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                                                                   EXHIBIT 10.44
    
                                                  

                         SUBSIDIARY SECURITY AGREEMENT



                  THIS SUBSIDIARY SECURITY AGREEMENT (this "Agreement") is made
as of this ____ day of July 1997 (the "Effective Date"), by each of West
Tennessee, Inc., Lake Forest Healthcare Center, Inc., Statesboro HealthCare,
Inc., Lake Health Care Center, Inc., Roberta Health Care Center, Inc.,
Gardendale Health Care Center, Inc., Southside Health Care Center, Inc.,
Gainesville Health Care Center, Inc., Charlton City Healthcare, Inc., Jeff
Davis Healthcare, Inc., Seaside Retirement, Inc., Mid-Florida, Inc., Bibb
Health & Rehabilitation, Inc., Brent-Lox Hall Nursing Home, Inc., Libbie
Rehabilitation Center, Inc., Phoenix Associates, Inc., Summer's Landing, Inc.,
Riveria Retirement, Inc., Pine Manor Healthcare, Inc., Suncoast Retirement,
Inc., Atrium of Jacksonville and The Atrium Nursing Home, Inc. (each, a
"Pledgor," and collectively, the "Pledgors"), in favor of SUN HEALTHCARE GROUP,
INC., a Delaware corporation (the "Lender"), witnesseth:

                                    RECITALS

                  WHEREAS, the Lender has agreed to make a loan to Retirement
Care Associates, Inc., a Colorado corporation ("RCA"), Retirement Management
Corporation, a Georgia corporation ("RMC"), and Capitol Care Management
Company, Inc., a Georgia corporation ("CCMC") in the principal amount of
$5,000,000.00 (the "Loan") pursuant to the terms and conditions of that certain
Promissory Note made by RCA, RMC and CCMC (as Maker) to the Lender (as Payee)
dated as of even date herewith (the "Note");

                  WHEREAS, each Pledgor acknowledges that it is a direct or
indirect wholly owned subsidiary of RCA and will derive substantial direct and
indirect benefit from the transactions contemplated by the Note;

                  WHEREAS, as a condition to the Loan, each Pledgor has agreed
to execute and deliver a Subsidiary Guaranty, dated as of even date herewith
(the "Subsidiary Guaranty") to the Lender; and

                  WHEREAS, in connection with the transactions contemplated by
the Note and the Subsidiary Guaranty, each Pledgor has agreed to enter into
this Agreement as security for the payment and performance of such Pledgor's
obligations hereunder and under the Subsidiary Guaranty.

                  NOW, THEREFORE, in order to secure the prompt payment of all
past, present, and future indebtedness, liabilities, and obligations of each
Pledgor to the Lender of any nature whatsoever in connection with the
Subsidiary Guaranty, together with all obligations of each Pledgor to the
Lender hereunder, however and wherever created, arising, or evidenced, whether
direct or indirect, absolute, contingent, or otherwise, now or hereafter
existing or due or to become due (collectively, the "Pledgors' Liabilities"),
and the



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performance by each Pledgor of all the terms, conditions, and provisions of
this Agreement and of any other loan document previously, simultaneously or
hereafter executed and delivered by the Pledgors and/or any other person,
singly or jointly with another person or persons, evidencing, securing,
guarantying, or in connection with any of the Pledgors' Liabilities, including
the Subsidiary Guaranty (collectively, the "Loan Documents"), each Pledgor
agrees with the Lender as follows:

                  1.     Collateral. To secure the payment and performance of 
the Pledgors' Liabilities and each Pledgor's performance of its obligations
under the Loan Documents, and subject to Section 20 hereof, each Pledgor hereby
grants to the Lender a security interest in, and security title to, all of the
following (being referred to collectively herein as the "Collateral"): (i) such
Pledgor's present or future accounts, accounts receivable, other receivables,
contract rights, issues, profits, rents, chattel paper, instruments and
documents, together with all of the proceeds, cash or non-cash, thereof,
however acquired, or now or hereafter existing, including, without limitation,
all reimbursable costs or payments from Medicaid and Medicare, or other state
or federal governmental agencies, amounts due from clients and third party
providers, rights to management fees, and amounts due to such Pledgor from
advances to any of its managed or affiliated companies, (ii) all revenues
payable to and rights to distributions of such Pledgor from agreements or
contracts with residents of facilities owned, leased or managed by such Pledgor
and all rights to deposits from such residents and insurance benefits due to
such Pledgor with respect to such residents (excluding any escrow accounts
maintained on behalf of such residents), and (iii) all proceeds of the
foregoing (collectively, the "Accounts").

The term "Collateral" as used herein means each and all of the items of
Collateral described above, and the term "proceeds" as used herein includes,
without limitation, the proceeds of all insurance policies covering all or any
part of such items of Collateral.

                  2.     Title to Collateral. Subject to Section 20 hereof, the
Pledgors jointly and severally warrant and represent that (i) they are the
lawful owner of the Collateral, and have the full right, power, and authority
to convey, transfer, and grant the security title and security interest in the
Collateral granted herein to the Lender; (ii) all licenses relating to the
Collateral are fully paid and freely assignable to Lender, and, upon the
occurrence of an Event of Default (as defined herein) and foreclosure by the
Lender, the Lender shall have all rights of the applicable Pledgor to any
Collateral licensed to such Pledgor or licensed by such Pledgor; (iii) the
Collateral is not, and so long as this Agreement is in effect will not be,
subject to any liens, claims, security interests, encumbrances, taxes, or
assessments, however described or denominated, except for liens, claims,
security interests and encumbrances in favor of the Lender and except as set
forth on Exhibit "A" hereto; (iv) no financing statement, mortgage, notice of
lien, deed of trust, deed to secure debt, security agreement, or any other
agreement or instrument creating an encumbrance, lien, charge against any of
the Collateral is in existence or on file in any public office, other than
financing statements (or other appropriate security documentation) filed on
behalf of the Lender or disclosed on Exhibit "A" hereto; and (v) all
information with respect to the Collateral and the Pledgors' Liabilities, or



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any of them, set forth in any written schedule, certificate, or other document
at any time heretofore or hereafter furnished by RCA or any Pledgor to the
Lender, including any Borrowing Base Certificate referred to in Section 3 of
that certain Security Agreement dated as of even date herewith executed by RCA
to the Lender (the "RCA Security Agreement"), and all other written information
heretofore or hereafter furnished by each Pledgor to the Lender, is and will be
true and correct in all material respects as of the date furnished.

                  3.     Further Assurances. Each Pledgor will defend its title 
to the Collateral against all persons and will, upon request of the Lender, (a)
furnish such further assurances of title as may be required by the Lender, (b)
deliver and execute or cause to be delivered and executed, in form and content
satisfactory to the Lender, any financing statements, notices, certificates of
title, and other documents and pay the cost of filing or recording the same in
all public offices deemed necessary by the Lender, as well as any recordation,
documentary, or transfer tax required by law to be paid in connection with such
filing or recording, and (c) do such other acts as the Lender may request in
order to perfect, preserve, maintain, or continue the perfection of the
Lender's security interest in the Collateral and/or its priority.

                  4.     Accounts, etc. Until such time as the Lender shall 
notify any Pledgor in writing of the revocation of such power and authority,
such Pledgor, as agent for the Lender, will, at its own expense, diligently
collect, as and when due, all amounts owing under the Accounts, including the
taking of such action with respect to such collection as the Lender may request
from time to time, and to hold in trust and segregate for the Lender all funds
received from the Accounts; provided, however, that until an Event of Default
shall occur or would occur but for the passage of time, or giving of notice, or
both (such event being a "default"), such Pledgor may use or consume in the
ordinary course of its business any such collections on the Accounts in any
lawful manner not inconsistent with this Agreement and the other Loan
Documents. The Lender, however, may after an Event of Default shall occur or
during the continuance of a default and upon notice to any Pledgor revoke such
power and authority and in any event shall have the authority and right to
notify any parties obligated on any of the Accounts to make payment to the
Lender of any amounts due or to become due thereunder, and enforce collection
of performance under any of the Accounts by suit or otherwise, and surrender,
release, or exchange all or any part thereof, or compromise or extend or renew
for any period (whether or not longer than the original period) any
indebtedness thereunder or evidenced thereby. After an Event of Default, each
Pledgor will, at its own expense, notify any parties obligated on any of the
Accounts to make payments to the Lender and will hold in trust and immediately
forward to the Lender all payments received by the Pledgor in the form
received, with all necessary endorsements thereon for collection by the Lender.

                  5.     Transfer and Other Liens. The Pledgors will not sell,
lease, transfer, exchange, or otherwise dispose of the Collateral, or any part
hereof, without the prior written consent of the Lender and will not permit any
lien, security interest, or other encumbrance to attach to the Collateral, or
any part thereof, other than those in favor of the Lender or those permitted by
the Lender in writing, except that each Pledgor may, in the ordinary course of
its



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business and in the absence of an Event of Default hereunder or notice by the
Lender to such Pledgor under this Agreement, collect its Accounts.

                  6.     Financial Statements, Books, and Records. Each Pledgor
will (a) at all times maintain, in accordance with generally accepted
accounting principles consistently applied, accurate and complete books and
records pertaining to the operation, business affairs, and financial condition
of such Pledgor and pertaining to the Collateral and any contracts and
collections relating to the Collateral, (b) furnish to the Lender promptly upon
request, certified by an officer of such Pledgor and in the form and content
and at the intervals specified by the Lender, such financial statements,
reports, schedules, and other information with respect to the operation,
business affairs, and financial condition of such Pledgor as the Lender may
from time to time require, (c) at all reasonable times, and without hindrance
or delay, permit the Lender or any person designated by the Lender to enter any
place of business of such Pledgor or any other premises where any books,
records, and other data concerning such Pledgor and/or the Collateral may be
kept and to examine, audit, inspect, and make extracts from and photocopies of
any such books, records, and other data, (d) furnish to the Lender promptly
upon request, certified by an officer of such Pledgor and in the form and
content specified by the Lender, lists of purchasers of inventory, aging of
accounts, aggregate cost or wholesale market value of inventory, schedules of
equipment, and other data concerning the Collateral as the Lender may from time
to time specify, and (e) mark its books and records in a manner satisfactory to
the Lender so that the Lender's rights in and to the Collateral will be shown.

                  7.     Names of Pledgors, Places of Business, and Location of
Collateral. Each Pledgor represents and warrants that its correct legal name is
as specified on the signature lines of this Agreement, and each legal or trade
name of such Pledgor for the previous five (5) years (if different from such
Pledgor's current legal name) is as specified below the signature lines of this
Agreement. Without the prior written consent of the Lender, no Pledgor will
change its name, dissolve, merge, or consolidate with any other person. Each
Pledgor warrants that the address of such Pledgor's chief executive office and
the address of each other place of business of such Pledgor are as specified
below the signature lines of this Agreement. The Collateral and all books and
records pertaining to the Collateral have been, are, and will be located at the
applicable Pledgor's chief executive office specified below or at any other
place of business which may be specified below the signature lines of this
Agreement. Without the prior written consent of the Lender, no Pledgor will
open any new place of business or change the location of any Collateral to any
place not specified below. Each Pledgor will immediately advise the Lender in
writing of the opening of any new place of business and of any change in the
location of the places where the Collateral or any part thereof, or the books
and records concerning the Collateral or any part thereof, are kept.

                  8.     Care of Collateral. Each Pledgor will maintain the
Collateral in first-class condition and will not do or permit anything to be
done to the Collateral that may impair its value. The Lender shall have no duty
to, and each Pledgor hereby releases the Lender from all claims for loss or
damage caused by the failure to, collect or enforce any Account or to preserve
rights against prior parties to the Collateral.



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                  9.     Taxes. Each Pledgor will pay as and when due and 
payable all taxes, levies, license fees, assessments, and other impositions
levied on the Collateral or any part thereof or for its use and operation.

                  10.    Specific Assignments. Promptly upon request by the
Lender, each Pledgor will execute and deliver to the Lender written
assignments, endorsements, and/or schedules, in form and content satisfactory
to the Lender, of specific Accounts or groups of Accounts, but the security
interest of the Lender hereunder shall not be limited in any way by such
assignments.

                  11.    Government Contracts. If any Account arises out of a
contract or contracts with the United States of America or any department,
agency, or instrumentality thereof, each Pledgor shall immediately notify the
Lender thereof in writing and execute any instruments or take any steps
required by the Lender in order that all moneys due or to become due under such
contract or contracts shall be assigned to the Lender and notice thereof given
under the Federal Assignment of Claims Act or other applicable law.

                  12.    Collateral Account.

                         (a)       Subject to the exercise by Fidelity of its 
rights and remedies under the Fidelity Agreement referred to in Section 20
hereof, each Pledgor will, upon the request of the Lender at any time and from
time to time both prior to and after the occurrence of an Event of Default
hereunder, deposit or cause to be deposited to a bank account designated by the
Lender and from which the Lender alone has power of access and withdrawal
(collectively, the "Collateral Account") all checks, drafts, cash, and other
remittances in payment or on account of payment of the Accounts, and the cash
proceeds of any returned goods, the sale or lease of which gave rise to an
Account and, when permitted by the paying companies (including without
limitation, Medicaid and Mutual of Omaha Medicare payment [EDS-Title XVIII])
all such payments therefrom (all of the foregoing herein collectively referred
to as "Items of Payment"). Each Pledgor shall deposit the Items of Payment for
credit to the Collateral Account within two (2) business days of the receipt
thereof, and in precisely the form received, except for the endorsement of such
Pledgor where necessary to permit the collection of the Items of Payment, which
endorsement such Pledgor hereby agrees to make. Pending such deposit, no
Pledgor will commingle any of the Items of Payment with any of its other funds
or property but will hold them separate and apart. The Lender may at any time
and from time to time apply the whole or any part of the collected funds
credited to the Collateral Account against the Pledgors' Liabilities.

                           (b)     So long as Lender, in its discretion, so 
desires, each Pledgor shall establish and maintain a blocked account in
Lender's name with a bank satisfactory to Lender (the "Collecting Bank") to
which such Pledgor will immediately deposit all payments from account debtors
in the identical form in which such payment was made, whether by cash or check.



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                           (c)     The Collecting Bank shall acknowledge and 
agree, in a manner satisfactory to Lender, that all payments made to such
blocked account are the sole and exclusive property of the Lender, that the
Collecting Bank has no right of set off against such blocked account, and that
the Collecting Bank will wire or otherwise transfer in immediately available
funds, in a manner satisfactory to Lender, funds deposited in such blocked
account to Lender on a daily basis as soon as such funds are collected. Each
Pledgor hereby agrees that all payments made to such blocked account or
otherwise received by Lender, whether on Accounts or as proceeds of the
Collateral or otherwise, will be the sole and exclusive property of Lender and
will be applied on account of the Obligations. With respect to any payment
relating to or proceeds of any Accounts or the Collateral which come into its
possession or under its control, each Pledgor and any affiliates, subsidiaries,
shareholders, directors, officers, employees, agents or persons acting for or
in concert with such Pledgor shall receive any such item, as trustee for
Lender, as sole and exclusive property of Lender, and immediately upon receipt
thereof, such Pledgor shall remit the same or cause the same to be remitted in
kind, to Lender, at Lender's address set forth herein. Each Pledgor agrees to
pay to Lender any and all fees, costs, expenses which Lender incurs in
connection with obtaining and maintaining the blocked account and depositing
for collection by Lender any check or item of payment received or delivered to
the Collecting Bank or the Lender, and each Pledgor further agrees to
reimburse, indemnify and hold harmless Lender from any claims asserted by the
Collecting Bank in connection with the blocked account or any returned or
uncollected checks received by the Collecting Bank as proceeds of the
Collateral.

                  13.    Rights of Lender and Duties of Pledgors. The Lender 
may at any time and from time to time both prior to and after the occurrence of
an Event of Default hereunder (a) notify the account debtors obligated on any
of the Collateral to make payments thereon directly to the Lender, and to take
control of the cash and noncash proceeds of any such Collateral; (b) charge to
the applicable Pledgor any Item of Payment credited to the Collateral Account
which is dishonored by the drawee or maker thereof; (c) compromise, extend, or
renew any of the Collateral or deal with the same as it may deem advisable; (d)
release, make exchanges or substitutions for, or surrender all or any part of
the Collateral; (e) remove from each Pledgor's place of business all books,
records, ledger sheets, correspondence, invoices, and documents relating to or
evidencing any of the Collateral or, without cost or expense to the Lender,
make such use of each Pledgor's place(s) of business as may be reasonably
necessary to administer, control, and collect the Collateral; (f) repair,
alter, or supply goods, if any, necessary to fulfill in whole or in part the
purchase order of any account debtor; (g) demand, collect, receipt for, and
give renewals, extensions, discharges, and releases of any of the Collateral;
(h) institute and prosecute legal and equitable proceedings to enforce
collection of, or realize upon, any of the Collateral; (i) settle, renew,
extend, compromise, compound, exchange, or adjust claims with respect to any of
the Collateral or any legal proceedings brought with respect thereto; (j)
endorse the name of the applicable Pledgor upon any Items of Payment relating
to the Collateral or upon any proof of claim in bankruptcy against an account
debtor; and (k) receive and open all mail addressed to each Pledgor and, if an
Event of Default exists hereunder, notify postal authorities to change the
address for the delivery of mail to each Pledgor to such address as the Lender
may designate; and for purposes of taking



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the actions described in Subsections (a) through (k) each Pledgor hereby
irrevocably appoints the Lender as its attorney-in-fact (which appointment
being coupled with an interest is irrevocable while any of Pledgors'
Liabilities remain unpaid), with power of substitution, in the name of the
Lender or in the name of such Pledgor or otherwise, for the use and benefit of
the Lender, but at the cost and expense of such Pledgor and without notice to
such Pledgor. Each Pledgor will (a) make no material change to the terms of any
Account without the prior written permission of the Lender; (b) on demand, make
available in form acceptable to the Lender shipping documents and delivery
receipts evidencing the shipment of goods which gave rise to an Account,
completion certificate, or other proof of the satisfactory performance of
services which gave rise to an Account, copies of the invoices arising out of
an Account, and such Pledgor's copy of any written contract or order from which
an Account arose; and (c) when requested, regularly advise the Lender whenever
an account debtor returns or refuses to retain any goods, the sale or lease of
which gave rise to an Account, and will comply with any instructions which the
Lender may give regarding the sale or other disposition of such returns.

                  14.    Performance by Lender. If any Pledgor fails to 
perform, observe, or comply with any of the conditions, terms, or covenants
contained in this Agreement, the Lender, without notice to or demand upon such
Pledgor and without waiving or releasing any of the Pledgors' Liabilities or
any Event of Default, may (but shall be under no obligation to) at any time
thereafter perform such conditions, terms, or covenants for the account and at
the expense of such Pledgor, and may enter upon any place of business or other
premises of such Pledgor for that purpose and take all such action thereon as
the Lender may consider necessary or appropriate for such purpose. All sums
paid or advanced by the Lender in connection with the foregoing and all costs
and expenses (including, without limitation, reasonable attorneys' fees
actually incurred and expenses) incurred in connection therewith (collectively,
the "Expense Payments") together with interest thereon at the post-default rate
of interest provided for in the Note (but in no event higher than the maximum
interest rate permitted by applicable law), from the date of payment until
repaid in full, shall be paid by such Pledgor to the Lender on demand and shall
constitute and become a part of the Pledgors' Liabilities secured hereby.

                  15.    Default. The occurrence of any one or more of the
following events shall constitute an event of default (an "Event of Default")
under this Agreement: (a) failure of any Pledgor to pay any of the Pledgors'
Liabilities as and when due and payable, after giving effect to any applicable
grace period; (b) failure of any Pledgor to perform, observe, or comply with
any of the provisions of this Agreement or of any of the other Loan Documents,
after giving effect to any applicable grace period; (c) the occurrence of an
Event of Default (as defined therein) under the Note or any of the other Loan
Documents; (d) any information contained in any financial statement,
application, schedule, report, or any other document given by any Pledgor or by
any other person in connection with the Pledgors' Liabilities, with the
Collateral, or with the Note or any of the Loan Documents, including any
Borrowing Base Certificate referred to in Section 3 of the RCA Security
Agreement, is not in all respects true and accurate or any Pledgor or such
other person omitted to state any material fact or any fact



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necessary to make such information not misleading; (e) any Pledgor is generally
not paying debts as such debts become due; (f) the filing of any petition for
relief under any provision of the Federal Bankruptcy Code or any similar state
law is brought by or against any Pledgor; (g) an application for the
appointment of a receiver for, the making of a general assignment for the
benefit of creditors by or the insolvency of, any Pledgor; (h) the dissolution,
merger, consolidation, or reorganization of any Pledgor; (i) suspension of the
operation of any Pledgor's present business; (j) transfer of a substantial part
(determined by market value) of any Pledgor's property; (k) sale, transfer, or
exchange, either directly or indirectly, of a controlling stock interest of any
Pledgor; (l) termination or withdrawal of any guaranty for the Pledgors'
Liabilities or the Note; (m) the Pension Benefit Guaranty Corporation commences
proceedings under Section 4042 of the Employee Retirement Income Security Act
of 1974 ("ERISA"), as amended, to terminate any employee pension benefit plan
of any Pledgor; (n) the determination in good faith by the Lender that a
material adverse change has occurred in the financial condition of any Pledgor
from the condition set forth in the most recent financial statement of such
Pledgor heretofore furnished to the Lender, or from the financial condition of
such Pledgor as heretofore most recently disclosed to the Lender in any other
manner; (o) the determination in good faith by the Lender that the prospect of
payment of any of the Pledgors' Liabilities is impaired for any reason; or (p)
the occurrence of an "Event of Default" under the Fidelity Agreement referred
to in Section 20 hereof.

                  16.    Rights and Remedies upon Default.

                         (a)       Upon and after an Event of Default, Lender 
shall have, subject to Section 20 hereof, the following rights and remedies:

                                   (i)       In addition to any other rights 
and remedies contained in this Agreement and in all the other Loan Documents
and the Note, all the rights and remedies of a secured party under the Uniform
Commercial Code of the State of New York or other applicable laws, all of which
rights and remedies shall be cumulative and non-exclusive, to the extent
permitted by law;

                                   (ii)      The right to open each Pledgor's 
mail and to collect any and all amounts due each Pledgor from account debtors;
and

                                   (iii)     The right to: (A) demand payment 
of the Accounts; (B) enforce payment of the Accounts by legal proceedings or
otherwise; (C) exercise all of each Pledgor's rights and remedies with respect
to the collection of the Accounts; (D) settle, adjust, compromise, extend or
renew the Accounts; (E) settle, adjust or compromise any legal proceedings
brought to collect the Accounts; (F) to the extent permitted by applicable law,
sell or assign the Accounts upon such terms, for such amounts and at such time
or times as Lender deems advisable; (G) discharge and release the Accounts; (H)
take control, in any manner, of any item of payment or proceeds from any
account debtor; (I) prepare, file, and sign any Pledgor's name on any proof of
claim in bankruptcy or similar document against any account debtor; (J)
prepare, file, and sign any Pledgor's name on any notice of lien,



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assignment or satisfaction of lien or similar document in connection with the
Accounts; (K) do all acts and things necessary, in Lender's sole discretion, to
fulfill each Pledgor's obligations under the Loan Documents; (L) endorse the
name of each Pledgor upon any chattel paper, document, instrument, invoice,
freight bill, bill of lading or similar document or agreement relating to the
Accounts; (M) use each Pledgor's stationery and sign each Pledgor's name to
verifications of the Accounts and notices thereof to account debtors; and (N)
use the information recorded on or contained in any data processing equipment
or computer hardware or software relating to the Accounts or proceeds thereof
to which each Pledgor has access.

                           (b)     Upon and after an Event of Default, Lender 
shall have, subject to Section 20 hereof, the right to: (i) sell or otherwise
dispose of all or any Collateral in its then condition, or after any further
manufacturing or processing thereof, at public or private sale or sales, with
such notice as may be required by law, in lots or in bulk, for cash or on
credit, all as Lender, in its sole discretion, may deem advisable; (ii) adjourn
such sales from time to time with or without notice; and (iii) to conduct such
sales on each Pledgor's premises or elsewhere and use each Pledgor's premises
without charge for such sales for such time or times as Lender may see fit.
Lender is hereby granted a license or other right to use, without charge, each
Pledgor's labels, patents, copyrights, rights of use of any name, trade
secrets, trade names, trademarks and advertising matter, or any property of a
similar nature, as it pertains to the Collateral, in advertising for sale and
selling any Collateral. Each Pledgor's rights under all licenses and all
franchise agreements shall inure to Lender's benefit. Lender shall have the
right to sell, lease or otherwise dispose of any Collateral, or any part
thereof, for cash, credit or any combination thereof, and Lender may purchase
all or any part of the Collateral at public or, to the extent permitted by law,
private sale and, in lieu of actual payment of such purchase price, may set off
the amount of such price against each Pledgor's obligations to Lender. The
proceeds realized from the sale of any Collateral shall be applied first to the
reasonable costs, expenses and attorneys' fees and expenses incurred by Lender
for collection and for acquisition, completion, protection, removal, storage,
sale and delivery of the Collateral; second, to the indebtedness under the
Subsidiary Guaranty; and third, to the payment of all other Pledgor
Liabilities. If any deficiency shall arise, each Pledgor shall remain liable to
Lender therefor.

                           (c)      Any notice required to be given by Lender 
of a sale, lease or other disposition of the Collateral or any other intended
action by Lender, if deposited in the United States mail, postage prepaid and
addressed to any Pledgor at its address set forth herein, at least five days
prior to such proposed action, shall constitute commercially reasonable and
fair notice thereof to such Pledgor.

                           (d)      Upon the occurrence of an Event of Default 
which has not been cured, the rate of interest accruing on the indebtedness
evidenced by the Note shall, at Lender's option, be increased to a default rate
of interest provided in the Note.

                  17.      Remedies Cumulative. Each right, power, and remedy 
of the Lender as provided for in this Agreement or in the other Loan Documents
or the Note or now or



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hereafter existing at law or in equity of by statute or otherwise shall be
cumulative and concurrent and shall be in addition to every other right, power,
or remedy provided for in this Agreement or in the other Loan Documents or the
Noted or now or hereafter existing at law or in equity or by statute or
otherwise, and the exercise or beginning of the exercise by the Lender or any
one or more of such rights, powers, or remedies shall not preclude the
simultaneous or later exercise by the Lender of any or all such other rights,
powers, or remedies.

                  18.    Waiver. No failure or delay by the Lender to insist 
upon the strict performance of any term, condition, covenant, or agreement of
this Agreement or of the other Loan Documents or of the Note, or to exercise
any right, power, or remedy consequent upon a breach thereof, shall constitute
a waiver of any such term, condition, covenant, or agreement or of any such
breach, or such term, condition, covenant, or agreement or of any such breach,
or preclude the Lender from exercising any such right, power, or remedy at any
later time or times. By accepting payment after the due date of any of the
Pledgors' Liabilities, the Lender shall not be deemed to have waived the right
either to require payment when due of all other Pledgors' Liabilities or to
declare an Event of Default for failure to effect such payment of any such
other Pledgors' Liabilities. Each Pledgor waives presentment, notice of
dishonor, and notice of non-payment with respect to Accounts.

                  19.    Miscellaneous. Time is of the essence of this 
Agreement. The section headings of this Agreement are for convenience only and
shall not limit or otherwise affect any of the terms hereof. Neither this
Agreement nor any term, condition, covenant, or agreement hereof may be
changed, waived, discharged, or terminated orally but only by an instrument in
writing signed by the party against whom enforcement of the change, waiver,
discharge, or termination is sought. This Agreement shall be governed by the
laws of the State of New York and shall be binding upon each Pledgor and its
heirs, executors, administrators, legal representatives, successors, and
assigns, and shall inure to the benefit of the Lender and its successors and
assigns. As used herein, the singular number shall include the plural, the
plural the singular, and the use of the masculine, feminine, or neuter gender
shall include all genders, as the context may require, and the term "person"
shall include an individual, a corporation, an association, a partnership, a
trust, and an organization. Invalidation of any one or more of the provisions
of their Agreement shall in no way affect any of the other provisions hereof,
which shall remain in full force and effect. All references herein to any
document, instrument, or agreement shall be deemed to refer to such document,
instrument, or agreement as the same may be amended, modified, restated,
supplemented, or replaced from time to time. Unless varied by this Agreement,
all terms used herein which are defined by the Uniform Commercial Code of the
State of New York shall have the same meanings hereunder an assigned to them by
the Uniform Commercial Code of the State of New York.

                  20.    Senior Security Agreement. Notwithstanding anything
contained herein to the contrary, this Agreement and the security interest
created hereby shall be junior to the security interest in favor of Fidelity
National Bank ("Fidelity") pursuant to that certain



                                      10.
<PAGE>   11



Security Agreement dated as of December 30, 1994, as such agreement has been
and may be amended from time to time (the "Fidelity Agreement"). To the extent
that there is any inconsistency between the exercise of the Lender's rights and
remedies provided for herein and the exercise by Fidelity of its rights and
remedies pursuant to the Fidelity Agreement, the exercise of the Lender's
rights and remedies provided for herein shall be subordinate to any exercise by
Fidelity of its rights and remedies pursuant to the Fidelity Agreement. Each
Pledgor represents and warrants that Fidelity has consented to this Agreement
and the security interest created hereby.



                                      11.

<PAGE>   12




                  IN WITNESS WHEREOF, each Pledgor has caused its duly
authorized officers to execute this Agreement and to affix its corporate seal
hereto, as of the day and year first written above.


                              PLEDGORS:

                              WEST TENNESSEE, INC.



                              By:
                                 --------------------------------------------
                                 Name:
                                      ---------------------------------------
                                 Title:
                                       --------------------------------------

                              Attest:
                                     ----------------------------------------
                                          Secretary


                                     [CORPORATE SEAL]


                                     Address of the above Pledgor's chief 
                                     executive office:







                                     Address(es) of other place(s) of business 
                                     of the above Pledgor:

                                     (1)     
                                             ---------------------------------

                                             ---------------------------------

                                             ---------------------------------


                                     (2)     ---------------------------------

                                             ---------------------------------

                                             ---------------------------------



                                      12.
<PAGE>   13



                                     Address(es) where Collateral of the above 
                                     Pledgor is to be located:

                                     (1)
                                             ---------------------------------

                                             ---------------------------------

                                             ---------------------------------
                                   
                                     (2)     
                                             ---------------------------------

                                             ---------------------------------

                                             ---------------------------------


                                     Previous legal and/or trade name(s) of the
                                     above Pledgor:

                                     (1)
                                             ---------------------------------

                                     (2)
                                             ---------------------------------



                               LAKE FOREST HEALTHCARE CENTER,
                               INC.



                               By:
                                  -------------------------------------------- 
                                  Name:
                                       --------------------------------------- 
                                  Title:
                                        --------------------------------------

                               Attest:
                                      ---------------------------------------- 
                                           Secretary


                                      [CORPORATE SEAL]


                                      Address of the above Pledgor's chief 
                                      executive office:


                                      ----------------------------------------  

                                      ----------------------------------------  
 
                                      ----------------------------------------  

                                      ----------------------------------------



                                      13.
<PAGE>   14





                                      Address(es) of other place(s) of
                                      business of the above Pledgor:

                                      (1)
                                             ---------------------------------

                                             ---------------------------------

                                             ---------------------------------

                                      (2)
                                             ---------------------------------

                                             ---------------------------------

                                             ---------------------------------


                                       Address(es) where Collateral of the
                                       above Pledgor is to be located:

                                       (1)
                                             ---------------------------------

                                             ---------------------------------

                                             ---------------------------------
                    
                                       (2)
                                             ---------------------------------

                                             ---------------------------------

                                             ---------------------------------

                                       Previous legal and/or trade name(s) of 
                                       the above Pledgor:

                                       (1)
                                             ---------------------------------

                                       (2)
                                             ---------------------------------


                                   STATESBORO HEALTHCARE, INC.



                                   By:
                                      ----------------------------------------
                                      Name:
                                           -----------------------------------
                                      Title:
                                            ----------------------------------

                                   Attest:
                                          ------------------------------------ 
                                             Secretary



                                      14.
<PAGE>   15





                                   [CORPORATE SEAL]


                                   Address of the above Pledgor's chief 
                                   executive office:


                                   -------------------------------------------

                                   -------------------------------------------

                                   -------------------------------------------

                                   -------------------------------------------

                                   Address(es) of other place(s) of business of 
                                   the above Pledgor:

                                   (1)
                                        --------------------------------------

                                        --------------------------------------

                                        --------------------------------------
                    
                                   (2)
                                        --------------------------------------

                                        --------------------------------------

                                        --------------------------------------


                                   Address(es) where Collateral of the above 
                                   Pledgor is to be located:

                                   (1)
                                        --------------------------------------

                                        --------------------------------------

                                        --------------------------------------

                                   (2)  
                                        --------------------------------------

                                        --------------------------------------

                                        --------------------------------------

                                   
                                   Previous legal and/or trade name(s) of the
                                   above Pledgor:

                                   (1)
                                        --------------------------------------

                                   (2)
                                        --------------------------------------



                                      15.
<PAGE>   16





                         LAKE HEALTH CARE CENTER, INC.




                         By:
                            --------------------------------------------------
                            Name:
                                 ---------------------------------------------
                            Title:
                                  --------------------------------------------
               
                         Attest:
                                ----------------------------------------------
                                     Secretary


                                [CORPORATE SEAL]


                                Address of the above Pledgor's chief 
                                executive office:



                                ----------------------------------------------

                                ---------------------------------------------- 

                                ----------------------------------------------

                                ----------------------------------------------


   
                                Address(es) of other place(s) of business of 
                                the above Pledgor:

                                (1)
                                        --------------------------------------

                                        --------------------------------------

                                        --------------------------------------

                                (2)
                                        --------------------------------------

                                        --------------------------------------

                                        --------------------------------------


                                Address(es) where Collateral of the above 
                                Pledgor is to be located:

                                (1)
                                        --------------------------------------

                                        --------------------------------------

                                        --------------------------------------



                                      16.
<PAGE>   17



                                (2)     
                                        --------------------------------------

                                        --------------------------------------

                                        --------------------------------------

                                
                                Previous legal and/or trade name(s) of the
                                above Pledgor:

                                (1)
                                        --------------------------------------

                                (2)
                                        --------------------------------------


                           ROBERTA HEALTH CARE CENTER, INC.



                           By:
                              ------------------------------------------------
                              Name:
                                   -------------------------------------------
                              Title:
                                    ------------------------------------------

                           Attest:
                                  --------------------------------------------
                                      Secretary


                                  [CORPORATE SEAL]


                                  Address of the above Pledgor's chief 
                                  executive office:



                                  --------------------------------------------

                                  -------------------------------------------- 

                                  -------------------------------------------- 

                                  --------------------------------------------

 
                                  Address(es) of other place(s) of business of 
                                  the above Pledgor:

                                  (1)
                                        --------------------------------------

                                        --------------------------------------

                                        --------------------------------------



                                      17.
<PAGE>   18




                                  (2)
                                        --------------------------------------

                                        --------------------------------------

                                        --------------------------------------


                                  Address(es) where Collateral of the above 
                                  Pledgor is to be located:

                                  (1)
                                        --------------------------------------

                                        --------------------------------------

                                        --------------------------------------

                                  (2)
                                        --------------------------------------

                                        --------------------------------------

                                        --------------------------------------


                                  Previous legal and/or trade name(s) of the
                                  above Pledgor:

                                  (1)
                                        --------------------------------------

                                  (2)
                                        --------------------------------------


                            GARDENDALE HEALTH CARE CENTER,
                            INC.



                            By:
                               -----------------------------------------------
                               Name:
                                    ------------------------------------------
                               Title:
                                     -----------------------------------------

                            Attest:
                                   -------------------------------------------
                                       Secretary


                                   [CORPORATE SEAL]


                                   Address of the above Pledgor's chief 
                                   executive office:



                                      18.
<PAGE>   19



                                   -------------------------------------------
  
                                   -------------------------------------------

                                   -------------------------------------------

                                   -------------------------------------------


                                   Address(es) of other place(s) of business of 
                                   the above Pledgor:

                                   (1)
                                        --------------------------------------

                                        --------------------------------------

                                        --------------------------------------


                                   (2)
                                        --------------------------------------

                                        --------------------------------------

                                        --------------------------------------

                                   Address(es) where Collateral of the above 
                                   Pledgor is to be located:

                                   (1)  
                                        --------------------------------------

                                        --------------------------------------

                                        --------------------------------------

                                   (2)
                                        --------------------------------------

                                        --------------------------------------

                                        --------------------------------------


                                   Previous legal and/or trade name(s) of the
                                   above Pledgor:

                                   (1)
                                        --------------------------------------

                                   (2)
                                        --------------------------------------



                             SOUTHSIDE HEALTH CARE CENTER, INC.



                             By:
                                ----------------------------------------------



                                      19.
<PAGE>   20



                                   Name:
                                        --------------------------------------
                                   Title:
                                         -------------------------------------

                               Attest:
                                      ----------------------------------------
                                          Secretary

                                   
                                      [CORPORATE SEAL]


                                      Address of the above Pledgor's chief 
                                      executive office:


                                      ----------------------------------------- 

                                      -----------------------------------------

                                      ----------------------------------------- 

                                      -----------------------------------------


                                      Address(es) of other place(s) of business 
                                      of the above Pledgor:

                                      (1)
                                             ---------------------------------

                                             ---------------------------------

                                             ---------------------------------

                                      (2)
                                             ---------------------------------

                                             ---------------------------------

                                             ---------------------------------


                                      Address(es) where Collateral of the above 
                                      Pledgor is to be located:

                                      (1)
                                             ---------------------------------

                                             ---------------------------------

                                             ---------------------------------

                                      (2)
                                             ---------------------------------

                                             ---------------------------------

                                             ---------------------------------



                                      20.

<PAGE>   21



                                     Previous legal and/or trade name(s) of the
                                     above Pledgor:

                                     (1)
                                             ---------------------------------

                                     (2)
                                             ---------------------------------


                                GAINESVILLE HEALTH CARE CENTER,
                                INC.



                                By:
                                   -------------------------------------------
                                   Name:
                                        --------------------------------------
                                   Title:
                                         -------------------------------------

                                Attest:
                                       ---------------------------------------
                                           Secretary


                                       [CORPORATE SEAL]


                                       Address of the above Pledgor's chief 
                                       executive office:



                                      ----------------------------------------

                                      ----------------------------------------

                                      ----------------------------------------

                                      ----------------------------------------

  
                                      Address(es) of other place(s) of business
                                      of the above Pledgor:

                                      (1)
                                             ---------------------------------

                                             ---------------------------------

                                             ---------------------------------

                                      (2)
                                             ---------------------------------

                                             ---------------------------------

                                             ---------------------------------



                                      21.
<PAGE>   22





                                    Address(es) where Collateral of the above 
                                    Pledgor is to be located:

                                    (1)
                                             ---------------------------------

                                             ---------------------------------

                                             ---------------------------------

                                    (2)
                                             ---------------------------------

                                             ---------------------------------

                                             ---------------------------------

                                    Previous legal and/or trade name(s) of the
                                    above Pledgor:

                                    (1)
                                             ---------------------------------

                                    (2)
                                             ---------------------------------


                              CHARLTON CITY HEALTHCARE, INC.



                              By:
                                 ---------------------------------------------
                                 Name:
                                      ----------------------------------------
                                 Title:
                                       ---------------------------------------

                              Attest:
                                     -----------------------------------------
                                         Secretary


                                     [CORPORATE SEAL]


                                     Address of the above Pledgor's chief 
                                     executive office:

                                     
                                     -----------------------------------------

                                     -----------------------------------------

                                     -----------------------------------------

                                     -----------------------------------------



                                      22.
<PAGE>   23





                                     Address(es) of other place(s) of business 
                                     of the above Pledgor:

                                     (1)
                                             ---------------------------------

                                             ---------------------------------

                                             ---------------------------------

                                     (2)
                                             ---------------------------------

                                             ---------------------------------

                                             ---------------------------------


                                     Address(es) where Collateral of the above 
                                     Pledgor is to be located:

                                     (1)
                                             ---------------------------------

                                             ---------------------------------

                                             ---------------------------------

                                     (2)
                                             ---------------------------------

                                             ---------------------------------

                                             ---------------------------------

                                     Previous legal and/or trade name(s) of the
                                     above Pledgor:

                                     (1)
                                             ---------------------------------

                                     (2)
                                             ---------------------------------


                              JEFF DAVIS HEALTHCARE, INC.



                              By:
                                 ---------------------------------------------
                                 Name:
                                      ----------------------------------------
                                 Title:
                                       ---------------------------------------

                              Attest:
                                     -----------------------------------------
                                         Secretary



                                      23.

<PAGE>   24





                                     [CORPORATE SEAL]


                                     Address of the above Pledgor's chief 
                                     executive office:



                                     -----------------------------------------

                                     -----------------------------------------

                                     -----------------------------------------

                                     -----------------------------------------


                                     Address(es) of other place(s) of business 
                                     of the above Pledgor:

                                     (1)
                                             ---------------------------------

                                             ---------------------------------

                                             ---------------------------------

                                     (2)
                                             ---------------------------------

                                             ---------------------------------

                                             ---------------------------------


                                     Address(es) where Collateral of the above 
                                     Pledgor is to be located:

                                     (1)
                                             ---------------------------------

                                             ---------------------------------

                                             ---------------------------------

                                     (2)
                                             ---------------------------------

                                             ---------------------------------

                                             ---------------------------------


                                      Previous legal and/or trade name(s) of 
                                      the above Pledgor:

                                      (1)
                                             ---------------------------------

                                      (2)
                                             ---------------------------------



                                      24.
<PAGE>   25
                            SEASIDE RETIREMENT, INC.



                            By:
                               -----------------------------------------------
                               Name:
                                    ------------------------------------------
                               Title:
                                     -----------------------------------------

                            Attest:
                                   -------------------------------------------
                                       Secretary


                                   [CORPORATE SEAL]


                                   Address of the above Pledgor's chief 
                                   executive office:



                                   -------------------------------------------

                                   -------------------------------------------

                                   -------------------------------------------

                                   Address(es) of other place(s) of business of 
                                   the above Pledgor:

                                   (1)
                                        --------------------------------------

                                        --------------------------------------

                                        --------------------------------------
                                        
                                   (2)
                                        --------------------------------------

                                        --------------------------------------

                                        --------------------------------------


                                   Address(es) where Collateral of the above 
                                   Pledgor is to be located:

                                   (1)
                                        --------------------------------------

                                        --------------------------------------

                                        --------------------------------------



                                      25.
<PAGE>   26
                                   (2)
                                        --------------------------------------

                                        --------------------------------------

                                        --------------------------------------


                                   Previous legal and/or trade name(s) of the
                                   above Pledgor:

                                   (1)
                                        --------------------------------------

                                   (2)
                                        --------------------------------------


                             MID-FLORIDA, INC.




                             By:
                                ----------------------------------------------
                                Name:
                                     -----------------------------------------
                                Title:
                                      ----------------------------------------

                             Attest:
                                    ------------------------------------------
                                        Secretary


                                    [CORPORATE SEAL]


                                    Address of the above Pledgor's chief 
                                    executive office:



                                    ------------------------------------------

                                    ------------------------------------------

                                    ------------------------------------------

                                    ------------------------------------------


                                    Address(es) of other place(s) of business 
                                    of the above Pledgor:

                                    (1)
                                        --------------------------------------

                                        --------------------------------------

                                        --------------------------------------



                                      26.
<PAGE>   27
                                    (2)
                                         -------------------------------------

                                         -------------------------------------

                                         -------------------------------------

                                    
                                    Address(es) where Collateral of the above 
                                    Pledgor is to be located:

                                    (1)
                                         -------------------------------------

                                         -------------------------------------

                                         -------------------------------------

                                    (2)
                                         -------------------------------------

                                         -------------------------------------

                                         -------------------------------------

                                    Previous legal and/or trade name(s) of the
                                    above Pledgor:

                                    (1)
                                         -------------------------------------

                                    (2)
                                         -------------------------------------


                              BIBB HEALTH & REHABILITATION, INC.



                              By:
                                 ---------------------------------------------
                                 Name:
                                      ----------------------------------------
                                 Title:
                                       ---------------------------------------

                              Attest:
                                     -----------------------------------------
                                         Secretary


                                     [CORPORATE SEAL]


                                     Address of the above Pledgor's chief 
                                     executive office:



                                      27.
<PAGE>   28

                                    ------------------------------------------

                                    ------------------------------------------

                                    ------------------------------------------

                                    ------------------------------------------


                                    Address(es) of other place(s) of business 
                                    of the above Pledgor:

                                    (1)
                                          ------------------------------------

                                          ------------------------------------

                                          ------------------------------------

                                    (2)
                                          ------------------------------------

                                          ------------------------------------

                                          ------------------------------------

                                    Address(es) where Collateral of the above 
                                    Pledgor is to be located:

                                    (1)
                                          ------------------------------------

                                          ------------------------------------

                                          ------------------------------------

                                    (2)
                                          ------------------------------------

                                          ------------------------------------

                                          ------------------------------------


                                    Previous legal and/or trade name(s) of the
                                    above Pledgor:

                                    (1)
                                          ------------------------------------

                                    (2)
                                          ------------------------------------


                                BRENT-LOX HALL NURSING HOME, INC.



                                By:
                                   -------------------------------------------



                                      28.
<PAGE>   29
                                 Name:
                                      ----------------------------------------
                                 Title:
                                       ---------------------------------------

                            Attest:
                                   -------------------------------------------
                                           Secretary


                                   [CORPORATE SEAL]



                                   Address of the above Pledgor's chief 
                                   executive office:



                                   -------------------------------------------

                                   -------------------------------------------

                                   -------------------------------------------

                                   -------------------------------------------


                                   Address(es) of other place(s) of business of 
                                   the above Pledgor:

                                   (1)
                                        --------------------------------------

                                        --------------------------------------

                                        --------------------------------------

                                   (2)
                                        --------------------------------------

                                        --------------------------------------

                                        --------------------------------------

                                   Address(es) where Collateral of the above 
                                   Pledgor is to be located:

                                   (1)
                                        --------------------------------------

                                        --------------------------------------

                                        --------------------------------------

                                   (2)
                                        --------------------------------------

                                        --------------------------------------

                                        --------------------------------------



                                      29.
<PAGE>   30
                                   Previous legal and/or trade name(s) of the
                                   above Pledgor:

                                   (1)
                                          ------------------------------------

                                   (2)
                                          ------------------------------------



                            LIBBIE REHABILITATION CENTER, INC.



                            By:
                               -----------------------------------------------
                               Name:
                                    ------------------------------------------
                               Title:
                                     -----------------------------------------

                            Attest:
                                   -------------------------------------------
                                       Secretary


                                   [CORPORATE SEAL]


                                   Address of the above Pledgor's chief 
                                   executive office:



                                   -------------------------------------------

                                   -------------------------------------------

                                   -------------------------------------------

                                   -------------------------------------------


                                   Address(es) of other place(s) of business of 
                                   the above Pledgor:

                                   (1)
                                          ------------------------------------

                                          ------------------------------------

                                          ------------------------------------

                                   (2)
                                          ------------------------------------

                                          ------------------------------------

                                          ------------------------------------



                                      30.
<PAGE>   31
                                   Address(es) where Collateral of the above 
                                   Pledgor is to be located:

                                   (1)
                                          ------------------------------------

                                          ------------------------------------

                                          ------------------------------------

                                   (2)
                                          ------------------------------------

                                          ------------------------------------

                                          ------------------------------------


                                   Previous legal and/or trade name(s) of the
                                   above Pledgor:

                                   (1)
                                          ------------------------------------

                                   (2)
                                          ------------------------------------


                             PHOENIX ASSOCIATES, INC.



                             By:
                                ----------------------------------------------
                                Name:
                                     -----------------------------------------
                                Title:
                                      ----------------------------------------

                             Attest:
                                    ------------------------------------------
                                        Secretary


                                    [CORPORATE SEAL]


                                    Address of the above Pledgor's chief 
                                    executive office:


                                    ------------------------------------------

                                    ------------------------------------------

                                    ------------------------------------------

                                    ------------------------------------------



                                      31.
<PAGE>   32
                                   Address(es) of other place(s) of business of
                                   the above Pledgor:

                                   (1)
                                          ------------------------------------

                                          ------------------------------------

                                          ------------------------------------

                                   (2)
                                          ------------------------------------

                                          ------------------------------------

                                          ------------------------------------


                                   Address(es) where Collateral of the above 
                                   Pledgor is to be located:

                                   (1)
                                          ------------------------------------

                                          ------------------------------------

                                          ------------------------------------

                                   (2)
                                          ------------------------------------

                                          ------------------------------------

                                          ------------------------------------


                                   Previous legal and/or trade name(s) of the
                                   above Pledgor:

                                   (1)
                                          ------------------------------------
                                     
                                   (2)
                                          ------------------------------------
                                          


                             SUMMER'S LANDING, INC.



                             By:
                                ----------------------------------------------
                                Name:
                                     -----------------------------------------
                                Title:
                                      ----------------------------------------

                             Attest:
                                    ------------------------------------------
                                        Secretary



                                      32.
<PAGE>   33
                                  [CORPORATE SEAL]


                                  Address of the above Pledgor's chief 
                                  executive office:



                                  --------------------------------------------

                                  --------------------------------------------

                                  --------------------------------------------

                                  --------------------------------------------


                                  Address(es) of other place(s) of business of 
                                  the above Pledgor:

                                  (1)
                                          ------------------------------------

                                          ------------------------------------

                                          ------------------------------------

                                  (2)
                                          ------------------------------------

                                          ------------------------------------

                                          ------------------------------------


                                  Address(es) where Collateral of the above
                                  Pledgor is to be located:

                                  (1)
                                          ------------------------------------

                                          ------------------------------------

                                          ------------------------------------

                                  (2)
                                          ------------------------------------

                                          ------------------------------------

                                          ------------------------------------

                                  Previous legal and/or trade name(s) of the
                                  above Pledgor:

                                  (1)
                                          ------------------------------------

                                  (2)
                                          ------------------------------------



                                      33.
<PAGE>   34
                             RIVERIA RETIREMENT, INC.



                             By:
                                ----------------------------------------------
                                Name:
                                     -----------------------------------------
                                Title:
                                      ----------------------------------------

                             Attest:
                                    ------------------------------------------
                                        Secretary


                                    [CORPORATE SEAL]


                                    Address of the above Pledgor's chief 
                                    executive office:


                                    ------------------------------------------

                                    ------------------------------------------

                                    ------------------------------------------

                                    ------------------------------------------


                                    Address(es) of other place(s) of business 
                                    of the above Pledgor:

                                    (1)
                                          ------------------------------------

                                          ------------------------------------

                                          ------------------------------------

                                    (2)
                                          ------------------------------------

                                          ------------------------------------

                                          ------------------------------------


                                    Address(es) where Collateral of the above 
                                    Pledgor is to be located:

                                    (1)
                                          ------------------------------------

                                          ------------------------------------

                                          ------------------------------------

                                    (2)
                                          ------------------------------------



                                      34.
<PAGE>   35

                                           ------------------------------------

                                           ------------------------------------

                                    Previous legal and/or trade name(s) of the
                                    above Pledgor:

                                    (1)
                                           ------------------------------------

                                    (2)
                                           ------------------------------------


                                    PINE MANOR HEALTHCARE, INC.


                                    By:
                                       ----------------------------------------
                                       Name:
                                            -----------------------------------
                                       Title:
                                             ----------------------------------

                                    Attest:
                                           ------------------------------------
                                           Secretary


                                    [CORPORATE SEAL]


                                    Address of the above Pledgor's chief 
                                    executive office:


                                    -------------------------------------------

                                    -------------------------------------------

                                    -------------------------------------------

                                    -------------------------------------------


                                    Address(es) of other place(s) of business of
                                    the above Pledgor:


                                    (1)
                                           ------------------------------------

                                           ------------------------------------

                                           ------------------------------------


                                       35.

<PAGE>   36



                                    (2)
                                           ------------------------------------

                                           ------------------------------------

                                           ------------------------------------

                                    Address(es) where Collateral of the above
                                    Pledgor is to be located:

                                    (1)
                                           ------------------------------------

                                           ------------------------------------

                                           ------------------------------------

                                    (2)
                                           ------------------------------------

                                           ------------------------------------

                                           ------------------------------------

                                    Previous legal and/or trade name(s) of the
                                    above Pledgor:

                                    (1)
                                           ------------------------------------
                                    (2)
                                           ------------------------------------

                                    SUNCOAST RETIREMENT, INC.


                                    By:
                                       ----------------------------------------
                                       Name:
                                            -----------------------------------
                                       Title:
                                             ----------------------------------

                                    Attest:
                                           ------------------------------------
                                           Secretary


                                       [CORPORATE SEAL]


                                    Address of the above Pledgor's chief 
                                    executive office:



                                       36.


<PAGE>   37


                                           ------------------------------------

                                           ------------------------------------

                                           ------------------------------------

                                           ------------------------------------


                                    Address(es) of other place(s) of business of
                                    the above Pledgor:


                                    (1)
                                           ------------------------------------

                                           ------------------------------------

                                           ------------------------------------

                                    (2)
                                           ------------------------------------

                                           ------------------------------------

                                           ------------------------------------


                                    Address(es) where Collateral of the above
                                    Pledgor is to be located:

                                    (1)
                                           ------------------------------------

                                           ------------------------------------

                                           ------------------------------------

                                    (2)
                                           ------------------------------------

                                           ------------------------------------

                                           ------------------------------------

                                    Previous legal and/or trade name(s) of the
                                    above Pledgor:

                                    (1)
                                           ------------------------------------
                                    (2)
                                           ------------------------------------


                                    ATRIUM OF JACKSONVILLE



                                    By:
                                       ----------------------------------------


                                       37.


<PAGE>   38



                                       Name:
                                            -----------------------------------
                                       Title:
                                             ----------------------------------

                                    Attest:
                                           ------------------------------------
                                           Secretary


                                           [CORPORATE SEAL]


                                    Address of the above Pledgor's chief 
                                    executive office:


                                           ------------------------------------

                                           ------------------------------------

                                           ------------------------------------

                                           ------------------------------------


                                    Address(es) of other place(s) of business of
                                    the above Pledgor:


                                    (1)
                                           ------------------------------------

                                           ------------------------------------

                                           ------------------------------------

                                    (2)
                                           ------------------------------------

                                           ------------------------------------

                                           ------------------------------------

                                    Address(es) where Collateral of the above
                                    Pledgor is to be located:

                                    (1)
                                           ------------------------------------

                                           ------------------------------------

                                           ------------------------------------

                                    (2)
                                           ------------------------------------

                                           ------------------------------------

                                           ------------------------------------


                                       38.


<PAGE>   39


                                    Previous legal and/or trade name(s) of the
                                    above Pledgor:

                                    (1)
                                           ------------------------------------

                                    (2)
                                           ------------------------------------



                                    THE ATRIUM NURSING HOME, INC.



                                    By:
                                       ----------------------------------------
                                       Name:
                                            -----------------------------------
                                       Title:
                                             ----------------------------------

                                    Attest:
                                           ------------------------------------
                                           Secretary


                                    [CORPORATE SEAL]


                                    Address of the above Pledgor's chief 
                                    executive office:


                                            ------------------------------------

                                            -----------------------------------

                                            -----------------------------------

                                            -----------------------------------


                                    Address(es) of other place(s) of business of
                                    the above Pledgor:


                                    (1)
                                           ------------------------------------

                                           ------------------------------------

                                           ------------------------------------

                                    (2)
                                           ------------------------------------

                                           ------------------------------------

                                           ------------------------------------


                                       39.


<PAGE>   40


                                    Address(es) where Collateral of the above
                                    Pledgor is to be located:

                                    (1)
                                           ------------------------------------

                                           ------------------------------------

                                           ------------------------------------

                                    (2)
                                           ------------------------------------

                                           ------------------------------------

                                           ------------------------------------


                                    Previous legal and/or trade name(s) of the
                                    above Pledgor:

                                    (1)
                                           ------------------------------------

                                    (2)
                                           ------------------------------------


                                       40.


<PAGE>   41


                                   EXHIBIT "A"



         [1. Security interest in favor of Fidelity National Bank pursuant to a
Security Agreement dated as of December 30, 1994, as such agreement has been and
may be amended from time to time (the "Fidelity Agreement").]

         [2. Financing statements have been filed in the states of Georgia,
Tennessee, Florida and Alabama in connection with the security interests granted
pursuant to the Fidelity Agreement.]



                                       41.