PARTIAL TERMINATION AND CONFIRMATION OF GUARANTEES AND OTHER INCIDENTAL DOCUMENTS

Exhibit 10.37

PARTIAL TERMINATION AND CONFIRMATION OF GUARANTEES
AND OTHER INCIDENTAL DOCUMENTS

THIS PARTIAL TERMINATION AND CONFIRMATION OF GUARANTEES AND OTHER INCIDENTAL DOCUMENTS (this “Confirmation”) is made as of November 1, 2006 by FIVE STAR QUALITY CARE, INC., a Maryland corporation (the “Guarantor”), FIVE STAR QUALITY CARE TRUST, a Maryland business trust (the “Tenant”), FSQ, INC., a Delaware corporation (the “Tenant Pledgor”), each of the parties identified on the signature page hereof as a subtenant pledgor (collectively, the “Subtenant Pledgors”) and each of the parties identified on the signature page hereof as a subtenant (collectively, the “Subtenants”) for the benefit of each of the parties identified on the signature page hereof as a landlord (collectively, the “Landlords”).

W I T N E S S E T H :

WHEREAS, pursuant to the terms of that certain Second Amended and Restated Lease Agreement, dated as of November 19, 2004, as amended by that certain First Amendment of Lease, dated as of May 17, 2005, that certain Second Amendment to Second Amended and Restated Lease Agreement, dated as of June 3, 2005, that certain Third Amendment to Second Amended and Restated Lease Agreement, dated as of October 31, 2005, that certain Third Amendment to Second Amended and Restated Lease Agreement, dated as of December 30, 2005, that certain Letter Agreement, dated as of March 13, 2006, that certain Fifth Amendment to Second Amended and Restated Lease Agreement, dated as of September 1, 2006, that certain Sixth Amendment to Second Amended and Restated Lease Agreement, dated as of October 1, 2006, that certain Seventh Amendment to Second Amended and Restated Lease Agreement, dated as of October 1, 2006, and that certain Eighth Amendment to Second Amended and Restated Lease, dated as of November 1, 2006 (as so amended, the “Consolidated Lease”), the Landlords lease to the Tenant, and the Tenant leases from the Landlords, certain property, all as more particularly described in the Consolidated Lease; and

WHEREAS, the payment and performance obligations of the Tenant with respect to the Consolidated Lease are guaranteed by those certain Guaranty Agreements described on Exhibit A attached hereto (collectively, the “Guarantees”); and

WHEREAS, the payment and performance obligations of the Tenant with respect to the Consolidated Lease are further secured by the other Incidental Documents (this and other capitalized terms used but not otherwise defined herein shall

have the meanings ascribed to them in the Consolidated Lease); and

WHEREAS, pursuant to a Ninth Amendment to Second Amended and Restated Lease Agreement, dated as of the date hereof (the “Ninth Amendment”), the Consolidated Lease is being amended to remove certain properties, as more particularly described in the Ninth Amendment; and

WHEREAS, pursuant to the terms of that certain Termination of Sublease, dated as of the date hereof (the “Sublease Termination”) , between Tenant and Five Star Quality Care-CT, LLC (“Connecticut Subtenant”), Tenant and Connecticut Subtenant mutually agree to terminate the Sublease (as such term is defined in the Sublease Termination);

WHEREAS, in connection with, and as a condition precedent to, the execution of the Ninth Amendment by the Landlords, the Landlords have required that the parties hereto confirm that the Guarantees and the other Incidental Documents remain in full force and effect and apply to the Consolidated Lease as amended by the Ninth Amendment;

WHEREAS, on May 6, 2005, the Guarantor undertook a corporate reorganization that resulted in changes in ownership of certain of the Subtenants, among other things; and

WHEREAS, in connection with the corporate reorganization of the Guarantor and the execution of the Ninth Amendment, the parties hereto wish to amend certain of the Incidental Documents, including (i) the Security Agreement, dated as of December 31, 2001, by and among certain of the Subtenants and certain of the Landlords, as amended and confirmed from time to time (the “Subtenant Security Agreement”); (ii) the Security Agreement, dated as of December 31, 2001, by and among the Tenant and certain of the Landlords, as amended and confirmed from time to time (the “Tenant Security Agreement”); and (iii) the Second Amended and Restated Pledge of Stock and Membership Interests Agreement, dated as of May 6, 2005, made by the Subtenant Pledgors for the benefit of the Landlords, as amended and confirmed from time to time (the “Subtenant Pledge Agreement”), all subject to and upon the terms and conditions herein set forth;

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

1.             Removal of Subtenant.  The Connecticut Subtenant, a party to the Subtenant Security Agreement and/or that certain Security Agreement dated as of October 25, 2002, by and among certain of the Subtenants and certain of the Landlords, as amended and confirmed from time to time, is hereby removed from the Subtenant Security Agreement.  The Connecticut Subtenant, a party to the Subtenant Guaranty (as defined in Exhibit A hereof) is hereby removed from the Subtenant Guaranty.

2.             Amendment of Subtenant Security Agreement.  The Subtenant Security Agreement is hereby amended by (i) replacing Exhibit A attached thereto with Schedule 1 attached hereto; (ii) replacing Schedule 1 attached thereto with Schedule 2 attached hereto; and (iii) replacing Schedule 2 attached thereto with Schedule 3 attached hereto.

3.             Amendment of Tenant Security Agreement.  The Tenant Security Agreement is hereby amended by replacing Schedule 2 attached thereto with Schedule 4 attached hereto.

4.             Amendment of Subtenant Pledge Agreement.  The Subtenant Pledge Agreement is hereby amended by (i) replacing Exhibit A attached thereto with Schedule 5 attached hereto; and (ii) replacing Exhibit B attached thereto with Schedule 6 attached hereto.

5.             Confirmation of Guarantees.  Each of the parties to the Guarantees hereby confirms that all references in the Guarantees to the “Master Lease” or the “Lease” shall refer to the Consolidated Lease as amended by the Ninth Amendment and the Guarantees are hereby ratified and confirmed in all respects.

6.             Confirmation of Other Incidental Documents.  Each of the parties to the Incidental Documents (other than the Guarantees) hereby confirms that all references in such Incidental Documents to the “Master Lease” or the “Lease” shall refer to the Consolidated Lease as amended by the Ninth Amendment and that such Incidental Documents, as amended by this Confirmation, are hereby ratified and confirmed in all respects.

7.             No Impairment, Etc.  The obligations, covenants, agreements and duties of the guarantors under the Guarantees shall not be impaired in any manner by the execution and delivery of the Ninth Amendment, the Guarantees, the other Incidental Documents, or any amendments, changes or modifications thereof, and in no event shall any ratification or confirmation of such Guarantees or such other Incidental Documents, or the obligations, covenants, agreements and the duties of the guarantors thereunder or of the parties under the

other Incidental Documents, including, without limitation, this Confirmation, be required in connection with any such amendment, change or modification.

[Signatures on following page.]

IN WITNESS WHEREOF, the parties hereto have caused this Confirmation to be duly executed, as a sealed instrument, as of the date first set forth above.

	GUARANTOR:
	FIVE STAR QUALITY CARE, INC.
	By:	/s/ Xxxxx X. Xxxxxx Xx.
		Xxxxx X. Xxxxxx Xx.
		Treasurer, Chief Financial
		Officer and Assistant
		Secretary
	TENANT:
	FIVE STAR QUALITY CARE TRUST
	By:	/s/ Xxxxx X. Xxxxxx Xx.
		Xxxxx X. Xxxxxx Xx.
		Treasurer, Chief Financial Officer
		and Assistant
		Secretary
	TENANT PLEDGOR:
	FSQ, INC.
	By:	/s/ Xxxxx X. Xxxxxx Xx.
		Xxxxx X. Xxxxxx Xx.
		Treasurer, Chief Financial
		Officer and Assistant Secretary

SUBTENANT PLEDGORS:

FSQ, INC., FIVE STAR QUALITY CARE TRUST, FVEST. XXX, INC., FIVE STAR QUALITY CARE-CA, INC., FIVE STAR QUALITY CARE-CA II, INC., FIVE STAR QUALITY CARE-CO, INC., THE HEARTLANDS RETIREMENT COMMUNITY-ELLICOTT CITY I, INC., FIVE STAR QUALITY CARE-GA, INC., FIVE STAR QUALITY CARE-IA, INC., FIVE STAR QUALITY CARE-NE, INC., FIVE STAR QUALITY CARE-WI, INC. and LIFETRUST AMERICA, INC.

	By:	/s/ Xxxxx X. Xxxxxx Xx.
		Xxxxx X. Xxxxxx Xx.
		Treasurer, Chief Financial
		Officer and Assistant
		Secretary of each of the
		foregoing entities
	LIFETRUST PROPERTIES, L.L.C.
	By:	LifeTrust America Inc.,
		Its Sole Member
	By:	/s/ Xxxxx X. Xxxxxx Xx.
		Xxxxx X. Xxxxxx Xx.
		Treasurer, Chief Financial
		Officer and Assistant
		Secretary

SUBTENANTS:

FIVE STAR QUALITY CARE-AZ, LLC, FIVE STAR QUALITY CARE-CA, LLC, FIVE STAR QUALITY CARE-CA II, LLC,

FIVE STAR QUALITY CARE-COLORADO, LLC,

FIVE STAR QUALITY CARE-CT, LLC, FIVE STAR QUALITY CARE-GA, LLC, FIVE STAR QUALITY CARE-IA, LLC, FIVE STAR QUALITY CARE-KS, LLC, FIVE STAR QUALITY CARE-MD, LLC, FIVE STAR QUALITY CARE-MO, LLC, FIVE STAR QUALITY CARE-NE, LLC, FIVE STAR QUALITY CARE-NC, LLC FIVE STAR QUALITY CARE-WI, LLC, FIVE STAR QUALITY CARE-WY, LLC, FIVE STAR QUALITY CARE-VA, LLC, FIVE STAR QUALITY CARE-CA, INC., FIVE STAR QUALITY CARE-IA, INC.,

FIVE STAR QUALITY CARE-NE, INC.,

MORNINGSIDE OF GALLATIN, LLC, THE HEARTLANDS RETIREMENT COMMUNITY — ELLICOTT CITY I, INC. and

MORNINGSIDE OF BELMONT, LLC

	By:	/s/ Xxxxx X. Xxxxxx Xx.
		Xxxxx X. Xxxxxx Xx.
		Treasurer, Chief Financial
		Officer and Assistant
		Secretary of each of the
		foregoing entities

MORNINGSIDE OF XXXXXXXX, X.X., MORNINGSIDE OF ATHENS, LIMITED PARTNERSHIP, MORNINGSIDE OF COLUMBUS, L.P., MORNINGSIDE OF XXXXXX, LIMITED PARTNERSHIP, MORNINGSIDE OF XXXXX, LIMITED PARTNERSHIP, MORNINGSIDE OF XXXXXXXXX, X.X. and MORNINGSIDE OF KENTUCKY, LIMITED PARTNERSHIP

	By:	LifeTrust America, Inc.,
		General Partner of each of
		the foregoing entities
		By:	/s/ Xxxxx X. Xxxxxx Xx.
			Xxxxx X. Xxxxxx Xx.
			Treasurer, Chief
			Financial Officer and
			Assistant Secretary

MORNINGSIDE OF BELLGRADE, RICHMOND, LLC, MORNINGSIDE OF CHARLOTTESVILLE, LLC, MORNINGSIDE OF NEWPORT NEWS, LLC and MORNINGSIDE OF XXXXXXXX — RICHMOND, LLC

	By:	LifeTrust America, Inc.,
		Member of each of the
		foregoing entities
		By:	/s/ Xxxxx X. Xxxxxx Xx.
			Xxxxx X. Xxxxxx Xx.
			Treasurer, Chief
			Financial Officer and
			Assistant Secretary

LANDLORD:

HRES2 PROPERTIES TRUST,

SPTIHS PROPERTIES TRUST,

SPT-MICHIGAN TRUST,

SPTMNR PROPERTIES TRUST,

SNH CHS PROPERTIES TRUST,

ELLICOTT CITY LAND I, LLC,

ELLICOTT CITY LAND II, LLC,

SNH/LTA PROPERTIES TRUST and

SNH/LTA PROPERTIES GA LLC

	By:	/s/ Xxxx X. Xxxxxxx
		Xxxx X. Xxxxxxx
		Treasurer of each of the
		foregoing entities

The following exhibit and schedules have been omitted and will be supplementally furnished to the Securities and Exchange Commission upon request:

Exhibit A

Schedule 1

Schedule 2

Schedule 3

Schedule 4

Schedule 5

Schedule 6