Document:

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                                                                   EXHIBIT 10.50

                  SECOND AMENDED AND RESTATED LEASE AGREEMENT,

                          dated as of November 19, 2004,

                                  by and among

             CERTAIN AFFILIATES OF SENIOR HOUSING PROPERTIES TRUST,

                                  AS LANDLORD,

                                       AND

                          FIVE STAR QUALITY CARE TRUST,

                                    AS TENANT

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ARTICLE 1     DEFINITIONS

       1.1          "Additional Charges"
       1.2          "Additional Properties"
       1.3          "Additional Rent"
       1.4          "Affiliated Person"
       1.5          "Agreement"
       1.6          "Applicable Laws"
       1.7          "Award"
       1.8          "Base Gross Revenues"
       1.9          "Base Year"
       1.10         "Beverly Manor Property"
       1.11         "Business Day"
       1.12         "Capital Addition"
       1.13         "Capital Expenditure"
       1.14         "Change in Control"
       1.15         "Claim"
       1.16         "Code"
       1.17         "Commencement Date"
       1.18         "Condemnation"
       1.19         "Condemnor"
       1.20         "Consolidated Financials"
       1.21         "Date of Taking"
       1.22         "Default"
       1.23         "Disbursement Rate"
       1.24         "Distribution"
       1.25         "Easement Agreement"
       1.26         "Encumbrance"
       1.27         "Entity"
       1.28         "Environment"
       1.29         "Environmental Obligation"
       1.30         "Environmental Notice"
       1.31         "Event of Default"
       1.32         "Excess Gross Revenues"
       1.33         "Existing Properties"
       1.34         "Extended Term"
       1.35         "Facility"
       1.36         "Facility Mortgage"
       1.37         "Facility Mortgagee"
       1.38         "Financial Officer's Certificate"
       1.39         "Fiscal Year"
       1.40         "Five Star"
       1.41         "Fixed Term"
       1.42         "Fixtures"
       1.43         "GAAP"
       1.44         "Government Agencies"
       1.45         "Gross Revenues"
       1.46         "Guarantor"
       1.47         "Guaranty"
       1.48         "Hazardous Substances"
       1.49         "Immediate Family"
       1.50         "Impositions"
       1.51         "Incidental Documents"
       1.52         "Indebtedness"
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<S>                 <C>
       1.53         "Insurance Requirements"
       1.54         "Interest Rate"
       1.55         "Land"
       1.56         "Landlord"
       1.57         "Landlord Default"
       1.58         "Landlord Liens"
       1.59         "Lease Year"
       1.60         "Leased Improvements"
       1.61         "Leased Intangible Property"
       1.62         "Leased Property"
       1.63         "Legal Requirements"
       1.64         "Lien"
       1.65         "LTA GMAC Leased Property"
       1.66         "LTA GMAC Leases"
       1.67         "Manager"
       1.68         "Management Agreement"
       1.69         "Minimum Rent"
       1.70         "Notice"
       1.71         "Officer's Certificate"
       1.72         "Original Lease"
       1.73         "Overdue Rate"
       1.74         "Parent"
       1.75         "Permitted Encumbrances"
       1.76         "Permitted Liens"
       1.77         "Permitted Use"
       1.78         "Person"
       1.79         "Pledge Agreement"
       1.80         "Property"
       1.81         "Provider Agreements"
       1.82         "Records"
       1.83         "Regulated Medical Wastes"
       1.84         "Rent"
       1.85         "SEC"
       1.86         "Security Agreement"
       1.87         "State"
       1.88         "Subordinated Creditor"
       1.89         "Subordination Agreement"
       1.90         "Subsidiary"
       1.91         "Successor Landlord"
       1.92         "Tenant"
       1.93         "Tenant's Personal Property"
       1.94         "Term"
       1.95         "Third Party Payor Programs"
       1.96         "Third Party Payors"
       1.97         "Unsuitable for Its Permitted Use"
       1.98         "Work"
ARTICLE 2     LEASED PROPERTY AND TERM
       2.1          Leased Property.
       2.2          Condition of Leased Property.
       2.3          Fixed Term.
       2.4          Extended Terms.
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ARTICLE 3     RENT
       3.1          Rent.
       3.2          Late Payment of Rent, Etc.
       3.3          Net Lease.
       3.4          No Termination, Abatement, Etc.
ARTICLE 4     USE OF THE LEASED PROPERTY
       4.1          Permitted Use.
       4.2          Compliance with Legal/Insurance Requirements, Etc.
       4.3          Compliance with Medicaid and Medicare Requirements.
       4.4          Environmental Matters.
ARTICLE 5     MAINTENANCE AND REPAIRS
       5.1          Maintenance and Repair.
       5.2          Tenant's Personal Property.
       5.3          Yield Up.
       5.4          Management Agreement.
ARTICLE 6     IMPROVEMENTS, ETC.
       6.1          Improvements to the Leased Property.
       6.2          Salvage.
ARTICLE 7     LIENS
       7.1          Liens.
       7.2          Landlord's Lien.
ARTICLE 8     PERMITTED CONTESTS
ARTICLE 9     INSURANCE AND INDEMNIFICATION
       9.1          General Insurance Requirements.
       9.2          Waiver of Subrogation.
       9.3          Form Satisfactory, Etc.
       9.4          No Separate Insurance; Self-Insurance.
       9.5          Indemnification of Landlord.
ARTICLE 10    CASUALTY
       10.1         Insurance Proceeds.
       10.2         Damage or Destruction.
       10.3         Damage Near End of Term.
       10.4         Tenant's Property.
       10.5         Restoration of Tenant's Property.
       10.6         No Abatement of Rent.
       10.7         Waiver.
ARTICLE 11    CONDEMNATION
       11.1         Total Condemnation, Etc.
       11.2         Partial Condemnation.
       11.3         Abatement of Rent.
       11.4         Temporary Condemnation.
       11.5         Allocation of Award.
ARTICLE 12    DEFAULTS AND REMEDIES
       12.1         Events of Default.
       12.2         Remedies.
       12.3         Tenant's Waiver.
       12.4         Application of Funds.
       12.5         Landlord's Right to Cure Tenant's Default.
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ARTICLE 13    HOLDING OVER
ARTICLE 14    LANDLORD DEFAULT
ARTICLE 15    PURCHASE RIGHTS
ARTICLE 16    SUBLETTING AND ASSIGNMENT
       16.1         Subletting and Assignment.
       16.2         Required Sublease Provisions.
       16.3         Permitted Sublease.
       16.4         Sublease Limitation.
ARTICLE 17    ESTOPPEL CERTIFICATES AND FINANCIAL STATEMENTS
       17.1         Estoppel Certificates.
       17.2         Financial Statements.
       17.3         General Operations.
ARTICLE 18    LANDLORD'S RIGHT TO INSPECT
ARTICLE 19    EASEMENTS
       19.1         Grant of Easements.
       19.2         Exercise of Rights by Tenant.
       19.3         Permitted Encumbrances.
ARTICLE 20    FACILITY MORTGAGES
       20.1         Landlord May Grant Liens.
       20.2         Subordination of Lease.
       20.3         Notice to Mortgagee and Superior Landlord.
ARTICLE 21    ADDITIONAL COVENANTS OF TENANT
       21.1         Prompt Payment of Indebtedness.
       21.2         Conduct of Business.
       21.3         Maintenance of Accounts and Records.
       21.4         Notice of Litigation, Etc.
       21.5         Indebtedness of Tenant.
       21.6         Distributions, Payments to Affiliated Persons, Etc.
       21.7         Prohibited Transactions.
       21.8         Liens and Encumbrances.
       21.9         Merger; Sale of Assets; Etc.
       21.10        Bankruptcy Remote Entities.
       21.11        LTA GMAC Properties.
ARTICLE 22    ARBITRATION
ARTICLE 23    75
       23.1         Limitation on Payment of Rent.
       23.2         No Waiver.
       23.3         Remedies Cumulative.
       23.4         Severability.
       23.5         Acceptance of Surrender.
       23.6         No Merger of Title.
       23.7         Conveyance by Landlord.
       23.8         Quiet Enjoyment.
       23.9         No Recordation.
       23.10        Notices.
       23.11        Construction.
       23.12        Counterparts; Headings.
       23.13        Applicable Law, Etc.
       23.14        Right to Make Agreement.
       23.15        Attorneys' Fees.
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       23.16        Property Specific Representations and Warranties.
       23.17        Nonliability of Trustees.
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                   SECOND AMENDED AND RESTATED LEASE AGREEMENT

     THIS SECOND AMENDED AND RESTATED LEASE AGREEMENT is entered into as of
November 19, 2004 by and among (i) each of the parties identified on the
signature page hereof as landlord (collectively, "LANDLORD"), and (ii) FIVE STAR
QUALITY CARE TRUST, a Maryland business trust, as tenant ("TENANT").

                              W I T N E S S E T H :

     WHEREAS, Landlord and Tenant are parties to that certain Amended and
Restated Lease Agreement, dated as of March 1, 2004, as amended by that certain
Partial Termination and Amendment of Lease Agreement, dated as of April 19, 2004
and that certain First Amendment to Amended and Restated Lease, dated June 23,
2004 (as so amended, the "ORIGINAL LEASE"); and

     WHEREAS, concurrently herewith, Landlord and certain of its subsidiaries
are acquiring the Additional Properties (this and other capitalized terms used
and not otherwise defined herein having the meanings given such terms in ARTICLE
1); and

     WHEREAS, Landlord and Tenant wish to amend, restate and expand the Original
Lease to add the certain additional properties effective as of the date hereof
and to make such other modifications as are set forth herein;

     NOW, THEREFORE, in consideration of the mutual covenants herein contained
and other good and valuable consideration, the mutual receipt and legal
sufficiency of which are hereby acknowledged, Landlord and Tenant hereby agree
that the Original Lease is hereby amended and restated in its entirety, as
follows:

                                    ARTICLE 1

                                   DEFINITIONS

     For all purposes of this Agreement, except as otherwise expressly provided
or unless the context otherwise requires, (a) the terms defined in this Article
shall have the meanings assigned to them in this Article and include the plural
as well as the singular, (b) all accounting terms not otherwise defined herein
shall have the meanings assigned to them in accordance with GAAP, (c) all
references in this Agreement to designated "Articles", "Sections" and other
subdivisions are to the designated Articles, Sections and other subdivisions of
this Agreement, and (d) the words "herein", "hereof", "hereunder" and

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other words of similar import refer to this Agreement as a whole and not to any
particular Article, Section or other subdivision.

     1.1    "ADDITIONAL CHARGES" shall have the meaning given such term in
SECTION 3.1.3.

     1.2    "ADDITIONAL PROPERTIES" shall mean, collectively, (i) the Properties
described in EXHIBITS A-68 - hereof, and (ii) the LTA GMAC Leased Property.

     1.3    "ADDITIONAL RENT" shall have the meaning given such term in SECTION
3.1.2(a).

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

     1.5    "AGREEMENT" shall mean this Second Amended and Restated Lease
Agreement, including all exhibits attached hereto, as it and they may be amended
from time to time as herein provided.

     1.6    "APPLICABLE LAWS" shall mean all applicable laws, statutes,
regulations, rules, ordinances, codes, licenses, permits and orders, from time
to time in existence, of all courts of competent jurisdiction and Government
Agencies, and all applicable judicial and administrative and regulatory decrees,
judgments and orders, including common law rulings and determinations, relating
to injury to, or the protection of, real or personal property or human health or
the Environment, including, without limitation, all valid and lawful
requirements of courts and other Government Agencies pertaining to reporting,
licensing, permitting, investigation, remediation and removal of underground
improvements (including, without limitation, treatment or storage tanks, or
water, gas or oil wells), or emissions, discharges, releases or threatened
releases of Hazardous Substances, chemical substances, pesticides, petroleum or
petroleum products, pollutants, contaminants or hazardous or toxic substances,
materials or wastes whether solid, liquid or

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gaseous in nature, into the Environment, or relating to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport or
handling of Hazardous Substances or Regulated Medical Wastes, underground
improvements (including, without limitation, treatment or storage tanks, or
water, gas or oil wells), or pollutants, contaminants or hazardous or toxic
substances, materials or wastes, whether solid, liquid or gaseous in nature.

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

     1.8    "BASE GROSS REVENUES" shall mean the amount of Gross Revenues for
the Leased Property and the LTA GMAC Leased Property for the Base Year,
PROVIDED, HOWEVER, that in the event that, with respect to any Lease Year, or
portion thereof, for any reason (including, without limitation, a casualty or
Condemnation) there shall be a reduction in the number of units available at any
Facility located at the Leased Property or in the services provided at such
Facility from the number of such units or the services provided during the Base
Year, in determining Additional Rent payable for such Lease Year, Base Gross
Revenues shall be reduced as follows: (a) in the event of the termination of
this Agreement with respect to any Property pursuant to ARTICLE 10, 11 OR 12,
all Gross Revenues for such Property for the period during the Base Year
equivalent to the period after the termination of this Agreement with respect to
such Property shall be subtracted from Base Gross Revenues; (b) in the event of
a partial closing of any Facility affecting the number of units, or the services
provided, at such Facility, Gross Revenues attributable to units or services at
such Facility shall be ratably allocated among all units in service at such
Facility during the Base Year and all such Gross Revenues attributable to units
no longer in service shall be subtracted from Base Gross Revenues throughout the
period of such closing; and (c) in the event of any other change in
circumstances affecting any Facility, Base Gross Revenues shall be equitably
adjusted in such manner as Landlord and Tenant shall reasonably agree.

     1.9    "BASE YEAR" shall mean (i) with respect to the Existing Properties,
the 2005 calendar year, and (ii) with respect to the Additional Properties, the
2006 calendar year.

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     1.10   "BEVERLY MANOR PROPERTY" shall mean the Leased Property known as and
located at Beverly Manor, St. Joseph, Missouri.

     1.11   "BUSINESS DAY" shall mean any day other than Saturday, Sunday, or
any other day on which banking institutions in The Commonwealth of Massachusetts
are authorized by law or executive action to close.

     1.12   "CAPITAL ADDITION" shall mean, with respect to any Property, any
renovation, repair or improvement to such Property, the cost of which
constitutes a Capital Expenditure.

     1.13   "CAPITAL EXPENDITURE" shall mean any expenditure treated as capital
in nature in accordance with GAAP.

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

     1.15   "CLAIM" shall have the meaning given such term in ARTICLE 8.

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

     1.17   "COMMENCEMENT DATE" shall mean the date hereof.

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

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

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

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

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

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

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

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

     1.26   "ENCUMBRANCE" shall have the meaning given such term in SECTION
20.1.

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

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

     1.29   "ENVIRONMENTAL OBLIGATION" shall have the meaning given such term in
SECTION 4.4.1.

     1.30   "ENVIRONMENTAL NOTICE" shall have the meaning given such term in
SECTION 4.4.1.

     1.31   "EVENT OF DEFAULT" shall have the meaning given such term in SECTION
12.1.

     1.32   "EXCESS GROSS REVENUES" shall mean, with respect to any Lease
Year, or portion thereof, the amount of Gross Revenues for such Lease Year, or
portion thereof, in excess of Base Gross Revenues for the equivalent period
during the Base Year.

     1.33   "EXISTING PROPERTIES" shall mean the Properties described in
EXHIBITS A-1 - 67 hereof.

     1.34   "EXTENDED TERM" shall have the meaning given such term in SECTION
2.4.

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

     1.36   "FACILITY MORTGAGE" shall mean any Encumbrance placed upon the
Leased Property, or any portion thereof, in accordance with ARTICLE 20.

     1.37   "FACILITY MORTGAGEE" shall mean the holder of any Facility Mortgage.

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

     1.39   "FISCAL YEAR" shall mean the calendar year or such other annual
period designated by Tenant and approved by Landlord.

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

     1.41   "FIXED TERM" shall have the meaning given such term in SECTION 2.3.

     1.42   "FIXTURES" shall have the meaning given such term in SECTION 2.1(d).

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

     1.44   "GOVERNMENT AGENCIES" shall mean any court, agency, authority,
board (including, without limitation, environmental protection, planning and
zoning), bureau, commission, department, office or instrumentality of any nature
whatsoever

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of any governmental or quasi-governmental unit of the United States or any State
or any county or any political subdivision of any of the foregoing, whether now
or hereafter in existence, having jurisdiction over Tenant or any Property, or
any portion thereof, or any Facility operated thereon.

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

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Property; revenues attributable to child care services provided primarily to
employees of the Leased Property or the LTA GMAC Leased Property; any proceeds
from any sale of the Leased Property or the LTA GMAC Leased Property or from the
refinancing of any debt encumbering the Leased Property or the LTA GMAC Leased
Property; proceeds from the disposition of furnishings, fixture and equipment no
longer necessary for the operation of the Facility located thereon; any security
deposits and other advance deposits, until and unless the same are forfeited to
Tenant or applied for the purpose for which they were collected; and interest
income from any bank account or investment of Tenant.

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

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

     1.48   "HAZARDOUS SUBSTANCES" shall mean any substance:

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

            (b)     which is or becomes defined as a "hazardous waste",
     "hazardous material" or "hazardous substance" or "pollutant" or
     "contaminant" under any present or future federal, state or local statute,
     regulation, rule or ordinance or amendments thereto including, without
     limitation, the Comprehensive Environmental Response, Compensation and
     Liability Act (42 U.S.C. Section 9601 ET SEQ.) and the Resource
     Conservation and Recovery Act (42 U.S.C. Section 6901 ET SEQ.) and the
     regulations promulgated thereunder; or

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

                                       15
<Page>

            (d)     the presence of which on any Property, or any portion
     thereof, causes or materially threatens to cause an unlawful nuisance upon
     such Property, or any portion thereof, or to adjacent properties or poses
     or materially threatens to pose a hazard to such Property, or any portion
     thereof, or to the health or safety of persons on or about such Property,
     or any portion thereof; or

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

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

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

            (h)     without limitation, constitutes Regulated Medical Wastes.

     1.49   "IMMEDIATE FAMILY" shall mean, with respect to any individual, such
individual's spouse, parents, brothers, sisters, children (natural or adopted),
stepchildren, grandchildren, grandparents, parents-in-law, brothers-in-law,
sisters-in-law, nephews and nieces.

     1.50   "IMPOSITIONS" shall mean, collectively, all taxes (including,
without limitation, all taxes imposed under the laws of any State, as such laws
may be amended from time to time, and all ad valorem, sales and use, or similar
taxes as the same relate to or are imposed upon Landlord, Tenant or the business
conducted upon the Leased Property), assessments (including, without limitation,
all assessments for public improvements or benefit, whether or not commenced or
completed prior to the date hereof), ground rents (including any minimum rent
under any ground lease, and any additional rent or charges thereunder), water,
sewer or other rents and charges, excises, tax levies, fees (including, without
limitation, license, permit, inspection, authorization and similar fees), and
all other governmental charges, in each case whether general or special,
ordinary or extraordinary, foreseen or unforeseen, of every character in respect
of the Leased Property or the business conducted thereon by Tenant (including
all interest and penalties thereon due to any failure in payment by Tenant),
which at any time prior to, during or in respect of the Term hereof may be
assessed or imposed on or in respect of or be a lien upon (a) Landlord's
interest in the Leased Property, (b)

                                       16
<Page>

the Leased Property or any part thereof or any rent therefrom or any estate,
right, title or interest therein, or (c) any occupancy, operation, use or
possession of, or sales from, or activity conducted on, or in connection with
the Leased Property or the leasing or use of the Leased Property or any part
thereof by Tenant; PROVIDED, HOWEVER, that nothing contained herein shall be
construed to require Tenant to pay and the term "Impositions" shall not include
(i) any tax based on net income imposed on Landlord, (ii) any net revenue tax of
Landlord, (iii) any transfer fee (but excluding any mortgage or similar tax
payable in connection with a Facility Mortgage) or other tax imposed with
respect to the sale, exchange or other disposition by Landlord of the Leased
Property or the proceeds thereof, (iv) any single business, gross receipts tax,
transaction privilege, rent or similar taxes as the same relate to or are
imposed upon Landlord, (v) any interest or penalties imposed on Landlord as a
result of the failure of Landlord to file any return or report timely and in the
form prescribed by law or to pay any tax or imposition, except to the extent
such failure is a result of a breach by Tenant of its obligations pursuant to
SECTION 3.1.3, (vi) any impositions imposed on Landlord that are a result of
Landlord not being considered a "United States person" as defined in Section
7701(a)(30) of the Code, (vii) any impositions that are enacted or adopted by
their express terms as a substitute for any tax that would not have been payable
by Tenant pursuant to the terms of this Agreement or (viii) any impositions
imposed as a result of a breach of covenant or representation by Landlord in any
agreement governing Landlord's conduct or operation or as a result of the
negligence or willful misconduct of Landlord.

     1.51   "INCIDENTAL DOCUMENTS" shall mean the Guaranty, the Security
Agreement, the Pledge Agreement any and other pledge or security agreement
issued or executed by an assignee or transferee pursuant to SECTION 16.1.

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

     1.53   "INSURANCE REQUIREMENTS" shall mean all terms of any insurance
policy required by this Agreement and all requirements of the issuer of any such
policy and all orders, rules and regulations and any other requirements of the
National Board of Fire Underwriters (or any other body exercising similar
functions) binding upon Landlord, Tenant, any Manager or the Leased Property.

                                       17
<Page>

     1.54   "INTEREST RATE" shall mean, (i) with respect to the Additional
Properties, nine percent (9%) per annum, and (ii) with respect to the Existing
Properties, ten percent (10%) per annum.

     1.55   "LAND" shall have the meaning given such term in SECTION 2.1(a).

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

     1.57   "LANDLORD DEFAULT" shall have the meaning given such term in ARTICLE
14.

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

     1.59   "LEASE YEAR" shall mean any Fiscal Year or portion thereof during
the Term.

     1.60   "LEASED IMPROVEMENTS" shall have the meaning given such term in
SECTION 2.1(b).

     1.61   "LEASED INTANGIBLE PROPERTY" shall mean all agreements, service
contracts, equipment leases, booking agreements and other arrangements or
agreements affecting the ownership, repair, maintenance, management, leasing or
operation of the Leased Property, or any portion thereof, to which Landlord is a
party; all books, records and files relating to the leasing, maintenance,
management or operation of the Leased Property, or any portion thereof,
belonging to Landlord; all transferable or assignable permits, certificates of
occupancy, operating permits, sign permits, development rights and approvals,
certificates, licenses, warranties and guarantees,

                                       18
<Page>

rights to deposits, trade names, service marks, telephone exchange numbers
identified with the Leased Property, and all other transferable intangible
property, miscellaneous rights, benefits and privileges of any kind or character
belonging to Landlord with respect to the Leased Property.

     1.62   "LEASED PROPERTY" shall have the meaning given such term in SECTION
2.1.

     1.63   "LEGAL REQUIREMENTS" shall mean all federal, state, county,
municipal and other governmental statutes, laws, rules, orders, regulations,
ordinances, judgments, decrees and injunctions affecting the Leased Property or
the maintenance, construction, alteration or operation thereof, whether now or
hereafter enacted or in existence, including, without limitation, (a) all
permits, licenses, authorizations, certificates of need, authorizations and
regulations necessary to operate any Property for its Permitted Use, and (b) all
covenants, agreements, restrictions and encumbrances contained in any
instruments at any time in force affecting any Property, including those which
may (i) require material repairs, modifications or alterations in or to any
Property or (ii) in any way materially and adversely affect the use and
enjoyment thereof, but excluding any requirements arising as a result of
Landlord's status as a real estate investment trust.

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

     1.65   "LTA GMAC LEASED PROPERTY" shall mean the "Leased Property", as
defined therein, under the LTA GMAC Leases.

     1.66   "LTA GMAC LEASES" shall mean, collectively, the Leases, dated as of
the date hereof, by and among Affiliated Persons of Landlord and Tenant,
together with all modifications, amendments and supplements thereto.

     1.67   "MANAGER" shall mean, with respect to any Property, the operator or
manager under any Management Agreement from time to time in effect with respect
to such Property, and its permitted successors and assigns.

     1.68   "MANAGEMENT AGREEMENT" shall mean, with respect to any Property, any
operating or management agreement from time to time entered into by Tenant with
respect to such Property in

                                       19
<Page>

accordance with the applicable provisions of this Agreement, together with all
amendments, modifications and supplements thereto.

     1.69   "MINIMUM RENT" shall mean the sum of Twenty-Four Million One
Hundred Fifty-Eight Thousand Two Hundred Fifty-One Dollars ($24,158,251) per
annum.

     1.70   "NOTICE" shall mean a notice given in accordance with SECTION 23.10.

     1.71   "OFFICER'S CERTIFICATE" shall mean a certificate signed by an
officer or other duly authorized individual of the certifying Entity duly
authorized by the board of directors or other governing body of the certifying
Entity.

     1.72   "ORIGINAL LEASE" shall have the meaning given such term in the
recitals to this Agreement.

     1.73   "OVERDUE RATE" shall mean, on any date, a PER ANNUM rate of interest
equal to the lesser of fifteen percent (15%) and the maximum rate then permitted
under applicable law.

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

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

     1.76   "PERMITTED LIENS" shall mean any Liens granted in accordance with
SECTION 21.8(a).

     1.77   "PERMITTED USE" shall mean, with respect to any Property, any use
of such Property permitted pursuant to SECTION 4.1.1.

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

                                       20
<Page>

     1.79   "PLEDGE AGREEMENT" shall mean the Pledge Agreement, dated as of the
December 31, 2002, made by FSQ, Inc. in favor of Landlord with respect to the
stock or other equity interests of Tenant, as amended, restated, supplemented or
otherwise modified from time to time.

     1.80   "PROPERTY" shall have the meaning given such term in SECTION 2.1.

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

     1.82   "RECORDS" shall have the meaning given such term in SECTION 7.2.

     1.83   "REGULATED MEDICAL WASTES" shall mean all materials generated by
Tenant, subtenants, patients, occupants or the operators of the Leased
Properties which are now or may hereafter be subject to regulation pursuant to
the Material Waste Tracking Act of 1988, or any Applicable Laws promulgated by
any Government Agencies.

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

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

     1.86   "SECURITY AGREEMENT" shall mean any security agreement made by
Tenant for the benefit of Landlord, as it may be amended, restated, supplemented
or otherwise modified from time to time.

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

     1.88   "SUBORDINATED CREDITOR" shall mean any creditor of Tenant which is
a party to a Subordination Agreement in favor of Landlord.

     1.89   "SUBORDINATION AGREEMENT" shall mean any agreement (and any
amendments thereto) executed by a Subordinated Creditor pursuant to which the
payment and performance of Tenant's obligations to such Subordinated Creditor
are subordinated to

                                       21
<Page>

the payment and performance of Tenant's obligations to Landlord under this
Agreement.

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

     1.91   "SUCCESSOR LANDLORD" shall have the meaning given such term in
SECTION 20.2.

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

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

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

     1.95   "THIRD PARTY PAYOR PROGRAMS" shall mean all third party payor
programs in which Tenant presently or in the future may participate, including,
without limitation, Medicare, Medicaid, CHAMPUS, Blue Cross and/or Blue Shield,
Managed Care Plans, other private insurance programs and employee assistance
programs.

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

     1.97   "UNSUITABLE FOR ITS PERMITTED USE" shall mean, with respect to any
Facility, a state or condition of such Facility such that (a) following any
damage or destruction involving a Facility, (i) such Facility cannot be operated
on a commercially practicable basis for its Permitted Use and it cannot
reasonably

                                       22
<Page>

be expected to be restored to substantially the same condition as existed
immediately before such damage or destruction, and as otherwise required by
SECTION 10.2.4, within twelve (12) months following such damage or destruction
or such longer period of time as to which business interruption insurance is
available to cover Rent and other costs related to the applicable Property
following such damage or destruction, (ii) the damage or destruction, if
uninsured, exceeds $1,000,000 or (iii) the cost of such restoration exceeds ten
percent (10%) of the fair market value of such Property immediately prior to
such damage or destruction, or (b) as the result of a partial taking by
Condemnation, such Facility cannot be operated, in the good faith judgment of
Tenant, on a commercially practicable basis for its Permitted Use.

     1.98   "WORK" shall have the meaning given such term in SECTION 10.2.4.

                                    ARTICLE 2

                            LEASED PROPERTY AND TERM

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

            (a)     those certain tracts, pieces and parcels of land, as more
     particularly described in EXHIBITS A-1 THROUGH A-82, attached hereto and
     made a part hereof (the "LAND");

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

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

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

                                       23
<Page>

     or incorporated into the Leased Improvements, including, without
     limitation, all furnaces, boilers, heaters, electrical equipment, heating,
     plumbing, lighting, ventilating, refrigerating, incineration, air and water
     pollution control, waste disposal, air-cooling and air-conditioning systems
     and apparatus, sprinkler systems and fire and theft protection equipment,
     all of which, to the maximum extent permitted by law, are hereby deemed by
     the parties hereto to constitute real estate, together with all
     replacements, modifications, alterations and additions thereto, but
     specifically excluding all items included within the category of Tenant's
     Personal Property (collectively, the "FIXTURES");

            (e)     all machinery, equipment, furniture, furnishings, moveable
     walls or partitions, computers or trade fixtures or other personal property
     of any kind or description used or useful in Tenant's business on or in the
     Leased Improvements, and located on or in the Leased Improvements, and all
     modifications, replacements, alterations and additions to such personal
     property, except items, if any, included within the category of Fixtures,
     but specifically excluding all items included within the category of
     Tenant's Personal Property;

            (f)     all of the Leased Intangible Property; and

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

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

                                       24
<Page>

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

     2.3    FIXED TERM. The initial term of this Agreement (the "FIXED TERM")
previously commenced as provided in the Original Lease and shall expire on
December 31, 2020.

     2.4    EXTENDED TERMS. Provided that no Event of Default shall have
occurred and be continuing, Tenant shall have the right to extend the Term for
one renewal term of fifteen (15) years (the "EXTENDED TERM").

     The  Extended Term shall commence on the day succeeding the expiration
of the Fixed Term. All of the terms, covenants and provisions of this Agreement
shall apply to the Extended Term, except that Tenant shall have no right to
extend the Term beyond the expiration of the Extended Term. If Tenant shall
elect to exercise the aforesaid option, it shall do so by giving Landlord Notice
thereof not later than December 31, 2018, it being understood and agreed that
time shall be of the essence with respect to the giving of such Notice. If
Tenant shall fail to give such Notice, this Agreement shall automatically
terminate at the end of the Fixed Term and Tenant shall have no further option
to extend the Term of this Agreement. If Tenant shall give such Notice, the
extension of this Agreement shall be automatically effected without the
execution of any additional documents; it being understood and agreed, however,
that Tenant and Landlord shall execute such documents and agreements as either
party shall reasonably require to evidence the same. Notwithstanding the
provisions of the foregoing sentence, if, subsequent to the giving of such
Notice, an Event of Default shall occur, at Landlord's option, the extension of
this Agreement shall cease to take effect and this Agreement shall automatically
terminate at the end of the Fixed Term, and Tenant shall have no further option
to extend the Term of this Agreement.

                                    ARTICLE 3

                                      RENT

     3.1    RENT. Tenant shall pay, in lawful money of the United States of
America which shall be legal tender for the payment of public and private debts,
without offset, abatement, demand or deduction (unless otherwise expressly
provided in this Agreement), Minimum Rent and Additional Rent to Landlord and

                                       25
<Page>

Additional Charges to the party to whom such Additional Charges are payable,
during the Term. All payments to Landlord shall be made by wire transfer of
immediately available federal funds or by other means acceptable to Landlord in
its sole discretion. Rent for any partial calendar month shall be prorated on a
per diem basis.

            3.1.1   MINIMUM RENT.

            (a)     PAYMENTS. Minimum Rent shall be paid in equal monthly
     installments in arrears on the first Business Day of each calendar month
     during the Term.

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

            (c)     ADJUSTMENTS OF MINIMUM RENT FOLLOWING DISBURSEMENTS UNDER
     SECTIONS 5.1.2(b), 10.2.3 AND 11.2. Effective on the date of each
     disbursement to pay for the cost of any repairs, maintenance, renovations
     or replacements pursuant to SECTIONS 5.1.2(b), 10.2.3 OR 11.2, the annual
     Minimum Rent shall be increased by a PER ANNUM amount equal to the
     Disbursement Rate times the amount so disbursed. If any such disbursement
     is made during any calendar month on a day other than the first Business
     Day of such calendar month, Tenant shall pay to Landlord on the first
     Business Day of the immediately following calendar month (in addition to
     the amount of Minimum Rent payable with respect to such calendar month, as
     adjusted pursuant to this paragraph (c)) the amount by which Minimum Rent
     for the preceding calendar month, as adjusted for such disbursement on a
     per diem basis, exceeded the amount of Minimum Rent paid by Tenant for such
     preceding calendar month.

            (d)     ALLOWANCE. Provided that no Event of Default shall have
     occurred and be continuing hereunder and Tenant shall otherwise comply with
     the applicable provisions of ARTICLE 6, Landlord agrees to provide Tenant
     with an allowance of up to $200,000 (the "ALLOWANCE") to pay for capital
     repairs and improvements to the Beverly Manor

                                       26
<Page>

     Property. Tenant shall provide Landlord with appropriate invoices and such
     other documentation and information as Landlord shall reasonably request
     each time Tenant requests a disbursement of all or any portion of the
     Allowance. There shall be no adjustment of Minimum Rent in connection with
     any such disbursement of the Allowance to Tenant. If Tenant incurs any
     amounts in excess of $200,000 in connection with any capital repairs or
     improvements to the Additional Property, Tenant shall pay for all such
     amounts in excess of $200,000 at Tenant's sole cost and expense; PROVIDED,
     HOWEVER, that nothing contained in this paragraph shall impair or otherwise
     limit Tenant's right to require Landlord to disburse such amounts subject
     to an adjustment in Minimum Rent in accordance with the terms hereof.

            (e)     ADJUSTMENTS OF MINIMUM RENT FOLLOWING PARTIAL LEASE
     TERMINATION. Subject to SECTION 4.1.1(b), if this Agreement shall terminate
     with respect to any Property but less than all of the Leased Property,
     Minimum Rent shall be reduced by the affected Property's allocable share of
     Minimum Rent determined in accordance with the applicable provisions of
     this Agreement.

            3.1.2   ADDITIONAL RENT.

            (a)     AMOUNT. Tenant shall pay additional rent ("ADDITIONAL
     RENT") with respect to each Lease Year during the Term subsequent to the
     Base Year in an amount, not less than zero, equal to (i) four percent (4%)
     of Excess Gross Revenues at the Leased Property. Quarterly payments of
     Additional Rent for the Leased Property shall be calculated based on Gross
     Revenues for such quarter during the preceding year and shall be due and
     payable and delivered to Landlord on the first Business Day of each
     calendar quarter, or portion thereof, thereafter occurring during the Term,
     together with an Officer's Certificate setting forth the calculation of
     Additional Rent due and payable for such quarter. Amounts paid under the
     LTA GMAC Leases shall be credited against amounts due hereunder.

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

            (c)     RECONCILIATION OF ADDITIONAL RENT. In addition, within
     seventy-five (75) days after the end of the Base

                                       27
<Page>

     Year and each Lease Year thereafter (or any portion thereof occurring
     during the Term), Tenant shall deliver, or cause to be delivered, to
     Landlord (i) a financial report setting forth the Gross Revenues for each
     Property for such preceding Lease Year, or portion thereof, together with
     an Officer's Certificate from Tenant's chief financial or accounting
     officer certifying that such report is true and correct, (ii) an audit of
     Gross Revenues prepared by a firm of independent certified public
     accountants proposed by Tenant and approved by Landlord (which approval
     shall not be unreasonably withheld, delayed or conditioned), and (iii) a
     statement showing Tenant's calculation of Additional Rent due for such
     preceding Lease Year based on the Gross Revenues set forth in such
     financial report, together with an Officer's Certificate from Tenant's
     chief financial or accounting officer certifying that such statement is
     true and correct.

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

            (d)     CONFIRMATION OF ADDITIONAL RENT. Tenant shall utilize, or
     cause to be utilized, an accounting system for the Leased Property in
     accordance with its usual and

                                       28
<Page>

     customary practices and in all material respects in accordance with GAAP,
     which will accurately record all Gross Revenues and Tenant shall retain,
     for at least three (3) years after the expiration of each Lease Year,
     reasonably adequate records conforming to such accounting system showing
     all Gross Revenues for such Lease Year. Landlord, at its own expense,
     except as provided hereinbelow, shall have the right, exercisable by Notice
     to Tenant, by its accountants or representatives, to audit the information
     set forth in the Officer's Certificate referred to in subparagraph (c)
     above and, in connection with such audits, to examine Tenant's books and
     records with respect thereto (including supporting data and sales and
     excise tax returns). Landlord shall begin such audit as soon as reasonably
     possible following its receipt of the applicable Officer's Certificate and
     shall complete such audit as soon as reasonably possible thereafter. All
     such audits shall be performed at the location where such books and records
     are customarily kept and in such a manner so as to minimize any
     interference with Tenant's business operations. If any such audit discloses
     a deficiency in the payment of Additional Rent and, either Tenant agrees
     with the result of such audit or the matter is otherwise determined, Tenant
     shall forthwith pay to Landlord the amount of the deficiency, as finally
     agreed or determined, together with interest at the Interest Rate, from the
     date such payment should have been made to the date of payment thereof. If
     any such audit discloses that Tenant paid more Additional Rent for any
     Lease Year than was due hereunder, and either Landlord agrees with the
     result of such audit or the matter is otherwise determined, provided no
     Event of Default has occurred and is continuing, Landlord shall, at
     Landlord's option, either grant Tenant a credit or pay to Tenant an amount
     equal to the amount of such overpayment against Additional Rent next coming
     due in the amount of such difference, as finally agreed or determined,
     together with interest at the Interest Rate, which interest shall accrue
     from the time of payment by Tenant until the date such credit is applied or
     paid, as the case may be; PROVIDED, HOWEVER, that, upon the expiration or
     sooner termination of the Term, provided no Event of Default has occurred
     and is continuing, Landlord shall pay the unapplied balance of such credit
     to Tenant, together with interest at the Interest Rate, which interest
     shall accrue from the date of payment by Tenant until the date of payment
     from Landlord. Any dispute concerning the correctness of an audit shall be
     settled by arbitration pursuant to the provisions of ARTICLE 22.

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<Page>

            Any proprietary information obtained by Landlord with respect
     to Tenant pursuant to the provisions of this Agreement shall be treated as
     confidential, except that such information may be disclosed or used,
     subject to appropriate confidentiality safeguards, pursuant to court order
     or in any litigation between the parties and except further that Landlord
     may disclose such information to its prospective lenders, provided that
     Landlord shall direct such lenders to maintain such information as
     confidential. The obligations of Tenant and Landlord contained in this
     SECTION 3.1.2 shall survive the expiration or earlier termination of this
     Agreement.

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

            (a)     IMPOSITIONS. Subject to ARTICLE 8 relating to permitted
     contests, Tenant shall pay, or cause to be paid, all Impositions before any
     fine, penalty, interest or cost (other than any opportunity cost as a
     result of a failure to take advantage of any discount for early payment)
     may be added for non-payment, such payments to be made directly to the
     taxing authorities where feasible, and shall promptly, upon request,
     furnish to Landlord copies of official receipts or other reasonably
     satisfactory proof evidencing such payments. If any such Imposition may, at
     the option of the taxpayer, lawfully be paid in installments (whether or
     not interest shall accrue on the unpaid balance of such Imposition), Tenant
     may exercise the option to pay the same (and any accrued interest on the
     unpaid balance of such Imposition) in installments and, in such event,
     shall pay, or cause to pay, such installments during the Term as the same
     become due and before any fine, penalty, premium, further interest or cost
     may be added thereto. Landlord, at its expense, shall, to the extent
     required or permitted by Applicable Law, prepare and file, or cause to be
     prepared and filed, all tax returns and pay all taxes due in respect of
     Landlord's net income, gross receipts, sales and use, single business,
     transaction privilege, rent, ad valorem, franchise taxes and taxes on its
     capital stock or other equity interests, and Tenant, at its expense, shall,
     to the extent required or permitted by Applicable Laws and regulations,
     prepare and file all other tax returns and reports in respect of any
     Imposition as may be required by Government Agencies. Provided no Event of
     Default shall

                                       30
<Page>

     have occurred and be continuing, if any refund shall be due from any taxing
     authority in respect of any Imposition paid by or on behalf of Tenant, the
     same shall be paid over to or retained by Tenant. Landlord and Tenant
     shall, upon request of the other, provide such data as is maintained by the
     party to whom the request is made with respect to the Leased Property as
     may be necessary to prepare any required returns and reports. In the event
     Government Agencies classify any property covered by this Agreement as
     personal property, Tenant shall file, or cause to be filed, all personal
     property tax returns in such jurisdictions where it may legally so file.
     Each party shall, to the extent it possesses the same, provide the other,
     upon request, with cost and depreciation records necessary for filing
     returns for any property so classified as personal property. Where Landlord
     is legally required to file personal property tax returns for property
     covered by this Agreement, Landlord shall provide Tenant with copies of
     assessment notices in sufficient time for Tenant to file a protest. All
     Impositions assessed against such personal property shall be (irrespective
     of whether Landlord or Tenant shall file the relevant return) paid by
     Tenant not later than the last date on which the same may be made without
     interest or penalty, subject to the provisions of ARTICLE 8.

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

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

            (c)     INSURANCE PREMIUMS. Tenant shall pay or cause to be paid all
     premiums for the insurance coverage required to be maintained pursuant to
     ARTICLE 9.

            (d)     OTHER CHARGES. Tenant shall pay or cause to be paid all
     other amounts, liabilities and obligations, including, without limitation,
     ground rents, if any, and all amounts payable under any equipment leases
     and all agreements to indemnify Landlord under SECTIONS 4.4.2 AND 9.5.

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<Page>

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

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

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

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

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<Page>

     3.4    NO TERMINATION, ABATEMENT, ETC. Except as otherwise specifically
provided in this Agreement, each of Landlord and Tenant, to the maximum extent
permitted by law, shall remain bound by this Agreement in accordance with its
terms and shall not take any action without the consent of the other to modify,
surrender or terminate this Agreement. In addition, except as otherwise
expressly provided in this Agreement, Tenant shall not seek, or be entitled to,
any abatement, deduction, deferment or reduction of the Rent, or set-off against
the Rent, nor shall the respective obligations of Landlord and Tenant be
otherwise affected by reason of (a) any damage to or destruction of the Leased
Property, or any portion thereof, from whatever cause or any Condemnation, (b)
the lawful or unlawful prohibition of, or restriction upon, Tenant's use of the
Leased Property, or any portion thereof, or the interference with such use by
any Person or by reason of eviction by paramount title; (c) any claim which
Tenant may have against Landlord by reason of any default (other than a monetary
default) or breach of any warranty by Landlord under this Agreement or any other
agreement between Landlord and Tenant, or to which Landlord and Tenant are
parties; (d) any bankruptcy, insolvency, reorganization, composition,
readjustment, liquidation, dissolution, winding up or other proceedings
affecting Landlord or any assignee or transferee of Landlord; or (e) for any
other cause whether similar or dissimilar to any of the foregoing (other than a
monetary default by Landlord). Except as otherwise specifically provided in this
Agreement, Tenant hereby waives all rights arising from any occurrence
whatsoever, which may now or hereafter be conferred upon it by law (a) to
modify, surrender or terminate this Agreement or quit or surrender the Leased
Property, or any portion thereof, or (b) which would entitle Tenant to any
abatement, reduction, suspension or deferment of the Rent or other sums payable
or other obligations to be performed by Tenant hereunder. The obligations of
Tenant hereunder shall be separate and independent covenants and agreements, and
the Rent and all other sums payable by Tenant hereunder shall continue to be
payable in all events unless the obligations to pay the same shall be terminated
pursuant to the express provisions of this Agreement.

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<Page>

                                   ARTICLE 4

                           USE OF THE LEASED PROPERTY

     4.1    PERMITTED USE.

            4.1.1   PERMITTED USE.

            (a)     Tenant shall, at all times during the Term, and at any other
     time that Tenant shall be in possession of any Property, continuously use
     and operate, or cause to be used and operated, such Property as a skilled
     nursing/intermediate care/independent living/assisted living/special
     care/group home facility as currently operated, and any uses incidental
     thereto. Tenant shall not use (and shall not permit any Person to use) any
     Property, or any portion thereof, for any other use without the prior
     written consent of Landlord, which approval shall not be unreasonably
     withheld, delayed or conditioned. No use shall be made or permitted to be
     made of any Property and no acts shall be done thereon which will cause the
     cancellation of any insurance policy covering such Property or any part
     thereof (unless another adequate policy is available) or which would
     constitute a default under any ground lease affecting such Property, nor
     shall Tenant sell or otherwise provide to residents or patients therein, or
     permit to be kept, used or sold in or about any Property any article which
     may be prohibited by law or by the standard form of fire insurance
     policies, or any other insurance policies required to be carried hereunder,
     or fire underwriter's regulations. Tenant shall, at its sole cost (except
     as expressly provided in SECTION 5.1.2(b)), comply or cause to be complied
     with all Insurance Requirements. Tenant shall not take or omit to take, or
     permit to be taken or omitted to be taken, any action, the taking or
     omission of which materially impairs the value or the usefulness of any
     Property or any part thereof for its Permitted Use.

            (b)     In the event that, in the reasonable determination of
     Tenant, it shall no longer be economically practical to operate any
     Property as currently operated, Tenant shall give Landlord Notice thereof,
     which Notice shall set forth in reasonable detail the reasons therefor.
     Thereafter, Landlord and Tenant shall negotiate in good faith to agree on
     an alternative use for such Property, appropriate adjustments to the
     Additional Rent and other related matters; PROVIDED, HOWEVER, in no event
     shall the Minimum Rent be reduced or abated as a result thereof. If

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<Page>

     Landlord and Tenant fail to agree on an alternative use for such Property
     within sixty (60) days after commencing negotiations as aforesaid, Tenant
     may market such Property for sale to a third party. If Tenant receives a
     bona fide offer (an "OFFER") to purchase such Property from a Person having
     the financial capacity to implement the terms of such Offer, Tenant shall
     give Landlord Notice thereof, which Notice shall include a copy of the
     Offer executed by such third party. In the event that Landlord shall fail
     to accept or reject such Offer within thirty (30) days after receipt of
     such Notice, such Offer shall be deemed to be rejected by Landlord. If
     Landlord shall sell the Property pursuant to such Offer, then, effective as
     of the date of such sale, this Agreement shall terminate with respect to
     such Property, and the Minimum Rent shall be reduced by an amount equal to
     (x) ten percent (10%) of the net proceeds of sale received by Landlord in
     the case of an Existing Property and (y) nine percent (9%) of the net
     proceeds of sale received by Landlord in the case of an Additional
     Property. If Landlord shall reject (or be deemed to have rejected) such
     Offer, then, effective as of the proposed date of such sale, this Agreement
     shall terminate with respect to such Property, and the Minimum Rent shall
     be reduced by an amount equal (i) in the case of an Offer for an Existing
     Property, to ten percent (10%) of the projected net proceeds determined by
     reference to such Offer, and (ii) in the case of an Additional Property,
     nine percent (9%) of the projected net proceeds determined by reference to
     such Offer.

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

            4.1.3   LAWFUL USE, ETC. Tenant shall not, and shall not permit any
     Person to use or suffer or permit the use of any Property or Tenant's
     Personal Property, if any, for any unlawful purpose. Tenant shall not, and
     shall not permit any Person to, commit or suffer to be committed any waste
     on any Property, or in any Facility, nor shall Tenant cause or permit any
     unlawful nuisance thereon or therein. Tenant shall not, and shall not
     permit any Person to, suffer nor permit any Property, or any portion
     thereof, to be used in such a manner as (i) may

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<Page>

materially and adversely impair Landlord's title thereto or to any portion
thereof, or (ii) may reasonably allow a claim or claims for adverse usage or
adverse possession by the public, as such, or of implied dedication of such
Property, or any portion thereof.

     4.2    COMPLIANCE WITH LEGAL/INSURANCE REQUIREMENTS, ETC. Subject to the
provisions of SECTION 5.1.2(b) and ARTICLE 8, Tenant, at its sole expense, shall
(i) comply with (or cause to be complied with) all material Legal Requirements
and Insurance Requirements in respect of the use, operation, maintenance,
repair, alteration and restoration of any Property and with the terms and
conditions of any ground lease affecting any Property, (ii) perform (or cause to
be performed) in a timely fashion all of Landlord's obligations under any ground
lease affecting any Property and (iii) procure, maintain and comply with (or
cause to be procured, maintained and complied with) all material licenses,
certificates of need, permits, provider agreements and other authorizations and
agreements required for any use of any Property and Tenant's Personal Property,
if any, then being made, and for the proper erection, installation, operation
and maintenance of the Leased Property or any part thereof.

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

     4.4    ENVIRONMENTAL MATTERS.

            4.4.1   RESTRICTION ON USE, ETC. During the Term and any other time
     that Tenant shall be in possession of any Property, Tenant shall not, and
     shall not permit any Person to, store, spill upon, dispose of or transfer
     to or from such Property any Hazardous Substance, except in compliance with
     all Applicable Laws. During the Term and any other time that Tenant shall
     be in possession of any Property, Tenant shall maintain (or shall cause to
     be maintained) such Property at all times free of any Hazardous Substance
     (except in compliance with all Applicable Laws). Tenant shall promptly: (a)
     upon receipt of notice or knowledge, notify Landlord in writing of any
     material

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<Page>

change in the nature or extent of Hazardous Substances at any Property, (b)
transmit to Landlord a copy of any report which is required to be filed by
Tenant or any Manager with respect to any Property pursuant to SARA Title III or
any other Applicable Law, (c) transmit to Landlord copies of any citations,
orders, notices or other governmental communications received by Tenant or any
Manager or their respective agents or representatives with respect thereto
(collectively, "ENVIRONMENTAL NOTICE"), which Environmental Notice requires a
written response or any action to be taken and/or if such Environmental Notice
gives notice of and/or presents a material risk of any material violation of any
Applicable Law and/or presents a material risk of any material cost, expense,
loss or damage (an "ENVIRONMENTAL OBLIGATION"), (d) observe and comply with (or
cause to be observed and complied with) all Applicable Laws relating to the use,
maintenance and disposal of Hazardous Substances and all orders or directives
from any official, court or agency of competent jurisdiction relating to the use
or maintenance or requiring the removal, treatment, containment or other
disposition thereof, and (e) pay or otherwise dispose (or cause to be paid or
otherwise disposed) of any fine, charge or Imposition related thereto, unless
Tenant or any Manager shall contest the same in good faith and by appropriate
proceedings and the right to use and the value of any of the Leased Property is
not materially and adversely affected thereby.

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

            4.4.2   INDEMNIFICATION OF LANDLORD. Tenant shall protect, indemnify
and hold harmless Landlord and each Facility Mortgagee, their trustees,
officers, agents, employees and beneficiaries, and any of their respective
successors or assigns with respect to this Agreement (collectively, the
"INDEMNITEES" and, individually, an "INDEMNITEE") for, from and against any and
all debts, liens, claims, causes of action, administrative orders or notices,
costs, fines, penalties or expenses

                                       37
<Page>

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

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

            4.4.3   SURVIVAL. The provisions of this SECTION 4.4 shall survive
the expiration or sooner termination of this Agreement.

                                    ARTICLE 5

                             MAINTENANCE AND REPAIRS

     5.1    MAINTENANCE AND REPAIR.

            5.1.1   TENANT'S GENERAL OBLIGATIONS. Tenant shall keep (or cause to
be kept), at Tenant's sole cost and expense, the Leased Property and all private
roadways, sidewalks and curbs appurtenant thereto (and Tenant's Personal
Property) in good order and repair, reasonable wear and tear excepted (whether
or not the need for such repairs occurs as a result of Tenant's or

                                       38
<Page>

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

            5.1.2   LANDLORD'S OBLIGATIONS.

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

            (b)     If, pursuant to the terms of this Agreement, Tenant is
     required to make any expenditures in connection with any repair,
     maintenance or renovation with respect to any Property, Tenant may, at its
     election, advance such funds or give Landlord Notice thereof, which Notice
     shall set forth, in reasonable detail, the nature of the required repair,
     renovation or replacement, the estimated cost

                                       39
<Page>

     thereof and such other information with respect thereto as Landlord may
     reasonably require. Provided that no Event of Default shall have occurred
     and be continuing and Tenant shall otherwise comply with the applicable
     provisions of ARTICLE 6, Landlord shall, within ten (10) Business Days
     after such Notice, subject to and in accordance with the applicable
     provisions of ARTICLE 6, disburse such required funds to Tenant (or, if
     Tenant shall so elect, directly to the Manager or any other Person
     performing the required work) and, upon such disbursement, the Minimum Rent
     shall be adjusted as provided in SECTION 3.1.1(c). Notwithstanding the
     foregoing, Landlord may elect not to disburse such required funds to
     Tenant; provided, however, that if Landlord shall elect not to disburse
     such required funds as aforesaid, Tenant's obligation to make such required
     repair, renovation or replacement shall be deemed waived by Landlord, and,
     notwithstanding anything contained in this Agreement to the contrary,
     Tenant shall have no obligation to make such required repair, renovation or
     replacement.

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

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

     5.2    TENANT'S PERSONAL PROPERTY. Tenant shall provide and maintain (or
cause to be provided and maintained) throughout the Term all such Tenant's
Personal Property as shall be necessary

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<Page>

in order to operate in compliance with applicable material Legal Requirements
and Insurance Requirements and otherwise in accordance with customary practice
in the industry for the Permitted Use. If, from and after the Commencement Date,
Tenant acquires an interest in any item of tangible personal property (other
than motor vehicles) on, or in connection with, the Leased Property, or any
portion thereof, which belongs to anyone other than Tenant, Tenant shall require
the agreements permitting such use to provide that Landlord or its designee may
assume Tenant's rights and obligations under such agreement upon Landlord's
purchase of the same in accordance with the provisions of ARTICLE 15 and the
assumption of management or operation of the Facility by Landlord or its
designee.

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

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

     5.4    MANAGEMENT AGREEMENT. Tenant shall not, without Landlord's prior
written consent (which consent shall not be unreasonably withheld, delayed or
conditioned), enter into, amend or modify the provisions of any Management
Agreement with respect to any Property. Any Management Agreement entered into
pursuant to the provisions of this SECTION 5.4 shall be subordinate to this
Agreement and shall provide, INTER ALIA, that all amounts due from Tenant to
Manager thereunder shall be

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subordinate to all amounts due from Tenant to Landlord (provided that, as long
as no Event of Default has occurred and is continuing, Tenant may pay all
amounts due to Manager thereunder pursuant to such Management Agreement) and for
termination thereof, at Landlord's option, upon the termination of this
Agreement. Tenant shall not take any action, grant any consent or permit any
action under any such Management Agreement which might have a material adverse
effect on Landlord, without the prior written consent of Landlord, which consent
shall not be unreasonably withheld, delayed or conditioned.

                                    ARTICLE 6

                               IMPROVEMENTS, ETC.

     6.1    IMPROVEMENTS TO THE LEASED PROPERTY. Tenant shall not make,
construct or install (or permit to be made, constructed or installed) any
Capital Additions without, in each instance, obtaining Landlord's prior written
consent, which consent shall not be unreasonably withheld, delayed or
conditioned provided that (a) construction or installation of the same would not
adversely affect or violate any material Legal Requirement or Insurance
Requirement applicable to any Property and (b) Landlord shall have received an
Officer's Certificate certifying as to the satisfaction of the conditions set
out in clause (a) above; PROVIDED, HOWEVER, that no such consent shall be
required in the event immediate action is required to prevent imminent harm to
person or property. Prior to commencing construction of any Capital Addition,
Tenant shall submit to Landlord, in writing, a proposal setting forth, in
reasonable detail, any such proposed improvement and shall provide to Landlord
such plans and specifications, and such permits, licenses, contracts and such
other information concerning the same as Landlord may reasonably request.
Landlord shall have thirty (30) days to review all materials submitted to
Landlord in connection with any such proposal. Failure of Landlord to respond to
Tenant's proposal within thirty (30) days after receipt of all information and
materials requested by Landlord in connection with the proposed improvement
shall be deemed to constitute approval of the same. Without limiting the
generality of the foregoing, such proposal shall indicate the approximate
projected cost of constructing such proposed improvement and the use or uses to
which it will be put. No Capital Addition shall be made which would tie in or
connect any Leased Improvements with any other improvements on property adjacent
to any Property (and not part of the Land) including, without limitation,
tie-ins of buildings or other structures or utilities. Except as permitted
herein, Tenant shall not finance the cost of any

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<Page>

construction of such improvement by the granting of a lien on or security
interest in the Leased Property or such improvement, or Tenant's interest
therein, without the prior written consent of Landlord, which consent may be
withheld by Landlord in Landlord's sole discretion. Any such improvements shall,
upon the expiration or sooner termination of this Agreement, remain or pass to
and become the property of Landlord, free and clear of all encumbrances other
than Permitted Encumbrances.

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

                                    ARTICLE 7

                                      LIENS

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

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

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vehicles), and Tenant's interest in all ledger sheets, files, records, documents
and instruments (including, without limitation, computer programs, tapes and
related electronic data processing) relating to the operation of the Facilities
(the "RECORDS") and all proceeds therefrom, subject to any Permitted
Encumbrances; and such Tenant's Personal Property shall not be removed from the
Leased Property at any time when an Event of Default has occurred and is
continuing.

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

                                    ARTICLE 8

                               PERMITTED CONTESTS

     Tenant shall have the right to contest the amount or validity of any
Imposition, Legal Requirement, Insurance Requirement, Environmental Obligation,
lien, attachment, levy, encumbrance, charge or claim (collectively, "CLAIMS") as
to the Leased Property, by appropriate legal proceedings, conducted in good
faith and with due diligence, provided that (a) the foregoing shall in no way be
construed as relieving, modifying or extending Tenant's obligation to pay (or
cause to be paid) any Claims as finally determined, (b) such contest shall not
cause Landlord or Tenant to be in default under any mortgage or deed of trust
encumbering the Leased Property, or any portion thereof (Landlord agreeing that
any such mortgage or deed of trust shall permit Tenant to exercise the rights
granted pursuant to this ARTICLE 8) or any interest therein or result in or
reasonably be expected to result in a lien attaching to the Leased Property, or
any portion thereof, (c) no part of the Leased Property nor any Rent therefrom
shall be in any immediate danger of sale, forfeiture, attachment or loss, and
(d) Tenant shall indemnify and hold harmless Landlord from and against any cost,
claim, damage, penalty or reasonable expense, including reasonable attorneys'
fees, incurred by Landlord in connection therewith or as a result thereof.
Landlord agrees to join in any such proceedings if required legally to prosecute
such contest, provided that Landlord shall not thereby be subjected to any
liability therefor (including, without limitation, for

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the payment of any costs or expenses in connection therewith) unless Tenant
agrees by agreement in form and substance reasonably satisfactory to Landlord,
to assume and indemnify Landlord with respect to the same. Tenant shall be
entitled to any refund of any Claims and such charges and penalties or interest
thereon which have been paid by Tenant or paid by Landlord to the extent that
Landlord has been fully reimbursed by Tenant. If Tenant shall fail (x) to pay or
cause to be paid any Claims when finally determined, (y) to provide reasonable
security therefor or (z) to prosecute or cause to be prosecuted any such contest
diligently and in good faith, Landlord may, upon reasonable notice to Tenant
(which notice shall not be required if Landlord shall reasonably determine that
the same is not practicable), pay such charges, together with interest and
penalties due with respect thereto, and Tenant shall reimburse Landlord
therefor, upon demand, as Additional Charges.

                                    ARTICLE 9

                          INSURANCE AND INDEMNIFICATION

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

     9.2    WAIVER OF SUBROGATION. Landlord and Tenant agree that (insofar as
and to the extent that such agreement may be effective without invalidating or
making it impossible to secure insurance coverage from responsible insurance
companies doing business in any State) with respect to any property loss which
is covered by insurance then being carried by Landlord or Tenant, the party
carrying such insurance and suffering said loss releases the others of and from
any and all claims with respect to such loss; and they further agree that their
respective insurance companies (and, if Landlord or Tenant shall self insure in
accordance with the terms hereof, Landlord or

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<Page>

Tenant, as the case may be) shall have no right of subrogation against the other
on account thereof, even though extra premium may result therefrom. In the event
that any extra premium is payable by Tenant as a result of this provision,
Landlord shall not be liable for reimbursement to Tenant for such extra premium.

     9.3    FORM SATISFACTORY, ETC. All insurance policies and endorsements
required pursuant to this ARTICLE 9 shall be fully paid for, nonassessable, and
issued by reputable insurance companies authorized to do business in the State
and having a general policy holder's rating of no less than A in Best's latest
rating guide. All property, business interruption, liability and flood insurance
policies with respect to each Property shall include no deductible in excess of
Two Hundred Fifty Thousand Dollars ($250,000). At all times, all property,
business interruption, liability and flood insurance policies, with the
exception of worker's compensation insurance coverage, shall name Landlord and
any Facility Mortgagee as additional insureds, as their interests may appear.
All loss adjustments shall be payable as provided in ARTICLE 10, except that
losses under liability and worker's compensation insurance policies shall be
payable directly to the party entitled thereto. Tenant shall cause all insurance
premiums to be paid and shall deliver (or cause to be delivered) policies or
certificates thereof to Landlord prior to their effective date (and, with
respect to any renewal policy, prior to the expiration of the existing policy).
All such policies shall provide Landlord (and any Facility Mortgagee if required
by the same) thirty (30) days prior written notice of any material change or
cancellation of such policy. In the event Tenant shall fail to effect (or cause
to be effected) such insurance as herein required, to pay (or cause to be paid)
the premiums therefor or to deliver (or cause to be delivered) such policies or
certificates to Landlord or any Facility Mortgagee at the times required,
Landlord shall have the right, upon Notice to Tenant, but not the obligation, to
acquire such insurance and pay the premiums therefor, which amounts shall be
payable to Landlord, upon demand, as Additional Charges, together with interest
accrued thereon at the Overdue Rate from the date such payment is made until
(but excluding) the date repaid.

     9.4    NO SEPARATE INSURANCE; SELF-INSURANCE. Tenant shall not take (or
permit any Person to take) out separate insurance, concurrent in form or
contributing in the event of loss with that required by this ARTICLE 9, or
increase the amount of any existing insurance by securing an additional policy
or additional policies, unless all parties having an insurable

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<Page>

interest in the subject matter of such insurance, including Landlord and all
Facility Mortgagees, are included therein as additional insureds and the loss is
payable under such insurance in the same manner as losses are payable under this
Agreement. In the event Tenant shall take out any such separate insurance or
increase any of the amounts of the then existing insurance, Tenant shall give
Landlord prompt Notice thereof. Tenant shall not self-insure (or permit any
Person to self-insure).

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

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<Page>

                                   ARTICLE 10

                                    CASUALTY

     10.1   INSURANCE PROCEEDS. Except as provided in the last clause of this
sentence, all proceeds payable by reason of any loss or damage to any Property,
or any portion thereof, and insured under any policy of insurance required by
ARTICLE 9 (other than the proceeds of any business interruption insurance) shall
be paid directly to Landlord (subject to the provisions of SECTION 10.2) and all
loss adjustments with respect to losses payable to Landlord shall require the
prior written consent of Landlord, which consent shall not be unreasonably
withheld, delayed or conditioned; PROVIDED, HOWEVER, that, so long as no Event
of Default shall have occurred and be continuing, all such proceeds less than or
equal to Two Hundred Fifty Thousand Dollars ($250,000) shall be paid directly to
Tenant and such losses may be adjusted without Landlord's consent. If Tenant is
required to reconstruct or repair any Property as provided herein, such proceeds
shall be paid out by Landlord from time to time for the reasonable costs of
reconstruction or repair of such Property necessitated by such damage or
destruction, subject to and in accordance with the provisions of SECTION 10.2.4.
Provided no Default or Event of Default has occurred and is continuing, any
excess proceeds of insurance remaining after the completion of the restoration
shall be paid to Tenant. In the event that the provisions of SECTION 10.2.1 are
applicable, the insurance proceeds shall be retained by the party entitled
thereto pursuant to SECTION 10.2.1.

     10.2   DAMAGE OR DESTRUCTION.

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

            10.2.2  PARTIAL DAMAGE OR DESTRUCTION. If, during the Term, any
Property shall be totally or partially destroyed but the Facility is not
rendered Unsuitable for Its Permitted Use,

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Tenant shall, subject to SECTION 10.2.3, promptly restore such Facility as
provided in SECTION 10.2.4.

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

            10.2.4  DISBURSEMENT OF PROCEEDS. In the event Tenant is required to
restore any Property pursuant to SECTION 10.2 and this Agreement is not
terminated as to such Property pursuant to this ARTICLE 10, Tenant shall
commence (or cause to be commenced) promptly and continue diligently to perform
(or cause to be performed) the repair and restoration of such Property
(hereinafter called the "WORK"), so as to restore (or cause to be restored) the
applicable Property in material compliance with all Legal Requirements and so
that such Property shall be, to the extent practicable, substantially equivalent
in value and general utility to its general utility and value immediately prior
to such damage or destruction. Subject to the terms hereof, Landlord shall
advance the insurance proceeds and any

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<Page>

additional amounts payable by Landlord pursuant to SECTION 10.2.3 or otherwise
deposited with Landlord to Tenant regularly during the repair and restoration
period so as to permit payment for the cost of any such restoration and repair.
Any such advances shall be made not more than monthly within ten (10) Business
Days after Tenant submits to Landlord a written requisition and substantiation
therefor on AIA Forms G702 and G703 (or on such other form or forms as may be
reasonably acceptable to Landlord). Landlord may, at its option, condition
advancement of such insurance proceeds and other amounts on (i) the absence of
any Event of Default, (ii) its approval of plans and specifications of an
architect satisfactory to Landlord (which approval shall not be unreasonably
withheld, delayed or conditioned), (iii) general contractors' estimates, (iv)
architect's certificates, (v) conditional lien waivers of general contractors,
if available, (vi) evidence of approval by all governmental authorities and
other regulatory bodies whose approval is required, (vii), if Tenant has elected
to advance deficiency funds pursuant to SECTION 10.2.3, Tenant depositing the
amount thereof with Landlord and (viii) such other certificates as Landlord may,
from time to time, reasonably require.

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

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

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

     10.4   TENANT'S PROPERTY. All insurance proceeds payable by reason of any
loss of or damage to any of Tenant's Personal Property shall be paid to Tenant
and, to the extent necessary to repair or replace Tenant's Personal Property in
accordance with

                                       50
<Page>

SECTION 10.5, Tenant shall hold such proceeds in trust to pay the cost of
repairing or replacing damaged Tenant's Personal Property.

     10.5   RESTORATION OF TENANT'S PROPERTY. If Tenant is required to restore
any Property as hereinabove provided, Tenant shall either (a) restore all
alterations and improvements made by Tenant and Tenant's Personal Property, or
(b) replace such alterations and improvements and Tenant's Personal Property
with improvements or items of the same or better quality and utility in the
operation of such Property.

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

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

                                   ARTICLE 11

                                  CONDEMNATION

     11.1   TOTAL CONDEMNATION, ETC. If either (i) the whole of any Property
shall be taken by Condemnation or (ii) a Condemnation of less than the whole of
any Property renders any Property Unsuitable for Its Permitted Use, this
Agreement shall terminate with respect to such Property, Tenant and Landlord
shall seek the Award for their interests in the applicable Property as provided
in SECTION 11.5.

     11.2   PARTIAL CONDEMNATION. In the event of a Condemnation of less than
the whole of any Property such that such Property is still suitable for its
Permitted Use, Tenant shall, to the extent of the Award and any additional
amounts disbursed by Landlord as hereinafter provided, commence (or cause to be

                                       51
<Page>

commenced) promptly and continue diligently to restore (or cause to be restored)
the untaken portion of the applicable Leased Improvements so that such Leased
Improvements shall constitute a complete architectural unit of the same general
character and condition (as nearly as may be possible under the circumstances)
as such Leased Improvements existing immediately prior to such Condemnation, in
material compliance with all Legal Requirements, subject to the provisions of
this SECTION 11.2. If the cost of the repair or restoration of the affected
Property exceeds the amount of the Award, Tenant shall give Landlord Notice
thereof which notice shall set forth in reasonable detail the nature of such
deficiency and whether Tenant shall pay and assume the amount of such deficiency
(Tenant having no obligation to do so, except that if Tenant shall elect to make
such funds available, the same shall become an irrevocable obligation of Tenant
pursuant to this Agreement). In the event Tenant shall elect not to pay and
assume the amount of such deficiency, Landlord shall have the right (but not the
obligation), exercisable at Landlord's sole election by Notice to Tenant given
within sixty (60) days after Tenant's Notice of the deficiency, to elect to make
available for application to the cost of repair or restoration the amount of
such deficiency; PROVIDED, HOWEVER, in such event, upon any disbursement by
Landlord thereof, the Minimum Rent shall be adjusted as provided in SECTION
3.1.1(c). In the event that neither Landlord nor Tenant shall elect to make such
deficiency available for restoration, either Landlord or Tenant may terminate
this Agreement with respect to the affected Property and the entire Award shall
be allocated as set forth in SECTION 11.5.

     Subject to the terms hereof, Landlord shall contribute to the cost of
restoration that part of the Award necessary to complete such repair or
restoration, together with severance and other damages awarded for the taken
Leased Improvements and any deficiency Landlord has agreed to disburse, to
Tenant regularly during the restoration period so as to permit payment for the
cost of such repair or restoration. Landlord may, at its option, condition
advancement of such Award and other amounts on (a) the absence of any Event of
Default, (b) its approval of plans and specifications of an architect
satisfactory to Landlord (which approval shall not be unreasonably withheld,
delayed or conditioned), (c) general contractors' estimates, (iv) architect's
certificates, (d) conditional lien waivers of general contractors, if available,
(e) evidence of approval by all governmental authorities and other regulatory
bodies whose approval is required, (f), if Tenant has elected to advance
deficiency funds pursuant to the preceding paragraph, Tenant depositing the
amount thereof with Landlord and (g) such other

                                       52
<Page>

certificates as Landlord may, from time to time, reasonably require. Landlord's
obligation under this SECTION 11.2 to disburse the Award and such other amounts
shall be subject to (x) the collection thereof by Landlord and (y) the
satisfaction of any applicable requirements of any Facility Mortgage, and the
release of such Award by the applicable Facility Mortgagee. Tenant's obligation
to restore the Leased Property shall be subject to the release of the Award by
the applicable Facility Mortgagee to Landlord.

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

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

     11.5   ALLOCATION OF AWARD. Except as provided in SECTION 11.4 and the
second sentence of this SECTION 11.5, the total Award shall be solely the
property of and payable to Landlord. Any portion of the Award made for the
taking of Tenant's leasehold interest in the Leased Property, loss of business

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during the remainder of the Term, the taking of Tenant's Personal Property, the
taking of Capital Additions paid for by Tenant and Tenant's removal and
relocation expenses shall be the sole property of and payable to Tenant (subject
to the provisions of SECTION 11.2). In any Condemnation proceedings, Landlord
and Tenant shall each seek its own Award in conformity herewith, at its own
expense.

                                   ARTICLE 12

                              DEFAULTS AND REMEDIES

     12.1   EVENTS OF DEFAULT. The occurrence of any one or more of the
following events shall constitute an "EVENT OF DEFAULT" hereunder:

            (a)     should Tenant fail to make any payment of the Rent or any
     other sum payable hereunder when due; or

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

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

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

                                       54
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     holder or holders, to cause any such obligations to become due prior to its
     stated maturity; or

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

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

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

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

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

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

                                       55
<Page>

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

            (l)     should there occur an "Event of Default", as defined
     therein, under either of the LTA GMAC Leases; or

            (m)     should there occur an "Event of Default", as defined
     therein, under that certain Joint and Several Promissory Note, dated as of
     November 19, 2004, made by Five Star for the benefit of Senior Housing
     Properties Trust in the original principal amount of Sixteen Million Eight
     Hundred Forty-Nine Thousand Dollars ($16,849,000).

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

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

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shall be paid to Tenant or as otherwise required by law and Tenant shall pay any
deficiency to Landlord, as Additional Charges, upon demand.

     12.2   REMEDIES. None of (a) the termination of this Agreement pursuant to
SECTION 12.1, (b) the repossession of the Leased Property, or any portion
thereof, (c) the failure of Landlord to relet the Leased Property, or any
portion thereof, nor (d) the reletting of all or any of portion of the Leased
Property, shall relieve Tenant of its liability and obligations hereunder, all
of which shall survive any such termination, repossession or reletting. In the
event of any such termination, Tenant shall forthwith pay to Landlord all Rent
due and payable with respect to the Leased Property, or terminated portion
thereof, through and including the date of such termination. Thereafter, Tenant,
until the end of what would have been the Term of this Agreement in the absence
of such termination, and whether or not the Leased Property, or any portion
thereof, shall have been relet, shall be liable to Landlord for, and shall pay
to Landlord, as current damages, the Rent (Additional Rent to be reasonably
calculated by Landlord based on historical Gross Revenues) and other charges
which would be payable hereunder for the remainder of the Term had such
termination not occurred, less the net proceeds, if any, of any reletting of the
Leased Property, or any portion thereof, after deducting all reasonable expenses
in connection with such reletting, including, without limitation, all
repossession costs, brokerage commissions, legal expenses, attorneys' fees,
advertising, expenses of employees, alteration costs and expenses of preparation
for such reletting. Tenant shall pay such current damages to Landlord monthly on
the days on which the Minimum Rent would have been payable hereunder if this
Agreement had not been so terminated with respect to such of the Leased
Property.

     At any time after such termination, whether or not Landlord shall have
collected any such current damages, as liquidated final damages beyond the date
of such termination, at Landlord's election, Tenant shall pay to Landlord an
amount equal to the present value (as reasonably determined by Landlord) of the
excess, if any, of the Rent and other charges which would be payable hereunder
from the date of such termination (assuming that, for the purposes of this
paragraph, annual payments by Tenant on account of Impositions and Additional
Rent would be the same as payments required for the immediately preceding twelve
calendar months, or if less than twelve calendar months have expired since the
Commencement Date, the payments required for such lesser period projected to an
annual amount) for what

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would be the then unexpired term of this Agreement if the same remained in
effect, over the fair market rental for the same period. Nothing contained in
this Agreement shall, however, limit or prejudice the right of Landlord to prove
and obtain in proceedings for bankruptcy or insolvency an amount equal to the
maximum allowed by any statute or rule of law in effect at the time when, and
governing the proceedings in which, the damages are to be proved, whether or not
the amount be greater than, equal to, or less than the amount of the loss or
damages referred to above.

     In case of any Event of Default, re-entry, expiration and dispossession by
summary proceedings or otherwise, Landlord may, (a) relet the Leased Property or
any part or parts thereof, either in the name of Landlord or otherwise, for a
term or terms which may at Landlord's option, be equal to, less than or exceed
the period which would otherwise have constituted the balance of the Term and
may grant concessions or free rent to the extent that Landlord considers
advisable and necessary to relet the same, and (b) may make such reasonable
alterations, repairs and decorations in the Leased Property, or any portion
thereof, as Landlord, in its sole and absolute discretion, considers advisable
and necessary for the purpose of reletting the Leased Property; and the making
of such alterations, repairs and decorations shall not operate or be construed
to release Tenant from liability hereunder as aforesaid. Landlord shall in no
event be liable in any way whatsoever for any failure to relet all or any
portion of the Leased Property, or, in the event that the Leased Property is
relet, for failure to collect the rent under such reletting. To the maximum
extent permitted by law, Tenant hereby expressly waives any and all rights of
redemption granted under any present or future laws in the event of Tenant being
evicted or dispossessed, or in the event of Landlord obtaining possession of the
Leased Property, by reason of the occurrence and continuation of an Event of
Default hereunder.

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

     12.4   APPLICATION OF FUNDS. Any payments received by Landlord under any
of the provisions of this Agreement during the existence or continuance of any
Event of Default (and any payment made to Landlord rather than Tenant due to the
existence of any Event of Default) shall be applied to Tenant's current and past
due obligations under this Agreement in such order as

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Landlord may determine or as may be prescribed by the laws of the State. Any
balance shall be paid to Tenant.

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

                                   ARTICLE 13

                                  HOLDING OVER

     Any holding over by Tenant after the expiration or sooner termination of
this Agreement shall be treated as a daily tenancy at sufferance at a rate equal
to two (2) times the Minimum Rent and other charges herein provided (prorated on
a daily basis). Tenant shall also pay to Landlord all damages (direct or
indirect) sustained by reason of any such holding over. Otherwise, such holding
over shall be on the terms and conditions set forth in this Agreement, to the
extent applicable. Nothing contained herein shall constitute the consent,
express or implied, of Landlord to the holding over of Tenant after the
expiration or earlier termination of this Agreement.

                                   ARTICLE 14

                                LANDLORD DEFAULT

     If Landlord shall default in the performance or observance of any of its
covenants or obligations set forth in this Agreement or any obligation of
Landlord, if any, under any agreement affecting the Leased Property, the
performance of which is not Tenant's obligation pursuant to this Agreement, and

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any such default shall continue for a period of thirty (30) days after Notice
thereof from Tenant to Landlord and any applicable Facility Mortgagee, or such
additional period as may be reasonably required to correct the same, Tenant may
declare the occurrence of a "LANDLORD DEFAULT" by a second Notice to Landlord
and to such Facility Mortgagee. Thereafter, Tenant may forthwith cure the same
and, subject to the provisions of the following paragraph, invoice Landlord for
costs and expenses (including reasonable attorneys' fees and court costs)
incurred by Tenant in curing the same, together with interest thereon (to the
extent permitted by law) from the date Landlord receives Tenant's invoice until
paid, at the Overdue Rate. Tenant shall have no right to terminate this
Agreement for any default by Landlord hereunder and no right, for any such
default, to offset or counterclaim against any Rent or other charges due
hereunder.

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

                                   ARTICLE 15

                                 PURCHASE RIGHTS

     Landlord shall have the option to purchase Tenant's Personal Property, at
the expiration or sooner termination of this Agreement, for an amount equal to
the then fair market value thereof (current replacement cost as determined by
agreement of the parties or, in the absence of such agreement, appraisal),
subject to, and with appropriate price adjustments for, all equipment leases,
conditional sale contracts, UCC-1 financing statements and other encumbrances to
which such Personal Property is subject. Upon the expiration or sooner
termination of this Agreement, Tenant shall use its reasonable efforts to
transfer and assign, or cause to be transferred and assigned, to Landlord or its
designee, or assist Landlord or its designee in obtaining, any contracts,
licenses, and certificates required for the then operation of the Leased
Property. Notwithstanding the foregoing, Tenant expressly acknowledges and
agrees that nothing contained in this ARTICLE 15 shall diminish, impair or
otherwise modify Landlord's rights under the Security Agreement and that any
amounts paid by Landlord in order to

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purchase Tenant's Personal Property in accordance with this Article 15 shall be
applied first to Tenant's current and past due obligations under this Agreement
in such order as Landlord may reasonably determine or as may be prescribed by
the laws of the State and any balance shall be paid to Tenant.

                                   ARTICLE 16

                            SUBLETTING AND ASSIGNMENT

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

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

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

     Any assignment or transfer of Tenant's interest under this Agreement
(including any sublease which is permitted pursuant to the terms of SECTION 16.3
below) shall be subject to such

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assignee's or transferee's delivery to Landlord of (i) a Guaranty, which
Guaranty shall be in form and substance satisfactory to Landlord in its sole
discretion and which Guaranty shall constitute an Incidental Document hereunder;
(ii) a pledge of the stock, partnership, membership or other ownership interests
of such assignee or other transferee to secure Tenant's obligations under this
Agreement and the Incidental Documents, which pledge shall be in form and
substance satisfactory to Landlord in its sole discretion and which pledge shall
constitute an Incidental Document hereunder; (iii) a security agreement granting
Landlord a security interest in all of such assignee's or transferee's right,
title and interest in and to any personal property, intangibles and fixtures
(other than accounts receivable) with respect to any Property which is subject
to any such assignment or transfer to secure Tenant's obligations under this
Agreement and the Incidental Documents, which security agreement shall be in
form and substance satisfactory to Landlord in its sole discretion and which
security agreement shall constitute an Incidental Document hereunder; and (iv)
in the case of a sublease, an assignment which assigns all of such subtenant's
right, title and interest in such sublease to Landlord to secure Tenant's
obligations under this Agreement and the Incidental Documents, which assignment
shall be in form and substance satisfactory to Landlord in its sole discretion
and which assignment shall constitute an Incidental Document hereunder.

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

     16.2   REQUIRED SUBLEASE PROVISIONS. Any sublease of all or any portion of
the Leased Property entered into on or after the date hereof shall provide (a)
that it is subject and subordinate to this Agreement and to the matters to which
this Agreement is or shall be subject or subordinate; (b) that in the event of
termination of this Agreement or reentry or dispossession of Tenant by Landlord
under this Agreement, Landlord may, at its option, terminate such sublease or
take over all of the right, title and interest of Tenant, as sublessor under
such sublease,

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and such subtenant shall, at Landlord's option, attorn to Landlord pursuant to
the then executory provisions of such sublease, except that neither Landlord nor
any Facility Mortgagee, as holder of a mortgage or as Landlord under this
Agreement, if such mortgagee succeeds to that position, shall (i) be liable for
any act or omission of Tenant under such sublease, (ii) be subject to any
credit, counterclaim, offset or defense which theretofore accrued to such
subtenant against Tenant, (iii) be bound by any previous modification of such
sublease not consented to in writing by Landlord or by any previous prepayment
of more than one (1) month's rent, (iv) be bound by any covenant of Tenant to
undertake or complete any construction of the applicable Property, or any
portion thereof, (v) be required to account for any security deposit of the
subtenant other than any security deposit actually delivered to Landlord by
Tenant, (vi) be bound by any obligation to make any payment to such subtenant or
grant any credits, except for services, repairs, maintenance and restoration
provided for under the sublease that are performed after the date of such
attornment, (vii) be responsible for any monies owing by Tenant to the credit of
such subtenant unless actually delivered to Landlord by Tenant, or (viii) be
required to remove any Person occupying any portion of the Leased Property; and
(c), in the event that such subtenant receives a written Notice from Landlord or
any Facility Mortgagee stating that an Event of Default has occurred and is
continuing, such subtenant shall thereafter be obligated to pay all rentals
accruing under such sublease directly to the party giving such Notice or as such
party may direct. All rentals received from such subtenant by Landlord or the
Facility Mortgagee, as the case may be, shall be credited against the amounts
owing by Tenant under this Agreement and such sublease shall provide that the
subtenant thereunder shall, at the request of Landlord, execute a suitable
instrument in confirmation of such agreement to attorn. An original counterpart
of each such sublease and assignment and assumption, duly executed by Tenant and
such subtenant or assignee, as the case may be, in form and substance reasonably
satisfactory to Landlord, shall be delivered promptly to Landlord and (a) in the
case of an assignment, the assignee shall assume in writing and agree to keep
and perform all of the terms of this Agreement on the part of Tenant to be kept
and performed and shall be, and become, jointly and severally liable with Tenant
for the performance thereof and (b) in case of either an assignment or
subletting, Tenant shall remain primarily liable, as principal rather than as
surety, for the prompt payment of the Rent and for the performance and
observance of all of the covenants and conditions to be performed by Tenant
hereunder.

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

     16.3   PERMITTED SUBLEASE. Notwithstanding the foregoing, including,
without limitation, SECTION 16.2, but subject to the provisions of SECTION 16.4
and any other express conditions or limitations set forth herein, Tenant may, in
each instance after Notice to Landlord, (a) enter into third party residency
agreements with respect to the units located at the Facilities, (b) sublease
space at any Property for laundry, commissary or child care purposes or other
concessions in furtherance of the Permitted Use, so long as such subleases will
not reduce the number of units at any Facility, will not violate or affect any
Legal Requirement or Insurance Requirement, and Tenant shall provide such
additional insurance coverage applicable to the activities to be conducted in
such subleased space as Landlord and any Facility Mortgagee may reasonably
require, and (c) enter into one or more subleases with Affiliated Persons of
Tenant with respect to the Leased Property, or any portion thereof, PROVIDED
Tenant gives Landlord Notice of the material terms and conditions thereof.
Landlord and Tenant acknowledge and agree that if Tenant enters into one (1) or
more subleases with Affiliated Persons of Tenant with respect to any Property,
or any portion thereof, in accordance with the preceding clause (c), Tenant may
allocate the rent and other charges with respect to the affected Property in any
reasonable manner; PROVIDED, HOWEVER, that such allocation shall not affect
Tenant's (nor any Guarantor's) liability for the Rent and other obligations of
Tenant under this Agreement; and, PROVIDED, FURTHER, that Tenant shall give
Landlord prompt written notice of any allocation or reallocation of the rent and
other charges with respect to the affected Property and, in any event, Tenant
shall give Landlord written notice of the amount of such allocations at least
ten (10) Business Days prior to the date that Landlord or Senior Housing
Properties Trust is required to file any tax returns in any State where such
affected Lease Property is located.

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

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successor provision thereto or would otherwise disqualify Landlord for treatment
as a real estate investment trust.

                                   ARTICLE 17

                 ESTOPPEL CERTIFICATES AND FINANCIAL STATEMENTS

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

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

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

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

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

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            (d)     at any time and from time to time upon not less than twenty
     (20) days Notice from Landlord or such additional period as may be
     reasonable under the circumstances, any Consolidated Financials, Tenant
     financials or any other audited or unaudited financial reporting
     information required to be filed by Landlord with any securities and
     exchange commission, the SEC or any successor agency, or any other
     governmental authority, or required pursuant to any order issued by any
     court, governmental authority or arbitrator in any litigation to which
     Landlord is a party, for purposes of compliance therewith; PROVIDED,
     HOWEVER, that, except as to calculations pertaining to Gross Revenues,
     Tenant shall not be required to provide audited financials with respect to
     any individual Facility unless Landlord shall agree to pay for the cost
     thereof;

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

            (f)     promptly, upon Notice from Landlord, such other information
     concerning the business, financial condition and affairs of Tenant, any
     Guarantor, and/or any Affiliated Party of Tenant which is a party to an LTA
     GMAC Lease as Landlord reasonably may request from time to time.

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

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

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

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

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

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

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

                                   ARTICLE 18

                           LANDLORD'S RIGHT TO INSPECT

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

                                   ARTICLE 19

                                    EASEMENTS

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

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

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

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

     19.2   EXERCISE OF RIGHTS BY TENANT. So long as no Event of Default has
occurred and is continuing, Tenant shall have the right to exercise all rights
of Landlord under the Easement Agreements and, in connection therewith, Landlord
shall execute and promptly return to Tenant such documents as Tenant shall
reasonably request. Tenant shall perform all obligations of Landlord under the
Easement Agreements.

     19.3   PERMITTED ENCUMBRANCES. Any agreements entered into in accordance
with this ARTICLE 19 shall be deemed a Permitted Encumbrance.

                                   ARTICLE 20

                               FACILITY MORTGAGES

     20.1   LANDLORD MAY GRANT LIENS. Without the consent of Tenant, Landlord
may, from time to time, directly or indirectly, create or otherwise cause to
exist any lien, encumbrance or title retention agreement ("ENCUMBRANCE") upon
the Leased Property, or any portion thereof, or interest therein, whether to
secure any borrowing or other means of financing or refinancing.

     20.2   SUBORDINATION OF LEASE. This Agreement and any and all rights of
Tenant hereunder are and shall be subject and subordinate to any ground or
master lease, and all renewals, extensions, modifications and replacements
thereof, and to all mortgages and deeds of trust, which may now or hereafter
affect the Leased Property, or any portion thereof, or any improvements thereon
and/or any of such leases, whether or not such mortgages

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or deeds of trust shall also cover other lands and/or buildings and/or leases,
to each and every advance made or hereafter to be made under such mortgages and
deeds of trust, and to all renewals, modifications, replacements and extensions
of such leases and such mortgages and deeds of trust and all consolidations of
such mortgages and deeds of trust. This section shall be self-operative and no
further instrument of subordination shall be required. In confirmation of such
subordination, Tenant shall promptly execute, acknowledge and deliver any
instrument that Landlord, the lessor under any such lease or the holder of any
such mortgage or the trustee or beneficiary of any deed of trust or any of their
respective successors in interest may reasonably request to evidence such
subordination. Any lease to which this Agreement is, at the time referred to,
subject and subordinate is herein called "SUPERIOR LEASE" and the lessor of a
Superior Lease or its successor in interest at the time referred to is herein
called "SUPERIOR LANDLORD" and any mortgage or deed of trust to which this
Agreement is, at the time referred to, subject and subordinate is herein called
"SUPERIOR MORTGAGE" and the holder, trustee or beneficiary of a Superior
Mortgage is herein called "SUPERIOR MORTGAGEE". Tenant shall have no obligations
under any Superior Lease or Superior Mortgage other than those expressly set
forth in this SECTION 20.2.

     If any Superior Landlord or Superior Mortgagee or the nominee or designee
of any Superior Landlord or Superior Mortgagee shall succeed to the rights of
Landlord under this Agreement (any such person, "SUCCESSOR LANDLORD"), whether
through possession or foreclosure action or delivery of a new lease or deed, or
otherwise, at such Successor Landlord's request, Tenant shall attorn to and
recognize the Successor Landlord as Tenant's landlord under this Agreement and
Tenant shall promptly execute and deliver any instrument that such Successor
Landlord may reasonably request to evidence such attornment (provided that such
instrument does not alter the terms of this Agreement), whereupon, this
Agreement shall continue in full force and effect as a direct lease between the
Successor Landlord and Tenant upon all of the terms, conditions and covenants as
are set forth in this Agreement, except that the Successor Landlord (unless
formerly the landlord under this Agreement or its nominee or designee) shall not
be (a) liable in any way to Tenant for any act or omission, neglect or default
on the part of any prior Landlord under this Agreement, (b) responsible for any
monies owing by or on deposit with any prior Landlord to the credit of Tenant
(except to the extent actually paid or delivered to the Successor Landlord), (c)
subject to any counterclaim or setoff which theretofore accrued to Tenant

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against any prior Landlord, (d) bound by any modification of this Agreement
subsequent to such Superior Lease or Mortgage, or by any previous prepayment of
Rent for more than one (1) month in advance of the date due hereunder, which was
not approved in writing by the Superior Landlord or the Superior Mortgagee
thereto, (e) liable to Tenant beyond the Successor Landlord's interest in the
Leased Property and the rents, income, receipts, revenues, issues and profits
issuing from the Leased Property, (f) responsible for the performance of any
work to be done by the Landlord under this Agreement to render the Leased
Property ready for occupancy by Tenant (subject to Landlord's obligations under
SECTION 5.1.2(b) or with respect to any insurance or Condemnation proceeds), or
(g) required to remove any Person occupying the Leased Property or any part
thereof, except if such person claims by, through or under the Successor
Landlord. Tenant agrees at any time and from time to time to execute a suitable
instrument in confirmation of Tenant's agreement to attorn, as aforesaid and
Landlord agrees to provide Tenant with an instrument of nondisturbance and
attornment from each such Superior Mortgagee and Superior Landlord (other than
the lessors under any ground leases with respect to the Leased Property, or any
portion thereof) in form and substance reasonably satisfactory to Tenant.
Notwithstanding the foregoing, any Successor Landlord shall be liable (a) to pay
to Tenant any amounts owed under SECTION 5.1.2(b), and (b) to pay to Tenant any
portions of insurance proceeds or Awards received by Landlord or the Successor
Landlord required to be paid to Tenant pursuant to the terms of this Agreement,
and, as a condition to any mortgage, lien or lease in respect of the Leased
Property, or any portion thereof, and the subordination of this Agreement
thereto, the mortgagee, lienholder or lessor, as applicable, shall expressly
agree, for the benefit of Tenant, to make such payments, which agreement shall
be embodied in an instrument in form reasonably satisfactory to Tenant.

     20.3   NOTICE TO MORTGAGEE AND SUPERIOR LANDLORD. Subsequent to the receipt
by Tenant of Notice from Landlord as to the identity of any Facility Mortgagee
or Superior Landlord under a lease with Landlord, as ground lessee, which
includes the Leased Property, or any portion thereof, as part of the demised
premises and which complies with SECTION 20.1 (which Notice shall be accompanied
by a copy of the applicable mortgage or lease), no Notice from Tenant to
Landlord as to a default by Landlord under this Agreement shall be effective
with respect to a Facility Mortgagee or Superior Landlord unless and until a
copy of the same is given to such Facility Mortgagee or Superior Landlord at the
address set forth in the above described Notice, and the curing of any of
Landlord's defaults within the

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applicable notice and cure periods set forth in ARTICLE 14 by such Facility
Mortgagee or Superior Landlord shall be treated as performance by Landlord.

                                   ARTICLE 21

                         ADDITIONAL COVENANTS OF TENANT

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

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

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

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

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

            (a)     Indebtedness of Tenant to Landlord;

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

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

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

            (e)     Indebtedness for purchase money financing in accordance with
     SECTION 21.8 (a) and other operating liabilities incurred in the ordinary
     course of Tenant's business;

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

            (g)     A guaranty of Five Star's obligations under its revolving
     line of credit.

     21.6   DISTRIBUTIONS, PAYMENTS TO AFFILIATED PERSONS, ETC. Tenant
shall not declare, order, pay or make, directly or indirectly, any Distributions
or any payment to any Affiliated Person of Tenant (including payments in the
ordinary course of business) or set apart any sum or property therefor, or agree
to do so, if, at the time of such proposed action, or immediately after giving
effect thereto, any Event of Default shall have occurred and be continuing.
Otherwise, as long as no Event of Default shall have occurred and be continuing,
Tenant may make Distributions and payments to Affiliated Persons; PROVIDED,
HOWEVER, that any such payments shall at all times be subordinate to Tenant's
obligations under this Agreement.

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

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

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

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     the cost of acquisition or construction of the property subject thereto;

            (b)     Permitted Encumbrances;

            (c)     Security interests in Accounts or Chattel Paper, in Support
     Obligations, General Intangibles or Deposit Accounts relating to such
     Accounts or Chattel Paper, in any Instruments or Investment Property
     evidencing or arising from such Accounts or Chattel Paper, in any
     documents, books, records or other information (including, without
     limitation, computer programs, tapes, discs, punch cards, data processing
     software and related property and rights) maintained with respect to any
     property described in this Section 21.8(c) or in any Proceeds of any of the
     foregoing (capitalized terms used in this Section 21.8(c) without
     definition being used as defined in or for purposes of Article 9 of the
     Uniform Commercial Code as in effect in the Commonwealth of Massachusetts);
     and

            (d)     As permitted pursuant to SECTION 21.5.

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

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

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     21.11  LTA GMAC PROPERTIES. Landlord and Tenant expressly acknowledge and
agree that, effective automatically upon the release of any LTA GMAC Leased
Property from the GMAC Financing, such LTA GMAC Leased Property shall be added
to and demised under this Agreement in accordance with the terms and conditions
hereof, the Minimum Rent payable hereunder shall be ratably increased by an
amount determined by Landlord, and the Minimum Rent, as defined therein, under
the applicable LTA GMAC Lease shall be reduced by the amount of such increase.
The addition of any such LTA GMAC Leased Property in accordance with the terms
hereof shall be automatic without any requirement that Landlord or Tenant take
any action or execute any document, instrument, amendment or confirmation with
respect thereto. Notwithstanding the foregoing, Landlord and Tenant shall
execute and deliver such documents, instruments, agreements and confirmations as
the other party shall reasonably request with respect to the foregoing.

                                   ARTICLE 22

                                   ARBITRATION

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

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

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days after the appointment of the second arbitrator, then such third arbitrator
shall be appointed by the American Arbitration Association from its qualified
panel of arbitrators, and shall be a person having at least ten (10) years'
recent professional experience as to the subject matter in question. The fees of
the third arbitrator and the expenses incident to the proceedings shall be borne
equally between Landlord and Tenant, unless the arbitrators decide otherwise.
The fees of respective counsel engaged by the parties, and the fees of expert
witnesses and other witnesses called for the parties, shall be paid by the
respective party engaging such counsel or calling or engaging such witnesses.

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

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

                                   ARTICLE 23

                                  MISCELLANEOUS

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

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this Agreement and any other agreements between Landlord and Tenant.

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

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

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

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

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

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

     23.8   QUIET ENJOYMENT. Tenant shall peaceably and quietly have, hold and
enjoy the Leased Property for the Term, free of hindrance or molestation by
Landlord or anyone claiming by, through or under Landlord, but subject to (a)
any Encumbrance permitted under ARTICLE 20 or otherwise permitted to be created
by Landlord hereunder, (b) all Permitted Encumbrances, (c) liens as to
obligations of Landlord that are either not yet due or which are being contested
in good faith and by proper proceedings, provided the same do not materially
interfere with Tenant's ability to operate any Facility and (d) liens that have
been consented to in writing by Tenant. Except as otherwise provided in this
Agreement, no failure by Landlord to comply with the foregoing covenant shall
give Tenant any right to cancel or terminate this Agreement or abate, reduce or
make a deduction from or offset against the Rent or any other sum payable under
this Agreement, or to fail to perform any other obligation of Tenant hereunder.

     23.9   NO RECORDATION. Neither Landlord nor Tenant shall record this
Agreement.

     23.10  NOTICES.

            (a)     Any and all notices, demands, consents, approvals, offers,
     elections and other communications required or permitted under this
     Agreement shall be deemed adequately given if in writing and the same shall
     be delivered either in hand, by telecopier with written acknowledgment of
     receipt, or by mail or Federal Express or similar expedited commercial
     carrier, addressed to the recipient of the notice, postpaid and registered
     or certified with return receipt requested (if by mail), or with all
     freight charges prepaid (if by Federal Express or similar carrier).

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

            (c)     All such notices shall be addressed,

     if to Landlord:

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

     if to Tenant to:

            c/o Five Star Quality Care, Inc.
            400 Centre Street
            Newton, Massachusetts  02458
            Attn:  Evrett W. Benton
            [Telecopier No. (617) 796-8385]

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

     23.11  CONSTRUCTION. Anything contained in this Agreement to the contrary
notwithstanding, all claims against, and liabilities of, Tenant or Landlord
arising prior to any date of termination or expiration of this Agreement with
respect to the Leased Property shall survive such termination or expiration. In
no event shall Landlord be liable for any consequential damages suffered by
Tenant as the result of a breach of this Agreement by Landlord. Neither this
Agreement nor any provision hereof may be changed, waived, discharged or
terminated except by an instrument in writing signed by the party to be charged.
All the terms and provisions of this Agreement shall be binding

                                       79
<Page>

upon and inure to the benefit of the parties hereto and their respective
successors and assigns. Each term or provision of this Agreement to be performed
by Tenant shall be construed as an independent covenant and condition. Time is
of the essence with respect to the provisions of this Agreement. Except as
otherwise set forth in this Agreement, any obligations of Tenant (including
without limitation, any monetary, repair and indemnification obligations) and
Landlord shall survive the expiration or sooner termination of this Agreement.
Whenever it is provided in this Agreement that Tenant shall direct any Manager
to take any action, Tenant shall not be deemed to have satisfied such obligation
unless Tenant shall have exhausted all applicable rights and remedies of Tenant
as "Owner" under such Manager's Management Agreement.

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

     23.13  APPLICABLE LAW, ETC. This Agreement shall be interpreted, construed,
applied and enforced in accordance with the laws of The Commonwealth of
Massachusetts applicable to contracts between residents of Massachusetts which
are to be performed entirely within Massachusetts, regardless of (i) where this
Agreement is executed or delivered; or (ii) where any payment or other
performance required by this Agreement is made or required to be made; or (iii)
where any breach of any provision of this Agreement occurs, or any cause of
action otherwise accrues; or (iv) where any action or other proceeding is
instituted or pending; or (v) the nationality, citizenship, domicile, principal
place of business, or jurisdiction of organization or domestication of any
party; or (vi) whether the laws of the forum jurisdiction otherwise would apply
the laws of a jurisdiction other than Massachusetts; or (vii) any combination of
the foregoing. Notwithstanding the foregoing, the laws of the State shall apply
to the perfection and priority of liens upon and the disposition of any
Property.

     23.14  RIGHT TO MAKE AGREEMENT. Each party warrants, with respect to
itself, that neither the execution of this Agreement, nor the consummation of
any transaction contemplated hereby, shall violate any provision of any law, or
any judgment, writ, injunction, order or decree of any court or governmental

                                       80
<Page>

authority having jurisdiction over it; nor result in or constitute a breach or
default under any indenture, contract, other commitment or restriction to which
it is a party or by which it is bound; nor require any consent, vote or approval
which has not been given or taken, or at the time of the transaction involved
shall not have been given or taken. Each party covenants that it has and will
continue to have throughout the term of this Agreement and any extensions
thereof, the full right to enter into this Agreement and perform its obligations
hereunder.

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

     23.16  PROPERTY SPECIFIC REPRESENTATIONS AND WARRANTIES. Tenant represents
and warrants to Landlord that, with respect to the Property located in Overland
Park, Kansas, as of October 25, 2002, and, with respect to the Property located
in Ellicott City, Maryland, as of the date hereof:

            (a)     All (if any) leases, subleases, licenses, concessions, and
     similar agreements granting an interest to any other person or entity for
     the use and occupancy of any portion of the such Property, and all (if any)
     agreements in place whereby residents are in occupancy at such Property,
     are legal, valid, binding, enforceable and in full force and effect, and to
     the best of Tenant's knowledge, no party is in breach or default, and no
     event has occurred which with notice or lapse of time, or both, would
     constitute a breach of default, or permit termination, modification, or
     acceleration under such agreements, and no party has repudiated any
     provision of such agreements;

            (b)     Tenant has not received written notice of any pending or
     threatened condemnation actions with respect to such Property or any part
     thereof;

            (c)     There are no actions, suits or proceedings pending against
     such Property in any court of law, or in equity or before any court,
     administrative agency, commission or other public governmental authority;

                                       81
<Page>

            (d)     To Tenant's knowledge, each Property is duly licensed and
     currently complies with licensing under applicable state and local laws to
     operate such Property in the manner that it is presently being operated,
     and Tenant has not received any notices of violations of any laws or
     regulations, other than those violations of law, rules, regulations,
     ordinances, orders or requirements noted in or issued by any Federal,
     state, county, municipal or other department or governmental agency having
     jurisdiction against or affecting either Property whenever noted or issued;

            (e)     To Tenant's knowledge, Tenant has not violated any
     requirements of law currently applicable to either Property or any part
     thereof with respect to: (i) the installation, existence or removal of or
     exposure to asbestos or asbestos-containing materials; (ii) the existence,
     discharge or removal of or exposure to hazardous materials; (iii) air
     emissions, water discharges, noise emissions and any other environmental,
     health or safety matter; and (iv) effects on the environment of such
     Property or any part thereof or of any activity heretofore, now or
     hereafter conducted on such Property (collectively, the "RELEVANT
     ENVIRONMENTAL LAWS");

            (f)     Tenant has not received any notice of any claim or citation
     of noncompliance with respect to any violation of Relevant Environmental
     Laws and, to Tenant's knowledge, there are no facts, circumstances,
     conditions or occurrences on either Property that could reasonably be
     expected to result in the violation of any such Relevant Environmental Laws
     or cause such Property to be subject to any restrictions on the existing or
     contemplated development, use or transferability thereof under any Relevant
     Environmental Laws.

            (g)     To Tenant's knowledge, each Property and the uses thereof
     comply in all material respects with all applicable building and zoning
     ordinances and codes;

            (h)     No governmental authority having jurisdiction over either
     Property has issued any citations with respect to any material deficiencies
     or other matters that fail to conform to applicable statutes, regulations
     or ordinances that have not been corrected as of the date hereof; Tenant
     has not received written or oral notice from any agency supervising or
     having authority over either Property requiring such Property or any
     service, staff, or practice provided at such Property to be modified,
     restricted or

                                       82
<Page>

     conditioned as to service or eligibility or be reworked or redesigned or
     additional furniture, fixtures, equipment or inventory to be provided at
     such Property so as to conform or comply with any existing in any
     applicable law, code or standard; and

            (i)     There has been no material adverse change with respect to
     the physical condition of the Overland Park Property or the operations at
     the Overland Park Property since April 1, 2002 and there has been no
     material adverse change with respect to the physical condition of the
     Ellicott City Property or the operations at the Ellicott City Property
     since November 2, 2002.

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

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.]

                                       83
<Page>

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

                                      LANDLORD:

                                        ELLICOTT CITY LAND I LLC, ELLICOTT
                                        CITY LAND II LLC, HRES2 PROPERTIES
                                        TRUST, SNH CHS PROPERTIES TRUST,
                                        SPTIHS PROPERTIES TRUST, SPT-
                                        MICHIGAN TRUST, SPTMNR PROPERTIES
                                        TRUST, SNH/LTA PROPERTIES TRUST,
                                        SNH/LTA PROPERTIES GA LLC

                                        By: /s/ John R. Hoadley
                                            --------------------------------
                                            John R. Hoadley, Treasurer of
                                             each of the foregoing entities

                                       84
<Page>

                                        TENANT:

                                        FIVE STAR QUALITY CARE TRUST

                                        By: /s/ Bruce J. Mackey Jr.
                                            --------------------------
                                            Bruce J. Mackey Jr.
                                            Treasurer

                                       85
<Page>

                            EXHIBITS A-1 THROUGH A-79

                                      LAND

          [These exhibits have been omitted and will be supplementally
       furnished to the Securities and Exchange Commission upon request.]

                                       86Exhibit 4.4

 

WARRANT
AGREEMENT

 

Agreement made
as of
                
       , 2004 between International Shipping
Enterprises, Inc., a Delaware corporation, with offices at 1225 Franklin
Avenue, Suite 325, Garden City, New York 11530 (“Company”), and Continental
Stock Transfer & Trust Company, a New York corporation, with offices at 17
Battery Place, New York, New York 10004 (“Warrant Agent”).

 

WHEREAS, the Company is engaged in a public
offering (“Public Offering”) of Units (“Units”) 
and, in connection therewith, has determined to issue and deliver up to
65,550,000 Warrants (“Warrants”) to the public investors, each Warrant
evidencing the right of the holder thereof to purchase one share of common
stock, par value $.0001 per share, of the Company’s Common Stock (“Common
Stock”) for $5.00, subject to adjustment as described herein; and

 

WHEREAS, the Company has filed with the
Securities and Exchange Commission a Registration Statement, No. 333-119719
on Form S-1 (“Registration Statement”) for the registration, under the
Securities Act of 1933, as amended (“Act”) of, among other securities, the
Warrants and the Common Stock issuable upon exercise of the Warrants; and

 

WHEREAS, the Company desires the Warrant
Agent to act on behalf of the Company, and the Warrant Agent is willing to so
act, in connection with the issuance, registration, transfer, exchange,
redemption and exercise of the Warrants; and

 

WHEREAS, the Company desires to provide for
the form and provisions of the Warrants, the terms upon which they shall be
issued and exercised, and the respective rights, limitation of rights, and
immunities of the Company, the Warrant Agent, and the holders of the Warrants;
and

 

WHEREAS, all acts and things have been done
and performed which are necessary to make the Warrants, when executed on behalf
of the Company and countersigned by or on behalf of the Warrant Agent, as
provided herein, the valid, binding and legal obligations of the Company, and
to authorize the execution and delivery of this Agreement.

 

NOW, THEREFORE, in consideration of the
mutual agreements herein contained, the parties hereto agree as follows:

 

1.                                       Appointment of Warrant Agent.  The Company hereby appoints the Warrant Agent
to act as agent

 

 

for the Company for the Warrants, and the
Warrant Agent hereby accepts such appointment and agrees to perform the same in
accordance with the terms and conditions set forth in this Agreement.

 

2.                                       Warrants.

 

2.1.                              Form of Warrant.  Each Warrant shall be issued in registered
form only, shall be in substantially the form of Exhibit A hereto, the
provisions of which are incorporated herein and shall be signed by, or bear the
facsimile signature of, the Chairman of the Board or President and Treasurer,
Secretary or Assistant Secretary of the Company and shall bear a facsimile of
the Company’s seal. In the event the person whose facsimile signature has been
placed upon any Warrant shall have ceased to serve in the capacity in which
such person signed the Warrant before such Warrant is issued, it may be issued
with the same effect as if he or she had not ceased to be such at the date of
issuance.

 

2.2.                              Effect of Countersignature.  Unless and until countersigned by the Warrant
Agent pursuant to this Agreement, a Warrant shall be invalid and of no effect
and may not be exercised by the holder thereof.

 

2.3.                              Registration.

 

2.3.1.                     Warrant Register.  The Warrant Agent shall maintain books
(“Warrant Register”), for the registration of original issuance and the
registration of transfer of the Warrants. 
Upon the initial issuance of the Warrants, the Warrant Agent shall issue
and register the Warrants in the names of the respective holders thereof in
such denominations and otherwise in accordance with instructions delivered to
the Warrant Agent by the Company.

 

2.3.2.                     Registered Holder.  Prior to due presentment for registration of
transfer of any Warrant, the Company and the Warrant Agent may deem and treat
the person in whose name such Warrant shall be registered upon the Warrant
Register (“registered holder”), as the absolute owner of such Warrant and of
each Warrant represented thereby (notwithstanding any notation of ownership or
other writing on the Warrant Certificate made by anyone other than the Company
or the Warrant Agent), for the purpose of any exercise thereof, and for all
other purposes, and neither the Company nor the Warrant Agent shall be affected
by any notice to the contrary.

 

2.4.                              Detachability of Warrants.  The securities comprising the Units will not
be separately transferable until 90 days after the date hereof unless Sunrise
Securities Corp. (“Sunrise”) informs the

 

2

 

Company of its decision to allow earlier
separate trading, but in no event will Sunrise allow separate trading of the
securities comprising the Units until the Company files a Current Report on
Form 8-K which includes an audited balance sheet reflecting the receipt by the
Company of the gross proceeds of the Public Offering including the proceeds
received by the Company from the exercise of the Underwriter’s over-allotment
option, if the over-allotment option is exercised prior to the filing of the
Form 8-K.

 

3.                                       Terms and Exercise of Warrants

 

3.1.                              Warrant Price.  Each Warrant shall, when countersigned by the
Warrant Agent, entitle the registered holder thereof, subject to the provisions
of such Warrant and of this Warrant Agreement, to purchase from the Company the
number of shares of Common Stock stated therein, at the price of $5.00 per
whole share, subject to the adjustments provided in Section 4 hereof and
in the last sentence of this Section 3.1. 
The term “Warrant Price” as used in this Warrant Agreement refers to the
price per share at which Common Stock may be purchased at the time a Warrant is
exercised.  The Company in its sole discretion
may lower the Warrant Price at any time prior to the Expiration Date.

 

3.2.                              Duration of Warrants.  A Warrant may be exercised only during the
period (“Exercise Period”) commencing on the later of the consummation by the
Company of a merger, capital stock exchange, asset acquisition or other similar
business combination (“Business Combination”) (as described more fully in the
Company’s Registration Statement) or                      ,
2005 and terminating at
5:00 p.m., New York City time on the earlier to occur of (i)                 
       , 2008 or (ii) the date fixed
for redemption of the Warrants as provided in Section 6 of this Agreement
(“Expiration Date”).  Except with respect
to the right to receive the Redemption Price (as set forth in Section 6
hereunder), each Warrant not exercised on or before the Expiration Date shall
become void, and all rights thereunder and all rights in respect thereof under
this Agreement shall cease at the close of business on the Expiration Date.  The Company in its sole discretion may extend
the duration of the Warrants by delaying the Expiration Date.

 

3.3.                              Exercise of Warrants.

 

3.3.1.                     Payment.  Subject to the provisions of the Warrant and
this Warrant Agreement, a Warrant, when countersigned by the Warrant Agent, may
be exercised by the registered holder thereof by surrendering it, at the office
of the Warrant Agent, or at the office of its successor as Warrant Agent, in
the Borough of Manhattan, City and State of New York, with the subscription
form, as set forth in the Warrant,

 

3

 

duly executed, and by paying in full, in
lawful money of the United States, in cash, good certified check or good bank
draft payable to the order of the Company (or as otherwise agreed to by the
Company), the Warrant Price for each full share of Common Stock as to which the
Warrant is exercised and any and all applicable taxes due in connection with
the exercise of the Warrant, the exchange of the Warrant for the Common Stock,
and the issuance of the Common Stock.

 

3.3.2.                     Issuance of Certificates.  As soon as practicable after the exercise of
any Warrant and the clearance of the funds in payment of the Warrant Price, the
Company shall issue to the registered holder of such Warrant a certificate or
certificates for the number of full shares of Common Stock to which he is
entitled, registered in such name or names as may be directed by him, her or
it, and if such Warrant shall not have been exercised in full, a new
countersigned Warrant for the number of shares as to which such Warrant shall
not have been exercised.  Notwithstanding
the foregoing, the Company shall not be obligated to deliver any securities
pursuant to the exercise of a Warrant unless a registration statement under the
Act with respect to the Common Stock is effective.  Warrants may not be exercised by, or
securities issued to, any registered holder in any state in which such exercise
would be unlawful.

 

3.3.3.                     Valid Issuance.  All shares of Common Stock issued upon the
proper exercise of a Warrant in conformity with this Agreement shall be validly
issued, fully paid and nonassessable.

 

3.3.4.                     Date of Issuance.  Each person in whose name any such
certificate for shares of Common Stock is issued shall for all purposes be
deemed to have become the holder of record of such shares on the date on which
the Warrant was surrendered and payment of the Warrant Price was made,
irrespective of the date of delivery of such certificate, except that, if the
date of such surrender and payment is a date when the stock transfer books of
the Company are closed, such person shall be deemed to have become the holder
of such shares at the close of business on the next succeeding date on which
the stock transfer books are open.

 

4

 

3.3.5.                     Warrant Solicitation and Warrant
Solicitation Fee.

 

a.                                       The Company has engaged Sunrise,
on a non-exclusive basis, as its agent for the solicitation of the exercise of
the Warrants.  The Company, at its cost,
will (i) assist Sunrise with respect to such solicitation, if requested by
Sunrise, and (ii) provide Sunrise, and direct the Company’s transfer agent and
the Warrant Agent to deliver to Sunrise, lists of the record and, to the extent
known, beneficial owners of the Company’s Warrants.  The Company hereby instructs the Warrant
Agent to cooperate with Sunrise in every respect in connection with Sunrise’s
solicitation activities, including, but not limited to, providing to Sunrise,
at the Company’s cost, a list of record and beneficial holders of the Warrants
and circulating a prospectus or offering circular disclosing the compensation
arrangements referenced in Section 3.3.5(b) below to holders of the
Warrants at the time of exercise of the Warrants.  In addition to the conditions set forth in
Section 3.3.5(b), Sunrise shall accept payment of the warrant solicitation
fee provided in Section 3.3.5(b) only if it has provided bona fide
services to the Company in connection with the exercise of the Warrants and only
to the extent that an investor who exercises his Warrants specifically
designates, in writing, that Sunrise solicited his exercise.  In addition to soliciting, either orally or
in writing, the exercise of Warrants by a Warrant holder, such services may
also include disseminating information, either orally or in writing, to Warrant
holders about the Company or the market for the Company’s securities, or
assisting in the processing of the exercise of Warrants.

 

b.                                      In each instance in which a
Warrant is exercised, the Warrant Agent shall promptly give written notice of
such exercise to the Company and Sunrise (“Warrant Agent’s Exercise
Notice”).  If, upon the exercise of any
Warrant more than one year from the effective date of the Registration
Statement, (i) the market price of the Company’s Common Stock is greater
than the Warrant Price, (ii) disclosure of compensation arrangements between
the Company and Sunrise with respect to the solicitation of the exercise of the
Warrants was made both at the time of the Public Offering and at the time of
exercise (by delivery of the Prospectus or as otherwise required by applicable
law, rule or regulation), (iii) the holder of the Warrant confirms in writing
that the exercise of the Warrant was solicited by Sunrise, (iv) the Warrant was
not held in a discretionary account, and (v) the solicitation of the exercise
of the Warrant was not in violation of Regulation M (as such rule or any
successor rule may be in effect as of such time of exercise) promulgated under
the Securities Exchange Act of 1934, as amended, then the Warrant Agent,
simultaneously with the distribution of the Common Stock underlying the
Warrants so exercised in accordance with the instructions from the Company
following receipt of the proceeds to the Company received upon exercise of such
Warrant(s), shall, on behalf of the Company, pay a fee of 5% of the Warrant
Price to Sunrise, provided that Sunrise delivers to the Warrant Agent within
ten (10) business days from the date on which Sunrise has received the Warrant
Agent’s Exercise Notice, a certificate that the conditions set

 

5

 

forth in the preceding clauses (iii), (iv)
and (v) have been satisfied. 
Notwithstanding the foregoing, no fee will be paid to Sunrise with
respect to the exercise by the Underwriters or their affiliates or the
Company’s officers or directors of Warrants purchased by it or them and still
held by them for its or their own account. 
Sunrise and the Company may at any time during business hours, examine
the records of the Warrant Agent, including its ledger of original Warrant
certificates returned to the Warrant Agent upon exercise of Warrants.

 

c.                                       The provisions of this
Section 3.3.5. may not be modified, amended or deleted without the prior
written consent of Sunrise.

 

4.                                       Adjustments.

 

4.1.                              Stock Dividends - Split-Ups.  If after the date hereof, and subject to the
provisions of Section 4.6 below, the number of outstanding shares of
Common Stock is increased by a stock dividend payable in shares of Common
Stock, or by a split-up of shares of Common Stock, or other similar event,
then, on the effective date of such stock dividend, split-up or similar event,
the number of shares of Common Stock issuable on exercise of each Warrant shall
be increased in proportion to such increase in outstanding shares of Common
Stock.

 

4.2.                              Aggregation of Shares.  If after the date hereof, and subject to the
provisions of Section 4.6, the number of outstanding shares of Common
Stock is decreased by a consolidation, combination, reverse stock split or
reclassification of shares of Common Stock or other similar event, then, on the
effective date of such consolidation, combination, reverse stock split,
reclassification or similar event, the number of shares of Common Stock
issuable on exercise of each Warrant shall be decreased in proportion to such
decrease in outstanding shares of Common Stock.

 

4.3                                 Adjustments in Exercise Price.  Whenever the number of shares of Common Stock
purchasable upon the exercise of the Warrants is adjusted, as provided in
Section 4.1 and 4.2 above, the Warrant Price shall be adjusted (to the
nearest cent) by multiplying such Warrant Price immediately prior to such
adjustment by a fraction (x) the numerator of which shall be the number of
shares of Common Stock purchasable upon the exercise of the Warrants
immediately prior to such adjustment, and (y) the denominator of which shall be
the number of shares of Common Stock so purchasable immediately thereafter.

 

4.4.                              Replacement of Securities upon
Reorganization, etc.  In case of any reclassification or

 

6

 

reorganization of the outstanding shares of
Common Stock (other than a change covered by Section 4.1 or 4.2 hereof or
that solely affects the par value of such shares of Common Stock), or in the
case of any merger or consolidation of the Company with or into another
corporation (other than a consolidation or merger in which the Company is the
continuing corporation and that does not result in any reclassification or
reorganization of the outstanding shares of Common Stock), or in the case of
any sale or conveyance to another corporation or entity of the assets or other
property of the Company as an entirety or substantially as an entirety in connection
with which the Company is dissolved, the Warrant holders shall thereafter have
the right to purchase and receive, upon the basis and upon the terms and
conditions specified in the Warrants and in lieu of the shares of Common Stock
of the Company immediately theretofore purchasable and receivable upon the
exercise of the rights represented thereby, the kind and amount of shares of
stock or other securities or property (including cash) receivable upon such
reclassification, reorganization, merger or consolidation, or upon a
dissolution following any such sale or transfer, that the Warrant holder would
have received if such Warrant holder had exercised his, her or its Warrant(s)
immediately prior to such event; and if any reclassification also results in a change
in shares of Common Stock covered by Section 4.1 or 4.2, then such
adjustment shall be made pursuant to Sections 4.1, 4.2, 4.3 and this
Section 4.4.  The provisions of this
Section 4.4 shall similarly apply to successive reclassifications,
reorganizations, mergers or consolidations, sales or other transfers.

 

4.5.                              Notices of Changes in Warrant.  Upon every adjustment of the Warrant Price or
the number of shares issuable upon exercise of a Warrant, the Company shall
give written notice thereof to the Warrant Agent, which notice shall state the
Warrant Price resulting from such adjustment and the increase or decrease, if
any, in the number of shares purchasable at such price upon the exercise of a
Warrant, setting forth in reasonable detail the method of calculation and the
facts upon which such calculation is based. 
Upon the occurrence of any event specified in Sections 4.1, 4.2, 4.3 or
4.4, then, in any such event, the Company shall give written notice to the Warrant
holder, at the last address set forth for such holder in the warrant register,
of the record date or the effective date of the event.  Failure to give such notice, or any defect
therein, shall not affect the legality or validity of such event.

 

4.6.                              No Fractional Shares.  Notwithstanding any provision contained in
this Warrant Agreement to the contrary, the Company shall not issue fractional
shares upon exercise of Warrants.  If, by
reason of any adjustment made pursuant to this Section 4, the holder of
any Warrant would be entitled, upon the exercise of such Warrant, to receive a
fractional interest in a share, the Company shall, upon such exercise, round up
to the nearest whole number the number of the shares of Common Stock to be
issued to the Warrant holder.

 

7

 

4.7.                              Form of Warrant.  The form of Warrant need not be changed
because of any adjustment pursuant to this Section 4, and Warrants issued
after such adjustment may state the same Warrant Price and the same number of
shares as is stated in the Warrants initially issued pursuant to this
Agreement.  However, the Company may at
any time in its sole discretion make any change in the form of Warrant that the
Company may deem appropriate and that does not affect the substance thereof,
and any Warrant thereafter issued or countersigned, whether in exchange or
substitution for an outstanding Warrant or otherwise, may be in the form as so
changed.

 

5.                                       Transfer and Exchange of
Warrants.

 

5.1.                              Registration of Transfer.  The Warrant Agent shall register the
transfer, from time to time, of any outstanding Warrant upon the Warrant
Register, upon surrender of such Warrant for transfer, properly endorsed with
signatures properly guaranteed and accompanied by appropriate instructions for
transfer.  Upon any such transfer, a new
Warrant representing an equal aggregate number of Warrants shall be issued and
the old Warrant shall be cancelled by the Warrant Agent.  The Warrants so cancelled shall be delivered
by the Warrant Agent to the Company from time to time upon request.

 

5.2.                              Procedure for Surrender of
Warrants.  Warrants may be surrendered to the Warrant
Agent, together with a written request for exchange or transfer, and thereupon
the Warrant Agent shall issue in exchange therefor one or more new Warrants as
requested by the registered holder of the Warrants so surrendered, representing
an equal aggregate number of Warrants; provided, however, that in the event
that a Warrant surrendered for transfer bears a restrictive legend, the Warrant
Agent shall not cancel such Warrant and issue new Warrants in exchange therefor
until the Warrant Agent has received an opinion of counsel for the Company
stating that such transfer may be made and indicating whether the new Warrants
must also bear a restrictive legend.

 

5.3.                              Fractional Warrants.  The Warrant Agent shall not be required to
effect any registration of transfer or exchange which will result in the
issuance of a warrant certificate for a fraction of a warrant.

 

5.4.                              Service Charges.  No service charge shall be made for any
exchange or registration of transfer of Warrants.

 

5.5.                              Warrant Execution and
Countersignature.  The Warrant Agent is hereby authorized to
countersign and to deliver, in accordance with the terms of this Agreement, the
Warrants required to be issued pursuant to the provisions of this
Section 5, and the Company, whenever required by the Warrant

 

8

 

Agent, will supply the Warrant Agent with
Warrants duly executed on behalf of the Company for such purpose.

 

6.                                       Redemption.

 

6.1.                              Redemption.  Subject to Section 6.4 hereof, with the
prior written consent of Sunrise, not less than all of the outstanding Warrants
may be redeemed, at the option of the Company, at any time after they become
exercisable and prior to their expiration, at the office of the Warrant Agent,
upon the notice referred to in Section 6.2., at the price of $.01 per
Warrant (“Redemption Price”), provided that the last sales price of the Common
Stock has been at least $8.50 per share, on each of twenty (20) trading days
within any thirty (30) trading day period ending on the third business day
prior to the date on which notice of redemption is given and the weekly trading
volume of the Common Stock has been at least 800,000 shares for each of the two
calendar weeks prior to the date on which notice of redemption is given.  The provisions of this Section 6.1 may
not be modified, amended or deleted without the prior written consent of
Sunrise.

 

6.2.                              Date Fixed for, and Notice of,
Redemption.  In the event the Company shall elect to
redeem all of the Warrants, the Company shall fix a date for the
redemption.  Notice of redemption shall
be mailed by first class mail, postage prepaid, by the Company not less than 30
days prior to the date fixed for redemption to the registered holders of the
Warrants to be redeemed at their last addresses as they shall appear on the
registration books.  Any notice mailed in
the manner herein provided shall be conclusively presumed to have been duly
given whether or not the registered holder received such notice.

 

6.3.                              Exercise After Notice of
Redemption.  The Warrants may be exercised in accordance
with Section 3 of this Agreement at any time after notice of redemption
shall have been given by the Company pursuant to Section 6.2. hereof and
prior to the time and date fixed for redemption.  On and after the redemption date, the record
holder of the Warrants shall have no further rights except to receive, upon
surrender of the Warrants, the Redemption Price.

 

6.4                                 Outstanding Warrants Only. The Company understands that
the redemption rights provided for by this Section 6 apply only to
outstanding Warrants. To the extent a person holds rights to purchase Warrants,
such purchase rights shall not be extinguished by redemption. However, once
such purchase rights are exercised, the Company may redeem the Warrants issued
upon such exercise provided that the criteria for redemption is met. The
provisions of this Section 6.4 may not be modified, amended or deleted without
the prior written consent of Sunrise.

 

9

 

7.                                       Other Provisions Relating to
Rights of Holders of Warrants.

 

7.1.                              No Rights as Stockholder.  A Warrant does not entitle the registered
holder thereof to any of the rights of a stockholder of the Company, including,
without limitation, the right to receive dividends, or other distributions,
exercise any preemptive rights to vote or to consent or to receive notice as
stockholders in respect of the meetings of stockholders or the election of
directors of the Company or any other matter.

 

7.2.                              Lost, Stolen, Mutilated, or
Destroyed Warrants.  If any Warrant is lost, stolen, mutilated, or
destroyed, the Company and the Warrant Agent may on such terms as to indemnity
or otherwise as they may in their discretion impose (which shall, in the case
of a mutilated Warrant, include the surrender thereof), issue a new Warrant of
like denomination, tenor, and date as the Warrant so lost, stolen, mutilated,
or destroyed.  Any such new Warrant shall
constitute a substitute contractual obligation of the Company, whether or not
the allegedly lost, stolen, mutilated, or destroyed Warrant shall be at any
time enforceable by anyone.

 

7.3.                              Reservation of Common Stock.  The Company shall at all times reserve and
keep available a number of its authorized but unissued shares of Common Stock
that will be sufficient to permit the exercise in full of all outstanding
Warrants issued pursuant to this Agreement.

 

7.4.                              Registration of Common Stock.  The Company agrees that prior to the
commencement of the Exercise Period, it shall file with the Securities and
Exchange Commission a post-effective amendment to the Registration Statement,
or a new registration statement, for the registration, under the Act, of, and
it shall take such action as is necessary to qualify for sale, in those states
in which the Warrants were initially offered by the Company, the Common Stock
issuable upon exercise of the Warrants. 
In either case, the Company will use its best efforts to cause the same
to become effective and to maintain the effectiveness of such registration
statement until the expiration of the Warrants in accordance with the
provisions of this Agreement.  The
provisions of this Section 7.4 may not be modified, amended or deleted
without the prior written consent of Sunrise.

 

10

 

8.                                       Concerning the Warrant Agent and
Other Matters.

 

8.1.                              Payment of Taxes.  The Company will from time to time promptly
pay all taxes and charges that may be imposed upon the Company or the Warrant
Agent in respect of the issuance or delivery of shares of Common Stock upon the
exercise of Warrants, but the Company shall not be obligated to pay any
transfer taxes in respect of the Warrants or such shares.

 

8.2.                              Resignation, Consolidation, or
Merger of Warrant Agent.

 

8.2.1.                     Appointment of Successor Warrant
Agent.  The Warrant Agent, or any successor to it
hereafter appointed, may resign its duties and be discharged from all further
duties and liabilities hereunder after giving sixty (60) days’ notice in
writing to the Company.  If the office of
the Warrant Agent becomes vacant by resignation or incapacity to act or
otherwise, the Company shall appoint in writing a successor Warrant Agent in
place of the Warrant Agent.  If the
Company shall fail to make such appointment within a period of 30 days after it
has been notified in writing of such resignation or incapacity by the Warrant
Agent or by the holder of the Warrant (who shall, with such notice, submit his
Warrant for inspection by the Company), then the holder of any Warrant may
apply to the Supreme Court of the State of New York for the County of New York
for the appointment of a successor Warrant Agent at the Company’s cost.  Any successor Warrant Agent, whether
appointed by the Company or by such court, shall be a corporation organized and
existing under the laws of the State of New York, in good standing and having
its principal office in the Borough of Manhattan, City and State of New York,
and authorized under such laws to exercise corporate trust powers and subject
to supervision or examination by federal or state authority.  After appointment, any successor Warrant
Agent shall be vested with all the authority, powers, rights, immunities,
duties, and obligations of its predecessor Warrant Agent with like effect as if
originally named as Warrant Agent hereunder, without any further act or deed;
but if for any reason it becomes necessary or appropriate, the predecessor
Warrant Agent shall execute and deliver, at the expense of the Company, an
instrument transferring to such successor Warrant Agent all the authority,
powers, and rights of such predecessor Warrant Agent hereunder; and upon
request of any successor Warrant Agent the Company shall make, execute,
acknowledge, and deliver any and all instruments in writing for more fully and
effectually vesting in and confirming to such successor Warrant Agent all such
authority, powers, rights, immunities, duties, and obligations.

 

8.2.2.                     Notice of Successor Warrant
Agent.  In the event a successor Warrant Agent shall
be appointed, the Company shall give notice thereof to the predecessor Warrant
Agent and the transfer agent for the Common Stock not later than the effective
date of any such appointment.

 

11

 

8.2.3.                     Merger or Consolidation of
Warrant Agent.  Any corporation into which the Warrant Agent
may be merged or with which it may be consolidated or any corporation resulting
from any merger or consolidation to which the Warrant Agent shall be a party
shall be the successor Warrant Agent under this Agreement without any further
act.

 

8.3.                              Fees and Expenses of Warrant
Agent.

 

8.3.1.                     Remuneration.  The Company agrees to pay the Warrant Agent
reasonable remuneration for its services as such Warrant Agent hereunder and
will reimburse the Warrant Agent upon demand for all expenditures that the
Warrant Agent may reasonably incur in the execution of its duties hereunder.

 

8.3.2.                     Further Assurances.  The Company agrees to perform, execute,
acknowledge, and deliver or cause to be performed, executed, acknowledged, and
delivered all such further and other acts, instruments, and assurances as may
reasonably be required by the Warrant Agent for the carrying out or performing
of the provisions of this Agreement.

 

8.4.                              Liability of Warrant Agent.

 

8.4.1.                     Reliance on Company Statement.  Whenever in the performance of its duties
under this Warrant Agreement, the Warrant Agent shall deem it necessary or
desirable that any fact or matter be proved or established by the Company prior
to taking or suffering any action hereunder, such fact or matter (unless other
evidence in respect thereof be herein specifically prescribed) may be deemed to
be conclusively proved and established by a statement signed by the President
or Chairman of the Board of the Company and delivered to the Warrant
Agent.  The Warrant Agent may rely upon
such statement for any action taken or suffered in good faith by it pursuant to
the provisions of this Agreement.

 

8.4.2.                     Indemnity.  The Warrant Agent shall be liable hereunder
only for its own negligence, willful misconduct or bad faith.  The Company agrees to indemnify the Warrant
Agent and save it harmless against any and all liabilities, including judgments,
costs and reasonable counsel fees, for anything done or omitted by the Warrant
Agent in the execution of this Agreement except as a result of the Warrant
Agent’s negligence, willful misconduct, or bad faith.

 

8.4.3.                     Exclusions.  The Warrant Agent shall have no
responsibility with respect to the

 

12

 

validity of this Agreement or with respect to
the validity or execution of any Warrant (except its countersignature thereof);
nor shall it be responsible for any breach by the Company of any covenant or
condition contained in this Agreement or in any Warrant; nor shall it be
responsible to make any adjustments required under the provisions of
Section 4 hereof or responsible for the manner, method, or amount of any
such adjustment or the ascertaining of the existence of facts that would
require any such adjustment; nor shall it by any act hereunder be deemed to
make any representation or warranty as to the authorization or reservation of
any shares of Common Stock to be issued pursuant to this Agreement or any
Warrant or as to whether any shares of Common Stock will when issued be valid
and fully paid and nonassessable.

 

8.5.                              Acceptance of Agency.  The Warrant Agent hereby accepts the agency
established by this Agreement and agrees to perform the same upon the terms and
conditions herein set forth and among other things, shall account promptly to
the Company with respect to Warrants exercised and concurrently account for,
and pay to the Company, all moneys received by the Warrant Agent for the
purchase of shares of the Company’s Common Stock through the exercise of
Warrants.

 

9.                                       Miscellaneous Provisions.

 

9.1.                              Successors.  All the covenants and provisions of this
Agreement by or for the benefit of the Company or the Warrant Agent shall bind
and inure to the benefit of their respective successors and assigns.

 

9.2.                              Notices.  Any notice, statement or demand authorized by
this Warrant Agreement to be given or made by the Warrant Agent or by the
holder of any Warrant to or on the Company shall be sufficiently given when so
delivered if by hand or overnight delivery or if sent by certified mail or
private courier service within five days after deposit of such notice, postage
prepaid, addressed (until another address is filed in writing by the Company
with the Warrant Agent), as follows:

 

International Shipping Enterprises, Inc.

1225 Franklin Avenue, Suite 325

Garden City, New York 11530

Attn:      Chairman

 

Any notice, statement or demand authorized by
this Agreement to be given or made by the holder of any Warrant or by the
Company to or on the Warrant Agent shall be sufficiently given when so
delivered if by hand or overnight delivery or if sent by certified mail or
private courier service within five days after deposit of such notice, postage
prepaid, addressed (until another address is filed in writing by the Warrant
Agent

 

13

 

with the Company), as follows:

 

Continental Stock Transfer & Trust
Company

17 Battery Place

New York, New York 10004

Attn:                    Compliance Department

 

with a copy in each case to:

 

Gusrae, Kaplan & Bruno, PLLC

120 Wall Street

11th Floor

New York, NY 10005

Attn:                    Scott M. Miller, Esq.

 

and

 

Graubard Miller

600 Third Avenue

New York, New York 10016

Attn:                    David Alan Miller, Esq.

 

and

 

Sunrise Securities Corp.

641 Lexington Avenue, 25th Floor

New York, New York 10022

Attn:                    Nathan
Low

 

9.3.                              Applicable law.  The validity, interpretation, and performance
of this Agreement and of the Warrants shall be governed in all respects by the
laws of the State of New York, without giving effect to conflict of laws.  The Company hereby agrees that any action,
proceeding or claim against it arising out of or relating in any way to this
Agreement shall be brought and enforced in the courts of the State of New York
or the United States District Court for the Southern District of New York, and
irrevocably submits to such jurisdiction, which jurisdiction shall be
exclusive.  The Company hereby waives any
objection to such exclusive jurisdiction and that such courts represent an
inconvenience forum.  Any such process or
summons to be served upon the Company may be served by transmitting a copy
thereof by registered or certified mail, return receipt requested, postage
prepaid, addressed to it at the address set forth in Section 9.2
hereof.  Such mailing shall be deemed
personal service and shall be legal and binding upon the Company in any action,
proceeding or claim.

 

14

 

9.4.                              Persons Having Rights under this
Agreement.  Nothing in this Agreement expressed and
nothing that may be implied from any of the provisions hereof is intended, or
shall be construed, to confer upon, or give to, any person or corporation other
than the parties hereto and the registered holders of the Warrants and, for the
purposes of Sections 3.3.5, 6.1, 6.4, 7.4 and 9.2 hereof, Sunrise, any
right, remedy, or claim under or by reason of this Warrant Agreement or of any
covenant, condition, stipulation, promise, or agreement hereof.  Sunrise shall be deemed to be a third-party
beneficiary of this Agreement with respect to Sections 3.3.5, 6.1, 6.4, 7.4 and
9.2 hereof.  All covenants, conditions,
stipulations, promises, and agreements contained in this Warrant Agreement
shall be for the sole and exclusive benefit of the parties hereto (and Sunrise
with respect to the Sections 3.3.5, 6.1, 6.4, 7.4 and 9.2 hereof) and their
successors and assigns and of the registered holders of the Warrants.

 

9.5.                              Examination of the Warrant
Agreement.  A copy of this Agreement shall be available
at all reasonable times at the office of the Warrant Agent in the Borough of
Manhattan, City and State of New York, for inspection by the registered holder
of any Warrant.  The Warrant Agent may require
any such holder to submit his Warrant for inspection by it.

 

9.6.                              Counterparts.  This Agreement may be executed in any number
of counterparts and each of such counterparts shall for all purposes be deemed
to be an original, and all such counterparts shall together constitute but one
and the same instrument.

 

9.7.                              Effect of Headings.  The Section headings herein are for
convenience only and are not part of this Warrant Agreement and shall not
affect the interpretation thereof.

 

15

 

IN WITNESS WHEREOF, this Agreement has been
duly executed by the parties hereto as of the day and year first above written.

 

	
  Attest:

  	
   

  	
  INTERNATIONAL
  SHIPPING ENTERPRISES, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Name:  Angeliki Frangou

  
	
   

  	
   

  	
   

  	
  Title:    Chairman

  
	
   

  	
   

  	
   

  
	
  Attest:

  	
   

  	
  CONTINENTAL
  STOCK TRANSFER

  & TRUST COMPANY

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Name:   Steven Nelson

  
	
   

  	
   

  	
   

  	
  Title:     Chairman

  

 

16

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