Exhibit 10.4

 

GUARANTY AGREEMENT

(LEASE NO. 5)

 

THIS GUARANTY AGREEMENT (this “Guaranty”) is entered into as of June 29, 2016 by
FIVE STAR QUALITY CARE, INC., a Maryland corporation (“Guarantor”), for the
benefit of SNH/LTA Properties Trust, a Maryland real estate investment trust, as
landlord (“Landlord”).

 

W I T N E S S E T H :

 

WHEREAS, Senior Housing Properties Trust, a Maryland real estate investment
trust and the ultimate parent of Landlord, and Guarantor, on behalf of
themselves and their respective subsidiaries, are parties to that certain
Transaction Agreement of even date herewith (the “Transaction Agreement”); and

 

WHEREAS, pursuant to the Transaction Agreement, Landlord acquired certain real
property from certain subsidiaries of Guarantor and leased such real property
back to another subsidiary of Guarantor, Five Star Quality Care Trust, a
Maryland statutory trust (“Tenant”), pursuant to that certain Lease Agreement
(Lease No. 5) of even date herewith (as the same may be amended, modified or
supplemented from time to time, “Lease No. 5”); and

 

WHEREAS, it was a condition of Landlord’s acquisition of such real property and
lease of such real property back to Tenant that Guarantor agree to enter into a
guaranty agreement pursuant to which Guarantor guarantee the payment and
performance of all of Tenant’s obligations under Lease No. 5, subject to and
upon the terms and condition herein set forth;

 

NOW, THEREFORE, in consideration of the foregoing and for other good and
valuable consideration, the mutual receipt and legal sufficiency of which are
hereby acknowledged, Guarantor hereby agrees as follows:

 

1.                                      Certain Terms.  Capitalized terms used
and not otherwise defined in this Guaranty shall have the meanings ascribed to
such terms in Lease No. 5.  Lease No. 5 and the Incidental Documents are
hereinafter collectively referred to as the “Lease No. 5 Documents”.

 

2.                                      Guaranteed Obligations.  For purposes of
this Guaranty the term “Guaranteed Obligations” shall mean the payment and
performance of each and every obligation of Tenant to Landlord under the Lease
No. 5 Documents or relating thereto, whether now existing or hereafter arising,
and including, without limitation, the payment of the full amount of the Rent
payable under Lease No. 5.

 

3.                                      Representations and Covenants. 
Guarantor represents, warrants, covenants, and agrees that:

 

3.1  Incorporation of Representations and Warranties.  The representations and
warranties of Tenant and its Affiliated Persons set forth in the Lease No. 5
Documents are true and correct on and as of the date hereof in all material
respects.

 

--------------------------------------------------------------------------------

 

3.2  Performance of Covenants and Agreements.  Guarantor hereby agrees to take
all lawful action in its power to cause Tenant duly and punctually to perform
all of the covenants and agreements set forth in the Lease No. 5 Documents.

 

3.3  Validity of Agreement.  Guarantor has duly and validly executed and
delivered this Guaranty; this Guaranty constitutes the legal, valid and binding
obligation of Guarantor, enforceable against Guarantor in accordance with its
terms, except as the enforceability thereof may be subject to bankruptcy,
fraudulent conveyance, insolvency, reorganization, moratorium and other laws
relating to or affecting creditors’ rights generally and subject to general
equitable principles, regardless of whether enforceability is considered in a
proceeding at law or in equity; and the execution, delivery and performance of
this Guaranty have been duly authorized by all requisite action of Guarantor and
such execution, delivery and performance by Guarantor will not result in any
breach of the terms, conditions or provisions of, or conflict with or constitute
a default under, or result in the creation of any lien, charge or encumbrance
upon any of the property or assets of Guarantor pursuant to the terms of, any
indenture, mortgage, deed of trust, note, other evidence of indebtedness,
agreement or other instrument to which it may be a party or by which it or any
of its property or assets may be bound, or violate any provision of law, or any
applicable order, writ, injunction, judgment or decree of any court or any order
or other public regulation of any governmental commission, bureau or
administrative agency.

 

3.4  Payment of Expenses.  Guarantor agrees, as principal obligor and not as
guarantor only, to pay to Landlord forthwith, upon demand, in immediately
available federal funds, all costs and expenses (including reasonable attorneys’
fees and disbursements) incurred or expended by Landlord in connection with the
enforcement of this Guaranty, together with interest on amounts recoverable
under this Guaranty from the time such amounts become due until payment at the
Overdue Rate.  Guarantor’s covenants and agreements set forth in this
Section 3.4 shall survive the termination of this Guaranty.

 

3.5  Notices.  Guarantor shall promptly give notice to Landlord of any event
known to it which might reasonably result in a material adverse change in its
financial condition.

 

3.6  Reports.  Guarantor shall promptly provide to Landlord each of the
financial reports, certificates and other documents required of it under the
Lease No. 5 Documents.

 

3.7  Books and Records.  Guarantor shall at all times keep proper books of
record and account in which full, true and correct entries shall be made of its
transactions in accordance with generally accepted accounting principles and
shall set aside on its books from its earnings for each fiscal year all such
proper reserves, including reserves for depreciation, depletion, obsolescence
and amortization of its properties during such fiscal year, as shall be required
in accordance with generally accepted accounting principles, consistently
applied, in connection with its business.  Guarantor shall permit access by
Landlord and its agents to the books and records maintained by Guarantor during
normal business hours and upon reasonable notice.  Any proprietary information
obtained by Landlord with respect to Guarantor pursuant to the provisions of
this Guaranty shall be treated as confidential, except that such information may
be disclosed or used, subject to appropriate confidentiality safeguards,
pursuant to any court order or in any litigation between the parties and except
further that Landlord may disclose such information to its prospective lenders,
provided that Landlord shall direct such lenders to maintain such information as
confidential.

 

--------------------------------------------------------------------------------

 

3.8  Taxes, Etc.  Guarantor shall pay and discharge promptly as they become due
and payable all taxes, assessments and other governmental charges or levies
imposed upon Guarantor or the income of Guarantor or upon any of the property,
real, personal or mixed, of Guarantor, or upon any part thereof, as well as all
claims of any kind (including claims for labor, materials and supplies) which,
if unpaid, might by law become a lien or charge upon any property and result in
a material adverse change in the financial condition of Guarantor; provided,
however, that Guarantor shall not be required to pay any such tax, assessment,
charge, levy or claim if the amount, applicability or validity thereof shall
currently be contested in good faith by appropriate proceedings or other
appropriate actions promptly initiated and diligently conducted and if Guarantor
shall have set aside on its books such reserves of Guarantor, if any, with
respect thereto as are required by generally accepted accounting principles.

 

3.9  Legal Existence of Guarantor.  Guarantor shall do or cause to be done all
things necessary to preserve and keep in full force and effect its legal
existence.

 

3.10  Compliance.  Guarantor shall use reasonable business efforts to comply in
all material respects with all applicable statutes, rules, regulations and
orders of, and all applicable restrictions imposed by, all governmental
authorities in respect of the conduct of its business and the ownership of its
property (including, without limitation, applicable statutes, rules,
regulations, orders and restrictions relating to environmental, safety and other
similar standards or controls).

 

3.11  Insurance.  Guarantor shall maintain, with financially sound and reputable
insurers, insurance with respect to its properties and business against loss or
damage of the kinds customarily insured against by owners of established
reputation engaged in the same or similar businesses and similarly situated, in
such amounts and by such methods as shall be customary for such owners and
deemed adequate by Guarantor.

 

3.12  No Change in Control.  Guarantor shall not permit the occurrence of any
direct or indirect Change in Control of Tenant or Guarantor.

 

4.                                      Guarantee.  Guarantor hereby
unconditionally guarantees that the Guaranteed Obligations which are monetary
obligations shall be paid in full when due and payable, whether upon demand, at
the stated or accelerated maturity thereof pursuant to any Lease No. 5 Document,
or otherwise, and that the Guaranteed Obligations which are performance
obligations shall be fully performed at the times and in the manner such
performance is required by the Lease No. 5 Documents.  With respect to the
Guaranteed Obligations which are monetary obligations, this guarantee is a
guarantee of payment and not of collectability and is absolute and in no way
conditional or contingent.  In case any part of the Guaranteed Obligations shall
not have been paid when due and payable or performed at the time performance is
required, Guarantor shall, in the case of monetary obligations, within five
(5) Business Days after receipt of notice from Landlord, pay or cause to be paid
to Landlord the amount thereof as is then due and payable and unpaid (including
interest and other charges, if any, due thereon through the date of payment in
accordance with the applicable provisions of the Lease No. 5 Documents) or, in
the case of non-monetary obligations, perform or cause to be performed such
obligations in accordance with the Lease No. 5 Documents.

 

5.                                      Set-Off.  Guarantor hereby authorizes
Landlord, at any time and without notice, to set off the whole or any portion or
portions of any or all sums credited by or due from

 

--------------------------------------------------------------------------------

 

Landlord to it against amounts payable under this Guaranty.  Landlord shall
promptly notify Guarantor of any such set-off made by Landlord and the
application made by Landlord of the proceeds thereof.

 

6.                                      Unenforceability of Guaranteed
Obligations, Etc.  If Tenant is for any reason under no legal obligation to
discharge any of the Guaranteed Obligations (other than because the same have
been previously discharged in accordance with the terms of the Lease No. 5
Documents), or if any other moneys included in the Guaranteed Obligations have
become unrecoverable from Tenant by operation of law or for any other reason,
including, without limitation, the invalidity or irregularity in whole or in
part of any Guaranteed Obligation or of any Transaction Document or any
limitation on the liability of Tenant thereunder not contemplated by the Lease
No. 5 Documents or any limitation on the method or terms of payment thereunder
which may now or hereafter be caused or imposed in any manner whatsoever, the
guarantees contained in this Guaranty shall nevertheless remain in full force
and effect and shall be binding upon Guarantor to the same extent as if
Guarantor at all times had been the principal debtor on all such Guaranteed
Obligations.

 

7.                                      Additional Guarantees.  This Guaranty
shall be in addition to any other guarantee or other security for the Guaranteed
Obligations and it shall not be prejudiced or rendered unenforceable by the
invalidity of any such other guarantee or security or by any waiver, amendment,
release or modification thereof.

 

8.                                      Consents and Waivers, Etc.  Guarantor
hereby acknowledges receipt of correct and complete copies of each of the Lease
No. 5 Documents, and consents to all of the terms and provisions thereof, as the
same may be from time to time hereafter amended or changed in accordance with
the terms and conditions thereof, and, except as otherwise provided herein, to
the maximum extent permitted by applicable law, waives (a) presentment, demand
for payment, and protest of nonpayment, of any principal of or interest on any
of the Guaranteed Obligations, (b) notice of acceptance of this Guaranty and of
diligence, presentment, demand and protest, (c) notice of any default hereunder
and any default, breach or nonperformance or Event of Default under any of the
Guaranteed Obligations or the Lease No. 5 Documents, (d) notice of the terms,
time and place of any private or public sale of any collateral held as security
for the Guaranteed Obligations, (e) demand for performance or observance of, and
any enforcement of any provision of, or any pursuit or exhaustion of rights or
remedies against Tenant or any other guarantor of the Guaranteed Obligations,
under or pursuant to the Lease No. 5 Documents, or any agreement directly or
indirectly relating thereto and any requirements of diligence or promptness on
the part of the holders of the Guaranteed Obligations in connection therewith,
and (f) to the extent Guarantor lawfully may do so, any and all demands and
notices of every kind and description with respect to the foregoing or which may
be required to be given by any statute or rule of law and any defense of any
kind which it may now or hereafter have with respect to this Guaranty, or any of
the Lease No. 5 Documents or the Guaranteed Obligations (other than that the
same have been discharged in accordance with the Lease No. 5 Documents).

 

9.                                      No Impairment, Etc.  The obligations,
covenants, agreements and duties of Guarantor under this Guaranty shall not be
affected or impaired by any assignment or transfer in whole or in part of any of
the Guaranteed Obligations without notice to Guarantor, or any waiver by
Landlord or any holder of any of the Guaranteed Obligations or by the holders of
all of the Guaranteed Obligations of the performance or observance by Tenant or
any other guarantor of any of the agreements, covenants, terms or conditions
contained in the Guaranteed Obligations

 

--------------------------------------------------------------------------------

 

or the Lease No. 5 Documents or any indulgence in or the extension of the time
for payment by Tenant or any other guarantor of any amounts payable under or in
connection with the Guaranteed Obligations or the Lease No. 5 Documents or any
other instrument or agreement relating to the Guaranteed Obligations or of the
time for performance by Tenant or any other guarantor of any other obligations
under or arising out of any of the foregoing or the extension or renewal thereof
(except that with respect to any extension of time for payment or performance of
any of the Guaranteed Obligations granted by Landlord or any other holder of
such Guaranteed Obligations to Tenant, Guarantor’s obligations to pay or perform
such Guaranteed Obligation shall be subject to the same extension of time for
performance), or the modification or amendment (whether material or otherwise)
of any duty, agreement or obligation of Tenant or any other guarantor set forth
in any of the foregoing, or the voluntary or involuntary sale or other
disposition of all or substantially all of the assets of Tenant or any other
guarantor or insolvency, bankruptcy, or other similar proceedings affecting
Tenant or any other guarantor or any assets of Tenant or any such other
guarantor, or the release or discharge of Tenant or any such other guarantor
from the performance or observance of any agreement, covenant, term or condition
contained in any of the foregoing without the consent of the holders of the
Guaranteed Obligations by operation of law, or any other cause, whether similar
or dissimilar to the foregoing.

 

10.                               Reimbursement, Subrogation, Etc.  Guarantor
hereby covenants and agrees that it will not enforce or otherwise exercise any
rights of reimbursement, subrogation, contribution or other similar rights
against Tenant (or any other person against whom Landlord may proceed) with
respect to the Guaranteed Obligations prior to the payment in full of all
amounts owing with respect to the Lease No. 5 Documents, and until all
indebtedness of Tenant to Landlord shall have been paid in full, Guarantor shall
not have any right of subrogation, and Guarantor waives any defense it may have
based upon any election of remedies by Landlord which destroys its subrogation
rights or its rights to proceed against Tenant for reimbursement, including,
without limitation, any loss of rights Guarantor may suffer by reason of any
rights, powers or remedies of Tenant in connection with any anti-deficiency laws
or any other laws limiting, qualifying or discharging the indebtedness to
Landlord.  Until all obligations of Tenant pursuant to the Lease No. 5 Documents
shall have been paid and satisfied in full, Guarantor further waives any right
to enforce any remedy which Landlord now has or may in the future have against
Tenant, any other guarantor or any other person and any benefit of, or any right
to participate in, any security whatsoever now or in the future held by
Landlord.

 

11.                               Defeasance.  This Guaranty shall terminate at
such time as the Guaranteed Obligations have been paid and performed in full and
all other obligations of Guarantor to Landlord under this Guaranty have been
satisfied in full; provided, however, if at any time, all or any part of any
payment applied on account of the Guaranteed Obligations is or must be rescinded
or returned for any reason whatsoever (including, without limitation, the
insolvency, bankruptcy or reorganization of Tenant), this Guaranty, to the
extent such payment is or must be rescinded or returned, shall be deemed to have
continued in existence notwithstanding any such termination.

 

12.                               Notices.

 

(a)  Any and all notices, demands, consents, approvals, offers, elections and
other communications required or permitted under this Guaranty shall be deemed
adequately given if in writing and the same shall be delivered either in hand,
by facsimile with confirmation of

 

--------------------------------------------------------------------------------

 

transmission by sender’s machine, or by mail or Federal Express or similar
expedited commercial carrier, addressed to the recipient of the notice, postpaid
and registered or certified with return receipt requested (if by mail), or with
all freight charges prepaid (if by Federal Express or similar carrier).

 

(b)  All notices required or permitted to be sent hereunder shall be deemed to
have been given for all purposes of this Guaranty upon confirmation of
transmission by sender’s machine in the case of a notice by facsimile, and, in
all other cases, upon the date of receipt or refusal, except that whenever under
this Guaranty a notice is either received on a day which is not a Business Day
or is required to be delivered on or before a specific day which is not a
Business Day, the day of receipt or required delivery shall automatically be
extended to the next Business Day.

 

(c)  All such notices shall be addressed,

 

if to Landlord to:

 

c/o Senior Housing Properties Trust

Two Newton Place

255 Washington Street, Suite 300

Newton, Massachusetts  02458

Attn:  Mr. David J. Hegarty

Fax No. (617) 796-8349

 

if to Guarantor to:

 

Five Star Quality Care, Inc.

400 Centre Street

Newton, Massachusetts  02458

Attn:  Mr. Bruce J. Mackey Jr.

Fax No. (617) 796-8385

 

(d)  By notice given as herein provided, the parties hereto and their respective
successors and assigns shall have the right from time to time and at any time
during the term of this Guaranty to change their respective addresses effective
upon receipt by the other parties of such notice and each shall have the right
to specify as its address any other address within the United States of America.

 

13.                               Successors and Assigns.  Whenever in this
Guaranty any of the parties hereto is referred to, such reference shall be
deemed to include the successors and assigns of such party, including without
limitation the holders, from time to time, of the Guaranteed Obligations; and
all representations, warranties, covenants and agreements by or on behalf of
Guarantor which are contained in this Guaranty shall inure to the benefit of
Landlord’s successors and assigns, including without limitation said holders,
whether so expressed or not.

 

14.                               Applicable Law.  Except as to matters
regarding the internal affairs of Landlord and issues of or limitations on any
personal liability of the shareholders and trustees of Landlord for obligations
of Landlord, as to which the laws of the state of Landlord’s organization shall
govern, this Guaranty shall be interpreted, construed, applied and enforced in
accordance with

 

--------------------------------------------------------------------------------

 

the laws of The Commonwealth of Massachusetts applicable to contracts between
residents of Massachusetts which are to be performed entirely within
Massachusetts, regardless of (a) where any such instrument is executed or
delivered; or (b) where any payment or other performance required by any such
instrument is made or required to be made; or (c) where any breach of any
provision of any such instrument occurs, or any cause of action otherwise
accrues; or (d) where any action or other proceeding is instituted or pending;
or (e) the nationality, citizenship, domicile, principal place of business, or
jurisdiction of organization or domestication of any party; or (f) whether the
laws of the forum jurisdiction otherwise would apply the laws of a jurisdiction
other than The Commonwealth of Massachusetts; or (g) any combination of the
foregoing.

 

15.                               Arbitration.

 

15.1                        Disputes.  Any disputes, claims or controversies
between the parties (a) arising out of or relating to this Guaranty, or
(b) brought by or on behalf of any shareholder of any party or a direct or
indirect parent of a party (which, for purposes of this Section 15, shall mean
any shareholder of record or any beneficial owner of shares of any party, or any
former shareholder of record or beneficial owner of shares of any party), either
on his, her or its own behalf, on behalf of any party or on behalf of any series
or class of shares of any party or shareholders of any party against any party
or any member, trustee, officer, manager (including The RMR Group LLC or its
successor), agent or employee of any party, including disputes, claims or
controversies relating to the meaning, interpretation, effect, validity,
performance or enforcement of this Guaranty, including this arbitration
provision, or the declarations of trust, limited liability company agreements,
charters, bylaws or other governing documents of any party hereto (all of which
are referred to as “Disputes”), or relating in any way to such a Dispute or
Disputes shall, on the demand of any party to such Dispute be resolved through
binding and final arbitration in accordance with the Commercial Arbitration
Rules (the “Rules”) of the American Arbitration Association (“AAA”) then in
effect, except as those Rules may be modified in this Section 15.  For the
avoidance of doubt, and not as a limitation, Disputes are intended to include
derivative actions against trustees, officers or managers of any party and class
actions by a shareholder against those individuals or entities and any party. 
For the avoidance of doubt, a Dispute shall include a Dispute made derivatively
on behalf of one party against another party.  For purposes of this Section 15,
the term “party” shall include any direct or indirect parent of a party.

 

15.2                        Selection of Arbitrators.  There shall be three
(3) arbitrators.  If there are only two (2) parties to the Dispute, each party
shall select one arbitrator within fifteen (15) days after receipt of a demand
for arbitration.  Such arbitrators may be affiliated or interested persons of
such parties.  If there are more than two (2) parties to the Dispute, all
claimants, on the one hand, and all respondents, on the other hand, shall each
select, by the vote of a majority of the claimants or the respondents, as the
case may be, one arbitrator within fifteen (15) days after receipt of a demand
for arbitration.  Such arbitrators may be affiliated or interested persons of
the claimants or the respondents, as the case may be.  If either a claimant (or
all claimants) or a respondent (or all respondents) fail to timely select an
arbitrator then the party (or parties) who has selected an arbitrator may
request the AAA to provide a list of three (3) proposed arbitrators in
accordance with the Rules (each of whom shall be neutral, impartial and
unaffiliated with any party) and the party (or parties) that failed to timely
appoint an arbitrator shall have ten (10) days from the date the AAA provides
such list to select one of the three (3) arbitrators proposed by

 

--------------------------------------------------------------------------------

 

AAA.  If such party (or parties) fail to select such arbitrator by such time,
the party (or parties) who have appointed the first arbitrator shall then have
ten (10) days to select one of the three (3) arbitrators proposed by AAA to be
the second arbitrator; and, if he/they should fail to select such arbitrator by
such time, the AAA shall select, within fifteen (15) days thereafter, one of the
three (3) arbitrators it had proposed as the second arbitrator.  The two
(2) arbitrators so appointed shall jointly appoint the third and presiding
arbitrator (who shall be neutral, impartial and unaffiliated with any party)
within fifteen (15) days of the appointment of the second arbitrator.  If the
third arbitrator has not been appointed within the time limit specified herein,
then the AAA shall provide a list of proposed arbitrators in accordance with the
Rules, and the arbitrator shall be appointed by the AAA in accordance with a
listing, striking and ranking procedure, with each party having a limited number
of strikes, excluding strikes for cause.

 

15.3                        Location of Arbitration.  The place of arbitration
shall be Boston, Massachusetts unless otherwise agreed by the parties.

 

15.4                        Scope of Discovery.  There shall be only limited
documentary discovery of documents directly related to the issues in dispute, as
may be ordered by the arbitrators.

 

15.5                        Arbitration Award.  In rendering an award or
decision (the “Arbitration Award”), the arbitrators shall be required to follow
the laws of State of Maryland.  Any arbitration proceedings or Arbitration Award
rendered hereunder and the validity, effect and interpretation of this
arbitration provision shall be governed by the Federal Arbitration Act, 9 U.S.C.
§1 et seq.  The Arbitration Award shall be in writing and may, but shall not be
required to, briefly state the findings of fact and conclusions of law on which
it is based.

 

15.6                        Costs.  Except to the extent expressly provided by
this Guaranty or as otherwise agreed by the parties, each party involved in a
Dispute shall bear its own costs and expenses (including attorneys’ fees), and
the arbitrators shall not render an award that would include shifting of any
such costs or expenses (including attorneys’ fees) or, in a derivative case or
class action, award any portion of a party’s award to the claimant or the
claimant’s attorneys.  Each party (or, if there are more than two (2) parties to
the Dispute, all claimants, on the one hand, and all respondents, on the other
hand, respectively) shall bear the costs and expenses of its (or their) selected
arbitrator and the parties (or, if there are more than two (2) parties to the
Dispute, all claimants, on the one hand, and all respondents, on the other hand)
shall equally bear the costs and expenses of the third appointed arbitrator.

 

15.7                        Final Judgment.  An Arbitration Award shall be final
and binding upon the parties thereto and shall be the sole and exclusive remedy
between such parties relating to the Dispute, including any claims,
counterclaims, issues or accounting presented to the arbitrators.  Judgment upon
the Arbitration Award may be entered in any court having jurisdiction.  To the
fullest extent permitted by law, no application or appeal to any court of
competent jurisdiction may be made in connection with any question of law
arising in the course of arbitration or with respect to any award made except
for actions relating to enforcement of this agreement to arbitrate or any
arbitral award issued hereunder and except for actions seeking interim or other
provisional relief in aid of arbitration proceedings in any court of competent
jurisdiction.

 

15.8                        Payment.  Any monetary award shall be made and
payable in U.S. dollars free of any tax, deduction or offset.  Each party
against which the Arbitration Award assesses a

 

--------------------------------------------------------------------------------

 

monetary obligation shall pay that obligation on or before the thirtieth (30th)
day following the date of the Arbitration Award or such other date as the
Arbitration Award may provide.

 

15.9                        Intended Beneficiaries.  This Section 15 is intended
to benefit and be enforceable by the shareholders, members, direct and indirect
parents, trustees, directors, officers, managers (including The RMR Group LLC or
its successor), agents or employees of any party and the parties and shall be
binding on the shareholders of any party and the parties, as applicable, and
shall be in addition to, and not in substitution for, any other rights to
indemnification or contribution that such individuals or entities may have by
contract or otherwise.

 

16.                               Modification of Agreement.  No modification or
waiver of any provision of this Guaranty, nor any consent to any departure by
Guarantor therefrom, shall in any event be effective unless the same shall be in
writing and signed by Landlord, and such modification, waiver or consent shall
be effective only in the specific instances and for the purpose for which
given.  No notice to or demand on Guarantor in any case shall entitle Guarantor
to any other or further notice or demand in the same, similar or other
circumstances.  This Guaranty may not be amended except by an instrument in
writing executed by or on behalf of the party against whom enforcement of such
amendment is sought.

 

17.                               Waiver of Rights by Landlord.  Neither any
failure nor any delay on Landlord’s part in exercising any right, power or
privilege under this Guaranty shall operate as a waiver thereof, nor shall a
single or partial exercise thereof preclude any other or further exercise or the
exercise of any other right, power or privilege.

 

18.                               Severability.  In case any one or more of the
provisions contained in this Guaranty should be invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability of the
remaining provisions contained herein shall not in any way be affected or
impaired thereby, but this Guaranty shall be reformed and construed and enforced
to the maximum extent permitted by applicable law.

 

19.                               Entire Contract.  This Guaranty constitutes
the entire agreement between the parties hereto with respect to the subject
matter hereof and shall supersede and take the place of any other instruments
purporting to be an agreement of the parties hereto relating to the subject
matter hereof.

 

20.                               Headings; Counterparts.  Headings in this
Guaranty are for purposes of reference only and shall not limit or otherwise
affect the meaning hereof.  This Guaranty may be executed in any number of
counterparts, each of which shall be an original, but all of which together
shall constitute one instrument, and in pleading or proving any provision of
this Guaranty, it shall not be necessary to produce more than one of such
counterparts.

 

21.                               Remedies Cumulative.  No remedy herein
conferred upon Landlord is intended to be exclusive of any other remedy, and
each and every remedy shall be cumulative and shall be in addition to every
other remedy given hereunder or now or hereafter existing at law or in equity or
by statute or otherwise.

 

22.                               NON-LIABILITY OF TRUSTEES.  THE DECLARATION OF
TRUST ESTABLISHING LANDLORD, DATED NOVEMBER 10, 2004, AS AMENDED AND

 

--------------------------------------------------------------------------------

 

SUPPLEMENTED, AS FILED WITH THE STATE DEPARTMENT OF ASSESSMENTS AND TAXATION OF
MARYLAND, PROVIDES THAT NO TRUSTEE, OFFICER, SHAREHOLDER, EMPLOYEE OR AGENT OF
LANDLORD SHALL BE HELD TO ANY PERSONAL LIABILITY, JOINTLY OR SEVERALLY, FOR ANY
OBLIGATION OF, OR CLAIM AGAINST, LANDLORD.  ALL PERSONS DEALING WITH LANDLORD IN
ANY WAY SHALL LOOK ONLY TO THE ASSETS OF LANDLORD FOR THE PAYMENT OF ANY SUM OR
THE PERFORMANCE OF ANY OBLIGATION.

 

--------------------------------------------------------------------------------

 

WITNESS the execution hereof under seal as of the date above first written.

 

 

FIVE STAR QUALITY CARE, INC.

 

 

 

 

 

By:

/s/ Bruce J. Mackey Jr.

 

 

Bruce J. Mackey Jr.

 

 

President

 

 

LANDLORD HEREBY CONSENTS TO THE EXECUTION AND DELIVERY OF THIS GUARANTY BY
GUARANTOR.

 

 

 

SNH/LTA PROPERTIES TRUST

 

 

 

 

 

By:

/s/ David J. Hegarty

 

 

David J. Hegarty

 

 

President

 

 

[SIGNATURE PAGE TO GUARANTY AGREEMENT (LEASE NO. 5)]

 

--------------------------------------------------------------------------------