Document:

Exhibit 10.5

 

EXECUTION COPY

 

KEY PRINCIPAL GUARANTY AND INDEMNITY AGREEMENT

 

This
Key Principal Guaranty and Indemnity Agreement (the “Guaranty”)
is made and entered into as of August 4, 2009, by Senior Housing
Properties Trust, a Maryland real estate investment trust (the “Guarantor”),
for the benefit of Citibank, N.A., a national banking association (together
with its successors and assigns, the “Lender”).

 

RECITALS

 

A.            Lender has agreed to enter into that certain Master
Credit Facility Agreement dated as of August 4, 2009 (as amended,
restated, modified or supplemented from time to time, the “Master
Agreement”), pursuant to which, inter alia,
Lender has agreed, subject to the terms, conditions and limitations of the
Master Agreement, to make a Term Loan (the “Term Loan”)
to SNH FM FINANCING LLC, a Delaware limited liability company, (“Borrower”),
which Term Loan is to be evidenced by, among other things, that certain Fixed
Facility Note and that certain Variable Facility Note, each dated of even date
herewith (collectively, the “Note”).

 

B.            The repayment of the Term Loan and all of the Obligations
of Borrower under the Master Agreement or the other Loan Documents are
guaranteed by this Guaranty to the extent of Borrower’s personal liability as
provided under Section 14.01(a)(v) and 14.01(a)(vi)of the Master
Agreement.

 

C.            Guarantor owns, directly or indirectly, an ownership
interest in Borrower and will receive a direct and material benefit from the
Term Loan made to Borrower.

 

D.            Lender is willing to make the Term Loan to Borrower only
if Guarantor agrees to enter into this Guaranty.

 

NOW, THEREFORE, in order to
induce Lender to make the Term Loan to Borrower, and in consideration thereof,
Guarantor hereby agrees as follows:

 

Section 1.              Definitions.  All
capitalized terms used but not defined in this Guaranty shall have the meanings
ascribed to such terms in the Master Agreement. 
In addition, the following terms shall have the following meanings:

 

“DUS Guide”
means the Fannie Mae Delegated Underwriting and Servicing Guide in its present
form and as amended, modified, supplemented or reissued from time to time (all
references to Parts, Chapters, Sections and other subdivisions of the DUS Guide
shall be deemed references to (i) the Parts, Chapters, Sections and other
subdivisions in effect on the date of the Master Agreement and (ii) any
successor provisions to such Parts, Chapters, Sections and other subdivisions.

 

1

 

Section 2.              Obligations.

 

(a)           Guaranty of Payment and Performance.  Guarantor irrevocably, absolutely and
unconditionally guarantees to Lender all of the following (collectively, the “Guaranteed
Obligations”):  the due and punctual
payment when due, whether at maturity or earlier, by reason of acceleration or
otherwise, at all times, of all amounts for which Borrower is personally liable
under Section 14.01(a)(v) and 14.01(a)(vi) of the Master
Agreement.

 

This Guaranty shall be an
unconditional guaranty of payment and performance and not of collection, and is
in no way conditioned upon any attempt by Lender to pursue or exhaust any
remedy against Borrower.  This Guaranty
is a continuing guaranty which shall remain in full force and effect until
terminated in accordance with Section 25.

 

(b)           Indemnification. 
Guarantor hereby agrees to indemnify, hold harmless and defend Fannie
Mae, Lender and their respective officers, members, directors, shareholders,
officials, agents, independent contractors and employees and each of them (each
an “indemnified party”) from and against any and all losses, claims, suits,
liabilities, actions, debts, damages, costs, obligations, judgments, charges
and expenses, including sums paid in settlement of claims and attorneys’ fees,
of any nature whatsoever suffered or incurred by Fannie Mae or Lender in any
manner as a direct or indirect result of:

 

(i).           the failure of Master Tenant to pay
all (a) reasonable operating expenses of Master Tenant, (b) amounts
owing to Borrower under the Master Lease and (c) obligations under the Master
Lease and each Subordination, Assignment and Security Agreement (collectively, “Master
Tenant Obligations”) prior to making intercompany affiliate loans or
distributing funds to its parent, except that such indemnity will not apply to
intercompany affiliate loans made in the ordinary course of implementing parent’s
cash management system and distributions in any Calendar Quarter if Master
Tenant has paid all Master Tenant Obligations in such Calendar Quarter; or

 

(ii).          the failure of each Operator to pay
all (a) reasonable operating expenses of each Mortgaged Property, (b) amounts
owing under each Sub-Lease to Master Tenant and (c) obligations of each
Operator pursuant to each Sub-Lease and each Subordination, Assignment and
Security Agreement (collectively, “Operator Obligations”) prior to making
intercompany Affiliate loans or distributing funds to its parent, except that
such indemnity will not apply to intercompany Affiliate loans made in the
ordinary course of implementing parent’s cash management system and
distributions in any Calendar Quarter if Master Tenant has paid all Operator
Obligations in such Calendar Quarter.

 

The obligations
under this Section 2(b) are herein referred to as the “Indemnification
Obligations.”  The Indemnification
Obligations and the Guaranteed Obligations are herein referred to as the “Guaranteed
Obligations.”

 

Section 3.              Form of Payment.  All
payments under this Guaranty shall be made to Lender in immediately available
funds, without reduction by any recoupment, set-off, counterclaim or
cross-claim against Lender.

 

2

 

Section 4.              Guarantor’s Obligations are
Absolute.  The obligations of Guarantor under this
Guaranty shall be absolute and unconditional, shall not be subject to any
counterclaim, set-off, recoupment, deduction, or defense based upon any claim
Guarantor may have against Lender or Borrower and shall remain in full force
and effect without regard to, and shall not be released, discharged or
terminated or in any other way affected by, any circumstance or condition
(whether or not Guarantor shall have any knowledge or notice thereof),
including, without limitation:

 

(a)           any amendment or modification of, or extension of time for
payment of any of the principal of, interest on or other amounts payable under
the Loan Documents;

 

(b)           any exercise or non-exercise by Lender of any right, power
or remedy under or in respect of the Loan Documents, or any waiver, consent,
forbearance, indulgence or other action, inaction or omission by Lender under
or in respect of the Loan Documents;

 

(c)           any assignment, sale or other transfer of Borrower’s
interest in all or any part of the real or personal property which at any time
constitutes collateral for the payment of the Guaranteed Obligations,
including, without limitation, a conveyance of such property by Borrower to
Lender by deed in lieu of foreclosure;

 

(d)           any bankruptcy, insolvency, reorganization, adjustment,
dissolution, liquidation or other like proceeding involving or affecting Borrower
or Lender or their respective properties or creditors, or any action taken with
respect to the Loan Documents by any trustee or receiver of Borrower or Lender,
or by any court, in any such proceeding;

 

(e)           any invalidity or unenforceability, in whole or in part,
of any term or provision of the Loan Documents or Borrower’s incapacity or lack
of authority to enter into the Loan Documents;

 

(f)            any release, compromise, settlement or discharge (other
than for payment) with respect to all or any portion of Borrower’s Obligations
under the Loan Documents;

 

(g)           any acceptance of additional or substituted collateral for
payment of the Guaranteed Obligations or any release or subordination of any
collateral held at any time by Lender as security for the payment of the
Guaranteed Obligations; or

 

(h)           any resort to Guarantor for payment of all or any portion
of the Guaranteed Obligations, whether or not Lender shall have resorted to any
collateral securing the Guaranteed Obligations, if any, or shall have proceeded
to pursue or exhaust its remedies against Borrower (or any other Person)
primarily or secondarily liable for the Guaranteed Obligations.

 

No exercise, delay in
exercise or non-exercise by Lender of any right hereby given it, no dealing by
Lender with Borrower, Guarantor or any other Person, no change, impairment or
suspension of any right or remedy of Lender, and no act or thing which, but for
this provision, could act as a release or exoneration of the liabilities of
Guarantor hereunder, shall in any way affect, decrease, diminish or impair any
of the obligations of Guarantor hereunder or give Guarantor or any other Person
any recourse or defense against Lender.

 

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Section 5.              Waiver. 
Guarantor unconditionally waives the following:

 

(a)           notice of acceptance of this Guaranty and notice of any of
the matters referred to in Section 4 hereof;

 

(b)           all notices which may be required by statute, rule of
law or otherwise to preserve intact any rights which Lender may have against
Guarantor under this Guaranty, including, without limitation, any demand, proof
or notice of non-payment of any of the principal of, interest on or other
amounts payable under the Loan Documents, and notice of any failure on the part
of Borrower to perform and comply with any covenant, agreement, term or
condition of the Loan Documents;

 

(c)           any right to the enforcement, assertion or exercise of any
right, power or remedy conferred upon Lender in the Loan Documents or
otherwise;

 

(d)           any requirement that Lender act with diligence in
enforcing its rights under the Loan Documents or this Guaranty;

 

(e)           any right to require Lender to proceed against or exhaust
its recourse against Borrower or any security or collateral held by Lender, if
any, at any time for the payment of the Guaranteed Obligations or to pursue any
other remedy in its power before being entitled to payment from Guarantor under
this Guaranty or before proceeding against Guarantor;

 

(f)            any failure by Lender to file or enforce a claim against
the estate (either in administration, bankruptcy or any other proceeding) of
Borrower or any other Person;

 

(g)           any defense based upon an election of remedies by Lender
which destroys or otherwise impairs the subrogation rights of Guarantor or the
right of Guarantor (after payment of the Guaranteed Obligations) to proceed
against Borrower for reimbursement, or both;

 

(h)           any defense based upon any taking, modification or release
of any collateral for the Guaranteed Obligations, if any, or any failure to
perfect any security interest in, or the taking of, or failure to take any
other action with respect to, any collateral securing payment of the Guaranteed
Obligations, if any;

 

(i)            any defense based upon the addition, substitution or
release, in whole or in part, of any Person(s), including, without limitation,
another guarantor, primarily or secondarily liable for or in respect of the
Guaranteed Obligations;

 

(j)            any rights or defenses based upon an offset by Guarantor
against any obligation now or hereafter owed to Guarantor by Borrower; and

 

(k)           all other notices which may or might
be lawfully waived by Guarantor;

 

it being the intention
hereof that Guarantor shall remain liable as principal, to the extent set forth
in this Guaranty, until the payment and performance in full of the Guaranteed
Obligations, notwithstanding any act, omission or thing which might otherwise
operate as a legal or equitable discharge of Guarantor other than the payment
and performance in full of the Guaranteed 

 

4

 

Obligations.  No delay by Lender in exercising any rights
and/or powers hereunder or in taking any action to enforce Borrower’s
obligations under the Loan Documents shall operate as a waiver as to such
rights or powers or in any manner prejudice any and all of Lender’s rights and
powers hereunder against Guarantor.  The
intention of Guarantor under this Guaranty is that, so long as any of the
Guaranteed Obligations remains unsatisfied, the obligations of Guarantor
hereunder shall not be discharged except by payment or performance and then
only to the extent of such payment or performance.  Guarantor agrees that Guarantor’s obligations
hereunder shall not be affected by any circumstances, whether or not referred to
in this Guaranty, which might constitute a legal or equitable discharge of a
surety or guarantor.

 

Section 6.              Election of Remedies.  This
Guaranty may be enforced from time to time, as often as occasion therefor may
arise, and without any requirement that Lender must first pursue or exhaust any
remedies available to it against Borrower under the Loan Documents or against
any other Person or resort to any collateral at any time held by it for
performance of the Guaranteed Obligations, if any, or any other source or means
of obtaining payment of any of the Guaranteed Obligations.

 

Section 7.              Representations and Warranties
of Guarantor.  Guarantor hereby represents and warrants to
Lender as follows:

 

(a)           Due Organization; Qualification.  Guarantor is qualified to transact business
and is in good standing in the State in which it is organized and in each other
jurisdiction in which such qualification and/or standing is necessary to the
conduct of its business and where the failure to be so qualified would adversely
affect the validity of, the enforceability of, or the ability of Guarantor to
perform the Guaranteed Obligations.

 

(b)           Power and Authority.  Guarantor has the requisite power and
authority (i) to own its properties and to carry on its business as now conducted
and as contemplated to be conducted in connection with the performance of the
Guaranteed Obligations, and (ii) to execute and deliver this Guaranty and
to carry out the transactions contemplated by this Guaranty.

 

(c)           Due Authorization. 
The execution, delivery and performance of this Guaranty has been duly
authorized by all necessary action and proceedings by or on behalf of
Guarantor, and no further approvals or filings of any kind, including any
approval of or filing with any Governmental Authority, are required by or on
behalf of Guarantor as a condition to the valid execution, delivery and
performance by Guarantor of this Guaranty.

 

(d)           Valid and Binding Obligations.  This Guaranty has been duly executed and
delivered by Guarantor and constitutes the legal, valid and binding obligations
of Guarantor, enforceable against Guarantor in accordance with its terms,
except as such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws or equitable principles
affecting the enforcement of creditors’ rights generally or by equitable
principles or by the exercise of discretion by any court.

 

(e)           Non-contravention: No Liens.  Neither the execution and delivery of this
Guaranty by Guarantor, nor the fulfillment of or compliance with the terms and
conditions of this 

 

5

 

Guaranty by Guarantor nor
the payment or performance of the Guaranteed Obligations by Guarantor, as
applicable:

 

(i)            does or will conflict with or result in any breach
or violation of any Applicable Law enacted or issued by any Governmental
Authority or other agency having jurisdiction over Guarantor, any of the
Mortgaged Properties or any other portion of the Collateral or assets of Guarantor,
or any judgment or order applicable to Guarantor or to which Guarantor is
subject;

 

(ii)           does or will conflict with or result
in any material breach or violation of, or constitute a default under, any of
the terms, conditions or provisions of Guarantor’s Organizational Documents,
any indenture, existing agreement or other instrument to which Guarantor is a
party or to which Guarantor, any of the Mortgaged Properties or any other
portion of the Collateral or other assets of Guarantor is subject; or

 

(iii)          does or will require the consent or
approval of any creditor of Guarantor, any Governmental Authority or any other
Person except such consents or approvals which have already been obtained.

 

(f)            Pending Litigation or
Other Proceedings.  There is no
pending or, to the knowledge of Guarantor, threatened action, suit, proceeding
or investigation, at law or in equity, before any court, board, body or
official of any Governmental Authority or arbitrator which, if decided
adversely to Guarantor, would have, or may reasonably be expected to have a
Material Adverse Effect.

 

(g)           Solvency.  Guarantor is not insolvent and will not be
rendered insolvent by the transaction contemplated by this Guaranty and after
giving effect to such transaction, Guarantor will not be left with an
unreasonably small amount of capital with which to engage in its business or
undertakings, nor will Guarantor have incurred, have intended to incur, or
believe that it has incurred, debts beyond its ability to pay such debts as
they mature. Guarantor did not receive less than a reasonably equivalent value
in exchange for incurrence of the Guaranteed Obligations.  There (i) is no contemplated, pending
or, to Guarantor’s knowledge, threatened bankruptcy, reorganization,
receivership, insolvency or like proceeding, whether voluntary or involuntary,
affecting Guarantor and (ii) has been no assertion or exercise of
jurisdiction over Guarantor by any court empowered to exercise bankruptcy
powers.

 

(h)           No Contractual Defaults.  There are no defaults by Guarantor or, to the
knowledge of Guarantor, by any other Person under any contract to which
Guarantor is a party other than defaults which do not have, and are not
reasonably be expected to have, a Material Adverse Effect.  Neither Guarantor nor, to the knowledge of
Guarantor, any other Person, has received notice or has any knowledge of any
existing circumstances in respect of which it could receive any notice of
default or breach in respect of any material contracts.

 

(i)            Representations True and
Correct.  The representations and
warranties made by Guarantor in this Guaranty are true, complete and correct in
all material respects as of the Initial Closing Date and do not contain any
untrue statement of material fact or omit to state a 

 

6

 

material fact required to
be stated therein or necessary in order to make the statements made therein, in
light of the circumstances under which they were made, not misleading.

 

(j)            ERISA.  Guarantor is in compliance in all material
respects with all applicable provisions of ERISA and has not incurred any
liability to the PBGC on a Plan under Title IV of ERISA.  None of the assets of Guarantor constitute
plan assets (within the meaning of Department of Labor Regulation § 2510.3-101)
of any employee benefit plan subject to Title I of ERISA.

 

(k)           Financial Information.  The financial statements of Guarantor which
have been furnished to Lender are complete and accurate in all material
respects and present fairly the financial condition of Guarantor, as of its
date in accordance with GAAP, applied on a consistent basis, and since the date
of the most recent of such financial statements no event has occurred which
would have, or may reasonably be expected to have a Material Adverse Effect or
a material adverse effect on the financial condition of Guarantor, and there
has not been any material transaction entered into by Guarantor other than as
disclosed in public filings.  Guarantor
has no material contingent obligations which are not otherwise required to be
disclosed in accordance with GAAP in its most recent financial statements.

 

(l)            Accuracy of Information.
No information, statement or report furnished in writing to Lender by Guarantor
in connection with this Guaranty or any other Loan Document or in connection
with the consummation of the transactions contemplated hereby and thereby
contains any material misstatement of fact or omits to state a material fact
necessary to make the statements contained therein, in light of the circumstances
under which they were made, not misleading.

 

(m)          No Conflicts of Interest.  No member, officer, agent or employee of
Lender has been or is in any manner interested, directly or indirectly, in that
Person’s own name, or in the name of any other Person, in the Guaranty, the
Loan Documents, or any Mortgaged Property, in any contract for property or
materials to be furnished or used in connection with such Mortgaged Property or
in any aspect of the transactions contemplated by the Loan Documents.

 

(n)           Governmental Approvals.  No Governmental Approval not already obtained
or made is required for the execution and delivery of this Guaranty or the
performance of the terms and provisions hereof by Guarantor.

 

(o)           Governmental Orders.  Guarantor is not presently under any cease or
desist order or other orders of a similar nature, temporary or permanent, of
any Governmental Authority which would have the effect of preventing or
hindering performance of its duties hereunder, nor are there any proceedings presently
in progress or to its knowledge contemplated which would, if successful, lead
to the issuance of any such order.

 

(p)           No Reliance. Guarantor
acknowledges, represents and warrants that it understands the nature and
structure of the transactions contemplated by this Guaranty and the other Loan
Documents; that it is familiar with the provisions of all of the documents and
instruments relating to such transactions; that it understands the risks
inherent in such 

 

7

 

transactions, including
the risk of loss of all or any of the Mortgaged Properties; and that it has not
relied on Lender or Fannie Mae for any guidance or expertise in analyzing the
financial or other consequences of the transactions contemplated by this
Guaranty or any other Loan Document or otherwise relied on Lender or Fannie Mae
in any manner in connection with interpreting, entering into or otherwise in
connection with this Guaranty, any other Loan Document or any of the matters
contemplated hereby or thereby.

 

(q)           Compliance with Applicable
Law.  Guarantor is in compliance with
Applicable Law, including all Governmental Approvals, if any, except for such
items of noncompliance that, singly or in the aggregate, have not had and are
not reasonably expected to cause, a Material Adverse Effect.

 

(r)            Contracts with Affiliates.  Guarantor has not entered into and is not a
party to any contract, lease or other agreement with any Affiliate of Guarantor
for the provision of any service, materials or supplies relating to any
Mortgaged Property.

 

(s)           UCC Amendment.                Guarantor represents and
warrants that the entities listed on Schedule 1 attached hereto (the “UCC
Affiliates”) are Affiliates of Guarantor and that the UCC Affiliates are the
only Affiliates of Guarantor that are named as secured parties on UCC financing
statements that name Operator, as debtor, and that pledge any of the Collateral
under the Loan Documents or any UCC Collateral under the Subordination,
Assignment and Security Agreement. 
Guarantor represents and warrants that it has the power and authority to
authorize, on behalf of the UCC Affiliates, the filing of terminations and/or
amendments, as applicable, relating to such UCC financing statements (the “Affiliate
UCC Amendments”) with the appropriate Governmental Authorities.  Guarantor hereby authorizes Lender to file
the Affiliate UCC Amendments with the appropriate Governmental Authority.

 

Section 8.              Affirmative Covenants of
Guarantor.
Guarantor agrees and covenants with Lender that, at all times during the Term
of this Guaranty:

 

(a)           Maintenance of Existence.  Guarantor shall maintain its existence and
continue to be a real estate investment trust organized under the laws of the
state of its organization (other than as permitted under Section 8.12(b) of
the Master Agreement).  Guarantor shall
continue to be duly qualified to do business in each jurisdiction in which such
qualification is necessary to the conduct of its business and where the failure
to be so qualified would adversely affect the validity of, the enforceability
of, or the ability to perform, its obligations under this Guaranty.

 

(b)           Financial Statements; Accountants’ Reports: Other
Information. Guarantor shall keep and maintain at all times complete and
accurate books of accounts and records in sufficient detail to correctly
reflect all of Guarantor’s financial transactions and assets as required by
GAAP. In addition, Guarantor shall furnish, or cause to be furnished, to Lender
the financial statements required of Guarantor by Section 8.03(a) of
the Master Agreement.  In addition,
Guarantor shall provide Lender with the following:

 

(i)            Accountants’ Reports.  Promptly upon receipt thereof, copies of any
reports or management letters submitted to Guarantor by its independent certified
public 

 

8

 

accountants in connection
with the examination of its financial statements made by such accountants.

 

(ii)           Other Reports.  All schedules, financial statements or other
similar reports reasonably requested by Lender with respect to Guarantor’s
business affairs or condition (financial or otherwise).

 

(c)           Maintain Licenses.  Guarantor shall procure and maintain in full
force and effect all licenses, Permits, charters and registrations which are
material to the conduct of its business and shall abide by and satisfy all
terms and conditions of all such licenses, Permits, charters and registrations.

 

(d)           Access to Records and Discussions
with Officers and Accountants. To the extent permitted by law, Guarantor
shall permit Lender to:

 

(i)            inspect, make copies and abstracts
of, and have reviewed or (after an Event of Default) audited Guarantor’s books
and records related to Borrower and the Mortgaged Properties;

 

(ii)           discuss Guarantor’s affairs, finances
and accounts with any of Guarantor’s officers, partners and employees and  (provided that an officer of Guarantor has
been given the opportunity by Lender to be a party to such discussion)
Guarantor’s independent public accountants;

 

(iii)          discuss the Mortgaged Properties’
conditions, operations or maintenance with the Operators of such Mortgaged
Properties and the officers of Guarantor; and

 

(iv)          receive any other information that
Lender deems reasonably necessary or relevant in connection with the Guaranty,
any Loan Document or the Guaranteed Obligations.

 

Notwithstanding
the foregoing, prior to an Event of Default and so long as no Potential Event
of Default has occurred and is continuing, all inspections shall be conducted
at reasonable times during normal business hours and upon reasonable notice to
Guarantor.

 

(e)           Inform Lender of Material
Events.  Guarantor shall promptly,
but in any event within five (5) Business Days, inform Lender in writing
of any of the following (and shall deliver to Lender copies of any related
written communications, complaints, orders, judgments and other documents
relating to the following) of which Guarantor has actual knowledge:

 

(i)            Defaults. The occurrence of
any Event of Default or any Potential Event of Default under any Loan Document;

 

(ii)           Regulatory Proceedings. The
commencement of any rulemaking or disciplinary proceeding or the promulgation
of any proposed or final rule which would have, or may reasonably be
expected to have, a Material Adverse Effect;

 

9

 

(iii)          Legal Proceedings. The
commencement or threat of, or amendment to, any proceedings by or against
Guarantor in any Federal, state or local court or before any Governmental
Authority, or before any arbitrator, which, if adversely determined, would have,
or at the time of determination may reasonably be expected to have, a Material
Adverse Effect;

 

(iv)          Bankruptcy Proceedings. The
commencement of any proceedings by or against Guarantor as debtor under any
applicable bankruptcy, reorganization, liquidation, insolvency or other similar
law now or hereafter in effect or of any proceeding in which a receiver,
liquidator, trustee or other similar official is sought to be appointed for it;

 

(v)           Regulatory Supervision or Penalty.
The receipt of notice from any Governmental Authority having jurisdiction over
Guarantor that (A) Guarantor is being placed under regulatory supervision,
(B) any license, Permit, charter, membership or registration material to
the conduct of Guarantor’s business or the Mortgaged Properties has been or is
to be suspended or revoked or (C) Guarantor is to cease and desist any
practice, procedure or policy employed by Guarantor, as the case may be, in the
conduct of its business, and such cessation would have, or may reasonably be
expected to have, a Material Adverse Effect;

 

(vi)          Material Adverse Effect.  The occurrence of any act, omission, change
or event which has a Material Adverse Effect subsequent to the date of the most
recent audited financial statements delivered to Lender pursuant to Section 8.03 of the Master
Agreement;

 

(vii)         Restructuring of Guarantor.  Any restructuring or reorganization of
Guarantor;

 

(viii)        Accounting Changes. Any material
change in Guarantor’s accounting policies or financial reporting practices;

 

(ix)           Legal and Regulatory Status.
The occurrence of any material act, omission, change or event, including any
Governmental Approval, the result of which is to change or alter in any way the
legal or regulatory status of Guarantor; and

 

(x)            Default on Indebtedness.  The occurrence of any event that results in
or, with the giving of notice, if applicable, or the passing of time, or both,
would result in (i) any default in respect of any Indebtedness of
Guarantor, (ii) the failure of Guarantor to pay when due or within any
applicable grace period any Indebtedness of Guarantor, or (iii) any
Indebtedness of Guarantor becoming due and payable before its normal maturity
by reason of a default or event of default, however described, or any other
event of default shall occur and continue after the applicable grace period, if
any, specified in the agreement or instrument relating to such Indebtedness if
any such event would, or reasonably could be expected to, result in a Material
Adverse Effect.

 

(xi)           Changes in Senior Management.  Any change in the identity of the members of
Senior Management.

 

10

 

(f)            ERISA.  Guarantor shall at all times remain in
compliance in all material respects with all applicable provisions of ERISA and
similar requirements of the PBGC.

 

(g)           Further Assurances.  Guarantor, at the request of Lender, but
without incurring any liability beyond the Guaranteed Obligations, shall
execute and deliver and, if necessary, file or record such statements,
documents, agreements and take such further action as Lender from time to time
may request as reasonably necessary, desirable or proper to carry out more
effectively the purposes of this Guaranty or any of the other Loan Documents or
in order to exercise or enforce its rights under the Loan Documents.

 

(h)           Monitoring Compliance. Upon
the request of Lender, but without incurring any liability beyond the
Guaranteed Obligations, from time to time, Guarantor shall promptly provide to
Lender such documents, certificates and other information as may be deemed
reasonably necessary to enable Lender to perform its functions under the DUS
Guide as the same relates to Guarantor.

 

(i)            Compliance with Net Worth Test.  Until the date upon which all of the
conditions set forth in Section 8.25 are satisfied in full, Guarantor shall at all times maintain its
Net Worth so that it is not less than $515,000,000.

 

(j)            Compliance with Liquidity Test.  Until the date upon which all of the
conditions set forth in Section 8.25 are satisfied in full, Guarantor shall at all times ensure
that the sum of (i) cash and Cash Equivalents maintained by it and (ii) the
amount available to be drawn by it under its lines of credit (including,
without limitation, under the Amended and Restated Credit Agreement dated as of
July 29, 2005, as amended, with certain lenders and Wachovia Bank,
National Association, as administrative agent) is not less than $21,000,000.

 

Section 9.              Negative
Covenants of Guarantor.

 

(a)           Other Activities.  Guarantor shall not dissolve or liquidate in
whole or in part.

 

(b)           Material Adverse Effect.  Guarantor shall not take or permit any action
which could reasonably be expected to have any Material Adverse Effect.

 

(c)           Principal Place of Business.  Guarantor shall not change its principal
place of business or the location of its books and records without first giving
ten (10) days’ prior written notice to Lender.

 

(d)           Transfer.  Guarantor shall not, and shall cause Borrower
not to cause or permit:

 

(i)            any Transfer prohibited by Sections 8.12 and 8.13 of the
Master Agreement; or

 

(ii)           any Change of Control;

 

11

 

except,
in each case, as otherwise permitted pursuant to the provisions of Sections  8.12, 8.13 and 8.14 of the
Master Agreement.

 

Section 10.            Expenses. Guarantor agrees to pay all reasonable
out-of-pocket costs and expenses, including court costs and expenses and the
reasonable fees and disbursements of legal counsel within thirty (30) days
after demand by Lender, incurred by or on behalf of Lender in connection with
the enforcement of Guarantor’s obligations under this Guaranty or the
protection of Lender’s rights under this Guaranty. The covenants contained in
this Section shall survive the payment of the Guaranteed Obligations.

 

Section 11.            Condition of Borrower. 
Guarantor is fully aware of the financial condition  of
Borrower and is executing and delivering this Guaranty based solely upon
Guarantor’s own independent investigation of all matters pertinent hereto and
is not relying in any manner upon any representation or statement made by
Lender. Guarantor represents and warrants that Guarantor is in a position to
obtain, and Guarantor hereby assumes full responsibility for obtaining, any
additional information concerning Borrower’s financial condition and any other
matters pertinent hereto as Guarantor may desire and Guarantor is not relying
upon or expecting Lender to furnish to Guarantor any information now or
hereafter in Lender’s possession concerning the same or any other matter. By
executing this Guaranty, Guarantor knowingly accepts the full range of risks
encompassed within a contract of this type, which risks Guarantor acknowledges.

 

Section 12.            Further Assurances. Guarantor agrees at any time and from time to
time upon request by Lender to take, or cause to be taken, any action and to
execute and deliver any  additional
documents which, in the reasonable opinion of Lender, may be necessary in order
to assure to Lender the full benefits of this Guaranty.

 

Section 13.            Subordination. Guarantor hereby irrevocably and
unconditionally agrees that  any claims,
direct or indirect, Guarantor may have by subrogation or other form of
reimbursement, against Borrower or to any
security or any interest therein, by virtue of this Guaranty or as a
consequence of any payment made by Guarantor pursuant to this Guaranty, shall
be fully subordinated in time and right of payment to the payment in full of
the Guaranteed Obligations and all other obligations of Guarantor to Lender
under this Guaranty.

 

Section 14.            No Subrogation. Guarantor shall not have any right of
subrogation against Borrower by reason of any payment by Guarantor under this
Guaranty until such time as all of the Guaranteed Obligations have been
satisfied in full. Nothing in the foregoing shall affect any claim which
Guarantor has against Borrower under the terms of the Organizational Documents
of Borrower.

 

Section 15.            Insolvency and Liability of
Borrower. So long
as any of the Guaranteed Obligations is unpaid and this Guaranty is in effect,
and to the extent not prohibited by the applicable bankruptcy court, Guarantor
agrees to file all claims against Borrower in any bankruptcy or other
proceeding in which the filing of claims is required by law in connection with
Indebtedness owed by Borrower to Guarantor and to assign to Lender all rights
of Guarantor thereunder up to the lesser of (i) the amount of such
Indebtedness or (ii) the amount of the Guaranteed Obligations.  In all such cases the Person or Persons
authorized to pay such 

 

12

 

claims shall pay to Lender
the full amount thereof to the full extent necessary to pay the Guaranteed
Obligations, and Guarantor hereby assigns to Lender all of Guarantor’s rights
to all such payments to which Guarantor would otherwise be entitled.
Notwithstanding the foregoing, and except to the extent that any sums owed by
Borrower to Lender under the Loan Documents shall have been fully satisfied
thereby, the liability of Guarantor hereunder shall in no way be affected by

 

(a)           the release or discharge of Borrower in any creditors’,
receivership, bankruptcy or other proceedings; or

 

(b)           the impairment, limitation or modification of the
liability of Borrower or the estate of Borrower in bankruptcy resulting from
the operation of any present or future provisions of the Bankruptcy Code or
other statute or from the decision in any court.

 

Section 16.            Preferences, Fraudulent
Conveyances, Etc. If
Lender is required to refund, or voluntarily refunds, any payment received from
Borrower because such payment is or may be avoided, invalidated, declared
fraudulent, set aside or determined to be void or voidable as a preference,
fraudulent conveyance, impermissible setoff or a diversion of trust funds under
the bankruptcy laws or for any similar reason, including, without limitation,
any judgment, order or decree of any court or administrative body having
jurisdiction over Lender or any of its property, or any settlement or
compromise of any claim effected by Lender with Borrower or other claimant (a “Rescinded Payment”), then Guarantor’s
liability to Lender shall continue in full force and effect, or Guarantor’s
liability to Lender shall be reinstated, as the case may be, with the same
effect and to the same extent as if the Rescinded Payment had not been received
by Lender, notwithstanding the cancellation or termination of any Note or any
of the other Loan Documents. In addition, Guarantor shall pay, or reimburse
Lender for, all expenses (including all reasonable attorneys’ fees, court costs
and related disbursements) incurred by Lender in the defense of any claim that
a payment received by Lender in respect of all or any part of the Guaranteed
Obligations from Guarantor must be refunded. The provisions of this Section shall
survive the termination of this Guaranty and any satisfaction and discharge of
Borrower by virtue of any payment, court order or any federal or state law.

 

Section 17.            Waiver. Neither this Guaranty nor any term hereof
may be changed, waived, discharged or terminated except by an instrument in
writing signed by Lender and Guarantor expressly referring to this Guaranty and
to the provisions so changed or limited. No such waiver shall extend to or
affect any obligation not expressly waived or impair any right consequent
thereon. No course of dealing or delay or omission on the part of Lender in
exercising any right under this Guaranty shall operate as a waiver thereof or
otherwise by prejudice thereto.

 

Section 18.            Notices. All notices or other communications
hereunder shall be sufficiently given and shall be deemed given when sent in
the manner prescribed by the Master Agreement addressed to the parties as
follows:

 

13

 

	
  As to Guarantor:

  	
  Senior Housing Properties Trust

  
	
   

  	
  400 Centre Street

  
	
   

  	
  Newton, MA 02458

  
	
   

  	
  Attention David J. Hegarty

  
	
   

  	
  Telecopy: (617) 796-8349

  
	
   

  	
   

  
	
  with a copy to:

  	
  Sullivan Worcester, LLP

  
	
   

  	
  One Post Office Square

  
	
   

  	
  Boston, MA 02109

  
	
   

  	
  Attention: Warren Heilbronner

  
	
   

  	
  Telecopy: (617) 338-2880

  
	
   

  	
   

  
	
  If to Lender or

  	
   

  
	
  to Fannie Mae:

  	
  As provided in Section 15.08 of the Master
  Agreement.

  

 

Section 19.            Assignability by Lender. Lender may, without notice to Guarantor,
assign or transfer the Term Loan and the Loan Documents, in whole or in part.
In such event, each and every immediate and successive assignee, transferee or
holder of all or any part of the Term Loan and the Loan Documents shall have
the right to enforce this Guaranty, by legal action or otherwise, as fully as
if such assignee, transferee, or holder were by name specifically given such
right and power in this Guaranty. Lender shall have an unimpaired right to
enforce this Guaranty for its benefit as to so much of the Term Loan and the
Loan Documents as Lender has not sold, assigned or transferred.

 

Section 20.            Guarantor Bound by Judgment
Against Borrower.
Guarantor shall be conclusively bound, in any jurisdiction, by the judgment in
any action by Lender against Borrower in connection with the Loan Documents
(wherever instituted) as if Guarantor were a party to such action even if not
so joined as a party.

 

Section 21.            Governing Law. The provisions of  Section 15.06 of the Master Agreement
(entitled “Choice of Law; Consent to Jurisdiction; Waiver of Jury Trial”)
are hereby incorporated into this Agreement by this reference to the fullest
extent as if the text of such Section were set forth in its entirety
herein.

 

Section 22.            Invalid Provisions. If any provision of this Guaranty or the
application thereof to Guarantor or any circumstance in any jurisdiction whose
laws govern this Guaranty shall, to any extent, be invalid or unenforceable
under any applicable statute, regulation or rule of law, then such
provision shall be deemed inoperative to the extent of such invalidity or
unenforceability and shall be deemed modified to conform to such statute,
regulation or rule or law. The remainder of this Guaranty and the
application of any such invalid or unenforceable provision to parties,
jurisdictions or circumstances other than those to whom or to which it is held
invalid or unenforceable, shall not be affected by such invalidity or
unenforceability nor shall such invalidity or unenforceability affect the
validity or enforceability of any other provision of this Guaranty.

 

Section 23.            General Provisions. This Guaranty shall be binding upon the
respective successors and assigns of Guarantor, and shall inure to the benefit
of Lender and its successors 

 

14

 

and assigns, including,
without limitation, each successive holder of the Note. The descriptive
headings of the Sections of the Guaranty have been inserted herein for
convenience of reference only and shall not define or limit the provisions
hereof.

 

Section 24.            Obligations Joint and Several.  The
obligations of Guarantor hereunder shall be joint and several with the
obligations of any other guarantors under this and any other guaranty and the
obligations of Borrower under the Loan Documents.

 

Section 25.            Term of Guaranty. 
Guarantor’s obligations under this Guaranty with respect to Section 14.01(a)(vi) of
the Master Agreement shall remain in effect until all obligations set forth in Section 8.26
of the Master Agreement are satisfied in full. 
The Indemnification Obligations, the Guaranteed Obligations with respect
to Section 14.01(a)(v) and all other obligations under this Guaranty
shall remain in effect until all Obligations under the Master Agreement are
satisfied in full.

 

[Remainder of page intentionally left blank.]

 

15

 

IN WITNESS WHEREOF,
Guarantor has signed this Guaranty under seal as of the day and year first
above written.

 

 

	
   

  	
  GUARANTOR:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Senior Housing Properties Trust,
  a Maryland real estate

  investment trust

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ David J. Hegarty

  
	
   

  	
  Name:

  	
  David J. Hegarty

  
	
   

  	
  Title:

  	
  President

  

 

S-1

 

SCHEDULE
1

 

UCC Affiliates

 

CCC
FINANCING I TRUST

CCC
FINANCING LIMITED, L.P.

CCC
INVESTMENTS I, L.L.C.

CCC
OF KENTUCKY TRUST

CCC OHIO HEALTHCARE TRUST

CCC
PUEBLO NORTE TRUST

CCC
RETIREMENT COMMUNITIES II, L.P.

CCCP
SENIOR LIVING LLC

CCDE
SENIOR LIVING LLC

CCFL
SENIOR LIVING LLC

CCOP
SENIOR LIVING LLC

CCSL
SENIOR LIVING LLC

ELLICOTT CITY LAND I LLC

ELLICOTT CITY LAND II LLC

HRES2
PROPERTIES TRUST

LEISURE
PARK VENTURE LIMITED PARTNERSHIP

LTJ SENIOR COMMUNITIES
LLC

PANTHER HOLDINGS LEVEL I,
L.P.

SNH CHS PROPERTIES TRUST

SNH/LTA PROPERTIES TRUST

SNH/LTA PROPERTIES GA LLC

SPT-MICHIGAN TRUST

SPTMNR PROPERTIES TRUST

 

I-1Exhibit 10.6

 

LEASE REALIGNMENT AGREEMENT

 

This
Lease Realignment Agreement (this “Agreement”) is made August 4,
2009, among Senior Housing Properties Trust (“SNH”) and its subsidiaries
listed on the signature page to this Agreement (together with SNH, the “SNH
Parties”) and Five Star Quality Care, Inc. (“Five Star”) and
its subsidiaries listed on the signature page to this Agreement (together
with Five Star, the “Five Star Parties” and together with the SNH
Parties, the “Parties”).

 

RECITAL

 

Certain
of the SNH Parties and certain of the Five Star Parties are, respectively,
landlords and tenants under the leases listed on Schedule A
(collectively, the “Leases”) of skilled nursing, intermediate care,
independent living, assisted living, special care and group home facilities,
rehabilitation hospital, clinic or professional level health or medical
services facilities, and other healthcare properties identified in the Leases
(collectively, “Leased Properties”).

 

To
facilitate a term loan (“Term Loan”) to be made to SNH FM Financing LLC,
a wholly owned subsidiary of SNH (“SNH Financing”), by Citibank, N.A. (“Citibank”),
the Parties have agreed to (a) amend and restate the Leases numbered 1-4
on Schedule A (collectively, as amended and restated, the “Amended
and Restated Leases”) to, inter alia,
change the pools of Leased Properties demised thereunder and to further amend
(the “First Amendment”) the Amended and Restated Lease under which the
Leased Properties identified on Schedule B (the “Mortgaged Properties”)
will be leased (the “Term Loan Lease”), (b) amend and restate the
security agreements from the tenants under the Amended and Restated Leases
(collectively, the “Amended and Restated Security Agreements”), (c) amend
and restate certain of the subleases under the Amended and Restated Leases,
(collectively, the “Amended and Restated Subleases”), (d) amend and
restate the security agreements from the subtenants under the Amended and
Restated Subleases (collectively, the “Amended and Restated Subtenant
Security Agreements”), (e) amend and restate the Five Star guarantees
and the subtenants’ guarantees of the Amended and Restated Leases
(collectively, the “Amended and Restated Guarantys”), (f) terminate
all pledges of equity interests of tenants and subtenants under the Leases and
an assignment and security agreement with respect to reserves for furniture,
fixtures and equipment thereunder (collectively, the “Termination Agreements”),
(g) the sale by certain of the Five Star Parties to the SNH Party that is
the landlord under the Term Loan Lease of furniture, fixtures and equipment
(the “FF&E”) located at the Mortgaged Properties, (h) the
pledge by certain of the Five Star Parties to Citibank of inventory and
equipment used at the Mortgaged Properties and leases, rents, contracts and
accounts receivable relating to or arising from operation of the Mortgaged
Properties pursuant to Subordination, Assignment and Security Agreements (the “SASAs”)
and certain further amendments to the Term Loan Lease as provided therein, and (i) conform
certain reporting and operational obligations of those Five Star Parties which
are tenants and/or operators of the Mortgaged Properties to those required by
the Term Loan.

 

In
addition, to facilitate the Term Loan, certain of the Five Star Parties have
been in negotiation with Citibank with respect to agreements and instruments to
be executed and delivered by them in connection therewith and with Wachovia
Bank, National Association (“Wachovia”) with respect to amendments to
their credit facility with Wachovia.

 

 

In
connection with all of the foregoing, the Parties have agreed to certain
accommodations to facilitate the Term Loan.

 

Now,
therefore, the Parties agree:

 

1.                                       Execution and Delivery. 
Contemporaneously with the closing of the Term Loan, the Amended and
Restated Leases, the First Amendment, the Amended and Restated Security
Agreements, the Amended and Restated Subleases, the Amended and Restated
Subtenant Security Agreements, the Amended and Restated Guarantys, the
Termination Agreements, the SASAs, bills of sale for the FF&E and all other
agreements, instruments and documents required in connection therewith will be
executed and delivered by the SNH Parties and the Five Star Parties which are
parties thereto in the forms agreed to by such Parties.

 

2.                                       Common Stock. 
Contemporaneously with the closing of the Term Loan, SNH will purchase
and Five Star will sell 3,200,000 shares of Five Star’s common stock, par value
$0.01 (the “FVE Common Stock”), and Five Star and SNH will enter into a
Registration Rights Agreement in the form of Exhibit A (the “Registration
Rights Agreement”); provided, however, that Five Star shall not issue the
FVE Common Stock to SNH until Five Star receives notification from the NYSE
Amex LLC of the NYSE Amex LLC’s approval for listing with the NYSE Amex LLC the
FVE Common Stock to be issued by Five Star to SNH pursuant to this Section 2.  Five Star agrees to submit within five
business days of the date of this Agreement a listing application with the NYSE
Amex LLC for listing approval with the NYSE Amex LLC of the FVE Common Stock.

 

3.                                       Consideration. 
In consideration for the purchase and sale of the FF&E, the FVE
Common Stock and certain other accommodations afforded the SNH Parties by the
FVE Parties as contemplated by this Agreement and the other agreements,
instruments and documents executed and delivered in connection with the
transactions contemplated hereby, and as reimbursement for certain internal
costs of the Five Star Parties, contemporaneously with the closing of the Term
Loan, SNH will pay Five Star $18,600,000 in cash and effect the rent reduction
provided in Section 5 hereof.

 

4.                                       Expenses.  Upon receipt
of invoices and in addition to the payment provided in Section 3 hereof,
SNH will pay all past and future out-of-pocket costs and expenses, including
attorney’s fees, incurred by the Five Star Parties in connection with or
arising from the negotiation and closing of the transactions contemplated by
this Agreement (but not costs and expenses of continued maintenance or
compliance) and the other agreements, instruments and documents executed and
delivered in connection with the transactions contemplated hereby, including
all past and future costs and expenses in connection with or arising from the
organization (but not the continued maintenance) of additional subsidiaries and
licensing.

 

5.                                       Rent Reduction. 
Minimum Rent (defined in the Amended and Restated Leases) for the
Amended and Restated Lease which includes the Leased Properties known as the
New England Rehabilitation Hospital and the Braintree Rehabilitation Hospital
will, upon closing of the Term Loan, be reduced by an annual amount equal to
$2,000,000 until the expiration or sooner termination of the Fixed Term (as
defined in that Amended and Restated Lease).

 

2

 

6.                                       Uneconomic Properties. 
So long as the First Amendment is effective (as such amendment may be
amended or modified from time to time), if the tenant under the Term Loan Lease
reasonably determines that it is no longer economically practical to operate a
Mortgaged Property as it is then operated and desires to market such Mortgaged
Property for sale or to replace such Mortgaged Property with another property
which is not then a Mortgaged Property, then upon notice to SNH with supporting
information, to the extent SNH Financing may then do so in compliance with its
covenants under the Term Loan, and so long as SNH Financing would not be
subject to any make-whole or similar payment, the landlord under the Term Loan
Lease will reasonably cooperate with the tenant and negotiate in good faith
with Citibank (or its successors) to permit such a sale or replacement of such
Mortgaged Property, subject to any required prepayment of the Term Loan not
being in excess of the sale proceeds if the Mortgaged Property is sold or, if
the Mortgaged Property is to be replaced, to no prepayment being required, and
to permit an amendment of the Term Loan Lease to reduce the Minimum Rent
(defined in the Term Loan Lease) upon such sale, consistent with the terms of
the Term Loan Lease as in effect immediately prior to the effectiveness of the
First Amendment, or upon such replacement, to adjust the Minimum Rent, if
appropriate, on terms acceptable to the landlord and tenant.  To the extent such sale or replacement could
not be done by SNH Financing in compliance with its covenants under the Term
Loan, SNH Financing shall negotiate in good faith with Citibank (or its
successors) to obtain the consent of Citibank (or its successors) to such sale
or replacement, subject to the other qualifications of the immediately
preceding sentence.

 

7.                                       Cooperation. 
Each of the Parties will use commercially reasonable efforts to take, or
cause to be taken, all actions and to do, or cause to be done, all things
necessary, proper or advisable to consummate and make effective the
transactions contemplated by this Agreement and to cooperate with each other in
connection with the foregoing, whether before or after the closing of the Term
Loan.  Additionally, the Five Star
Parties will timely provide the SNH Parties with information and documentation
reflecting the historical cost basis of the Five Star Parties in the FF&E.

 

8.                                       Redemption and Compliance. 
Five Star shall not and shall cause its subsidiaries not to offer to
redeem or redeem any shares of Five Star common stock if as a result of such
redemption the FVE Common Stock issued to SNH by Five Star pursuant to this
Agreement would then represent more than 9.8% of the then issued and outstanding
shares of Five Star common stock; provided for these purposes, shares issued to
officers and employees which are subject to vesting or similar restrictions
shall not be deemed to be issued and outstanding.  Five Star will reasonably cooperate with any
SNH request involving SNH’s compliance with section 856(d)(2)(B) of the
Internal Revenue Code of 1986, as amended (including the applicable attribution
rules of section 856(d)(5)).

 

9.                                       Transfer Restrictions. 
Subject to ownership limitations in Five Star’s governing instruments,
as they may be in effect from time to time, for so long as Five Star may have
net operating loss carryforwards or similar tax benefits which may be applied
to Five Star’s future taxable income and the application of such loss carryforwards
or benefits may be limited as a result of ownership changes in Five Star’s
stock pursuant to applicable tax law, regulations or rules, SNH shall not sell,
dispose or otherwise transfer, or offer to do the same, without Five Star’s
prior written consent (not to be unreasonably withheld, conditioned or
delayed), any shares of the FVE Common Stock.

 

3

 

10.                                 Indemnity.  Should any of
the Parties default in its obligations under the Term Loan or any agreement,
document or instrument executed in connection therewith, such defaulting
Parties will pay or reimburse any other Party for any cost, expense, loss or
damage suffered or incurred by such other Party as a result of such default.

 

11.                                 Representations and Warranties of Five
Star Parties.  The Five Star Parties represent and warrant
to the SNH Parties that:

 

(a)                                  Organization. 
Each of the Five Star Parties is duly organized, validly existing and in
good standing under the laws of its jurisdiction or organization and has full
corporate, trust, limited liability company or limited partnership power and
authority to conduct its business as it is now being conducted and to own,
operate or lease its properties and assets.

 

(b)                                 Authorization. 
Each of the Five Star Parties has all requisite corporate, trust,
limited liability company or limited partnership power and authority to execute
and deliver this Agreement and the other agreements, documents or instruments
which it is required to execute and deliver in connection with this Agreement
and the transactions contemplated hereby and to perform its respective
obligations hereunder and thereunder. 
The execution and delivery by each of the Five Star Parties of this
Agreement and the other agreements, documents or instruments which they are
required to execute and deliver in connection with this Agreement and the
transactions contemplated hereby and the consummation by each of the
transactions contemplated hereby have been duly authorized by all necessary
corporate, trust, limited liability company or limited partnership action.  This Agreement and the other agreements,
documents or instruments required to be executed and delivered by each of the
Five Star Parties in connection this Agreement and the transactions contemplated
hereby has been duly and validly executed and delivered by each of the Five
Star Parties party thereto and, assuming due authorization, execution and
delivery by each of the other Parties, constitutes the legal, valid and binding
obligation of such Five Star Parties, enforceable against each of the Five Star
Parties in accordance with its terms, except as such enforcement may be subject
to (i) bankruptcy, insolvency, reorganization, moratorium, fraudulent
transfer or other similar laws relating to creditors’ rights generally, (ii) general
principles of equity (whether applied in a proceeding at law or in equity) and (iii) any
implied covenant of good faith and fair dealing.

 

(c)                                  No Violation. 
The execution and delivery by each of the Five Star Parties of this
Agreement and the agreements, documents or instruments required to be executed
and delivered by them in connection with the transactions contemplated hereby
does not, and the consummation by each of them of the transactions contemplated
hereby will not, (i) conflict with, or result in any violation of or
default under, any provision of the governing instruments of the Five Star
Parties; (ii) conflict with or result in any violation of or default
under, any law or judgment applicable to any such entity, or to which any of
their respective properties are subject; or (iii) conflict with, or, with
or without notice or the lapse of time, result in a breach, termination (or
right of termination) or violation of or default under the terms of any
agreement, contract, indenture or other instrument to 

 

4

 

which any such entity is a party or subject, or to
which any of its respective properties are subject.

 

(d)                                 Approvals.  The execution
and delivery by each of the Five Star Parties of this Agreement and the
agreements, documents or instruments required to executed and delivered by them
in connection with this Agreement and the other transactions contemplated
hereby and the consummation by it of the transactions contemplated hereby do
not require the consent, approval, order, or authorization of any person under
any agreement, contract, indenture or other instrument or laws to which any
Five Star Party is a party or subject or to which any of its respective properties
are subject, and no declaration, filing or registration with any governmental
entity is required by any such entity in connection with the execution and
delivery of this Agreement and the consummation by it of the transactions
contemplated by this Agreement, except for consents which have been obtained
and filings required under securities laws.

 

(e)                                  FF&E.  The Five Star
Parties have, or will have at the closing of the Term Loan, title to all of the
FF&E, free and clear of any liens or encumbrances, subject to SNH’s right
and obligation to acquire the FF&E pursuant to this Agreement.

 

(f)                                    Common Shares. 
The FVE Common Stock to be issued to SNH, when issued in accordance with
the terms of this Agreement, will be duly authorized, validly issued, fully
paid and non-assessable and not subject to any preemptive rights and issued in
compliance with all applicable laws.  As
of the date of this Agreement and after giving effect to the issuance of the
FVE Common Stock, the FVE Common Stock to be issued to SNH by Five Star will
represent approximately 9.03% of the issued and outstanding shares of common
stock of Five Star.

 

12.                                 Representations and Warranties of SNH. 
The SNH Parties represent and warrant to the Five Star Parties:

 

(a)                                  Organization.  Each of the
SNH Parties is duly organized, validly
existing and in good standing under the laws of its jurisdiction or
organization and has full corporate, real estate investment trust, limited
liability company or limited partnership power and authority to conduct its business
as it is now being conducted and to own, operate or lease its properties and
assets.

 

(b)                                 Authorization. 
Each of the SNH Parties has all requisite corporate, trust, limited
liability company or limited partnership power and authority to execute and deliver
this Agreement and the other agreements, documents or instruments which it is
required to execute and deliver in connection with this Agreement and the
transactions contemplated hereby and to perform its respective obligations
hereunder and thereunder.  The execution
and delivery by each of the SNH Parties of this Agreement and the other
agreements, documents or instruments which they are required to execute and
deliver in connection with this Agreement and the transactions contemplated
hereby and the consummation by each of the transactions contemplated hereby
have been duly authorized by all necessary corporate, trust, limited liability
company or limited partnership action. 
This Agreement and the other agreements, documents or instruments
required to be executed and delivered by each of the SNH Parties in connection
this 

 

5

 

Agreement and the transactions contemplated hereby has
been duly and validly executed and delivered by each of the SNH Parties party
thereto and, assuming due authorization, execution and delivery by each of the
other Parties, constitutes the legal, valid and binding obligation of such SNH
Parties, enforceable against each of the SNH Parties in accordance with its
terms, except as such enforcement may be subject to (i) bankruptcy,
insolvency, reorganization, moratorium, fraudulent transfer or other similar
laws relating to creditors’ rights generally, (ii) general principles of
equity (whether applied in a proceeding at law or in equity) and (iii) any
implied covenant of good faith and fair dealing.

 

(c)                                  No Violation. 
The execution and delivery by each of the SNH Parties of this Agreement
and the agreements, documents or instruments required to be executed and
delivered by them in connection with the transactions contemplated hereby does
not, and the consummation by each of them of the transactions contemplated
hereby will not, (i) conflict with, or result in any violation of or
default under, any provision of the governing instruments of any of the SNH
Parties; (ii) conflict with or result in any violation of or default
under, any law or judgment applicable to any such entity, or to which any of
their respective properties are subject; or (iii) conflict with, or, with
or without notice or the lapse of time, result in a breach, termination (or
right of termination) or violation of or default under the terms of any
agreement, contract, indenture or other instrument to which any such entity is
a party or subject, or to which any of its respective properties are subject.

 

(d)                                 Approvals.  The execution
and delivery by each of the SNH Parties of this Agreement and the agreements,
documents or instruments required to executed and delivered by them in
connection with this Agreement and the other transactions contemplated hereby
and the consummation by it of the transactions contemplated hereby do not
require the consent, approval, order, or authorization of any person under any
agreement, contract, indenture or other instrument or laws to which any SNH
Party is a party or subject or to which any of its respective properties are
subject, and no declaration, filing or registration with any governmental
entity is required by any such entity in connection with the execution and
delivery of this Agreement and the consummation by it of the transactions
contemplated by this Agreement, except for consents which have been obtained
and filings required under securities laws.

 

(e)                                  Private Placement.

 

(i)                                     SNH is (A) an “accredited investor”
within the meaning of Rule 501 of Regulation D promulgated under the
Securities Act of 1933, as amended (the “Securities Act”); (B) aware
that the sale of the FVE Common Stock to it is being made in reliance on a
private placement exemption from registration under the Securities Act and (C) acquiring
the FVE Common Stock for its own account.

 

(ii)                                  SNH understands and agrees that the FVE
Common Stock is being offered in a transaction not involving any public
offering within the meaning of the Securities Act, that the FVE Common Stock
has not been registered under the Securities Act and that the FVE Common Stock
may be offered, resold, pledged 

 

6

 

or otherwise transferred only (A) in a
transaction not involving a public offering, (B) pursuant to an exemption
from registration under the Securities Act, or (C) to Five Star or one of
its subsidiaries, in each of cases (A) through (C) in accordance with
any applicable securities laws of any State of the United States, and that it will
notify any subsequent purchaser of the FVE Common Stock from it of the resale
restrictions referred to above, as applicable.

 

(iii)                               SNH understands that, unless sold
pursuant to a registration statement that has been declared effective under the
Securities Act or in compliance with Rule 144 promulgated thereunder, Five
Star may require that the FVE Common Stock will bear a legend or other
restriction substantially to the effect provided in Section 14(a) hereof.

 

(iv)                              SNH:

 

(A)                              is able to fend for itself in the
transactions contemplated hereby;

 

(B)                                has such knowledge and experience in financial and business
matters as to be capable of evaluating the merits and risks of its prospective
investment in the FVE Common Stock; and

 

(C)                                has the ability to bear the economic
risks of its prospective investment and can afford the complete loss of such
investment.

 

(v)                                 SNH acknowledges that (A) it has
conducted its own investigation of Five Star and the terms of the FVE Common
Stock, (B) it has had access to Five Star’s public filings with the
Securities and Exchange Commission and to such financial and other information
as it deems necessary to make its decision to purchase the FVE Common Stock,
and (C) has been offered the opportunity to conduct such review and analysis
of the business, assets, condition, operations and prospects of Five Star and
its subsidiaries and to ask questions of Five Star and received answers
thereto, each as it deemed necessary in connection with the decision to
purchase the FVE Common Stock.  SNH
further acknowledges that it has had such opportunity to consult with its own
counsel, financial and tax advisors and other professional advisers as it
believes is sufficient for purposes of the purchase of the FVE Common Stock.

 

(vi)                              SNH understands that Five Star will rely
upon the truth and accuracy of the foregoing representations, acknowledgements
and agreements.

 

13.                                 Issuance of Common Shares. 
It is agreed that the issuance of the FVE Common Stock will not
constitute a prohibited Change of Control (defined in the Term Loan Lease).

 

14.                                 Legends.  SNH
understands and agrees that any certificate or account statement representing
the FVE Common Stock shall bear legends or other restrictions substantially to
the 

 

7

 

following effect (it being agreed that if the FVE Common Stock is not
certificated, other appropriate restrictions shall be implemented to give
effect to the following):

 

(a)                                  “THIS SECURITY WAS ORIGINALLY ISSUED IN A
TRANSACTION EXEMPT FROM REGISTRATION UNDER THE UNITED STATES SECURITIES ACT OF
1933, AS AMENDED, (THE “SECURITIES ACT”), AND THIS SECURITY MAY NOT BE
OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR
AN APPLICABLE EXEMPTION THEREFROM.  THE
HOLDER OF THIS SECURITY AGREES FOR THE BENEFIT OF THE COMPANY THAT THIS
SECURITY MAY BE OFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY (A) IN
A TRANSACTION NOT INVOLVING A PUBLIC OFFERING, (B) PURSUANT TO ANY OTHER
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, INCLUDING
RULE 144 PROMULGATED UNDER THE SECURITIES ACT (IF AVAILABLE), OR (C) PURSUANT
TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN EACH OF
CASES (A) THROUGH (C) IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS
OF ANY STATE OF THE UNITED STATES.”;

 

(b)                                 “THIS SECURITY IS SUBJECT TO AND MAY ONLY
BE TRANSFERRED IN ACCORDANCE WITH THE TERMS OF THE LEASE REALIGNMENT AGREEMENT,
DATED AS OF AUGUST [_], 2009, AMONG SENIOR HOUSING PROPERTIES TRUST, FIVE STAR
QUALITY CARE, INC. AND CERTAIN OF THEIR RESPECTIVE SUBSIDIARIES, A COPY OF
WHICH IS ON FILE WITH THE SECRETARY OF FIVE STAR QUALITY CARE, INC.”;

 

(c)                                  any legend generally appearing on
certificates or account statements for the Company’s shares; and

 

(d)                                 any legend required by applicable state
securities laws.

 

15.                                 No Amendment of Financing Documents. 
None of the SNH Parties shall enter, effect or cause any amendment or
modification to the Term Loan or any other agreement, document or instrument
with respect thereto if such amendment or modification would be materially
adverse to Five Star without the prior written consent of FVE (not to be
unreasonably withheld, conditioned or delayed) and any other applicable FVE
Party.

 

16.                                 Arbitration.

 

(a)                                  Any disputes, claims or controversies
between any SNH Party on the one hand and any Five Star Party on the other hand
(i) arising out of or relating to this Agreement or the transactions
contemplated hereby, or (ii) brought by or on behalf of any shareholder of
either SNH or Five Star (which, for purposes of this Section 16, shall
mean any shareholder of record or any beneficial owner of shares of either SNH
or Five Star, or any former shareholder of record or beneficial owner of shares
of either SNH or Five Star), either on its own behalf, on behalf of either SNH
or Five Star or on behalf of any series or class of shares of either SNH or
Five Star or shareholders of either SNH or Five Star against either SNH or Five
Star or any trustee, director, officer, manager 

 

8

 

(including Reit Management & Research LLC or
its successor), agent or employee of either SNH or Five Star, including
disputes, claims or controversies relating to the meaning, interpretation,
effect, validity, performance or enforcement of this Agreement, the declaration
of trust or the bylaws of SNH or the charter or bylaws of Five Star (all of
which are referred to as “Disputes”) or relating in any way to such a
Dispute or Disputes, shall on the demand of any party to such Dispute be
resolved through binding and final arbitration in accordance with the
Commercial Arbitration Rules (the “Rules”) of the American
Arbitration Association (“AAA”) then in effect, except as modified
herein.  For the avoidance of doubt, and
not as a limitation, Disputes are intended to include derivative actions
against trustees, directors, managers or officers of either SNH or Five Star
and class actions by a shareholder of either SNH or Five Star against those
individuals or entities and either SNH and Five Star.

 

(b)                                 There shall be three arbitrators.  If there are (i) only two parties to the
Dispute, each party shall select one arbitrator within 15 days after receipt by
respondent of a copy of the demand for arbitration and (ii) more than two
parties to the Dispute, all claimants, on the one hand, and all respondents, on
the other hand, shall each select, by the vote of a majority of the claimants
or the respondents, as the case may be, one arbitrator.  The two party-nominated arbitrators shall
jointly nominate the third and presiding arbitrator within 15 days of the
nomination of the second arbitrator.  If
any arbitrator has not been nominated within the time limit specified herein,
then the AAA shall provide a list of proposed arbitrators in accordance with
the Rules, and the arbitrator shall be appointed by the AAA in accordance with
a listing, striking and ranking procedure, with each party having a limited
number of strikes, excluding strikes for cause. 
For the avoidance of doubt, the arbitrators appointed by the parties to
such Dispute may be affiliates or interested persons of such parties but the
third arbitrator elected by the party arbitrators or by the AAA shall be
unaffiliated with either party.

 

(c)                                  The place of arbitration shall be Boston,
Massachusetts unless otherwise agreed by the parties.

 

(d)                                 There shall be only limited documentary
discovery of documents directly related to the issues in dispute, as may be
ordered by the arbitrators.

 

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

 

(f)                                    Except to the extent expressly provided
by this Agreement or as otherwise agreed between the parties, each party
involved in a Dispute shall bear its own costs and expenses (including
attorneys’ fees), and the arbitrators shall not render an award that would
include shifting of any such costs or expenses (including attorneys’ fees) or,
in a derivative case or class action by a shareholder of either SNH or Five
Star, award any portion of SNH’s or Five Star’s award to the claimant or the
claimant’s attorneys.  Each 

 

9

 

party (or, if there are more than two parties to the
Dispute, all claimants, on the one hand, and all respondents, on the other
hand, respectively) shall bear the costs and expenses of its (or their)
selected arbitrator and the parties (or, if there are more than two parties to
the Dispute, all claimants, on the one hand, and all respondents, on the other
hand) shall equally bear the costs and expenses of the third appointed
arbitrator.

 

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

 

(h)                                 Any monetary award shall be made and
payable in U.S. dollars free of any tax, deduction or offset.  The party against which the Award assesses a
monetary obligation shall pay that obligation on or before the 30th day following
the date of the Award or such other date as the Award may provide.

 

17.                                 Miscellaneous.

 

(a)                                  No Waiver.  No failure by
any Party to insist upon the strict performance of any term hereof or to
exercise any right, power or remedy consequent upon a breach thereof 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.

 

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

 

(c)                                  Notices.

 

(i)                                     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 telecopy 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).

 

10

 

(ii)                                  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
telecopy, 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.

 

(iii)                               All such notices shall be addressed,

 

if to any SNH Party:

 

Senior Housing Properties
Trust

400 Centre Street

Newton, Massachusetts  02458

Attn:  David J. Hegarty, President

Facsimile:  (617) 796-8349

 

with a copy to (which
shall not constitute notice):

 

Sullivan &
Worcester LLP

One Post Office Square

Boston, Massachusetts  02109

Attn:  Richard Teller

Facsimile: (617) 338-2880

 

if to any Five Star
Party:

 

Five Star Quality Care, Inc.

400 Centre Street

Newton, Massachusetts  02458

Attn:  Bruce J. Mackey, Jr.,
President

Facsimile:  (617) 658-1751

 

with a copy to (which
shall not constitute notice):

 

Skadden,
Arps, Slate, Meagher & Flom LLP

One Beacon Street

Boston, Massachusetts  02108

Attn.:  Louis A. Goodman

Facsimile:  (617) 573-4822

 

(iv)                              By notice given as herein provided, the
Parties 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 and 

 

11

 

facsimile numbers 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.

 

(d)                                 Waiver;
Successors and Assigns.   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 and their respective successors and
assigns.

 

(e)                                  Counterparts;
Headings.   This Agreement may
be executed in two or more counterparts, each of which shall constitute an
original, but which, when taken together, shall constitute but one instrument
and shall become effective as of the date hereof when copies hereof, which,
when taken together, bear the signatures of each of the Parties 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.

 

(f)                                    Applicable Law,
Etc.  Except as to matters regarding the internal
affairs of a Party and issues of or limitations on any personal liability of
the shareholders, members and limited partners and trustees, directors,
managers and general partners of a Party, as to which the laws of a Party’s
jurisdiction of formation or organization shall govern, this Agreement shall be
interpreted, construed, applied and enforced in accordance with the laws of The
Commonwealth of Massachusetts without giving effect to the principles of
conflicts of laws thereof that would require the application of any law of
another jurisdiction.

 

(g)                                 Attorneys’ Fees. 
If any lawsuit or arbitration or other legal proceeding arises in
connection with the interpretation or enforcement of this Agreement solely
among the Parties, 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.

 

(h)                                 Non-liability of Trustees and Directors.

 

(i)                                     THE DECLARATIONS OF
TRUST ESTABLISHING CERTAIN OF THE PARTIES, COPIES OF WHICH, TOGETHER WITH ALL
AMENDMENTS THERETO OR RESTATEMENTS THEREOF (THE “DECLARATIONS”), ARE DULY FILED
IN THE OFFICE OF THE STATE DEPARTMENT OF ASSESSMENTS AND TAXATION OF MARYLAND
PROVIDE THAT NO TRUSTEE, OFFICER, SHAREHOLDER, EMPLOYEE OR AGENT OF SUCH
PARTIES SHALL BE HELD TO ANY PERSONAL LIABILITY, JOINTLY OR SEVERALLY, FOR ANY
OBLIGATION OF, OR CLAIM AGAINST, SUCH PARTIES. 
ALL PERSONS DEALING WITH SUCH PARTIES, IN ANY WAY, SHALL LOOK ONLY TO
THE ASSETS OF SUCH PARTIES FOR THE PAYMENT OF ANY SUM OR THE PERFORMANCE OF ANY
OBLIGATION.

 

12

 

(ii)                                  A COPY OF THE ARTICLES OF INCORPORATION,
AS IN EFFECT ON THE DATE HEREOF, OF FIVE STAR, TOGETHER WITH ALL AMENDMENTS AND
SUPPLEMENTS THERETO, IS DULY FILED IN THE OFFICE OF THE STATE DEPARTMENT OF
ASSESSMENTS AND TAXATION OF MARYLAND.  NO
DIRECTOR, OFFICER, SHAREHOLDER, EMPLOYEE OR AGENT OF FIVE STAR SHALL BE HELD TO
ANY PERSONAL LIABILITY, JOINTLY OR SEVERALLY, FOR ANY OBLIGATION OF, OR CLAIM
AGAINST, FIVE STAR.  ALL PERSONS DEALING
WITH FIVE STAR, IN ANY WAY, SHALL LOOK ONLY TO THE ASSETS OF FIVE STAR FOR THE
PAYMENT OF ANY SUM OR THE PERFORMANCE OF ANY OBLIGATION.

 

Signatures
appear on the pages to follow

 

13

 

Executed
under seal as of the date first above written.

 

	
   

  	
  SENIOR HOUSING PROPERTIES TRUST

  
	
   

  	
   

  
	
   

  	
  SNH FM FINANCING TRUST

  
	
   

  	
   

  
	
   

  	
  ELLICOTT CITY LAND I, LLC

  
	
   

  	
   

  
	
   

  	
  SNH SOMERFORD PROPERTIES TRUST

  
	
   

  	
   

  
	
   

  	
  SPTMNR PROPERTIES TRUST

  
	
   

  	
   

  
	
   

  	
  SNH/LTA PROPERTIES TRUST

  
	
   

  	
   

  
	
   

  	
  SPTIHS PROPERTIES TRUST

  
	
   

  	
   

  
	
   

  	
  SNH CHS PROPERTIES TRUST

  
	
   

  	
   

  
	
   

  	
  SNH/LTA PROPERTIES GA LLC

  
	
   

  	
   

  
	
   

  	
  SPTMNR PROPERTIES TRUST

  
	
   

  	
   

  
	
   

  	
  SNH/LTA PROPERTIES GA LLC

  
	
   

  	
   

  
	
   

  	
  SNH/LTA PROPERTIES TRUST

  
	
   

  	
   

  
	
   

  	
  O.F.C. CORPORATION

  
	
   

  	
   

  
	
   

  	
  SNH CHS PROPERTIES TRUST

  
	
   

  	
   

  
	
   

  	
  CCC OF KENTUCKY TRUST

  
	
   

  	
   

  
	
   

  	
  LEISURE PARK VENTURE LIMITED PARTNERSHIP

  
	
   

  	
  By:

  	
  CC
  Leisure Park Corporation,

  
	
   

  	
   

  	
  its
  General Partner

  
	
   

  	
   

  
	
   

  	
  CCDE SENIOR LIVING LLC

  
	
   

  	
   

  
	
   

  	
  CCOP SENIOR LIVING LLC

  
	
   

  	
   

  
	
   

  	
  CCC PUEBLO NORTE TRUST

  
	
   

  	
   

  
	
   

  	
  CCC RETIREMENT COMMUNITIES II, L.P.

  
	
   

  	
  By:

  	
  Crestline Ventures LLC,

  
	
   

  	
   

  	
  its General Partner

  
	
   

  	
   

  
	
   

  	
  CCC INVESTMENTS I, L.L.C.

  
	
   

  	
   

  
	
   

  	
  CCC FINANCING I TRUST

  
	
   

  	
   

  
	
   

  	
  CCC FINANCING LIMITED, L.P.

  
	
   

  	
  By:

  	
  CCC
  Retirement Trust,

  
	
   

  	
   

  	
  its
  General Partner

  
	
   

  	
   

  
	
   

  	
  SNH SOMERFORD PROPERTIES TRUST

  
	
   

  	
   

  
	
   

  	
  HRES 1 PROPERTIES TRUST

  

 

 

14

 

	
   

  	
  SNH NS PROPERTIES TRUST

  
	
   

  	
   

  
	
   

  	
  SNH/LTA PROPERTIES TRUST

  
	
   

  	
   

  
	
   

  	
  SNH/LTA PROPERTIES GA LLC

  
	
   

  	
   

  
	
   

  	
  CCOP SENIOR LIVING LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ David J. Hegarty

  
	
   

  	
   

  	
  Name:

  	
  David J. Hegarty

  
	
   

  	
   

  	
  Title:

  	
  President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  FIVE STAR QUALITY CARE, INC.

  
	
   

  	
   

  
	
   

  	
  FVE FM FINANCING, INC.

  
	
   

  	
   

  
	
   

  	
  FIVE STAR QUALITY CARE TRUST

  
	
   

  	
   

  
	
   

  	
  FS TENANT HOLDING COMPANY TRUST

  
	
   

  	
   

  
	
   

  	
  FS COMMONWEALTH LLC

  
	
   

  	
   

  
	
   

  	
  FS PATRIOT LLC

  
	
   

  	
   

  
	
   

  	
  FIVE STAR QUALITY CARE — NS TENANT,

  
	
   

  	
  LLC

  
	
   

  	
   

  
	
   

  	
  ANNAPOLIS
  HERITAGE PARTNERS, LLC

  
	
   

  	
   

  
	
   

  	
  COLUMBIA
  HERITAGE PARTNERS, LLC

  
	
   

  	
   

  
	
   

  	
  ENCINITAS
  HERITAGE PARTNERS, LLC

  
	
   

  	
   

  
	
   

  	
  FIVE
  STAR QUALITY CARE-AZ, LLC

  
	
   

  	
   

  
	
   

  	
  FIVE
  STAR QUALITY CARE-CA, LLC

  
	
   

  	
   

  
	
   

  	
  FIVE
  STAR QUALITY CARE-COLORADO, LLC

  
	
   

  	
   

  
	
   

  	
  FIVE
  STAR QUALITY CARE-FL, LLC

  
	
   

  	
   

  
	
   

  	
  FIVE
  STAR QUALITY CARE-GA, LLC

  
	
   

  	
   

  
	
   

  	
  FIVE
  STAR QUALITY CARE-GHV, LLC

  
	
   

  	
   

  
	
   

  	
  FIVE
  STAR QUALITY CARE-IA, INC.

  
	
   

  	
   

  
	
   

  	
  FIVE
  STAR QUALITY CARE-IA, LLC

  
	
   

  	
   

  
	
   

  	
  FIVE
  STAR QUALITY CARE-MN, LLC

  
	
   

  	
   

  
	
   

  	
  FIVE
  STAR QUALITY CARE-MO, LLC

  
	
   

  	
   

  
	
   

  	
  FIVE
  STAR QUALITY CARE-MS, LLC

  
	
   

  	
   

  
	
   

  	
  FIVE
  STAR QUALITY CARE-NE, INC.

  

 

15

 

	
   

  	
  FIVE
  STAR QUALITY CARE-NE, LLC

  
	
   

  	
   

  
	
   

  	
  FIVE
  STAR QUALITY CARE-VA, LLC

  
	
   

  	
   

  
	
   

  	
  FIVE
  STAR QUALITY CARE-WI, LLC

  
	
   

  	
   

  
	
   

  	
  FIVE
  STAR QUALITY CARE-WY, LLC

  
	
   

  	
   

  
	
   

  	
  FREDERICK
  HERITAGE PARTNERS, LLC

  
	
   

  	
   

  
	
   

  	
  FRESNO
  HERITAGE PARTNERS, A CALIFORNIA LIMITED PARTNERSHIP

  
	
   

  	
  By:
   Hamilton Place, LLC, its General Partner

  
	
   

  	
   

  
	
   

  	
  HAGERSTOWN
  HERITAGE PARTNERS, LLC

  
	
   

  	
   

  
	
   

  	
  MORNINGSIDE
  OF BELMONT, LLC

  
	
   

  	
   

  
	
   

  	
  MORNINGSIDE
  OF COLUMBUS, L.P.

  
	
   

  	
  By:
   LifeTrust America, Inc., its
  General Partner

  
	
   

  	
   

  
	
   

  	
  MORNINGSIDE
  OF DALTON, LIMITED PARTNERSHIP

  
	
   

  	
  By:
   LifeTrust America, Inc., its
  General Partner

  
	
   

  	
   

  
	
   

  	
  MORNINGSIDE
  OF EVANS, LIMITED PARTNERSHIP

  
	
   

  	
  By:
  LifeTrust America, Inc., its General Partner

  
	
   

  	
   

  
	
   

  	
  MORNINGSIDE
  OF GALLATIN, LLC

  
	
   

  	
   

  
	
   

  	
  MORNINGSIDE
  OF KENTUCKY, LIMITED PARTNERSHIP

  
	
   

  	
  By:
  LifeTrust America, Inc., its General Partner

  
	
   

  	
   

  
	
   

  	
  NEWARK
  HERITAGE PARTNERS I, LLC

  
	
   

  	
   

  
	
   

  	
  NEWARK
  HERITAGE PARTNERS II, LLC

  
	
   

  	
   

  
	
   

  	
  REDLANDS
  HERITAGE PARTNERS, LLC

  
	
   

  	
   

  
	
   

  	
  ROSEVILLE
  HERITAGE PARTNERS, A CALIFORNIA LIMITED PARTNERSHIP

  
	
   

  	
  By:
   Hamilton Place, LLC, its General
  Partner

  
	
   

  	
   

  
	
   

  	
  FIVE
  STAR QUALITY CARE-CA II, LLC

  
	
   

  	
   

  
	
   

  	
  FIVE
  STAR QUALITY CARE-IN, LLC

  
	
   

  	
   

  
	
   

  	
  FIVE
  STAR QUALITY CARE-KS, LLC

  
	
   

  	
   

  
	
   

  	
  FIVE
  STAR QUALITY CARE-MD, LLC

  
	
   

  	
   

  
	
   

  	
  FIVE
  STAR QUALITY CARE-TX, LLC

  
	
   

  	
   

  
	
   

  	
  FIVE
  STAR QUALITY CARE-WI, LLC

  
	
   

  	
   

  
	
   

  	
  FS
  LAFAYETTE TENANT TRUST

  

 

16

 

	
   

  	
  FS
  LEISURE PARK TENANT TRUST

  
	
   

  	
   

  
	
   

  	
  FS
  LEXINGTON TENANT TRUST

  
	
   

  	
   

  
	
   

  	
  FS
  TENANT POOL I TRUST

  
	
   

  	
   

  
	
   

  	
  FS
  TENANT POOL II TRUST

  
	
   

  	
   

  
	
   

  	
  FS
  TENANT POOL III TRUST

  
	
   

  	
   

  
	
   

  	
  FS
  TENANT POOL IV TRUST

  
	
   

  	
   

  
	
   

  	
  FSQC-AL,
  LLC

  
	
   

  	
   

  
	
   

  	
  MORNINGSIDE
  OF ANDERSON, L.P.

  
	
   

  	
  By:
  LifeTrust America, Inc., its General Partner

  
	
   

  	
   

  
	
   

  	
  MORNINGSIDE
  OF ATHENS, LIMITED PARTNERSHIP

  
	
   

  	
  By:
  LifeTrust America, Inc., its General Partner

  
	
   

  	
   

  
	
   

  	
  FIVE
  STAR QUALITY CARE-IL, LLC

  
	
   

  	
   

  
	
   

  	
  FIVE
  STAR QUALITY CARE-KS, LLC

  
	
   

  	
   

  
	
   

  	
  FIVE
  STAR QUALITY CARE-NJ, LLC

  
	
   

  	
   

  
	
   

  	
  FIVE
  STAR QUALITY CARE-VA, LLC

  
	
   

  	
   

  
	
   

  	
  MORNINGSIDE
  OF GREENWOOD, L.P.

  
	
   

  	
  By:
  LifeTrust America, Inc.

  
	
   

  	
   

  
	
   

  	
  MORNINGSIDE
  OF SKIPWITH-RICHMOND,

  
	
   

  	
  LLC

  
	
   

  	
   

  
	
   

  	
  STOCKTON
  HERITAGE PARTNERS, LLC

  
	
   

  	
   

  
	
   

  	
  FIVE
  STAR QUALITY CARE-MD, LLC

  
	
   

  	
   

  
	
   

  	
  FIVE
  STAR QUALITY CARE-NC, LLC

  
	
   

  	
   

  
	
   

  	
  FIVE
  STAR QUALITY CARE-SAVANNAH, LLC

  
	
   

  	
   

  
	
   

  	
  MORNINGSIDE
  OF BELLGRADE, RICHMOND,

  
	
   

  	
  LLC

  
	
   

  	
   

  
	
   

  	
  MORNINGSIDE
  OF CHARLOTTESVILLE, LLC

  
	
   

  	
   

  
	
   

  	
  MORNINGSIDE
  OF NEWPORT NEWS, LLC

  
	
   

  	
   

  
	
   

  	
  THE
  HEARTLANDS RETIREMENT

  COMMUNITY-ELLICOTT CITY I, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Bruce J. Mackey Jr.

  
	
   

  	
   

  	
  Name:

  	
  Bruce J. Mackey Jr.

  
	
   

  	
   

  	
  Title:

  	
  President

  

 

17

 

SCHEDULE A

Leases

 

1.                                       Amended and Restated Master Lease
Agreement (Lease No. 1), dated as of June 30, 2008, by and among
Ellicott City Land I, LLC, Ellicott City Land II, LLC, SNH CHS Properties
Trust, SPTIHS Properties Trust, SPTMNR Properties Trust, SNH/LTA Properties
Trust, SNH/LTA Properties GA LLC, and Savannah Square, Inc. (as Landlord)
and Five Star Quality Care Trust (as Tenant);

 

2.                                       Amended and Restated Master Lease
Agreement (Lease No. 2), dated as of June 30, 2008, by and among CCC
Financing I Trust, CCC of Kentucky Trust, CCC Ohio Healthcare Trust, CCC Pueblo
Norte Trust, CCC Investments I, L.L.C., CCCP Senior Living LLC, CCDE Senior
Living LLC, CCFL Senior Living LLC, CCOP Senior Living  LLC, CCSL Senior Living LLC, LTJ Senior
Communities LLC, CCC Financing Limited, L.P., CCC Retirement Trust, CCC
Retirement Communities II, L.P., HRES1 Properties Trust, Leisure Park Venture
Limited Partnership and Panther Holdings Level I, L.P., (as Landlord) and FS
Commonwealth LLC, FS Patriot LLC, FS Tenant Holding Company Trust, and FS
Tenant Pool III Trust (as Tenant);

 

3.                                       Amended and Restated Master Lease
Agreement (Lease No. 3), dated as of June 30, 2008, by and among SNH
Somerford Properties Trust, SPTIHS Properties Trust, and SPTMNR Properties
Trust (as Landlord) and Five Star Quality Care Trust (as Tenant), as amended;

 

4.                                       Amended and Restated Master Lease
Agreement (Lease No. 4), dated as of August 1, 2008, by and between
SNH NS Properties Trust (as Landlord) and Five Star Quality Care - NS Tenant,
LLC (as Tenant);

 

5.                                       Lease Agreement, dated as of November 19,
2004, by and among MSD — Macon, LLC, MSD — Beaufort, LLC, MSD — Camden, LLC,
MSD — Hartsville, LLC, MSD — Lexington, LLC, MSD — Orangeburg, LLC, MSD —
Seneca, LLC, MSD — Cullman, LLC, MSD — Madison, LLC, MSD — Sheffield, LLC, MSD —
Bowling Green, LLC, MSD — Paducah, LLC, MSD — Conyers, LLC, MSD — Gainesville,
LLC, MSD — Cleveland, LLC and MSD — Cookeville, LLC (as Landlord) and
Morningside of Macon, LLC, Morningside of Beaufort, LLC, Morningside of Camden,
LLC, Morningside of Hartsville, LLC, Morningside of Lexington, LLC, Morningside
of Orangeburg, LLC, Morningside of Seneca, L.P., Morningside of Cullman, LLC,
Morningside of Madison, LLC, Morningside of Sheffield, LLC, Morningside of
Bowling Green, LLC, Morningside of Paducah, LLC, Morningside of Conyers, LLC,
Morningside of  Gainesville, LLC,
Morningside of  Cleveland, LLC and
Morningside of Cookeville, LLC;

 

6.                                       Lease Agreement, dated as of November 19,
2004, by and among MSD - Jackson, LLC, MSD - Knoxville, LLC, MSD - Franklin,
LLC, and MSD - Hopkinsville, LLC (as Landlord) and Morningside of Jackson, LLC,
Morningside of Knoxville, LLC, Morningside of Franklin, LLC and Morningside of
Hopkinsville, Limited Partnership (as Tenant); and

 

 

7.                                       Master Lease Agreement, dated 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, (as Landlord) and Five Star Quality
Care-RMI, LLC (as Tenant).

 

2

 

SCHEDULE B

Mortgaged Properties

 

	
  Forum
  at Desert Harbor

  
	
  13840
  North Desert Harbor Drive

  
	
  Peoria,
  AZ 85381

  
	
   

  
	
  Forum
  at Tucson

  
	
  2500
  North Rosemont Blvd.

  
	
  Tucson,
  AZ 85712

  
	
   

  
	
  The
  Remington Club I

  
	
  16925
  Hierba Drive

  
	
  San
  Diego, CA 92128

  
	
   

  
	
  The
  Remington Club II

  
	
  16916
  Hierba Drive

  
	
  San
  Diego, CA 92128

  
	
   

  
	
  Rio
  Las Palmas

  
	
  877
  East March Lane

  
	
  Stockton,
  CA 95207

  
	
   

  
	
  Foulk
  Manor North

  
	
  1212
  Foulk Road

  
	
  Wilmington,
  DE 19803

  
	
   

  
	
  Park
  Summit at Coral Springs

  
	
  8500
  Royal Palm Blvd.

  
	
  Coral
  Springs, FL 33065

  
	
   

  
	
  Coral
  Oaks

  
	
  900
  West Lake Road

  
	
  Palm
  Harbor, FL 34684

  
	
   

  
	
  Savannah Square

  
	
  One Savannah Square Drive

  
	
  Savannah, GA 31406

  
	
   

  
	
  Forum at the Crossing

  
	
  8505 Woodfield Crossing Blvd.

  
	
  Indianapolis,
  IN 46240

  
	
   

  
	
  Forum
  at Overland Park

  
	
  3501
  West 95th Street

  
	
  Overland
  Park, KS 66206

  
	
   

  
	
  Forum at Brookside

  
	
  200
  Brookside Drive

  
	
  Louisville,
  KY 40243

  
	
   

  
	
  Gables at Winchester

  
	
  299 Cambridge Street

  
	
  Winchester, MA 01890

  
	
   

  
	
  HeartFields
  at Easton

  
	
  700
  Port Street

  
	
  Easton, MD 21601

  

 

 

	
  Heartlands at Ellicott
  City

  
	
  3004
  North Ridge Road

  
	
  Ellicott
  City, MD 21043

  
	
   

  
	
  Heartlands
  at Severna Park

  
	
  715
  Benfield Road

  
	
  Severna
  Park, MD 21146

  
	
   

  
	
  Aspenwood

  
	
  14400 Homecrest Road

  
	
  Silver Springs, MD 20906

  
	
   

  
	
  HeartFields
  at Cary

  
	
  1050
  Crescent Green Drive

  
	
  Cary,
  NC 27511

  
	
   

  
	
  Montebello

  
	
  10500 Academy Road

  
	
  Albuquerque, NM 87111

  
	
   

  
	
  Forum at Knightsbridge

  
	
  4590 and 4625
  Knightsbridge Blvd.

  
	
  Columbus, OH 43214

  
	
   

  
	
  Forum
  at Memorial Woods

  
	
  777
  North Post Oak Road

  
	
  Houston,
  TX 77024

  
	
   

  
	
  Forum at Lincoln Heights

  
	
  311 West Nottingham Road

  
	
  San
  Antonio, TX 78209

  
	
   

  
	
  Forum
  at Woodlands

  
	
  5055
  W Panther Creek Drive

  
	
  Woodlands,
  TX 77381

  
	
   

  
	
  Morningside of
  Charlottesville

  
	
  491
  Crestwood Drive

  
	
  Charlottesville,
  VA 22903

  
	
   

  
	
  HeartFields at
  Fredericksburg

  
	
  20 HeartFields Lane

  
	
  Fredericksburg, VA 22405

  
	
   

  
	
  Morningside
  of Bellgrade

  
	
  2800
  Polo Parkway

  
	
  Midlothian,
  VA 23113

  
	
   

  
	
  Morningside of Newport News

  
	
  655 Denbigh Boulevard

  
	
  Newport
  News, VA 23608

  
	
   

  
	
  Meadowmere
  - Northshore Assisted Living

  
	
  10803
  North Port Washington Road

  
	
  Mequon, WI 53092

  

 

4

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