises which constitutes a “Reportable Use” (as hereinafter defined) of Hazardous Substances without the express prior written consent of Landlord and compliance in a timely manner (at Tenant’s sole cost and expense) with all Applicable Requirements (as defined below). “Reportable Use” shall mean (i) the installation or use of any above or below ground storage tank, (ii) the generation, possession, storage, use, transportation, or disposal of a Hazardous Substance that requires a permit from, or with respect to which a report, notice, registration or business plan is required to be filed with, any governmental authority, and (iii) the presence in, on or about the Demised Premises of a Hazardous Substance with respect to which any Applicable Requirements require that a notice be given to persons entering or occupying the Demised Premises or neighboring properties. Notwithstanding the foregoing, Tenant may, without Landlord’s prior consent, but upon notice to Landlord and in compliance with all Applicable Requirements, use any ordinary and customary materials reasonably required to be used by Tenant in the normal course of the uses permitted under Section 6 of the Lease, so long as such use is not a Reportable Use and does not expose the Demised Premises or neighboring properties to any meaningful risk of contamination or damage or expose Landlord to any liability therefor. In addition, Landlord may (but without any obligation to do so) condition its consent to any Reportable Use of any Hazardous Substance by Tenant upon Tenant’s giving Landlord such additional assurances as Landlord, in its reasonable discretion, deems necessary to protect itself, the public, the Demised Premises and the environment against damage, contamination or injury and/or liability therefor, including but not limited to the installation (and, at Landlord’s option, removal on or before Lease expiration or earlier termination) of reasonably necessary protective modifications to the Demised Premises.

To the extent necessary to Tenant’s business and consistent with the prudent operation of Tenant’s business and all applicable laws, roles, and regulations, Tenant may store and/or utilize Hazardous Substances; provided, however, that Tenant shall from time to time furnish Landlord with a comprehensive list of all such Hazardous Materials (i.e., medical, special, infectious, or otherwise) so stored and/or utilized at the Demised Premises. In addition, prior to the installation and use of any equipment, Tenant shall provide Landlord with a list of such equipment and its intended use; a list of any Hazardous Substances which will be used or generated in connection with such equipment; and Tenant’s proposed procedures for the use, storage and disposal of any Hazardous Substances, including, but not limited to, the procedure for silver recovery for any radiology equipment.

If Tenant knows, or has reasonable cause to believe, that a Hazardous Substance has come to be located in, on, under or about the Demised Premises, other than as set forth above or as previously consented to by Landlord, Tenant shall immediately give Landlord written notice thereof, together with a copy of any statement, report, notice, registration, application, permit, business plan, license, claim, action, or proceeding given to, or received from, any governmental authority or private party concerning the presence, spill, release, discharge of, or exposure to, such Hazardous Substance including but not limited to all such documents as may be involved in any Reportable Use involving the Demised Premises, Tenant shall not cause or permit any Hazardous Substance to be spilled or released in, on, under or about the Demised Premises (including, without limitation, through the plumbing or sanitary sewer system).

Tenant shall indemnify, protect, defend and hold Landlord, its agents, employees, lenders and ground lessor, if any, and the Demised Premises, harmless from and against any and all damages, liabilities, judgments, costs, claims, liens, expenses, penalties, loss of permits and attorneys’ and consultants’ fees arising out of or involving any Hazardous Substance brought onto the Demised Premises by or for Tenant or by anyone under Tenant’s control. Tenant’s obligations under this paragraph shall include, but not be limited to, the effects of any contamination or injury to person, property or the environment created or suffered by Tenant, and the cost of investigation (including consultants’ and attorneys’ fees and testing), removal, remediation, restoration and/or abatement thereof, or of any contamination therein involved, and shall survive the expiration or earlier termination of this Lease. No termination, cancellation or release agreement entered into by Landlord and Tenant shall release Tenant from its obligations under this Lease with respect to Hazardous Substances, unless specifically so agreed by Landlord in writing at the lime of such agreement.

Tenant shall, at Tenant’s sole cost and expense, fully, diligently and in a timely manner, comply with all “Applicable Requirements” which term is used in this Lease to mean all laws, rules, regulations, ordinances, directives, covenants, easements and restrictions of record, permits, the requirements of any applicable fire insurance underwriter or rating bureau, and the recommendations of Landlord’s engineers and/or consultants, relating in any manner to the Demised Premises (including but not limited to matters pertaining to (i) industrial hygiene, (ii) environmental conditions on, in, under or about the Demised Premises, including soil and groundwater conditions, and (iii) the use, generation, manufacture, production, installation, maintenance, removal, transportation, storage, spill, or release of any Hazardous Substance), now in effect or which may hereafter come into effect. Tenant shall, within five (5) days after receipt of Landlord’s written request, provide Landlord with copies of all documents and information, including but not limited to permits, registrations, manifests, applications, reports and certificates, evidencing Tenant’s compliance with any Applicable Requirements specified by Landlord, and shall immediately upon receipt, notify Landlord in writing (with copies of any documents involved) of any threatened or actual claim, notice, citation, warning, complaint or report pertaining to or involving failure by Tenant or the Demised Premises to comply with any Applicable Requirements.

Landlord, Landlord’s agents, employees, contractors and designated representatives, and any mortgagee under a mortgage or beneficiary under a deed of trust encumbering the Demised Premises shall have the right to enter the Demised Premises at any time in the case of an emergency, and otherwise at reasonable times, for the purpose of inspecting the condition of the Demised Premises and for verifying compliance by Tenant with this Lease and all Applicable Requirements, and Landlord shall be entitled to employ experts and/or consultants in connection therewith to advise Landlord with respect to Tenant’s activities, including but not limited to Tenant’s installation, operation, use, monitoring, maintenance, or removal of any Hazardous Substance on or from the Demised Premises. The costs and expenses of any such inspections shall be paid by the party requesting same, unless a default of this Lease by Tenant or a violation of Applicable Requirements or a contamination, caused or materially contributed to by Tenant, is found to exist or to be imminent, or unless the inspection is requested or ordered by a governmental authority as the result of any such existing or imminent violation or contamination. In such case, Tenant shall upon request reimburse Landlord or Landlord’s Mortgagee, as the case maybe, for the costs and expenses of such inspections.

7.         Alteration and Improvements. Tenant shall not make any additions, alterations, improvements or changes (“improvements”) in or to the Demised Premises without the prior written approval of Landlord, which approval shall not be unreasonably withheld. In no event shall any consent be granted if Tenant is in default hereunder. Notwithstanding the foregoing, Tenant shall have the right to make improvements without Landlord’s consent where such improvements; (i) are non-structural; (ii) do not affect the electrical, mechanical, plumbing, HVAC or other systems of the building containing the Demised Premises; and (iii) cost no more than One Hundred Thousand Dollars ($]00,000) in any calendar year. Any improvements shall be made promptly and in a good and workmanlike manner and in compliance with all insurance requirements and with all applicable permits, authorizations, building regulations, zoning laws and all other governmental rules, regulations, ordinances, statutes and laws, now or hereafter in effect pertaining to the Demised Premises or Tenant’s use thereof shall be performed in such manner as not to delay or impose any additional expense upon Landlord in construction, maintenance or operation of the building containing the Demised Premises. Throughout the performance of improvements, Tenant, at its expense, shall carry, or cause to be carried, workers’ compensation insurance in statutory limits, and general liability insurance for any occurrence in or about the Demised Premises, of which Landlord and its managing agent shall be named as additional parties insured, in such limits as Landlord may reasonably prescribe. Tenant further covenants and agrees that any mechanic’s lien filed against the Demised Premises for work claimed to have been done for, or materials claimed to have been furnished to Tenant, will be discharged by Tenant, by bond or otherwise, within ten (10) days after the filing thereof, at the cost and expense of Tenant.

8.         Liens. Tenant shall at all times indemnify, save, and hold Landlord and the Demised Premises, free, clear and harmless from any claims, liens, demands, charges, encumbrances, litigation and judgments arising directly or indirectly out of any use, occupancy or activity of tenant, or any person or entity holding through or under Tenant or out of any work performed, material furnished, or obligations incurred by Tenant in, upon or otherwise in connection with the Demised Premises. Tenant shall give Landlord written notice at least ten (10) business days prior to the commencement of any such work on the Demised Premises to afford Landlord the opportunity of filing appropriate notices of non-responsibility. Tenant shall, at its sole cost and expense, within fifteen (15) days after filing of any lien of record, obtain the discharge and release thereof. Nothing contained herein shall prevent Landlord, at the cost and for the account of Tenant, from obtaining said discharge and release in the event Tenant fails or refuses to do the same within said fifteen (15) day period,

9.         Landlord’s Repairs. Except as set forth herein, Landlord shall have no maintenance, repair or restoration obligations whatsoever under this Lease or otherwise, Tenant expressly waives the benefit of any statute in effect now or in the future which might give Tenant the right to make repairs at the Landlord’s expense or to terminate this Lease due to the Landlord’s failure to keep the Demised Premises in good order, condition, or repair. Notwithstanding anything to the contrary, Landlord shall, at its cost and expense, be obligated to maintain the roof and structure of the Premises and to make all requisite repairs thereto and restorations thereof, except to the extent that such maintenance, repair or restoration is required as a result of the willful misconduct or negligence of Tenant or any of its personnel, patients, agents, licensees or invitees, in which event the cost of such maintenance, repair or restoration shall be borne by Tenant.

10.       Indemnification. Tenant hereby covenants and agrees to indemnify, save and hold Landlord harmless from any and all liability, loss, expenses (including attorney’s fees, judgments, claims, liens and demands of any kind whatsoever) in connection with, (j) Tenant’s use of the Demised Premises, or (ii) the conduct of Tenant’s business, or (iii) any activity, work or things done in the Demised Premises, or (iv) any default in the performances of any obligation on Tenant’s part to be performed under the terms of the Lease, or (v) any negligence of Tenant, or any of Tenant’s agents, contributors or employees. Notwithstanding the foregoing, Tenant shall not be required to defend, save harmless or indemnify Landlord, and Landlord shall indemnify, save and hold harmless Tenant, from any liability for injury, loss, accident or damage to any person is or property resulting from Landlord’s negligence or willful acts or omissions, or those of Landlord’s agents, contractors or employees.

11.       Subordination. Tenant agrees upon request of Landlord to subordinate this Lease and its rights hereunder to the lien of any mortgage, deed of trust or other encumbrance, together with any renewal, extensions or replacements thereof, now or hereafter placed, charged or enforced against the Demised Premises, or any portion thereof, or any property of which the Demised Premises is a part, and to execute and deliver at any time, and from time to time, upon demand by Landlord, such documents as may be required to effectuate such subordination, and in the event that Tenant shall fail, neglect or refuse to execute and deliver any such documents to be executed by it, Tenant hereby appoints Landlord, it successors and assigns, the attorney-in-fact of Tenant irrevocably to execute and deliver any and all such documents for and on behalf of Tenant; provided, however, Tenant shall not be required to effectuate such subordination, nor shall Landlord be authorized to effectuate such subordination on behalf of Tenant, unless the mortgagee or beneficiary named in such mortgage, deed of trust, or other encumbrance shall first agree in writing, for the benefit of Tenant, that so long as Tenant is not in default under any of the provisions, covenants or conditions of this Lease on the part of Tenant to be kept and performed, that neither this Lease nor any of the rights to Tenant hereunder shall be terminated or modified or be subject to termination or modification, nor shall Tenant’s possession of the Demised Premises be disturbed by proceedings to foreclose said mortgage, deed of trust or other encumbrance. In the event that the mortgagee or beneficiary of any such mortgage or deed of trust elects to have this Lease a prior lien to its mortgage or deed of trust, then and in such event, upon such mortgagee’s or beneficiary’s giving written notice to Tenant to that effect, this Lease shall be deemed prior in lien to such mortgage or deed of trust, whether this Lease is dated prior to or subsequent to the date of recordation of such mortgage or deed of trust. Tenant shall, in the event any proceedings are brought for the foreclosure of the Demised Premises or in the event of exercise of the power of sale under any deed of trust made by the Landlord covering the Demised Premises, attorn to the purchaser upon any such foreclosure or sale and recognize such purchaser as the Landlord under this Lease.

12.       Estoppel Certificate. Upon Landlord’s written request, Tenant shall execute, acknowledge and deliver to Landlord a written statement certifying; (i) that none of the terms or provisions of this Lease have been changed (or if they have been changed, stating how they have been changed); (ii) that this Lease has not been canceled or terminated; (iii) the last date of payment of the Base Rent and other charges and the time period covered by such payment; (iv) that Landlord is not in default under this Lease (or, if Landlord is claimed to be in default, stating why); and (v) such other matters as may be reasonably required by Landlord or the holder of a mortgage, deed of trust or lien to which the Demised Premises is or becomes subject. Tenant shall deliver such statement to Landlord within ten (10) days after Landlord’s request. Any such statement by Tenant may be given by Landlord to any prospective purchaser or encumbrancer of the Demised Premises. Such purchaser or encumbrancer may rely conclusively upon such statement as true and correct.

If Tenant does not deliver such statement to Landlord within such ten (10) day period, Landlord, and any prospective purchaser or encumbrancer, may conclusively presume and rely upon the following facts: (i) that the terms and provisions of this Lease have not been changed except as otherwise represented by Landlord; (ii) that this Lease has not been canceled or terminated except as otherwise represented by Landlord; (iii) that not more than one month’s Base Rent or other charges have been paid in advance; and (iv) that Landlord is not in default under the Lease, In such event, Tenant shall be estopped from denying the truth of such facts.

13.       Assignment and Subletting, Tenant shall not assign, mortgage, pledge, hypothecate or encumber this Lease nor the leasehold estate hereby created or any interest herein or sublet the Demised Premises or any portion thereof, or license the use of all or any portion of the Demised Premises without prior written consent of the Landlord which consent shall not be withheld: (i) for any sublease, so long as Tenant has not subleased in the aggregate over one-third of the Demised Premises giving effect to such sublease; and (ii) for an assignment, if the proposed assignment is being made to an assignee of good repute with equal or superior credit-worthiness to that of Landlord, and such assignee will only utilize the Demised Premises as an inpatient rehabilitation hospital. Neither the consent by Landlord to any assignment or subletting, nor the act of any such assignment or subletting, shall constitute a waiver of the necessity for such consent to any subsequent assignment subletting, nor shall it constitute a release of any obligations of Tenant under this Lease. Tenant shall pay all costs, expenses and reasonable attorney’s fees that may be incurred or paid by Landlord in processing, documenting, or administering any request of Tenant for Landlord’s consent required pursuant to this Section. If this Lease be assigned, or if the Demised Premises or any part thereof be sublet or occupied by anybody other than Tenant, Landlord may collect rent from the assignee, subtenant or occupant, and apply the net amount collected to the rent herein reserved, but no such assignment, subletting, occupancy or collection shall be deemed a waiver of this covenant, or the acceptance of the assignee, subtenant or occupant as tenant, or a release of Tenant from the further performance by Tenant of covenants on the part of Tenant herein contained,

a.        Assignor Remains Liable. In the absence of an express agreement in writing to the contrary, executed by Landlord, no assignment, mortgage, pledge, hypothecation, encumbrance, subletting or license hereof or hereunder shall act as a release of Tenant from any of the provisions, covenants and conditions of this Lease on the part of Tenant to be kept and performed.

b.        No Merger. The voluntary or other surrender of this Lease by Tenant, or a mutual cancellation hereof, or the termination of this Lease by Landlord pursuant to any provision contained herein, shall not work a merger, but at the option of Landlord, shall either terminate any or all existing subleases or sub-tenancies, or operate as an assignment to the Landlord of any and all such subleases or sub-tenancies.

14.        Insolvency. It is understood and agreed that neither this Lease nor any interest herein or hereunder, nor any estate hereby created in favor of Tenant, shall pass by operation of law under any state or federal insolvency or bankruptcy act, or any similar law now or hereafter in effect, to any trustee, receiver, assignee for the benefit of creditors, or any other person whomsoever without the express prior written consent of Landlord.

15.       Condemnation. Should the whole or any part of the Demised Premises be condemned or taken by a competent authority for any public or quasi-public purpose, all awards payable on account of such condemnation and taking shall be payable to Landlord, and Tenant hereby waives any and all interest therein. If the whole of the Demised Premises shall be so condemned and taken, then this Lease shall terminate upon such taking. If greater than one-third (1/3) of the floor space of the Demised Premises is condemned or taken, and if the remaining portion thereof will not be reasonably adequate for the operation of Tenant’s business after Tenant completes such repairs or alterations as are necessary to restore such part of the Demised Premises to as near its former condition immediately preceding the taking as the circumstances will permit, either Landlord or Tenant shall have the option of terminating this Lease by notifying the other party hereto of such election in writing within twenty (20) days after such taking. If by such condemnation and taking one-third (1/3) or less of the Demised Premises has been taken, or if a part only of the Demised Premises is taken and the remaining part thereof is suitable for the purposes for which Tenant has leased said premises, this Lease shall continue in full force and effect, and Tenant shall proceed with reasonable diligence to restore such part of the Demised Premises to as near its former condition immediately preceding the taking as the circumstances will permit, but the Base Rent shall be reduced in an amount equal to that proportion of the Base Rent which the floor space of the portion taken bears to the total floor space of the Demised Premises. Landlord shall reimburse Tenant for Tenant’s reasonable restoration costs, to the extent Landlord has recovered same from the condemning authority, within thirty (30) days after Landlord’s receipt of Tenant’s written demand and documentation evidencing the cost of such restoration.

16.       Destruction of Premises. In the case of (i) the total destruction of the Demised Premises or any portion thereof substantially interfering with Tenant’s use of the Demised Premises, whether by fire or other casualty, not caused by the default or negligence of Tenant, its agents, employees, servants, contractors, subtenants, licensees, customers or business invitees, or (ii) in the event any mortgagee under a mortgage or beneficiary under a deed of trust hold a lien encumbering the Demised Premises shall require payments of insurance proceeds, or (iii) in the event of a natural uninsured loss to the Demised Premises, Landlord, at its option, may terminate this Lease by notifying Tenant of such termination within ninety (90) days after the date of such casualty. If Landlord does not thus elect to terminate the Lease, Tenant shall repair such damage within 180 days, this Lease shall not terminate, but shall continue in full force and effect. If this Lease is terminated pursuant to this Section and if Tenant is not in default hereunder, rent shall be prorated as of the date of termination, and all rights and obligations hereunder shall cease and terminate.

a.         Lease Does Not Terminate If Damage by Tenant. Notwithstanding the foregoing provisions, in the event the Demised Premises, or any portion thereof, shall be damaged by fire or other casualty due to the fault or negligence of Tenant, its agents, employees, servants, contractors, subtenants, licensees, customers or business invitees, then, without prejudice to any other rights and remedies of Landlord, this Lease shall not terminate, the damage shall be repaired by Tenant, and there shall be no apportionment or abatement of any rent.

b.        Insurance Proceeds. All insurance proceeds payable under any fire and extended coverage risk insurance required to be maintained by Tenant pursuant to this Lease shall be payable solely to Landlord or any mortgagee under a mortgage or beneficiary under a deed of trust holding a lien encumbering the Demised Premises (as their respective interests shall appear) to be held and applied to the cost of restoring the Demised Premises, and Tenant shall have no interest therein, except that Tenant shall be entitled to all insurance proceeds payable for the destruction of Tenant’s personal property (in no event, however, shall Tenant be entitled to insurance proceeds with respect to destruction of any improvements, betterments or fixtures on the Demised Premises). Tenant shall also deposit with Landlord the amount of any deductible required under any insurance policy covering fire or other casualty. If for any reason any portion lot the cost to restore the Demised Premises is not covered by insurance, then Tenant shall pay to Landlord, upon demand, any cost or expense that is not so covered. Such repair and restoration shall be performed by properly insured and licensed contractors, in accordance with plans and specifications approved by Landlord, and shall comply with the requirements of this Lease and all applicable laws, codes and regulations. In the event Landlord is required to pay any portion of such restoration or repair costs, Tenant shall reimburse Landlord therefor, together with interest at twelve percent (12%) per year, within ten (10) days after receiving demand therefor from Landlord. Tenant shall in no. case be entitled to compensation for damages on account of any annoyance or inconvenience in making repairs under any provision of this Lease. Neither the rent payable by Tenant nor any of Tenant’s other obligations under any provisions of this Lease shall be affected by any damage to or destruction of the Demised Premises or any portion thereof by any cause whatsoever. Notwithstanding anything to the contrary set forth above, if such damage or destruction shall occur during the last two (2) years of the Lease, Tenant shall not be required to repair or restore the Demised Premises, provided that all insurance proceeds and deductibles required to be paid to Landlord above are paid to Landlord, and Tenant shall pay to Landlord all rent and all other sums due under this Lease for the remainder of the Term of this Lease.

c.        Tenant must Notify Landlord of Damage. If Tenant becomes aware of any casualty affecting the Demised Premises, Tenant shall notify Landlord in writing as to the details pertaining to such casualty (so far as known to Tenant) within forty-eight (48) hours after Tenant gains knowledge of such casualty.

17.      Expenditures by Landlord. Whenever under any provision of this Lease, Tenant shall be obligated to make any payment or expenditure, or to do any act or thing, or to incur any liability whatsoever, and Tenant fails, refuses or neglects to perform as herein required, Landlord shall be entitled, but shall not be obligated, to make any such payment or to do any such act or thing, or to incur any such liability, all on behalf of and at the cost and for the account of Tenant. In such event, the amount thereof with interest thereon at the rate of 12% per year or at the maximum rate per annum rate allowed by law, if lower than 12%, at the time and said sum shall constitute and be collectable as additional rent on demand,

18.        Default. Tenant’s compliance with each and every covenant and obligation hereof on its part to be performed hereunder is a condition precedent to each and every covenant and obligation of Landlord hereunder. Landlord shall have all the rights and remedies provided in this Section or elsewhere herein, in the event that:

a.         Tenant shall default in the payment or any sum of money required to be paid hereunder and such default continues for ten (10) days after written notice thereof from Landlord to Tenant; or

b.         Tenant shall default in the performance of any other provision, covenant or condition of this Lease on the part of Tenant to be kept and performed and such default continues for twenty (20) days after written notice thereof from Landlord to Tenant; provided, however, that if the default complained of in such notice is of such a nature that the same can be rectified or cured, but cannot with reasonable diligence be done within said thirty (30) day period, then such default shall be deemed to be rectified or cured if Tenant shall, within said thirty (30) day period, commence to rectify and cure the same and shall thereafter complete such rectification and cure with all due diligence, and in any event, within sixty (60) days from the date of giving such notice; or

c.        Tenant should vacate or abandon the Demised Premises during the Term of this Lease;

d.        There is filed any petition in bankruptcy or the Tenant is adjudicated as a bankrupt or insolvent, or there is appointed a receiver or trustee to take possession of Tenant or of all or substantially all of the assets of Tenant, or there is a general assignment by Tenant for the benefit of creditors, or any action is taken by or against Tenant under any state or federal insolvency or bankruptcy act, or any similar law now or hereafter in effect, including, without limitation, the filing of execution or attachment against Tenant and such levy continues in effect for a period of twenty (20) days.

e.        In the event of a default as designated in this Section or elsewhere herein, in addition to any other rights or remedies provided for herein or at law or in equity, Landlord, at its sole option, shall have the following rights:

(1)           The right to declare the Term of this Lease ended and to reenter the Demised Premises and lake possession thereof, and to terminate all of the rights of Tenant in and to the Demised Premises, or

(2)           The right without declaring the Term of this Lease ended, to reenter the Demised Premises and to occupy the same, or any portion thereof, for or on account of Tenant as hereinafter provided, applying any monies received first to the payment of such expenses as Landlord may have paid, assumed or incurred in recovering possession of the Demised Premises, including costs, expenses of attorney's fees in placing the same in good order and condition, or preparing or altering the same for reletting, and all other expenses, commissions and charges paid, assumed or incurred by Landlord in or in connection with reletting the Demised Premises and then to the fulfillment of the covenants of Tenant. Any such reletting as provided for herein may be for the remainder of the Term of this Lease or for a longer or shorter period. Such reletting shall be for such rent and on such other terms and conditions as Landlord, in its sole discretion, deems appropriate. Landlord may execute any lease made pursuant to the terms hereof either in Landlord's own name or in the name of Tenant, or assume Tenant's interest in and to any existing subleases to any tenant of the Demised Premises, as Landlord may see fit, and Tenant shall have no right or authority whatsoever to collect any rent from such tenants, subtenants, licensees or concessionaires on the Demised Premises. In any case, and whether or not the Demised Premises or any part thereof be relet, Tenant, until the end of what would have been the Term of this Lease in the absence of such default and whether or not the Demised Premises or any part thereof shall have been relet, shall be liable to Landlord and shall pay to Landlord monthly an amount equal to the amount due as rent hereunder, less the net proceeds for said month, if any, of any reletting effected for the account of Tenant pursuant to the provisions of this paragraph, after deducting all of Landlord's expenses in connection with such reletting, including, without limitation, all repossession costs, brokerage commissions, legal expenses, attorney's fees, expenses of employees, alteration costs, and expenses of preparation for such reletting (all said costs are cumulative and shall be applied against proceeds of reletting until paid in full), or

(3)           The right, even though it may have relet all or any portion of the Demised Premises in accordance with the provisions of subparagraph (2) of this section, to thereafter at any time elect to terminate this Lease for such previous default on the part of Tenant, and to terminate all of the rights of Tenant in and to the Demised Premises. Pursuant to said rights of reentry, Landlord may remove all persons from the Demised Premises and may, but shall not be obligated to, remove all property therefrom, and may, but shall not be obligated to, enforce any rights Landlord may have against said property or store the same in any public or private warehouse or elsewhere at the cost and for the account of Tenant or the owner or owners thereof. Tenant agrees to hold Landlord free, and harmless of any liability whatsoever for the removal and/or storage of any such property, whether of Tenant or any third party whomsoever. Anything contained herein to the contrary notwithstanding, Landlord shall not be deemed to have terminated this Lease or the liability of Tenant to pay any rent or other sum of money thereafter to accrue hereunder, or Tenant's liability for damages under any of the provisions hereof, by any such reentry, or by any action in unlawful detainer or otherwise to obtain possession of the Demised Premises, unless Landlord shall have specifically, with reference to this Section, notified Tenant in writing that it has so elected to terminate this Lease, Tenant covenants and agrees that the service by Landlord pursuant to such notice shall not (unless Landlord elects to the contrary at the time of, or at any time subsequent to, the service of such notice thereof to Tenant) be deemed to be a termination of this Lease or the termination of any liability of Tenant hereunder to Landlord.

f.             No Waiver. The waiver by Landlord of any default or breach of any of the provisions, covenants or conditions hereof on the part of Tenant to be kept and performed shall not be a waiver of any preceding or subsequent breach of the same or any other provision, covenant or condition contained herein. The subsequent acceptance of rent or any other payment hereunder by Tenant to Landlord shall not be construed to be a waiver of any preceding breach by Tenant of any provision, covenants or condition of this Lease other than the failure of Tenant to pay the particular rental or other payment or portion thereof so accepted, regardless of Landlord's knowledge of such preceding breach at the time of acceptance of such rental or other payment. No payment by Tenant or receipt by Landlord of a lesser amount than the rent herein provided shall be deemed to be other than on account of the earliest rent due and payable hereunder, nor shall any endorsement or statement on any check or any letter accompanying any check or payment as rent be deemed an accord and satisfaction, and Landlord may accept any such check or payment without prejudice to Landlord's right to recover the balance of such rent or pursue any other remedy provided in this Lease, This paragraph may not be waived.

19.       Quiet Possession. Tenant, upon paying the rentals and other payments herein required from Tenant, and upon Tenant's performance of all of the provisions, covenants and conditions of this Lease on its part to be kept and performed, may quietly have, hold and enjoy the Demised Premises during the Term of this Lease without any disturbance from Landlord or from any other person claiming through Landlord, however, Landlord and its agents shall have free access to the Demised Premises for the purpose of examining them and Tenant's compliance with this Lease and exhibit them to prospective purchasers and prospective tenants.

20.        Sale by Landlord. In the event of any sale or exchange of the Demised Premises by Landlord, Landlord shall be and is hereby relieved of all liability under any and all of its covenants and obligations contained in or derived from this Lease, arising out of any act, occurrence or omission relating to the Demised Premises occurring after the consummation of such sale or exchange. Tenant agrees to attorn to such purchaser or grantee.

23.       Default by Landlord. It is agreed that in the event Landlord fails or refuses to perform any of the provisions, covenants or conditions of this Lease on Landlord's part to be kept or performed, that Tenant, prior to exercising any right or remedy Tenant may have against Landlord on account of such default, shall give a twenty (20) day written notice to Landlord of such default, specifying in said notice the default with which Landlord is charged. Notwithstanding any other provision hereof, Tenant agrees that if the default complained of in the notice provided for by this Section is of such a nature that the same can be rectified or cured by Landlord, but cannot with reasonable diligence be rectified or cured within said twenty (20) day period, then such default shall be deemed to be rectified or cured if Landlord within said twenty (20) day period shall commence the rectification and curing thereof and shall continue thereafter with all due diligence to cause such rectification and curing to proceed and so does complete the same, with the use of diligence as aforesaid. The liability of Landlord to Tenant for any default by Landlord under the terms of this Lease shall be limited to the lesser of: (i) the interest of Landlord in the Demised Premises; or (ii) the interest Landlord would have in the Demised Premises if the Demised Premises were encumbered by third party debt in an amount equal to eighty percent (80%) of the value of the Demised Premises (as such value is determined by Landlord) and Tenant agrees to look solely to such amount for recovery of any judgment from Landlord, it being intended that Landlord shall not be personally liable for any judgment or deficiency.

22.       Force Majeure. Whenever a day is appointed herein on which, or a period of time is appointed in which, either party hereto is required to do or complete any act, matter, or thing, the time for the doing or completion thereof shall be extended by a period of time equal to the number of days on or during which such party is prevented from, or is unreasonably interfered with, the doing or completion of such act, matter or things because of labor disputes, civil commotion, war, warlike operation, sabotage, governmental regulations or control, fire or other casualty, inability to obtain any materials, or to obtain fuel or energy, weather or other acts of God, or other causes beyond such party's reasonable control (financial inability excepted), provided, however, that nothing contained herein shall excuse Tenant from the prompt payment of any rent or charge required of Tenant hereunder.

23.       Notices. Any and all notices and demands by or from Landlord to Tenant, or by or from Tenant to Landlord, required or desired to be given hereunder shall be in writing and shall be validly given or made if served either personally or if deposited in the United States mail, certified or registered postage prepaid, return receipt requested. If such notice or demand be served by registered or certified mail in the manner provided herein, service shall be conclusively deemed given three (3) days after mailing or upon receipt, whichever is sooner.

a.             Notice to Landlord. Any notice or demand to Landlord shall be addressed to Landlord at the address listed on the signature page of this Lease.

b.             Notice to Tenant. Any notice or demand to Tenant shall be addressed to Tenant at the address listed on the signature page of this Lease.

c.             Change of Address. Any party herein may change its address for the purpose of receiving notices or demands as herein provided by a written notice given in the manner aforesaid to the other party hereto.

24.       Brokers. Tenant warrants that it has had no dealings with any broker or agent in connection with this Lease, and covenants to pay, hold harmless and indemnify Landlord from and against any and all cost, expense or liability for any compensation, commissions and charges claimed by any broker or agent with respect to this Lease or the negotiations thereof.

25.      Work Prior to Opening.

a.             Landlord's Work. At Landlord's cost and expense, Landlord shall cause the Demised Premises to be constructed in substantial accordance with plans and specifications prepared or to be prepared by Landlord's architect. Said construction shall include all work described in Exhibit B attached hereto and incorporated herein by reference ("Landlord's Work"). Landlord shall use reasonable efforts to substantially complete Landlord’s Work as soon as is practicable.

b.            Tenant's Work.

(1)         Landlord shall also perform all work described in Exhibit C attached hereto ("Tenant's Work"). All such Tenant’s Work shall be promptly and diligently completed in accordance with the terms of this Section 25, and in strict compliance with zoning, building and other applicable codes, laws and ordinances. The cost of Tenant’s Work shall be borne by Landlord and/or Tenant as follows: Landlord shall pay for the initial $85 per square foot (i.e. an aggregate of $4,250,000) of Tenant’s Work ("Landlord‘s Contribution") and Tenant shall, in accordance with such timing and procedures as Landlord may reasonably designate, pay all sums in excess thereof.

(2)         Tenant shall promptly furnish Landlord with proof that Tenant has: (i) complied with Landlord’s timing and procedures with respect to the funding of its share of the costs of Tenant’s Work; and (ii) deposited into an account under Landlord’s control (the “Tenant’s Construction Contribution Account") the entire amount Tenant reasonably estimates is necessary to perform Tenant’s Work (the "Tenants Contribution Funds"), co-terminus with application of Landlord’s Contribution. The Tenant’s Contribution Funds shall be used solely to pay for the construction and performance of the Tenant's Work pursuant to this Lease. Tenant agrees that if an “Event of Default" occurs under this Lease, or if Landlord elects to do so in connection with performing Tenant’s Work as set forth in Section 25(b)(1) above, Landlord may:

(A)         Enter upon the Demised Premises and take possession of any materials or equipment, and construct, perform and complete the Tenant’s Work, at the risk and expense of Tenant. Landlord shall have the right at any time to discontinue work commenced by it in respect of the Tenant’s Work or to change any course of action undertaken and shall not be bound by any limitations or requirements of time. In connection with any construction of the Tenant’s Work undertaken, Landlord may (i) engage contractors, engineers and others for the purpose of furnishing labor, materials and equipment in connection with any construction of the Tenant’s Work, (ii) cause to be paid, settled or compromised, out of the Tenant’s Construction Contribution Account, all bills or claims which may become liens against the Demised Premises or the Tenant’s Work, or which have been or may be incurred in connection with the construction, completion and/or performance of the Tenant’s Work or for the discharge of liens, encumbrances or defects in the title of the Demised Premises or the Tenant’s Work, and (iii) take such action or refrain from acting under this Lease as Landlord may in its sole discretion from time to time determine without limitation.

(B)         Employ watchmen at Tenant's expense, out of the Tenant’s Construction Contribution Account, to protect the Tenant’s Work, including any building materials stored on the Demised Premises, from depreciation or injury.

(C)         For the purpose of carrying out this Section 25 and exercising these rights, powers and privileges, Tenant hereby irrevocably constitutes and appoints Landlord as its true and lawful attorney-in-fact to execute, acknowledge and deliver any instruments and do and perform any acts such as are referred to in this Section 25 in the name and on behalf of Tenant.

(D)         Exercise any other remedies provided under this Lease or applicable law or in equity, any and/or all of which remedies Landlord may exercise concurrently or consecutively at any time.

(3)         At such time as Landlord or Tenant shall have received the requisite approvals from any municipality or governmental agency having jurisdiction over the completion of the Tenant’s Work, such party hereto shall provide such documentation to the other party hereto.

(4)         The provisions of this Section 25 shall survive any termination of this Lease.

(5)         "Tenant's Plans," prepared in conformity with Exhibit C attached hereto, and containing a layout for Tenant’s intended use of the Demised Premises and exterior sign drawing, are included in the Building Plans in Exhibit B.

(6)         Tenant shall not install any fixtures or equipment which can exceed the capacity of any utility facilities serving the Demised Premises. Any additional utility facilities required in connection with any equipment installed by Tenant shall be installed at Tenant's expense and shall comply with all applicable code requirements and with plans and specifications which are approved in writing by Landlord.

26.      Miscellaneous Additional Provisions.

a.            Captions. The captions appearing at the commencement of the sections hereof are descriptive only and for convenience in reference to this Lease and in no way whatsoever define, limit or describe the scope or intent of this Lease, nor in any way affect this Lease.

b.            Remedies Cumulative. The various rights, options, elections and remedies of Landlord contained in this Lease shall be cumulative and no one of them shall be construed as exclusive of any other, or of any right, priority or remedy allowed or provided for by law and not expressly waived in this Lease.

c.             Successors and Assigns. Subject to the provisions restricting assignment, the terms, provisions, covenants and conditions contained in this Lease shall apply to, bind and inure to the benefit of the heirs, executors, administrators, legal representatives, successors and permitted assigns of Landlord and Tenant, respectively.

d.            Partial invalidity. If any term, provision, covenant or condition of this Lease, or any application thereof, should be held by a court of competent jurisdiction to be invalid, void or unenforceable, all provisions, covenants and conditions of this Lease, and all applications thereof, not held invalid, void or unenforceable, shall continue in full force and effect and shall in no way be affected, impaired or invalidated thereby.

e.             Time of the Essence. Time is of the essence of this Lease and all of the terms, provisions, covenants and conditions hereof.

f.             Entire Agreement. This Lease contains the entire agreement between the parties and cannot be changed or terminated orally.

g.            No Partnership. Nothing contained in this Lease shall be deemed or construed by the parties hereto or by any third party to create the relationship of principal and agent or of partnership or of joint venture or of any association between Landlord and Tenant. Neither the method of computation of rent nor any other provisions contained in this Lease nor any acts of the parties hereto shall be deemed to create any relationship between Landlord and Tenant other than the relationship of Landlord and Tenant.

h.            Attorney's Fees and Costs. In any action brought by Landlord to enforce any of its rights under or arising from this Lease, Landlord shall be entitled to receive its cost and legal expenses including reasonable attorney’s fees, whether such action is prosecuted to judgment or not. The parties hereto shall And they hereby do waive trial by jury in any action, proceeding or counterclaims brought by either of the parties hereto against the other on any matters whatsoever arising out of or in any way connected with this Lease, the relationship of landlord and tenant, Tenant's use or occupancy of the Demised Premises, and/or any claim of injury or damage. In the event Landlord commences any proceedings for nonpayment of rent, Tenant will not interpose any counterclaim of whatever nature or description in any such proceedings. This shall not, however, be construed as a waiver of the Tenant’s rights to assert such claims in any separate action or actions brought by Tenant. The parties hereto covenant and agree that Landlord shall have no duty to mitigate damages arising in any way out of Tenant's failure to comply with any term, condition, covenant or agreement of this Lease.

i.              Number and Gender. Masculine or feminine pronouns shall be substituted for the neuter form and vice versa, and the plural shall be substituted for the singular form and vice versa, in any place or places herein in which the context requires such substitution or substitutions.

j.            Governing Law. The laws of the State of Nevada shall govern the validity, construction, performance and effect of this Lease, exclusive of the conflict of laws provisions thereof.

k.             Joint Liability of All Tenants. In the event Tenant now or hereafter shall consist of more than one person, firm or corporation, then and in such event, all such persons, firms or corporations shall be jointly and severally liable as Tenant hereunder.

1.             No Lease until Signed by the Parties. The submission of this Lease for examination does not constitute a reservation of or option for the Demised Premises and this Lease becomes effective as a Lease only upon execution and delivery thereof by Landlord and Tenant.

m.           Tenant must Advise Landlord of Matters Affecting Title. Should any claim or lien be filed against the Demised Premises, or any action or proceeding be instituted affecting the title to the Demised Premises, tenant shall give Landlord written notice thereof as soon as Tenant obtains knowledge thereof.

n.            Lease Construed According to its Terms. Although the printed provisions of those Lease were drawn by Tenant, this Lease shall not be construed either for or against Landlord or Tenant, but this Lease shall be interpreted in accordance with the general tenor of its language.

o.             Acknowledgment of Independent Advice. Each party whose signature appears below acknowledges that he has read all of the provisions of the foregoing agreement, understands them, has sought independent advice regarding the legal effect of the provisions herein, and agrees to be bound by said provisions.

p.            Warranty. In the event Tenant shall consist of a corporation, the officer signing this agreement for such corporation shall deliver to Landlord, on or before the date of execution of this Lease, a Resolution of the Board of Directors of such corporation approving this Lease and authorizing execution of this Lease by the above-described officer of the corporation.

q.            Waiver. No course of dealing or delay between the parties shall operate as a waiver of the rights of any party to this Lease. No default, covenant or condition of this Lease may be waived other than in writing.

r.             Counterparts. This Lease may be executed in facsimile form and in one or more counterparts, and by the different parties hereto on separate counterparts, each of which shall be deemed an original, but all of which shall constitute one and the same Lease.

IN WITNESS WHEREOF, the parties hereto have executed this Lease the day and year first written above.

EXHIBIT A

SITE PLAN

EXHIBIT B

BUILDING SHELL & TENANT IMPROVEMENTS

EXHIBIT C

DESCRIPTION OF TENANT’S WORK

TENANTS WORK - The following work is required to be completed, placing the Demised Premises in finished condition, ready to open for business, by Landlord at Tenant's and/or Landlord’s expense as set forth in Section 25(b)(1) above. Tenant's Work shall be in accordance with the following:

All of Tenant’s Work shall be governed in all respect by, and be subject to, the following:

Providing and installing all tenant improvements per plans.

All furnishings, trade fixtures, equipment, signs, and related parts, including installation. Location and design of all signs subject to prior written consent of Landlord.

Landlord reserves the right to require changes in Tenant's Work when necessary by reason of code requirements. Tenant shall maintain the Demised Premises and make all repairs thereto, other than repair of the foundation, roof and structural portions of the walls.

EXHIBIT D

TENANT’S PLANS

ADDENDUM

To the lease dated January 30, 2006 by and between LVRH Properties LLC, a Nevada limited liability company, “Landlord” and Las Vegas Rehabilitation Hospital LLC, a Nevada limited liability company, “Tenant” for the premises located at 9175 W. Oquendo Road. Las Vegas, Nevada and is composed of a 50,000 square foot free-standing inpatient and outpatient rehabilitation hospital containing 50 private inpatient beds, Las Vegas, Nevada, is hereby incorporated and made a part:

All other terms and conditions shall remain the same.

GUARANTY OF LEASE

THIS GUARANTY OF LEASE (this “Guaranty”) is made as of June 1, 2010 by HealthSouth Corporation, a Delaware corporation (“Guarantor”), in favor of LVRH Properties LLC, a Nevada limited-liability company (“Landlord”).

FOR VALUABLE CONSIDERATION, the receipt and sufficiency of which are hereby acknowledged, Guarantor hereby unconditionally and irrevocably guarantees the full and faithful performance by HealthSouth Rehabilitation Hospital of Desert Canyon, LLC, a Delaware limited liability company (“Tenant"), of all the terms, covenants and conditions of that certain Lease Agreement, dated January 30, 2006, between Landlord and Las Vegas Rehabilitation Hospital LLC, a Nevada limited liability company (“LVRH”), as amended by that certain Lease Assignment and Amendment, dated as of June 1, 2010, among Landlord, LVRH and Tenant (collectively, the “Lease”). This Guaranty shall remain in full force and effect regardless of any amendment, modification, extension, compromise or release of any term, covenant or condition of the Lease or of any party thereto, as the case may be.

The undersigned agrees to indemnify Landlord against any and all liability, loss, costs, charges, penalties, obligations, expenses, attorney fees, litigation, judgments, damages, claims and demands of any kind whatsoever in connection with, arising out of or by reason of the failure by Tenant to perform its obligations under the Lease. Guarantor waives any right or claim of rights to cause a marshalling of Tenant’s assets or to proceed against Guarantor or Tenant or any security for the Lease or this Guaranty in any particular order and Guarantor agrees that any payments or performance required to be made hereunder shall become due upon demand in accordance with the terms hereof immediately upon the happening of a default under the Lease, whether or not Guarantor has been given notice of such default, and Guarantor hereby expressly waives and relinquishes all rights and remedies accorded by applicable law to guarantors, including, but not limited to, notice of demand, notice of default, any failure to pursue Tenant or its property, or any defense arising out of the absence, impairment or loss of any right of reimbursement or subrogation.

The obligations of Guarantor hereunder are independent of the obligations of Tenant and, in the event of any default hereunder, a separate action or actions may be brought and prosecuted against Guarantor whether or not Tenant is joined therein or a separate action or actions is or are brought against Tenant. Landlord’s rights hereunder shall not be exhausted by its exercise of any of its rights or remedies or by any action or by any number of successive actions until and unless all obligations hereby guaranteed have been paid and fully performed.

No delay on Landlord’s part in exercising any right, power or privilege under this Guaranty or any other document executed in connection herewith shall operate as a waiver of any such privilege, power or right.

Guarantor agrees that any judgment rendered against Tenant for monies or performance due Landlord shall in every and all respects bind and be conclusive against Guarantor to the same extent as if Guarantor had appeared in any such proceedings and judgment therein had been rendered against Guarantor.

Any circumstance which operates to toll any statute of limitations as to Tenant shall also toll the statute of limitations as to Guarantor.

In the event any action is commenced by Landlord against Guarantor in connection with this Guaranty, including any bankruptcy proceeding, Landlord shall be entitled to its costs and expenses, including reasonable attorney fees.

The terms, covenants and conditions contained in this Guaranty shall inure to the benefit of the successors and assigns of Landlord.

If any term, covenant or condition of this Guaranty, or any application thereof, should be held by a court of competent jurisdiction to be invalid, void or unenforceable, all terms, covenants and conditions of this Guaranty, and all applications thereof, not held invalid, void or unenforceable shall continue in full force and effect and shall in no way be affected, impaired or invalidated thereby.

In this Guaranty, whenever the context so requires, the masculine gender includes the feminine and/or neuter, and the singular number includes the plural.

This Guaranty shall be construed in accordance with its intent and without regard to any presumption or other rule requiring construction against the party causing the same to be drafted.

The laws of the State of Nevada shall govern the validity, construction, performance and effect of this Guaranty and any legal suit, action or proceeding against Guarantor arising out of or relating to this Guaranty shall be instituted in any federal or state court in Clark County, Nevada, and Guarantor waives any objection which it may now or hereafter have to the laying of venue of any such suit, action or proceeding, and Guarantor hereby irrevocably submits to the jurisdiction of any such court in any suit, action or proceeding.

Should Guarantor consist of more than one person or entity, then, in such event, all such persons and entities shall be jointly and severally liable as Guarantor hereunder.

[Signature Page Follows]

IN WITNESS WHEREOF, Guarantor has executed this Guaranty as of the date first above written.

LEASE AGREEMENT

(Triple-Net/Single-Tenant)

THIS LEASE AGREEMENT (Triple-Net/Single-Tenant) (this "Agreement") is made this 30^th day of January, 2006, by and between LVRH PROPERTIES LLC, a Nevada limited-liability company ("Landlord") and LAS VEGAS REHABILITATION HOSPITAL, a Nevada limited-liability company ("Tenant”) with respect to the demise by Landlord to Tenant of that certain premises described as 9175 W. Oquendo Road, Las Vegas, Nevada and shown on the Site Plan attached as Exhibit A hereto, (all of such premises collectively, the "Demised Premises"),

NOW, THEREFORE, for and in consideration of the covenants and agreements set forth herein, Landlord and Tenant agree as follows:

1.         Grant of Leasehold. Landlord hereby demises and leases the Demised Premises to Tenant for the period, at the rental rate, and subject to the other terms and conditions set forth herein.

2.         Demised Premises. Landlord shall construct upon the Demised Premises a shell building containing approximately fifty thousand (50,000) square feet as provided in Exhibit B (attached) (the “Building"). There shall be no deduction or exclusion for any square feet of the Building included within the Demised Premises by reason of corridors, interior partitions or any other interior construction, improvements or equipment. The actual number of square feet of the Building shall be deemed to be equal to the aforementioned approximation.

3.        Term.

a.           Base Term. Unless terminated earlier as provided herein, the term of this Lease (as extended from time to time and until the term hereof expires or is terminated hereunder, the "Term") shall be for a period of ten (10) years, beginning at 1:00 A.M. on the earlier of the following dates: (i) the day after Landlord receives a Certificate of Occupancy or Temporary Certificate of Occupancy for the Demised Premises, issued by the applicable building department in the municipality in which the Demised Premises is located, upon completion of Landlord's Work (as hereinafter defined); or (ii) the date Tenant commences to do business in, upon or from the Demised Premises (the "Commencement Date"). Lessee shall execute, within seven (7) days of Landlord’s request, a Memorandum of Lease in form acceptable to Landlord, reflecting the existence and duration of the Lease, the location of the Demised Premises, and such other information as Landlord may reasonably request, which Memorandum may be placed of record by Landlord.

b.            Extension Option. So long as no "Event of Default" (as hereinbelow defined) is in effect at the time of such exercise by Tenant, Tenant shall have two consecutive rights to extend the Tenant of this Lease by a period of ten (10) years per each such extension option; provided, however, that upon any such extension of the Term all of the remaining Term and conditions hereof (including, without limitation, the cost of living adjustments to Base Rent set forth in Section 4(a) below) shall remain in force and effect; provided further, that to exercise any such option Tenant must give Landlord written notice of such exercise, in accordance with the provisions hereof, not less than six (6) months prior to the date that the Term would otherwise expire.

c.             Holdover. Tenant shall vacate the Demised Premises on the expiration or earlier termination of this Lease, Tenant shall reimburse Landlord for and indemnify and hold Landlord harmless against all damages, claims, losses, penalties, charges, and expenses (including reasonable attorneys' fees) incurred by Landlord resulting from any delay by Tenant in vacating the Demised Premises, If Tenant does not vacate the Demised Premises upon the expiration or earlier termination of the Lease, Tenant's occupancy of the Demised Premises shall be a tenancy at sufferance, subject to all the terms of this Lease applicable to a tenancy at sufferance, except that the "Base Rent” (as hereinafter defined) then in effect shall be equal to one hundred fifty percent (150%) of the Base Rent in effect immediately prior to the expiration or earlier termination of this Lease. Nothing contained in this paragraph shall be construed as consent by Landlord to any holding over by Tenant of the Demised Premises, and Landlord expressly reserves the right to require Tenant to surrender possession of the Demised Premises to Landlord upon the expiration or earlier termination of the Lease.

4.        Rent.

a.             Base Rent. Subject to adjustment as hereinafter provided, Tenant shall pay Landlord as base rent ("Base Rent") for the Term of this Lease the sum of TWO DOLLARS FIFTY CENTS ($2.50) per square foot of the Demised Premises (i.e., $125,000) per month in advance on the first day of each month during the Term of this Lease beginning on the Commencement Date, If the Commencement Date is not the first day of a calendar month then: (i) Base Rent for such fractional portion of the first month shall be due on the Commencement Date, and (ii) the Base Rent due for such fractional month shall be prorated based upon the actual number of days in such fractional month.

b.            Cost of Living Adjustment. The Base Rent shall be increased from the amount then in effect on the first day of the thirteenth (13th) full calendar month following the Commencement Date and on each annual anniversary thereof (each, an "Adjustment Date") during the Term of the Lease (including any extension option periods) in the amount of three percent (3%) per year of the Base Rent amount then in effect. Landlord shall notify Tenant of each increase by delivering a written statement setting forth the new amount of the Base Rent. Tenant shall pay the new Base Rent from its effective date until the next annual increase.

c.            Utilities. Tenant shall in respect of all periods of the Term pay all costs and charges of any kind (including all usage charges) for the provision of all utilities and services at the Demised Premises, including without limitation water, gas, heat, electricity, power, garbage service, air conditioning, telephone service, sewer service charges and sewer rentals charged or attributable to the Demised Premises, cleaning of the Demised Premises and all other services or utilities used in, upon or about the Demised Premises by Tenant or any of its subtenants, licensees, or concessionaires during the term hereof (collectively “Utilities and Services"). Tenant shall contract with, and pay directly to the appropriate supplier the cost of all Utilities and Services supplied to the Demised Premises.

d.            Property Taxes. Tenant shall in respect of all periods of the Term pay all real property taxes and general and special assessments on the Demised Premises, and shall pay all taxes charged against trade fixtures, utility installations, furnishings, equipment or any other personal property belonging to Tenant. Except to the extent Landlord elects to bill for any taxes and/or assessments under Section 4(f) below. Landlord shall forward to Tenant in a timely manner all bills and notices with respect to such real property taxes and assessments as are received by Landlord from third parties, and within five (5) days after request by Landlord (and in no event less than quarterly), Tenant shall provide Landlord with written evidence of each such payment.

e.            Other Costs. The parties acknowledge that this Lease is intended to be a fully net lease to the Landlord and that Tenant shall be responsible for all costs and expenses of any kind or nature incurred in connection with the ownership or operation of the Demised Premises including, without limitation; those set forth in Sections 4(c) and 4(d) hereinabove; all repairs required to be made to the Demised Premises, except to the extent of such roof or structural repairs as are expressly required to be made by Landlord pursuant to Section 9 hereinbelow; all costs of landscaping, parking, sweeping, maintenance and repairs, power, water, other utilities, decorative features, wages for on-site cleaning, parking, and/or security personnel, management fees, insurance premiums and deductibles, license and permit fees and associated costs, professional fees, waste disposal (except as set forth below), heating, ventilation and air conditioning costs and repairs, and materials and supplies. Tenant shall be solely responsible (and at its sole cost and expense) for all waste disposal including all medical, special, infectious, and other waste disposal and for all Hazardous Waste disposal and Tenant shall in all respects indemnify, defend (with counsel designated by Landlord) and hold Landlord harmless with respect thereto.

f.            Monthly and Other Payment of Non-Base Rent Charges. Landlord may in its discretion from time to time estimate the aggregate amount of all charges to be paid by Tenant hereunder other than for Base Rent and bill Tenant for one-twelfth of such amount on a monthly rental invoice, in which event such billed amount must be paid punctually together with the Base Rent due (it being understood that such additional amount shall for all purposes be treated as “Rent” hereunder). Promptly after each anniversary of the Commencement Date, Landlord shall calculate the actual sum that would be due under this Lease (i.e., for all charges from Tenant other than for Base Rent) in respect of the 12-month period immediately prior to such anniversary and refund any overpaid amount resulting from Tenant’s prior monthly payments or bill Tenant for any underpaid amount resulting notwithstanding Tenant’s prior monthly payments (with any underpaid sum to be due promptly upon billing). In addition to the foregoing, Landlord may from time to time in its discretion establish such further procedures with respect to payment of non- Base Rent sums due under this Lease as Landlord may from time to time reasonably designate.

g.           Payment. Each payment of rent or any other obligation of the Tenant shall be paid in lawful money of the United States of America without prior demand or notice and without any deduction, set off or counterclaim whatsoever by delivering the rent payment including all adjustments thereto to the office of the Landlord or at such other place or places as may from time to time be designated in writing by the Landlord, All sums to be paid under this Lease by Tenant, including, without limitation, all Base Rent, and all other charges required to be paid under this Section 4, shall for all purposes be deemed to be “Rent.”

5.         Possession and Surrender of Demised Premises.

a.             Acceptance of Demised Premises. Tenant shall by entering upon and occupying the Demised Premises be deemed to have accepted the Demised Premises in its “as is” condition as of the Commencement Date, subject to all recorded matters and laws, Tenant acknowledges that neither Landlord nor its agents have made any representations or warranties as to the suitability or fitness of the Demised Premises for the conduct of Tenant’s business or for any other purpose, nor has Landlord or its agents or employees agreed to undertake any alterations or construct any further tenant improvements to the Demised Premises except as expressly provided in this Lease. Notwithstanding anything to the contrary, upon Landlord’s request Tenant shall hereafter execute and deliver such Memorandum of Commencement Date, in form reasonably designated by Landlord, certifying the date that is the Commencement Date, Tenant’s acceptance and approval of the Demised Premises without reservation, and such other matters as Landlord may reasonably request.

b.            Removal of Tenant's Property. Upon the expiration or sooner termination of the term of this Lease, Tenant shall, at its sole cost and expense, remove all personal properly and trade fixtures which Tenant has installed or placed on the Demised Premises (all of which are hereinafter referred to as "Tenant's property") from the Demised Premises and repair all damage thereto resulting from such removal and Tenant shall thereupon surrender the Demised Premises in the same condition as on the date when the Demised Premises was ready for occupancy, reasonable wear and tear excepted. In the event Tenant shall fail to remove any of Tenant's property as provided herein, Landlord may, but is not obligated to, at Tenant's expense, remove all of such property not so removed and repair all damage to the Demised Premises resulting from such removal, and Landlord shall have no responsibility to Tenant for any loss or damage to said property caused by or resulting from such removal or otherwise.

6.        Use of Demised Premises. The Demised Premises are leased to Tenant solely for the operation of a rehabilitation hospital and uses incidental thereto. Tenant shall continuously use the Demised Premises for this purpose and shall not use or allow to be used the Demised Premises, or any portion thereof, for any other purpose or purposes whatsoever without Landlord's prior written consent. Tenant shall conduct business under the trade name of “DESERT CANYON REHABILITATION HOSPITAL” and no other without prior written consent of Landlord.

a.            Tenant's Duty to Keep Demised Premises Repaired and in Good Order. Tenant shall keep and maintain in good order, condition, and repair (including any such replacement and restoration as is required for that purpose) the Demised Premises and every part thereof and any and all appurtenances thereto wherever located, including, but not limited to, the exterior and interior portion of all doors, door checks, windows, plate glass, store front, all plumbing and sewage facilities within the Demised Premises, fixtures, heating and air conditioning and electrical systems, sprinkler system, if any, and walls, floors and ceilings, and any work performed by or on behalf of Tenant after the Commencement Date. Tenant shall also keep and maintain in good order, condition and repair (including any such replacement and restoration as is required for that purpose) any special equipment, fixtures or facilities other than the usual and ordinary plumbing and utility facilities, which special facilities shall include but not be limited to grease traps, located outside the Demised Premises. Tenant shall contract with a service company for the maintenance of air-conditioning equipment, with a copy of the service contract to be furnished to the Landlord within ten (10) days after opening for business, and a copy of any subsequent contracts to be furnished from time to time during the Term of this Lease. Landlord agrees to assign to Tenant any warranties Landlord may have pertaining to those parts of the Demised Premises Tenant is responsible for maintaining hereunder. Tenant shall store all trash and garbage in metal containers located where designated by Landlord and so as not to be visible or create a nuisance to customers and business invitees in the Demised Premises, and so as not to create or permit any health or fire hazard, and arrange for the prompt and regular removal thereof, If Tenant fails to maintain or repair the Demised Premises as required hereunder, Landlord may, upon ten (10) days prior notice to Tenant (except that no notice shall be required in the case of an emergency), enter the Demised Premises and perform such maintenance or repair on behalf of Tenant. In such case, Tenant shall reimburse Landlord for all costs incurred in performing such maintenance or repair, immediately upon demand.

b.           Compliance with Law; Due Licensure of Medical Personnel. Tenant will not use the Demised Premises or any portion thereof; (i) in violation of any law, ordinance, rule, regulation, certificate of occupancy, or (ii) for any business or purpose that creates risks of fire or other hazards that would in any way increase, suspend or void the rate or amount of insurance of any type to the Landlord on any part of the Demised Premises. Tenant shall at all times during the Term of this Lease, and at Tenant's sole cost and expense, comply with all governmental rules, regulations, ordinances, statutes and laws, (including, without limitation, the Americans with Disabilities Act of 1990 (and all rules and regulations promulgated thereunder)), and the orders and regulations of the National Board of Fire Underwriters or any other body now or hereafter exercising similar functions, now or hereafter in effect pertaining to the use, occupancy, condition or alteration of the Demised Premises. Landlord makes no representation or warranty as to the condition of the Demised Premises with respect to any law or the suitability of the Demised Premises for Tenant’s intended use or whether such use complies with any or all laws. Tenant covenants that all persons who furnish medical services or related activities of any kind at the Demised Premises shall be and remain appropriately licensed and in good standing with the applicable state licensing board(s) and any applicable federal, state or local certification or licensing agency or office.

c.           Compliance with Rules and Regulations. Tenant hereby covenants and agrees that it, its agents, employees, servants, contractors, subtenants and licensees shall abide by the rules and regulations set forth above and such additional rules and regulations hereafter adopted and amendments and modifications of any of the foregoing as Landlord may, from time to time, adopt for the safety, care and cleanliness of the Demised Premises, for the preservation of good order thereon,

d.          Use of Plumbing. The plumbing facilities in the Demised Premises shall not be used for any other purpose than that for which they are constructed, and no foreign substance of any kind shall be thrown therein, and the expense of any breakage, stoppage or damage resulting from a violation of this provision shall be borne by Tenant who shall, or whose employees, agents, servants, customers or invitees shall have caused it,

e.           Pest Control. Tenant shall keep the Demised Premises free from pests and vermin.

f.            Trash. Tenant shall not burn any trash or garbage of any kind in or about the Demised Premises.

g.           Insurance. Tenant shall, at Tenant's expense, maintain property insurance on the Demised Premises and appurtenant structures in such amount as Landlord and any mortgagees may deem necessary or appropriate. In addition, Tenant shall, at Tenant's expense, obtain and keep in force at all times during the Term of the Lease, a policy or policies of insurance covering loss or damage to all of the improvements, betterments, personal property, utility installations, trade fixtures, furnishings, and business contents located within the Demised Premises, in the amount of one hundred percent (100%) of the full replacement value thereof as reasonably ascertained by the Tenant's insurance carrier against risks of direct physical loss or damage, normally covered in an "all risk” policy (including the perils of flood and surface waters), as such term is used in the insurance industry; provided, however, that Tenant shall have no obligation to insure against earthquakes or against acts of terror. The proceeds of such insurance shall be used for the repair or replacement of the property so insured (including, without limitation, any repair or replacement of such property in accordance with Section 16 below).

Tenant shall, at Tenant's expense, maintain a policy of Commercial General Liability insurance insuring Tenant and as additional insureds, Landlord and any of Landlord's mortgagees, against liability arising out of the ownership, use, occupancy or maintenance of the Premises, Such insurance shall be on an occurrence basis providing single-limit coverage in an amount not less than Two Million Dollars ($2,000,000) per occurrence. The initial amount of such insurance shall be subject to periodic increases upon reasonable demand by Landlord based upon inflation, increased liability awards, recommendation of professional insurance advisers, and other relevant factors. However, the limits of such insurance shall not limit Tenant's liability nor relieve Tenant of any obligation hereunder.

Insurance required to be maintained by Tenant hereunder shall be in companies holding a "General Policyholders' Rating" of B-plus or better and a "financial rating" of 10 or better, as set forth in the most current issue of "Best's Insurance Guide," or such comparable ratings as Landlord shall approve, in its sole discretion. Tenant shall promptly deliver to Landlord, within thirty (30) days of the Commencement Date, original certificates evidencing the existence and amounts of such insurance. No such policy shall be cancelable or subject to reduction of coverage except after thirty (30) days prior written notice to Landlord, Tenant shall, within thirty (30) days prior to the expiration, cancellation or reduction of such policies, furnish Landlord with renewals or "binders" thereof. Tenant shall not do or permit to be done anything which shall invalidate the insurance policies required under this Lease.

Tenant shall obtain from the issuers of the insurance policies referred to in this Lease a waiver of subrogation provision in said policies (with respect to Landlord) and Tenant hereby releases and relieves Landlord, and waives any and all rights of recovery against Landlord, or against the employees, officers, agents and representatives of Landlord, for loss or damage arising out of or incident to the perils required to be insured against under this Lease which perils occur in, on or about the Demised Premises, whether due to the negligence of Landlord or Landlord's or their agents, employees, contractors or invitees.

h.           Signs. Tenant shall not place any signs on the exterior of the Demised Premises without Landlord's consent, which consent shall not be unreasonably withheld.

i.            Hazardous Substances, Including Medical, Special, and Infectious Waste, The term "Hazardous Substance" as used in this Lease shall mean any product, substance, chemical, material or waste (i.e., whether medical, special, infectious, or otherwise), whose presence, nature, quantity and/or intensity of existence, use, manufacture, disposal, transportation, spill, release or effect, either by itself or in combination with other materials expected to be on the Demised Premises, is: (i) potentially injurious to the public health, safety or welfare, the environment, or the Demised Premises; (ii) regulated or monitored by any governmental authority; or (iii) a basis for potential liability of Landlord to any governmental agency or third party under any applicable statute or common law theory. Hazardous Substance shall include, but not be limited to, hydrocarbons, petroleum, gasoline, crude oil or any products or by-products thereof, or any hazardous or toxic substance, material or waste, regulated or listed pursuant to any federal, state or local environmental law, including without limitation, the Clean Air Act, the Clean Water Act, the Toxic Substances Control Act, the Comprehensive Environmental Response Compensation and Liability Act, the Resource Conservation and Recovery Act, the Federal Insecticide, Fungicide, Rodenticide Act, the Safe Drinking Water Act, and the Occupational Safety and Health Act,. Tenant shall not engage in any activity in or about the Demised Premises which constitutes a "Reportable Use" (as hereinafter defined) of Hazardous Substances without the express prior written consent of Landlord and compliance in a timely manner (at Tenant's sole cost and expense) with all Applicable Requirements (as defined below). "Reportable Use" shall mean (i) the installation or use of any above or below ground storage tank, (ii) the generation, possession, storage, use, transportation, or disposal of a Hazardous Substance that requires a permit from, or with respect to which a report, notice, registration or business plan is required to be filed with, any governmental authority, and (iii) the presence in, on or about the Demised Premises of a Hazardous Substance with respect to which any Applicable Requirements require that a notice be given to persons entering or occupying the Demised Premises or neighboring properties. Notwithstanding the foregoing, Tenant may, without Landlord’s prior consent, but upon notice to Landlord and in compliance with all Applicable Requirements, use any ordinary and customary materials reasonably required to be used by Tenant in the normal course of the uses permitted under Section 6 of the Lease, so long as such use is not a Reportable Use and does not expose the Demised Premises or neighboring properties to any meaningful risk of contamination or damage or expose Landlord to any liability therefor. In addition, Landlord may (but without any obligation to do so) condition its consent to any Reportable Use of any Hazardous Substance by Tenant upon Tenant's giving Landlord such additional assurances as Landlord, in its reasonable discretion, deems necessary to protect itself, the public, the Demised Premises and the environment against damage, contamination or injury and/or liability therefor, including but not limited to the installation (and, at Landlord’s option, removal on or before Lease expiration or earlier termination) of reasonably necessary protective modifications to the Demised Premises.

To the extent necessary to Tenant’s business and consistent with the prudent operation of Tenant’s business and all applicable laws, rules, and regulations, Tenant may store and/or utilize Hazardous Substances; provided, however, that Tenant shall from time to time furnish Landlord with a comprehensive list of all such Hazardous Materials (i.e., medical, special, infectious, or otherwise) so stored and/or utilized at the Demised Premises. In addition, prior to the installation and use of any equipment, Tenant shall provide Landlord with a list of such equipment and its Intended use; a list of any Hazardous Substances which will be used or generated in connection with such equipment; and Tenant's proposed procedures for the use, storage and disposal of any Hazardous Substances, including, but not limited to, the procedure for silver recovery for any radiology equipment.

If Tenant knows, or has reasonable cause to believe, that a Hazardous Substance has come to be located in, on, under or about the Demised Premises, other than as set forth above or as previously consented to by Landlord, Tenant shall immediately give Landlord written notice thereof, together with a copy of any statement, report, notice, registration, application, permit, business plan, license, claim, action, or proceeding given to, or received from, any governmental authority or private party concerning the presence, spill, release, discharge of, or exposure to, such Hazardous Substance including but not limited to all such documents as may be involved in any Reportable Use involving the Demised Premises. Tenant shall not cause or permit any Hazardous Substance to be spilled or released in, on, under or about the Demised Premises (including, without limitation, through the plumbing or sanitary sewer system).

Tenant shall indemnify, protect, defend and hold Landlord, its agents, employees, lenders and ground lessor, if any, and the Demised Premises, harmless from and against any and all damages, liabilities, judgments, costs, claims, liens, expenses, penalties, loss of permits and attorneys' and consultants' fees arising out of or involving any Hazardous Substance brought onto the Demised Premises by or for Tenant or by anyone under Tenant's control. Tenant's obligations under this paragraph shall include, but not be limited to, the effects of any contamination or injury to person, property or the environment created or suffered by Tenant, and the cost of investigation (including consultants' and attorneys' fees and testing), removal, remediation, restoration and/or abatement thereof, or of any contamination therein involved, and shall survive the expiration or earlier termination of this Lease. No termination, cancellation or release agreement entered into by Landlord and Tenant shall release Tenant from its obligations under this Lease with respect to Hazardous Substances, unless specifically so agreed by Landlord in writing at the time of such agreement.

Tenant shall, at Tenant's sole cost and expense, fully, diligently and in a timely manner, comply with all "Applicable Requirements," which term is used in this Lease to mean all laws, rules, regulations, ordinances, directives, covenants, easements and restrictions of record, permits, the requirements of any applicable fire insurance underwriter or rating bureau, and the recommendations of Landlord’s engineers and/or consultants, relating in any manner to the Demised Premises (including but not limited to matters pertaining to (i) industrial hygiene, (ii) environmental conditions on, in, under or about the Demised Premises, including soil and groundwater conditions, and (iii) the use, generation, manufacture, production, installation, maintenance, removal, transportation, storage, spill, or release of any Hazardous Substance), now in effect or which may hereafter come into effect. Tenant shall, within five (5) days after receipt of Landlord's written request, provide Landlord with copies of all documents and information, including but not limited to permits, registrations, manifests, applications, reports and certificates, evidencing Tenant's compliance with any Applicable Requirements specified by Landlord, and shall immediately upon receipt, notify Landlord in writing (with copies of any documents involved) of any threatened or actual claim, notice, citation, warning, complaint or report pertaining to or involving failure by Tenant or the Demised Premises to comply with any Applicable Requirements.

Landlord, Landlord's agents, employees, contractors and designated representatives, and any mortgagee under a mortgage or beneficiary under a deed of trust encumbering the Demised Premises shall have the right to enter the Demised Premises at any time in the case of an emergency, and otherwise at reasonable times, for the purpose of inspecting the condition of the Demised Premises and for verifying compliance by Tenant with this Lease and all Applicable Requirements, and Landlord shall be entitled to employ experts and/or consultants in connection therewith to advise Landlord with respect to Tenant's activities, including but not limited to Tenant's installation, operation, use, monitoring, maintenance, or removal of any Hazardous Substance on or from the Demised Premises. The costs and expenses of any such inspections shall be paid by the party requesting same, unless a default of this Lease by Tenant or a violation of Applicable Requirements or a contamination, caused or materially contributed to by Tenant, is found to exist or to be inuninent, or unless the inspection is requested or ordered by a governmental authority as the result of any such existing or imminent violation or contamination. In such case, Tenant shall upon request reimburse Landlord or Landlord's Mortgagee, as the case may be, for the costs and expenses of such inspections.

7.         Alteration and Improvements. Tenant shall not make any additions, alterations, improvements or changes ("improvements") in or to the Demised Premises without the prior written approval of Landlord, which approval shall not be unreasonably withheld. In no event shall any consent be granted if Tenant is in default hereunder. Notwithstanding the foregoing, Tenant shall have the right to make improvements without Landlord’s consent where such improvements: (i) are non-structural; (ii) do not affect the electrical, mechanical, plumbing, HVAC or other systems of the building containing the Demised Premises; and (iii) cost no more than One Hundred Thousand Dollars ($100,000) in any calendar year. Any improvements shall be made promptly and in a good and workmanlike manner and in compliance with all insurance requirements and with all applicable permits, authorizations, building regulations, zoning laws and all other governmental rules, regulations, ordinances, statutes and laws, now or hereafter in effect pertaining to the Demised Premises or Tenant's use thereof shall be performed in such manner as not to delay or impose any additional expense upon Landlord in construction, maintenance or operation of the building containing the Demised Premises. Throughout the performance of improvements, Tenant, at its expense, shall carry, or cause to be carried, workers' compensation insurance in statutory limits, and general liability insurance for any occurrence in or about the Demised Premises, of which Landlord and its managing agent shall be named as additional parties insured, in such limits as Landlord may reasonably prescribe. Tenant further covenants and agrees that any mechanic's lien filed against the Demised Premises for work claimed to have been done for, or materials claimed to have been furnished to Tenant, will be discharged by Tenant, by bond or otherwise, within ten (10) days after the filing thereof, at the cost and expense of Tenant.

8.         Liens. Tenant shall at all times indemnify, save, and hold Landlord and the Demised Premises, free, clear and harmless from any claims, liens, demands, charges, encumbrances, litigation and judgments arising directly or indirectly out of any use, occupancy or activity of tenant, or any person or entity holding through or under Tenant or out of any work performed, material furnished, or obligations incurred by Tenant in, upon or otherwise in connection with the Demised Premises, Tenant shall give Landlord written notice at least ten (10) business days prior to the commencement of any such work on the Demised Premises to afford Landlord the opportunity of filing appropriate notices of non-responsibility. Tenant shall, at its sole cost and expense, within fifteen (15) days after filing of any lien of record, obtain the discharge and release thereof. Nothing contained herein shall prevent Landlord, at the cost and for the account of Tenant, from obtaining said discharge and release in the event Tenant fails or refuses to do the same within said fifteen (15) day period,

9.         Landlord's Repairs. Except as set forth herein, Landlord shall have no maintenance, repair or restoration obligations whatsoever under this Lease or otherwise. Tenant expressly waives the benefit of any statute in effect now or in the future which might give Tenant the right to make repairs at the Landlord's expense or to terminate this Lease due to the Landlord's failure to keep the Demised Premises in good order, condition, or repair. Notwithstanding anything to the contrary, Landlord shall, at its cost and expense, be obligated to maintain the roof and structure of the Premises and to make all requisite repairs thereto and restorations thereof, except to the extent that such maintenance, repair or restoration is required as a result of the willful misconduct or negligence of Tenant or any of its personnel, patients, agents, licensees or invitees, in which event the cost of such maintenance, repair or restoration shall be borne by Tenant.

10.      Indemnification. Tenant hereby covenants and agrees to indemnify, save and hold Landlord harmless from any and all liability, loss, expenses (including attorney's fees, judgments, claims, liens and demands of any kind whatsoever) in correction with, (i) Tenant's use of the Demised Premises, or (ii) the conduct of Tenant’s business, or (iii) any activity, work or things done in the Demised Premises, or (iv) any default in the performances of any obligation on Tenant's part to be performed under the terms of the Lease, or (v) any negligence of Tenant, or any of Tenant's agents, contributors or employees. Notwithstanding the foregoing, Tenant shall not be required to defend, save harmless or indemnify Landlord, and Landlord shall indemnify, save and hold harmless Tenant, from any liability for injury, loss, accident or damage to any person is or property resulting from Landlord’s negligence or willful acts or omissions, or those of Landlord's agents, contractors or employees.

11.       Subordination. Tenant agrees upon request of Landlord to subordinate this Lease and its rights hereunder to the lien of any mortgage, deed of trust or other encumbrance, together with any renewal, extensions or replacements thereof, now or hereafter placed, charged or enforced against the Demised Premises, or any portion thereof, or any property of which the Demised Premises is a part, and to execute and deliver at any time, and from time to time, upon demand by Landlord, such documents as may be required to effectuate such subordination, and in the event that Tenant shall fail, neglect or refuse to execute and deliver any such documents to be executed by it, Tenant hereby appoints Landlord, it successors and assigns, the attorney-in-fact of Tenant irrevocably to execute and deliver any and all such documents for and on behalf of Tenant; provided, however, Tenant shall not be required to effectuate such subordination, nor shall Landlord be authorized to effectuate such subordination on behalf of Tenant, unless the mortgagee or beneficiary named in such mortgage, deed of trust, or other encumbrance shall first agree in writing, for the benefit of Tenant, that so long as Tenant is not in default under any of the provisions, covenants or conditions of this Lease on the part of Tenant to be kept and performed, that neither this Lease nor any of the rights to Tenant hereunder shall be terminated or modified or be subject to termination or modification, nor shall Tenant's possession of the Demised Premises be disturbed by proceedings to foreclose said mortgage, deed of trust or other encumbrance. In the event that the mortgagee or beneficiary of any such mortgage or deed of trust elects to have this Lease a prior lien to its mortgage or deed of trust, then and in such event, upon such mortgagee's or beneficiary's giving written notice to Tenant to that effect, this Lease shall be deemed prior in lien to such mortgage or deed of trust, whether this Lease is dated prior to or subsequent to the date of recordation of such mortgage or deed of trust. Tenant shall, in the event any proceedings are brought for the foreclosure of the Demised Premises or in the event of exercise of the power of sale under any deed of trust made by the Landlord covering the Demised Premises, attorn to the purchaser upon any such foreclosure or sale and recognize such purchaser as the Landlord under this Lease.

12.       Estoppel Certificate. Upon Landlord's written request, Tenant shall execute, acknowledge and deliver to Landlord a written statement certifying; (i) that none of the terms or provisions of this Lease have been changed (or if they have been changed, stating how they have been changed); (ii) that this Lease has not been canceled or terminated; (iii) the last date of payment of the Base Rent and other charges and the time period covered by such payment; (iv) that Landlord is not in default under this Lease (or, if Landlord is claimed to be in default, stating why); and (v) such other matters as may be reasonably required by Landlord or the holder of a mortgage, deed of trust or lien to which the Demised Premises is or becomes subject. Tenant shall deliver such statement to Landlord within ten (10) days after Landlord's request, Any such statement by Tenant may be given by Landlord to any prospective purchaser or encumbrancer of the Demised Premises. Such purchaser or encumbrancer may rely conclusively upon such statement as true and correct.

If Tenant does not deliver such statement to Landlord within such ten (10) day period, Landlord, and any prospective purchaser or encumbrancer, may conclusively presume and rely upon the following facts: (i) that the terms and provisions of this Lease have not been changed except as otherwise represented by Landlord; (ii) that this Lease has not been canceled or terminated except as otherwise represented by Landlord; (iii) that not more than one month's Base Rent or other charges have been paid in advance; and (iv) that Landlord is not in default under the Lease. In such event, Tenant shall be estopped from denying the truth of such facts.

13.       Assignment and Subletting. Tenant shall not assign, mortgage, pledge, hypothecate or encumber this Lease nor the leasehold estate hereby created or any interest herein or sublet the Demised Premises or any portion thereof, or license the use of all or any portion of the Demised Premises without prior written consent of the Landlord which consent shall not be withheld: (i) for any sublease, so long as Tenant has not subleased in the aggregate over one-third of the Demised Premises giving effect to such sublease; and (ii) for an assignment, if the proposed assignment is being made to an assignee of good repute with equal or superior credit-worthiness to that of Landlord, and such assignee will only utilize the Demised Premises as an inpatient rehabilitation hospital. Neither the consent by Landlord to any assignment or subletting, nor the act of any such assignment or subletting, shall constitute a waiver of the necessity for such consent to any subsequent assignment or subletting, nor shall it constitute a release of any obligations of Tenant under this Lease. Tenant shall pay all costs, expenses and reasonable attorney’s fees that may be incurred or paid by Landlord in processing, documenting, or administering any request of Tenant for Landlord's consent required pursuant to this Section. If this Lease be assigned, or if the Demised Premises or any part thereof be sublet or occupied by anybody other than Tenant, Landlord may collect rent from the assignee, subtenant or occupant, and apply the net amount collected to the rent herein reserved, but no such assignment, subletting, occupancy or collection shall be deemed a waiver of this covenant, or the acceptance of the assignee, subtenant or occupant as tenant, or a release of Tenant from the further performance by Tenant of covenants on the part of Tenant herein contained.

a.           Assignor Remains Liable. In the absence of an express agreement in writing to the contrary, executed by Landlord, no assignment, mortgage, pledge, hypothecation, encumbrance, subletting or license hereof or hereunder shall act as a release of Tenant from any of the provisions, covenants and conditions of this Lease on the part of Tenant to be kept and

performed.

b.           No Merger. The voluntary or other surrender of this Lease by Tenant, or a mutual cancellation hereof, or the termination of this Lease by Landlord pursuant to any provision contained herein, shall not work a merger, but at the option of Landlord, shall either terminate any or all existing subleases or sub-tenancies, or operate as an assignment to the Landlord of any and all such subleases or sub-tenancies.

14.       Insolvency. It is understood and agreed that neither this Lease nor any interest herein or hereunder, nor any estate hereby created in favor of Tenant, shall pass by operation of law under any state or federal insolvency or bankruptcy act, or any similar law now or hereafter in effect, to any trustee, receiver, assignee for the benefit of creditors, or any other person whomsoever without the express prior written consent of Landlord.

15.       Condemnation. Should the whole or any part of the Demised Premises be condemned or taken by a competent authority for any public or quasi-public purpose, all awards payable on account of such condemnation and taking shall be payable to Landlord, and Tenant hereby waives any and all interest therein. If the whole of the Demised Premises shall be so condemned and taken, then this Lease shall terminate upon such taking. If greater than one-third (1/3) of the floor space of the Demised Premises is condemned or taken, and if the remaining portion thereof will not be reasonably adequate for the operation of Tenant’s business after Tenant completes such repairs or alterations as are necessary to restore such part of the Demised Premises to as near its former condition immediately preceding the taking as the circumstances will permit, either Landlord or Tenant shall have the option of terminating this Lease by notifying the other party hereto of such election in writing within twenty (20) days after such taking. If by such condemnation and taking one-third (1/3) or less of the Demised Premises has been taken, or if a part only of the Demised Premises is taken and the remaining part thereof is suitable for the purposes for which Tenant has leased said premises, this Lease shall continue in full force and effect, and Tenant shall proceed with reasonable diligence to restore such part of the Demised Premises to as near its former condition immediately preceding the taking as the circumstances will permit, but the Base Rent shall be reduced in an amount equal to that proportion of the Base Rent which the floor space of the portion taken bears to the total floor space of the Demised Premises. Landlord shall reimburse Tenant for Tenant’s reasonable restoration costs, to the extent Landlord has recovered same from the condemning authority, within thirty (30) days after Landlord’s receipt of Tenant’s written demand and documentation evidencing the cost of such restoration.

16.       Destruction of Premises. In the case of (i) the total destruction of the Demised Premises or any portion thereof substantially interfering with Tenant's use of the Demised Premises, whether by fire or other casualty, not caused by the default or negligence of Tenant, its agents, employees, servants, contractors, subtenants, licensees, customers or business invitees, or (ii) in the event any mortgagee under a mortgage or beneficiary under a deed of trust hold a lien encumbering the Demised Premises shall require payments of insurance proceeds, or (iii) in the event of a natural uninsured loss to the Demised Premises, Landlord, at its option, may terminate this Lease by notifying Tenant of such termination within ninety (90) days after the date of such casualty. If Landlord does not thus elect to terminate the Lease, Tenant shall repair such damage within 180 days, this Lease shall not terminate, but shall continue in full force and effect. If this Lease is terminated pursuant to this Section and if Tenant is not in default hereunder, rent shall be prorated as of the date of termination, and all rights and obligations hereunder shall cease and terminate.

a.           lease Does Not Terminate If Damage by Tenant. Notwithstanding the foregoing provisions, in the event the Demised Premises, or any portion thereof, shall be damaged by fire or other casualty due to the fault or negligence of Tenant, its agents, employees, servants, contractors, subtenants, licensees, customers or business invitees, then, without prejudice to any other rights and remedies of Landlord, this Lease shall not terminate, the damage shall be repaired by Tenant, and there shall be no apportionment or abatement of any rent.

b.          Insurance Proceeds. All insurance proceeds payable under any fire and extended coverage risk insurance required to be maintained by Tenant pursuant to this Lease shall be payable solely to Landlord or any mortgagee under a mortgage or beneficiary under a deed of trust holding a lien encumbering the Demised Premises (as their respective interests shall appear) to be held and applied to the cost of restoring the Demised Premises, and Tenant shall have no interest therein, except that Tenant shall be entitled to all insurance proceeds payable for the destruction of Tenant's personal property (in no event, however, shall Tenant be entitled to insurance proceeds with respect to destruction of any improvements, betterments or fixtures on the Demised Premises). Tenant shall also deposit with Landlord the amount of any deductible required under any insurance policy covering fire or other casualty. If for any reason any portion of the cost to restore the Demised Premises is not covered by insurance, then Tenant shall pay to Landlord, upon demand, any cost or expense that is not so covered. Such repair and restoration shall be performed by properly insured and licensed contractors, in accordance with plans and specifications approved by Landlord, and shall comply with the requirements of this Lease and all applicable laws, codes and regulations. In the event Landlord is required to pay any portion of such restoration or repair costs, Tenant shall reimburse Landlord therefor, together with interest at twelve percent (12%) per year, within ten (10) days after receiving demand therefor from Landlord. Tenant shall in no case be entitled to compensation for damages on account of any annoyance or inconvenience in making repairs under any provision of this Lease. Neither the rent payable by Tenant nor any of Tenant's other obligations under any provisions of this Lease shall be affected by any damage to or destruction of the Demised Premises or any portion thereof by any cause whatsoever. Notwithstanding anything to the contrary set forth above, if such damage or destruction shall occur during the last two (2) years of the Lease, Tenant shall not be required to repair or restore the Demised Premises, provided that all insurance proceeds and deductibles required to be paid to Landlord above are paid to Landlord, and Tenant shall pay to Landlord all rent and all other sums due under this Lease for the remainder of the Term of this Lease,

c.           Tenant must Notify Landlord of Damage. If Tenant becomes aware of any casualty affecting the Demised Premises, Tenant shall notify Landlord in writing as to the details pertaining to such casualty (so far as known to Tenant) within forty-eight (48) hours after Tenant gains knowledge of such casualty.

17.      Expenditures by Landlord. Whenever under any provision of this Lease, Tenant shall be obligated to make any payment or expenditure, or to do any act or thing, or to incur any liability whatsoever, and Tenant fails, refuses or neglects to perform as herein required, Landlord shall be entitled, but shall not be obligated, to make any such payment or to do any such act or thing, or to incur any such liability, all on behalf of and at the cost and for the account of Tenant. In such event, the amount thereof with interest thereon at the rate of 12% per year or at the maximum rate per annum rate allowed by law, if lower than 12%, at the time and said sum shall constitute and be collectable as additional rent on demand.

18.      Default. Tenant's compliance with each and every covenant and obligation hereof on its part to be performed hereunder is a condition precedent to each and every covenant and obligation of Landlord hereunder. Landlord shall have all the rights and remedies provided in this Section or elsewhere herein, in the event that:

a.             Tenant shall default in the payment or any sum of money required to be paid hereunder and such default continues for ten (10) days after written notice thereof from Landlord to Tenant; or

b.             Tenant shall default in the performance of any other provision, covenant or condition of this Lease on the part of Tenant to be kept and performed and such default continues for twenty (20) days after written notice thereof from Landlord to Tenant; provided, however, that if the default complained of in such notice is of such a nature that the same can be rectified or cured, but cannot with reasonable diligence be done within said thirty (30) day period, then such default shall be deemed to be rectified or cured if Tenant shall, within said thirty (30) day period, commence to rectify and cure the same and shall thereafter complete such rectification and cure with all due diligence, and in any event, within sixty (60) days from the date of giving such notice;

or

c.             Tenant should vacate or abandon the Demised Premises during the Term of this Lease;

d.            There is filed any petition in bankruptcy or the Tenant is adjudicated as a bankrupt or insolvent, or there is appointed a receiver or trustee to take possession of Tenant or of all or substantially all of the assets of Tenant, or there is a general assignment by Tenant for the benefit of creditors, or any action is taken by or against Tenant under any state or federal insolvency or bankruptcy act, or any similar law now or hereafter in effect, including, without limitation, the filing of execution or attachment against Tenant and such levy continues in effect for a period of twenty (20) days.

e.             In the event of a default as designated in this Section or elsewhere herein, in addition to any other rights or remedies provided for herein or at law or in equity, Landlord, at its sole option, shall have the following rights:

(l)          The right to declare the Term of this Lease ended and to reenter the Demised Premises and lake possession thereof, and to terminate all of the rights of Tenant in and to the Demised Premises, or

(2)           The right without declaring the Term of this Lease ended, to reenter the Demised Premises and to occupy the same, or any portion thereof, for or on account of Tenant as hereinafter provided, applying any monies received first to the payment of such expenses as Landlord may have paid, assumed or incurred in recovering possession of the Demised Premises, including costs, expenses of attorney's fees in placing the same in good order and condition, or preparing or altering the same for reletting, and all other expenses, commissions and charges paid, assumed or incurred by Landlord in or in connection with reletting the Demised Premises and then to the fulfillment of the covenants of Tenant. Any such reletting as provided for herein may be for the remainder of the Term of this Lease or for a longer or shorter period. Such reletting shall be for such rent and on such other terms and conditions as Landlord, in its sole discretion, deems appropriate. Landlord may execute any lease made pursuant to the terms hereof either in Landlord's own name or in the name of Tenant, or assume Tenant's interest in and to any existing subleases to any tenant of the Demised Premises, as Landlord may see fit, and Tenant shall have no right or authority whatsoever to collect any rent from such tenants, subtenants, licensees or concessionaires on the Demised Premises. In any case, and whether or not the Demised Premises or any part thereof be relet, Tenant, until the end of what would have been the Term of this Lease in the absence of such default and whether or not the Demised Premises or any part thereof shall have been relet, shall be liable to Landlord and shall pay to Landlord monthly an amount equal to the amount due as rent hereunder, less the net proceeds for said month, if any, of any reletting effected for the account of Tenant pursuant to the provisions of this paragraph, after deducting all of Landlord's expenses in connection with such reletting, including, without limitation, all repossession costs, brokerage commissions, legal expenses, attorney's fees, expenses of employees, alteration costs, and expenses of preparation for such reletting (all said costs are cumulative and shall be applied against proceeds of reletting until paid in full), or

(3)           The right, even though it may have relet all or any portion of the Demised Premises in accordance with the provisions of subparagraph (2) of this section, to thereafter at any time elect to terminate this Lease for such previous default on the part of Tenant, and to terminate all of the rights of Tenant in and to the Demised Premises. Pursuant to said rights of reentry, Landlord may remove all persons from the Demised Premises and may, but shall not be obligated to, remove all property therefrom, and may, but shall not be obligated to, enforce any rights Landlord may have against said property or store the same in any public or private warehouse or elsewhere at the cost and for the account of Tenant or the owner or owners thereof. Tenant agrees to hold Landlord free, and harmless of any liability whatsoever for the removal and/or storage of any such property, whether of Tenant or any third party whomsoever. Anything contained herein to the contrary notwithstanding, Landlord shall not be deemed to have terminated this Lease or the liability of Tenant to pay any rent or other sum of money thereafter to accrue hereunder, or Tenant's liability for damages under any of the provisions hereof, by any such reentry, or by any action in unlawful detainer or otherwise to obtain possession of the Demised Premises, unless Landlord shall have specifically, with reference to this Section, notified Tenant in writing that it has so elected to terminate this Lease. Tenant covenants and agrees that the service by Landlord pursuant to such notice shall not (unless Landlord elects to the contrary at the time of, or at any time subsequent to, the service of such notice thereof to Tenant) be deemed to be a termination of this Lease or the termination of any liability of Tenant hereunder to Landlord.

f.             No Waiver, The waiver by Landlord of any default or breach of any of the provisions, covenants or conditions hereof on the part of Tenant to be kept and performed shall not be a waiver of any preceding or subsequent breach of the same or any other provision, covenant or condition contained herein. The subsequent acceptance of rent or any other payment hereunder by Tenant to Landlord shall not be construed to be a waiver of any preceding breach by Tenant of any provision, covenants or condition of this Lease other than the failure of Tenant to pay the particular rental or other payment or portion thereof so accepted, regardless of Landlord's knowledge of such preceding breach at the time of acceptance of such rental at other payment. No payment by Tenant or receipt by Landlord of a lesser amount than the rent herein provided shall be deemed to be other than on account of the earliest rent due and payable hereunder, nor shall any endorsement or statement on any check or any letter accompanying any check or payment as rent be deemed an accord and satisfaction, and Landlord may accept any such check or payment without prejudice to Landlord's right to recover the balance of such rent or pursue any other remedy provided in this Lease. This paragraph may not be waived.

19.       Quiet Possession. Tenant, upon paying the rentals and other payments herein required from Tenant, and upon Tenant's performance of all of the provisions, covenants and conditions of this Lease on its part to be kept and performed, may quietly have, hold and enjoy the Demised Premises during the Term of this Lease without any disturbance from Landlord or from any other person claiming through Landlord, however, Landlord and its agents shall have free access to the Demised Premises for the purpose of examining them and Tenant's compliance with this Lease and exhibit them to prospective purchasers and prospective tenants.

20.       Sale by Landlord, In the event of any sale or exchange of the Demised Premises by Landlord, Landlord shall be and is hereby relieved of all liability under any and all of its covenants and obligations contained in or derived from this Lease, arising out of any act, occurrence or omission relating to the Demised Premises occurring after the consummation of such sale or exchange. Tenant agrees to attorn to such purchaser or grantee.

21.      Default by Landlord. It is agreed that in the event Landlord fails or refuses to perform any of the provisions, covenants or conditions of this Lease on Landlord's pari to be kept or performed, that Tenant, prior to exercising any right or remedy Tenant may have against Landlord on account of such default, shall give a twenty (20) day written notice to Landlord of such default, specifying in said notice the default with which Landlord is charged. Notwithstanding any other provision hereof, Tenant agrees that if the default complained of in the notice provided for by this Section is of such a nature that the same can be rectified or cured by Landlord, but cannot with reasonable diligence be reclined or cured within said twenty (20) day period, then such default shall be deemed to be rectified or cured if Landlord within said twenty (20) day period shall commence the rectification and curing thereof and shall continue thereafter with all due diligence to cause such rectification and curing to proceed and so does complete the same, with the use of diligence as aforesaid. The liability of Landlord to Tenant for any default by Landlord under the terms of this Lease shall be limited to the lesser of: (i) the interest of Landlord in the Demised Premises; or (ii) the interest Landlord would have in the Demised Premises if the Demised Premises were encumbered by third party debt in an amount equal to eighty percent (80%) of the value of the Demised Premises (as such value is determined by Landlord) and Tenant agrees to look solely to such amount for recovery of any judgment from Landlord, it being intended that Landlord shall not be personally liable for any judgment or deficiency.

22.      Force Majeure. Whenever a day is appointed herein on which, or a period of time is appointed in which, either party hereto is required to do or complete any act, matter, or thing, the time for the doing or completion thereof shall be extended by a period of time equal to the number of days on or during which such party is prevented from, or is unreasonably interfered with, the doing or completion of such act, matter or things because of labor disputes, civil commotion, war, warlike operation, sabotage, governmental regulations or control, fire or other casualty, inability to obtain any materials, or to obtain fuel or energy, weather or other acts of God, or other causes beyond such party's reasonable control (financial inability excepted), provided, however, that nothing contained herein shall excuse Tenant from the prompt payment of any rent or charge required of Tenant hereunder.

23.      Notices. Any and all notices and demands by or from Landlord to Tenant, or by or from Tenant to Landlord, required or desired to be given hereunder shall be in writing and shall be validly given or made if served either personally or if deposited in the United States mail, certified or registered postage prepaid, return receipt requested. If such notice or demand be served by registered or certified mail in the manner provided herein, service shall be conclusively deemed given three (3) days after mailing or upon receipt, whichever is sooner.

a.             Notice to landlord. Any notice or demand to Landlord shall be addressed to Landlord at the address listed on the signature page of this Lease.

b.            Notice to Tenant. Any notice or demand to Tenant shall be addressed to Tenant at the address listed on the signature page of this Lease.

c.            Change of Address. Any party herein may change its address for the purpose of receiving notices or demands as herein provided by a written notice given in the manner aforesaid to the other party hereto.

24.       Brokers. Tenant warrants that it has had no dealings with any broker or agent in connection with this Lease, and covenants to pay, hold harmless and indemnify Landlord from and against any and all cost, expense or liability for any compensation, commissions and charges claimed by any broker or agent with respect to this Lease or the negotiations thereof.

25.       Work Prior to Opening.

a.            Landlord's Work. At Landlord's cost and expense, Landlord shall cause the Demised Premises to be constructed in substantial accordance with plans and specifications prepared or to be prepared by Landlord's architect. Said construction shall include all work described in Exhibit B attached hereto and incorporated herein by reference ("Landlord's Work"). Landlord shall use reasonable efforts to substantially complete Landlord's Work as soon as is practicable.

b.           Tenant's Work.

(1)          Landlord shall also perform all work described in Exhibit C attached hereto ("Tenant's Work"). All such Tenant's Work shall be promptly and diligently completed in accordance with the terms of this Section 25, and in strict compliance with zoning, building and other applicable codes, laws and ordinances. The cost of Tenant's Work shall be borne by Landlord and/or Tenant as follows: Landlord shall pay for the initial $85 per square foot (i.e. an aggregate of $4,250,000) of Tenant's Work ("Landlord's Contribution ") and Tenant shall, in accordance with such timing and procedures as Landlord may reasonably designate, pay all sums in excess thereof.

(2)          Tenant shall promptly famish Landlord with proof that Tenant has: (i) complied with Landlord's timing and procedures with respect to the funding of its share of the costs of Tenant's Work; and (ii) deposited into an account under Landlord's control (the "Tenant's Construction Contribution Account") the entire amount Tenant reasonably estimates is necessary to perform Tenant's Work (the "Tenant's Contribution Funds"), co-terminus with application of Landlord's Contribution. The Tenant's Contribution Funds shall be used solely to pay for the construction and performance of the Tenant's Work pursuant to this Lease. Tenant agrees that if an "Event of Default" occurs under this Lease, or if Landlord elects to do so in connection with performing Tenant's Work as set forth in Section 25(b)(1) above, Landlord may:

(A)         Enter upon the Demised Premises and take possession of any materials or equipment, and construct, perform and complete the Tenant's Work, at the risk and expense of Tenant. Landlord shall have the right at any time to discontinue work commenced by it in respect of the Tenant's Work or to change any course of action undertaken and shall not be bound by any limitations or requirements of time. In connection with any construction of the Tenant's Work undertaken, Landlord may (i) engage contractors, engineers and others for the purpose of furnishing labor, materials and equipment in connection with any construction of the Tenant's Work, (ii) cause to be paid, settled or compromised, out of the Tenant's Construction Contribution Account, all bills or claims which may become liens against the Demised Premises or the Tenant's Work, or which have been or may be incurred in connection with the construction, completion and/or performance of the Tenant's Work or for the discharge of liens, encumbrances or defects in the title of the Demised Premises or the Tenant's Work, and (iii) take such action or refrain from acting under this Lease as Landlord may in its sole discretion from time to time determine without limitation.

(B)         Employ watchmen at Tenant's expense, out of the Tenant's Construction Contribution Account, to protect the Tenant's Work, including any building materials stored on the Demised Premises, from depreciation or injury,

(C)         For the purpose of carrying out this Section 25 and exercising these rights, powers and privileges, Tenant hereby irrevocably constitutes and appoints Landlord as its true and lawful attorney-in-fact to execute, acknowledge and deliver any instruments and do and perform any acts such as are referred to in this Section 25 in the name and on behalf of Tenant.

(D)         Exercise any other remedies provided under this Lease or applicable law or in equity, any and/or all of which remedies Landlord may exercise concurrently or consecutively at any time.

(3)          At such time as Landlord or Tenant shall have received the requisite approvals from any municipality or governmental agency having jurisdiction over the completion of the Tenant's Work, such party hereto shall provide such documentation to the other party hereto.

(4)          The provisions of this Section 25 shall survive any termination of this Lease.

(5)          "Tenant's Plans," prepared in conformity with Exhibit C attached hereto, and containing a layout for Tenant's intended use of the Demised Premises and exterior sign drawing, are included in the Building Plans in Exhibit B.

(6)          Tenant shall not install any fixtures or equipment which can exceed the capacity of any utility facilities serving the Demised Premises. Any additional utility facilities required in connection with any equipment installed by Tenant shall be installed at Tenant's expense and shall comply with all applicable code requirements and with plans and specifications which are approved in writing by Landlord.

26.      Miscellaneous Additional Provisions.

a.           Captions. The captions appearing at the commencement of the sections hereof are descriptive only and for convenience in reference to this Lease and in no way whatsoever define, limit or describe the scope or intent of this Lease, nor in any way affect this Lease.

b.          Remedies Cumulative. The various rights, options, elections and remedies of Landlord contained in this Lease shall be cumulative and no one of them shall be construed as exclusive of any other, or of any right, priority or remedy allowed or provided for by law and not expressly waived in this Lease.

c.           Successors and Assigns. Subject to the provisions restricting assignment, the terms, provisions, covenants and conditions contained in this Lease shall apply to, bind and inure to the benefit of the heirs, executors, administrators, legal representatives, successors and permitted assigns of Landlord and Tenant, respectively.

d.           Partial Invalidity, If any term, provision, covenant or condition of this Lease, or any application thereof, should be held by a court of competent jurisdiction to be invalid void or unenforceable, all provisions, covenants and conditions of this Lease, and all applications thereof, not held invalid, void or unenforceable, shall continue in full force and effect and shall in no way be affected, impaired or invalidated thereby.

e.           Time of the Essence. Time is of the essence of this Lease and all of the terms, provisions, covenants and conditions hereof.

f.            Entire Agreement. This Lease contains the entire agreement between the parties and cannot be changed or terminated orally.

g.           No Partnership. Nothing contained in this Lease shall be deemed or construed by the parties hereto or by any third party to create the relationship of principal and agent or of partnership or of joint venture or of any association between Landlord and Tenant. Neither the method of computation of rent nor any other provisions contained in this Lease nor any acts of the parties hereto shall be deemed to create any relationship between Landlord and Tenant other than the relationship of Landlord and Tenant.

h.          Attorney's Fees and Costs, In any action brought by Landlord to enforce any of its rights under or arising from this Lease, Landlord shall be entitled to receive its cost and legal expenses including reasonable attorney's fees, whether such action is prosecuted to judgment or not The parties hereto shall And they hereby do waive trial by jury in any action, proceeding or counterclaims brought by either of the parties hereto against the other on any matters whatsoever arising out of or in any way connected with this Lease, the relationship of landlord and tenant, Tenant's use or occupancy of the Demised Premises, and/or any claim of injury or damage. In the event Landlord commences any proceedings for nonpayment of rent, Tenant will not interpose any counterclaim of whatever nature or description in any such proceedings. This shall not, however, be construed as a waiver of the Tenant's rights to assert such claims in any separate action or actions brought by Tenant. The parties hereto covenant and agree that Landlord shall have no duty to mitigate damages arising in any way out of Tenant's failure to comply with any term, condition, covenant or agreement of this Lease.

i.            Number and Gender, Masculine or feminine pronouns shall be substituted for the neuter form and vice versa, and the plural shall be substituted for the singular form and vice versa, in any place or places herein in which the context requires such substitution or substitutions.

j.           Governing Law, The laws of the State of Nevada shall govern the validity, construction, performance and effect of this Lease, exclusive of the conflict of laws provisions thereof.

k.          Joint Liability of All Tenants. In the event Tenant now or hereafter shall consist of more than one person, firm or corporation, then and in such event, all such persons, firms or corporations shall be jointly and severally liable as Tenant hereunder.

l.            No Lease until Signed by the Parties. The submission of this Lease for examination does not constitute a reservation of or option for the Demised Premises and this Lease becomes effective as a Lease only upon execution and delivery thereof by Landlord and Tenant.

m.          Tenant must Advise Landlord of Matters Affecting Title, Should any claim or lien be filed against the Demised Premises, or any action or proceeding be instituted affecting the title to the Demised Premises, tenant shall give Landlord written notice thereof as soon as Tenant obtains knowledge thereof.

n.          Lease Construed According to its Terms, Although the printed provisions of those Lease were drawn by Tenant, this Lease shall not be construed either for or against Landlord or Tenant, but this Lease shall be interpreted in accordance with the general tenor of its language.

o.         Acknowledgment of Independent Advice. Each party whose signature appears below acknowledges that he has read all of the provisions of the foregoing agreement, understands them, has sought independent advice regarding the legal effect of the provisions herein, and agrees to be bound by said provisions.

p.          Warranty. In the event Tenant shall consist of a corporation, the officer signing this agreement for such corporation shall deliver to Landlord, on or before the date of execution of this Lease, a Resolution of the Board of Directors of such corporation approving this Lease and authorizing execution of this Lease by the above-described officer of the corporation.

q.          Waiver. No course of dealing or delay between the parties shall operate as a waiver of the rights of any party to this Lease. No default, covenant or condition of this Lease may be waived other than in writing.

r.           Counterparts. This Lease may be executed in facsimile form and in one or more counterparts, and by the different parties hereto on separate counterparts, each of which shall be deemed an original, but all of which shall constitute one and the same Lease.

IN WITNESS WHEREOF, the parties hereto have executed this Lease the day and year first written above.

EXHIBIT A

SITE PLAN

EXHIBIT B

BUILDING SHELL & TENANT IMPROVEMENTS

EXHIBIT C

DESCRIPTION OF TENANT'S WORK

TENANT'S WORK - The following work is required to be completed, placing the Demised Premises in finished condition, ready to open for business, by Landlord at Tenant's and/or Landlord's expense as set forth in Section 25(b)(1) above. Tenant's Work shall be in accordance with the following:

All of Tenant's Work shall be governed in all respect by, and be subject to, the following:

Providing and installing all tenant improvements per plans.

All furnishings, trade fixtures, equipment, signs, and related parts, including installation. Location and design of all signs subject to prior written consent of Landlord.

Landlord reserves the right to require changes in Tenant's Work when necessary by reason of code requirements. Tenant shall maintain the Demised Premises and make all repairs thereto, other than repair of the foundation, roof and structural portions of the walls.

EXHIBIT D

TENANT'S PLANS

AMENDMENT NO. 1

FIRST AMENDMENT TO THE LEASE dated JANUARY 30, 3006 by and between LVRH PROPERTIES LLC, a Nevada limited-liability company ("Landlord") and LAS VEGAS REHABILITATION HOSPITAL, a Nevada limited-liability company ("Tenant") with respect to the demise by Landlord to Tenant of that certain premises described as 9175 W. Oquendo Road, Las Vegas, Nevada and shown on the Site Plan attached as Exhibit A hereto, (all of such premises collectively, the "Demised Premises ").

Landlord has agreed to the following changes:

AMENDMENT NO. 2

SECOND AMENDMENT TO THE LEASE dated JANUARY 30, 2006 by and between LVRH PROPERTIES LLC, a Nevada limited-liability company ("Landlord") and LAS VEGAS REHABILITATION HOSPITAL, a Nevada limited-liability company ("Tenant") with respect to the demise by Landlord to Tenant of that certain premises described as 9175 W. Oqaendo Road, Las Vegas, Nevada and shown on the Site Plan attached as Exhibit A hereto, (all of such premises collectively, the "Demised Premises ").

Landlord has agreed to the following changes:

AMENDMENT NO. 3

THIRD AMENDMENT TO THE LEASE dated JANUARY 30, 2006 by and between LVRH PROPERTIES LLC, a Nevada limited-liability company ("Landlord") and LAS VEGAS REHABILITATION HOSPITAL, a Nevada limited-liability company ("Tenant") with respect to the demise by Landlord to Tenant of that certain premises described as 9175 W. Oquendo Road, Las Vegas, Nevada and shown on the Site Plan attached as Exhibit A hereto, (all of such premises collectively, the "Demised Premises ").

Landlord has agreed to the following changes:

AMENDMENT NO. 4

THIRD AMENDMENT TO THE LEASE dated JANUARY 30, 2006 by and between LVRH PROPERTIES LLC, a Nevada limited-liability company ("Landlord") and LAS VEGAS REHABILITATION HOSPITAL, a Nevada limited-liability company ("Tenant") with respect to the demise by Landlord to Tenant of that certain premises described as 9175 W, Oquendo Road, Las Vegas, Nevada and shown on the Site Plan attached as Exhibit A hereto, (all of such premises collectively, the "Demised Premises ").

Landlord has agreed to the following changes:

Attachment (1)

Lease Discount Periods

Lease Discount Periods

At end of 1st Term (2017) additional rent is terminated

* Note - Additional rent only payable from hospital quarterly cash flow greater than 1.5 times lease payments.

-Additional rent not subject to 3% increase.

Attachment (2)

* increase rent by $10,759 per month per lease modification * rate change each April

Exhibit 10.2

COBALT SURPRISE INPATIENT REHABILITATION FACILITY

SURPRISE, ARIZONA

LEASE AGREEMENT

DATED AS OF DECEMBER 30, 2015

BY AND BETWEEN

CHP SURPRISE AZ REHAB OWNER, LLC,

A DELAWARE LIMITED LIABILITY COMPANY

AS LANDLORD,

AND

COBALT REHABILITATION HOSPITAL IV, LLC

A TEXAS LIMITED LIABILITY COMPANY,

AS TENANT

TABLE OF CONTENTS

TABLE OF EXHIBITS

LEASE AGREEMENT

This LEASE AGREEMENT (this “Lease”) is entered into as of December 30, 2015 (the “Effective Date”) by and between CHP SURPRISE AZ REHAB OWNER, LLC, a Delaware limited liability company, as landlord (“Landlord”) and COBALT REHABILITATION HOSPITAL IV, LLC, a Texas limited liability company, as tenant (“Tenant”).

WITNESSETH:

WHEREAS, CHP PARTNERS, LP, a Delaware limited partnership (“CNL”), entered into that certain Asset Purchase Agreement with SURPRISE REHAB, LP, a Texas limited partnership (“Seller”), dated as of June 17, 2015 (as may be amended, the “Purchase Agreement”), with respect to the purchase of certain real and personal property described therein; and

WHEREAS, CNL assigned to Landlord, an Affiliate of CNL, all of its rights, title and interest in and to the Purchase Agreement with respect to the Leased Property (these and other capitalized terms used and not otherwise defined herein having the meanings ascribed to such terms in Article 1), and Landlord has assumed all of CNL’s obligations thereunder; and

WHEREAS, pursuant to the Purchase Agreement, Landlord has acquired the Leased Property as of the Effective Date; and

WHEREAS, Landlord desires to lease to Tenant all of Landlord’s interests in the Leased Property, and Tenant desires to lease from Landlord all of Landlord’s interests in the Leased Property, all subject to and conditioned upon the terms and conditions herein set forth.

NOW, THEREFORE, in consideration of the mutual covenants herein contained and other good and valuable consideration, the mutual receipt and legal sufficiency of which are hereby acknowledged, Landlord and Tenant hereby agree as follows:

ARTICLE 1

DEFINITIONS

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

“Accessibility Laws” shall mean all applicable laws, statutes, regulations, rules, ordinances, codes, licenses, permits and orders, from time to time in existence, of all courts of competent jurisdiction and Government Agencies, and all applicable judicial and administrative and regulatory decrees, judgments and orders, including common law rulings and determinations, relating to accessibility for the disabled or handicapped, including, but not limited to, any applicable provisions of The Architectural Barriers Act of 1968, The Rehabilitation Act of 1973, The Fair Housing Act of 1988, The Americans With Disabilities Act, the accessibility code(s), if any, of the State in which the Leased Property is located, and all regulations and guidelines promulgated under any all of the foregoing, as the same may be amended from time to time.

“Accounting Period” shall mean each calendar month beginning on the first day of the month and ending on the last day of such month. Notwithstanding the foregoing, if the Effective Date is other than the first day of a calendar month, then the first (1st) Accounting Period under this Lease shall begin on the Effective Date and end on the last day of the first full calendar month thereafter.

“Additional Charges” shall have the meaning given such term in Section 3.3.

“Affiliate” shall mean, with respect to any Person, (i) any Person directly or indirectly Controlling, Controlled by or under common Control with any such Person, (ii) in the case of any such Person which is a partnership, any partner in such partnership, (iii) in the case of any such Person which is a limited liability company, any member of such company, (iv) in the case of any such Person which is a corporation, any officer, director or stockholder of such corporation, (v) any other Person which is a Parent, a Subsidiary, or a Subsidiary of a Parent with respect to such Person or to one or more of the Persons referred to in the preceding clauses (i) through (iv), (vi) any other Person who is an officer, director, trustee or employee of, or partner in, such Person or any Person referred to in the preceding clauses (i) through (v) and (vii) any other Person who is a member of, or trustee of any trust for the benefit of, the Immediate Family of such Person or of any Person referred to in the preceding clauses (i) through (vi); provided, however, a Person shall not be deemed to be an Affiliate solely by virtue of the ownership of shares of stock registered under the Securities Act of 1934, as amended, unless such Person, as holder of such stock, is required to file a Schedule 13-D, pursuant to Section 13(d) of such Act and Rule 13-d-1 promulgated thereunder.

“After-Acquired Intellectual Property” shall have the meaning given such term in Section 20.6.1.

“Applicable Laws” shall mean all applicable laws, statutes, regulations, rules, ordinances, codes, licenses, permits and orders, from time to time in existence, of all courts of competent jurisdiction and Government Agencies, all Legal Requirements and all applicable judicial and administrative and regulatory decrees, judgments and orders, including common law rulings and determinations of any kind, including without limitation, those relating to (i) damage to, or the protection of, real or personal property, (ii) human health and safety (except those requirements which, by definition, are solely the responsibility of employers), (iii) the Environment, including, without limitation, all valid and lawful requirements of courts and other Government Agencies pertaining to reporting, licensing, permitting, investigation, remediation and removal of underground improvements (including, without limitation, treatment or storage tanks, or water, gas or oil wells), or emissions, discharges, releases or threatened releases of Hazardous Substances, chemical substances, pesticides, petroleum or petroleum products, pollutants, contaminants or hazardous or toxic substances, materials or wastes whether solid, liquid or gaseous in nature, into the Environment, or relating to the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of Hazardous Substances, underground improvements (including, without limitation, treatment or storage tanks, or water, gas or oil wells), or pollutants, contaminants or hazardous or toxic substances, materials or wastes, whether solid, liquid or gaseous in nature, (iv) Accessibility Laws, (v) securities, including, without limitation, the marketing thereof, (vi) inpatient rehabilitation facility licensure or (vii) participation in Medicare or Medicaid programs.

“Additional Appraiser” shall have the meaning given to such term in Section 3.2.4.

“Approved Appraisers” shall have the meaning given to such term in Section 3.2.4.

“Approved Reserve Budget” shall have the meaning given such term in Section 5.2.3.

“Business” means the operation of the Facility and other activities related thereto.

“Business Day” shall mean any day other than Saturday, Sunday, or any other day on which federal banking institutions are authorized by law or executive action to close.

“Claim” shall have the meaning given such term in Section 14.4.

“CNL” shall have the meaning given such term in the Recitals.

“Code” shall mean the Internal Revenue Code of 1986 and, to the extent applicable, the Treasury Regulations promulgated thereunder, each as amended from time to time.

“Compete” shall have the meaning given such term in Section 21.27.

“Compliant Coverage” shall mean that Tenant has achieved and maintained: (i) during the First Compliance Period, both a 1.3x Rent Coverage Ratio and a 1.3x Fixed Charge Coverage Ratio, and (ii) during the Second Compliance Period, both a 1.75x Rent Coverage Ratio and a 1.75x Fixed Charge Coverage Ratio.

“Condemnation” shall mean (a) the exercise of any governmental power with respect to the Leased Property or any interest therein, whether by legal proceedings or otherwise, by a Condemnor under its power of condemnation, (b) a voluntary sale or transfer of the Leased Property, or any portion thereof, by Landlord to any Condemnor, either under threat of condemnation or while legal proceedings for condemnation are pending, or (c) a taking or voluntary conveyance of all or part of the Leased Property, or any interest therein, or right accruing thereto or use thereof, as the result or in settlement of any condemnation or other eminent domain proceeding affecting the Leased Property, whether or not the same shall have actually been commenced.

“Condemnor” shall mean any public or quasi-public authority, or Person having the power of Condemnation.

“Confidential Information” shall have the meaning given such term in Section 21.24.

“Control” (including the correlative meanings of the terms “Controlling”, “Controlled by”, and “under common control with”) as used with respect to any Person, shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management policies of such Person whether through the ownership of voting securities, by contract or otherwise.

“Covered Person” shall have the meaning given such term in Section 21.27.

“CPI Index” shall mean the Consumer Price Index for the county in which the Facility is located, all urban consumers, all items, published by the Bureau of Labor Statistics, United States Department of Labor, 1982-84 = 100 (or any successor index).

“Default” shall mean any event or condition existing which with the giving of notice and/or lapse of time would ripen into an Event of Default.

“Deferred Rent Amount” shall mean an amount equal to five (5) months Rent due during the first Fiscal Year of the Term.

“Deferred Rent Date” shall mean the date which is five (5) months after the Effective Date.

“EBITDAR” shall mean Tenant’s earnings (as set forth in the quarterly financial statements delivered pursuant to Section 17.2), before deductions for interest, taxes, depreciation, amortization and payment of Rent under this Lease, based on the time period for which it is being measured.

“Effective Date” shall have the meaning given such term in the introductory paragraph of this Lease.

“Emergency” shall have the meaning given such term in Section 5.2.3.

“Entity” shall mean any corporation, general or limited partnership, limited liability company, limited liability partnership, stock company or association, joint venture, association, company, trust, bank, trust company, land trust, business trust, cooperative, any government or agency or political subdivision thereof or any other association or entity.

“Environment” shall mean soil, surface waters, ground waters, land, streams, sediments, surface or subsurface strata and ambient air.

“EP” means an independent, qualified, licensed and insured environmental professional.

“Escrow Agreement” shall mean that certain agreement attached hereto as Exhibit I pursuant to which Fidelity National Title Insurance Company is holding agreed upon amounts to provide for the payment of the Speculative Builder Tax.

“Event of Default” shall have the meaning given such term in Section 12.1.

“Extended Term” shall have the meaning given such term in Section 2.6.

“Extension Option(s)” shall have the meaning given such term in Section 2.6.

“Facility Mortgage” shall have the meaning given such term in Section 19.1.

“Facility” means the inpatient rehabilitation facility known as Cobalt Surprise Inpatient Rehabilitation Facility located on the Land.

“Facility Purchase Price” shall mean Twenty Three Million Six Hundred Sixty Thousand Dollars ($23,660,000.00).

“First Compliance Period” shall mean the period beginning on the Effective Date and terminating on the date which is twenty-four (24) months thereafter.

“Fiscal Quarter” shall mean the first, second, third and fourth three-month period (each consisting of three (3) Accounting Periods) during each Fiscal Year. Notwithstanding the foregoing, the first (1st) Fiscal Quarter under this Lease shall begin on the Effective Date and end on the last day of the first full Fiscal Quarter thereafter.

“Fiscal Year” shall mean each fiscal year of Tenant, each such fiscal year to consist of twelve (12) consecutive Accounting Periods, beginning on January 1 and ending on December 31. Notwithstanding the foregoing, the first (1st) Fiscal Year under this Lease shall begin on the Effective Date and end on December 31, 2016 and the last Fiscal Year of this Lease shall begin on January 1 of such year and end on the last day of the Term. If Tenant shall, for a bona fide business reason, change its Fiscal Year during the Term, appropriate adjustments, if any, shall be made with respect to the timing of certain accounting and reporting requirements of this Lease; provided, however, that in no event shall any such change or adjustment increase or reduce any monetary obligation under this Lease.

“Fixed Charge Coverage Ratio” shall mean, for a given period or interval during the Term, the ratio of Tenant’s EBITDAR to the sum of: (i) the Minimum Rent due under the Lease, (ii) other rents and lease payments of Tenant due to other parties, (iii) interest and principal payments on Indebtedness of Tenant, and (iv) capital expenditures of Tenant not financed or leased during such period or interval.

“Force Majeure Event” means any circumstance which is not within the reasonable control of either party hereto, caused by any of the following: strikes; lockouts; acts of God; civil commotion; fire or any other casualty; governmental action; or other similar cause or circumstance which is not within the reasonable control of either party hereto. Neither lack of financing nor general economic and/or market conditions or factors is a Force Majeure Event.

“GAAP” shall mean generally accepted accounting principles consistently applied.

“Government Agencies” shall mean any legislative body, court, agency, authority, board (including, without limitation, health and long term care, environmental protection, planning and zoning), bureau, commission, department, office or instrumentality of any nature whatsoever of any governmental or quasi-governmental unit of the United States or the State or any county or any political subdivision of any of the foregoing, whether now or hereafter in existence, having jurisdiction over Tenant or the Leased Property or any portion thereof, or the Business operated thereon.

“Gross Revenues” shall mean, for a given period or interval, all gross revenues and receipts of every kind derived by or for the benefit of Tenant or its Affiliates from operating or causing the operation of the Leased Property and all parts thereof, including, but not limited to: gross revenues from both cash and credit transactions (after reasonable deductions for bad debts and discounts for prompt or cash payments and refunds) from rental or subleasing of every kind; entrance fees, fees for health care and personal care services, license, lease and concession fees and rentals, off premises catering, if any, and parking (not including gross receipts of licensees, lessees and concessionaires); gross revenues from vending machines; health club membership fees; food and beverage sales; wholesale and retail sales of merchandise (other than proceeds from the sale of furnishings, fixtures and equipment no longer necessary to the operation of the Facility, which shall be deposited in the Reserve) and service charges, to the extent not distributed to employees at the Facility as gratuities, interest income except as specifically provided below, community fees, and deposits forfeited, all as determined in accordance with GAAP on an accrual basis; provided, however, that Gross Revenues shall not include the following: gratuities to Facility employees; federal, state or municipal excise, sales, occupancy, use or similar taxes collected directly from residents or included as part of the sales price of any goods or services; insurance proceeds (except for business interruption insurance proceeds); any proceeds from any sale of the Leased Property or from the refinancing of any debt encumbering the Leased Property; proceeds from the disposition of furnishings, fixture and equipment no longer necessary for the operation of the Facility; and interest which accrues on amounts deposited in the Reserve.

“Guarantor” shall mean the guarantor(s) under the Guaranty, which shall be Cobalt Rehabilitation Hospitals, LLC, or any successor thereto as permitted pursuant to the terms of the Guaranty.

“Guaranty” shall mean that certain Guaranty Agreement dated as of the Effective Date and attached hereto as Exhibit B, executed by Guarantor in favor of Landlord with respect to Tenant’s obligations under this Lease, as the same may be amended.

“Hazardous Substances” shall mean any substance:

(a)          the presence of which requires or may hereafter require notification, investigation or remediation under any federal, state or local statute, regulation, rule, ordinance, order, action or policy; or

(b)          which is or becomes defined as a “hazardous waste”, “hazardous material” or “hazardous substance” or “pollutant” or “contaminant” under any present or future federal, state or local statute, regulation, rule or ordinance or amendments thereto including, without limitation, the Comprehensive Environmental Response, Compensation and Liability Act (42 U.S.C. et seq.) and the Resource Conservation and Recovery Act (42 U.S.C. Section 6901 et seq.) and the regulations promulgated thereunder; or

(c)          which is toxic, explosive, corrosive, flammable, infectious, radioactive, carcinogenic, mutagenic or otherwise hazardous and is or becomes regulated by any governmental authority, agency, department, commission, board, agency or instrumentality of the United States, any state of the United States, or any political subdivision thereof; or

(d)          the presence of which on the Leased Property causes or materially threatens to cause an unlawful nuisance upon the Leased Property or to adjacent properties or poses or materially threatens to pose a hazard to the Leased Property or to the health or safety of persons on or about the Leased Property, including without limitation molds/microbial organisms which affect health, indoor air quality and/or structural integrity; or

(e)          without limitation, which contains gasoline, diesel fuel or other petroleum hydrocarbons or volatile organic compounds; or

(f)           without limitation, which contains polychlorinated biphenyls (PCBs) or asbestos or urea formaldehyde foam insulation; or

(g)          without limitation, which contains or emits radioactive particles, waves or material; or

(h)          without limitation, which constitutes materials which are now or may hereafter be subject to regulation pursuant to the Material Waste Tracking Act of 1988, or any Applicable Laws promulgated by any Government Agencies.

“Immediate Family” shall mean, with respect to any individual, such individual’s spouse, parents, brothers, sisters, children (natural or adopted), stepchildren, grandchildren, grandparents, parents in law, brothers-in-law, sisters-in-law, nephews and nieces.

“Improvement Project” shall have the meaning given such term in Section 5.3.

“Incident” shall have the meaning given such term in Section 20.3.

“Indebtedness” shall mean all obligations, contingent or otherwise, which in accordance with GAAP should be reflected on the obligor’s balance sheet as liabilities.

“Initial Annual Lease Amount” shall mean an amount equal to: (i) the sum of (A) Facility Purchase Price, plus (B) the Speculative Builder Tax Claim Amount, divided by (ii) an amount equal to 1 divided by 0.0775 (~12.903225).

“Initial Landlord P&E” shall mean and refer to all P&E of any kind or description which are owned by Landlord and located on the Land as of the Effective Date, including, without limitation, those items enumerated on Exhibit G attached hereto and made a part hereof, but specifically excluding items of Tenant’s Personal Property.

“Initial Term” shall have the meaning given such term in Section 2.5.

“Intellectual Property” means all works of authorship, including without limitation, all literary works, pictorial, graphic and sculptural works, architectural works, software, works of visual art, and any other work that may be the subject matter of copyright protection and all worldwide registrations thereof; any trademarks, service marks, brand names, trade dress, trade names, designs and any other word, symbol, device, product configuration, slogan or any combination thereof used to distinguish or identify goods or services that may be the subject matter of trademark protection, including all worldwide applications and registrations therefore and associated goodwill; any patents, invention disclosures or inventions, including all processes, machines, manufactures and compositions of matter, designs and any other invention that may be the subject matter of patent protection, and all worldwide statutory or other legal protection obtained or obtainable therein, including without limitation all published and granted patents and pending applications and provisionals, reissues, divisionals, renewals, extensions, continuations, and continuations-in-part, design patents and industrial design registrations; all domain names, URLs, websites, and all data, content, “look and feel”, operating and underlying code or software of all websites; all trade secrets, proprietary information, data, and knowledge and experience of a technical, commercial or administrative nature, including all proprietary information, know-how, information processes, operating, maintenance and other manuals, data and databases, computer programs, including all documentation, design specifications, and flowcharts, operational and other plans, schematics and drawings, customer data and lists, advertising, marketing and product concepts and campaigns and other valuable or proprietary information or data; and all worldwide statutory protection obtained or obtainable thereon on all of the preceding; all rights to enforce, enjoin or sue, any claims, judgments, causes of action or other legal and equitable rights and remedies arising out of or related to any infringement, misappropriation or violation of any of the foregoing; and all right, title and interest to claim royalties, residuals, damages and other remuneration for use of any of the foregoing rights.

“IRF License” shall mean the licenses required by Applicable Law to operate the Facility as an inpatient rehabilitation facility, including, but not limited to those applicable to a “Special Hospital” providing rehabilitation services.

“Insurance Requirements” shall mean all terms of any insurance policy, certificate or endorsement required by this Lease and all requirements of the issuer of any such policy and all orders, rules and regulations and any other requirements of the National Board of Fire Underwriters (or any other body exercising similar functions) binding upon Landlord, Tenant or any of the Leased Property.

“Inventory” shall mean all inventory, as such term is customarily used and defined in its most broad and inclusive sense, including, but not limited to, all inventory of merchandise, food, beverages, medical supplies and other consumables held by Tenant for sale to or for consumption by residents or employees at the Facility or in connection with the Business, and operating supplies, cleaning supplies, building and maintenance supplies and spare parts.

“IP License” shall have the meaning set forth in Section 20.6.1.

“Land” shall have the meaning given such term in Section 2.1(a).

“Landlord” shall have the meaning given such term in the preambles to this Lease and shall include its successors and assigns.

“Lease” shall mean this Lease Agreement, including all Exhibits and Schedules hereto, as it and they may be amended or restated from time to time as herein provided.

“Leased Improvements” shall have the meaning given such term in Section 2.1(b).

“Leased Intangible Property” shall mean all transferable or assignable (a) governmental permits, including licenses and authorizations, required for the construction, ownership and operation of the Leased Improvements, including without limitation, certificates of authority, certificates of occupancy, building permits, signage permits, site use approvals, zoning certificates, environmental and land use permits and any and all necessary approvals from state or local authorities and other approvals granted by any public body or by any private party pursuant to a recorded instrument relating to the Leased Improvements or the Land; (b) telephone exchange numbers identified with the Leased Property, if any, and customer files, guest lists, credit records, labels, promotional literature (but only to the extent not included in Tenant’s Personal Property), security codes, all records and sales and other customer data, and any unexpired guaranties or warranties, relating to the Leased Property and/or the operation of the Business; and (c) certificates, licenses, warranties and guarantees and contracts, other than such permits, operating permits, certificates, licenses and approvals which are to be held by, or transferred to, Tenant in accordance with the terms of the Purchase Agreement or otherwise in order to permit Tenant to operate such Leased Improvements properly and in accordance with the terms of this Lease. The term “Leased Intangible Property” shall specifically exclude items of Tenant’s Personal Property.

“Leased Property” shall have the meaning given such term in Section 2.1.

“Legal Requirements” shall mean all federal, state, county, municipal and other governmental statutes, laws, rules, orders, regulations, ordinances, judgments, decrees and injunctions affecting the Leased Property or the maintenance, construction, alteration or operation thereof, whether now or hereafter enacted or in existence, including, without limitation, (a) all permits, licenses, authorizations, certificates and regulations necessary or required for the operation of the Leased Property for its Permitted Use, (b) all covenants, agreements, declarations, restrictions and encumbrances contained in any instruments at any time in force affecting the Leased Property or to which Tenant has consented or which are required to be granted pursuant to Applicable Laws, including those which may (i) require material repairs, modifications or alterations in or to the Leased Property or (ii) in any way materially and adversely affect the use and enjoyment thereof, but excluding any requirements arising as a result of Landlord’s status as a real estate investment trust, and (c) Applicable Laws.

“Letter of Credit” shall have the meaning given such term in Section 3.8.

“Licensed Intellectual Property” shall have the meaning set forth in Section 20.6.1.

“Licensed Use” shall have the meaning set forth in Section 20.6.1.

“Lien” shall mean any mortgage, security interest, pledge, collateral assignment, or other encumbrance, lien or charge of any kind, including but not limited to construction, mechanics’ and materialmen’s liens, or any transfer of property or assets for the payment of Indebtedness or performance of any other obligation in priority to payment of the obligor’s general creditors.

“Major Alterations” shall have the meaning given such term in Section 6.2.2.

“Management Fees” shall mean any management fees paid by Tenant to Cobalt Rehab Management LLC, a Texas limited liability company, pursuant to that certain Management Agreement dated December 30, 2015.

“Minimum Rent” shall mean annual rent as set forth in Section 3.2, subject to prorations and adjustments as set forth in Section 3.2.

“Minor Alterations” shall have the meaning given such term in Section 6.2.1.

“Mortgagee” shall mean the holder of any Facility Mortgage.

“Notice” shall mean a notice given in accordance with Section 21.10.

“Officer’s Certificate” shall have the meaning given such term in Section 17.2.

“Operating Contracts” shall mean the various service agreements, equipment leases, purchase contracts and special event contracts, software licenses and information technology contracts, and other contracts utilized in the operation of the Business, all as more particularly set forth on Exhibit E attached hereto and made a part hereof.

“Operating Expenses” means all those ordinary and necessary expenses incurred in the operation of the Business in accordance with this Lease, including all costs and expenses associated with the employees (including salaries, wages, bonuses and other compensation of all employees and their benefits, including life, medical and disability insurance and retirement benefits), the costs associated with permits and licenses, the cost of maintenance and utilities, administrative expenses, the costs of advertising, marketing and business promotion, any and all taxes, assessments, charges, levies, fees (including, without limitation, license, permit, inspection, authorization and similar fees) and other impositions and charges of every kind and nature whatsoever, extraordinary as well as ordinary, foreseen or unforeseen, and each and every installment thereof which shall or may during or with respect to the Term accrue and be charged, laid, levied, assessed, or imposed upon, or arise in connection with, the use, occupancy, operation or possession of the Leased Property or the Business conducted thereon, all premiums and other charges to obtain the insurance policies required pursuant to the terms hereof, all capital expenditures to the extent deductible in accordance with GAAP. The term “Operating Expenses” shall expressly exclude (i) any debt service for any Facility Mortgage or other financing obtained by Landlord in connection with all or a portion of the Leased Property or any costs associated therewith (including, without limitation, principal and interest payments, closing/settlement costs, origination fees, discount fees, brokerage commissions and other types of customary fees, costs and expenses), (ii) any federal, state and local income taxes, other taxes on income or net worth, franchise taxes, margin taxes, capital, estate, succession, inheritance, value added or transfer taxes of Landlord or similar taxes or charges or substitutes therefor, (iii) any expenses for which Landlord actually receives reimbursement from insurance, condemnation awards or any other source; (iv) costs incurred in connection with the sale or other change of ownership of all or a portion of the Leased Property (including, without limitation, brokerage commissions); (v) costs or expenses paid by either Landlord or Tenant in accordance with Section 5.2 or 5.3 hereof (including, without limitation, any capital expenditures made pursuant thereto); (vi) charges for depreciation of any of the Leased Property or (vii) costs or expenses resulting from Landlord’s default hereunder.

“Overdue Rate” shall mean, on any date, a per annum rate of interest equal to the lesser of (a) twelve percent (12%), or (b) the maximum rate then permitted under Applicable Laws.

“P&E” shall mean all items of personal property, as defined under the Model Uniform Commercial Code, including, but not limited to: (a) all equipment, machinery, fixtures, and other items of property, now or hereafter located on or permanently affixed to or incorporated into the Leased Improvements, including, without limitation, all furnaces, boilers, heaters, electrical equipment, heating, plumbing, lighting, ventilating, refrigerating, incineration, air and water pollution control, waste disposal, air cooling and air conditioning systems and apparatus, sprinkler systems and fire and theft protection equipment and irrigation equipment, together with all replacements, modifications, alterations and additions thereto, all of which to the extent not otherwise constituting real property under Applicable Law; (b) all furniture, furnishings, movable walls or partitions, computers or trade fixtures or other personal property of any kind or description used or useful in the Business on or in the Leased Improvements, and located on or in the Leased Improvements, and all modifications, replacements, alterations and additions to such personal property; (c) “Property and Equipment,” “P&E,” and “FF&E” (as such terms are customarily used and defined in the most broad and inclusive sense); (d) all linen, china, glassware, tableware, uniforms and similar items, whether used in connection with public space or tenant rooms; (e) all replacements of or additions to items set forth in clause (a) through (d) above; and (f) the Initial Landlord P&E. The term “P&E” shall specifically exclude items of Tenant’s Personal Property.

“P&E Replacements” shall mean all items of P&E purchased with funds from the Reserve established under Article 5 of this Lease or with insurance proceeds payable with respect to P&E or P&E Replacements (specifically excluding all insurance proceeds payable with respect to items of Tenant’s Personal Property) and all other items of P&E added and used at the Leased Property during the Term of this Lease (specifically excluding items of Tenant’s Personal Property), together with all leasehold improvements made by Tenant during the Term of this Lease to the extent not constituting real property affixed to the Land, whether purchased from the Reserve or with other funds of Tenant, all subject to disposal and further replacement at the end of their useful lives.

“Parent” shall mean, with respect to any Person, any Person which directly, or indirectly through one or more Subsidiaries or Affiliates, (i) owns more than fifty percent (50%) of the voting or beneficial interest in, or (ii) otherwise has the right or power (whether by contract, through ownership of securities or otherwise) to Control, such Person.

“Permits” means all licenses, permits and certificates used or useful in connection with the ownership, operation, use or occupancy of the Facility, the Leased Property or the Business, including, without limitation, the IRF License issued to Tenant by the Arizona State Department of Health, business licenses, state and local health and environmental department licenses, any other licenses required in connection with the operation of the Leased Property for the Permitted Use, food service licenses, licenses to conduct business and all such other permits, licenses and rights, obtained from any governmental, quasi-governmental or private person or entity whatsoever.

“Permitted Encumbrances” shall mean (a) all rights, restrictions, and easements of record set forth on Exhibit F attached hereto and made a part hereof, (b) to the extent not referenced on Exhibit F, any mortgage and other documents of record relating to a Facility Mortgage, and (c) any other such encumbrances as may have been consented to in writing by Landlord from time to time in accordance with the terms of Section 2.8 hereof.

“Permitted Renovations” shall have the meaning given that term in Section 6.2.

“Permitted Use” shall have the meaning given such term in Section 4.1.1.

“Person” shall mean any individual or Entity, and the heirs, executors, administrators, legal representatives, successors and assigns of such Person where the context so admits.

“Purchase Agreement” shall have the meaning given such term in the Recitals.

“REIT” shall have the meaning given such term in Article 15.

“REIT Personal Property Limitation” shall have the meaning given such term in Section 15.1.

“Related Lease” means any lease agreement pursuant to which (a) a Subsidiary or Affiliate of Cobalt Rehabilitation Hospitals, LLC is the then current tenant and (b) a Subsidiary or Affiliate of CNL Healthcare Properties, Inc. is the then current landlord.

“Related Tenant” shall mean a tenant under a Related Lease.

“Release” shall have the meaning given such term in Section 4.2.

“Rent” shall mean, collectively, Minimum Rent and Additional Charges.

“Rent Coverage Ratio” shall mean, for any given period or interval during the Term, the ratio of Tenant’s EBITDAR to the Minimum Rent due under the Lease.

“Reserve” shall have the meaning given such term in Section 5.2.

“Reserve Budget” shall have the meaning given such term in Section 5.2.3.

“Reserve Expenditures” shall have the meaning given such term in Section 5.2.

“Reserve Payment” shall have the meaning given such term in Section 5.2.2.

“SEC” shall mean the Securities and Exchange Commission.

“Second Compliance Period” shall mean the period beginning on the day immediately following the termination of the First Compliance Period and terminating on the date which is twelve (12) months thereafter.

“Security Deposit” shall have the meaning given such term in Section 3.8.

“Seller” shall have the meaning given such term in the Recitals.

“Severe Incident” shall have the meaning given such term in Section 20.3.1.

“Significant Property Damage” shall have the meaning given such term in Section 20.3.2.