Exhibit 10.3















                         AMENDED MASTER LEASE AGREEMENT,

                          dated as of January 11, 2002,

                                  by and among

             CERTAIN AFFILIATES OF SENIOR HOUSING PROPERTIES TRUST,
                                  AS LANDLORD,

                                       AND

          FS TENANT HOLDING COMPANY TRUST and FS TENANT POOL III TRUST,
                                    AS TENANT

<PAGE>

                                TABLE OF CONTENTS

                                                                            Page


EXHIBITS
A-1 through A-31               The Land
B                              MSLS Operating Agreements




<PAGE>

                                TABLE OF CONTENTS

                                                                            Page

ARTICLE 1   DEFINITIONS........................................................1
1.1  "Accounting Period".......................................................2
1.2  "Additional Charges"......................................................2
1.3  "Additional Rent".........................................................2
1.4  "Affiliated Person".......................................................2
1.5  "Agreement"...............................................................2
1.6  "Applicable Laws".........................................................2
1.7  "Applicable Percentage"...................................................3
1.8  "Award"...................................................................3
1.9  "Base Net Patient Revenues"...............................................3
1.10  "Base Year"..............................................................3
1.11  "Business Day"...........................................................4
1.12  "Capital Addition".......................................................4
1.13  "Capital Expenditure"....................................................4
1.14  "Change in Control"......................................................4
1.15  "Claim"..................................................................4
1.16  "Code"...................................................................4
1.17  "Commencement Date"......................................................4
1.18  "Condemnation"...........................................................5
1.19  "Condemnor"..............................................................5
1.20  "Consolidated Financials"................................................5
1.21  "Date of Taking".........................................................5
1.22  "Default"................................................................5
1.23  "Disbursement Rate"......................................................5
1.24  "Distribution"...........................................................5
1.25  "Easement Agreement".....................................................5
1.26  "Encumbrance"............................................................6
1.27  "Entity".................................................................6
1.28  "Environment"............................................................6
1.29  "Environmental Obligation"...............................................6
1.30  "Environmental Notice"...................................................6
1.31  "Event of Default".......................................................6
1.32  "Excess Net Patient Revenues"............................................6
1.33  "Extended Term"..........................................................6
1.34  "Facility"...............................................................6
1.35  "Facility Mortgage"......................................................6
1.36  "Facility Mortgagee".....................................................6
1.37  "FF&E Estimate"..........................................................6
1.38  "FF&E Reserve"...........................................................6
1.39  "FF&E Reserve Payment"...................................................7
1.40  "Financial Officer's Certificate"........................................7
1.41  "Fiscal Year"............................................................7
1.42  "Five Star"..............................................................7
1.43  "Fixed Term".............................................................7
1.44  "Fixtures"...............................................................7
1.45  "GAAP"...................................................................7
1.46  "Government Agencies"....................................................7

                                      -i-
<PAGE>

                                TABLE OF CONTENTS
                                  (continued)
                                                                            Page

1.47  "Guarantor"..............................................................8
1.48  "Guaranty"...............................................................8
1.49  "Hazardous Substances"...................................................8
1.50  "Immediate Family".......................................................9
1.51  "Impositions"............................................................9
1.52  "Incidental Documents"..................................................10
1.53  "Indebtedness"..........................................................10
1.54  "Insurance Requirements"................................................10
1.55  "Interest Rate".........................................................10
1.56  "Land"..................................................................10
1.57  "Landlord"..............................................................10
1.58  "Landlord Default"......................................................10
1.59  "Landlord Liens"........................................................10
1.60  "Lease Year"............................................................11
1.61  "Leased Improvements"...................................................11
1.62  "Leased Intangible Property"............................................11
1.63  "Leased Personal Property"..............................................11
1.64  "Leased Property".......................................................11
1.65  "Legal Requirements"....................................................11
1.66  "Lien"..................................................................11
1.67  "Manager"...............................................................11
1.68  "Management Agreement"..................................................12
1.69  "Minimum Rent"..........................................................12
1.70  "MSLS"..................................................................12
1.71  "MSLS Operating Agreements".............................................12
1.72  "Net Patient Revenues"..................................................12
1.73  "Notice"................................................................13
1.74  "Officer's Certificate".................................................13
1.75  "Original Landlord".....................................................13
1.76  "Original Lease"........................................................13
1.77  "Original Properties"...................................................13
1.78  "Other Lease"...........................................................13
1.79  "Overdue Rate"..........................................................13
1.80  "Parent"................................................................13
1.81  "Permitted Encumbrances"................................................14
1.82  "Permitted Liens".......................................................14
1.83  "Permitted Use".........................................................14
1.84  "Person"................................................................14
1.85  "Property"..............................................................14
1.86  "Provider Agreements"...................................................14
1.87  "Records"...............................................................14
1.88  "Regulated Medical Wastes"..............................................14
1.89  "Rent"..................................................................14
1.90  "SEC"...................................................................14
1.91  "Security Agreement"....................................................14
1.92  "State".................................................................14
1.93  "Stock Pledge Agreement"................................................14

                                      -ii-
<PAGE>

                                TABLE OF CONTENTS
                                  (continued)
                                                                            Page

1.94  "Subordinated Creditor".................................................15
1.95  "Subordination Agreement"...............................................15
1.96  "Subsidiary"............................................................15
1.97  "Successor Landlord"....................................................15
1.98  "Tenant"................................................................15
1.99  "Tenant's Personal Property"............................................15
1.100  "Term".................................................................15
1.101  "Third Party Payor Programs"...........................................15
1.102  "Third Party Payors"...................................................15
1.103  "Unsuitable for Its Permitted Use".....................................16
1.104  "Work".................................................................16
ARTICLE 2   LEASED PROPERTY AND TERM..........................................16
2.1  Leased Property..........................................................16
2.2  Condition of Leased Property.............................................17
2.3  Fixed Term...............................................................18
2.4  Extended Terms...........................................................18
2.5  Limitations on Term......................................................18
ARTICLE 3   RENT..............................................................19
3.1  Rent.....................................................................19
3.2  Late Payment of Rent, Etc................................................24
3.3  Net Lease................................................................24
3.4  No Termination, Abatement, Etc...........................................24
ARTICLE 4   USE OF THE LEASED PROPERTY........................................25
4.1  Permitted Use............................................................25
4.2  Compliance with Legal/Insurance Requirements, Etc........................27
4.3  Compliance with Medicaid and Medicare Requirements.......................27
4.4  Environmental Matters....................................................27
ARTICLE 5   MAINTENANCE AND REPAIRS...........................................29
5.1  Maintenance and Repair...................................................29
5.2  Tenant's Personal Property...............................................32
5.3  Yield Up.................................................................33
5.4  MSLS Operating Agreements................................................33
5.5  Other Management Agreements..............................................34
ARTICLE 6   IMPROVEMENTS, ETC.................................................34
6.1  Improvements to the Leased Property......................................34
6.2  Salvage..................................................................35
ARTICLE 7   LIENS.............................................................35
7.1  Liens....................................................................35
7.2  Landlord's Lien..........................................................35
ARTICLE 8   PERMITTED CONTESTS................................................36
ARTICLE 9   INSURANCE AND INDEMNIFICATION.....................................37
9.1  General Insurance Requirements...........................................37
9.2  Waiver of Subrogation....................................................37
9.3  Form Satisfactory, Etc...................................................37
9.4  No Separate Insurance; Self-Insurance....................................38

                                     -iii-
<PAGE>

                                TABLE OF CONTENTS
                                  (continued)
                                                                            Page

9.5  Indemnification of Landlord..............................................38
ARTICLE 10  CASUALTY..........................................................39
10.1  Insurance Proceeds......................................................39
10.2  Damage or Destruction...................................................40
10.3  Damage Near End of Term.................................................42
10.4  Tenant's Property.......................................................42
10.5  Restoration of Tenant's Property........................................42
10.6  No Abatement of Rent....................................................42
10.7  Waiver..................................................................42
ARTICLE 11  CONDEMNATION......................................................42
11.1  Total Condemnation, Etc.................................................43
11.2  Partial Condemnation....................................................43
11.3  MSLS Operating Agreements...............................................44
11.4  Abatement of Rent.......................................................44
11.5  Temporary Condemnation..................................................44
11.6  Allocation of Award.....................................................45
ARTICLE 12  DEFAULTS AND REMEDIES.............................................45
12.1  Events of Default.......................................................45
12.2  Remedies................................................................47
12.3  Tenant's Waiver.........................................................49
12.4  Application of Funds....................................................49
12.5  Landlord's Right to Cure Tenant's Default...............................49
ARTICLE 13  HOLDING OVER......................................................49
ARTICLE 14  LANDLORD DEFAULT..................................................50
ARTICLE 15  PURCHASE RIGHTS...................................................50
ARTICLE 16  SUBLETTING AND ASSIGNMENT.........................................51
16.1  Subletting and Assignment...............................................51
16.2  Required Sublease Provisions............................................52
16.3  Permitted Sublease......................................................53
16.4  Sublease Limitation.....................................................53
ARTICLE 17  ESTOPPEL CERTIFICATES AND FINANCIAL STATEMENTS....................54
17.1  Estoppel Certificates...................................................54
17.2  Financial Statements....................................................54
17.3  General Operations......................................................55
ARTICLE 18  LANDLORD'S RIGHT TO INSPECT.......................................56
ARTICLE 19  EASEMENTS.........................................................56
19.1  Grant of Easements......................................................56
19.2  Exercise of Rights by Tenant............................................56
19.3  Permitted Encumbrances..................................................57
ARTICLE 20  FACILITY MORTGAGES................................................57
20.1  Landlord May Grant Liens................................................57
20.2  Subordination of Lease..................................................57
20.3  Notice to Mortgagee and Superior Landlord...............................58
ARTICLE 21  ADDITIONAL COVENANTS OF TENANT....................................59

                                      -iv-
<PAGE>

                                TABLE OF CONTENTS
                                  (continued)
                                                                            Page

21.1  Prompt Payment of Indebtedness..........................................59
21.2  Conduct of Business.....................................................59
21.3  Maintenance of Accounts and Records.....................................59
21.4  Notice of Litigation, Etc...............................................60
21.5  Indebtedness of Tenant..................................................60
21.6  Distributions, Payments to Affiliated Persons, Etc......................61
21.7  Prohibited Transactions.................................................61
21.8  Liens and Encumbrances..................................................61
21.9  Merger; Sale of Assets; Etc.............................................62
ARTICLE 22  ABITRATION........................................................62
ARTICLE 23  MISCELLANEOUS.....................................................63
23.1  Limitation on Payment of Rent...........................................63
23.2  No Waiver...............................................................63
23.3  Remedies Cumulative.....................................................64
23.4  Severability............................................................64
23.5  Acceptance of Surrender.................................................64
23.6  No Merger of Title......................................................64
23.7  Conveyance by Landlord..................................................64
23.8  Quiet Enjoyment.........................................................64
23.9  No Recordation..........................................................65
23.10  Notices................................................................65
23.11  Construction...........................................................66
23.12  Counterparts; Headings.................................................66
23.13  Applicable Law, Etc....................................................66
23.14  Right to Make Agreement................................................67
23.15  Attorneys' Fees........................................................67
23.16  Nonliability of Trustees...............................................67
23.17  Bankruptcy Remote Entities.............................................68
23.18  Joint and Several Liability............................................68

                                      -v-








<PAGE>
                         AMENDED MASTER LEASE AGREEMENT


         THIS AMENDED  MASTER LEASE  AGREEMENT is entered into as of January 11,
2002,  by and among (i) each of the parties  identified  on the  signature  page
hereof,  as  landlord  (collectively,  "Landlord"),  and (ii) FS TENANT  HOLDING
COMPANY  TRUST,  a Maryland  business  trust,  and FS TENANT  POOL III TRUST,  a
Maryland business trust, as tenant (collectively, "Tenant").

                              W I T N E S S E T H :

         WHEREAS,  Landlord  owns fee simple title to  twenty-eight  (28) of the
Properties  (this and other  capitalized  terms used and not  otherwise  defined
herein  having the  meanings  ascribed to such terms in Article 1) and holds the
ground tenant's  interest with respect to three (3) of the Properties  described
on Exhibits A-1 - A-31; and

         WHEREAS,  pursuant to that certain Master Lease Agreement,  dated as of
January 7, 2002 (the "Original Lease"),  by and among CCC Ohio Healthcare,  Inc.
and  Leisure  Park  Venture  Limited  Partnership,  as  landlord  (collectively,
"Original Landlord"), and Tenant, as tenant, Original Landlord leased two (2) of
the Properties  described in the Original Lease (the "Original  Properties")  to
Tenant and Tenant leased the Original Properties from Landlord; and

         WHEREAS,  Landlord (including,  without limitation,  Original Landlord)
and Tenant wish to amend the Original Lease,  as of the date hereof,  to include
the twenty-nine  (29)  Properties  which are not already subject to the Original
Lease and to make certain  other changes to the Original  Lease,  all subject to
and 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 that, as of the date hereof,  the Original Lease is hereby amended to read
as follows:

                                   ARTICLE 1

                                  DEFINITIONS

         For all  purposes  of this  Agreement,  except as  otherwise  expressly
provided or unless the context otherwise requires, (a) the terms defined in this
Article shall have the meanings assigned to them in this Article and include the
plural as well as the singular,  (b) all accounting terms not otherwise  defined
herein shall have the meanings assigned to them in accordance with GAAP, (c) all
references in this  Agreement to  designated  "Articles,"  "Sections"  and other
subdivisions are to the designated Articles,  Sections and other subdivisions of
this  Agreement,  and (d) the words  "herein,"  "hereof,"  "hereunder" and other
words of  similar  import  refer  to this  Agreement  as a whole  and not to any
particular Article, Section or other subdivision.
<PAGE>
         1.1 "Accounting  Period" shall, with respect to any Property,  (a) have
the meaning given such term in the MSLS Operating Agreements so long as the MSLS
Operating  Agreement with respect to such Property  shall remain in effect,  and
(b)  thereafter,  mean  each  calendar  month or such  other  accounting  period
designated by Landlord and Tenant.

         1.2  "Additional  Charges"  shall have the  meaning  given such term in
Section 3.1.3.

         1.3 "Additional Rent" shall have the meaning given such term in Section
3.1.2(a).

         1.4 "Affiliated  Person" shall mean, with respect to any Person, (a) in
the  case of any  such  Person  which  is a  partnership,  any  partner  in such
partnership,  (b) in the case of any such  Person  which is a limited  liability
company,  any member of such company,  (c) 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 (a) and (b), (d) any
other Person who is an officer,  director, trustee or employee of, or partner in
or member of, such Person or any Person  referred  to in the  preceding  clauses
(a),  (b) and (c),  and (e) any other  Person  who is a member of the  Immediate
Family of such Person or of any Person referred to in the preceding  clauses (a)
through (d).

         1.5  "Agreement"  shall mean this  Master  Lease  Agreement,  including
Exhibits  A and B  hereto,  as it and they may be  amended  from time to time as
herein provided.

         1.6  "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, and all applicable judicial and administrative and regulatory decrees,
judgments and orders, including common law rulings and determinations,  relating
to injury to, or the protection of, real or personal property or human health or
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 or
Regulated  Medical  Wastes,   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.

                                      -2-
<PAGE>
         1.7  "Applicable  Percentage"  shall mean (a)  through  the last day of
Fiscal Year 2002,  two and 65/100 percent  (2.65%),  (b) commencing on the first
day of Fiscal Year 2003 and continuing through the last day of Fiscal Year 2007,
two and 85/100 percent  (2.85%),  and (c)  thereafter,  three and 50/100 percent
(3.5%)  (but,  in each case,  in no event less than the  amount  required  to be
deposited  on  account  of the  FF&E  Reserve  required  to be  established  and
maintained  under the MSLS  Operating  Agreements so long as such MSLS Operating
Agreements shall be in effect).

         1.8 "Award" shall mean all  compensation,  sums or other value awarded,
paid or  received  by virtue of a total or  partial  Condemnation  of any of the
Leased  Property  (after  deduction  of all  reasonable  legal  fees  and  other
reasonable costs and expenses,  including,  without  limitation,  expert witness
fees, incurred by Landlord, in connection with obtaining any such award).

         1.9 "Base  Net  Patient  Revenues"  shall  mean,  with  respect  to any
Property,  Net Patient  Revenues at such Property for the Base Year in the event
the Base Year  consists of 52 weeks,  or, in the event the Base Year consists of
53 weeks, (x) Base Net Patient Revenues for such Property for the Base Year, (y)
divided by 53 and then (z)  multiplied  by 52;  provided,  however,  that in the
event that, with respect to any Lease Year, or portion  thereof,  for any reason
(including,  without  limitation,  a casualty or Condemnation)  there shall be a
reduction  in the  number of units  available  at the  Facility  located at such
Property or in the services  provided at such  Facility  from the number of such
units or the services  provided during the Base Year, in determining  Additional
Rent payable with respect to such Property for such Lease Year, Base Net Patient
Revenues with respect to the affected Property shall be reduced as follows:  (a)
in the event of the  termination  of this Agreement with respect to any Property
pursuant to Article 10, 11 or 12, all Net Patient Revenues for such Property for
the period during the Base Year  equivalent to the period after the  termination
of this Agreement  with respect to such Property  shall be subtracted  from Base
Net Patient  Revenues;  (b) in the event of a partial  closing of such  Facility
affecting the number of units, or the services provided,  at such Facility,  Net
Patient  Revenues  attributable  to units or services at such Facility  shall be
ratably  allocated  among all units in service at such Facility  during the Base
Year  and all such Net  Patient  Revenues  attributable  to units no  longer  in
service shall be subtracted from Base Net Patient Revenues throughout the period
of such  closing;  and (c) in the  event of any other  change  in  circumstances
affecting any Facility, Base Net Patient Revenues shall be equitably adjusted in
such manner as Landlord and Tenant shall reasonably  agree. It is understood and
agreed that Base Net Patient  Revenues  shall be calculated  separately for each
Property  and shall  not be  determined  on an  aggregate  basis for the  Leased
Property.

         1.10 "Base Year" shall mean the 2002 Fiscal Year.

                                      -3-
<PAGE>
         1.11 "Business Day" shall mean any day other than Saturday,  Sunday, or
any other day on which banking institutions in The Commonwealth of Massachusetts
are authorized by law or executive action to close.

         1.12 "Capital  Addition" shall mean, with respect to any Property,  any
renovation,  repair or improvement to the Leased Property (or portion  thereof),
the cost of which  constitutes  a Capital  Expenditure  and, so long as the MSLS
Operating Agreement remains in effect with respect to such Property,  the making
or implementation of which requires  "Owner's" consent under such MSLS Operating
Agreement.

         1.13  "Capital  Expenditure"  shall  mean any  expenditure  treated  as
capital in nature in accordance with GAAP.

         1.14 "Change in Control" shall mean (a) the  acquisition by any Person,
or two or more Persons acting in concert,  of beneficial  ownership  (within the
meaning  of Rule  13d-3 of the  SEC) of 9.8% or  more,  or  rights,  options  or
warrants to acquire 9.8% or more, of the  outstanding  shares of voting stock of
Tenant  or any  Guarantor,  as the  case may be,  or the  power  to  direct  the
management and policies of Tenant or any Guarantor,  directly or indirectly, (b)
the merger or  consolidation  of Tenant or any Guarantor  with or into any other
Person (other than the merger or  consolidation of any Person into Tenant or any
Guarantor  that  does not  result  in a Change  in  Control  of  Tenant  or such
Guarantor under clauses (a), (c) or (d) of this definition), (c) any one or more
sales or conveyances to any Person of all or any material  portion of its assets
(including  capital stock) or business of Tenant or any  Guarantor,  as the case
may be, or (d) the  cessation,  for any reason,  of the  individuals  who at the
beginning of any twenty-four  (24) consecutive  month period  (commencing on the
date  hereof)  constituted  the board of  directors  of Tenant or any  Guarantor
(together  with  any new  directors  whose  election  by  such  Board  or  whose
nomination for election by the shareholders of Tenant or such Guarantor,  as the
case may be, was approved by a vote of a majority of the directors then still in
office who were either  directors  at the  beginning of any such period or whose
election or nomination  for election was previously so approved) to constitute a
majority of the board of directors of Tenant or any Guarantor then in office.

         1.15 "Claim" shall have the meaning given such term in Article 8.

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

         1.17  "Commencement  Date" shall  mean,  with  respect to the  Original
Properties,  the date of the  Original  Lease,  and with  respect  to all  other
Properties, the date of this Agreement.

                                      -4-
<PAGE>
         1.18 "Condemnation"  shall mean, with respect to any Property,  (a) the
exercise of any  governmental  power with respect to such  Property,  whether by
legal proceedings or otherwise, by a Condemnor of its power of condemnation, (b)
a  voluntary  sale or transfer  of such  Property 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 such
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 such Property,  whether or not the same shall have actually
been commenced.

         1.19 "Condemnor" shall mean any public or quasi-public  Person,  having
the power of Condemnation.

         1.20 "Consolidated Financials" shall mean, for any Fiscal Year or other
accounting period of Five Star, annual audited and quarterly unaudited financial
statements of Five Star prepared on a consolidated basis,  including Five Star's
consolidated  balance sheet and the related statements of income and cash flows,
all  in  reasonable   detail,   and  setting  forth  in  comparative   form  the
corresponding figures for the corresponding period in the preceding Fiscal Year,
and prepared in accordance with GAAP throughout the periods reflected.

         1.21 "Date of Taking"  shall mean,  with respect to any  Property,  the
date the Condemnor has the right to possession of such Property,  or any portion
thereof, in connection with a Condemnation.

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

         1.23 "Disbursement  Rate" shall mean an annual rate of interest,  as of
the date of  determination,  equal to the greater of (i) the  Interest  Rate and
(ii) the per annum rate for ten (10) year U.S. Treasury Obligations as published
in The Wall Street  Journal  plus four  hundred  (400) basis  points;  provided,
however, that in no event shall the Disbursement Rate exceed eleven and one-half
percent (11.5%).

         1.24  "Distribution"  shall mean (a) any  declaration or payment of any
dividend (except  ordinary cash dividends  payable in common stock of Tenant) on
or in respect of any  shares of any class of  capital  stock of Tenant,  (b) any
purchase, redemption, retirement or other acquisition of any shares of any class
of capital stock of a corporation,  (c) any other  distribution on or in respect
of any shares of any class of capital stock of a  corporation  or (d) any return
of capital to shareholders.

         1.25  "Easement  Agreement"  shall mean any  conditions,  covenants and
restrictions,  easements, declarations,  licenses and other agreements which are
Permitted Encumbrances and such other agreements as may be granted in accordance
with Section 19.1.

                                      -5-
<PAGE>
         1.26  "Encumbrance"  shall have the meaning  given such term in Section
20.1.

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

         1.28  "Environment"  shall mean soil,  surface  waters,  ground waters,
land,  stream,  sediments,  surface or  subsurface  strata and ambient air.

         1.29 "Environmental  Obligation" shall have the meaning given such term
in Section 4.4.1.

         1.30  "Environmental  Notice" shall have the meaning given such term in
Section 4.4.1.

         1.31  "Event of  Default"  shall  have the  meaning  given such term in
Section 12.1.

         1.32  "Excess Net Patient  Revenues"  shall mean,  with  respect to any
Property,  with respect to any Lease Year, or portion thereof, the amount of Net
Patient Revenues for such Property for such Lease Year, or portion  thereof,  in
excess of Base Net Patient Revenues for such Property for the equivalent  period
during the Base Year.

         1.33 "Extended  Term" shall have the meaning given such term in Section
2.4.

         1.34 "Facility"  shall mean, with respect to any Property,  the skilled
nursing/intermediate   care/independent   living/assisted   living/special  care
facility being operated or proposed to be operated on such Property.

         1.35 "Facility  Mortgage"  shall mean any  Encumbrance  placed upon the
Leased Property, or any portion thereof, in accordance with Article 20.

         1.36  "Facility  Mortgagee"  shall  mean  the  holder  of any  Facility
Mortgage.

         1.37 "FF&E  Estimate" shall have the meaning given such term in Section
5.1.2.

         1.38 "FF&E Reserve" shall mean, with respect to any Property, a reserve
account  established and maintained in accordance  with the applicable  terms of
the MSLS  Operating  Agreement with respect to such Property for so long as such
MSLS  Operating  Agreement  shall remain in effect and  thereafter in accordance
with the terms of this Agreement.

                                      -6-
<PAGE>
         1.39 "FF&E Reserve Payment" shall,  with respect to any Property,  with
respect to any Lease Year, or portion  thereof,  (a) have the meaning given such
term in the MSLS Operating  Agreements so long as the MSLS  Operating  Agreement
with respect to such Property shall remain in effect,  and (b) thereafter,  mean
the  Applicable  Percentage  of Net Patient  Revenues at such  Property for such
Lease Year, or portion thereof.

         1.40 "Financial Officer's  Certificate" shall mean, as to any Person, a
certificate of the chief executive  officer,  chief  financial  officer or chief
accounting officer (or such officers'  authorized designee) of such Person, duly
authorized,  accompanying the financial  statements  required to be delivered by
such Person  pursuant to Section  17.2,  in which such officer shall certify (a)
that such statements have been properly prepared in accordance with GAAP and are
true,  correct and  complete in all  material  respects  and fairly  present the
consolidated  financial  condition of such Person at and as of the dates thereof
and the results of its and their operations for the periods covered thereby, and
(b),  in the event  that the  certifying  party is an  officer of Tenant and the
certificate  is being given in such  capacity,  certify that no Event of Default
has occurred and is continuing hereunder.

         1.41  "Fiscal  Year"  shall  mean (a) when used with  reference  to any
Property,  "Fiscal Year" as defined in the MSLS Operating  Agreements so long as
the MSLS  Operating  Agreement  with  respect to such  Property  shall remain in
effect and, thereafter, the calendar year or such other annual period designated
by Tenant and  approved by  Landlord  and (b) when used with  reference  to Five
Star, Tenant or any other Person,  the calendar year or such other annual period
designated by Tenant and approved by Landlord.

         1.42 "Five Star" shall mean Five Star  Quality  Care,  Inc., a Maryland
corporation, and its permitted successors and assigns.

         1.43 "Fixed  Term"  shall have the  meaning  given such term in Section
2.3.

         1.44  "Fixtures"  shall  have the  meaning  given  such term in Section
2.1(d).

         1.45  "GAAP"  shall  mean  generally  accepted  accounting   principles
consistently applied.

         1.46  "Government  Agencies" shall mean any court,  agency,  authority,
board (including,  without limitation,  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 any 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

                                      -7-
<PAGE>
Leased Property or any portion thereof or any Facility operated thereon.

         1.47  "Guarantor"  shall  mean  Five  Star  and each  and  every  other
guarantor  of  Tenant's   obligations  under  this  Agreement,   and  each  such
guarantor's successors and assigns.

         1.48  "Guaranty"  shall  mean  any  guaranty  agreement  executed  by a
Guarantor in favor of Landlord  pursuant to which the payment or  performance of
Tenant's  obligations  under this  Agreement are  guaranteed,  together with all
modifications, amendments and supplements thereto.

         1.49 "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,  or any
         portion  thereof,  causes or materially  threatens to cause an unlawful
         nuisance  upon the  Leased  Property,  or any  portion  thereof,  or to
         adjacent  properties or poses or materially  threatens to pose a hazard
         to the Leased  Property,  or any portion  thereof,  or to the health or
         safety of  persons  on or about the  Leased  Property,  or any  portion
         thereof; 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

                                      -8-
<PAGE>
                  (g) without  limitation,  which contains or emits  radioactive
         particles, waves or material; or

                  (h) without limitation, constitutes Regulated Medical Wastes.

         1.50  "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.

         1.51  "Impositions"  shall mean,  collectively,  all taxes  (including,
without limitation,  all taxes imposed under the laws of any State, as such laws
may be amended from time to time, and all ad valorem,  sales and use, or similar
taxes as the same relate to or are imposed upon Landlord, Tenant or the business
conducted upon the Leased Property), assessments (including, without limitation,
all assessments for public improvements or benefit,  whether or not commenced or
completed  prior to the date hereof),  ground rents  (including any minimum rent
under any ground lease, and any additional rent or charges  thereunder),  water,
sewer or other rents and charges, excises, tax levies, fees (including,  without
limitation,  license, permit,  inspection,  authorization and similar fees), and
all  other  governmental  charges,  in each case  whether  general  or  special,
ordinary or extraordinary, foreseen or unforeseen, of every character in respect
of the Leased Property or the business  conducted  thereon by Tenant  (including
all  interest  and  penalties  thereon due to any failure in payment by Tenant),
which at any time  prior to,  during or in  respect  of the Term  hereof  may be
assessed  or  imposed  on or in  respect  of or be a lien  upon  (a)  Landlord's
interest in the Leased Property,  (b) the Leased Property or any part thereof or
any rent therefrom or any estate,  right, title or interest therein,  or (c) any
occupancy, operation, use or possession of, or sales from, or activity conducted
on, or in  connection  with the  Leased  Property  or the  leasing or use of the
Leased Property or any part thereof by Tenant;  provided,  however, that nothing
contained  herein  shall be  construed  to  require  Tenant  to pay and the term
"Impositions"  shall not  include  (i) any tax based on net  income  imposed  on
Landlord,  (ii) any net revenue tax of  Landlord,  (iii) any  transfer  fee (but
excluding  any  mortgage or similar tax  payable in  connection  with a Facility
Mortgage)  or other tax  imposed  with  respect to the sale,  exchange  or other
disposition by Landlord of the Leased Property or the proceeds thereof, (iv) any
single  business,  gross receipts tax,  transaction  privilege,  rent or similar
taxes as the same relate to or are imposed  upon  Landlord,  (v) any interest or
penalties imposed on Landlord as a result of the failure of Landlord to file any
return or report  timely and in the form  prescribed by law or to pay any tax or
imposition,  except to the extent such failure is a result of a breach by Tenant
of its obligations  pursuant to Section 3.1.3,  (vi) any impositions  imposed on
Landlord  that are a result of Landlord not being  considered  a "United  States
person" as defined in Section  7701(a)(30)  of the Code,  (vii)

                                      -9-
<PAGE>
any  impositions  that  are  enacted  or  adopted  by their  express  terms as a
substitute  for any tax that would not have been  payable by Tenant  pursuant to
the terms of this Agreement or (viii) any  impositions  imposed as a result of a
breach of covenant or  representation  by  Landlord in any  agreement  governing
Landlord's  conduct or  operation  or as a result of the  negligence  or willful
misconduct of Landlord.

         1.52  "Incidental  Documents"  shall mean the  Guaranty,  the  Security
Agreement and the Stock Pledge Agreement.

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

         1.54  "Insurance  Requirements"  shall mean all terms of any  insurance
policy  required by this Agreement or the MSLS  Operating  Agreements so long as
such MSLS Operating  Agreements  shall remain in effect 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,  MSLS, any Manager
or the Leased Property.

         1.55 "Interest Rate" shall mean ten percent (10%) per annum.

         1.56 "Land" shall have the meaning given such term in Section 2.1(a).

         1.57 "Landlord" shall have the meaning given such term in the preambles
to this Agreement and shall also include their respective  permitted  successors
and assigns.

         1.58  "Landlord  Default"  shall  have the  meaning  given such term in
Article 14.

         1.59  "Landlord  Liens"  shall  mean  liens on or  against  the  Leased
Property or any  payment of Rent (a) which  result from any act of, or any claim
against,  Landlord or any owner of a direct or  indirect  interest in the Leased
Property  (other than the lessor under any ground lease affecting any portion of
the Leased  Property),  or which  result from any  violation  by Landlord of any
terms of this  Agreement,  or (b) which result from liens in favor of any taxing
authority  by reason of any tax owed by Landlord or any fee owner of a direct or
indirect interest in the Leased Property (other than the lessor under any Ground
Lease affecting any portion of the Leased  Property);  provided,  however,  that
"Landlord  Lien"  shall not include  any lien  resulting  from any tax for which
Tenant is  obligated  to pay or indemnify  Landlord  against  until such time as
Tenant  shall  have  already  paid to or on  behalf of  Landlord  the tax or the
required indemnity with respect to the same.

                                      -10-
<PAGE>
         1.60 "Lease Year" shall mean any Fiscal Year or portion  thereof during
the Term.

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

         1.62 "Leased  Intangible  Property" shall mean all agreements,  service
contracts,  equipment  leases,  booking  agreements  and other  arrangements  or
agreements affecting the ownership, repair, maintenance,  management, leasing or
operation of the Leased Property, or any portion thereof, to which Landlord is a
party;  all books,  records  and files  relating  to the  leasing,  maintenance,
management  or  operation  of  the  Leased  Property,  or any  portion  thereof,
belonging to Landlord;  all transferable or assignable permits,  certificates of
occupancy,  operating permits,  sign permits,  development rights and approvals,
certificates,  licenses,  warranties and guarantees,  rights to deposits,  trade
names,  service marks,  telephone  exchange  numbers  identified with the Leased
Property, and all other transferable intangible property,  miscellaneous rights,
benefits  and  privileges  of any kind or character  belonging to Landlord  with
respect to the Leased Property.

         1.63 "Leased Personal  Property" shall have the meaning given such term
in Section 2.1(e).

         1.64  "Leased  Property"  shall  have the  meaning  given  such term in
Section 2.1.

         1.65  "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 of need,  authorizations  and
regulations necessary to operate any Property for its Permitted Use, and (b) all
covenants,   agreements,   restrictions  and   encumbrances   contained  in  any
instruments at any time in force  affecting any Property,  including those which
may (i) require  material  repairs,  modifications  or  alterations in or to any
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.

         1.66  "Lien"  shall  mean  any  mortgage,  security  interest,  pledge,
collateral assignment, or other encumbrance,  lien or charge of any kind, or any
transfer of property  or assets for the  purpose of  subjecting  the same to the
payment of  Indebtedness  or performance of any other  obligation in priority to
payment of its general creditors.

         1.67 "Manager" shall mean,  with respect to any Property,  the operator
or  manager  under any  Management  Agreement  from time to time

                                      -11-
<PAGE>
in effect  with  respect to such  Property,  and its  permitted  successors  and
assigns.

         1.68  "Management  Agreement" shall mean, with respect to any Property,
(a) so long as the same shall  remain in effect,  the MSLS  Operating  Agreement
with respect to such Property,  and (b) thereafter,  any operating or management
agreement from time to time entered into by Tenant with respect to such Property
in accordance with the applicable  provisions of this  Agreement,  together with
all amendments, modifications and supplements thereto.

         1.69   "Minimum   Rent"   shall  mean   Sixty-Three   Million   Dollars
($63,000,000) per annum.

         1.70 "MSLS" shall mean Marriott Senior Living  Services,  Inc., and its
permitted successors and assigns.

         1.71 "MSLS Operating  Agreements"  shall mean,  collectively,  the MSLS
Operating  Agreements  described  in Exhibit B,  together  with all  amendments,
modifications and supplements thereto.

         1.72 "Net Patient  Revenues"  shall mean, with respect to any Property,
for each Fiscal Year during the Term,  all revenues and receipts  (determined on
an accrual basis and in all material  respects in accordance with GAAP) of every
kind  derived  from  renting,  using and/or  operating  such  Property and parts
thereof,  including,  but not limited to: all patient,  client or resident rents
and revenues  received or  receivable  for the use of otherwise by reason of all
units, beds and other facilities  provided,  meals served,  services  performed,
space or  facilities  subleased or goods sold on such  Property,  or any portion
thereof,  including,  without  limitation,  any other  arrangements  with  third
parties  relating to the possession or use of any portion of such Property;  and
proceeds,  if any, from business interruption or other loss of income insurance;
provided,  however,  that Net Patient  Revenues shall not include the following:
revenue  from  professional  fees or  charges  by  physicians  and  unaffiliated
providers of services, when and to the extent such charges are paid over to such
physicians and unaffiliated  providers of services, or are separately billed and
not included in  comprehensive  fees;  contractual  allowances  (relating to any
period  during  the  Term)  for  billings  not  paid  by or  received  from  the
appropriate governmental agencies or third party providers; allowances according
to GAAP for uncollectible  accounts,  including credit card accounts and charity
care or other administrative  discounts;  all proper patient billing credits and
adjustments  according  to GAAP  relating  to health care  accounting;  provider
discounts  for hospital or other  medical  facility  utilization  contracts  and
credit card discounts;  any amounts  actually paid by Tenant for the cost of any
federal,  state or local  governmental  programs imposed specially to provide or
finance indigent patient care; federal,  state or municipal excise,  sales, use,
occupancy  or  similar  taxes  collected  directly  from  patients,  clients  or
residents  or  included  as part of the sales  price of any  goods or

                                      -12-
<PAGE>
services;  insurance proceeds (other than proceeds from business interruption or
other loss of income  insurance);  Award  proceeds  (other  than for a temporary
Condemnation);  revenues  attributable to services actually provided off-site or
otherwise away from such Property, such as home health care, to persons that are
not patients,  clients or residents at such Property;  revenues  attributable to
child care  services  provided  primarily  to employees  of such  Property;  any
proceeds  from any sale of such  Property  or from the  refinancing  of any debt
encumbering such Property; proceeds from the disposition of furnishings, fixture
and  equipment no longer  necessary  for the  operation of the Facility  located
thereon; any security deposits and other advance deposits,  until and unless the
same are  forfeited  to Tenant or applied  for the  purpose  for which they were
collected; and interest income from any bank account or investment of Tenant. It
is  understood  and  agreed  that  Net  Patient  Revenues  shall  be  calculated
separately  for each Property and shall not be determined on an aggregate  basis
for the Leased Property.

         1.73  "Notice"  shall mean a notice  given in  accordance  with Section
23.10.

         1.74  "Officer's  Certificate"  shall mean a  certificate  signed by an
officer  or other duly  authorized  individual  of the  certifying  Entity  duly
authorized by the board of directors or other  governing  body of the certifying
Entity.

         1.75 "Original  Landlord" shall have the meaning given such term in the
recitals.

         1.76  "Original  Lease"  shall have the meaning  given such term in the
recitals.

         1.77  "Original  Properties"  shall have the meaning given such term in
the recitals.

         1.78  "Other  Lease"  shall  mean the  Master  Lease  Agreement,  dated
December 31, 2001, by and among  certain  Affiliated  Persons of Senior  Housing
Properties Trust, as landlord,  and certain  Affiliated Persons of Five Star, as
tenant, together with all modifications, amendments and supplements thereto.

         1.79  "Overdue  Rate"  shall  mean,  on any date,  a per annum  rate of
interest equal to the lesser of fifteen  percent (15%) and the maximum rate then
permitted under applicable law.

         1.80 "Parent" shall mean, with respect to any Person,  any Person which
owns  directly,  or indirectly  through one or more  Subsidiaries  or Affiliated
Persons,  twenty percent (20%) or more of the voting or beneficial  interest in,
or otherwise has the right or power (whether by contract,  through  ownership of
securities or otherwise) to control, such Person.

                                      -13-
<PAGE>
         1.81 "Permitted Encumbrances" shall mean, with respect to any Property,
all rights, restrictions, and easements of record set forth on Schedule B to the
applicable  owner's or leasehold title insurance  policy issued to Landlord with
respect to such Property,  plus any other  encumbrances as may have been granted
or caused by Landlord or otherwise consented to in writing by Landlord from time
to time.

         1.82 "Permitted  Liens" shall mean any Liens granted in accordance with
Section 21.8(a).

         1.83 "Permitted Use" shall mean, with respect to any Property,  any use
of such Property permitted pursuant to Section 4.1.1.

         1.84  "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.

         1.85 "Property" shall have the meaning given such term in Section 2.1.

         1.86 "Provider  Agreements" shall mean all participation,  provider and
reimbursement  agreements  or  arrangements  now or  hereafter in effect for the
benefit  of  Tenant or any  Manager  in  connection  with the  operation  of any
Facility  relating to any right of payment or other  claim  arising out of or in
connection with Tenant's participation in any Third Party Payor Program.

         1.87 "Records" shall have the meaning given such term in Section 7.2.

         1.88 "Regulated  Medical Wastes" shall mean all materials  generated by
Tenant,  subtenants,   patients,  occupants  or  the  operators  of  the  Leased
Properties  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.

         1.89 "Rent" shall mean, collectively, the Minimum Rent, Additional Rent
and Additional Charges.

         1.90 "SEC" shall mean the Securities and Exchange Commission.

         1.91 "Security  Agreement" shall mean the Security Agreement,  dated as
of the date  hereof,  made by Tenant for the benefit of  Landlord,  as it may be
amended, restated, supplemented or otherwise modified from time to time.

         1.92  "State"  shall mean,  with  respect to any  Property,  the state,
commonwealth or district in which the such Property is located.

         1.93 "Stock Pledge  Agreement"  shall mean the Stock Pledge  Agreement,
dated as of the date hereof, made by FSQ, Inc., a Delaware corporation, in favor
of Landlord with respect to the stock of Tenant,

                                      -14-
<PAGE>
as it may be amended, restated,  supplemented or otherwise modified from time to
time.

         1.94 "Subordinated Creditor" shall mean any creditor of Tenant which is
a party to a Subordination Agreement in favor of Landlord.

         1.95  "Subordination  Agreement"  shall  mean  any  agreement  (and any
amendments  thereto)  executed by a Subordinated  Creditor pursuant to which the
payment and performance of Tenant's  obligations to such  Subordinated  Creditor
are  subordinated  to the payment and  performance  of Tenant's  obligations  to
Landlord under this Agreement.

         1.96  "Subsidiary"  shall mean, with respect to any Person,  any Entity
(a) in which such  Person  owns  directly,  or  indirectly  through  one or more
Subsidiaries,  twenty percent (20%) or more of the voting or beneficial interest
or (b) which such Person otherwise has the right or power to control (whether by
contract, through ownership of securities or otherwise).

         1.97  "Successor  Landlord"  shall have the meaning  given such term in
Section 20.2.

         1.98  "Tenant"  shall have the meaning given such term in the preambles
to this Agreement and shall also include its permitted successors and assigns.

         1.99  "Tenant's  Personal  Property"  shall mean all motor vehicles and
consumable inventory and supplies,  furniture,  furnishings,  equipment, movable
walls and  partitions,  equipment and machinery and all other tangible  personal
property of Tenant,  if any, acquired by Tenant on and after the date hereof and
located  at the  Leased  Property  or used in  Tenant's  business  at the Leased
Property and all modifications,  replacements, alterations and additions to such
personal  property  installed  at the  expense of  Tenant,  other than any items
included within the definition of Fixtures or Leased Personal Property.

         1.100 "Term" shall mean, collectively,  the Fixed Term and the Extended
Terms,  to the extent properly  exercised  pursuant to the provisions of Section
2.4, unless sooner terminated pursuant to the provisions of this Agreement.

         1.101  "Third  Party Payor  Programs"  shall mean all third party payor
programs in which Tenant presently or in the future may participate,  including,
without limitation,  Medicare, Medicaid, CHAMPUS, Blue Cross and/or Blue Shield,
Managed Care Plans,  other private  insurance  programs and employee  assistance
programs.

         1.102 "Third Party Payors" shall mean Medicare, Medicaid, CHAMPUS, Blue
Cross and/or Blue Shield,  private insurers and any other Person which presently
or in the future maintains Third Party Payor Programs.

                                      -15-
<PAGE>
         1.103  "Unsuitable  for Its Permitted Use" shall mean,  with respect to
any Facility,  a state or condition of such Facility such that (a) following any
damage or destruction involving a Facility, (i) such Facility cannot be operated
on a  commercially  practicable  basis  for  its  Permitted  Use  and it  cannot
reasonably  be expected to be restored to  substantially  the same  condition as
existed immediately before such damage or destruction, and as otherwise required
by  Section  10.2.4,   within  twelve  (12)  months  following  such  damage  or
destruction  or such  longer  period of time as to which  business  interruption
insurance is available to cover Rent and other costs  related to the  applicable
Property  following such damage or destruction,  (ii) the damage or destruction,
if uninsured,  exceeds $1,000,000 or (iii) the cost of such restoration  exceeds
ten percent (10%) of the fair market value of such Property immediately prior to
such  damage  or  destruction,  or (b) as the  result  of a  partial  taking  by
Condemnation,  such Facility  cannot be operated,  in the good faith judgment of
Tenant, on a commercially practicable basis for its Permitted Use.

         1.104 "Work" shall have the meaning given such term in Section 10.2.4.

                                   ARTICLE 2

                            LEASED PROPERTY AND TERM

         2.1  Leased  Property.  Upon and  subject  to the terms and  conditions
hereinafter set forth, Landlord leases to Tenant and Tenant leases from Landlord
all of Landlord's right, title and interest in and to all of the following (each
of items (a) through (g) below which, as of the  Commencement  Date,  relates to
any single Facility, a "Property" and, collectively, the "Leased Property"):

                  (a) those certain tracts,  pieces and parcels of land, as more
         particularly  described in Exhibits A-1 through A-31,  attached  hereto
         and made a part hereof (the "Land");

                  (b) all buildings,  structures and other improvements of every
         kind including,  but not limited to, alleyways and connecting  tunnels,
         sidewalks,  utility  pipes,  conduits and lines (on-site and off-site),
         parking areas and roadways appurtenant to such buildings and structures
         presently   situated   upon  the  Land   (collectively,   the   "Leased
         Improvements");

                  (c) all easements,  rights and  appurtenances  relating to the
         Land and the Leased Improvements;

                  (d) all  equipment,  machinery,  fixtures,  and other items of
         property,  now or hereafter 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

                                      -16-
<PAGE>
         and  water  pollution   control,   waste   disposal,   air-cooling  and
         air-conditioning systems and apparatus,  sprinkler systems and fire and
         theft  protection  equipment,  all  of  which,  to the  maximum  extent
         permitted by law, are hereby deemed by the parties hereto to constitute
         real estate, together with all replacements, modifications, alterations
         and additions  thereto,  but specifically  excluding all items included
         within the category of Tenant's  Personal Property  (collectively,  the
         "Fixtures");

                  (e) all machinery, equipment, furniture, furnishings, moveable
         walls or  partitions,  computers  or trade  fixtures or other  personal
         property of any kind or description used or useful in Tenant's 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,  except items,  if any,  included
         within the category of Fixtures,  but specifically  excluding all items
         included   within  the   category   of   Tenant's   Personal   Property
         (collectively, the "Leased Personal Property");

                  (f) all of the Leased Intangible Property; and

                  (g) any and all leases of space in the Leased Improvements.

         2.2  Condition  of Leased  Property.  Tenant  acknowledges  receipt and
delivery of  possession  of the Leased  Property  and Tenant  accepts the Leased
Property  in its  "as  is"  condition,  subject  to the  rights  of  parties  in
possession,  the existing state of title,  including all covenants,  conditions,
restrictions,  reservations,  mineral  leases,  easements  and other  matters of
record or that are visible or apparent on the Leased  Property,  all  applicable
Legal Requirements,  the lien of any financing instruments,  mortgages and deeds
of trust  existing prior to the  Commencement  Date or permitted by the terms of
this Agreement, and such other matters which would be disclosed by an inspection
of the Leased  Property  and the record title  thereto or by an accurate  survey
thereof.  TENANT REPRESENTS THAT IT HAS INSPECTED THE LEASED PROPERTY AND ALL OF
THE  FOREGOING  AND HAS  FOUND THE  CONDITION  THEREOF  SATISFACTORY  AND IS NOT
RELYING ON ANY  REPRESENTATION  OR WARRANTY OF LANDLORD OR LANDLORD'S  AGENTS OR
EMPLOYEES  WITH RESPECT  THERETO AND TENANT  WAIVES ANY CLAIM OR ACTION  AGAINST
LANDLORD IN RESPECT OF THE CONDITION OF THE LEASED  PROPERTY.  LANDLORD MAKES NO
WARRANTY  OR  REPRESENTATION,  EXPRESS  OR  IMPLIED,  IN  RESPECT  OF THE LEASED
PROPERTY  OR ANY PART  THEREOF,  EITHER  AS TO ITS  FITNESS  FOR USE,  DESIGN OR
CONDITION FOR ANY PARTICULAR  USE OR PURPOSE OR OTHERWISE,  AS TO THE QUALITY OF
THE MATERIAL OR WORKMANSHIP THEREIN,  LATENT OR PATENT, IT BEING AGREED THAT ALL
SUCH RISKS ARE TO BE BORNE BY TENANT.  To the maximum  extent  permitted by law,
however,  Landlord hereby assigns to Tenant all of Landlord's  rights to proceed
against any  predecessor  in interest or insurer for breaches of  warranties  or
representations  or for latent  defects in the Leased  Property.  Landlord shall
fully cooperate with Tenant in the

                                      -17-
<PAGE>
prosecution of any such claims,  in Landlord's or Tenant's name, all at Tenant's
sole  cost and  expense.  Tenant  shall  indemnify,  defend,  and hold  harmless
Landlord  from and  against  any  loss,  cost,  damage or  liability  (including
reasonable  attorneys'  fees)  incurred  by  Landlord  in  connection  with such
cooperation.

         2.3 Fixed Term.  The initial term of this  Agreement (the "Fixed Term")
shall commence on the Commencement Date and shall expire on December 31, 2017.

         2.4 Extended  Terms.  Provided  that (i) no Event of Default shall have
occurred and be continuing, and (ii) the term of the Other Lease shall have been
simultaneously extended,  Tenant shall have the right to extend the Term for two
consecutive  renewal terms of, in the case of the first  Extended Term, ten (10)
years  and,  in  the  case  of  the  second   Extended  Term,   five  (5)  years
(collectively, the "Extended Terms").

         Each Extended Term shall  commence on the day succeeding the expiration
of the Fixed Term or the preceding Extended Term, as the case may be. All of the
terms,  covenants  and  provisions  of this  Agreement  shall apply to each such
Extended Term,  except that Tenant shall have no right to extend the Term beyond
the expiration of the Extended  Terms.  If Tenant shall elect to exercise either
of the aforesaid options,  it shall do so by giving Landlord Notice thereof,  in
the case of the first  Extended  Term,  not later than  twenty-four  (24) months
prior  to the  expiration  of the  Fixed  Term,  and in the  case of the  second
Extended  Term, not later than eleven (11) months prior to the expiration of the
first  Extended  Term, it being  understood and agreed that time shall be of the
essence with respect to the giving of such Notice.  If Tenant shall fail to give
such Notice,  this  Agreement  shall  automatically  terminate at the end of the
Fixed Term or the preceding  Extended Term, as the case may be, and Tenant shall
have no further  option to extend the Term of this  Agreement.  If Tenant  shall
give such Notice and notice  pursuant to the Other Lease,  the extension of this
Agreement  shall  be  automatically   effected  without  the  execution  of  any
additional documents;  it being understood and agreed,  however, that Tenant and
Landlord  shall  execute such  documents  and  agreements  as either party shall
reasonably require to evidence the same.  Notwithstanding  the provisions of the
foregoing  sentence,  if,  subsequent to the giving of such Notice,  an Event of
Default shall occur, at Landlord's option, the extension of this Agreement shall
cease to take effect and this Agreement shall automatically terminate at the end
of the Fixed Term or the preceding Extended Term, as the case may be, and Tenant
shall have no further option to extend the Term of this Agreement.

         2.5 Limitations on Term.  Notwithstanding anything contained in Section
2.3 or Section 2.4 to the contrary,  the term of this  Agreement with respect to
any  Leased  Property  shall not  extend  beyond  the term of any  ground  lease
(including  all  renewals and  extensions  thereof)  pursuant to which  Landlord
leases such Leased Property.

                                      -18-
<PAGE>
                                   ARTICLE 3

                                      RENT

         3.1 Rent.  Tenant  shall pay, in lawful  money of the United  States of
America which shall be legal tender for the payment of public and private debts,
without  offset,  abatement,  demand or deduction  (unless  otherwise  expressly
provided in this  Agreement),  Minimum Rent and Additional  Rent to Landlord and
Additional  Charges to the party to whom such  Additional  Charges are  payable,
during the Term.  All  payments  to Landlord  shall be made by wire  transfer of
immediately  available federal funds or by other means acceptable to Landlord in
its sole discretion. Rent for any partial Accounting Period shall be prorated on
a per diem basis.

                  3.1.1 Minimum Rent.

                  (a)  Payments.  Minimum  Rent  shall be paid in arrears on the
         last Business Day of each Accounting Period.

                  (b) Allocation of Minimum Rent.  Minimum Rent may be allocated
         and reallocated among the Properties  comprising the Leased Property by
         agreement among Landlord and Tenant; provided, however that in no event
         shall the  Minimum  Rent  allocated  to any  Property  be less than the
         monthly amount payable by Landlord on account of any Facility  Mortgage
         and/or  ground or master lease with respect to such  Property nor shall
         the aggregate  amount of Minimum Rent  allocated  among the  Properties
         exceed the total amount payable for the Leased Property.

                  (c) Adjustments of Minimum Rent Following  Disbursements Under
         Sections  5.1.3(b),  10.2.3  and  11.2.  Effective  on the date of each
         disbursement  to  pay  for  the  cost  of  any  repairs,   maintenance,
         renovations or replacements  pursuant to Sections  5.1.3(b),  10.2.3 or
         11.2,  the annual Minimum Rent shall be increased by a per annum amount
         equal to the  Disbursement  Rate times the amount so disbursed.  If any
         such  disbursement  is made  during  any month on a day other  than the
         first  Business  Day  of an  Accounting  Period,  Tenant  shall  pay to
         Landlord  on  the  first  Business  Day of  the  immediately  following
         Accounting  Period (in  addition to the amount of Minimum  Rent payable
         with respect to such Accounting  Period,  as adjusted  pursuant to this
         paragraph  (c)) the  amount  by which  Minimum  Rent for the  preceding
         Accounting  Period,  as adjusted  for such  disbursement  on a per diem
         basis,  exceeded  the  amount of  Minimum  Rent paid by Tenant for such
         preceding Accounting Period.

                  (d)  Adjustments  of  Minimum  Rent  Following  Partial  Lease
         Termination.  Subject  to Section  4.1.1(b),  if this  Agreement  shall
         terminate  with respect to any Property but less than all of the Leased
         Property,  Minimum  Rent shall be reduced  by the

                                      -19-
<PAGE>
         affected  Property's  allocable  share of Minimum  Rent  determined  in
         accordance with the applicable provisions of this Agreement.

                  3.1.2 Additional Rent.

                  (a) Amount.  Tenant  shall pay  additional  rent  ("Additional
         Rent") with respect to each Lease Year during the Term, with respect to
         each Property,  in an amount, not less than zero, equal to five percent
         (5%) of Excess Net Patient  Revenues with respect to such Property.  So
         long as the MSLS  Operating  Agreement  shall  remain  in  effect  with
         respect to a Property, copies of each Interim Report (as defined in the
         MSLS Operating  Agreements)  delivered  pursuant to Section 9.01 of the
         MSLS Operating Agreement shall be delivered to Landlord upon receipt by
         Tenant and each quarterly  payment of Additional Rent for such Property
         shall be due and payable and shall be  delivered  to Landlord  with the
         payment of the  Minimum  Rent next due after  receipt  of such  Interim
         Report,  together  with an  Officer's  Certificate  setting  forth  the
         calculation of Additional Rent due and payable for such quarter. If the
         MSLS  Operating  Agreement  terminates  with  respect  to  a  Property,
         thereafter,  quarterly  payments of  Additional  Rent for such Property
         shall be  calculated  based on Net Patient  Revenues  for such  quarter
         during the preceding year and shall be due and payable and delivered to
         Landlord on the first Business Day of each calendar quarter, or portion
         thereof,  thereafter  occurring  during  the  Term,  together  with  an
         Officer's  Certificate setting forth the calculation of Additional Rent
         due and payable for such quarter.

                  (b) Quarterly  Installments.  Installments  of Additional Rent
         for each Lease  Year  during the Term,  or  portion  thereof,  shall be
         calculated  and paid  quarterly in arrears,  together with an Officer's
         Certificate  setting forth the  calculation of Additional  Rent due and
         payable for such quarter.

                  (c)  Reconciliation  of Additional  Rent. In addition,  within
         seventy-five  (75) days  after the end of the Base Year and each  Lease
         Year  thereafter (or any portion  thereof  occurring  during the Term),
         Tenant  shall  deliver,  or cause to be  delivered,  to Landlord  (i) a
         financial  report  setting  forth  the Net  Patient  Revenues  for each
         Property for such preceding  Lease Year, or portion  thereof,  together
         with  an  Officer's   Certificate  from  Tenant's  chief  financial  or
         accounting  officer certifying that such report is true and correct and
         (ii) a statement  showing  Tenant's  calculation of Additional Rent due
         for such  preceding  Lease Year based on the Net Patient  Revenues  set
         forth in such financial report,  together with an Officer's Certificate
         from Tenant's chief  financial or accounting  officer  certifying  that
         such statement is true and correct.  Notwithstanding the foregoing,  if
         any  MSLS  Operating  Agreement  terminates,  Tenant  shall  thereafter
         deliver to Landlord,  together with the financial  report and Officer's
         Certificate  referred to in clause (i) of the

                                      -20-
<PAGE>
         preceding sentence, an audit of Net Patient Revenues prepared by a firm
         of  independent  certified  public  accountants  proposed by Tenant and
         approved  by  Landlord   (which  approval  shall  not  be  unreasonably
         withheld, delayed or conditioned).

                  If the annual Additional Rent for such preceding Lease Year as
         set forth in Tenant's  statement  thereof exceeds the amount previously
         paid with  respect  thereto by Tenant,  Tenant shall pay such excess to
         Landlord at such time as the  statement  is  delivered,  together  with
         interest at the Interest  Rate,  which  interest  shall accrue from the
         close of such  preceding  Lease Year until the date that such statement
         is required to be delivered and, thereafter, such interest shall accrue
         at the Overdue Rate,  until the amount of such difference shall be paid
         or  otherwise  discharged.  If the  annual  Additional  Rent  for  such
         preceding Lease Year as shown in such statement is less than the amount
         previously paid with respect thereto by Tenant,  provided that no Event
         of Default shall have occurred and be continuing,  Landlord shall grant
         Tenant a credit  against  the  Additional  Rent next  coming due in the
         amount of such difference, together with interest at the Interest Rate,
         which  interest  shall  accrue from the date of payment by Tenant until
         the date such  credit is applied  or paid,  as the case may be. If such
         credit cannot be made because the Term has expired prior to application
         in full  thereof,  provided  no Event of Default  has  occurred  and is
         continuing,  Landlord shall pay the unapplied balance of such credit to
         Tenant,  together with interest at the Interest  Rate,  which  interest
         shall  accrue  from the date of  payment  by  Tenant  until the date of
         payment by Landlord.

                  (d) Confirmation of Additional Rent. Tenant shall utilize,  or
         cause to be utilized,  an accounting  system for the Leased Property in
         accordance  with its usual and customary  practices and in all material
         respects in accordance with GAAP, which will accurately  record all Net
         Patient Revenues and Tenant shall retain,  for at least three (3) years
         after the expiration of each Lease Year,  reasonably  adequate  records
         conforming to such accounting  system showing all Net Patient  Revenues
         for such Lease Year. Landlord,  at its own expense,  except as provided
         hereinbelow,  shall have the right, exercisable by Notice to Tenant, by
         its accountants or representatives,  to audit the information set forth
         in the Officer's Certificate referred to in subparagraph (c) above and,
         in connection with such audits,  to examine  Tenant's books and records
         with respect  thereto  (including  supporting data and sales and excise
         tax  returns).  Landlord  shall begin such audit as soon as  reasonably
         possible following its receipt of the applicable Officer's  Certificate
         and  shall   complete  such  audit  as  soon  as  reasonably   possible
         thereafter.  If any such audit discloses a deficiency in the payment of
         Additional Rent and, either Tenant agrees with the result of such audit
         or the matter is  otherwise  compromised  with  Landlord,  Tenant shall
         forthwith  pay to  Landlord  the amount of the  deficiency,  as finally
         agreed or determined, together with

                                      -21-
<PAGE>
         interest at the Interest  Rate,  from the date such payment should have
         been made to the date of payment  thereof.  If any such audit discloses
         that Tenant paid more  Additional  Rent for any Lease Year than was due
         hereunder,  and either Landlord agrees with the result of such audit or
         the matter is  otherwise  determined,  provided no Event of Default has
         occurred and is  continuing,  Landlord  shall,  at  Landlord's  option,
         either  grant  Tenant a credit or pay to Tenant an amount  equal to the
         amount of such overpayment  against  Additional Rent next coming due in
         the  amount  of such  difference,  as  finally  agreed  or  determined,
         together  with  interest at the Interest  Rate,  which  interest  shall
         accrue from the time of payment by Tenant until the date such credit is
         applied or paid, as the case may be; provided,  however, that, upon the
         expiration  or sooner  termination  of the Term,  provided  no Event of
         Default  has  occurred  and  is  continuing,  Landlord  shall  pay  the
         unapplied  balance of such credit to Tenant,  together with interest at
         the Interest Rate, which interest shall accrue from the date of payment
         by  Tenant  until  the  date of  payment  from  Landlord.  Any  dispute
         concerning the  correctness of an audit shall be settled by arbitration
         pursuant to the provisions of Article 22.

         Any proprietary information obtained by Landlord with respect to Tenant
pursuant to the provisions of this Agreement  shall be treated as  confidential,
except that such information may be used, subject to appropriate confidentiality
safeguards,  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.
The  obligations  of Tenant and Landlord  contained in this Section  3.1.2 shall
survive the expiration or earlier termination of this Agreement.

                  3.1.3 Additional  Charges. In addition to the Minimum Rent and
Additional Rent payable hereunder, Tenant shall pay (or cause to be paid) to the
appropriate  parties and discharge (or cause to be  discharged)  as and when due
and payable the following (collectively, "Additional Charges"):

                  (a)  Impositions.  Subject to Article 8 relating to  permitted
         contests, Tenant shall pay, or cause to be paid, all Impositions before
         any fine, penalty, interest or cost (other than any opportunity cost as
         a result of a  failure  to take  advantage  of any  discount  for early
         payment)  may be  added  for  non-payment,  such  payments  to be  made
         directly to the taxing authorities where feasible,  and shall promptly,
         upon request,  furnish to Landlord copies of official receipts or other
         reasonably  satisfactory  proof  evidencing such payments.  If any such
         Imposition  may,  at the option of the  taxpayer,  lawfully  be paid in
         installments  (whether  or not  interest  shall  accrue  on the  unpaid
         balance of such Imposition),  Tenant may exercise the option to pay the
         same  (and  any  accrued   interest  on  the  unpaid  balance  of  such
         Imposition) in installments and, in such event,  shall pay, or cause to
         pay,  such  installments  during  the Term as

                                      -22-
<PAGE>
         the same  become  due and before any fine,  penalty,  premium,  further
         interest or cost may be added thereto. Landlord, at its expense, shall,
         to the extent  required or permitted  by  Applicable  Law,  prepare and
         file,  or cause to be prepared  and filed,  all tax returns and pay all
         taxes due in respect of Landlord's net income,  gross  receipts,  sales
         and use,  single  business,  transaction  privilege,  rent, ad valorem,
         franchise  taxes and taxes on its capital  stock,  and  Tenant,  at its
         expense,  shall, to the extent required or permitted by Applicable Laws
         and regulations,  prepare and file all other tax returns and reports in
         respect of any  Imposition as may be required by  Government  Agencies.
         Provided no Event of Default shall have occurred and be continuing,  if
         any  refund  shall be due from any taxing  authority  in respect of any
         Imposition paid by or on behalf of Tenant,  the same shall be paid over
         to or retained by Tenant.  Landlord and Tenant  shall,  upon request of
         the other,  provide such data as is maintained by the party to whom the
         request is made with respect to the Leased Property as may be necessary
         to prepare any required  returns and reports.  In the event  Government
         Agencies  classify any property  covered by this  Agreement as personal
         property,  Tenant  shall  file,  or cause  to be  filed,  all  personal
         property  tax  returns in such  jurisdictions  where it may  legally so
         file.  Each party shall,  to the extent it possesses the same,  provide
         the other, upon request,  with cost and depreciation  records necessary
         for filing returns for any property so classified as personal property.
         Where  Landlord  is legally  required  to file  personal  property  tax
         returns for property covered by this Agreement,  Landlord shall provide
         Tenant with copies of assessment  notices in sufficient time for Tenant
         to file a protest.  All  Impositions  assessed  against  such  personal
         property  shall be  (irrespective  of whether  Landlord or Tenant shall
         file the  relevant  return) paid by Tenant not later than the last date
         on which the same may be made without  interest or penalty,  subject to
         the provisions of Article 8.

         Landlord shall give prompt Notice to Tenant of all Impositions  payable
by Tenant  hereunder  of which  Landlord  at any time has  knowledge;  provided,
however,  that  Landlord's  failure  to give  any  such  notice  shall in no way
diminish Tenant's obligation hereunder to pay such Impositions.

                  (b) Utility Charges.  Tenant shall pay or cause to be paid all
         charges for  electricity,  power,  gas, oil, water and other  utilities
         used in connection with the Leased Property.

                  (c) Insurance  Premiums.  Tenant shall pay or cause to be paid
         all  premiums  for the  insurance  coverage  required to be  maintained
         pursuant to Article 9.

                  (d) FF&E Reserve Payment. Tenant shall pay or cause to be paid
         all FF&E Reserve Payments required pursuant to Section 5.1.2.

                                      -23-
<PAGE>
                  (e) Other  Charges.  Tenant  shall pay or cause to be paid all
         other  amounts,   liabilities  and  obligations,   including,   without
         limitation,  ground  rents,  if any, and all amounts  payable under any
         equipment  leases  and  all  agreements  to  indemnify  Landlord  under
         Sections 4.4.2 and 9.5.

                  (f)  Reimbursement for Additional  Charges.  If Tenant pays or
         causes to be paid property taxes or similar or other Additional Charges
         attributable  to  periods  after  the  end of the  Term,  whether  upon
         expiration  or  sooner   termination  of  this  Agreement  (other  than
         termination  by reason of an Event of  Default),  Tenant may,  within a
         reasonable  time after the end of the Term,  provide Notice to Landlord
         of its estimate of such  amounts.  Landlord  shall  promptly  reimburse
         Tenant  for all  payments  of such taxes and other  similar  Additional
         Charges  that are  attributable  to any  period  after the Term of this
         Agreement.

         3.2 Late  Payment of Rent,  Etc. If any  installment  of Minimum  Rent,
Additional Rent or Additional  Charges (but only as to those Additional  Charges
which are payable  directly to Landlord)  shall not be paid within ten (10) days
after its due date, Tenant shall pay Landlord, on demand, as Additional Charges,
a late charge (to the extent  permitted by law)  computed at the Overdue Rate on
the amount of such  installment,  from the due date of such  installment  to the
date of payment thereof.  To the extent that Tenant pays any Additional  Charges
directly to Landlord or any Facility  Mortgagee  pursuant to any  requirement of
this  Agreement,  Tenant  shall  be  relieved  of its  obligation  to  pay  such
Additional  Charges to the Entity to which they would  otherwise  be due. If any
payments  due from  Landlord  to Tenant  shall not be paid  within ten (10) days
after its due date,  Landlord shall pay to Tenant,  on demand, a late charge (to
the extent  permitted by law) computed at the Overdue Rate on the amount of such
installment  from  the due  date  of such  installment  to the  date of  payment
thereof.

         In the event of any  failure  by Tenant to pay any  Additional  Charges
when due, Tenant shall promptly pay and discharge,  as Additional Charges, every
fine, penalty,  interest and cost which is added for non-payment or late payment
of such items. Landlord shall have all legal,  equitable and contractual rights,
powers and remedies provided either in this Agreement or by statute or otherwise
in the  case  of  non-payment  of the  Additional  Charges  as in  the  case  of
non-payment of the Minimum Rent and Additional Rent.

         3.3 Net Lease.  The Rent shall be  absolutely  net to  Landlord so that
this Agreement  shall yield to Landlord the full amount of the  installments  or
amounts of the Rent throughout the Term, subject to any other provisions of this
Agreement  which expressly  provide  otherwise,  including those  provisions for
adjustment or abatement of such Rent.

         3.4 No Termination,  Abatement,  Etc. Except as otherwise  specifically
provided in this Agreement,  each of Landlord and Tenant,

                                      -24-
<PAGE>
to the maximum extent  permitted by law, shall remain bound by this Agreement in
accordance  with its terms and shall not take any action  without the consent of
the other to modify, surrender or terminate this Agreement. In addition,  except
as otherwise expressly provided in this Agreement,  Tenant shall not seek, or be
entitled to, any  abatement,  deduction,  deferment or reduction of the Rent, or
set-off  against the Rent, nor shall the respective  obligations of Landlord and
Tenant be otherwise  affected by reason of (a) any damage to or  destruction  of
the  Leased  Property  or  any  portion  thereof  from  whatever  cause  or  any
Condemnation,  (b) the lawful or unlawful  prohibition of, or restriction  upon,
Tenant's use of the Leased Property, or any portion thereof, or the interference
with such use by any Person or by reason of eviction by paramount title; (c) any
claim which  Tenant may have  against  Landlord by reason of any default  (other
than a  monetary  default)  or breach of any  warranty  by  Landlord  under this
Agreement  or any other  agreement  between  Landlord  and  Tenant,  or to which
Landlord and Tenant are parties; (d) any bankruptcy, insolvency, reorganization,
composition,  readjustment,   liquidation,  dissolution,  winding  up  or  other
proceedings affecting Landlord or any assignee or transferee of Landlord; or (e)
for any other cause whether similar or dissimilar to any of the foregoing (other
than a monetary default by Landlord).  Except as otherwise specifically provided
in this  Agreement,  Tenant hereby waives all rights arising from any occurrence
whatsoever,  which  may  now or  hereafter  be  conferred  upon it by law (a) to
modify,  surrender or terminate  this  Agreement or quit or surrender the Leased
Property  or any  portion  thereof,  or (b) which  would  entitle  Tenant to any
abatement,  reduction, suspension or deferment of the Rent or other sums payable
or other  obligations to be performed by Tenant  hereunder.  The  obligations of
Tenant hereunder shall be separate and independent covenants and agreements, and
the Rent and all other sums  payable by Tenant  hereunder  shall  continue to be
payable in all events unless the obligations to pay the same shall be terminated
pursuant to the express provisions of this Agreement.

                                   ARTICLE 4

                           USE OF THE LEASED PROPERTY

         4.1 Permitted Use.

                  4.1.1 Permitted Use.

                  (a) Tenant  shall,  at all times  during the Term,  and at any
         other time that Tenant shall be in possession  of the Leased  Property,
         continuously  use and operate,  or cause to be used and operated,  each
         Property   as   a   skilled    nursing/intermediate    care/independent
         living/assisted living/special care facility as currently operated, and
         any uses incidental thereto. Tenant shall not use (and shall not permit
         any Person to use) any  Property or any  portion  thereof for any other
         use without the prior written consent of Landlord, which approval shall
         not be unreasonably withheld,  delayed or conditioned.  No use shall be

                                      -25-
<PAGE>
         made or  permitted to be made of any Property and no acts shall be done
         thereon  which  will cause the  cancellation  of any  insurance  policy
         covering such  Property or any part thereof  (unless  another  adequate
         policy is  available)  or which would  constitute  a default  under any
         ground lease  affecting  any of the Leased  Property,  nor shall Tenant
         sell or otherwise provide to residents or patients  therein,  or permit
         to be kept, used or sold in or about any Property any article which may
         be  prohibited  by  law or by  the  standard  form  of  fire  insurance
         policies,  or any  other  insurance  policies  required  to be  carried
         hereunder, or fire underwriter's regulations. Tenant shall, at its sole
         cost  (except as  expressly  provided in Section  5.1.2(b)),  comply or
         cause to be complied with all Insurance Requirements.  Tenant shall not
         take or omit to take, or permit to be taken or omitted to be taken, any
         action, the taking or omission of which materially impairs the value or
         the  usefulness  of any of the Leased  Property or any part thereof for
         its Permitted Use.

                  (b) In the event  that,  in the  reasonable  determination  of
         Tenant,  it shall no longer be  economically  practical  to operate any
         Property as  currently  operated,  Tenant  shall give  Landlord  Notice
         thereof,  which Notice shall set forth in reasonable detail the reasons
         therefor.  Thereafter,  (i) Landlord and Tenant shall negotiate in good
         faith to agree on an  alternative  use for such  Property,  appropriate
         adjustments to the Additional Rent and other related matters; provided,
         however,  in no event shall the Minimum  Rent be reduced or abated as a
         result thereof,  and (ii) Tenant may market such Property for sale to a
         third  party;  provided,  however,  that so long as the MSLS  Operating
         Agreement  with respect to such Property  remains in effect,  such sale
         shall be  subject  to, and  comply  with the terms of,  any  applicable
         restrictions  on the  sale  or  other  transfer  to  such  third  party
         contained in such MSLS Operating  Agreement or in any other document or
         instrument  executed  in  connection  therewith  or  otherwise  related
         thereto.  If Tenant receives a bona fide offer (an "Offer") to purchase
         such  Property that  complies  with the  requirements  of the preceding
         clause (ii) from a Person  having the  financial  capacity to implement
         the terms of such Offer,  Tenant shall give  Landlord  Notice  thereof,
         which Notice shall  include a copy of the Offer  executed by such third
         party.  In the event that Landlord  shall fail to accept or reject such
         Offer within thirty (30) days after receipt of such Notice,  such Offer
         shall be deemed to be rejected by  Landlord.  If Landlord  shall either
         sell the  Property  pursuant  to such  Offer,  or  reject  such  Offer,
         effective as of the date or proposed date of such sale, as the case may
         be, this Agreement shall  terminate with respect to such Property,  and
         the  Minimum  Rent shall be reduced by an amount  equal to ten  percent
         (10%) of the net proceeds of sale  received by Landlord or, in the case
         of rejection,  the  projected  net proceeds  determined by reference to
         such Offer.

                                      -26-
<PAGE>
                  4.1.2 Necessary  Approvals.  Tenant shall proceed with all due
diligence and exercise reasonable efforts to obtain and maintain, or cause to be
obtained and  maintained,  all approvals  necessary to use and operate,  for its
Permitted Use, each Property and the Facility  located thereon under  applicable
law and, without limiting the foregoing,  shall exercise  reasonable  efforts to
maintain   (or  cause  to  be   maintained)   appropriate   certifications   for
reimbursement and licensure.

                  4.1.3 Lawful Use, Etc.  Tenant shall not, and shall not permit
any Person to use or suffer or permit the use of the Leased Property or Tenant's
Personal Property, if any, for any unlawful purpose. Tenant shall not, and shall
not  permit any Person  to,  commit or suffer to be  committed  any waste on any
Property,  or in any  Facility,  nor shall  Tenant  cause or permit any unlawful
nuisance  thereon or therein.  Tenant shall not, and shall not permit any Person
to, suffer nor permit the Leased Property, or any portion thereof, to be used in
such a manner  as (i) may  materially  and  adversely  impair  Landlord's  title
thereto  or to any  portion  thereof,  or (ii) may  reasonably  allow a claim or
claims for adverse  usage or adverse  possession  by the public,  as such, or of
implied dedication of the Leased Property or any portion thereof.

         4.2 Compliance with Legal/Insurance  Requirements,  Etc. Subject to the
provisions of Article 8 and Section 5.1.3(b), Tenant, at its sole expense, shall
(i) comply (or cause to be complied with) with all material  Legal  Requirements
and  Insurance  Requirements  in  respect  of the use,  operation,  maintenance,
repair, alteration and restoration of the Leased Property and with the terms and
conditions of any ground lease affecting any Property, (ii) perform (or cause to
be performed) all of Landlord's obligations under any ground lease affecting any
Property and (iii)  procure,  maintain and comply with (or cause to be procured,
maintained  and complied  with) all  material  licenses,  certificates  of need,
permits,  provider  agreements and other  authorizations and agreements required
for any use of the Leased Property and Tenant's Personal Property,  if any, then
being made, and for the proper erection, installation, operation and maintenance
of the Leased Property or any part thereof.

         4.3 Compliance with Medicaid and Medicare Requirements.  Tenant, at its
sole  cost and  expense,  shall  make (or  shall  cause  to be  made),  whatever
improvements  (capital  or  ordinary)  as are  required  to  conform  the Leased
Property to such  standards  as may,  from time to time,  be required by Federal
Medicare (Title 18) or Medicaid (Title 19) for skilled and/or  intermediate care
nursing programs, to the extent Tenant is a participant in such programs, or any
other applicable programs or legislation,  or capital  improvements  required by
any other governmental  agency having jurisdiction over the Leased Property as a
condition of the continued  operation of each Property for its Primary  Intended
Use.

         4.4 Environmental Matters.

                                      -27-
<PAGE>
                  4.4.1  Restriction on Use, Etc.  During the Term and any other
time that Tenant shall be in  possession  of the Leased  Property,  Tenant shall
not,  and shall not  permit  any Person to,  store,  spill  upon,  dispose of or
transfer  to or from the Leased  Property  any  Hazardous  Substance,  except in
compliance  with all  Applicable  Laws.  During the Term and any other time that
Tenant shall be in possession of the Leased Property, Tenant shall maintain (and
shall  cause to be  maintained)  the  Leased  Property  at all times free of any
Hazardous  Substance  (except in compliance  with all Applicable  Laws).  Tenant
shall  promptly:  (a) upon  receipt  of notice  or  knowledge,  promptly  notify
Landlord in writing of any material  change in the nature or extent of Hazardous
Substances at the Leased Property, (b) transmit to Landlord a copy of any report
which is required to be filed by Tenant, MSLS or any Manager with respect to the
Leased  Property  pursuant to SARA Title III or any other  Applicable  Law,  (c)
transmit  to  Landlord  copies  of  any  citations,  orders,  notices  or  other
governmental  communications  received  by Tenant,  MSLS or any Manager or their
respective  agents  or  representatives  with  respect  thereto   (collectively,
"Environmental  Notice"), which Environmental Notice requires a written response
or any action to be taken  and/or if such  Environmental  Notice gives notice of
and/or presents a material risk of any material  violation of any Applicable Law
and/or  presents a material risk of any material cost,  expense,  loss or damage
(an  "Environmental  Obligation"),  (d)  observe  and  comply  (and  cause to be
observed and complied) with all Applicable Laws relating to the use, maintenance
and  disposal of  Hazardous  Substances  and all orders or  directives  from any
official,  court or  agency of  competent  jurisdiction  relating  to the use or
maintenance   or  requiring  the  removal,   treatment,   containment  or  other
disposition  thereof,  and (e) pay or otherwise  dispose (or cause to be paid or
otherwise  disposed) of any fine, charge or Imposition  related thereto,  unless
Tenant,  MSLS or any  Manager  shall  contest  the  same in  good  faith  and by
appropriate  proceedings and the right to use and the value of any of the Leased
Property is not materially and adversely affected thereby.

         If, at any time prior to the termination of this  Agreement,  Hazardous
Substances  (other than those maintained in accordance with Applicable Laws) are
discovered  on the Leased  Property,  subject to  Tenant's  and MSLS's  right to
contest the same in  accordance  with  Article 8,  Tenant  shall take (and shall
cause to be taken) all actions and incur any and all  expenses,  as are required
by any Government  Agency and by Applicable Law, (i) to clean up and remove from
and about the Leased Property all Hazardous Substances thereon,  (ii) to contain
and prevent any further release or threat of release of Hazardous  Substances on
or about the Leased  Property  and (iii) to use good faith  efforts to eliminate
any further release or threat of release of Hazardous Substances on or about the
Leased Property.

                  4.4.2  Indemnification  of  Landlord.  Tenant  shall  protect,
indemnify  and  hold  harmless  Landlord  and  each  Facility  Mortgagee,  their
trustees,  officers,  agents,  employees  and  beneficiaries,  and any of  their
respective  successors or assigns with

                                      -28-
<PAGE>
respect to this Agreement (collectively, the "Indemnitees" and, individually, an
"Indemnitee") for, from and against any and all debts, liens, claims,  causes of
action,  administrative orders or notices,  costs, fines,  penalties or expenses
(including, without limitation, reasonable attorney's fees and expenses) imposed
upon,  incurred by or asserted  against any Indemnitee  resulting  from,  either
directly or indirectly,  the presence in, upon or under the soil or ground water
of the Leased Property or any properties  surrounding the Leased Property of any
Hazardous  Substances in violation of any Applicable  Law,  except to the extent
the same arise from the acts or omissions of Landlord or any other Indemnitee or
during any period that Landlord or a Person  designated by Landlord  (other than
Tenant) is in possession of the Leased  Property from and after the date hereof.
Tenant's  duty herein  includes,  but is not limited to, costs  associated  with
personal  injury or property  damage claims as a result of the presence prior to
the expiration or sooner termination of the Term and the surrender of the Leased
Property to Landlord in accordance with the terms of this Agreement of Hazardous
Substances in, upon or under the soil or ground water of the Leased  Property in
violation of any Applicable  Law. Upon Notice from Landlord and any other of the
Indemnitees,  Tenant  shall  undertake  the defense,  at Tenant's  sole cost and
expense, of any indemnification  duties set forth herein, in which event, Tenant
shall not be liable for payment of any  duplicative  attorneys' fees incurred by
any Indemnitee.

         Tenant shall, upon demand, pay (or cause to be paid) to Landlord, as an
Additional  Charge,  any  cost,  expense,  loss or  damage  (including,  without
limitation,  reasonable  attorneys'  fees)  reasonably  incurred by Landlord and
arising from a failure of Tenant to observe and perform (or cause to be observed
and  performed) the  requirements  of this Section 4.4, which amounts shall bear
interest from the date ten (10) Business Days after written  demand  therefor is
given to Tenant until paid by Tenant to Landlord at the Overdue Rate.

                  4.4.3  Survival.  The  provisions  of this  Section  4.4 shall
survive the expiration or sooner termination of this Agreement.

                                   ARTICLE 5

                            MAINTENANCE AND REPAIRS

         5.1 Maintenance and Repair.

                  5.1.1  Tenant's  General  Obligations.  Tenant  shall keep (or
cause to be kept),  at  Tenant's  sole cost and  expense  (except  as  expressly
provided in Section  5.1.3(b)),  the Leased  Property and all private  roadways,
sidewalks and curbs appurtenant thereto (and Tenant's Personal Property) in good
order and repair, reasonable wear and tear excepted (whether or not the need for
such repairs  occurs as a result of Tenant's,  MSLS's or any Manager's  use, any
prior use, the elements or the age of the Leased  Property or Tenant's  Personal
Property or any portion  thereof),  and shall  promptly make or cause to

                                      -29-
<PAGE>
be made all necessary and appropriate repairs and replacements  thereto of every
kind and nature,  whether  interior or exterior,  structural  or  nonstructural,
ordinary  or  extraordinary,  foreseen or  unforeseen  or arising by reason of a
condition  existing  prior  to  the  commencement  of  the  Term  (concealed  or
otherwise).  All repairs shall be made in a good, workmanlike manner, consistent
with industry standards for comparable Facilities in like locales, in accordance
with all applicable federal, state and local statutes,  ordinances, codes, rules
and regulations relating to any such work. Tenant shall not take or omit to take
(or  permit  any  Person  to take or omit to take)  any  action,  the  taking or
omission  of which  would  materially  and  adversely  impair  the  value or the
usefulness of the Leased Property or any material part thereof for its Permitted
Use. Tenant's obligations under this Section 5.1.1 shall be limited in the event
of any  casualty or  Condemnation  as set forth in Article 10 and Article 11 and
also as set forth in Section  5.1.3(b) and Tenant's  obligations with respect to
Hazardous Substances are as set forth in Section 4.4.

                  5.1.2 FF&E  Reserve.  Upon or prior to the  execution  of this
Agreement,  Landlord has established the FF&E Reserve for each Property.  Tenant
shall,  as  Additional  Charges,  with  respect to each Lease  Year,  or portion
thereof,  deposit,  or cause to be deposited,  the FF&E Reserve Payment into the
FF&E  Reserve  for each  Property,  of which  amounts  shall be  applied  to (a)
replacements and renewals to such Property's furniture,  furnishings,  fixtures,
Soft  Goods (as such term is  defined in the MSLS  Operating  Agreements),  Case
Goods (as such term is defined in the MSLS Operating  Agreements),  vehicles and
equipment,  but specifically excluding any Fixed Asset Supplies (as such term is
defined in the MSLS  Operating  Agreements) or Software (as such term is defined
in the MSLS Operating  Agreements),  and (b) routine  repairs and maintenance to
the Facility located on such Property which are normally capitalized under GAAP,
such as exterior and interior  repainting,  resurfacing  building walls, floors,
roofs and parking areas, and replacing folding walls and the like, but which are
not major repairs, alterations,  improvements,  renewals or replacements to such
Facility's  building's  structure  or  exterior  facade  or to  its  mechanical,
electrical,  heating,  ventilating,  air  conditioning,   plumbing  or  vertical
transportation systems. Any additional funds required for repairs,  maintenance,
renovations  and  replacements  to and at any  Property  in  excess  of those on
deposit for such  Property in the  applicable  FF&E Reserve shall be advanced in
accordance  with  Section  5.1.3(b).  So long as the  MSLS  Operating  Agreement
remains in effect with a  Property,  Tenant  shall,  promptly  after  receipt or
sending  thereof,  furnish to Landlord copies of the FF&E Estimate (as such term
is defined in the MSLS Operating  Agreements)  submitted by MSLS under such MSLS
Operating Agreement,  together with any and all other documentation submitted by
MSLS in connection therewith, and Tenant's responses thereto, if any.

         If a MSLS Operating  Agreement  terminates  with respect to a Property,
thereafter,  Tenant shall prepare with respect to such Property an estimate (the
"FF&E Estimate") of FF&E Reserve expenditures  necessary at such Property during
the ensuing Fiscal

                                      -30-
<PAGE>
Year, and shall submit such FF&E Estimate to Landlord,  on or before  December 1
of the preceding  Lease Year, for its review and approval,  which approval shall
not be unreasonably withheld, delayed or conditioned. In the event that Landlord
shall  fail to  respond  within  thirty  (30)  days  after  receipt  of the FF&E
Estimate, such FF&E Estimate shall be deemed approved by Landlord. Tenant shall,
consistent with the FF&E Estimate  approved by Landlord,  from time to time make
expenditures  from the  FF&E  Reserve  to be  applied  to the  cost of  repairs,
maintenance,  renovations and replacements to and at such Property in accordance
with this Agreement  provided that Tenant shall not materially  deviate from the
FF&E Estimate approved by Landlord without the prior approval of Landlord, which
approval shall not be unreasonably withheld,  delayed or conditioned,  except in
the case of emergency  where immediate  action is necessary to prevent  imminent
harm to person or property.  All amounts from the FF&E Reserve  shall be paid to
Persons who are not Affiliated  Persons of Tenant  without  mark-up or allocated
internal costs by Tenant or its Affiliated Persons.

         Funds in the FF&E  Reserve and all property  purchased  with funds from
the FF&E Reserve  during the Term shall be the property of Landlord and all FF&E
Reserve Payments shall constitute Additional Charges.

                  5.1.3 Landlord's Obligations.

                  (a) Except as otherwise  expressly provided in this Agreement,
         Landlord  shall not, under any  circumstances,  be required to build or
         rebuild any improvement on the Leased Property, or to make any repairs,
         replacements,  alterations,  restorations  or renewals of any nature or
         description to the Leased Property,  whether ordinary or extraordinary,
         structural or  nonstructural,  foreseen or  unforeseen,  or to make any
         expenditure  whatsoever with respect thereto, or to maintain the Leased
         Property in any way.  Except as  otherwise  expressly  provided in this
         Agreement,  Tenant hereby waives,  to the maximum  extent  permitted by
         law, the right to make  repairs at the expense of Landlord  pursuant to
         any law in effect on the date  hereof or  hereafter  enacted.  Landlord
         shall have the right to give, record and post, as appropriate,  notices
         of  nonresponsibility  under any mechanic's  lien laws now or hereafter
         existing.

                  (b) If, at any time, any MSLS Operating Agreement with respect
         to a Property  shall  require  that  funds be  disbursed  for  repairs,
         maintenance,  renovations  or  replacements  at  or  to  such  Property
         (including,  but not limited to,  pursuant to Section  8.01 and 8.03 of
         the MSLS Operating  Agreements),  or if,  pursuant to the terms of this
         Agreement (including, without limitation, the provisions of Section 5.4
         hereof), Tenant is required to make any expenditures in connection with
         any repair,  maintenance or renovation with respect to any Property and
         the amount of such  disbursements  or  expenditures  either exceeds the
         amount on deposit in the FF&E Reserve or is not a permitted expenditure
         therefrom,  Tenant may,  at its  election,  advance  such funds or

                                      -31-
<PAGE>
         give  Landlord  Notice  thereof,  which  Notice  shall  set  forth,  in
         reasonable  detail,  the nature of the required  repair,  renovation or
         replacement, the estimated cost thereof and such other information with
         respect  thereto as Landlord may reasonably  require.  Provided that no
         Event of Default shall have occurred and be continuing and Tenant shall
         otherwise comply with the applicable  provisions of Article 6, Landlord
         shall, within ten (10) Business Days after such Notice,  subject to and
         in  accordance  with the  applicable  provisions of Article 6, disburse
         such required  funds to Tenant (or, if Tenant shall so elect,  directly
         to the Manager or any other Person  performing  the required work) and,
         upon such disbursement,  the Minimum Rent shall be adjusted as provided
         in Section 3.1.1(c).

                  5.1.4  Nonresponsibility  of Landlord,  Etc. All  materialmen,
contractors, artisans, mechanics and laborers and other persons contracting with
Tenant with  respect to the Leased  Property,  or any part  thereof,  are hereby
charged with notice that liens on the Leased Property or on Landlord's  interest
therein  are  expressly  prohibited  and that they must look solely to Tenant to
secure  payment for any work done or material  furnished  to Tenant,  MSLS,  any
Manager or for any other purpose during the term of this Agreement.

         Nothing contained in this Agreement shall be deemed or construed in any
way as constituting the consent or request of Landlord,  express or implied,  by
inference or otherwise, to any contractor, subcontractor, laborer or materialmen
for the  performance  of any labor or the  furnishing  of any  materials for any
alteration,  addition,  improvement or repair to the Leased Property or any part
thereof or as giving  Tenant any right,  power or  authority  to contract for or
permit the rendering of any services or the  furnishing  of any  materials  that
would give rise to the filing of any lien  against  the Leased  Property  or any
part thereof nor to subject Landlord's estate in the Leased Property or any part
thereof to liability  under any mechanic's  lien law of any State in any way, it
being expressly  understood  Landlord's  estate shall not be subject to any such
liability.

         5.2 Tenant's Personal  Property.  Tenant shall provide and maintain (or
cause to be  provided  and  maintained)  throughout  the Term all such  Tenant's
Personal  Property as shall be necessary in order to operate in compliance  with
applicable material Legal Requirements and Insurance  Requirements and otherwise
in accordance  with  customary  practice in the industry for the Permitted  Use,
and,  subject to MSLS's right to purchase all or any portion thereof pursuant to
Section 10.03 of the MSLS Operating  Agreements,  all of such Tenant's  Personal
Property  shall,  upon the expiration or earlier  termination of this Agreement,
become the  property  of  Landlord.  If, from and after the  Commencement  Date,
Tenant  acquires an interest in any item of tangible  personal  property  (other
than motor  vehicles)  on, or in  connection  with,  the Leased  Property  which
belongs to anyone other than Tenant or MSLS, Tenant shall require the agreements
permitting such use to provide that Landlord or its designee may assume Tenant's
rights  and  obligations  under  such  agreement  upon the  termination  of this

                                      -32-
<PAGE>
Agreement  and the  assumption  of  management  or  operation of the Facility by
Landlord or its designee.

         5.3  Yield  Up.  Upon the  expiration  or  sooner  termination  of this
Agreement,  Tenant shall vacate and surrender the Leased Property to Landlord in
substantially  the same  condition  in which the Leased  Property  was in on the
Commencement Date, except as repaired, rebuilt, restored, altered or added to as
permitted or required by the provisions of this  Agreement,  reasonable wear and
tear  excepted  (and casualty  damage and  Condemnation,  in the event that this
Agreement is terminated  following a casualty or Condemnation in accordance with
Article 10 or Article 11 excepted).

         In  addition,  upon  the  expiration  or  earlier  termination  of this
Agreement, Tenant shall, at Landlord's sole cost and expense, use its good faith
efforts to transfer (or cause to be  transferred) to and cooperate with Landlord
or Landlord's  nominee in connection with the processing of all applications for
licenses,  operating  permits  and  other  governmental  authorizations  and all
contracts,  including contracts with governmental or quasi-governmental Entities
which  may be  necessary  for the  use and  operation  of the  Facility  as then
operated. If requested by Landlord,  Tenant shall continue to manage one or more
of the Facilities  after the expiration of the Term for up to one hundred eighty
(180) days,  on such  reasonable  terms  (which  shall  include an  agreement to
reimburse  Tenant  for its  reasonable  out-of-pocket  costs and  expenses,  and
reasonable administrative costs), as Landlord shall reasonably request.

         5.4 MSLS  Operating  Agreements.  Simultaneously  herewith,  Tenant has
assumed the obligations of "Owner" under the MSLS Operating  Agreements.  Tenant
shall not amend or modify any MSLS Operating  Agreement without Landlord's prior
written consent,  which consent shall not be unreasonably  withheld,  delayed or
conditioned.  Except as expressly provided in Section 5.1.3(b), Tenant shall, at
its sole cost and expense,  perform all of its obligations as "Owner" under each
MSLS Operating Agreement. Tenant shall, at all times, direct MSLS to perform all
of MSLS's obligations under the MSLS Operating  Agreements and shall enforce all
of MSLS's obligations  thereunder.  Tenant shall not take any action,  grant any
consent,  or, except as provided in the MSLS  Operating  Agreements,  permit any
action  under any of the MSLS  Operating  Agreements  without the prior  written
consent of Landlord (which consent shall not be unreasonably  withheld,  delayed
or  conditioned).  Except as provided in the MSLS Operating  Agreements,  Tenant
shall not permit MSLS to assign any MSLS  Operating  Agreement or terminate  any
MSLS Operating  Agreement without the prior written approval of Landlord in each
instance.  If Landlord  shall perform any  obligations of "Owner" under any MSLS
Operating Agreement (which Landlord may do subject to Section 12.5), the cost of
such  performance  shall be  payable  upon  demand by Tenant  to  Landlord  with
interest  accruing  from the demand date at the Overdue Rate and Landlord  shall
have the same rights and remedies for failure to pay such costs on demand as for
Tenant's failure to pay Minimum Rent.

                                      -33-
<PAGE>
         5.5 Other Management Agreements. If any MSLS Operating Agreement should
terminate with respect to a Property, Tenant shall not, without Landlord's prior
written  consent (which consent shall not be unreasonably  withheld,  delayed or
conditioned), enter into, amend or modify the provisions of any other Management
Agreement with respect to such Property.  Any Management  Agreement entered into
pursuant to the  provisions  of this  Section 5.5 shall be  subordinate  to this
Agreement  and shall  provide,  inter alia,  that all amounts due from Tenant to
Manager  thereunder  shall be  subordinate  to all  amounts  due from  Tenant to
Landlord  (provided  that,  as long as no Event of Default has  occurred  and is
continuing,  Tenant may pay all  amounts due to Manager  thereunder  pursuant to
such Management  Agreement) and for termination  thereof,  at Landlord's option,
upon the termination of this Agreement.  Tenant shall not take any action, grant
any consent or permit any action under any such Management Agreement which might
have a material adverse effect on Landlord, without the prior written consent of
Landlord,  which  consent  shall  not  be  unreasonably  withheld,   delayed  or
conditioned.

                                   ARTICLE 6

                               IMPROVEMENTS, ETC.

         6.1  Improvements  to the  Leased  Property.  Tenant  shall  not  make,
construct  or  install  (or permit to be made,  constructed  or  installed)  any
Capital Additions without, in each instance,  obtaining Landlord's prior written
consent,  which  consent  shall  not  be  unreasonably   withheld,   delayed  or
conditioned provided that (a) construction or installation of the same would not
adversely  affect  or  violate  any  material  Legal  Requirement  or  Insurance
Requirement  applicable  to the  Leased  Property  and (b)  Landlord  shall have
received an  Officer's  Certificate  certifying  as to the  satisfaction  of the
conditions set out in clause (a) above; provided,  however, that no such consent
shall be  required  (a) in the event  immediate  action is  required  to prevent
imminent  harm to  person  or  property  or (b) so long  as the  MSLS  Operating
Agreement  shall remain in effect with respect to a Property,  in the event such
MSLS  Operating  Agreement  shall permit MSLS to take action with respect to the
affected  Property without first obtaining the "Owner's" consent under such MSLS
Operating Agreement.  Prior to commencing  construction of any Capital Addition,
Tenant  shall submit to  Landlord,  in writing,  a proposal  setting  forth,  in
reasonable detail,  any such proposed  improvement and shall provide to Landlord
such plans and specifications,  and such permits,  licenses,  contracts and such
other  information  concerning  the same as  Landlord  may  reasonably  request.
Landlord  shall have  thirty  (30) days to review  all  materials  submitted  to
Landlord in connection with any such proposal. Failure of Landlord to respond to
Tenant's  proposal  within thirty (30) days after receipt of all information and
materials  requested by Landlord in  connection  with the  proposed  improvement
shall be  deemed  to  constitute  approval  of the same.  Without  limiting  the
generality  of the  foregoing,  such  proposal  shall  indicate the  approximate
projected cost of constructing such proposed  improvement

                                      -34-
<PAGE>
and the use or uses to which it will be put. No Capital  Addition  shall be made
which  would  tie  in  or  connect  any  Leased   Improvements  with  any  other
improvements  on property  adjacent to the Leased  Property (and not part of the
Land) including, without limitation, tie-ins of buildings or other structures or
utilities.  Except as permitted herein, Tenant shall not finance the cost of any
construction  of such  improvement  by the  granting  of a lien  on or  security
interest  in the Leased  Property  or such  improvement,  or  Tenant's  interest
therein,  without the prior  written  consent of Landlord,  which consent may be
withheld by Landlord in Landlord's sole discretion. Any such improvements shall,
upon the expiration or sooner  termination of this Agreement,  remain or pass to
and become the property of Landlord,  free and clear of all  encumbrances  other
than Permitted Encumbrances.

         6.2 Salvage.  All materials which are scrapped or removed in connection
with the making of either Capital Additions or non-Capital  Additions or repairs
required by Article 5 shall be or become the property of the party that paid for
such work.

                                   ARTICLE 7

                                     LIENS

         7.1 Liens. Subject to Article 8, Tenant shall use its best efforts not,
directly  or  indirectly,  to  create  or allow to  remain  and  shall  promptly
discharge (or cause to be discharged),  at its expense,  any lien,  encumbrance,
attachment,  title  retention  agreement  or claim upon the Leased  Property  or
Tenant's  leasehold   interest  therein  or  any  attachment,   levy,  claim  or
encumbrance in respect of the Rent, other than (a) Permitted  Encumbrances,  (b)
restrictions,  liens and other encumbrances which are consented to in writing by
Landlord,  (c) liens for those taxes of Landlord which Tenant is not required to
pay hereunder,  (d) subleases permitted by Article 16, (e) liens for Impositions
or for sums resulting from  noncompliance with Legal Requirements so long as (i)
the same are not yet due and payable,  or (ii) are being contested in accordance
with  Article 8, (f) liens of  mechanics,  laborers,  materialmen,  suppliers or
vendors  incurred in the  ordinary  course of business  that are not yet due and
payable or are for sums that are being  contested in accordance  with Article 8,
(g) any  Facility  Mortgages  or other  liens  which are the  responsibility  of
Landlord pursuant to the provisions of Article 20 and (h) Landlord Liens and any
other voluntary liens created by Landlord.

         7.2 Landlord's  Lien. In addition to any statutory  landlord's lien and
in order to secure  payment of the Rent and all other sums payable  hereunder by
Tenant,  and to secure  payment of any loss,  cost or damage which  Landlord may
suffer by reason of Tenant's breach of this Agreement, Tenant hereby grants unto
Landlord, to the maximum extent permitted by Applicable Law, a security interest
in and an express contractual lien upon Tenant's Personal Property (except motor
vehicles), and Tenant's interest in all ledger sheets, files, records,

                                      -35-
<PAGE>
documents and instruments  (including,  without  limitation,  computer programs,
tapes and related  electronic data processing)  relating to the operation of the
Facilities (the "Records") and all proceeds therefrom,  subject to any Permitted
Encumbrances;  and such Tenant's Personal Property shall not be removed from the
Leased  Property  at any time  when an  Event of  Default  has  occurred  and is
continuing.

         Upon Landlord's  request,  Tenant shall execute and deliver to Landlord
financing  statements  in form  sufficient  to perfect the security  interest of
Landlord in Tenant's  Personal  Property and the proceeds  thereof in accordance
with the provisions of the applicable laws of the State.  During the continuance
of an Event of Default,  Tenant hereby grants  Landlord an  irrevocable  limited
power of  attorney,  coupled  with an  interest,  to execute all such  financing
statements  in Tenant's  name,  place and stead.  The security  interest  herein
granted is in addition to any statutory lien for the Rent.

                                   ARTICLE 8

                               PERMITTED CONTESTS

         Tenant  shall have the right to contest  the amount or  validity of any
Imposition, Legal Requirement, Insurance Requirement,  Environmental Obligation,
lien, attachment, levy, encumbrance, charge or claim (collectively, "Claims") as
to the Leased  Property,  by appropriate  legal  proceedings,  conducted in good
faith and with due diligence, provided that (a) the foregoing shall in no way be
construed as relieving,  modifying or extending  Tenant's  obligation to pay (or
cause to be paid) any Claims as finally  determined,  (b) such contest shall not
cause  Landlord or Tenant to be in default  under any  mortgage or deed of trust
encumbering  the Leased  Property  (Landlord  agreeing that any such mortgage or
deed of trust shall  permit  Tenant to exercise the rights  granted  pursuant to
this Article 8) or any interest  therein or result in or  reasonably be expected
to result in a lien attaching to the Leased Property,  (c) no part of the Leased
Property  nor any Rent  therefrom  shall  be in any  immediate  danger  of sale,
forfeiture, attachment or loss, and (d) Tenant shall indemnify and hold harmless
Landlord  from and  against  any cost,  claim,  damage,  penalty  or  reasonable
expense,   including  reasonable   attorneys'  fees,  incurred  by  Landlord  in
connection therewith or as a result thereof. Landlord agrees to join in any such
proceedings  if  required  legally to  prosecute  such  contest,  provided  that
Landlord  shall not thereby be subjected to any liability  therefor  (including,
without  limitation,  for the  payment of any costs or  expenses  in  connection
therewith)  unless Tenant  agrees by agreement in form and substance  reasonably
satisfactory to Landlord,  to assume and indemnify  Landlord with respect to the
same.  Tenant shall be entitled to any refund of any Claims and such charges and
penalties or interest thereon which have been paid by Tenant or paid by Landlord
to the extent that Landlord has been fully reimbursed by Tenant. If Tenant shall
fail (x) to pay or cause to be paid any Claims when finally  determined,  (y) to
provide  reasonable  security  therefor  or  (z) to  prosecute  or  cause  to be
prosecuted  any such contest  diligently  and in good faith,  Landlord

                                      -36-
<PAGE>
may,  upon  reasonable  notice to Tenant  (which notice shall not be required if
Landlord shall reasonably determine that the same is not practicable),  pay such
charges,  together with interest and  penalties  due with respect  thereto,  and
Tenant shall reimburse Landlord therefor, upon demand, as Additional Charges.

                                   ARTICLE 9

                         INSURANCE AND INDEMNIFICATION

         9.1 General Insurance  Requirements.  Tenant shall, at all times during
the Term and at any other  time  Tenant  shall be in  possession  of the  Leased
Property,  keep (or cause to be kept) each  Property  and all  property  located
therein or  thereon,  insured  against  the risks and in such  amounts as is (a)
required  by the  MSLS  Operating  Agreements  so  long  as the  MSLS  Operating
Agreements  remain in effect,  and (b) against such risks and in such amounts as
Landlord shall  reasonably  require and may be commercially  reasonable.  Tenant
shall  prepare a proposal  setting  forth the  insurance  Tenant  proposes to be
maintained  with respect to such Property  during the ensuing  Fiscal Year,  and
shall submit such proposal to Landlord on or before  December 1 of the preceding
Lease Year,  for  Landlord's  review and approval,  which  approval shall not be
unreasonably withheld, delayed or conditioned.  In the event that Landlord shall
fail to respond  within  thirty (30) days after receipt of such  proposal,  such
proposal shall be deemed approved.

         9.2 Waiver of  Subrogation.  Landlord and Tenant agree that (insofar as
and to the extent that such agreement may be effective  without  invalidating or
making it impossible to secure  insurance  coverage from  responsible  insurance
companies  doing  business in any State) with respect to any property loss which
is covered by  insurance  then being  carried by Landlord  or Tenant,  the party
carrying such  insurance and suffering said loss releases the others of and from
any and all claims with respect to such loss;  and they further agree that their
respective  insurance companies (and, if Landlord or Tenant shall self insure in
accordance with the terms hereof,  Landlord or Tenant, as the case may be) shall
have no right of subrogation  against the other on account thereof,  even though
extra  premium  may result  therefrom.  In the event  that any extra  premium is
payable by Tenant as a result of this  provision,  Landlord  shall not be liable
for reimbursement to Tenant for such extra premium.

         9.3 Form  Satisfactory,  Etc. All insurance  policies and  endorsements
required pursuant to this Article 9 shall be fully paid for,  nonassessable,  be
issued by insurance  carriers  authorized  to do business in the State,  and, so
long the MSLS Operating  Agreement remains in effect with respect to a Property,
with  respect  to any  insurance  maintained  by MSLS,  be issued  by  reputable
insurance  companies,  and, otherwise,  be issued by insurance carriers having a
general policy  holder's rating of no less than A in Best's latest rating guide.
So long as the MSLS  Operating  Agreement  remains in

                                      -37-
<PAGE>
effect  with  respect  to  a  Property,  the  property,  business  interruption,
liability  and flood  insurance  policies  with respect to such  Property  shall
include only those deductibles permitted by such MSLS Operating Agreement. After
the  MSLS  Operating  Agreement  terminates  with  respect  to a  Property,  all
property,  business  interruption,  liability and flood insurance  policies with
respect to such  Property  shall  include no deductible in excess of Two Hundred
Fifty  Thousand  Dollars  ($250,000).  At  all  times,  all  property,  business
interruption,  liability  and flood  insurance  policies,  with the exception of
worker's compensation  insurance coverage,  shall name Landlord and any Facility
Mortgagee  as  additional  insureds,  as their  interests  may appear.  All loss
adjustments shall be payable as provided in Article 10, except that losses under
liability and worker's compensation insurance policies shall be payable directly
to the party entitled thereto.  Tenant shall cause all insurance  premiums to be
paid and shall  deliver  (or cause to be  delivered)  policies  or  certificates
thereof to Landlord  prior to their  effective  date (and,  with  respect to any
renewal  policy,  prior to the  expiration  of the  existing  policy).  All such
policies shall provide  Landlord (and any Facility  Mortgagee if required by the
same)  thirty  (30)  days  prior  written  notice  of  any  material  change  or
cancellation of such policy.  In the event Tenant shall fail to effect (or cause
to be effected) such insurance as herein required,  to pay (or cause to be paid)
the premiums  therefor or to deliver (or cause to be delivered) such policies or
certificates  to  Landlord  or any  Facility  Mortgagee  at the times  required,
Landlord shall have the right, upon Notice to Tenant, but not the obligation, to
acquire such  insurance  and pay the premiums  therefor,  which amounts shall be
payable to Landlord, upon demand, as Additional Charges,  together with interest
accrued  thereon at the  Overdue  Rate from the date such  payment is made until
(but excluding) the date repaid.

         9.4 No Separate  Insurance;  Self-Insurance.  Tenant shall not take (or
permit  any  Person  to take)  out  separate  insurance,  concurrent  in form or
contributing  in the event of loss  with that  required  by this  Article  9, or
increase the amount of any existing  insurance by securing an additional  policy
or additional  policies,  unless all parties having an insurable interest in the
subject  matter  of  such  insurance,   including   Landlord  and  all  Facility
Mortgagees,  are included therein as additional insureds and the loss is payable
under  such  insurance  in the same  manner as losses  are  payable  under  this
Agreement.  In the event  Tenant shall take out any such  separate  insurance or
increase any of the amounts of the then  existing  insurance,  Tenant shall give
Landlord  prompt Notice  thereof.  Tenant shall not  self-insure  (or permit any
Person to  self-insure)  without  Landlord's  prior written  consent;  provided,
however, that MSLS may self insure if and to the extent permitted under the MSLS
Operating Agreements.

         9.5  Indemnification of Landlord.  Notwithstanding the existence of any
insurance  provided  for herein and without  regard to the policy  limits of any
such insurance,  Tenant shall protect, indemnify and hold

                                      -38-
<PAGE>
harmless  Landlord for, from and against all liabilities,  obligations,  claims,
damages,  penalties, causes of action, costs and reasonable expenses (including,
without limitation, reasonable attorneys' fees), to the maximum extent permitted
by law,  imposed upon or incurred by or asserted  against  Landlord by reason of
the  following,  except to the extent caused by Landlord's  gross  negligence or
willful misconduct:  (a) any accident,  injury to or death of persons or loss of
or damage to property  occurring  on or about the Leased  Property or  adjoining
sidewalks  or  rights of way,  (b) any past,  present  or  future  use,  misuse,
non-use,  condition,  management,  maintenance  or repair by Tenant,  MSLS,  any
Manager or anyone  claiming under any of them or Tenant's  Personal  Property or
any  litigation,  proceeding  or claim by  governmental  entities or other third
parties to which Landlord is made a party or participant  relating to the Leased
Property or Tenant's Personal Property or such use, misuse, non-use,  condition,
management,  maintenance,  or  repair  thereof  including,  failure  to  perform
obligations  (other than  Condemnation  proceedings) to which Landlord is made a
party, (c) any Impositions that are the obligations of Tenant to pay pursuant to
the applicable provisions of this Agreement,  and (d) any failure on the part of
Tenant or anyone  claiming  under  Tenant to perform  or comply  with any of the
terms of this  Agreement.  Tenant,  at its expense,  shall  contest,  resist and
defend any such  claim,  action or  proceeding  asserted or  instituted  against
Landlord  (and shall not be  responsible  for any  duplicative  attorneys'  fees
incurred by Landlord) or may compromise or otherwise  dispose of the same,  with
Landlord's  prior  written  consent  (which  consent  may  not  be  unreasonably
withheld, delayed or conditioned).  The obligations of Tenant under this Section
9.5 are in  addition  to the  obligations  set  forth in  Section  4.4 and shall
survive the termination of this Agreement.

                                   ARTICLE 10

                                    CASUALTY

         10.1 Insurance Proceeds.  Except as provided in the last clause of this
sentence,  all proceeds payable by reason of any loss or damage to any Property,
or any portion  thereof,  and insured under any policy of insurance  required by
Article 9 (other than the proceeds of any business interruption insurance) shall
be paid directly to Landlord (subject to the provisions of Section 10.2) and all
loss  adjustments  with respect to losses  payable to Landlord shall require the
prior  written  consent of Landlord,  which  consent  shall not be  unreasonably
withheld, delayed or conditioned;  provided,  however, that, so long as no Event
of Default shall have occurred and be continuing, all such proceeds less than or
equal to Two Hundred Fifty Thousand Dollars ($250,000) shall be paid directly to
Tenant and such losses may be adjusted without Landlord's  consent. If Tenant is
required to reconstruct or repair any Property as provided herein, such proceeds
shall be paid out by  Landlord  from  time to time for the  reasonable  costs of
reconstruction  or  repair  of such  Property  necessitated  by such  damage  or
destruction, subject to and in accordance with the

                                      -39-
<PAGE>
provisions  of Section  10.2.4.  Provided  no  Default  or Event of Default  has
occurred and is continuing, any excess proceeds of insurance remaining after the
completion  of the  restoration  shall be paid to Tenant.  In the event that the
provisions of Section  10.2.1 are  applicable,  the insurance  proceeds shall be
retained by the party entitled thereto pursuant to Section 10.2.1.

         10.2 Damage or Destruction.

                  10.2.1 Damage or  Destruction of Leased  Property.  If, during
the Term, any Property shall be totally or partially  destroyed and the Facility
located  thereon is thereby  rendered  Unsuitable for Its Permitted Use,  either
Landlord or Tenant may, by the giving of Notice thereof to the other,  terminate
this Agreement with respect to such affected Property, whereupon, this Agreement
shall  terminate  with respect to such affected  Property and Landlord  shall be
entitled to retain the insurance  proceeds payable on account of such damage. In
such event,  Tenant shall pay to Landlord the amount of any deductible under the
insurance policies covering such Facility,  the amount of any uninsured loss and
any difference  between the  replacement  cost of the affected  Property and the
casualty insurance proceeds therefor.

                  10.2.2 Partial Damage or Destruction. If, during the Term, any
Property  shall be  totally  or  partially  destroyed  but the  Facility  is not
rendered  Unsuitable  for Its Permitted  Use,  Tenant shall,  subject to Section
10.2.3, promptly restore such Facility as provided in Section 10.2.4.

                  10.2.3  Insufficient  Insurance  Proceeds.  If the cost of the
repair or restoration of the applicable Property exceeds the amount of insurance
proceeds  received by Landlord and Tenant  pursuant to Section 9.1, Tenant shall
give Landlord  Notice thereof which notice shall set forth in reasonable  detail
the nature of such deficiency and whether Tenant shall pay and assume the amount
of such deficiency (Tenant having no obligation to do so, except that, if Tenant
shall elect to make such funds  available,  the same shall become an irrevocable
obligation  of Tenant  pursuant to this  Agreement).  In the event  Tenant shall
elect not to pay and assume the amount of such  deficiency,  Landlord shall have
the right (but not the  obligation),  exercisable at Landlord's sole election by
Notice to Tenant,  given  within  sixty (60) days after  Tenant's  notice of the
deficiency,  to elect to make available for application to the cost of repair or
restoration the amount of such  deficiency;  provided,  however,  in such event,
upon any disbursement by Landlord thereof, the Minimum Rent shall be adjusted as
provided in Section  3.1.1(c).  In the event that  neither  Landlord  nor Tenant
shall elect to make such deficiency  available for restoration,  either Landlord
or Tenant may terminate this Agreement with respect to the affected  Property by
Notice to the other, whereupon,  this Agreement shall so terminate and insurance
proceeds  shall be distributed  as provided in Section  10.2.1.  It is expressly
understood and agreed, however, that, notwithstanding anything in this Agreement
to the contrary,  Tenant shall be strictly

                                      -40-
<PAGE>
liable and solely  responsible for the amount of any deductible and shall,  upon
any insurable  loss,  pay over the amount of such  deductible to Landlord at the
time and in the manner herein provided for payment of the applicable proceeds to
Landlord.

                  10.2.4  Disbursement  of  Proceeds.  In the  event  Tenant  is
required to restore any Property  pursuant to Section 10.2 and this Agreement is
not  terminated  as to such  Property  pursuant to this Article 10, Tenant shall
commence (or cause to be commenced)  promptly and continue diligently to perform
(or  cause  to be  performed)  the  repair  and  restoration  of  such  Property
(hereinafter called the "Work"), so as to restore (or cause to be restored) such
Property in material  compliance  with all Legal  Requirements  and so that such
Property shall be, to the extent practicable,  substantially equivalent in value
and general utility to its general utility and value  immediately  prior to such
damage or destruction.  Subject to the terms hereof,  Landlord shall advance the
insurance  proceeds and any additional  amounts payable by Landlord  pursuant to
Section 10.2.3 or otherwise  deposited with Landlord to Tenant  regularly during
the repair and  restoration  period so as to permit  payment for the cost of any
such  restoration  and  repair.  Any such  advances  shall be made not more than
monthly within ten (10) Business Days after Tenant submits to Landlord a written
requisition and  substantiation  therefor on AIA Forms G702 and G703 (or on such
other form or forms as may be reasonably acceptable to Landlord).  Landlord may,
at its  option,  condition  advancement  of such  insurance  proceeds  and other
amounts on (i) the absence of any Event of Default,  (ii) its  approval of plans
and  specifications  of an architect  satisfactory  to Landlord  (which approval
shall not be  unreasonably  withheld,  delayed or  conditioned),  (iii)  general
contractors'  estimates,  (iv)  architect's  certificates,  (v) conditional lien
waivers of general contractors,  if available,  (vi) evidence of approval by all
governmental authorities and other regulatory bodies whose approval is required,
(vii),  if Tenant has elected to advance  deficiency  funds  pursuant to Section
10.2.3, Tenant depositing the amount thereof with Landlord and (viii) such other
certificates as Landlord may, from time to time, reasonably require.

         Landlord's obligation to disburse insurance proceeds under this Article
10 shall be subject to the release of such proceeds by any Facility Mortgagee to
Landlord.

         Tenant's obligation to restore the applicable Property pursuant to this
Article 10 shall be subject to the release of  available  insurance  proceeds by
the applicable  Facility Mortgagee to Landlord or directly to Tenant and, in the
event such proceeds are insufficient,  Landlord electing to make such deficiency
available therefor (and disbursement of such deficiency).

                  10.2.5 MSLS Operating Agreements.  Notwithstanding anything to
the  contrary  contained  in  this  Agreement,  so long  as the  MSLS  Operating
Agreement  shall remain in effect with respect to a Property,  if such  Property
shall be totally or partially  destroyed  and Tenant as "Owner"  under such MSLS
Operating  Agreement shall be

                                      -41-
<PAGE>
obligated to restore such  Property,  Tenant shall,  subject to Section  10.2.3,
promptly restore such Facility as provided in Section 10.2.4.

         10.3 Damage Near End of Term. Notwithstanding any provisions of Section
10.1 or 10.2 to the contrary, if damage to or destruction of any Property occurs
during the last twelve (12) months of the Term and if such damage or destruction
cannot  reasonably  be expected to be fully  repaired and restored  prior to the
date that is six (6)  months  prior to the end of the Term,  the  provisions  of
Section  10.2.1  shall apply as if such  Property  had been totally or partially
destroyed and the Facility thereon rendered Unsuitable for its Permitted Use.

         10.4 Tenant's Property. All insurance proceeds payable by reason of any
loss of or damage to any of Tenant's  Personal  Property shall be paid to Tenant
and, to the extent necessary to repair or replace Tenant's  Personal Property in
accordance  with Section  10.5,  Tenant shall hold such proceeds in trust to pay
the cost of repairing or replacing damaged Tenant's Personal Property.

         10.5 Restoration of Tenant's Property. If Tenant is required to restore
any  Property  as  hereinabove  provided,  Tenant  shall  either (a) restore all
alterations and improvements made by Tenant and Tenant's Personal  Property,  or
(b) replace such  alterations and improvements  and Tenant's  Personal  Property
with  improvements  or items of the same or better  quality  and  utility in the
operation of such  Property.  If Tenant is not required to restore and does not,
in fact,  restore,  Tenant  shall pay over to Landlord  the  amount,  if any, of
insurance  proceeds  received by Tenant with respect to any of Tenant's Personal
Property which was purchased with funds from the FF&E Reserve.

         10.6 No Abatement of Rent.  This  Agreement  shall remain in full force
and effect and Tenant's  obligation  to make all payments of Rent and to pay all
other charges as and when required  under this Agreement  shall remain  unabated
during  the Term  notwithstanding  any  damage  involving  the  Leased  Property
(provided  that Landlord  shall credit against such payments any amounts paid to
Landlord  as a  consequence  of such  damage  under  any  business  interruption
insurance obtained by Tenant hereunder). The provisions of this Article 10 shall
be considered an express agreement  governing any cause of damage or destruction
to the Leased Property and, to the maximum extent  permitted by law, no local or
State statute,  laws,  rules,  regulation or ordinance in effect during the Term
which provide for such a contingency shall have any application in such case.

         10.7 Waiver.  Tenant hereby waives any statutory  rights of termination
which may arise by reason of any damage or destruction  of the Leased  Property,
or any portion thereof.

                                   ARTICLE 11

                                  CONDEMNATION

                                      -42-
<PAGE>
         11.1 Total  Condemnation,  Etc. If either (i) the whole of any Property
shall be taken by  Condemnation or (ii) a Condemnation of less than the whole of
any  Property  renders any  Property  Unsuitable  for Its  Permitted  Use,  this
Agreement  shall  terminate with respect to such  Property,  Tenant and Landlord
shall seek the Award for their interests in the applicable  Property as provided
in Section 11.6.

         11.2 Partial Condemnation.  In the event of a Condemnation of less than
the whole of any  Property  such that such  Property is still  suitable  for its
Permitted  Use,  Tenant  shall,  to the  extent of the Award and any  additional
amounts disbursed by Landlord as hereinafter provided,  commence (or cause to be
commenced) promptly and continue diligently to restore (or cause to be restored)
the untaken  portion of the applicable  Leased  Improvements so that such Leased
Improvements shall constitute a complete  architectural unit of the same general
character and condition (as nearly as may be possible  under the  circumstances)
as such Leased Improvements existing immediately prior to such Condemnation,  in
material  compliance with all Legal  Requirements,  subject to the provisions of
this  Section  11.2.  If the cost of the repair or  restoration  of the affected
Property  exceeds the amount of the Award,  Tenant  shall give  Landlord  Notice
thereof  which  notice shall set forth in  reasonable  detail the nature of such
deficiency and whether Tenant shall pay and assume the amount of such deficiency
(Tenant having no obligation to do so, except that if Tenant shall elect to make
such funds available,  the same shall become an irrevocable obligation of Tenant
pursuant  to this  Agreement).  In the event  Tenant  shall elect not to pay and
assume the amount of such deficiency, Landlord shall have the right (but not the
obligation),  exercisable at Landlord's  sole election by Notice to Tenant given
within sixty (60) days after Tenant's Notice of the deficiency, to elect to make
available for  application  to the cost of repair or  restoration  the amount of
such  deficiency;  provided,  however,  in such event,  upon any disbursement by
Landlord  thereof,  the  Minimum  Rent shall be  adjusted as provided in Section
3.1.1(c). In the event that neither Landlord nor Tenant shall elect to make such
deficiency  available for  restoration,  either Landlord or Tenant may terminate
this Agreement with respect to the affected  Property and the entire Award shall
be allocated as set forth in Section 11.6.

         Subject to the terms hereof,  Landlord shall  contribute to the cost of
restoration  that  part of the  Award  necessary  to  complete  such  repair  or
restoration,  together with  severance  and other damages  awarded for the taken
Leased  Improvements  and any  deficiency  Landlord has agreed to  disburse,  to
Tenant regularly  during the restoration  period so as to permit payment for the
cost of such repair or  restoration.  Landlord  may,  at its  option,  condition
advancement  of such Award and other  amounts on (i) the absence of any Event of
Default,  (ii)  its  approval  of  plans  and  specifications  of  an  architect
satisfactory to Landlord  (which  approval shall not be  unreasonably  withheld,
delayed or conditioned),  (iii) general contractors' estimates, (iv) architect's
certificates, (v) conditional lien waivers of general contractors, if available,
(vi) evidence of approval by all

                                      -43-
<PAGE>
governmental authorities and other regulatory bodies whose approval is required,
(vii),  if Tenant has  elected  to  advance  deficiency  funds  pursuant  to the
preceding  paragraph,  Tenant  depositing  the amount  thereof with Landlord and
(viii) such other  certificates  as Landlord may, from time to time,  reasonably
require. Landlord's obligation under this Section 11.2 to disburse the Award and
such other  amounts shall be subject to (x) the  collection  thereof by Landlord
and  (y)  the  satisfaction  of any  applicable  requirements  of  any  Facility
Mortgage,  and the release of such Award by the applicable  Facility  Mortgagee.
Tenant's  obligation  to  restore  the Leased  Property  shall be subject to the
release of the Award by the applicable Facility Mortgagee to Landlord.

         11.3  MSLS  Operating  Agreements.   Notwithstanding  anything  to  the
contrary  contained in this Agreement,  so long as the MSLS Operating  Agreement
shall remain in effect with respect to a Property, if there is a Condemnation of
any portion of such  Property  and Tenant as "Owner"  under such MSLS  Operating
Agreement shall be obligated to restore such Property,  Tenant shall, subject to
the second and third  sentences  of this  Section  11.3,  promptly  restore such
Facility as provided in Section 11.2.

         11.4  Abatement of Rent.  Other than as  specifically  provided in this
Agreement,  this  Agreement  shall  remain in full force and effect and Tenant's
obligation to make all payments of Rent and to pay all other charges as and when
required  under  this   Agreement   shall  remain   unabated   during  the  Term
notwithstanding any Condemnation  involving the Leased Property,  or any portion
thereof.  The  provisions  of this  Article  11 shall be  considered  an express
agreement  governing any Condemnation  involving the Leased Property and, to the
maximum  extent  permitted  by law,  no  local  or  State  statute,  law,  rule,
regulation  or  ordinance  in effect  during the Term which  provides for such a
contingency shall have any application in such case.

         11.5 Temporary Condemnation. In the event of any temporary Condemnation
of any Property or Tenant's interest  therein,  this Agreement shall continue in
full force and effect and Tenant shall continue to pay (or cause to be paid), in
the  manner  and on the terms  herein  specified,  the full  amount of the Rent.
Tenant  shall  continue to perform and  observe  (or cause to be  performed  and
observed) all of the other terms and conditions of this Agreement on the part of
the Tenant to be  performed  and  observed.  Provided  no Event of  Default  has
occurred  and is  continuing,  the  entire  amount  of any  Award  made for such
temporary  Condemnation  allocable to the Term,  whether paid by way of damages,
rent or  otherwise,  shall be paid to Tenant.  Tenant  shall,  promptly upon the
termination of any such period of temporary  Condemnation,  at its sole cost and
expense,  restore the Leased Property to the condition that existed  immediately
prior to such  Condemnation,  in material  compliance with all applicable  Legal
Requirements,  unless such period of temporary  Condemnation shall extend beyond
the  expiration of the Term, in which event Tenant shall not be required to make
such restoration.

                                      -44-
<PAGE>
         11.6  Allocation  of Award.  Except as provided in Section 11.5 and the
second  sentence  of this  Section  11.6,  the total  Award  shall be solely the
property  of and  payable  to  Landlord.  Any  portion of the Award made for the
taking of Tenant's leasehold  interest in the Leased Property,  loss of business
during the  remainder  of the Term,  the taking of  Tenant's  Personal  Property
(other than any such property  purchased with the FF&E  Reserve),  the taking of
Capital  Additions  paid for by  Tenant  and  Tenant's  removal  and  relocation
expenses  shall be the sole  property of and  payable to Tenant  (subject to the
provisions  of Section  11.2).  In any  Condemnation  proceedings,  Landlord and
Tenant shall each seek its own Award in conformity herewith, at its own expense.

                                   ARTICLE 12

                             DEFAULTS AND REMEDIES

         12.1  Events  of  Default.  The  occurrence  of any  one or more of the
following events shall constitute an "Event of Default" hereunder:

                  (a) should  Tenant fail to make any payment of the Rent or any
         other sum (including,  but not limited to, funding of the FF&E Reserve)
         payable hereunder when due; or

                  (b) should  Tenant fail to maintain  the  insurance  coverages
         required under Article 9; or

                  (c) should Tenant default in the due observance or performance
         of any of the terms,  covenants or  agreements  contained  herein to be
         performed or observed by it (other than as specified in clauses (a) and
         (b) above) and such default shall  continue for a period of thirty (30)
         days after Notice thereof from Landlord to Tenant;  provided,  however,
         that if such  default is  susceptible  of cure but such cure  cannot be
         accomplished  with due diligence  within such period of time and if, in
         addition,  Tenant  commences  to cure or cause to be cured such default
         within  thirty  (30)  days  after  Notice  thereof  from  Landlord  and
         thereafter   prosecutes  the  curing  of  such  default  with  all  due
         diligence, such period of time shall be extended to such period of time
         (not to exceed an additional  ninety (90) days in the aggregate) as may
         be necessary to cure such default with all due diligence; or

                  (d)  should  any  obligation  of  Tenant  in  respect  of  any
         Indebtedness  for  money  borrowed  or for  any  material  property  or
         services, or any guaranty relating thereto, be declared to be or become
         due and payable prior to the stated maturity  thereof,  or should there
         occur and be continuing with respect to any such Indebtedness any event
         of default under any instrument or agreement evidencing or securing the
         same,  the  effect of which is to permit  the holder or holders of such
         instrument or agreement or a trustee,  agent or other representative on
         behalf of such

                                      -45-
<PAGE>
         holder or  holders,  to cause such any such  obligations  to become due
         prior to its stated maturity; or

                  (e) should an event of default by Tenant, any Guarantor or any
         Affiliated Person as to Tenant or any Guarantor occur and be continuing
         beyond the  expiration of any  applicable  cure period under any of the
         Incidental Documents; or

                  (f) should any event of  default by any  Affiliated  Person of
         Five  Star  occur  and  be  continuing  beyond  the  expiration  of any
         applicable cure period under the Other Lease; or

                  (g) should Tenant or any Guarantor generally not be paying its
         debts as they  become  due or  should  Tenant or any  Guarantor  make a
         general assignment for the benefit of creditors; or

                  (h) should any  petition be filed by or against  Tenant or any
         Guarantor  under the  Federal  bankruptcy  laws,  or  should  any other
         proceeding be instituted by or against Tenant or any Guarantor  seeking
         to  adjudicate  Tenant or any  Guarantor  a bankrupt or  insolvent,  or
         seeking  liquidation,   reorganization,   arrangement,   adjustment  or
         composition  of Tenant's  debts under any law  relating to  bankruptcy,
         insolvency or reorganization or relief of debtors, or seeking the entry
         of an order  for  relief or the  appointment  of a  receiver,  trustee,
         custodian or other similar  official for Tenant or any Guarantor or for
         any  substantial  part of the property of Tenant or any  Guarantor  and
         such  proceeding is not dismissed  within one hundred eighty (180) days
         after institution thereof; or

                  (i) should  Tenant or any  Guarantor  cause or  institute  any
         proceeding for its dissolution or termination; or

                  (j)  should  the  estate or  interest  of Tenant in the Leased
         Property  or any  part  thereof  be  levied  upon  or  attached  in any
         proceeding  and the same shall not be vacated or discharged  within the
         later of (x) ninety (90) days after  commencement  thereof,  unless the
         amount in dispute is less than  $250,000,  in which case  Tenant  shall
         give  notice to  Landlord  of the  dispute but Tenant may defend in any
         suitable  way, and (y) two hundred  seventy (270) days after receipt by
         Tenant  of  Notice  thereof  from  Landlord  (unless  Tenant  shall  be
         contesting  such lien or attachment  in good faith in  accordance  with
         Article 8); or

                  (k)  should any  default  by Tenant as "Owner"  under any MSLS
         Operating  Agreement  occur and be continuing  beyond the expiration of
         any applicable cure period under such MSLS Operating Agreement; or

                  (l)  should  there  occur  any  direct or  indirect  Change in
         Control of Tenant or any  Guarantor,  except as otherwise  permitted by
         Article 16; or

                                      -46-
<PAGE>
                  (m) should a final  unappealable  determination be made by the
         applicable  Government  Agency that Tenant  shall have failed to comply
         with applicable  Medicare and/or Medicaid  regulations in the operation
         of any  Facility,  as a result  of which  failure  Tenant  is  declared
         ineligible to receive reimbursements under the Medicare and/or Medicaid
         programs for such Facility;

then,  and in any such  event,  Landlord,  in  addition  to all  other  remedies
available to it, may terminate  this Agreement with respect to any or all of the
Leased  Property by giving Notice  thereof to Tenant and upon the  expiration of
the time, if any,  fixed in such Notice,  this  Agreement  shall  terminate with
respect to all or the designated  portion of the Leased  Property and all rights
of Tenant under this Agreement with respect thereto shall cease.  Landlord shall
have and may exercise all rights and remedies  available at law and in equity to
Landlord as a result of Tenant's breach of this Agreement.

         Upon the  occurrence  of an Event of Default,  subject to any rights of
MSLS under any MSLS Operating Agreement,  Landlord may, in addition to any other
remedies provided herein,  enter upon the Leased Property or any portion thereof
and take possession of any and all of Tenant's  Personal  Property,  if any, and
the Records, without liability for trespass or conversion (Tenant hereby waiving
any right to notice or hearing  prior to such taking of  possession by Landlord)
and sell the same at public or private  sale,  after  giving  Tenant  reasonable
Notice  of the time and place of any  public  or  private  sale,  at which  sale
Landlord  or its assigns may  purchase  all or any portion of Tenant's  Personal
Property,  if any, unless otherwise prohibited by law. Unless otherwise provided
by law and  without  intending  to  exclude  any other  manner of giving  Tenant
reasonable  notice,  the  requirement of reasonable  Notice shall be met if such
Notice is given at least ten (10) days  before  the date of sale.  The  proceeds
from any such  disposition,  less all expenses  incurred in connection  with the
taking  of  possession,   holding  and  selling  of  such  property  (including,
reasonable   attorneys'   fees)  shall  be  applied  as  a  credit  against  the
indebtedness  which is secured by the security  interest granted in Section 7.2.
Any surplus  shall be paid to Tenant or as otherwise  required by law and Tenant
shall pay any deficiency to Landlord, as Additional Charges, upon demand.

         12.2 Remedies.  None of (a) the termination of this Agreement  pursuant
to Section  12.1,  (b) the  repossession  of the Leased  Property or any portion
thereof,  (c) the  failure of  Landlord  to re-let the  Leased  Property  or any
portion  thereof,  nor (d) the  reletting of all or any of portion of the Leased
Property,  shall relieve Tenant of its liability and obligations hereunder,  all
of which shall survive any such termination,  repossession or re-letting. In the
event of any such  termination,  Tenant shall forthwith pay to Landlord all Rent
due and payable  with  respect to the Leased  Property,  or  terminated  portion
thereof, through and including the date of such termination. Thereafter, Tenant,
until the end of what would have been the Term of this  Agreement in the absence
of such  termination,  and  whether or not the Leased  Property  or any  portion
thereof  shall have been re-let,

                                      -47-
<PAGE>
shall be liable to Landlord for, and shall pay to Landlord,  as current damages,
the Rent  (Additional  Rent to be  reasonably  calculated  by Landlord  based on
historical  Net  Patient  Revenues)  and other  charges  which  would be payable
hereunder for the remainder of the Term had such termination not occurred,  less
the net  proceeds,  if any, of any  re-letting  of the Leased  Property,  or any
portion thereof, after deducting all reasonable expenses in connection with such
reletting,  including,  without limitation,  all repossession  costs,  brokerage
commissions,   legal  expenses,   attorneys'  fees,  advertising,   expenses  of
employees,  alteration  costs and expenses of  preparation  for such  reletting.
Tenant shall pay such current  damages to Landlord  monthly on the days on which
the Minimum Rent would have been payable  hereunder  if this  Agreement  had not
been so terminated with respect to such of the Leased Property.

         At any time after such termination,  whether or not Landlord shall have
collected any such current damages,  as liquidated final damages beyond the date
of such  termination,  at Landlord's  election,  Tenant shall pay to Landlord an
amount equal to the present value (as reasonably  determined by Landlord) of the
excess,  if any, of the Rent and other charges which would be payable  hereunder
from the date of such  termination  (assuming  that,  for the  purposes  of this
paragraph,  annual  payments by Tenant on account of Impositions  and Additional
Rent would be the same as payments required for the immediately preceding twelve
calendar  months,  or if less than twelve calendar months have expired since the
Commencement  Date, the payments required for such lesser period projected to an
annual  amount) for what would be the then  unexpired  term of this Agreement if
the same  remained in effect,  over the fair market  rental for the same period.
Nothing contained in this Agreement shall, however, limit or prejudice the right
of Landlord to prove and obtain in  proceedings  for bankruptcy or insolvency an
amount  equal to the maximum  allowed by any statute or rule of law in effect at
the time when,  and governing the  proceedings  in which,  the damages are to be
proved,  whether or not the amount be greater  than,  equal to, or less than the
amount of the loss or damages referred to above.

         In case of any Event of Default, re-entry, expiration and dispossession
by summary proceedings or otherwise, Landlord may, subject to any rights of MSLS
under the MSLS Operating Agreement, (a) relet the Leased Property or any part or
parts thereof, either in the name of Landlord or otherwise,  for a term or terms
which may at  Landlord's  option,  be equal to,  less than or exceed  the period
which would  otherwise  have  constituted  the balance of the Term and may grant
concessions  or free rent to the extent that  Landlord  considers  advisable and
necessary  to relet the  same,  and (b) may make  such  reasonable  alterations,
repairs  and  decorations  in the  Leased  Property  or any  portion  thereof as
Landlord, in its sole and absolute discretion, considers advisable and necessary
for the  purpose  of  reletting  the  Leased  Property;  and the  making of such
alterations,  repairs  and  decorations  shall not  operate or be  construed  to
release Tenant from liability hereunder as aforesaid. Landlord shall in no event
be liable in any way  whatsoever  for any failure to relet all or

                                      -48-
<PAGE>
any portion of the Leased Property, or, in the event that the Leased Property is
relet,  for  failure to collect  the rent under such  reletting.  To the maximum
extent  permitted by law, Tenant hereby  expressly  waives any and all rights of
redemption granted under any present or future laws in the event of Tenant being
evicted or dispossessed, or in the event of Landlord obtaining possession of the
Leased  Property,  by reason of the occurrence and  continuation  of an Event of
Default hereunder.

         12.3  Tenant's  Waiver.  IF THIS  AGREEMENT IS  TERMINATED  PURSUANT TO
SECTION 12.1 OR 12.2,  TENANT WAIVES,  TO THE EXTENT PERMITTED BY LAW, ANY RIGHT
TO A TRIAL BY JURY IN THE EVENT OF SUMMARY  PROCEEDINGS  TO ENFORCE THE REMEDIES
SET FORTH IN THIS  ARTICLE 12, AND THE BENEFIT OF ANY LAWS NOW OR  HEREAFTER  IN
FORCE EXEMPTING PROPERTY FROM LIABILITY FOR RENT OR FOR DEBT.

         12.4 Application of Funds. Any payments  received by Landlord under any
of the provisions of this  Agreement  during the existence or continuance of any
Event of Default (and any payment made to Landlord rather than Tenant due to the
existence of any Event of Default) shall be applied to Tenant's current and past
due obligations  under this Agreement in such order as Landlord may determine or
as may be  prescribed  by the laws of the State.  Any  balance  shall be paid to
Tenant.

         12.5 Landlord's Right to Cure Tenant's Default.  If an Event of Default
shall have occurred and be continuing,  Landlord,  after Notice to Tenant (which
Notice shall not be required if Landlord shall  reasonably  determine  immediate
action is necessary to protect person or property), without waiving or releasing
any obligation of Tenant and without  waiving or releasing any Event of Default,
may (but shall not be obligated to), at any time  thereafter,  make such payment
or perform  such act for the account  and at the expense of Tenant,  and may, to
the  maximum  extent  permitted  by law,  enter upon the Leased  Property or any
portion  thereof  for such  purpose  and take all such  action  thereon  as,  in
Landlord's  sole  and  absolute  discretion,  may be  necessary  or  appropriate
therefor.  No such entry shall be deemed an eviction of Tenant.  All  reasonable
costs and expenses (including,  without limitation,  reasonable attorneys' fees)
incurred by Landlord in connection therewith, together with interest thereon (to
the extent  permitted  by law) at the  Overdue  Rate from the date such sums are
paid by Landlord until repaid, shall be paid by Tenant to Landlord, on demand.

                                   ARTICLE 13

                                  HOLDING OVER

         Any holding over by Tenant after the  expiration or sooner  termination
of this  Agreement  shall be treated as a daily  tenancy at sufferance at a rate
equal to two (2)  times  the  Minimum  Rent and other  charges  herein  provided
(prorated  on a daily  basis).  Tenant  shall

                                      -49-
<PAGE>
also pay to Landlord all damages (direct or indirect) sustained by reason of any
such  holding  over.  Otherwise,  such  holding  over  shall be on the terms and
conditions  set  forth in this  Agreement,  to the  extent  applicable.  Nothing
contained herein shall constitute the consent,  express or implied,  of Landlord
to the holding over of Tenant after the  expiration  or earlier  termination  of
this Agreement.

                                   ARTICLE 14

                                LANDLORD DEFAULT

         If Landlord  shall default in the  performance  or observance of any of
its covenants or  obligations  set forth in this  Agreement or any obligation of
Landlord,  if any,  under any  agreement  affecting  the  Leased  Property,  the
performance of which is not Tenant's obligation pursuant to this Agreement,  and
any such  default  shall  continue for a period of thirty (30) days after Notice
thereof from Tenant to Landlord and any applicable Facility  Mortgagee,  or such
additional period as may be reasonably  required to correct the same, Tenant may
declare the  occurrence  of a "Landlord  Default" by a second Notice to Landlord
and to such Facility Mortgagee.  Thereafter,  Tenant may forthwith cure the same
and, subject to the provisions of the following paragraph,  invoice Landlord for
costs and  expenses  (including  reasonable  attorneys'  fees and  court  costs)
incurred by Tenant in curing the same,  together with  interest  thereon (to the
extent permitted by law) from the date Landlord  receives Tenant's invoice until
paid,  at the  Overdue  Rate.  Tenant  shall  have no  right to  terminate  this
Agreement  for any  default by  Landlord  hereunder  and no right,  for any such
default,  to  offset  or  counterclaim  against  any Rent or other  charges  due
hereunder.

         If Landlord  shall in good faith dispute the occurrence of any Landlord
Default and Landlord, before the expiration of the applicable cure period, shall
give Notice thereof to Tenant,  setting forth, in reasonable  detail,  the basis
therefor,  no Landlord  Default  shall be deemed to have  occurred  and Landlord
shall have no obligation with respect thereto until final adverse  determination
thereof.  If Tenant and Landlord shall fail, in good faith,  to resolve any such
dispute  within ten (10) days after  Landlord's  Notice of  dispute,  either may
submit the matter for resolution in accordance with Article 22.

                                   ARTICLE 15

                                PURCHASE RIGHTS

         Subject  to the right of MSLS  pursuant  to  Section  10.03 of the MSLS
Operating  Agreements,  Landlord  shall  have the  option to  purchase  Tenant's
Personal  Property,  at the expiration or termination of this Agreement,  for an
amount equal to the then fair market value thereof (current  replacement cost as
determined  by  agreement  of the parties or, in the absence of such  agreement,
appraisal),  subject  to,  and  with  appropriate  price  adjustments  for,  all
equipment  leases,  conditional sale contracts,  UCC-1 financing  statements and
other  encumbrances to

                                      -50-
<PAGE>
which such Personal Property is subject (except that any such property purchased
with the FF&E Reserve  shall be  transferred  to Landlord as provided in Section
5.1.2).  Upon the  expiration or sooner  termination of this  Agreement,  Tenant
shall  use its  reasonable  efforts  to  transfer  and  assign,  or  cause to be
transferred and assigned, to Landlord or its designee, or assist Landlord or its
designee in obtaining,  any contracts,  licenses,  and certificates required for
the then operation of the Leased Property.

                                   ARTICLE 16

                           SUBLETTING AND ASSIGNMENT

         16.1  Subletting  and  Assignment.  Except as provided in Section 16.3,
Tenant shall not, without Landlord's prior written consent (which consent may be
given or withheld in Landlord's sole and absolute discretion), assign, mortgage,
pledge,  hypothecate,  encumber or otherwise transfer this Agreement or sublease
or permit the  sublease  (which term shall be deemed to include the  granting of
concessions,  licenses and the like),  of all or any part of the Leased Property
or suffer or permit this Agreement or the leasehold estate created hereby or any
other  rights  arising  under  this  Agreement  to  be  assigned,   transferred,
mortgaged,  pledged,  hypothecated or encumbered,  in whole or in part,  whether
voluntarily,  involuntarily  or by  operation  of  law,  or  permit  the  use or
operation of the Leased Property by anyone other than Tenant,  MSLS, any Manager
approved by Landlord pursuant to the applicable  provisions of this Agreement or
residents  and  patients  of  Tenant,  or the Leased  Property  to be offered or
advertised for assignment or subletting.

         For purposes of this Section  16.1,  an  assignment  of this  Agreement
shall be deemed to include, without limitation, any direct or indirect Change in
Control of Tenant.

         If this  Agreement  is assigned  or if the Leased  Property or any part
thereof are sublet (or occupied by anybody other than Tenant, MSLS, any Manager,
their  respective  employees or  residents or patients of Tenant),  Landlord may
collect the rents from such assignee, subtenant or occupant, as the case may be,
and apply the net amount  collected  to the Rent  herein  reserved,  but no such
collection  shall be  deemed a waiver of the  provisions  set forth in the first
paragraph of this Section 16.1,  the  acceptance  by Landlord of such  assignee,
subtenant or occupant,  as the case may be, as a tenant,  or a release of Tenant
from  the  future  performance  by  Tenant  of  its  covenants,   agreements  or
obligations contained in this Agreement.

         Any  assignment or transfer of Tenant's  interest  under this Agreement
shall be subject to such assignee's or transferee's  delivery to Landlord of (i)
a pledge of the stock,  partnership,  membership or other ownership interests of
such assignee or other  transferee  to secure  Tenant's  obligations  under this
Agreement  and the  Incidental  Documents,  which  pledge  shall  be in form and
substance  satisfactory  to Landlord in its sole  discretion and (ii) a security
agreement  granting

                                      -51-
<PAGE>
Landlord a security  interest in of all such assignee's or  transferee's  right,
title and interest in and to any  personal  property,  intangibles  and fixtures
(other than accounts  receivable)  with respect to any Leased  Property which is
subject to any such assignment or transfer to secure Tenant's  obligations under
this Agreement and the Incidental  Documents,  which security agreement shall be
in form and substance satisfactory to Landlord in its sole discretion.

         No  subletting  or  assignment  shall in any way impair the  continuing
primary  liability of Tenant  hereunder  (unless  Landlord and Tenant  expressly
otherwise agree that Tenant shall be released from all  obligations  hereunder),
and no consent to any subletting or assignment in a particular instance shall be
deemed to be a waiver of the  prohibition  set forth in this  Section  16.1.  No
assignment,  subletting  or  occupancy  shall  affect  any  Permitted  Use.  Any
subletting,  assignment  or other  transfer  of  Tenant's  interest  under  this
Agreement in  contravention of this Section 16.1 shall be voidable at Landlord's
option.

         16.2 Required Sublease  Provisions.  Any sublease of all or any portion
of the Leased  Property  entered into on or after the date hereof shall  provide
(a) that it is subject and  subordinate  to this Agreement and to the matters to
which this  Agreement  is or shall be subject  or  subordinate;  (b) that in the
event of termination of this Agreement or reentry or  dispossession of Tenant by
Landlord  under this  Agreement,  Landlord  may, at its option,  terminate  such
sublease  or take  over all of the  right,  title and  interest  of  Tenant,  as
sublessor under such sublease,  and such subtenant shall, at Landlord's  option,
attorn to Landlord  pursuant to the then executory  provisions of such sublease,
except that neither Landlord nor any Facility Mortgagee, as holder of a mortgage
or as  Landlord  under  this  Agreement,  if  such  mortgagee  succeeds  to that
position,  shall (i) be liable  for any act or  omission  of Tenant  under  such
sublease, (ii) be subject to any credit,  counterclaim,  offset or defense which
theretofore  accrued to such  subtenant  against  Tenant,  (iii) be bound by any
previous  modification  of such sublease not consented to in writing by Landlord
or by any previous  prepayment of more than one (1) month's rent,  (iv) be bound
by any  covenant of Tenant to  undertake  or complete  any  construction  of the
Leased  Property  or any  portion  thereof,  (v) be  required to account for any
security  deposit of the  subtenant  other than any  security  deposit  actually
delivered  to Landlord by Tenant,  (vi) be bound by any  obligation  to make any
payment to such  subtenant or grant any credits,  except for services,  repairs,
maintenance and  restoration  provided for under the sublease that are performed
after the date of such attornment,  (vii) be responsible for any monies owing by
Tenant to the credit of such subtenant unless actually  delivered to Landlord by
Tenant,  or (viii) be required to remove any Person occupying any portion of the
Leased  Property;  and (c), in the event that such subtenant  receives a written
Notice from Landlord or any Facility  Mortgagee stating that an Event of Default
has occurred and is continuing,  such subtenant shall thereafter be obligated to
pay all rentals  accruing under such sublease  directly to the party giving such
Notice or as such party may direct.  All rentals received from such

                                      -52-
<PAGE>
subtenant  by Landlord or the Facility  Mortgagee,  as the case may be, shall be
credited  against  the amounts  owing by Tenant  under this  Agreement  and such
sublease shall provide that the subtenant  thereunder  shall,  at the request of
Landlord,  execute a suitable  instrument in  confirmation  of such agreement to
attorn.  An  original  counterpart  of each such  sublease  and  assignment  and
assumption,  duly executed by Tenant and such subtenant or assignee, as the case
may be, in form and  substance  reasonably  satisfactory  to Landlord,  shall be
delivered  promptly  to  Landlord  and  (a) in the  case of an  assignment,  the
assignee  shall assume in writing and agree to keep and perform all of the terms
of this  Agreement on the part of Tenant to be kept and  performed and shall be,
and become, jointly and severally liable with Tenant for the performance thereof
and (b) in case of either an  assignment  or  subletting,  Tenant  shall  remain
primarily liable, as principal rather than as surety,  for the prompt payment of
the Rent and for the  performance  and  observance  of all of the  covenants and
conditions to be performed by Tenant hereunder.

         The provisions of this Section 16.2 shall not be deemed a waiver of the
provisions set forth in the first paragraph of Section 16.1.

         16.3  Permitted  Sublease  Notwithstanding  the  foregoing,  including,
without limitation,  Section 16.2, but subject to the provisions of Section 16.4
and any other express conditions or limitations set forth herein, Tenant may, in
each  instance  after Notice to Landlord may (unless  otherwise  provided in the
MSLS Operating Agreements), (a) enter into third party residency agreements with
respect  to the units  located  at the  Facilities,  (b)  sublease  space at any
Property for laundry,  commissary or child care purposes or other concessions in
furtherance  of the Permitted Use, so long as such subleases will not reduce the
number  of  units  at any  Facility,  will  not  violate  or  affect  any  Legal
Requirement or Insurance  Requirement,  and Tenant shall provide such additional
insurance  coverage  applicable  to  the  activities  to be  conducted  in  such
subleased space as Landlord and any Facility  Mortgagee may reasonably  require,
(c) enter into subleases,  concession or license agreements  expressly permitted
by the terms of the MSLS Operating  Agreements  (including,  without limitation,
the provisions of Sections 2.02 and 2.04(6) of the MSLS  Operating  Agreements),
subject to and upon the terms and conditions  contained  therein,  and (d) enter
into one or more subleases with Affiliated Persons of Tenant with respect to the
Leased Property or any portion thereof  provided Tenant gives Landlord Notice of
the material terms and conditions thereof.

         16.4 Sublease  Limitation.  Anything contained in this Agreement to the
contrary  notwithstanding,  Tenant  shall not sublet the Leased  Property on any
basis  such that the  rental  to be paid by any  sublessee  thereunder  would be
based, in whole or in part, on the net income or profits derived by the business
activities  of such  sublessee,  any other formula such that any portion of such
sublease  rental would fail to qualify as "rents from real property"  within the
meaning of Section  856(d) of the Code,  or any similar or  successor  provision
thereto or

                                      -53-
<PAGE>
would otherwise  disqualify  Landlord for treatment as a real estate  investment
trust.

                                   ARTICLE 17

                 ESTOPPEL CERTIFICATES AND FINANCIAL STATEMENTS

         17.1 Estoppel Certificates.  At any time and from time to time, but not
more than a  reasonable  number  of times per year,  upon not less than ten (10)
Business  Days prior Notice by either  party,  the party  receiving  such Notice
shall  furnish  to the  other an  Officer's  Certificate  certifying  that  this
Agreement is unmodified  and in full force and effect (or that this Agreement is
in full force and effect as modified and setting forth the  modifications),  the
date to which the Rent has been paid, that no Default or an Event of Default has
occurred and is continuing  or, if a Default or an Event of Default shall exist,
specifying in reasonable detail the nature thereof, and the steps being taken to
remedy the same, and such  additional  information  as the requesting  party may
reasonably request. Any such certificate furnished pursuant to this Section 17.1
may be relied upon by the  requesting  party,  its  lenders and any  prospective
purchaser or mortgagee of the Leased  Property or the leasehold  estate  created
hereby.

         17.2 Financial  Statements.  Tenant shall furnish or cause Five Star to
furnish, as applicable, the following statements to Landlord:

                  (a) within  forty-five (45) days after each of the first three
         fiscal  quarters  of any  Fiscal  Year,  the most  recent  Consolidated
         Financials, accompanied by the Financial Officer's Certificate;

                  (b) within ninety (90) days after the end of each Fiscal Year,
         the most recent  Consolidated  Financials  and financials of Tenant for
         such year,  certified by an  independent  certified  public  accountant
         reasonably  satisfactory  to Landlord  and  accompanied  by a Financial
         Officer's Certificate;

                  (c) within  forty-five  (45) days after the end of each month,
         an unaudited operating statement and statement of capital  expenditures
         prepared  on a  Facility  by  Facility  basis  and  a  combined  basis,
         including  occupancy  percentages  and average rate,  accompanied  by a
         Financial Officer's Certificate;

                  (d) at any  time  and from  time to time  upon  not less  than
         twenty (20) days Notice from Landlord or such additional  period as may
         be reasonable under the  circumstances,  any  Consolidated  Financials,
         Tenant financials or any other audited or unaudited financial reporting
         information  required to be filed by Landlord with any  securities  and
         exchange  commission,  the SEC or any  successor  agency,  or any other
         governmental authority, or required pursuant to any order issued by any
         court,  governmental

                                      -54-
<PAGE>
         authority or arbitrator in any litigation to which Landlord is a party,
         for purposes of compliance therewith;  provided,  however, that, except
         as to calculations pertaining to Net Patient Revenues, Tenant shall not
         be  required  to  provide  audited   financials  with  respect  to  any
         individual  Facility  unless  Landlord  shall agree to pay for the cost
         thereof;

                  (e) promptly,  after receipt or sending thereof, copies of all
         notices given or received by Tenant under any Management Agreement; and

                  (f)   promptly,   upon  Notice  from   Landlord,   such  other
         information concerning the business, financial condition and affairs of
         Tenant and any Guarantor as Landlord  reasonably  may request from time
         to time.

         Landlord may at any time,  and from time to time,  provide any Facility
Mortgagee  with copies of any of the foregoing  statements,  subject to Landlord
obtaining the agreement of such Facility  Mortgagee to maintain such  statements
and the information therein as confidential.

         17.3  General  Operations.  Tenant  covenants  and agrees to furnish to
Landlord,  within thirty (30) days after receipt or modification thereof, copies
of:

                  (a) all licenses  authorizing  Tenant and/or MSLS or any other
         Manager to operate any Facility for its Primary Intended Use;

                  (b) all Medicare and Medicaid  certifications,  together  with
         provider  agreements and all material  correspondence  relating thereto
         with respect to any Facility (excluding,  however, correspondence which
         may be subject to any attorney client privilege);

                  (c) if  required  under  Applicable  Law with  respect  to any
         Facility,  a license for each individual employed as administrator with
         respect to such Facility;

                  (d) all reports of surveys, statements of deficiencies,  plans
         of  correction,  and  all  material  correspondence  relating  thereto,
         including,  without limitation, all reports and material correspondence
         concerning    compliance    with   or    enforcement    of   licensure,
         Medicare/Medicaid,  and accreditation requirements,  including physical
         environment  and Life Safety Code survey reports  (excluding,  however,
         correspondence  which may be subject to any attorney client privilege);
         and

                  (e) with reasonable promptness,  such other confirmation as to
         the  licensure  and Medicare and  Medicaid  participation  of Tenant as
         Landlord may reasonably request from time to time.

                                      -55-
<PAGE>
                                   ARTICLE 18

                          LANDLORD'S RIGHT TO INSPECT

         Tenant shall  permit  Landlord and its  authorized  representatives  to
inspect  the Leased  Property  during  usual  business  hours upon not less than
forty-eight (48) hours' notice and to make such repairs as Landlord is permitted
or required to make pursuant to the terms of this  Agreement,  provided that any
inspection or repair by Landlord or its  representatives  will not  unreasonably
interfere  with  Tenant's use and  operation of the Leased  Property and further
provided  that in the event of an  emergency,  as  determined by Landlord in its
reasonable discretion, prior Notice shall not be necessary.

                                   ARTICLE 19

                                   EASEMENTS

         19.1 Grant of Easements.  Provided no Event of Default has occurred and
is  continuing,  Landlord will join in granting and, if necessary,  modifying or
abandoning  such  rights-of-way,   easements  and  other  interests  as  may  be
reasonably requested by Tenant for ingress and egress, and electric,  telephone,
gas, water, sewer and other utilities so long as:

                  (a) the instrument creating,  modifying or abandoning any such
         easement,  right-of-way  or  other  interest  is  satisfactory  to  and
         approved  by  Landlord   (which  approval  shall  not  be  unreasonably
         withheld, delayed or conditioned);

                  (b)  Landlord  receives an Officer's  Certificate  from Tenant
         stating  (i)  that  such  grant,  modification  or  abandonment  is not
         detrimental to the proper  conduct of business on such  Property,  (ii)
         the consideration,  if any, being paid for such grant,  modification or
         abandonment (which  consideration shall be paid by Tenant),  (iii) that
         such  grant,  modification  or  abandonment  does not impair the use or
         value of such  Property for the  Permitted  Use, and (iv) that,  for as
         long as this  Agreement  shall be in effect,  Tenant  will  perform all
         obligations, if any, of Landlord under any such instrument; and

                  (c) Landlord receives  evidence  satisfactory to Landlord that
         the Manager has  granted  its  consent to such grant,  modification  or
         abandonment  in  accordance  with the  requirements  of such  Manager's
         Management Agreement or that such consent is not required.

         19.2  Exercise of Rights by Tenant.  So long as no Event of Default has
occurred and is  continuing,  Tenant shall have the right to exercise all rights
of Landlord under the Easement Agreements and, in connection therewith, Landlord
shall  execute and  promptly  return to Tenant such  documents  as Tenant  shall
reasonably  request.  Tenant

                                      -56-
<PAGE>
shall perform all obligations of Landlord under the Easement Agreements.

         19.3 Permitted Encumbrances.  Any agreements entered into in accordance
with this Article 19 shall be deemed a Permitted Encumbrance.

                                   ARTICLE 20

                               FACILITY MORTGAGES

         20.1 Landlord May Grant Liens. Without the consent of Tenant,  Landlord
may, from time to time,  directly or  indirectly,  create or otherwise  cause to
exist any lien,  encumbrance or title retention agreement  ("Encumbrance")  upon
the Leased  Property,  or any portion  thereof or interest  therein,  whether to
secure any borrowing or other means of financing or refinancing,  provided that,
so long as the MSLS  Operating  Agreements  shall  remain  in  effect,  any such
Encumbrance  shall be consistent with the  requirements of Article 6 of the MSLS
Operating Agreement affecting the applicable Property.

         20.2  Subordination of Lease.  This Agreement and any and all rights of
Tenant  hereunder  are and shall be  subject  and  subordinate  to any ground or
master  lease,  and all renewals,  extensions,  modifications  and  replacements
thereof,  and to all  mortgages  and deeds of trust,  which may now or hereafter
affect  the  Leased  Property  or any  improvements  thereon  and/or any of such
leases,  whether or not such  mortgages or deeds of trust shall also cover other
lands  and/or  buildings  and/or  leases,  to each  and  every  advance  made or
hereafter  to be made  under  such  mortgages  and  deeds of  trust,  and to all
renewals,  modifications,  replacements  and  extensions of such leases and such
mortgages and deeds of trust and all  consolidations of such mortgages and deeds
of trust.  This section  shall be  self-operative  and no further  instrument of
subordination shall be required.  In confirmation of such subordination,  Tenant
shall promptly  execute,  acknowledge  and deliver any instrument that Landlord,
the  lessor  under  any such  lease or the  holder of any such  mortgage  or the
trustee  or  beneficiary  of any  deed  of  trust  or any  of  their  respective
successors in interest may  reasonably  request to evidence such  subordination.
Any lease to which this  Agreement  is, at the time  referred  to,  subject  and
subordinate is herein called "Superior Lease" and the lessor of a Superior Lease
or its successor in interest at the time referred to is herein called  "Superior
Landlord"  and any mortgage or deed of trust to which this  Agreement is, at the
time referred to, subject and subordinate is herein called  "Superior  Mortgage"
and the holder,  trustee or beneficiary of a Superior  Mortgage is herein called
"Superior Mortgagee".  Tenant shall have no obligations under any Superior Lease
or Superior Mortgage other than those expressly set forth in this Section 20.2.

         If any  Superior  Landlord  or  Superior  Mortgagee  or the  nominee or
designee of any Superior  Landlord or Superior  Mortgagee  shall  succeed

                                      -57-
<PAGE>
to the rights of Landlord  under this  Agreement  (any such  person,  "Successor
Landlord"),  whether through  possession or foreclosure  action or delivery of a
new lease or deed, or otherwise,  at such Successor  Landlord's request,  Tenant
shall attorn to and recognize the Successor  Landlord as Tenant's landlord under
this Agreement and Tenant shall promptly execute and deliver any instrument that
such  Successor  Landlord may  reasonably  request to evidence  such  attornment
(provided  that such  instrument  does not  alter the terms of this  Agreement),
whereupon,  this  Agreement  shall continue in full force and effect as a direct
lease  between  the  Successor  Landlord  and  Tenant  upon  all of  the  terms,
conditions  and  covenants as are set forth in this  Agreement,  except that the
Successor  Landlord  (unless  formerly the landlord  under this Agreement or its
nominee or designee) shall not be (a) liable in any way to Tenant for any act or
omission,  neglect  or  default  on the part of any prior  Landlord  under  this
Agreement,  (b) responsible for any monies owing by or on deposit with any prior
Landlord  to the  credit  of  Tenant  (except  to the  extent  actually  paid or
delivered to the Successor Landlord),  (c) subject to any counterclaim or setoff
which theretofore accrued to Tenant against any prior Landlord, (d) bound by any
modification of this Agreement subsequent to such Superior Lease or Mortgage, or
by any previous prepayment of Rent for more than one (1) month in advance of the
date due hereunder,  which was not approved in writing by the Superior  Landlord
or the Superior  Mortgagee  thereto,  (e) liable to Tenant  beyond the Successor
Landlord's  interest in the Leased  Property  and the rents,  income,  receipts,
revenues,  issues and profits issuing from the Leased Property,  (f) responsible
for the  performance of any work to be done by the Landlord under this Agreement
to render  the  Leased  Property  ready for  occupancy  by  Tenant  (subject  to
Landlord's  obligations  under Section 5.1.3(b) or with respect to any insurance
or Condemnation  proceeds),  or (g) required to remove any Person  occupying the
Leased Property or any part thereof, except if such person claims by, through or
under the Successor Landlord. Tenant agrees at any time and from time to time to
execute a suitable  instrument in confirmation of Tenant's  agreement to attorn,
as  aforesaid  and  Landlord  agrees to provide  Tenant  with an  instrument  of
nondisturbance  and  attornment  from each such Superior  Mortgagee and Superior
Landlord  (other than the lessors under ground leases with respect to the Leased
Property, or any portion thereof) in form and substance reasonably  satisfactory
to Tenant. Notwithstanding the foregoing, any Successor Landlord shall be liable
(a) to pay to Tenant any amounts owed under Section 5.1.3(b),  and (b) to pay to
Tenant any portions of insurance  proceeds or Awards received by Landlord or the
Successor  Landlord  required to be paid to Tenant pursuant to the terms of this
Agreement,  and, as a condition to any mortgage, lien or lease in respect of the
Leased Property, or any portion thereof, and the subordination of this Agreement
thereto,  the mortgagee,  lienholder or lessor,  as applicable,  shall expressly
agree, for the benefit of Tenant,  to make such payments,  which agreement shall
be embodied in an instrument in form reasonably satisfactory to Tenant.

         20.3 Notice to  Mortgagee  and  Superior  Landlord.  Subsequent  to the
receipt by Tenant of Notice  from  Landlord as to the  identity of

                                      -58-
<PAGE>
any Facility  Mortgagee or Superior  Landlord  under a lease with  Landlord,  as
ground  lessee,  which  includes  the  Leased  Property  as part of the  demised
premises and which complies with Section 20.1 (which Notice shall be accompanied
by a copy of the  applicable  mortgage  or  lease),  no  Notice  from  Tenant to
Landlord as to a default by Landlord  under this  Agreement  shall be  effective
with  respect to a Facility  Mortgagee or Superior  Landlord  unless and until a
copy of the same is given to such Facility Mortgagee or Superior Landlord at the
address  set  forth in the  above  described  Notice,  and the  curing of any of
Landlord's  defaults within the applicable  notice and cure periods set forth in
Article 14 by such Facility  Mortgagee or Superior  Landlord shall be treated as
performance by Landlord.

                                   ARTICLE 21

                         ADDITIONAL COVENANTS OF TENANT

         21.1 Prompt Payment of  Indebtedness.  Tenant shall (a) pay or cause to
be paid when due all  payments  of  principal  of and  premium  and  interest on
Tenant's Indebtedness for money borrowed and shall not permit or suffer any such
Indebtedness to become or remain in default beyond any applicable  grace or cure
period,  (b) pay or cause to be paid when due all  lawful  claims  for labor and
rents with respect to the Leased Property,  (c) pay or cause to be paid when due
all  trade  payables  and (d) pay or  cause  to be paid  when  due all  other of
Tenant's  Indebtedness  upon which it is or becomes  obligated,  except, in each
case,  other than that referred to in clause (a), to the extent payment is being
contested in good faith by appropriate  proceedings in accordance with Article 8
and if Tenant shall have set aside on its books  adequate  reserves with respect
thereto  in  accordance  with  GAAP,  if   appropriate,   or  unless  and  until
foreclosure,  distraint  sale or  other  similar  proceedings  shall  have  been
commenced.

         21.2 Conduct of Business. Tenant shall not engage in any business other
than the leasing and operation of the Leased Property  (including any incidental
or  ancillary  business  relating  thereto) and shall do or cause to be done all
things  necessary  to  preserve,  renew and keep in full force and effect and in
good standing its corporate  existence and its rights and licenses  necessary to
conduct such business.

         21.3  Maintenance  of  Accounts  and  Records.  Tenant  shall keep true
records and books of account of Tenant in which full,  true and correct  entries
will be made of  dealings  and  transactions  in relation  to the  business  and
affairs  of Tenant in  accordance  with  GAAP.  Tenant  shall  apply  accounting
principles in the  preparation of the financial  statements of Tenant which,  in
the judgment of and the opinion of its independent  public  accountants,  are in
accordance  with GAAP,  where  applicable,  except for changes  approved by such
independent  public  accountants.  Tenant shall provide to Landlord  either in a
footnote to the financial  statements  delivered under Section 17.2 which relate
to the period in which such  change  occurs,  or in separate  schedules  to

                                      -59-
<PAGE>
such financial statements, information sufficient to show the effect of any such
changes on such financial statements.

         21.4 Notice of  Litigation,  Etc.  Tenant  shall give prompt  Notice to
Landlord of any  litigation  or any  administrative  proceeding  to which it may
hereafter  become a party of which Tenant has notice or actual  knowledge  which
involves a  potential  liability  equal to or  greater  than Two  Hundred  Fifty
Thousand  Dollars  ($250,000)  or which may  otherwise  result  in any  material
adverse  change in the business,  operations,  property,  prospects,  results of
operation or condition,  financial or other,  of Tenant.  Forthwith  upon Tenant
obtaining knowledge of any Default,  Event of Default or any default or event of
default under any agreement  relating to  Indebtedness  for money borrowed in an
aggregate amount exceeding,  at any one time, Two Hundred Fifty Thousand Dollars
($250,000),  or any event or condition that would be required to be disclosed in
a current report filed by Tenant on Form 8-K or in Part II of a quarterly report
on Form 10-Q if Tenant were required to file such reports  under the  Securities
Exchange  Act of 1934,  as  amended,  Tenant  shall  furnish  Notice  thereof to
Landlord  specifying the nature and period of existence  thereof and what action
Tenant has taken or is taking or proposes to take with respect thereto.

         21.5 Indebtedness of Tenant.  Tenant shall not create, incur, assume or
guarantee, or permit to exist, or become or remain liable directly or indirectly
upon, any Indebtedness except the following:

                  (a) Indebtedness of Tenant to Landlord;

                  (b) Indebtedness of Tenant for Impositions, to the extent that
         payment  thereof  shall  not at the  time  be  required  to be  made in
         accordance with the provisions of Article 8;

                  (c)  Indebtedness  of Tenant in respect of judgments or awards
         (i) which have been in force for less than the applicable appeal period
         and in  respect  of which  execution  thereof  shall  have been  stayed
         pending  such  appeal or  review,  or (ii)  which are fully  covered by
         insurance  payable to Tenant,  or (iii)  which are for an amount not in
         excess of $250,000 in the aggregate at any one time outstanding and (x)
         which  have been in force for not  longer  than the  applicable  appeal
         period, so long as execution is not levied thereunder or (y) in respect
         of which an  appeal  or  proceedings  for  review  shall at the time be
         prosecuted in good faith in accordance  with the  provisions of Article
         8, and in respect of which  execution  thereof  shall have been  stayed
         pending such appeal or review;

                  (d) unsecured borrowings of Tenant from its Affiliated Persons
         which  are  by  their  terms  expressly   subordinate   pursuant  to  a
         Subordination  Agreement  to the  payment and  performance  of Tenant's
         obligations under this Agreement; or

                                      -60-
<PAGE>
                  (e)  Indebtedness  for purchase money  financing in accordance
         with Section  21.8(a) and other operating  liabilities  incurred in the
         ordinary course of Tenant's business; or

                  (f) Indebtedness of Tenant as guarantor or borrower secured by
         Liens permitted under Section 21.8(c).

         21.6 Distributions,  Payments to Affiliated Persons,  Etc. Tenant shall
not declare,  order, pay or make,  directly or indirectly,  any Distributions or
any  payment  to any  Affiliated  Person of Tenant  (including  payments  in the
ordinary course of business) or set apart any sum or property therefor, or agree
to do so, if, at the time of such proposed action,  or immediately  after giving
effect  thereto,  any Event of Default  shall have  occurred and be  continuing.
Otherwise, as long as no Event of Default shall have occurred and be continuing,
Tenant  may make  Distributions  and  payments  to  Affiliated  Persons  without
restriction.

         21.7 Prohibited Transactions. Tenant shall not permit to exist or enter
into any agreement or  arrangement  whereby it engages in a  transaction  of any
kind with any Affiliated  Person as to Tenant or any Guarantor,  except on terms
and conditions which are commercially reasonable.

         21.8 Liens and  Encumbrances.  Except as  permitted  by Section 7.1 and
Section  21.5,  Tenant  shall not  create or incur or  suffer to be  created  or
incurred  or to exist  any Lien on this  Agreement  or any of  Tenant's  assets,
properties, rights or income, or any of its interest therein, now or at any time
hereafter owned, other than:

                  (a)  Security   interests   securing  the  purchase  price  of
         equipment or personal  property  whether  acquired  before or after the
         Commencement Date; provided,  however,  that (i) such Lien shall at all
         times  be  confined  solely  to the  asset  in  question  and  (ii) the
         aggregate  principal  amount of  Indebtedness  secured by any such Lien
         shall  not  exceed  the  cost of  acquisition  or  construction  of the
         property subject thereto;

                  (b) Permitted Encumbrances;

                  (c)  Security  interests  in  Accounts  or Chattel  Paper,  in
         Support  Obligations,  General Intangibles or Deposit Accounts relating
         to such Accounts or Chattel  Paper,  in any  Instruments  or Investment
         Property  evidencing or arising from such Accounts or Chattel Paper, in
         any documents, books, records or other information (including,  without
         limitation,   computer  programs,   tapes,  discs,  punch  cards,  data
         processing  software and related  property and rights)  maintained with
         respect to any property  described  in this  Section  21.8(c) or in any
         Proceeds  of any of the  foregoing  (capitalized  terms  used  in  this
         Section  21.8(c)  without  definition  being  used as defined in or for
         purposes  of

                                      -61-
<PAGE>
         Article  9  of  the  Uniform  Commercial  Code  as  in  effect  in  the
         Commonwealth of Massachusetts); and

                  (d) As permitted pursuant to Section 21.5.

         21.9 Merger;  Sale of Assets;  Etc.  Without  Landlord's  prior written
consent (which consent may be given or withheld in Landlord's sole  discretion),
Tenant shall not (i) sell, lease (as lessor or sublessor), transfer or otherwise
dispose of, or abandon,  all or any  material  portion of its assets  (including
capital stock) or business to any Person, (ii) merge into or with or consolidate
with any other Entity,  or (iii) sell, lease (as lessor or sublessor),  transfer
or otherwise  dispose of, or abandon,  any personal  property or fixtures or any
real property; provided, however, that, notwithstanding the provisions of clause
(iii)  preceding,  Tenant may dispose of equipment or fixtures which have become
inadequate, obsolete, worn-out, unsuitable, undesirable or unnecessary, provided
substitute  equipment or fixtures having equal or greater value and utility (but
not necessarily having the same function) have been provided.

                                   ARTICLE 22

                                  ARBITRATION

         Landlord or Tenant may elect to submit any dispute  hereunder  that has
an amount in  controversy in excess of $250,000 to  arbitration  hereunder.  Any
such dispute shall be resolved in  accordance  with the  Commercial  Arbitration
Rules of the  American  Association  then  pertaining  and the  decision  of the
arbitrators with respect to such dispute shall be binding,  final and conclusive
on the parties.

         In the event  Landlord or Tenant shall elect to submit any such dispute
to  arbitration  hereunder,  Landlord  and Tenant shall each appoint and pay all
fees of a fit and impartial  person as arbitrator  with at least ten (10) years'
recent  professional  experience in the general  subject  matter of the dispute.
Notice of such appointment  shall be sent in writing by each party to the other,
and the arbitrators so appointed,  in the event of their failure to agree within
thirty (30) days after the appointment of the second  arbitrator upon the matter
so submitted,  shall appoint a third  arbitrator.  If either  Landlord or Tenant
shall fail to appoint an arbitrator,  as aforesaid,  for a period of twenty (20)
days after written  notice from the other party to make such  appointment,  then
the arbitrator appointed by the party having made such appointment shall appoint
a second  arbitrator and the two (2) so appointed  shall,  in the event of their
failure to agree upon any decision within thirty (30) days thereafter, appoint a
third  arbitrator.  If such  arbitrators  fail to agree upon a third  arbitrator
within forty five (45) days after the appointment of the second arbitrator, then
such third arbitrator shall be appointed by the American Arbitration Association
from its qualified panel of  arbitrators,  and shall be a person having at least
ten (10) years'  recent  professional  experience  as to the  subject  matter in
question.  The fees of the third  arbitrator  and the  expenses

                                      -62-
<PAGE>
incident to the proceedings  shall be borne equally between Landlord and Tenant,
unless the arbitrators decide otherwise.  The fees of respective counsel engaged
by the parties,  and the fees of expert witnesses and other witnesses called for
the parties,  shall be paid by the  respective  party  engaging  such counsel or
calling or engaging such witnesses.

         The decision of the  arbitrators  shall be rendered  within thirty (30)
days  after  appointment  of the third  arbitrator.  Such  decision  shall be in
writing and in duplicate,  one  counterpart  thereof to be delivered to Landlord
and one to  Tenant.  A  judgment  of a court of  competent  jurisdiction  may be
entered  upon the  award of the  arbitrators  in  accordance  with the rules and
statutes applicable thereto then obtaining.

         Landlord and Tenant  acknowledge and agree that, to the extent any such
dispute shall involve any Manager and be subject to arbitration pursuant to such
Manager's  Management   Agreement,   Landlord  and  Tenant  shall  cooperate  to
consolidate any such arbitration  hereunder and under such Management  Agreement
into a single proceeding.

                                   ARTICLE 23

                                 MISCELLANEOUS

         23.1 Limitation on Payment of Rent. All agreements between Landlord and
Tenant herein are hereby  expressly  limited so that in no  contingency or event
whatsoever,  whether by reason of acceleration of Rent, or otherwise,  shall the
Rent or any other amounts  payable to Landlord under this  Agreement  exceed the
maximum  permissible  under applicable law, the benefit of which may be asserted
by Tenant as a defense, and if, from any circumstance whatsoever, fulfillment of
any provision of this Agreement, at the time performance of such provision shall
be due, shall involve  transcending the limit of validity  prescribed by law, or
if from any  circumstances  Landlord  should ever receive as fulfillment of such
provision such an excessive amount,  then, ipso facto, the amount which would be
excessive  shall be applied to the  reduction of the  installment(s)  of Minimum
Rent next due and not to the payment of such  excessive  amount.  This provision
shall control every other  provision of this Agreement and any other  agreements
between Landlord and Tenant.

         23.2 No Waiver.  No failure by  Landlord  or Tenant to insist  upon the
strict  performance of any term hereof or to exercise any right, power or remedy
consequent upon a breach  thereof,  and no acceptance of full or partial payment
of Rent during the continuance of any such breach,  shall constitute a waiver of
any such breach or of any such term. To the maximum extent  permitted by law, no
waiver of any breach shall affect or alter this Agreement,  which shall continue
in full force and effect with respect to any other then  existing or  subsequent
breach.

                                      -63-
<PAGE>
         23.3 Remedies Cumulative.  To the maximum extent permitted by law, each
legal,  equitable or contractual  right, power and remedy of Landlord or Tenant,
now or hereafter  provided  either in this Agreement or by statute or otherwise,
shall be  cumulative  and  concurrent  and shall be in  addition  to every other
right,  power and  remedy and the  exercise  or  beginning  of the  exercise  by
Landlord or Tenant (as applicable) of any one or more of such rights, powers and
remedies shall not preclude the simultaneous or subsequent  exercise by Landlord
of any or all of such other rights, powers and remedies.

         23.4  Severability.   Any  clause,  sentence,   paragraph,  section  or
provision  of this  Agreement  held by a court of competent  jurisdiction  to be
invalid,  illegal or  ineffective  shall not impair,  invalidate  or nullify the
remainder of this Agreement,  but rather the effect thereof shall be confined to
the clause,  sentence,  paragraph,  section or  provision so held to be invalid,
illegal  or  ineffective,  and  this  Agreement  shall be  construed  as if such
invalid, illegal or ineffective provisions had never been contained therein.

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

         23.6 No Merger of Title. It is expressly  acknowledged  and agreed that
it is the intent of the parties that there shall be no merger of this  Agreement
or of the leasehold  estate  created  hereby by reason of the fact that the same
Person may acquire,  own or hold,  directly or indirectly  this Agreement or the
leasehold estate created hereby and the fee estate or ground landlord's interest
in the Leased Property.

         23.7 Conveyance by Landlord.  If Landlord or any successor owner of all
or any  portion of the Leased  Property  shall  convey all or any portion of the
Leased Property in accordance with the terms hereof other than as security for a
debt,  and the  grantee  or  transferee  of such of the  Leased  Property  shall
expressly assume all obligations of Landlord  hereunder arising or accruing from
and after the date of such  conveyance or transfer,  Landlord or such  successor
owner,  as the  case  may be,  shall  thereupon  be  released  from  all  future
liabilities  and  obligations  of Landlord  under this Agreement with respect to
such of the Leased Property  arising or accruing from and after the date of such
conveyance or other  transfer and all such future  liabilities  and  obligations
shall thereupon be binding upon the new owner.

         23.8 Quiet Enjoyment. Tenant shall peaceably and quietly have, hold and
enjoy the Leased  Property for the Term,  free of hindrance  or  molestation  by
Landlord or anyone  claiming by, through or under  Landlord,  but subject to (a)
any Encumbrance  permitted under Article

                                      -64-
<PAGE>
20 or otherwise permitted to be created by Landlord hereunder, (b) all Permitted
Encumbrances,  (c) liens as to  obligations  of Landlord that are either not yet
due or which  are being  contested  in good  faith  and by  proper  proceedings,
provided the same do not materially  interfere with Tenant's  ability to operate
any  Facility  and (d) liens that have been  consented  to in writing by Tenant.
Except as otherwise provided in this Agreement, no failure by Landlord to comply
with the foregoing  covenant  shall give Tenant any right to cancel or terminate
this  Agreement or abate,  reduce or make a deduction from or offset against the
Rent or any other sum payable  under this  Agreement,  or to fail to perform any
other obligation of Tenant hereunder.

         23.9 No  Recordation.  Neither  Landlord  nor Tenant  shall record this
Agreement.

         23.10 Notices.

                  (a) Any and all notices, demands, consents, approvals, offers,
         elections  and other  communications  required or permitted  under this
         Agreement shall be deemed  adequately  given if in writing and the same
         shall  be  delivered   either  in  hand,  by  telecopier  with  written
         acknowledgment  of  receipt,  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  Agreement
         upon  the date of  acknowledged  receipt,  in the  case of a notice  by
         telecopier,  and,  in all  other  cases,  upon the date of  receipt  or
         refusal,  except that whenever  under this Agreement 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:

                    c/o Senior Housing Properties Trust
                    400 Centre Street
                    Newton, Massachusetts  02458
                    Attn:  Mr. David J. Hegarty
                    [Telecopier No. (617) 796-8349]

                                      -65-
<PAGE>
         if to Tenant to:

                    c/o Five Star Quality Care, Inc.
                    400 Centre Street
                    Newton, Massachusetts  02458
                    Attn:  Evrett W. Benton
                    [Telecopier 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  Agreement  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.

         23.11  Construction.  Anything  contained  in  this  Agreement  to  the
contrary  notwithstanding,  all claims  against,  and  liabilities of, Tenant or
Landlord  arising  prior  to any  date  of  termination  or  expiration  of this
Agreement with respect to the Leased Property shall survive such  termination or
expiration.  In no event shall Landlord be liable for any consequential  damages
suffered  by Tenant as the  result of a breach of this  Agreement  by  Landlord.
Neither  this  Agreement  nor  any  provision  hereof  may be  changed,  waived,
discharged or terminated  except by an instrument in writing signed by the party
to be charged.  All the terms and provisions of this Agreement  shall be binding
upon and  inure to the  benefit  of the  parties  hereto  and  their  respective
successors and assigns. Each term or provision of this Agreement to be performed
by Tenant shall be construed as an independent  covenant and condition.  Time is
of the essence  with  respect to the  provisions  of this  Agreement.  Except as
otherwise set forth in this  Agreement,  any  obligations  of Tenant  (including
without limitation,  any monetary,  repair and indemnification  obligations) and
Landlord shall survive the expiration or sooner  termination of this  Agreement.
Whenever it is provided in this  Agreement  that Tenant shall direct MSLS or any
Manager to take any action,  Tenant shall not be deemed to have  satisfied  such
obligation unless Tenant shall have exhausted all applicable rights and remedies
of Tenant as "Owner" under the MSLS Operating  Agreement or any other Management
Agreement.

         23.12 Counterparts;  Headings. This Agreement may be executed in two or
more counterparts,  each of which shall constitute an original,  but which, when
taken together,  shall  constitute but one instrument and shall become effective
as of the date hereof when copies hereof,  which, when taken together,  bear the
signatures  of each of the parties  hereto shall have been  signed.  Headings in
this  Agreement are for purposes of reference only and shall not limit or affect
the meaning of the provisions hereof.

         23.13  Applicable  Law,  Etc.  This  Agreement  shall  be  interpreted,
construed,  applied and enforced in accordance with the laws of The Commonwealth
of  Massachusetts  applicable to contracts

                                      -66-
<PAGE>
between  residents of  Massachusetts  which are to be performed  entirely within
Massachusetts,  regardless of (i) where this Agreement is executed or delivered;
or (ii) where any payment or other  performance  required by this  Agreement  is
made or required to be made;  or (iii) where any breach of any provision of this
Agreement  occurs, or any cause of action otherwise  accrues;  or (iv) where any
action or other  proceeding is instituted  or pending;  or (v) the  nationality,
citizenship,   domicile,   principal  place  of  business,  or  jurisdiction  of
organization  or  domestication  of any party;  or (vi)  whether the laws of the
forum  jurisdiction  otherwise would apply the laws of a jurisdiction other than
Massachusetts;  or (vii) any combination of the foregoing.  Notwithstanding  the
foregoing,  the laws of the State shall apply to the  perfection and priority of
liens upon and the disposition of any Property.

         23.14 Right to Make  Agreement.  Each party  warrants,  with respect to
itself,  that neither the execution of this Agreement,  nor the  consummation of
any transaction  contemplated hereby, shall violate any provision of any law, or
any judgment,  writ,  injunction,  order or decree of any court or  governmental
authority having  jurisdiction  over it; nor result in or constitute a breach or
default under any indenture,  contract, other commitment or restriction to which
it is a party or by which it is bound; nor require any consent, vote or approval
which has not been given or taken,  or at the time of the  transaction  involved
shall not have been given or taken.  Each party  covenants  that it has and will
continue  to have  throughout  the  term of this  Agreement  and any  extensions
thereof, the full right to enter into this Agreement and perform its obligations
hereunder.

         23.15  Attorneys'  Fees. If any lawsuit or  arbitration  or other legal
proceeding  arises in connection with the  interpretation or enforcement of this
Agreement,  the  prevailing  party therein shall be entitled to receive from the
other party the  prevailing  party's  costs and expenses,  including  reasonable
attorneys' fees incurred in connection therewith, in preparation therefor and on
appeal therefrom, which amounts shall be included in any judgment therein.

         23.16 Nonliability of Trustees.  THE DECLARATIONS OF TRUST ESTABLISHING
CERTAIN OF THE PARTIES COMPRISING LANDLORD,  COPIES OF WHICH,  TOGETHER WITH ALL
AMENDMENTS THERETO (THE  "DECLARATIONS"),  ARE DULY FILED WITH THE DEPARTMENT OF
ASSESSMENTS  AND TAXATION OF THE STATE OF MARYLAND,  PROVIDE THAT THE NAMES "CCC
FINANCING I TRUST,"  "CCC OF KENTUCKY  TRUST," "CCC OHIO  HEALTHCARE  TRUST" AND
"CCC  PUEBLO  NORTE  TRUST"  REFER  TO  THE  TRUSTEES  UNDER  THE   DECLARATIONS
COLLECTIVELY AS TRUSTEES,  BUT NOT  INDIVIDUALLY OR PERSONALLY,  ANY AND THAT NO
TRUSTEE, OFFICER, SHAREHOLDER,  EMPLOYEE OR AGENT OF SUCH ENTITIES SHALL BE HELD
TO ANY PERSONAL LIABILITY, JOINTLY OR SEVERALLY, FOR ANY OBLIGATION OF, OR CLAIM
AGAINST,  SUCH ENTITIES.  ALL PERSONS  DEALING WITH SUCH  ENTITIES,  IN ANY WAY,
SHALL LOOK ONLY TO THE ASSETS OF SUCH ENTITIES FOR THE PAYMENT OF ANY SUM OR THE
PERFORMANCE OF ANY OBLIGATION.

                                      -67-
<PAGE>

         23.17 Bankruptcy Remote Entities.  At Landlord's request,  Tenant shall
make such amendments,  modifications  or other changes to its charter  documents
and  governing  bodies  (including,   without  limitation,   Tenant's  board  of
directors), and take such other action, as may from time to time be necessary to
qualify  Tenant as a "bankruptcy  remote  entity,"  provided that Landlord shall
reimburse  Tenant for all costs and  expenses  reasonably  incurred by Tenant in
connection with the making of such amendments or modifications.

         23.18 Joint and Several  Liability.  Each of FS Tenant Holding  Company
Trust and FS Tenant  Pool III Trust  acknowledge  and agree  that they  shall be
jointly and severally  liable for the payment and performance of all of Tenant's
obligations hereunder.



                                      -68-
<PAGE>
         IN WITNESS  WHEREOF,  the parties  have  executed  this  Agreement as a
sealed instrument as of the date above first written.

                                    LANDLORD:

                                    CCC FINANCING I TRUST,
                                    a Maryland business trust


                                    By:  /s/ John R. Hoadley
                                          Its:  Treasurer


                                    CCC FINANCING LIMITED, L.P.,
                                    a Delaware limited partnership


                                    By: CCC RETIREMENT TRUST, its
                                        General Partner


                                    By: /s/ John R. Hoadley
                                          Its: Treasurer


                                    CCC INVESTMENTS I, L.L.C.,
                                    a Delaware limited liability company


                                    By: /s/ John R. Hoadley
                                          Its: Treasurer


                                    CCC OF KENTUCKY TRUST,
                                    a Maryland business trust


                                    By: /s/ John R. Hoadley
                                    Its: Treasurer


                                    CCC OHIO HEALTHCARE TRUST,
                                    a Maryland business trust


                                    By: /s/ John R. Hoadley
                                         Its: Treasurer




                  [Signatures continue on the following page.]

                                      -69-
<PAGE>


                                    CCC PUEBLO NORTE TRUST,
                                    a Maryland business trust


                                    By: /s/ John R. Hoadley
                                         Its: Treasurer


                                    CCC RETIREMENT COMMUNITIES II, L.P.,
                                    a Delaware partnership


                                    By: CRESTLINE VENTURES LLC, its
                                        General Partner limited


                                    By: /s/ John R. Hoadley
                                          Its: Treasurer


                                    CCCP SENIOR LIVING LLC,
                                    a Delaware limited liability company


                                    By: /s/ John R. Hoadley
                                          Its: Treasurer


                                    CCDE SENIOR LIVING LLC,
                                    a Delaware limited liability company


                                    By: /s/ John R. Hoadley
                                          Its: Treasurer


                                    CCFL SENIOR LIVING LLC,
                                    a Delaware limited liability company


                                    By: /s/ John R. Hoadley
                                          Its: Treasurer


                                    CCOP SENIOR LIVING LLC,
                                    a Delaware limited liability company


                                    By: /s/ John R. Hoadley
                                          Its: Treasurer


                  [Signatures continue on the following page.]

                                      -70-
<PAGE>

                                    CCSL SENIOR LIVING LLC,
                                    a Delaware limited liability company


                                    By: /s/ John R. Hoadley
                                          Its: Treasurer


                                    LEISURE PARK VENTURE LIMITED
                                    PARTNERSHIP, a Delaware limited
                                    partnership


                                    By: CCC LEISURE PARK CORPORATION, its
                                        General Partner


                                    By: /s/ John R. Hoadley
                                          Its: Treasurer


                                    LTJ SENIOR COMMUNITIES LLC,
                                    a Delaware limited liability company


                                    By: /s/ John R. Hoadley
                                          Its: Treasurer


                                    PANTHER HOLDINGS LEVEL I, L.P.,
                                    a Delaware limited partnership


                                    By: PANTHER GENPAR TRUST, its
                                        General Partner


                                    By: /s/ John R. Hoadley
                                          Its: Treasurer


                                    TENANT:

                                    FS TENANT HOLDING COMPANY TRUST,
                                    a Maryland business trust


                                    By: /s/ Bruce J. Mackey Jr
                                          Its: Treasurer and Chief
                                               Financial Officer



                                      -71-
<PAGE>

                                    FS TENANT POOL III TRUST,
                                    a Maryland business trust


                                    By: /s/ Bruce J. Mackey Jr.
                                          Its: Treasurer, Chief
                                               Financial Officer and
                                               Assistant Secretary



                                      -72-
<PAGE>

                                    EXHIBIT B

                            MSLS Operating Agreements

1.       Operating  Agreement  between  Senior  Living of Boynton  Beach Limited
         Partnership and MSLS dated August 11, 1995 (Boynton Beach).

2.       Management  Agreement  between FGI  Financing I  Corporation  and Forum
         Group,  Inc.  dated as of January 30, 1994, as assigned by that certain
         Assignment and Assumption  Agreement between Forum Group, Inc. and MSLS
         dated June 20, 1997  (Brookside,  Deer Creek,  Desert Harbor,  Memorial
         Woods,  Overland Park, Park Lane,  Tucson), as affected by that certain
         Transition  Agreement,  dated as of June 21, 1997 between Host Marriott
         Corporation  and MSLS as amended by that  certain  First  Amendment  to
         Transition  Agreement,  dated as of  December  17,  1998  between  Host
         Marriott  Corporation  and  MSLS,  as  assigned  to  Crestline  Capital
         Corporation  pursuant to that  certain  Assignment  and  Assumption  of
         Transition  Agreements,  dated as of December  28,  1998,  between Host
         Marriott Corporation and Crestline Capital Corporation.

3.       Operating Agreement by and between Forum Investments I, L.L.C. and MSLS
         dated  June 21,  1997 as amended by the First  Amendment  to  Operating
         Agreement by and between  Forum  Investments  I, L.L.C.  and MSLS dated
         December 17, 1998 (Coral Oaks).

4.       Operating  Agreement by and between Forum  Retirement  Communities  II,
         L.P. and MSLS dated June 21, 1997, as amended by the First Amendment to
         Operating  Agreement by and between Forum  Retirement  Communities  II,
         L.P. and MSLS dated December 17, 1998 (The Crossing).

5.       Operating  Agreement  by and between CCC  Financing  Limited,  L.P. and
         Marriott Senior Living  Service,  Inc. dated June 21, 1997 (Foulk Manor
         South).

6.       Operating  Agreement  by and between CCC  Financing  Limited,  L.P. and
         Marriott Senior Living  Service,  Inc. dated June 21, 1997 (Foulk Manor
         North).

7.       Operating  Agreement by and between Forum  Retirement  Communities  II,
         L.P.  and MSLS dated June 21,  1997 as  amended by First  Amendment  to
         Operating  Agreement by and between Forum  Retirement  Communities  II,
         L.P. and MSLS dated December 17, 1998 (Forwood Manor).
<PAGE>

8.       Operating Agreement by and between Forum Investments I, L.L.C. and MSLS
         dated  June  21,  1997 as  amended  by  First  Amendment  to  Operating
         Agreement  by and  between  Forum  Investment  I,  LLC and  MSLS  dated
         December 17, 1998 (Fountain View).

9.       Operating,  Agreement by and between LTJ Senior Communities Corporation
         and MSLS  dated  January  16,  1998 as amended  by First  Amendment  to
         Operating  Agreement by and between LTJ Senior Communities  Corporation
         and MSLS dated December 17, 1998 (Gables at Winchester).

10.      Management   Agreement   between  Forum  Group,  Inc.  and  Forum  Ohio
         Healthcare,  Inc.  dated as of September  1, 1995,  as assigned by that
         certain   Assignment  and  Assumption   Agreement  between  Forum  Ohio
         Healthcare,  Inc.  and MSLS dated  June 20,  1997  (Knightsbridge),  as
         affected by that  certain  Transition  Agreement,  dated as of June 21,
         1997  between  Host  Marriott  Corporation  and  MSLS  as  assigned  to
         Crestline Capital  Corporation  pursuant to that certain Assignment and
         Assumption  of  Transition  Agreements,  dated as of December 28, 1998,
         between Host Marriott Corporation and Crestline Capital Corporation.

11.      Operating  Agreement by and between  Forum of  Kentucky,  Inc. and MSLS
         dated  June  21,  1997 as  amended  by  First  Amendment  to  Operating
         Agreement  by and  between  Forum of  Kentucky,  Inc.  and  MSLS  dated
         December 17, 1998 (Lafayette).

12.      Operating  Agreement  by  and  between  Leisure  Park  Venture  Limited
         Partnership  and MSLS dated  December  30, 1997 as amended by the First
         Amendment  to Operating  Agreement by and between  Leisure Park Venture
         Limited  Partnership  and MSLS  dated  January  26,  1998 and by Second
         Amendment  to Operating  Agreement by and between  Leisure Park Venture
         Limited Partnership and MSLS dated December 17, 1998 (Leisure Park).

13.      Operating  Agreement by and between  Forum of  Kentucky,  Inc. and MSLS
         dated  June 20,  1997 as amended by the First  Amendment  to  Operating
         Agreement  by and  between  Forum of  Kentucky,  Inc.  and  MSLS  dated
         December 17, 1998 (Lexington at Country Place).

14.      Operating Agreement between CCC Financing Limited,  L.P. and MSLS dated
         June 21, 1997 (Lincoln Heights).

15.      Operating Agreement by and between CCC Financing Limited, L.P. and MSLS
         dated June 21, 1997 (Millcroft).

                                      B-2
<PAGE>
16.      Operating Agreement by and between CCC Financing Limited, L.P. and MSLS
         dated June 21, 1997 (The Monte Vista at Coronado).

17.      Operating Agreement by and between CCC Financing Limited, L.P. and MSLS
         dated June 21, 1997 (Montebello on Academy).

18.      Operating Agreement by and between CCC Financing Limited, L.P. and MSLS
         dated June 21, 1997 (Myrtle Beach Manor).

19.      Operating Agreement by and between CCC Financing Limited, L.P. and MSLS
         dated June 21, 1997 (Park Summit).

20.      Operating  Agreement by and between Forum Pueblo  Norte,  Inc. and MSLS
         dated  June 21,  1997,  as  amended  by First  Amendment  to  Operating
         Agreement  by and  between  Forum  Pueblo  Norte,  Inc.  and MSLS dated
         December 17, 1998 (Pueblo Norte).

21.      Operating  Agreement by and between Forum Retirement  Communities.  II,
         L.P.  and MSLS dated June 21,  1997 as  amended by First  Amendment  to
         Operating  Agreement by and between Forum  Retirement  Communities  II,
         L.P. and MSLS dated December 17, 1998 (Remington Club I).

22.      Operating Agreement by and between Forum Retirement Communities I, L.P.
         and MSLS dated June 21, 1997 (Remington Club II).

23.      Operating Agreement by and between CCC Financing Limited, L.P. and MSLS
         dated June 21, 1997 (Shipley Manor).

24.      Operating Agreement by and between Forum Investments I, L.L.C. and MSLS
         dated  June 21,  1997,  as  amended  by First  Amendment  to  Operating
         Agreement  by and between  Forum  Investment  I, L.L.C.  and MSLS dated
         December 17, 1998 (Springwood Court/Independence Court).

25.      Operating Agreement by and between Forum Investments I, L.L.C. and MSLS
         dated June 21,  1997,  as amended by the First  Amendment  to Operating
         Agreement  by and between  Forum  Investment  I, L.L.C.  and MSLS dated
         December 17, 1998 (Tiffany House).

26.      Operating  Agreement by and between Panther  Holdings Level I, L.P. and
         MSLS dated June 21,  1997,  as amended by First  Amendment to Operating
         Agreement by and between Panther  Holdings Level 1, L.P. and MSLS dated
         December 17, 1998 (The Woodlands).

                                      B-3

<PAGE>


                                OMITTED EXHIBITS

The following exhibits to the Amended Master Lease have been omitted:

Exhibit Letter                                       Exhibit Title

A-1 through A-31                                     Land

The Registrant agrees to furnish  supplementally a copy of the foregoing omitted
exhibits to the Securities and Exchange Commission upon request.