Exhibit 10.38


CONFIRMATION OF GUARANTEES AND CONFIRMATION 

AND AMENDMENT OF OTHER INCIDENTAL DOCUMENTS


THIS CONFIRMATION OF GUARANTEES AND CONFIRMATION
AND AMENDMENT OF OTHER INCIDENTAL DOCUMENTS (this “Confirmation”) is made as of November 6,
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 other 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, that certain Eighth Amendment to
Second Amended and Restated Lease Agreement dated as of November 1, 2006 and
that certain Ninth 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 Tenth Amendment to Second Amended and
Restated Lease Agreement, dated as of the date hereof (the “Tenth Amendment”),
the Consolidated Lease is being amended to add certain property thereto, as
more particularly described in the Tenth Amendment;


WHEREAS, the Tenant intends to enter
into a sublease (the “Sublease”) with Morningside of Kentucky, Limited
Partnership, a Delaware limited partnership (“Morningside-Kentucky”) to
sublease the property being added to the Consolidated Lease pursuant to the
Tenth Amendment to Morningside-Kentucky;


WHEREAS, in connection with, and as
a condition precedent to, the execution of the Tenth 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 Tenth Amendment; and


WHEREAS, in connection with the
execution of the Tenth Amendment and the Sublease, 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.             Amendment of
Subtenant Security Agreement.  The
Subtenant Security Agreement is hereby amended by: (i) deleting the following
paragraph 30 from Exhibit A attached thereto:


25.           Amended and Restated Sublease
Agreement, dated September 1, 2006, by and between Five Star Quality Care











Trust, a Maryland
business trust, and Morningside of Kentucky, Limited Partnership, a Delaware
limited partnership.


(ii) inserting the following new paragraph at the end
of Exhibit A attached thereto:


Second Amended and
Restated Sublease Agreement, dated November 6, 2006, by and between Five Star
Quality Care Trust, a Maryland business trust, and Morningside of Kentucky,
Limited Partnership, a Delaware limited partnership.


and (iii) inserting the following in the appropriate
order on Schedule 2 attached thereto:


	
  

  	
  KENTUCKY:

  	
   

  	
  THE NEIGHBORHOOD OF 

  	
   

  	
  Morningside of Kentucky, Limited 

  
	
   

  	
   

  	
   

  	
  SOMERSET

  100 Neighborly Way 

  	
   

  	
  Partnership

  
	
   

  	
   

  	
   

  	
  Somerset, KY 42501

  	
   

  	
   

  




                 2.             Amendment of Tenant Security Agreement.  The Tenant Security Agreement is hereby
amended by inserting the following in the appropriate order on Schedule 2
attached thereto:


	
  

  	
  KENTUCKY:

  	
   

  	
  THE NEIGHBORHOOD OF 

  
	
   

  	
   

  	
   

  	
  SOMERSET

  100 Neighborly Way 

  
	
   

  	
   

  	
   

  	
  Somerset, KY 42501

  




                 3.             Amendment of Subtenant Pledge Agreement.  The Subtenant Pledge Agreement is hereby
amended by (i) deleting the following paragraph 25 from Exhibit A attached
thereto:


34.           Amended and Restated Sublease
Agreement, dated June 3, 2005, by and between Five Star Quality Care Trust, a
Maryland business trust, as sublandlord, and Morningside of Kentucky, Limited
Partnership, a Delaware limited partnership, as subtenant.


and (ii) inserting the following new paragraph at the
end of Exhibit A attached thereto:


Second Amended and
Restated Sublease Agreement, dated November 6, 2006, by and between Five Star
Quality Care Trust, a Maryland business trust, as sublandlord, and Morningside
of Kentucky, Limited Partnership, a Delaware limited partnership, as subtenant.











4.             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 Tenth Amendment and the
Guarantees are hereby ratified and confirmed in all respects.


5.             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”,
the “Lease” or the “Second Amended Lease” shall refer to the Consolidated Lease
as amended by the Tenth Amendment and that such Incidental Documents, as
amended by this Confirmation, are hereby ratified and confirmed in all
respects.


6.             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 Eighth 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/ Bruce J. Mackey Jr.

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Bruce J. Mackey Jr.

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Treasurer, Chief Financial

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Officer and Assistant Secretary

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  TENANT:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  FIVE STAR QUALITY CARE TRUST

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Bruce J. Mackey Jr

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Bruce J. Mackey Jr.

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Treasurer, Chief Financial

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Officer and Assistant Secretary

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  TENANT PLEDGOR:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  FSQ, INC.

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Bruce J. Mackey Jr.

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Bruce J. Mackey Jr.

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Treasurer, Chief Financial

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Officer and Assistant Secretary

  	
   

  	
   

  	
   

  



 











 


	
  

  	
  SUBTENANT
  PLEDGORS:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  FSQ,
  INC., FIVE STAR QUALITY CARE TRUST, FVEST. JOE, 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/ Bruce J.
  Mackey Jr.

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Bruce J. Mackey
  Jr.

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  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/ Bruce J.
  Mackey Jr.

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Bruce J.Mackey
  Jr.

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  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-FL, LLC, FIVE STAR QUALITY
  CARE-GA, LLC, FIVE STAR QUALITY CARE-GHV, LLC, FIVE STAR QUALITY CARE-IA,
  LLC, FIVE STAR QUALITY CARE-IL, LLC, FIVE STAR QUALITY CARE-KS, LLC, FIVE
  STAR QUALITY CARE-MD, LLC, FIVE STAR QUALITY CARE-MO, LLC, FIVE STAR QUALITY
  CARE-MS, 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/ Bruce J.
  Mackey Jr.

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Bruce J. Mackey
  Jr.

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Treasurer, Chief
  Financial

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Officer and
  Assistant Secretary

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  of each of the
  foregoing 

  entities

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 











 


	
  

  	
  MORNINGSIDE
  OF ANDERSON, L.P., MORNINGSIDE OF ATHENS, LIMITED PARTNERSHIP, MORNINGSIDE OF
  COLUMBUS, L.P., MORNINGSIDE OF DALTON, LIMITED PARTNERSHIP, MORNINGSIDE OF
  EVANS, LIMITED PARTNERSHIP, MORNINGSIDE OF GREENWOOD, L.P. and MORNINGSIDE OF
  KENTUCKY, LIMITED PARTNERSHIP

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  LifeTrust
  America, Inc.

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  General Partner
  of each of the

  foregoing
  entities

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Bruce J.
  Mackey Jr.

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Treasurer, Chief
  Financial

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Officer and
  Assistant 

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Secretary

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

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

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  LifeTrust
  America, Inc., 

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Member of each
  of the foregoing

  entities

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Bruce J.
  Mackey Jr.

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Bruce J. Mackey
  Jr.

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  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/ John R. Hoadley

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  John R. Hoadley

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Treasurer of each of the 

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  foregoing entities

  	
   

  	
   

  	
   

  












 


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


Exhibit A