Exhibit 99.28  MASTER
LEASE AGREEMENT   dated as of September 1,
2008,  by and among  CERTAIN AFFILIATES OF SENIOR
HOUSING PROPERTIES TRUST,  AS LANDLORD,  AND  FIVE STAR
QUALITY CARE-RMI, LLC,  AS TENANT


ARTICLE 1
  
  DEFINITIONS
  
  11.1
  
  Additional Charges
  
  11.2
  
  Additional Rent
  
  21.3
  
  Affiliated Person
  
  21.4
  
  Agreement
  
  21.5
  
  Applicable Laws
  
  21.6
  
  Award
  
  21.7
  
  Base Gross Revenues
  
  31.8
  
  Base Year
  
  31.9
  
  Business Day
  
  31.10
  
  Capital Addition
  
  31.11
  
  Capital Expenditure
  
  31.12
  
  Change in Control
  
  31.13
  
  Claim
  
  41.14
  
  Code
  
  41.15
  
  Commencement Date
  
  41.16
  
  Condemnation
  
  41.17
  
  Condemnor
  
  51.18
  
  Consolidated Financials
  
  51.19
  
  Date of Taking
  
  51.20
  
  Default
  
  51.21
  
  Disbursement Rate
  
  51.22
  
  Distribution
  
  51.23
  
  Easement Agreement
  
  51.24
  
  Encumbrance
  
  61.25
  
  Entity
  
  61.26
  
  Environment
  
  61.27
  
  Environmental Obligation
  
  61.28
  
  Environmental Notice
  
  61.29
  
  Event of Default
  
  61.30
  
  Excess Gross Revenues
  
  61.31
  
  Extended Term
  
  61.32
  
  Facility
  
  61.33
  
  Facility Mortgage
  
  61.34
  
  Facility Mortgagee
  
  61.35
  
  Financial Officers Certificate
  
  61.36
  
  Fiscal Year
  
  71.37
  
  Five Star
  
  71.38
  
  Fixed Term
  
  71.39
  
  Fixtures
  
  71.40
  
  FNM Financing
  
  71.41
  
  FNM Financing Documents
  
  71.42
  
  GAAP
  
  71.43
  
  Government Agencies
  
  71.44
  
  Gross Revenues
  
  81.45
  
  Guarantor
  
  91.46
  
  Guaranty
  
  91.47
  
  Hazardous Substances
  
  91.48
  
  Immediate Family
  
  101.49
  
  Impositions
  
  101.50
  
  Incidental Documents
  
  111.51
  
  Indebtedness
  
  111.52
  
  Insurance Requirements
  
  11


1.53
  
  Interest Rate
  
  111.54
  
  Land
  
  111.55
  
  Landlord
  
  111.56
  
  Landlord Default
  
  121.57
  
  Landlord Liens
  
  121.58
  
  Lease Year
  
  121.59
  
  Leased Improvements
  
  121.60
  
  Leased Intangible Property
  
  121.61
  
  Leased Property
  
  121.62
  
  Legal Requirements
  
  121.63
  
  Lien
  
  131.64
  
  Manager
  
  131.65
  
  Management Agreement
  
  131.66
  
  Master Lease Agreement No. 3
  
  131.67
  
  Minimum Rent
  
  131.68
  
  Notice
  
  131.69
  
  Officers Certificate
  
  131.70
  
  Overdue Rate
  
  141.71
  
  Parent
  
  141.72
  
  Permitted Encumbrances
  
  141.73
  
  Permitted Liens
  
  141.74
  
  Permitted Use
  
  141.75
  
  Person
  
  141.76
  
  Pledge Agreement
  
  141.77
  
  Property
  
  141.78
  
  Provider Agreements
  
  141.79
  
  Records
  
  151.80
  
  Regulated Medical Wastes
  
  151.81
  
  Rent
  
  151.82
  
  SEC
  
  151.83
  
  Security Agreement
  
  151.84
  
  State
  
  151.85
  
  Subordinated Creditor
  
  151.86
  
  Subordination Agreement
  
  151.87
  
  Subsidiary
  
  151.88
  
  Successor Landlord
  
  151.89
  
  Tenant
  
  161.90
  
  Tenants Personal Property
  
  161.91
  
  Term
  
  161.92
  
  Third Party Payor Programs
  
  161.93
  
  Third Party Payors
  
  161.94
  
  Unsuitable for Its Permitted Use
  
  161.95
  
  Work
  
  17ARTICLE 2
  
  LEASED PROPERTY AND TERM
  
  172.1
  
  Leased Property
  
  172.2
  
  Condition of Leased Property
  
  182.3
  
  Fixed Term
  
  192.4
  
  Extended Terms
  
  19ARTICLE 3
  
  RENT
  
  193.1
  
  Rent
  
  193.2
  
  Late Payment of Rent, Etc.
  
  253.3
  
  Net Lease
  
  26  2


3.4
  
  No Termination, Abatement, Etc.
  
  26ARTICLE 4
  
  USE OF THE LEASED PROPERTY
  
  274.1
  
  Permitted Use
  
  274.2
  
  Compliance with Legal/Insurance
  Requirements, Etc.
  
  294.3
  
  Compliance with Medicaid and Medicare
  Requirements
  
  294.4
  
  Environmental Matters
  
  30ARTICLE 5
  
  MAINTENANCE AND REPAIRS
  
  325.1
  
  Maintenance and Repair
  
  325.2
  
  Tenants Personal Property
  
  345.3
  
  Yield Up
  
  345.4
  
  Management Agreement
  
  35ARTICLE 6
  
  IMPROVEMENTS, ETC.
  
  356.1
  
  Improvements to the Leased Property
  
  356.2
  
  Salvage
  
  36ARTICLE 7
  
  LIENS
  
  367.1
  
  Liens
  
  367.2
  
  Landlords Lien
  
  37ARTICLE 8
  
  PERMITTED CONTESTS
  
  37ARTICLE 9
  
  INSURANCE AND INDEMNIFICATION
  
  389.1
  
  General Insurance Requirements
  
  389.2
  
  Waiver of Subrogation
  
  399.3
  
  Form Satisfactory, Etc.
  
  399.4
  
  No Separate Insurance; Self-Insurance
  
  409.5
  
  Indemnification of Landlord
  
  40ARTICLE 10
  
  CASUALTY
  
  4110.1
  
  Insurance Proceeds
  
  4110.2
  
  Damage or Destruction
  
  4110.3
  
  Damage Near End of Term
  
  4310.4
  
  Tenants Property
  
  4410.5
  
  Restoration of Tenants Property
  
  4410.6
  
  No Abatement of Rent
  
  4410.7
  
  Waiver
  
  44ARTICLE 11
  
  CONDEMNATION
  
  4511.1
  
  Total Condemnation, Etc.
  
  4511.2
  
  Partial Condemnation
  
  4511.3
  
  Abatement of Rent
  
  4611.4
  
  Temporary Condemnation
  
  4611.5
  
  Allocation of Award
  
  47ARTICLE 12
  
  DEFAULTS AND REMEDIES
  
  4712.1
  
  Events of Default
  
  4712.2
  
  Remedies
  
  5012.3
  
  Tenants Waiver
  
  5112.4
  
  Application of Funds
  
  5212.5
  
  Landlords Right to Cure Tenants Default
  
  52ARTICLE 13
  
  HOLDING OVER
  
  52ARTICLE 14
  
  LANDLORD DEFAULT
  
  53ARTICLE 15
  
  PURCHASE RIGHTS
  
  53ARTICLE 16
  
  SUBLETTING AND ASSIGNMENT
  
  5416.1
  
  Subletting and Assignment
  
  54  3


16.2
  
  Required Sublease Provisions
  
  5516.3
  
  Permitted Sublease
  
  5716.4
  
  Sublease Limitation
  
  57ARTICLE 17
  
  ESTOPPEL CERTIFICATES AND FINANCIAL STATEMENTS
  
  5817.1
  
  Estoppel Certificates
  
  5817.2
  
  Financial Statements
  
  5817.3
  
  General Operations
  
  59ARTICLE 18
  
  LANDLORDS RIGHT TO INSPECT
  
  60ARTICLE 19
  
  EASEMENTS
  
  6019.1
  
  Grant of Easements
  
  6019.2
  
  Exercise of Rights by Tenant
  
  6119.3
  
  Permitted Encumbrances
  
  61ARTICLE 20
  
  FACILITY MORTGAGES
  
  6120.1
  
  Landlord May Grant Liens
  
  6120.2
  
  Subordination of Lease
  
  6120.3
  
  Notice to Mortgagee and Superior Landlord
  
  63ARTICLE 21
  
  ADDITIONAL COVENANTS OF TENANT
  
  6421.1
  
  Prompt Payment of Indebtedness
  
  6421.2
  
  Conduct of Business
  
  6421.3
  
  Maintenance of Accounts and Records
  
  6421.4
  
  Notice of Litigation, Etc.
  
  6521.5
  
  Indebtedness of Tenant
  
  6521.6
  
  Distributions, Payments to Affiliated
  Persons, Etc.
  
  6621.7
  
  Prohibited Transactions
  
  6621.8
  
  Liens and Encumbrances
  
  6621.9
  
  Merger; Sale of Assets; Etc.
  
  6721.10
  
  Pledge Agreement
  
  6821.11
  
  FNM Financing
  
  68ARTICLE 22
  
  ARBITRATION
  
  68ARTICLE 23
  
  MISCELLANEOUS
  
  7023.1
  
  Limitation on Payment of Rent
  
  7023.2
  
  No Waiver
  
  7023.3
  
  Remedies Cumulative
  
  7023.4
  
  Severability
  
  7023.5
  
  Acceptance of Surrender
  
  7123.6
  
  No Merger of Title
  
  7123.7
  
  Conveyance by Landlord
  
  7123.8
  
  Quiet Enjoyment
  
  7123.9
  
  No Recordation
  
  7223.10
  
  Notices
  
  7223.11
  
  Construction
  
  7323.12
  
  Counterparts; Headings
  
  7323.13
  
  Applicable Law, Etc.
  
  7323.14
  
  Right to Make Agreement
  
  7423.15
  
  Attorneys Fees
  
  7423.16
  
  Nonliability of Trustees
  
  74  4


LEASE
AGREEMENT  THIS
LEASE AGREEMENTis entered into as of September 1, 2008 by and among SNH RMI FOX
RIDGE MANOR PROPERTIES LLC, SNH RMI JEFFERSON MANOR PROPERTIES LLC, SNH RMI
MCKAY MANOR PROPERTIES LLC, SNH RMI NORTHWOOD MANOR PROPERTIES LLC, SNH RMI OAK
WOODS MANOR PROPERTIES LLC, SNH RMI PARK SQUARE MANOR PROPERTIES LLC, SNH RMI
SMITH FARMS MANOR PROPERTIES LLC,and SNH RMI
SYCAMORE MANOR PROPERTIES LLC, each a Maryland limited liability
company (collectively, Landlord), and FIVE STAR
QUALITY CARERMI, LLC, a Maryland limited liability company, as
tenant (Tenant).  W I T N E S S E T H :  WHEREAS,Landlord
collectively owns the eight (8) Properties(this and other capitalized terms used and not
otherwise defined herein having the meanings ascribed to such terms in Article 1) described on Exhibits A-1 through A-8
attached hereto and made a part hereof; and  WHEREAS,Landlord wishes
to lease the Properties to Tenant and Tenant wishes to lease the Properties
from Landlord, 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 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.  1.1Additional
Chargesshall have the meaning
given such term in Section 3.1.3.


1.2Additional
Rentshall have the meaning
given such term in Section 3.1.2(a).  1.3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).  1.4Agreementshall mean this Master Lease Agreement,
including all schedules and exhibits attached hereto, as it and they may be
amended from time to time as herein provided.  1.5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.  1.6Awardshall mean all compensation, sums or
other value awarded, paid or received by virtue of a total or partial  2


Condemnation
of any 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).  1.7Base
Gross Revenuesshall mean the
amount of Gross Revenues for the Leased Property for the Base Year, 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
any Facility located at the Leased 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 for such Lease Year, Base Gross
Revenues 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 Gross 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 Gross Revenues; (b) in the event of a partial closing of any
Facility affecting the number of units, or the services provided, at such
Facility, Gross 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 Gross Revenues attributable to units no longer in
service shall be subtracted from Base Gross Revenues throughout the period of
such closing; and (c) in the event of any other change in circumstances
affecting any Facility, Base Gross Revenues shall be equitably adjusted in such
manner as Landlord and Tenant shall reasonably agree.  1.8Base
Yearshall mean the 2009
calendar year.  1.9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.  1.10Capital
Additionshall mean, with
respect to any Property, any renovation, repair or improvement to such
Property, the cost of which constitutes a Capital Expenditure.  1.11Capital
Expenditureshall mean any
expenditure treated as capital in nature in accordance with GAAP.  1.12Change in Control  shall
mean (a) the acquisition by any Person, or two or more Persons acting in
concert, of  3


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 or other voting interests 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 Person or
the merger or consolidation of any Person into Tenant or any Guarantor (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), (d) or (e) of this definition), (c) any one or
more sales, conveyances, dividends or distributions to any Person of all or any
material portion of the assets (including capital stock or other equity
interests) or business of Tenant or any Guarantor, whether or not otherwise a
Change in Control, (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
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 such Guarantor then in office, or (e) the
election to the board of directors of Tenant or any Guarantor of any individual
not nominated or appointed by vote of a majority of the directors of Tenant or
such Guarantor in office immediately prior to the nomination or appointment of
such individual.  1.13Claimshall have the meaning given such term in
Article 8.  1.14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.  1.15Commencement
Dateshall mean the date
hereof.  1.16Condemnationshall
mean, with respect to any Property, or any portion thereof, (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 such  4


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.  1.17Condemnorshall mean any public or quasi-public
Person, having the power of Condemnation.  1.18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.  1.19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.  1.20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.  1.21Disbursement
Rateshall mean an annual rate
of interest, as of the date of determination, equal to the greater of (a) eight
percent (8%) and (b) the per annum rate for ten (10) year U.S.
Treasury Obligations as published in The Wall Street Journal plus three
hundred (300) basis points; provided, however, that in no event
shall the Disbursement Rate exceed eleven and one-half percent (11.5%).  1.22Distributionshall mean (a) any declaration or
payment of any dividend (except ordinary cash dividends payable in common stock
or other equity interests of Tenant) on or in respect of any shares of any
class of capital stock or other equity interests 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.  1.23Easement
Agreementshall mean any
conditions, covenants and restrictions, easements, declarations, licenses and
other agreements which are Permitted Encumbrances and such  5


other
agreements as may be granted in accordance with Section 19.1.  1.24Encumbranceshall have the meaning given such term in
Section 20.1.  1.25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.  1.26Environmentshall mean soil, surface waters, ground
waters, land, stream, sediments, surface or subsurface strata and ambient air.  1.27Environmental
Obligationshall have the
meaning given such term in Section 4.4.1.  1.28Environmental
Noticeshall have the meaning
given such term in Section 4.4.1.  1.29Event
of Defaultshall have the
meaning given such term in Section 12.1.  1.30Excess
Gross Revenuesshall mean the
amount of Gross Revenues for any Lease Year, or portion thereof, in excess of
Base Gross Revenues for the equivalent period during the Base Year.  1.31Extended
Termshall have the meaning
given such term in Section 2.4.  1.32Facilityshall mean, with respect to any Property,
the independent living or assisted facility being operated or proposed to be
operated on such Property.  1.33Facility
Mortgageshall mean any
Encumbrance placed upon the Leased Property, or any portion thereof, in
accordance with Article 20.  1.34Facility
Mortgageeshall mean the holder
of any Facility Mortgage.  1.35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  6


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, that no
Event of Default has occurred and is continuing hereunder.  1.36Fiscal
Yearshall mean the calendar
year or such other annual period designated by Tenant and approved by Landlord.  1.37Five Star  shall mean Five Star Quality Care, Inc.,
a Maryland corporation, and its permitted successors and assigns.  1.38Fixed
Termshall have the meaning
given such term in Section 2.3.  1.39Fixturesshall have the meaning given such term in
Section 2.1(d).  1.40FNM Financing  shall mean the financing provided by Fannie
Mae, a federally chartered corporation (as successor by assignment from Red
Mortgage Capital, Inc.) to Landlord (as successor by assignment from the
original borrowers thereunder), in the aggregate original principal amount of
Fifty Million Five Hundred Thousand and 00/100s Dollars ($50,500,000.00), and
secured by one or more liens on the Leased Property.  1.41FNM Financing Documents  shall mean, collectively, each and every
promissory note, mortgage, assignments of leases and rents or other document or
instrument entered into with respect to, or otherwise evidencing, the FNM
Financing.  1.42GAAPshall mean generally accepted accounting
principles consistently applied.  1.43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 any Property, or any portion
thereof, or any Facility operated thereon.  7


1.44Gross
Revenues  shall mean, for each Fiscal Year
during the Term, in the aggregate, 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 the Leased Property and parts
thereof, including, but not limited to: 
all rents and revenues received or receivable for the use of or
otherwise by reason of all units, beds and other facilities provided, meals
served, services performed, space or facilities subleased or goods sold on the
Leased Property, or any portion thereof, including, without limitation, any other
arrangements with third parties relating to the possession or use of any
portion of the Leased Property; and proceeds, if any, from business
interruption or other loss of income insurance; provided, however,
that Gross 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 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 the Leased Property,
such as home health care, to persons that are not patients, clients or
residents at the Leased Property; revenues attributable to child care services
provided primarily to employees of the Leased Property; any proceeds from any
sale of the Leased Property or from the refinancing of any debt encumbering the
Leased Property; proceeds from the disposition of furnishings, fixture and
equipment no longer necessary for the operation of the Facility 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  8


they
were collected; and interest income from any bank account or investment of
Tenant.  1.45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.  1.46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.  1.47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. Section 9601et 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 any Property, or any portion thereof, causes or materially
threatens to cause an unlawful nuisance upon such Property, or any portion
thereof, or to adjacent properties or poses or materially threatens to pose a
hazard to such Property, or any portion thereof, or to the health or safety of
persons on or about such Property, or any portion thereof; or  9


(e)without
limitation, which contains gasoline, diesel fuel or other petroleum
hydrocarbons or volatile organic compounds; or  (f)without
limitation, which contains polychlorinated biphenyls (PCBs) or asbestos or urea
formaldehyde foam insulation; or  (g)without
limitation, which contains or emits radioactive particles, waves or material;
or  (h)without
limitation, constitutes Regulated Medical Wastes.  1.48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.  1.49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  10


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) 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.  1.50Incidental Documentsshall mean, collectively, any Guaranty, any Security Agreement and any
Pledge Agreement.  1.51Indebtednessshall mean all obligations, contingent or
otherwise, which in accordance with GAAP should be reflected on the obligors
balance sheet as liabilities.  1.52Insurance
Requirementsshall mean all
terms of any insurance policy required by this Agreement 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, any Manager
or the Leased Property.  1.53Interest Rateshall mean a per annum interest rate equal to eight percent (8%).  1.54Landshall have the meaning given such term in
Section 2.1(a).  1.55Landlordshall have the meaning given such term in
the preambles to this Agreement and shall also include their respective
permitted successors and assigns.  11


1.56Landlord
Defaultshall have the meaning
given such term in Article 14.  1.57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.  1.58Lease
Yearshall mean any Fiscal Year
or portion thereof during the Term.  1.59Leased
Improvementsshall have the
meaning given such term in Section 2.1(b).  1.60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.  1.61Leased Property  shall have the meaning given such term in Section 2.1.  1.62Legal
Requirementsshall mean all
federal, state, county, municipal and other governmental statutes, laws, rules,
orders, regulations, ordinances, judgments, decrees and  12


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.  1.63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 general creditors.  1.64Manager  shall mean, with respect to any Property, the
operator or manager under any Management Agreement from time to time in effect
with respect to such Property, and its permitted successors and assigns.  1.65Management Agreement  shall mean, with respect to any Property, 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.  1.66Master
Lease Agreement No. 3 shall mean that certain Amended and Restated
Master Lease Agreement (Lease No. 3), dated as of June 30, 2008,
among certain entities comprising Landlord, certain other affiliates of
Landlord and Tenant, as it may be amended, restated, supplemented or otherwise
modified from time to time.  1.67Minimum
Rentshall mean the sum of Four Million Nine Hundred Eighty-One Thousand
Four Hundred Twenty-Nine and 00/100s Dollars ($4,981,429.00) per annum.  1.68Noticeshall mean a notice given in accordance
with Section 23.10.  1.69Officers
Certificateshall mean a
certificate signed by an officer or other duly authorized individual of the  13


certifying
Entity duly authorized by the board of directors or other governing body of the
certifying Entity.  1.70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.  1.71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.  1.72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.  1.73Permitted
Liensshall mean any Liens
granted in accordance with Section 21.8(a).  1.74Permitted
Useshall mean, with respect to
any Property, any use of such Property permitted pursuant to Section 4.1.1.  1.75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.  1.76Pledge Agreement  shall mean any pledge agreement made in favor
of Landlord with respect to the stock or other equity interests of Tenant or
any assignee, subtenant or other transferee, as it or they may be amended,
restated, supplemented or otherwise modified from time to time.  1.77Propertyshall have the meaning given such term in
Section 2.1.  1.78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.  14


1.79Recordsshall have the meaning given such term in
Section 7.2.  1.80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.  1.81Rentshall mean, collectively, the Minimum
Rent, Additional Rent and Additional Charges.  1.82SECshall mean the Securities and Exchange
Commission.  1.83Security
Agreementshall mean any
security agreement made by Tenant or any assignee, subtenant or other
transferee for the benefit of Landlord, as it or they may be amended, restated,
supplemented or otherwise modified from time to time.  1.84Stateshall mean, with respect to any Property,
the state, commonwealth or district in which the such Property is located.  1.85Subordinated
Creditorshall mean any
creditor of Tenant which is a party to a Subordination Agreement in favor of
Landlord.  1.86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.  1.87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).  1.88Successor
Landlordshall have the meaning
given such term in Section 20.2.  15


1.89Tenantshall have the meaning given such term in
the preambles to this Agreement and shall also include its permitted successors
and assigns.  1.90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 and Tenants receivables, if
any, acquired by Tenant on and after the applicable Commencement Date for any
Property and located at such 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.  1.91Termshall mean, collectively, the Fixed Term
and the Extended Term, to the extent properly exercised pursuant to the
provisions of Section 2.4, unless sooner terminated pursuant to the
provisions of this Agreement.  1.92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.  1.93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.  1.94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  16


Condemnation,
such Facility cannot be operated, in the good faith judgment of Tenant, on a
commercially practicable basis for its Permitted Use.  1.95Workshall have the meaning given such term in
Section 10.2.4.   ARTICLE 2  LEASED PROPERTY AND TERM  2.1Leased
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
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-8 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 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  17


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;  (f)all
of the Leased Intangible Property; and  (g)any
and all leases of space in the Leased Improvements.  2.2Condition
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 applicable Commencement Date for any Property 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  18


the
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.  2.3Fixed
Term. The initial term of this
Agreement (the Fixed Term) shall commence on the Commencement Date and
shall expire on December 31, 2024.  2.4Extended
Terms. Provided that no Event of
Default shall have occurred and be continuing, Tenant shall have the right to
extend the Term for one renewal term of fifteen (15) years (the Extended
Term).  The
Extended Term shall commence on the day succeeding the expiration of the Fixed
Term.  All of the terms, covenants and
provisions of this Agreement shall apply to the Extended Term, except that
Tenant shall have no right to extend the Term beyond the expiration of the
Extended Term.  If Tenant shall elect to
exercise the aforesaid option, it shall do so by giving Landlord Notice thereof
not later than December 31, 2020, 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 and
Tenant shall have no further option to extend the Term of this Agreement.  If Tenant shall give such Notice, 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, and Tenant shall have no further option to extend
the Term of this Agreement.  ARTICLE 3  RENT  3.1Rent. 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  19


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 calendar month shall be prorated on a per diem
basis.  3.1.1Minimum
Rent.  (a)Payments.  Minimum Rent shall be paid in equal monthly
installments in arrears on the first Business Day of each calendar month during
the Term.  (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 5.1.2(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 5.1.2(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
calendar month on a day other than the first Business Day of such calendar month,
Tenant shall pay to Landlord on the first Business Day of the immediately
following calendar month (in addition to the amount of Minimum Rent payable
with respect to such calendar month, as adjusted pursuant to this paragraph
(c)) the amount by which Minimum Rent for the preceding calendar month, as
adjusted for such disbursement on a per diem basis, exceeded the amount of
Minimum Rent paid by Tenant for such preceding calendar month.  (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 affected Propertys
allocable share of  20


Minimum Rent determined
in accordance with the applicable provisions of this Agreement.  3.1.2Additional
Rent.  (a)Amount. Tenant shall pay additional rent (Additional
Rent) with respect to each Lease Year during the Term subsequent to the
Base Year in an amount, not less than zero, equal to four percent (4%) of
Excess Gross Revenues at the Leased Property.  (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.  Quarterly payments
of Additional Rent for the Leased Property shall be calculated based on Gross
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.  (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 Gross
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 Gross 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.  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.  21


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 Gross 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 Gross
Revenues for such Lease Year.  Landlord,
at its own expense, except as provided herein below, 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.  All such
audits shall be performed at the location where such books and records are
customarily kept and in such a manner so as to minimize any interference with
Tenants business operations.  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
determined, Tenant shall forthwith pay to Landlord the amount of the
deficiency, as finally agreed or determined, together with interest at the
Interest Rate, from the date such payment should have been made to the date of
payment thereof, and if the amount of such deficiency exceeds five percent (5%)  22


of the Additional Rent
that should have been paid for any Lease Year, Tenant shall forthwith pay to
Landlord the aggregate amount of all costs and expenses incurred by Landlord in
connection with any such audit.  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 disclosed or used, subject to appropriate confidentiality
safeguards, pursuant to court order or in any litigation between the parties
and except further that Landlord may disclose such information to its
prospective lenders, provided that Landlord shall direct such lenders to
maintain such information as confidential. 
The obligations of Tenant and Landlord contained in this Section 3.1.2
shall survive the expiration or earlier termination of this Agreement.  3.1.3Additional
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  23


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 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 or other equity interests, 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  24


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)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.  (e)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.  3.2Late
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  25


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.  3.3Net
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.  3.4No
Termination, Abatement, Etc.  Except as otherwise specifically provided in
this Agreement, each of Landlord and Tenant, 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  26


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  4.1Permitted
Use.  4.1.1Permitted
Use.  (a)Tenant
shall, at all times during the Term, and at any other time that Tenant shall be
in possession of any Property, continuously use and operate, or cause to be
used and operated, such Property as a skilled nursing/ intermediate
care/independent living/assisted living/special care/group home 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 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
such 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)),  27


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 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, 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.  If Landlord and Tenant
fail to agree on an alternative use for such Property within sixty (60) days
after commencing negotiations as aforesaid, Tenant may market such Property for
sale to a third party.  If Tenant
receives a bona fide offer (an Offer) to purchase such Property 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 sell the Property pursuant to such Offer, then, effective as of
the date of such sale, this Agreement shall terminate with respect to such
Property, and the Minimum Rent shall be reduced by an amount equal to the
product of the net proceeds of sale received by Landlord multiplied by the
Interest Rate.  If Landlord shall reject
(or be deemed to have rejected) such Offer, then, effective as of the proposed
date of such sale, this Agreement shall terminate with respect to such
Property, and the Minimum Rent shall be reduced by an amount equal to the
product of the projected net proceeds determined by reference to such Offer
multiplied by the Interest Rate.  4.1.2Necessary
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  28


efforts to maintain (or cause to be maintained) appropriate
certifications for reimbursement and licensure.  4.1.3Lawful
Use, Etc. Tenant shall not, and
shall not permit any Person to use or suffer or permit the use of any 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 any Property, or any portion thereof,
to be used in such a manner as (a) may materially and adversely impair
Landlords title thereto or to any portion thereof, or (b) may reasonably
allow a claim or claims for adverse usage or adverse possession by the public,
as such, or of implied dedication of such Property, or any portion thereof.  4.2Compliance
with Legal/Insurance Requirements, Etc. Subject to the provisions of Section 5.1.2(b) and
Article 8, Tenant, at its sole expense, shall (a) comply with
(or cause to be complied with) all material Legal Requirements and Insurance
Requirements in respect of the use, operation, maintenance, repair, alteration
and restoration of any Property and with the terms and conditions of any ground
lease affecting any Property, (b) perform (or cause to be performed) in a
timely fashion all of Landlords obligations under any ground lease affecting
any Property and (c) 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 any 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.  4.3Compliance
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 each 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 with respect to such Property, or any other
applicable programs or legislation, or capital improvements required by any
other governmental agency having jurisdiction over any Property as a condition
of the continued operation of such Property for its Permitted Use.  29


4.4Environmental
Matters.  4.4.1Restriction
on Use, Etc. During the Term and
any other time that Tenant shall be in possession of any Property, Tenant shall
not, and shall not permit any Person to, store, spill upon, dispose of or
transfer to or from such 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 any Property,
Tenant shall maintain (or shall cause to be maintained) such 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,
notify Landlord in writing of any material change in the nature or extent of
Hazardous Substances at any Property, (b) transmit to Landlord a copy of
any report which is required to be filed by Tenant or any Manager with respect
to any 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 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 with (or 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 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 any Property, subject to Tenant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, (x) to clean up and remove from and about
such Property all Hazardous Substances thereon, (y) to contain and prevent
any further release or threat of release of  30


Hazardous Substances on or about such Property and (z) to
use good faith efforts to eliminate any further release or threat of release of
Hazardous Substances on or about such Property.  4.4.2Indemnification
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 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 any
Property or any properties surrounding such 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 such Property from and after the Commencement Date.  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 such Property to Landlord in accordance with the
terms of this Agreement of Hazardous Substances in, upon or under the soil or
ground water of such 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 to
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.  4.4.3Survival. The provisions of this Section 4.4
shall survive the expiration or sooner termination of this Agreement.  31


ARTICLE 5  MAINTENANCE AND REPAIRS  5.1          Maintenance
and Repair.  5.1.1Tenants
General Obligations. Tenant
shall keep (or cause to be kept), at Tenants sole cost and expense, 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
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 be made all necessary and appropriate repairs and
replacements to each Property 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 Date (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
andArticle 11 and Tenants obligations with respect to Hazardous
Substances are as set forth in Section 4.4.  5.1.2Landlord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 any Property at the
expense of Landlord pursuant to any law in effect on  32


the Commencement Date or
thereafter 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, pursuant to the
terms of this Agreement, Tenant is required to make any expenditures in
connection with any repair, maintenance or renovation with respect to any
Property, Tenant may, at its election, advance such funds or 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).  Notwithstanding the foregoing, Landlord may
elect not to disburse such required funds to Tenant; provided, however, that if
Landlord shall elect not to disburse such required funds as aforesaid, Tenants
obligation to make such required repair, renovation or replacement shall be
deemed waived by Landlord, and, notwithstanding anything contained in this
Agreement to the contrary, Tenant shall have no obligation to make such
required repair, renovation or replacement.  5.1.3Nonresponsibility
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 or
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  33


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.  5.2Tenant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.  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, or any portion thereof, which belongs to anyone
other than Tenant, 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 Landlords purchase of the same in
accordance with the provisions of Article 15 and the assumption of
management or operation of the Facility by Landlord or its designee.  5.3Yield
Up. Upon the expiration or
sooner termination of this Agreement (or the termination of this Agreement with
respect to any Property), Tenant shall vacate and surrender the Leased Property
or such Property (as applicable) to Landlord in substantially the same condition
in which such 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  34


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.  5.4Management
Agreement.  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 Management Agreement with respect to any Property.  Any Management Agreement entered into
pursuant to the provisions of this Section 5.4 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.  6.1Improvements
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 any 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 in the event immediate action is
required to prevent imminent harm to person or property.  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  35


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 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 any 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.  6.2Salvage. 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  7.1Liens. 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 any portion thereof, 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  36


responsibility
of Landlord pursuant to the provisions of Article 20 and (h) Landlord
Liens and any other voluntary liens created by Landlord.  7.2Landlord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, 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 and shall be subordinate to any
lien imposed by the FNM Financing Documents.  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, or any portion thereof (Landlord
agreeing that any such mortgage or deed of  37


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, or any portion thereof, (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 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  9.1General
Insurance Requirements. Tenant
shall, at all times during the Term and at any other time Tenant shall be in
possession of any Property, or any portion thereof, keep (or cause to be kept)
such Property and all property located therein or thereon, insured against the
risks and in such amounts as is 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 each 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  38


after
receipt of such proposal, such proposal shall be deemed approved.  9.2Waiver
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.  9.3Form Satisfactory,
Etc. All insurance policies and
endorsements required pursuant to this Article 9 shall be fully
paid for, nonassessable, and issued by reputable insurance companies authorized
to do business in the State and having a general policy holders rating of no
less than A in Bests latest rating guide. 
All property, business interruption, liability and flood insurance policies
with respect to each 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  39


Facility
Mortgagee at the times required, Landlord shall have the right, but not the
obligation, upon Notice to Tenant, 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.  9.4No
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).  9.5Indemnification
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 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 any Property or portion thereof or adjoining sidewalks or
rights of way, (b) any past, present or future use, misuse, non-use,
condition, management, maintenance or repair by Tenant, 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 any Property or portion
thereof 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  40


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  10.1Insurance
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 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.  10.2Damage
or Destruction.  10.2.1Damage
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  41


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.  10.2.2Partial
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.  10.2.3Insufficient
Insurance Proceeds.  If the cost
of the repair or restoration of the applicable Facility 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 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.  42


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) the applicable 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 (a) the
absence of any Event of Default, (b) its approval of plans and
specifications of an architect satisfactory to Landlord (which approval shall
not be unreasonably withheld, delayed or conditioned), (c) general
contractors estimates, (d) architects certificates, (e) conditional
lien waivers of general contractors, if available, (f) evidence of
approval by all governmental authorities and other regulatory bodies whose
approval is required, (g), if Tenant has elected to advance deficiency funds
pursuant to Section 10.2.3, Tenant depositing the amount thereof
with Landlord and (h) 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).  10.3        Damage
Near End of Term. Notwithstanding any provisions of Section 10.1
or 10.2 to the contrary, if damage to  43


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.  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, or
any portion thereof (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, or any portion thereof, 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.  44


ARTICLE 11  CONDEMNATION  11.1        Total
Condemnation, Etc. 
If either (a) the whole of any Property shall be taken by
Condemnation or (b) 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 11.5.  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 11.5.  Subject
to the terms hereof, Landlord shall contribute to the cost of restoration that
part of the Award necessary to  45


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 (a) the
absence of any Event of Default, (b) its approval of plans and
specifications of an architect satisfactory to Landlord (which approval shall
not be unreasonably withheld, delayed or conditioned), (c) general
contractors estimates, (iv) architects certificates, (d) conditional
lien waivers of general contractors, if available, (e) evidence of
approval by all governmental authorities and other regulatory bodies whose
approval is required, (f), if Tenant has elected to advance deficiency funds
pursuant to the preceding paragraph, Tenant depositing the amount thereof with
Landlord and (g) 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        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.  11.4        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  46


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 affected 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.  11.5        Allocation
of Award. Except
as provided in Section 11.4 and the second sentence of this Section 11.5,
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, 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 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 should such default 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  47


(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 holder or holders, to cause 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 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  (g)           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  (h)           should Tenant or any Guarantor cause
or institute any proceeding for its dissolution or termination; or  48


(i)            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  (j)            should there occur any direct or
indirect Change in Control of Tenant or any Guarantor; or  (k)           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, 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  49


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 relet 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 reletting. 
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 relet, 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 Gross 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 reletting 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  50


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 (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) 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 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.  51


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 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.  52


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  Landlord shall have the option to purchase Tenants
Personal Property, at the expiration or sooner 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 which such Personal Property is subject.  Upon the expiration or sooner  53


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.  Notwithstanding
the foregoing, Tenant expressly acknowledges and agrees that nothing contained
in this Article 15 shall diminish, impair or otherwise modify
Landlords rights under the Security Agreement and that any amounts paid by
Landlord in order to purchase Tenants Personal Property in accordance with
this Article 15 shall be applied first to Tenants current and past
due obligations under this Agreement in such order as Landlord may reasonably
determine or as may be prescribed by the laws of the State and any balance
shall be paid to Tenant.  ARTICLE 16  SUBLETTING AND
ASSIGNMENT  16.1Subletting
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 the Leased Property, or any portion thereof, 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, or any portion thereof, by anyone other than Tenant, any
Manager approved by Landlord pursuant to the applicable provisions of this Agreement
or residents and patients of Tenant, or the Leased Property, or any portion
thereof, 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 portion thereof, is sublet (or occupied by anybody other than
Tenant or 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  54


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 Guaranty, which Guaranty shall be in form and substance
satisfactory to Landlord in its sole discretion and which Guaranty shall
constitute an Incidental Document hereunder; (ii) 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 which pledge shall constitute an
Incidental Document hereunder; (iii) a security agreement granting
Landlord a security interest in all of 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 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 and which
security agreement shall constitute an Incidental Document hereunder; and (iv) in
the case of a sublease, an assignment which assigns all of such subtenants
right, title and interest in such sublease to Landlord to secure Tenants
obligations under this Agreement and the Incidental Documents, which assignment
shall be in form and substance satisfactory to Landlord in its sole discretion
and which assignment shall constitute an Incidental Document hereunder.  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.  16.2Required
Sublease Provisions. Any
sublease of all or any portion of the Leased Property shall provide (a) that
it is subject and subordinate to this Agreement and to the matters to  55


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
applicable 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
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 (x) 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 (y) in the case of  56


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.  16.3Permitted
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, (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,
and (c) 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.  Landlord and Tenant acknowledge and agree
that if Tenant enters into one (1) or more subleases with Affiliated
Persons of Tenant with respect to any Property, or any portion thereof, in
accordance with the preceding clause (c), Tenant may allocate the rent and
other charges with respect to the affected Property in any reasonable manner; provided,
however, that such allocation shall not affect Tenants (nor any
Guarantors) liability for the Rent and other obligations of Tenant under this
Agreement; and, provided, further, that Tenant shall give
Landlord prompt written notice of any allocation or reallocation of the rent
and other charges with respect to the affected Property and, in any event,
Tenant shall give Landlord written notice of the amount of such allocations at
least ten (10) Business Days prior to the date that Landlord or Senior
Housing Properties Trust is required to file any tax returns in any State where
such affected Property is located.  16.4Sublease
Limitation. Anything contained
in this Agreement to the contrary notwithstanding, Tenant shall not sublet the
Leased Property, or any portion thereof, 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  57


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 would otherwise
disqualify Landlord for treatment as a real estate investment trust.  ARTICLE 17  ESTOPPEL
CERTIFICATES AND FINANCIAL STATEMENTS  17.1Estoppel
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
any portion thereof, or the leasehold estate created hereby.  17.2Financial
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 a
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  58


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 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 Gross 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/or 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.  17.3General
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 or any Manager to operate any Facility for its
Permitted 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);  59


(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.  ARTICLE 18  LANDLORDS RIGHT
TO INSPECT  Tenant
shall permit Landlord and its authorized representatives to inspect the Leased
Property, or any portion thereof, 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  60


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 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.  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  61


mortgages
and deeds of trust, which may now or hereafter affect the Leased Property, or
any portion thereof, 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 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  62


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 5.1.2(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 any
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 5.1.2(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 any Facility Mortgagee or Superior Landlord
under a lease with Landlord, as ground lessee, which includes the Leased
Property, or any portion thereof, 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  63


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.  Tenant acknowledges the
existence of the FNM Financing and agrees to provide notice of any default by
Landlord to Fannie Mae at the following address:  c/o Red Mortgage Capital, Inc.Two Miranova Place, 12th FloorColumbus, Ohio 43215  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). 
Tenant 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  64


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 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  65


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;  (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;  (f)            Indebtedness of Tenant as guarantor
or borrower secured by Liens permitted under Section 21.8(c);  (g)           A guaranty of Five
Stars obligations under its revolving line of credit.  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; provided,
however, that any such payments shall at all times be subordinate to
Tenants obligations under this Agreement.  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  66


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 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 other equity interests) 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.  67


21.10Pledge Agreement.  At
any time following the repayment in full of the FNM Financing, at Landlords
request, Tenant shall execute and deliver, or cause to be executed and
delivered, as the case may be, to Landlord, (i) a pledge of stock,
partnership, membership or other ownership interest in Tenant 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 Landlord a security interest in all
of Tenants right, title and interest in and to any personal property,
intangibles and fixtures with respect any of the Properties 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.  21.11FNM Financing.  (a)           Tenant shall comply with the terms,
covenants and conditions contained in the FNM Financing Documents, and shall
not take any action that would cause a default thereunder.  (b)           It is expressly understood and agreed
that in the event of any inconsistency between the terms, covenants and
conditions hereof and those provided in the FNM Financing Documents, the FNM
Financing Documents shall control.  (c)           Landlord and Tenant expressly
acknowledge and agree that, effective automatically upon the repayment in full
of the FNM Financing, in whole or in part with respect to any Property, this
Lease shall terminate with respect to the Leased Property or the affected
Property and the Leased Property or the affected Property shall be deemed to be
added to and demised under the Master Lease Agreement No. 3 for the Rent
set forth herein and otherwise on the terms and conditions of the Master Lease
Agreement No. 3.  Such termination
and addition shall occur automatically without the need to execute any
additional documentation, but Landlord and Tenant shall execute any
documentation reasonably requested by the other to evidence such termination
and addition.  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 arbitration shall be conducted in
Boston, Massachusetts in accordance with the Commercial Arbitration Rules of
the American Association then  68


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 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.  69


ARTICLE 23  MISCELLANEOUS  23.1Limitation
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.  23.2No
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.  23.3Remedies
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.  23.4Severability. 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  70


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.  23.5Acceptance
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.  23.6No
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.  23.7Conveyance
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.  23.8Quiet
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 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  71


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.  23.9No
Recordation.  Neither Landlord
nor Tenant shall record this Agreement.  23.10Notices.  (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.  72


(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) 796-8439  if to Tenant to:  c/o Five Star Quality Care, Inc. 400
Centre Street Newton,
Massachusetts  02458 Attn:  Mr. Bruce J. Mackey Jr. Telecopier No. (617)
796-8243  (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.  23.11Construction. 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.  23.12Counterparts;
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.  23.13Applicable
Law, Etc.  This Agreement shall
be interpreted, construed, applied and enforced in accordance with  73


the laws of The Commonwealth
of Massachusetts applicable to contracts between residents of Massachusetts
which are to be performed entirely within Massachusetts, regardless of (a) where
this Agreement is executed or delivered; or (b) where any payment or other
performance required by this Agreement is made or required to be made; or (c) where
any breach of any provision of this Agreement occurs, or any cause of action
otherwise accrues; or (d) where any action or other proceeding is
instituted or pending; or (e) the nationality, citizenship, domicile,
principal place of business, or jurisdiction of organization or domestication
of any party; or (f) whether the laws of the forum jurisdiction otherwise
would apply the laws of a jurisdiction other than Massachusetts; or (g) 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.  23.14Right
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.  23.15Attorneys
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.  23.16Nonliability of Trustees.  THE
DECLARATIONS OF TRUST ESTABLISHING CERTAIN ENTITIES COMPRISING LANDLORD, COPIES
OF WHICH, TOGETHER WITH ALL AMENDMENTS THERETO (COLLECTIVELY, THE DECLARATIONS),
ARE DULY FILED WITH THE DEPARTMENT OF ASSESSMENTS AND TAXATION OF THE STATE OF
MARYLAND, PROVIDE THAT THE NAMES OF SUCH ENTITIES REFER TO THE TRUSTEES UNDER
SUCH DECLARATIONS COLLECTIVELY AS TRUSTEES, BUT NOT INDIVIDUALLY OR  74


PERSONALLY,
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.  75


IN
WITNESS WHEREOF, the
parties have executed this Agreement as a sealed instrument as of the date
above first written.   LANDLORD:
  
  SNH RMI FOX RIDGE MANOR
  PROPERTIES LLC,
  SNH RMI JEFFERSON MANOR
  PROPERTIES LLC,
  SNH RMI MCKAY MANOR PROPERTIES
  LLC,
  SNH RMI NORTHWOOD MANOR
  PROPERTIES LLC,
  SNH RMI OAK WOODS MANOR
  PROPERTIES LLC,
  SNH RMI PARK SQUARE MANOR
  PROPERTIES LLC,
  SNH RMI
  SMITH FARMS MANOR PROPERTIES LLC, and
  SNH RMI SYCAMORE MANOR
  PROPERTIES LLC,
  each a Maryland limited
  liability companyBy:
  /s/ David J. HegartyDavid J. HegartyPresident of each of the foregoing entities


TENANT:FIVE STAR QUALITY CARERMI,
  LLC,  
  a Maryland limited liability companyBy:
  /s/ Francis R. Murphy
  IIIFrancis R. Murphy IIITreasurer and Chief
  Financial Officer


EXHIBITS
A-1 THROUGH A-8  LAND  Certain Exhibits to this
agreement have been omitted.  The Company
agrees to furnish supplementally copies of any of the omitted Exhibits to the
Securities and Exchange Commission upon request.