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                                                                    Exhibit 10.8

                PLEDGE OF SHARES OF BENEFICIAL INTEREST AGREEMENT

         THIS PLEDGE OF SHARES OF BENEFICIAL INTEREST AGREEMENT (this
"AGREEMENT") is made and given as of December 31, 2001 by FIVE STAR QUALITY
CARE, INC., a Maryland corporation (the "PLEDGOR"), for the benefit of each of
the other parties identified on the signature page hereof (together with their
respective successors and assigns, collectively, the "SECURED PARTIES").

                              W I T N E S S E T H:

         WHEREAS, pursuant to a Master Lease Agreement, dated as of the date
hereof (the "MASTER LEASE"), the Secured Parties leased to Five Star Quality
Care Trust, a Maryland business trust (the "TENANT"), and the Tenant leased from
the Secured Parties, certain premises as more particularly described in the
Master Lease, subject to and upon the terms and conditions set forth therein;
and

         WHEREAS, pursuant to a Guaranty Agreement, dated as of the date hereof
(the "GUARANTY"), Five Star Quality Care, Inc., a Maryland corporation (the
"GUARANTOR"), guaranteed to the Secured Parties the payment and performance of
all of the obligations of the Tenant to the Secured Parties with respect to the
Master Lease and other related documents, subject to and upon the terms and
conditions set forth therein; and

         WHEREAS, the Pledgor owns all of the outstanding shares of beneficial
interest in the Tenant and is a wholly-owned subsidiary of the Guarantor; and

         WHEREAS, the Pledgor shall derive direct substantial benefit from the
transactions contemplated by the Master Lease and the Guaranty; and

         WHEREAS, it is a condition precedent to the Secured Parties' entering
into the Master Lease and accepting the Guaranty that the Pledgor pledge all of
the shares of beneficial interest in the Tenant to the Secured Parties as
security for the payment and performance of (i) all of the obligations of the
Tenant to the Secured Parties with respect to the Master Lease and other related
documents and (ii) all of the obligations of the Guarantor to the Secured
Parties with respect to the Guaranty and other related documents;

         NOW, THEREFORE, in consideration of the foregoing and for other good
and valuable consideration, the mutual receipt and

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legal sufficiency of which are hereby acknowledged, the Pledgor hereby agrees as
follows:

         SECTION 1. CERTAIN TERMS. Capitalized terms used and not otherwise
defined in this Agreement shall have the meanings ascribed to such terms in the
Master Lease. The Master Lease, the Incidental Documents and the Guaranty are
herein collectively referred to as the "TRANSACTION DOCUMENTS."

         SECTION 2. PLEDGE. The Pledgor hereby pledges to the Secured Parties
all of the shares of beneficial interest in the Tenant (the "PLEDGED SHARES")
listed in EXHIBIT A attached hereto and all other shares of beneficial interest
in the Tenant in which the Pledgor may have rights from time to time and any
other securities or other investment property and other collateral of the
Pledgor now owned or hereafter acquired which under this Agreement are required
to be pledged to the Secured Parties, and in each case, all certificates
representing such Pledged Shares or other investment property or collateral, and
all rights, options, warrants, stock or other securities or other property which
may hereafter be received, receivable or distributed in respect of the Pledged
Shares, together with all proceeds of the foregoing, including, without
limitation, all dividends, cash, notes, securities or other property from time
to time acquired, receivable or otherwise distributed in respect of, or in
exchange for, the foregoing, (the Pledged Shares and any additional securities
or collateral pledged hereunder, collectively, the "PLEDGED COLLATERAL"), and
the Pledgor hereby grants to the Secured Parties a security interest in all of
the Pledged Collateral and the proceeds thereof as security for the due and
punctual payment and performance of the Secured Obligations (as hereinafter
defined).

         The Pledgor has delivered to and deposited with the Secured Parties any
and all certificates or other instruments representing the Pledged Collateral
and undated trust share powers endorsed in blank, as security for the payment
and performance of all of the Secured Obligations. If in the future the Pledgor
possesses or controls any other certificates or other instruments representing
the Pledged Collateral, the Pledgor shall immediately and without notice deliver
the same to the Secured Parties together with undated trust share powers
endorsed in blank, as security for the payment and performance of all of the
Secured Obligations.

         SECTION 3. SECURED OBLIGATIONS. For purposes of this Agreement, the
term "SECURED OBLIGATIONS" shall mean the payment and performance of each and
every obligation of the Tenant and

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the Guarantor under the Transaction Documents or relating thereto, whether now
existing or hereafter arising, and including, without limitation, the payment of
the full amount of the Rent payable under the Master Lease.

         SECTION 4. REPRESENTATIONS OF THE PLEDGOR. The Pledgor covenants that
the Pledged Shares are duly and validly pledged to the Secured Parties in
accordance with law and the Pledgor shall warrant and defend the Secured
Parties' right, title and security interest in and to the Pledged Shares against
the claims and demands of all persons whomsoever. The Pledgor represents and
warrants to the Secured Parties that the Pledgor has good and marketable title
to all the Pledged Shares, free and clear of all claims, mortgages, pledges,
liens, security interests and other encumbrances of every nature whatsoever;
that the Pledged Shares are not subject to any restriction on transfer contained
in the Declaration of Trust or any other charter documents of the Tenant or in
any agreement or instrument to which the Tenant or the Pledgor is a party or by
which the Tenant or the Pledgor is bound which would prohibit or restrict the
pledge of the Pledged Shares hereunder or the disposition thereof upon default
hereunder; that all of the Pledged Shares have been duly and validly issued and
are fully paid for and nonassessable; and that the Pledged Shares constitute all
of the presently issued and outstanding shares of the beneficial interests of
the Tenant.

         SECTION 5. COVENANTS OF THE PLEDGOR. The Pledgor hereby covenants and
agrees that it shall not sell, convey or otherwise dispose of any of the Pledged
Collateral nor create, incur or permit to exist any pledge, mortgage, lien,
charge, encumbrance or any security interest whatsoever with respect to any of
the Pledged Collateral or the proceeds thereof, other than the liens on and
security interests in the Pledged Collateral created hereby. The Pledgor further
covenants and agrees that it shall not consent to or approve the issuance of any
additional shares of beneficial interest in the Tenant. The Pledgor further
covenants and agrees that, until the Secured Obligations are paid in full, the
Pledgor shall not change the state of its incorporation or its corporate name
without providing the Secured Parties with thirty (30) days' prior written
notice and making all filings and taking all such other actions as the Secured
Party determines are necessary or appropriate to continue or perfect the
security interest granted hereunder.

         SECTION 6. FILING OF FINANCING STATEMENTS ETC. The Pledgor authorizes
the Secured Parties to file from time to time one or more financing statements
describing the Pledged

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Collateral. The Pledgor will cooperate with the Secured Parties at their request
from time to time in obtaining control agreements in form and substance
reasonably satisfactory to the Secured Parties with respect to any collateral
investment property, deposit accounts, or other Pledged Collateral as to which
the Secured Parties determine such agreements are necessary or appropriate to
perfect the security interest granted hereunder.

         SECTION 7. DISTRIBUTIONS, ETC. Upon the dissolution, winding up,
liquidation or reorganization of the Tenant, whether in bankruptcy, insolvency
or receivership proceedings or upon an assignment for the benefit of creditors
or any other marshalling of the assets and liabilities of the Tenant, if any sum
shall be paid or any property shall be distributed upon or with respect to any
of the Pledged Collateral, such sum shall be paid over to the Secured Parties,
to be held as collateral security for the Secured Obligations. If any dividend
shall be declared on any of the Pledged Collateral (excluding cash dividends),
or any share of beneficial interest or fraction thereof shall be issued pursuant
to any split of beneficial interests involving any of the Pledged Collateral, or
any distribution of capital shall be made on any of the Pledged Collateral, or
any property shall be distributed upon or with respect to the Pledged Collateral
pursuant to recapitalization or reclassification of the capital of the Tenant,
the shares or other property so distributed shall be delivered to the Secured
Parties to be held as collateral security for the Secured Obligations.

         SECTION 8. EVENT OF DEFAULT. For purposes of this Agreement, the term
"EVENT OF DEFAULT" shall mean (a) the occurrence of an Event of Default under
the Transaction Documents; (b) the failure of the Guarantor to comply with any
of its covenants or obligations under the Guaranty and the continuation thereof
for a period of ten (10) Business Days after written notice thereof; (c) the
failure of the Pledgor to comply with any of its covenants or obligations under
this Agreement and the continuation thereof for a period of ten (10) Business
Days after written notice thereof; or (d) any representation or warranty
contained herein or made by the Pledgor in connection herewith shall prove to
have been false or misleading in any material respect when made.

         SECTION 9. REMEDIES. (a) Upon the occurrence and during the continuance
of an Event of Default, the Secured Parties may cause all or any of the Pledged
Collateral to be transferred into its name or into the name of its nominee or
nominees,

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subject to the provisions of the Uniform Commercial Code or other applicable
law.

         (b) Upon the occurrence and during the continuance of an Event of
Default, the Secured Parties shall be entitled to exercise the voting power with
respect to the Pledged Collateral, to receive and retain, as collateral security
for the Secured Obligations, any and all dividends or other distributions at any
time and from time to time declared or made upon any of the Pledged Collateral,
and to exercise any and all such rights of payment, conversion, exchange,
subscription or any other rights, privileges or options pertaining to the
Pledged Collateral as if it were the absolute owner thereof, including, without
limitation, all such rights under the Declaration of Trust or any other charter
document of the Tenant, and further including, without limitation, the right to
exchange, at its discretion, any and all of the Pledged Collateral upon the
merger, consolidation, reorganization, recapitalization or other readjustment of
the Tenant, upon the exercise of any such right, privilege or option pertaining
to the Pledged Collateral, and in connection therewith, to deposit and deliver
any and all of the Pledged Collateral with any committee, depositary, transfer
agent, registrar or other designated agency upon such terms and conditions as
the Secured Parties may determine.

         (c) Upon the occurrence and during the continuance of an Event of
Default, the Secured Parties shall have all of the rights and remedies of a
secured party under the Uniform Commercial Code or other applicable law and
shall have the right to sell, resell, assign and deliver all or any of the
Pledged Collateral in one or more parcels at any exchange or broker's board or
at public or private sale. The Secured Parties shall give the Pledgor at least
ten (10) days' prior written notice of the time and place of any public sale
thereof or of the time after which any private sale or any other intended
disposition thereof is to be made. Any such notice shall be deemed to meet any
requirement hereunder or under any applicable law (including the Uniform
Commercial Code) that reasonable notification be given of the time and place of
such sale or other disposition. Such notice may be given without any demand of
performance or other demand, all such demands being hereby expressly waived by
the Pledgor to the extent permitted by applicable law. All such sales shall be
at such commercially reasonable price or prices as the Secured Parties shall
deem best and either for cash or on credit or for future delivery (without
assuming any responsibility for credit risk). At any such sale or sales, the
Secured Parties may purchase any or all of the Pledged

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Collateral to be sold thereat upon such terms as the Secured Parties may deem
best. Upon any such sale or sales, the Pledged Collateral so purchased shall be
held by the purchaser absolutely free from any claims or rights of any kind or
nature of the Pledgor, including any equity of redemption and any similar
rights, all such equity of redemption and any similar rights being hereby
expressly waived and released by the Pledgor to the extent permitted by
applicable law. In the event any consent, approval or authorization of any
governmental agency will be necessary to effectuate any such sale or sales, the
Pledgor shall execute, and hereby agrees to cause the Tenant to execute, all
such applications or other instruments as may be required. The proceeds of any
such sale or sales, together with any other additional collateral security at
the time received and held hereunder, shall be received and applied: FIRST, to
the payment of all costs and expenses of such sale, including attorneys' fees;
and SECOND, to the payment of the Secured Obligations in such order of priority
as the Secured Parties shall determine; and any surplus thereafter remaining
shall be paid to the Pledgor or to whomever may be legally entitled thereto
(including, if applicable, any subordinated creditor of the Pledgor).

         The Pledgor recognizes that the Secured Parties may be unable to effect
a public sale of all or a part of the Pledged Collateral by reason of certain
prohibitions contained in the Securities Act of 1933, and may be compelled to
resort to one or more private sales to a restricted group of purchasers who will
be obliged to agree, among other things, to acquire such Pledged Collateral for
their own accounts, for investment and not with a view to the distribution or
resale thereof. The Pledgor agrees that private sales so made may be at prices
and upon other terms less favorable to the seller than if such Pledged
Collateral were sold at public sales, and that the Secured Parties shall have no
obligation to delay sale of any such Pledged Collateral for the period of time
necessary to permit such Pledged Collateral to be registered for public sale
under the Securities Act of 1933. The Pledgor agrees that private sales made
under the foregoing circumstances may be deemed to have been made in a
commercially reasonable manner. Nothing herein shall be deemed to require the
Pledgor to effect a registration of the Pledged Collateral under the Securities
Act of 1933.

         (d) Upon the occurrence and during the continuance of any Event of
Default, the Secured Parties, in their discretion, may demand, sue for and/or
collect any money or property at any time due, payable or receivable, to which
it may be entitled hereunder, on account of or in exchange for any of the
Pledged

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Collateral. Upon the occurrence and during the continuance of any Event of
Default, the Secured Parties shall further have the right, for and in the name,
place and stead of the Pledgor, to execute endorsements, assignments, or other
instruments of conveyance or transfer with respect to all or any of the Pledged
Collateral.

         (e) The Secured Parties shall not be obligated to do any of the acts
hereinabove authorized and in the event that the Secured Parties elect to do any
such act, the Secured Parties shall not be responsible to the Pledgor, other
than for gross negligence or willful misconduct.

         (f) The Secured Parties shall have no obligation to marshal any assets
in favor of the Pledgor, or against or in payment of the Secured Obligations or
any other obligation owed to the Secured Parties by the Pledgor or any other
person.

         SECTION 10. RIGHTS OF SECURED PARTIES. No course of dealing between the
Pledgor and the Secured Parties nor any failure to exercise, nor any delay in
exercising, on the part of the Secured Parties, any right, power or privilege
hereunder or under any of the Secured Obligations, shall operate as a waiver
thereof; nor shall any single or partial exercise of any right, power or
privilege hereunder or thereunder preclude any other or further exercise thereof
or the exercise of any other right, power or privilege. The rights and remedies
herein provided and provided under any of the Secured Obligations are cumulative
and are in addition to, and not exclusive of, any rights or remedies provided by
law, including, without limitation, the rights and remedies of a Secured Parties
under the Uniform Commercial Code.

         SECTION 11. ASSIGNMENT, ETC. No waiver by the Secured Parties or by any
other holder of Secured Obligations of any default shall be effective unless in
writing nor operate as a waiver of any other default or of the same default on a
future occasion. In the event of a sale or assignment by any Secured Party of
its interest under the Transaction Documents, such Secured Party may assign or
transfer its rights and interest under this Agreement in whole or in part to the
purchaser or assignee of such interest, whereupon such purchaser or purchasers
shall become vested with all of the powers and rights given to such Secured
Party hereunder, and such Secured Party shall thereafter be forever released and
fully discharged from any liability or responsibility thereafter arising
hereunder with respect to the rights and interests so assigned.

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         SECTION 12. DUTY OF SECURED PARTIES. Beyond the exercise of reasonable
care to assure the safe custody of the Pledged Collateral while held hereunder,
the Secured Parties shall have no duty or liability to collect any sums due in
respect thereof or to protect or preserve rights pertaining thereto, and shall
be relieved of all responsibility for the Pledged Collateral upon surrendering
the same to the Pledgor.

         SECTION 13. WAIVERS, ETC. To the extent permitted by applicable law,
the Pledgor, on its own behalf and on behalf of its successors and assigns,
hereby waives presentment, demand, payment, notice of dishonor, protest and,
except as otherwise provided herein, all other demands and notices in connection
with this Agreement or the enforcement of the rights of the Secured Parties
hereunder or in connection with any Secured Obligations. The Secured Parties may
release, supersede, exchange or modify any collateral security it may from time
to time hold and release, surrender or modify the liability of any third party
without giving notice hereunder to the Pledgor. The Secured Parties shall be
under no duty to exhaust its rights against any such collateral security or any
such third party before realizing on the Pledged Collateral. Such modifications,
changes, renewals, releases or other actions shall in no way affect the
Pledgor's obligations hereunder.

         The Pledgor further waives any right it may have under the Constitution
of the Commonwealth of Massachusetts (or under the constitution of any other
state in which the any of the Pledged Collateral may be located), or under the
Constitution of the United States of America, to notice (except for notice
specifically required hereby) or to a judicial hearing prior to the exercise of
any right or remedy provided by this Agreement to the Secured Parties, and
waives its rights, if any, to set aside or invalidate any sale duly consummated
in accordance with the foregoing provisions hereof on the grounds (if such be
the case) that the sale was consummated without a prior judicial hearing. THE
PLEDGOR'S WAIVERS UNDER THIS SECTION 13 HAVE BEEN MADE VOLUNTARILY,
INTELLIGENTLY AND KNOWINGLY AND AFTER THE PLEDGOR HAS BEEN APPRISED AND
COUNSELED BY ITS ATTORNEYS AS TO THE NATURE THEREOF AND ITS POSSIBLE ALTERNATIVE
RIGHTS.

         SECTION 14. FURTHER ASSURANCES AS TO COLLATERAL; ATTORNEY-IN-FACT. From
time to time hereafter, the Pledgor shall execute and deliver, or will cause to
be executed and delivered, such additional instruments, certificates or
documents (including, without limitation, financing statements, renewal
statements, collateral assignments and other security documents), and shall take
all such actions, as the Secured Parties may reasonably

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request, for the purposes of implementing or effectuating the provisions of this
Agreement or of more fully perfecting or renewing the Secured Parties' rights
with respect to the Pledged Collateral (or with respect to any additions thereto
or replacements or proceeds thereof or with respect to any other property or
assets hereafter acquired by the Pledgor which may be deemed to be a part of the
Pledged Collateral) pursuant hereto and thereto. The Secured Parties are hereby
appointed the attorney-in-fact, with full power of substitution, of the Pledgor
for the purpose of carrying out the provisions of this Agreement and taking any
action, including, without limitation, executing, delivering and filing
applications, certificates, instruments and other documents and papers with
governmental authorities, and executing any instruments, including without
limitation, assignments, conveyances and transfers which are required to be
taken or executed by the Pledgor under this Agreement, on its behalf and in its
name which appointment is coupled with an interest, is irrevocable and durable
and shall survive the subsequent dissolution, disability or incapacity of the
Pledgor.

         SECTION 15. NOTICES. (a) Any and all notices, demands, consents,
approvals, offers, elections and other communications required or permitted
under this Agreement shall be deemed adequately given if in writing and the same
shall be delivered either in hand, by telecopier with electronic confirmation of
receipt, or by mail or Federal Express or similar expedited commercial carrier,
addressed to the recipient of the notice, postpaid and registered or certified
with return receipt requested (if by mail), or with all freight charges prepaid
(if by Federal Express or similar carrier).

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

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         (c)      All such notices shall be addressed,

         if to the Secured Parties to:

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

         if to the Pledgor to:

                  400 Centre Street
                  Newton, Massachusetts  02458
                  Attn:  Mr. Evrett W. Benton
                  [Telecopier No. (617) 332-2261]

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

         SECTION 16. SUCCESSORS AND ASSIGNS. This Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and assigns, and the term "Secured Parties" shall be deemed to
include any other holder or holders of any of the Secured Obligations. Where the
context so permits or requires, terms defined herein in the singular number
shall include the plural, and in the plural number, the singular. This Agreement
may be executed in any number of counterparts and by the different parties on
separate counterparts, each of which, when so executed and delivered, shall be
an original and all of which shall together constitute one and the same
agreement.

         SECTION 17. APPOINTMENT OF AGENT FOR SECURED PARTIES. Each of the
Secured Parties hereby appoints SPTMNR Properties Trust as its agent for the
following purposes under this Agreement (including, without limitation, the full
power and authority to act of the Secured Parties' behalf for such purposes):
(i) to give or receive notices, demands, claims and other communications on
behalf of the Secured Parties under this Agreement and (ii) to receive and hold
any and all certificates

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or other instruments representing the Pledged Collateral which are to be
delivered from time to time by the Pledgor to the Secured Parties in accordance
with the terms and conditions of this Agreement.

         SECTION 18. REINSTATEMENT. This Agreement shall continue to be
effective, or be reinstated, as the case may be, if at any time any amount
received by the Secured Parties in respect of the Pledged Collateral is
rescinded or must otherwise be restored or returned by the Secured Parties upon
the insolvency, bankruptcy, dissolution, liquidation or reorganization of the
Pledgor or upon the appointment of any intervenor or conservator of, or trustee
or similar official for the Pledgor or any substantial part of its or property,
or otherwise, all as though such payments had not been made.

         SECTION 19. RESTRICTIONS ON TRANSFER. To the extent that any
restrictions imposed by the Declaration of Trust or any other charter documents
of the Tenant or any other document or instrument would in any way affect or
impair the pledge of the Pledged Collateral hereunder or the exercise by the
Secured Parties of any right granted hereunder including, without limitation,
the right of the Secured Parties to dispose of the Pledged Collateral upon the
occurrence of any Event of Default, the Pledgor hereby waives such restrictions,
and the Pledgor hereby agrees that it will take any action which the Secured
Parties may reasonably request in order that the Secured Parties may obtain and
enjoy the full rights and benefits granted to the Secured Parties by this
Agreement free of any such restrictions.

         SECTION 20. APPLICABLE LAW. This Agreement and any other instruments
executed and delivered to evidence, complete or perfect the transactions
contemplated hereby and thereby shall be interpreted, construed, applied and
enforced in accordance with the laws of the Commonwealth of Massachusetts
applicable to contracts between residents of Massachusetts which are to be
performed entirely within Massachusetts regardless of (i) where any such
instrument is executed or delivered; or (ii) where any payment or other
performance required by any such instrument is made or required to be made; or
(iii) where any breach of any provision of any such instrument occurs, or any
cause of action otherwise accrues; or (iv) where any action or other proceeding
is instituted or pending; or (v) the nationality, citizenship, domicile,
principal place of business, or jurisdiction of organization or domestication of
any party; or (vi) whether the laws of the forum jurisdiction otherwise would
apply the laws of a jurisdiction other than the Commonwealth of Massachusetts;
or (vii) any combination of the foregoing.

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         SECTION 21. ARBITRATION. The Secured Parties or the Pledgor may elect
to submit any dispute hereunder that has an amount in controversy in excess of
$250,000 to arbitration hereunder. Any such dispute shall be resolved in
accordance with the Commercial Arbitration Rules of the American Association
then pertaining and the decision of the arbitrators with respect to such dispute
shall be binding, final and conclusive on the parties.

         In the event the Secured Parties or the Pledgor shall elect to submit
any such dispute to arbitration hereunder, the Secured Parties and the Pledgor
shall each appoint and pay all fees of a fit and impartial person as arbitrator
with at least ten (10) years' recent professional experience in the general
subject matter of the dispute. Notice of such appointment shall be sent in
writing by each party to the other, and the arbitrators so appointed, in the
event of their failure to agree within thirty (30) days after the appointment of
the second arbitrator upon the matter so submitted, shall appoint a third
arbitrator. If either the Secured Parties or the Pledgor shall fail to appoint
an arbitrator, as aforesaid, for a period of twenty (20) days after written
notice from the other party to make such appointment, then the arbitrator
appointed by the party having made such appointment shall appoint a second
arbitrator and the two (2) so appointed shall, in the event of their failure to
agree upon any decision within thirty (30) days thereafter, appoint a third
arbitrator. If such arbitrators fail to agree upon a third arbitrator within
forty five (45) days after the appointment of the second arbitrator, then such
third arbitrator shall be appointed by the American Arbitration Association from
its qualified panel of arbitrators, and shall be a person having at least ten
(10) years' recent professional experience as to the subject matter in question.
The fees of the third arbitrator and the expenses incident to the proceedings
shall be borne equally between the Secured Parties and the Pledgor, unless the
arbitrators decide otherwise. The fees of respective counsel engaged by the
parties, and the fees of expert witnesses and other witnesses called for the
parties, shall be paid by the respective party engaging such counsel or calling
or engaging such witnesses.

         The decision of the arbitrators shall be rendered within thirty (30)
days after appointment of the third arbitrator. Such decision shall be in
writing and in duplicate, one counterpart thereof to be delivered to the Secured
Parties and one to the Pledgor. A judgment of a court of competent jurisdiction
may be entered upon the award of the arbitrators in

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accordance with the rules and statutes applicable thereto then obtaining.

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

         SECTION 22. SEVERABILITY. In case any one or more of the provisions
contained in this Agreement should be invalid, illegal or unenforceable in any
respect, the validity, legality and enforceability of the remaining provisions
contained herein shall not in any way be affected or impaired thereby, but this
Agreement shall be reformed and construed and enforced to the maximum extent
permitted by applicable law.

         SECTION 23. ENTIRE CONTRACT. This Agreement constitutes the entire
agreement between the parties hereto with respect to the subject matter hereof
and shall supersede and take the place of any other instruments purporting to be
an agreement of the parties hereto relating to the subject matter hereof.

         SECTION 24. HEADINGS; COUNTERPARTS. Headings in this Agreement are for
purposes of reference only and shall not limit or otherwise affect the meaning
hereof. This Agreement may be executed in any number of counterparts, each of
which shall be an original, but all of which together shall constitute one
instrument, and in pleading or proving any provision of this Agreement, it shall
not be necessary to produce more than one of such counterparts.

         SECTION 25. NONLIABILITY OF TRUSTEES. THE DECLARATIONS OF TRUST
ESTABLISHING THE SECURED PARTIES, COPIES OF WHICH, TOGETHER WITH ALL AMENDMENTS
THERETO (THE "DECLARATIONS"), ARE DULY FILED WITH THE DEPARTMENT OF ASSESSMENTS
AND TAXATION OF THE STATE OF MARYLAND, PROVIDE THAT THE NAMES "HRES2 PROPERTIES
TRUST," "SPTIHS PROPERTIES TRUST," "SPT-MICHIGAN TRUST" AND "SPTMNR PROPERTIES
TRUST" REFER TO THE TRUSTEES UNDER EACH DECLARATION COLLECTIVELY AS TRUSTEES,
BUT NOT INDIVIDUALLY OR PERSONALLY, AND THAT NO TRUSTEE, OFFICER, SHAREHOLDER,
EMPLOYEE OR AGENT OF THE SECURED PARTIES SHALL BE HELD TO ANY PERSONAL
LIABILITY, JOINTLY OR SEVERALLY, FOR ANY OBLIGATION OF OR CLAIM AGAINST, THE
SECURED PARTIES. ALL PERSONS DEALING WITH THE SECURED PARTIES, IN ANY WAY, SHALL
LOOK ONLY TO THE ASSETS OF THE SECURED PARTIES FOR THE PAYMENT OF ANY SUM OR THE
PERFORMANCE OF ANY OBLIGATION.

                                      -13-
<PAGE>

         WITNESS the execution hereof under seal as of the date above first
written.

                                    PLEDGOR:

                                    FIVE STAR QUALITY CARE, INC.,
                                    a Maryland corporation

                                    By:  /s/ Bruce J. Mackey Jr.
                                         -----------------------------
                                         Treasurer and Chief Financial
                                         Officer

                                    SECURED PARTIES:

                                    HRES2 PROPERTIES TRUST

                                    By: /s/ David J. Hegarty
                                        ------------------------------
                                        Its: President
                                             -------------------------

                                    SPTIHS PROPERTIES TRUST

                                    By: /s/ David J. Hegarty
                                        ------------------------------
                                        Its: President
                                             -------------------------

                                    SPT-MICHIGAN TRUST

                                    By: /s/ David J. Hegarty
                                        ------------------------------
                                        Its: President
                                             -------------------------

                                    SPTMNR PROPERTIES TRUST

                                    By: /s/ David J. Hegarty
                                        ------------------------------
                                        Its: President
                                             -------------------------

                                      -14-
<PAGE>

                                Omitted Exhibits

         The following exhibit to the Pledge of Shares of Beneficial Interest
Agreement has been omitted:

<Table>
<Caption>
Exhibit Letter                               Exhibit Title
--------------                               --------------
<S>                                        <C>

     A                                       Pledged Shares of Beneficial
                                             Interest
</Table>

         The Registrant agrees to furnish supplementally a copy of the
foregoing omitted exhibit to the Securities and Exchange Commission upon
request.<PAGE>

                                                                    Exhibit 10.9

                               SECURITY AGREEMENT

         THIS SECURITY AGREEMENT (this "AGREEMENT") is entered into as of this
31st day of December, 2001, by and among (i) FIVE STAR QUALITY CARE TRUST, a
Maryland business trust (the "TENANT"), and (ii) each of the other parties
identified on the signature page hereof (collectively, the "SECURED PARTIES").

                              W I T N E S S E T H:
                              - - - - - - - - - -

         WHEREAS, pursuant to that certain Master Lease Agreement, dated as of
the date hereof (as amended from time to time, the "MASTER LEASE"), the Secured
Parties leased to the Tenant and the Tenant leased from the Secured Parties,
certain premises as more particularly described in the Master Lease, subject to
and upon the terms and conditions set forth in the Master Lease; and

         WHEREAS, as security for the payment and performance of each and every
obligation and liability of the Tenant to the Secured Parties, whether now
existing or hereafter arising, under the Master Lease or any other document or
agreement executed and delivered pursuant thereto, including, without
limitation, the payment of the Rent (this and other capitalized terms used and
not otherwise defined herein having the meanings ascribed to such terms in
SECTION 1), and the payment and performance of each and every other obligation
of the Tenant to the Secured Parties, whether now existing or hereafter arising,
whether direct or indirect, absolute or contingent, due or to become due
(collectively, the "OBLIGATIONS"), the Tenant has agreed to grant to the Secured
Parties a first and perfected lien and security interest in the Collateral;

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

         SECTION 1. DEFINITIONS. As used in this Agreement, the following terms
shall have the meanings specified below. Except as otherwise defined, terms
defined in the Uniform Commercial Code and used herein without definition shall
have the meanings given such terms in the Uniform Commercial Code.

         "AFFILIATED PERSON" shall have the meaning given such term in the
Master Lease.

<PAGE>

         "BUSINESS DAY" shall have the meaning given such term in the Master
Lease.

         "COLLATERAL" shall mean all of the Tenant's right, title and interest
in and under or arising out of all and any personal property, intangibles and
fixtures of any type or description (other than Excluded Collateral), wherever
located and now existing or hereafter arising, or which constitute or arise from
the operation, maintenance or repair of the Leased Property or any portion
thereof, together with any and all additions and accessions thereto and
replacements, products, proceeds (including, without limitation, proceeds of
insurance) and supporting obligations thereof, including, but not limited to,
the following:

         (a)      all goods, including, without limitation, all Equipment; and

         (b)      all General Intangibles; and

         (c)      all other personal property or fixtures of any nature
                  whatsoever which relate to the operation, maintenance or
                  repair of the Leased Property, or any portion thereof, and all
                  property from time to time described in any financing
                  statement signed by the Tenant naming the Secured Parties as
                  Secured Parties; and

         (d)      all claims, rights, powers or privileges and remedies relating
                  to the foregoing or arising in connection therewith,
                  including, without limitation, all Licenses and Permits which
                  Tenant legally may grant a security interest in, rights to
                  make determinations, to exercise any election (including, but
                  not limited to, election of remedies) or option or to give or
                  receive any notice, consent, waiver or approval; all liens,
                  security, guaranties, endorsements, warranties and indemnities
                  and all insurance, eminent domain and condemnation awards and
                  claims therefor relating thereto or arising in connection
                  therewith; all rights to property forming the subject matter
                  of any of the foregoing, including, without limitation, rights
                  to stoppage in transit and rights to returned or repossessed
                  property; all writings relating to the foregoing or arising in
                  connection therewith; and

         (e)      all contract rights, general intangibles and other property
                  rights of any nature whatsoever arising out of or in
                  connection with any of the foregoing (other than Excluded
                  Collateral), including, without

                                      -2-
<PAGE>

                  limitation, payments due or to become due, whether as
                  repayments, reimbursements, contractual obligations,
                  indemnities, damages or otherwise.

         "EQUIPMENT" shall mean all buildings, structures, improvements,
fixtures and items of machinery, equipment and other tangible personal property
which constitute, arise from or relate to the operation, maintenance or repair
of the Leased Property or any portion thereof, together with all repairs,
replacements, improvements, substitutions, extensions or renewals thereof or
additions thereto, all parts, additions and accessories incorporated therein or
affixed thereto, and all "equipment" as such term is defined in the Uniform
Commercial Code, and all cash and non-cash proceeds therefrom.

         "EVENT OF DEFAULT" shall have the meaning given such term in SECTION 6.

         "EXCLUDED COLLATERAL" shall mean Accounts or Chattel Paper, Support
Obligations, General Intangibles or Deposit Accounts relating to such Accounts
or Chattel Paper, Instruments or Investment Property evidencing or arising from
such Accounts or Chattel Paper, any documents, books, records or other
information (including, without limitation, computer programs, tapes, discs,
punch cards, data processing software and related property and rights)
maintained with respect to any of the foregoing or any Proceeds of any of the
foregoing.

         "FACILITIES" shall have the meaning given such term in the Master
Lease.

         "GENERAL INTANGIBLES" shall mean all present and future general
intangibles and contract rights (other than Excluded Collateral) which
constitute, arise from or relate to the operation, maintenance or repair of the
Leased Property, or any portion thereof, including, but not limited to, all
causes of action, corporate or business records, inventions, designs, patents,
patent applications, trademarks, trademark registrations and applications
therefor, goodwill, trade names, trade secrets, trade processes, copyrights,
copyright registrations and applications therefor, franchises, customer lists,
computer programs, claims under guaranties, tax refund claims, rights and claims
against carriers and shippers, leases, claims under insurance policies, all
rights to indemnification and all other intangible personal property of every
kind and nature which constitutes, arises from or relates to the operation,
maintenance or repair of the Leased Property, or any portion thereof.

                                      -3-
<PAGE>

         "INSTRUMENT" shall have the meaning give such term in Article 9 of the
Uniform Commercial Code.

         "MASTER LEASE" shall have the meaning given such term in the preambles
to this Agreement.

         "LEASED PROPERTY" shall have the meaning given such term in the Master
Lease.

         "LICENSES" shall mean all certificates of need, licenses, permits,
rights of use, covenants or rights otherwise benefiting or permitting the use
and operation of each applicable Property or any part thereof pertaining to the
operation, maintenance or repair of such Property or any portion thereof.

         "OBLIGATIONS" shall have the meaning given such term in the preambles
to this Agreement.

         "OVERDUE RATE" shall have the meaning given such term in the Master
Lease.

         "PERMITS" shall mean all permits, approvals, consents, waivers,
exemptions, variances, franchises, orders, authorizations, rights and licenses
obtained or hereafter obtained from any federal, state or other governmental
authority or agency relating to the operation, maintenance or repair, each
applicable Property, or any portion thereof.

         "PERSON" shall have the meaning given such term in the Master Lease.

         "PROPERTY" shall have the meaning given such term in the Master Lease.

         "RENT" shall have the meaning given such term in the Master Lease.

         "UNIFORM COMMERCIAL CODE" means Article 9 of the Uniform Commercial
Code as in effect in the Commonwealth of Massachusetts from time to time.

         SECTION 2. SECURITY INTEREST. As security for the prompt payment and
performance of all the Obligations, the Tenant hereby grants, pledges, transfers
and assigns to the Secured Parties, their successors and assigns and all other
holders from time to time of the Obligations, a continuing security interest
under the Uniform Commercial Code from time to time in effect in the
jurisdiction in which any of the Collateral is located in and a continuing lien
upon all of the Tenant's right, title and

                                      -4-
<PAGE>

interest in the Collateral, together with any and all additions thereto and
replacements, products and proceeds thereof, whether now existing or hereafter
arising or acquired and wherever located.

         SECTION 3. GENERAL REPRESENTATIONS, WARRANTIES AND COVENANTS. The
Tenant represents, warrants and covenants, which representations, warranties and
covenants shall survive execution and delivery of this Agreement, as follows:

                  (a) Each of the warranties and representations of the Tenant
contained herein, in the Master Lease or in any other document executed in
connection herewith or therewith are true and correct on the date hereof.

                  (b) Except for the lien granted to the Secured Parties
pursuant to this Security Agreement and any liens permitted under the Master
Lease, the Tenant is, and as to the Collateral acquired from time to time after
the date hereof the Tenant will be, the owner of all the Collateral free from
any lien, security interest, encumbrance or other right, title or interest of
any Person, except for the security interest of the Secured Parties therein, and
the Tenant shall defend the Collateral against all claims and demands of all
Persons at any time claiming the same or any interest therein adverse to the
Secured Parties. The lien granted in this Agreement by the Tenant to the Secured
Parties in the Collateral is not prohibited by and does not constitute a default
under any agreements or other instruments constituting a part of the Collateral,
and no consent is required of any Person to effect such lien which has not been
obtained.

                  (c) Except as permitted under the Master Lease, there is no
financing statement (or similar statement or instrument of registration under
the law of any jurisdiction) now on file or registered in any public office
covering any interest of any kind in the Collateral, or intended so to be, which
has not been terminated, and so long as this Agreement remains in effect or any
of the Obligations or any obligations of any Affiliated Person of the Tenant to
the Secured Parties remain unpaid, the Tenant will not execute and there will
not be on file in any public office any financing statement (or similar
statement or instrument of registration under the law of any jurisdiction) or
statements relating to the Collateral, except financing statements filed or to
be filed in respect of and covering the security interest of the Secured
Parties.

                  (d) The chief executive office and the principal place of
business of the Tenant are as set forth in SCHEDULE 1

                                      -5-
<PAGE>

and the Tenant will not move its chief executive office or establish any other
principal place of business except to such new location as the Tenant may
establish in accordance with this SECTION 3(D). The location of each Facility
comprising a portion of the Leased Property is as set forth in SCHEDULE 2. The
originals of all documents evidencing Collateral and the only original books of
account and records of the Tenant relating thereto are, and will continue to be,
kept at such chief executive office or the applicable Facility, as the case may
be, or at such new location as the Tenant may establish in accordance with this
SECTION 3(D). The Tenant shall not move its chief executive office or establish
any other principal place of business until (i) the Tenant shall have given to
the Secured Parties not less than ten (10) days' prior written notice of its
intention to do so, which notice shall clearly describe such new location and
provide such other information in connection therewith as the Secured Parties
may reasonably request, and (ii) with respect to such new location, the Tenant
shall have taken such action, satisfactory to the Secured Parties (including,
without limitation, all action required by SECTION 5), to maintain the security
interest of the Secured Parties in the Collateral.

                  (e) All tangible personal property owned on the date hereof by
the Tenant to be used in connection with the operation or maintenance of the
Leased Property, or any portion thereof, is located at each applicable Property
or is in transit to such Property from the vendor thereof. The Tenant agrees
that (i) all such property held by the Tenant on the date hereof, once at each
applicable Property, shall remain at such Property and (ii) all such property
subsequently acquired by the Tenant shall immediately upon acquisition be
transferred to and remain at the applicable Property.

                  (f) The Tenant's corporate name and organizational
identification number are as set forth on the signature page hereto. The name
under which each of the Facilities is operated is set forth on SCHEDULE 2. The
Tenant shall not (i) change such names without providing the Secured Parties
with thirty (30) days' prior written notice and making all filings and taking
all such other actions as the Secured Parties determines are necessary or
appropriate to continue or perfect the security interest granted hereunder, (ii)
change its corporate organizational number, nor (iii) conduct its business in
any other name or take title to any Collateral in any other name while this
Agreement remains in effect. Except as otherwise set forth on SCHEDULE 1, the
Tenant has not ever had any other name nor conducted business in any other name
in any jurisdiction.

                                      -6-
<PAGE>

The Tenant is organized as a Maryland business trust. Subject to the terms and
conditions of the Master Lease, the Tenant shall not change its organizational
structure or jurisdiction of organization without giving at least thirty (30)
days' prior written notice thereof to the Secured Parties.

         (g) The Secured Parties are authorized (but are under no obligation) to
make, upon ten (10) Business Days' notice to the Tenant (except in the case of
exigent circumstances, in which circumstances upon such notice, if any, as may
then be reasonably practical), any payments which in the Secured Parties'
opinion are necessary to:

                  (i)      discharge any liens which have or may take priority
                           over the lien hereof; and

                  (ii)     pay all premiums payable on the insurance policies
                           referred to in the Master Lease or any other document
                           or agreement executed in connection therewith or
                           herewith, upon the failure of the Tenant to make such
                           payments within the time permitted therein.

The Tenant shall have no claim against the Secured Parties by reason of its
decision not to make any payments or perform such obligations permitted under
this SECTION 3(G). The Tenant shall repay to the Secured Parties any sums paid
by the Secured Parties upon demand. Any sums paid and expenses incurred by the
Secured Parties pursuant to this paragraph shall bear interest at the Overdue
Rate.

                  (h) If any of the Collateral at any time becomes evidenced by
an Instrument, the Tenant shall promptly deliver such Instrument to the Secured
Parties, appropriately endorsed to the order of the Secured Parties, to be held
pursuant to this Agreement.

                  (i) The Tenant shall not sell, transfer, change the
registration, if any, of, dispose of, attempt to dispose of, or substantially
modify or abandon the Collateral or any material part thereof, other than as
permitted under the Master Lease, without the prior written consent of the
Secured Parties. Except as permitted under the Master Lease, the Tenant shall
not create, incur, assume or suffer to exist any lien upon any of the Collateral
without the prior written consent of the Secured Parties.

                  (j) The Tenant shall not assert against the Secured Parties
any claim or defense which the Tenant may have against

                                      -7-
<PAGE>

any seller of the Collateral or any part thereof or against any Person with
respect to the Collateral or any part thereof.

                  (k) The Tenant shall, upon demand, pay to the Secured Parties
the amount of any and all reasonable expenses, including the reasonable fees and
expenses of its counsel and of any experts and agents, which the Secured Parties
may incur in connection with (i) the administration of this Agreement, (ii) the
custody or preservation of, or the sale of, collection from, or other
realization upon, any of the Collateral, (iii) the exercise or enforcement of
any of the rights of the Secured Parties hereunder and under such other
agreements or (iv) the failure by the Tenant to perform or observe any of the
provisions hereof.

                  (l) The Tenant shall indemnify and hold harmless the Secured
Parties from and against any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind and nature whatsoever which may be imposed on, incurred by or asserted
against the Secured Parties in any way relating to or arising out of this
Agreement or arising out of the Tenant's obligations under any other documents
contemplated by or referred to herein or therein or the transactions
contemplated hereby or thereby or the enforcement of any of the terms hereof or
of any such other documents.

         SECTION 4. SPECIAL PROVISIONS CONCERNING EQUIPMENT. The Tenant shall
not impair the rights of the Secured Parties in the Equipment. Regardless of the
manner of the affixation of any Equipment to real property, the Equipment so
attached shall at all times constitute and remain personal property. The Tenant
retains all liability and responsibility in connection with the Equipment and
the liability of the Tenant to pay the Obligations shall in no way be affected
or diminished by reason of the fact that such Equipment may be lost, destroyed,
stolen or damaged or for any reason whatsoever have become unavailable to the
Tenant. Upon the request of the Secured Parties, the Tenant shall provide to the
Secured Parties a current list of Equipment.

         SECTION 5.  FINANCING STATEMENTS; DOCUMENTARY STAMP TAXES.

                  (a) The Tenant shall, at its own expense, make, execute,
endorse, acknowledge, file and/or deliver to the Secured Parties from time to
time such lists, descriptions and designations of inventory, warehouse receipts,
bills of lading, documents of title, vouchers, invoices, schedules, confirmatory
assignments, conveyances, financing statements, transfer endorsements, powers of
attorney, certificates, reports and

                                      -8-
<PAGE>

other assurances or instruments and take such further steps relating to the
Collateral and other property or rights covered by the security interest hereby
granted, which the Secured Parties reasonably deem appropriate or advisable to
perfect, preserve or protect their security interest in the Collateral. The
Tenant authorizes the Secured Parties to file any such financing statements
without the signature of the Tenant and the Tenant will pay all applicable
filing fees and related expenses. To the extent permitted by law, a carbon,
photographic or other reproduction of this Agreement or a financing statement
shall be sufficient as a financing statement.

                  (b) The Tenant shall procure, pay for, affix to any and all
documents and cancel any documentary tax stamps required by and in accordance
with, applicable law, and the Tenant shall indemnify and hold harmless the
Secured Parties from and against any liability (including interest and
penalties) in respect of such documentary stamp taxes.

         SECTION 6. EVENT OF DEFAULT. For purposes of this Agreement, the term
"EVENT OF DEFAULT" shall mean (a) the occurrence of an Event of Default under
the Master Lease or any document or agreement executed in connection therewith;
(b) the failure of the Tenant to comply with any of its covenants or obligations
under this Agreement and the continuance thereof for a period of ten (10)
Business Days after written notice thereof; (c) any representation or warranty
contained herein or made by the Tenant in connection herewith shall prove to
have been false or misleading in any material respect when made; or (d) the
occurrence of any default or event of default under any document, instrument or
agreement evidencing the Obligations.

         SECTION 7. REMEDIES.

                  (a) Upon the occurrence and during the continuance of an Event
of Default, in addition to any rights and remedies now or hereafter granted
under applicable law, under the Master Lease or under any other documents or
agreements entered into in connection herewith or therewith, and not by way of
limitation of any such rights and remedies, the Secured Parties shall have all
of the rights and remedies of a secured party under the Uniform Commercial Code
as enacted in any applicable jurisdiction, and the right, without notice to, or
assent by, the Tenant, in the name of the Tenant or in the name of the Secured
Parties or otherwise:

                  (i)      with respect to the General Intangibles to ask for,
                           demand, collect, receive, compound and give
                           acquittance therefor or any part thereof, to

                                      -9-
<PAGE>

                           extend the time of payment of, compromise or settle
                           for cash, credit or otherwise, and upon any terms and
                           conditions, any thereof, to exercise and enforce any
                           rights and remedies in respect thereof, and to file
                           any claims, commence, maintain or discontinue any
                           actions, suits or other proceedings deemed by the
                           Secured Parties necessary or advisable for the
                           purpose of collecting or enforcing payment and
                           performance thereof;

                  (ii)     to take possession of any or all of the Collateral
                           and to use, hold, store, operate, merge and/or
                           control the same and to exclude the Tenant and all
                           Persons claiming under it wholly or partly therefrom,
                           and, for that purpose, to enter, with the aid and
                           assistance of any Person or Persons and with or
                           without legal process, any premises where the
                           Collateral, or any part thereof, are, or may be,
                           placed or assembled, and to remove any such
                           Collateral;

                  (iii)    from time to time, at the expense of the Tenant, to
                           make all such repairs, replacements, alterations,
                           additions and improvements to and of the Collateral
                           as the Secured Parties may reasonably deem proper; to
                           carry on the business and to exercise all rights and
                           powers of the Tenant in respect to the Collateral, as
                           the Secured Parties shall deem best, including the
                           right to enter into any and all such agreements with
                           respect to the leasing, management and/or operation
                           of the Collateral or any part thereof as the Secured
                           Parties may see fit; to collect and receive all
                           rents, issues, profits, fees, revenues and other
                           income of the same and every part thereof which
                           rents, issues, profits, fees, revenues and other
                           income may be applied to pay the expenses of holding
                           and operating the Collateral and of conducting the
                           business thereof, and of all maintenance, repairs,
                           replacements, alterations, additions and
                           improvements, and to make all payments which the
                           Secured Parties may be required or may elect to make,
                           if any, for taxes, assessments, insurance and other
                           charges upon the Collateral or any part thereof, and
                           all other payments which the Secured Parties may be
                           required or authorized to

                                      -10-
<PAGE>

                           make under any provision of this Agreement
                           (including, without limitation, reasonable legal
                           costs and attorneys' fees);

                  (iv)     to execute any instrument and do all other things
                           necessary and proper to protect and preserve and
                           realize upon the Collateral and the other rights
                           contemplated hereby;

                  (v)      upon notice to such effect, to require the Tenant to
                           deliver, at the Tenant's expense, any or all
                           Collateral which is reasonably movable to the Secured
                           Parties at a place designated by the Secured Parties,
                           and after delivery thereof the Tenant shall have no
                           further claim to or interest in the Collateral; and

                  (vi)     without obligation to resort to other security, at
                           any time and from time to time, to sell, re-sell,
                           assign and deliver all or any of the Collateral, in
                           one or more parcels at the same or different times,
                           and all right, title and interest, claim and demand
                           therein and right of redemption thereof, at public or
                           private sale, for cash, upon credit or for future
                           delivery, and at such price or prices and on such
                           terms as the Secured Parties may determine, with the
                           amounts realized from any such sale to be applied to
                           the Secured Obligations in the manner determined by
                           the Secured Parties.

The Tenant hereby agrees that all of the foregoing may be effected without
demand, advertisement or notice (except as hereinafter provided or as may be
required by law), all of which (except as hereinafter provided) are hereby
expressly waived, to the maximum extent permitted by law. The Secured Parties
shall not be obligated to do any of the acts hereinabove authorized and in the
event that the Secured Parties elects to do any such act, the Secured Parties
shall not be responsible to the Tenant.

                  (b) Upon the occurrence and during the continuance of an Event
of Default, the Secured Parties may take legal proceedings for the appointment
of a receiver or receivers (to which the Secured Parties shall be entitled as a
matter of right) to take possession of the Collateral pending the sale thereof
pursuant either to the powers of sale granted by this Agreement or to a
judgment, order or decree made in any judicial proceeding for the foreclosure or
involving the enforcement of this Agreement. If, after the exercise of any or
all of such

                                      -11-
<PAGE>

rights and remedies, any of the Obligations shall remain unpaid or unsatisfied,
the Tenant shall remain liable for any deficiency or performance thereof, as
applicable.

                  (c) Upon any sale of any of the Collateral, whether made under
the power of sale hereby given or under judgment, order or decree in any
judicial proceeding for the foreclosure or involving the enforcement of this
Agreement:

                  (i)      the Secured Parties may bid for and purchase the
                           property being sold and, upon compliance with the
                           terms of sale, may hold, retain and possess and
                           dispose of such property in its own absolute right
                           without further accountability, and may, in paying
                           the purchase money therefor, deliver any instruments
                           evidencing the Obligations or agree to the
                           satisfaction of all or a portion of the Obligations
                           in lieu of cash in payment of the amount which shall
                           be payable thereon, and such instruments, in case the
                           amounts so payable thereon shall be less than the
                           amount due thereon, shall be returned to the Secured
                           Parties after being appropriately stamped to show
                           partial payment;

                  (ii)     the Secured Parties may make and deliver to the
                           purchaser or purchasers a good and sufficient deed,
                           bill of sale and instrument of assignment and
                           transfer of the property sold;

                  (iii)    all right, title, interest, claim and demand
                           whatsoever, either at law or in equity or otherwise,
                           of the Tenant of, in and to the property so sold
                           shall be divested; such sale shall be a perpetual bar
                           both at law and in equity against the Tenant, its
                           successors and assigns, and against any and all
                           Persons claiming or who may claim the property sold
                           or any part thereof from, through or under the
                           Tenant, its successors or assigns;

                  (iv)     the receipt of the Secured Parties or of the officers
                           thereof making such sale shall be a sufficient
                           discharge to the purchaser or purchasers at such sale
                           for his or their purchase money, and such purchaser
                           or purchasers, and his or their assigns or personal
                           representatives, shall not, after paying such
                           purchase money and receiving such receipt of the

                                      -12-
<PAGE>

                           Secured Parties or of such officer therefor, be
                           obliged to see to the application of such purchase
                           money or be in any way answerable for any loss,
                           misapplication or nonapplication thereof; and

                  (v)      to the extent that it may lawfully do so, the Tenant
                           agrees that it will not at any time insist upon, or
                           plead, or in any manner whatsoever claim or take
                           advantage of, any appraisement, valuation, stay,
                           extension or redemption laws, or any law permitting
                           it to direct the order in which the Collateral or any
                           part thereof shall be sold, now or at any time
                           hereafter in force, which may delay, prevent or
                           otherwise affect the performance or enforcement of
                           this Agreement or any other document, the Master
                           Lease or any other document or agreement entered into
                           in connection herewith or therewith, and the Tenant
                           hereby expressly waives all benefit or advantage of
                           any such laws and covenants that it will not hinder,
                           delay or impede the execution of any power granted or
                           delegated to the Secured Parties in this Agreement,
                           but will suffer and permit the execution of every
                           such power as though no such laws were in force.

In the event of any sale of Collateral pursuant to this SECTION 7, the Secured
Parties shall, at least ten (10) days before such sale, give the Tenant written
notice of its intention to sell, except that, if the Secured Parties shall
determine in its reasonable discretion that any of the Collateral threatens to
decline in value, any such sale may be made upon three (3) days' written notice
to the Tenant, which time periods the Tenant hereby agrees are reasonable.

                  (d) The Secured Parties are hereby irrevocably appointed the
true and lawful attorney-in-fact of the Tenant in its name and stead, to make
all necessary deeds, bills of sale and instruments of assignment and transfer of
the property sold pursuant to this SECTION 7 and for such other purposes as are
necessary or desirable to effectuate the provisions of this Agreement, and for
that purpose it may execute and deliver all necessary deeds, bills of sale and
instruments of assignment and transfer, and may substitute one or more Persons
with like power, the Tenant hereby ratifying and confirming all that its said
attorney, or such substitute or substitutes, shall lawfully

                                      -13-
<PAGE>

do by virtue hereof. If so requested by the Secured Parties or by any purchaser,
the Tenant shall ratify and confirm any such sale or transfer by executing and
delivering to the Secured Parties or to such purchaser all property, deeds,
bills of sale, instruments or assignment and transfer and releases as may be
designated in any such request.

         SECTION 8. APPLICATION OF MONEYS. All moneys which the Secured Parties
shall receive pursuant hereto shall first be applied (to the extent thereof) to
the payment of all reasonable costs and expenses incurred in connection with the
administration and enforcement of, or the preservation of any rights under, this
Agreement or any of without limitation, the reasonable fees and disbursements of
its counsel and agents), and the balance, if any, shall be applied first to
accrued and unpaid interest, charges and fees on, and then to outstanding
principal of, any Obligations of the Tenant (or its affiliates) to the Secured
Parties, and then to any other amounts outstanding on any such Obligations and
then as required by law to any other parties having an interest therein.

         SECTION 9. WAIVERS, ETC. The Tenant, on its own behalf and on behalf of
its successors and assigns, hereby waives presentment, demand, notice, protest
and, except as is otherwise specifically provided herein, all other demands and
notices in connection with this Agreement or the enforcement of the rights of
the Secured Parties hereunder or in connection with any Obligations or any
Collateral; waives all rights to require a marshaling of assets by the Secured
Parties; consents to and waives notice of (i) the substitution, release or
surrender of any Collateral, (ii) the addition or release of Persons primarily
or secondarily liable on any Obligation or on any Collateral, (iii) the
acceptance of partial payments on any Collateral and/or the settlement or
compromise thereof, (iv) any requirement of diligence or promptness on the part
of the Secured Parties in the enforcement of any rights in respect of any
Collateral or any other agreement or instrument directly or indirectly relating
thereto, and (v) any enforcement of any present or future agreement or
instrument relating directly or indirectly to the Collateral. No delay or
omission on the part of the Secured Parties or any holder of Obligations in
exercising any right hereunder shall operate as a waiver of such right or of any
other right hereunder. No waiver of any such right on any one occasion shall be
construed as a bar to or waiver of any such right on any future occasion. No
course of dealing between the Tenant and the Secured Parties or any holder of

                                      -14-
<PAGE>

Obligations, nor any failure to exercise, nor any delay in exercising, on the
part of the Secured Parties or any holder of Obligations, any right, power or
privilege hereunder or under any of the Obligations, shall operate as a waiver
thereof; nor shall any single or partial exercise of any right, power or
privilege hereunder or thereunder preclude any other or further exercise
thereof, or the exercise of any other right, power or privilege.

         The Tenant further waives any right it may have under the constitution
of any state or commonwealth in which any of the Collateral may be located, or
under the Constitution of the United States of America, to notice (except for
notice specifically required hereby) or to a judicial hearing prior to the
exercise of any right or remedy provided by this Agreement to the Secured
Parties, and waives its rights, if any, to set aside or invalidate any sale duly
consummated in accordance with the foregoing provisions hereof on the grounds
(if such be the case) that the sale was consummated without a prior judicial
hearing. THE TENANT'S WAIVERS UNDER THIS SECTION 9 HAVE BEEN MADE VOLUNTARILY,
INTELLIGENTLY AND KNOWINGLY AND AFTER THE TENANT HAS BEEN APPRISED AND COUNSELED
BY ITS ATTORNEYS AS TO THE NATURE THEREOF AND ITS POSSIBLE ALTERNATIVE RIGHTS.

         The Secured Parties shall not be required to marshal any present or
future security for (including without limitation this Agreement and the
Collateral pledged hereunder), or guaranties of, the Obligations or any of them,
or to resort to such security or guaranties in any particular order; and all of
the rights hereunder and in respect of such securities and guaranties shall be
cumulative and in addition to all other rights, however existing or arising. To
the maximum extent permitted by applicable law, the Tenant hereby agrees that it
will not invoke any law relating to the marshalling of collateral which, might
cause delay in or impede the enforcement of the Secured Parties' rights under
this Agreement or under any other instrument evidencing any of the Obligations
or under which any of the Obligations is outstanding or by which any of the
Obligations is secured or guaranteed, and, to the maximum extent permitted by
applicable law, the Tenant hereby irrevocably waives the benefits of all such
laws.

         SECTION 10. FURTHER ASSURANCES AS TO COLLATERAL; ATTORNEY-IN-FACT. From
time to time hereafter, the Tenant will execute and deliver, or will cause to be
executed and delivered, such additional instruments, certificates or documents
(including, without limitation, financing statements, renewal statements,
mortgages, collateral assignments and other security documents), and will take
all such actions as the Secured Parties may reasonably request, for the purposes
of implementing or

                                      -15-
<PAGE>

effectuating the provisions of this Agreement or of more fully perfecting or
renewing the Secured Parties' rights with respect to the Collateral (or with
respect to any additions thereto or replacements or proceeds thereof or with
respect to any other property or assets hereafter acquired by the Tenant which
may be deemed to be a part of the Collateral) pursuant hereto and thereto. The
Secured Parties are hereby appointed the attorney-in-fact, with full power of
substitution, of the Tenant for the purpose of carrying out the provisions of
this Agreement and taking any action, including, without limitation, executing,
delivering and filing applications, certificates, instruments and other
documents and papers with governmental authorities, and executing any
instruments, including without limitation financing or continuation statements,
deeds to secure debt, mortgages, assignments, conveyances, assignments and
transfers which are required to be taken or executed by the Tenant under this
Agreement, on its behalf and in its name which appointment is coupled with an
interest, is irrevocable and durable and shall survive the subsequent
dissolution, disability or incapacity of the Tenant.

         SECTION 11. ARBITRATION. The Secured Parties or the Tenant may elect to
submit any dispute hereunder that has an amount in controversy in excess of
$250,000 to arbitration hereunder. Any such dispute shall be resolved in
accordance with the Commercial Arbitration Rules of the American Association
then pertaining and the decision of the arbitrators with respect to such dispute
shall be binding, final and conclusive on the parties.

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

                                      -16-
<PAGE>

upon a third arbitrator within forty five (45) days after the appointment of the
second arbitrator, then such third arbitrator shall be appointed by the American
Arbitration Association from its qualified panel of arbitrators, and shall be a
person having at least ten (10) years' recent professional experience as to the
subject matter in question. The fees of the third arbitrator and the expenses
incident to the proceedings shall be borne equally between the Secured Parties
and the Tenant, unless the arbitrators decide otherwise. The fees of respective
counsel engaged by the parties, and the fees of expert witnesses and other
witnesses called for the parties, shall be paid by the respective party engaging
such counsel or calling or engaging such witnesses.

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

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

         SECTION 12. APPOINTMENT OF AGENT FOR SECURED PARTIES. Each of the
Secured Parties hereby appoints SPTMNR Properties Trust as its agent for the
following purposes under this Agreement (including, without limitation, the full
power and authority to act of the Secured Parties' behalf for such purposes):
(i) to give or receive notices, demands, claims and other communications on
behalf of the Secured Parties under this Agreement and (ii) to receive and hold
any and all Collateral which is to be delivered from time to time by the Tenant
to the Secured Parties in accordance with the terms and conditions of this
Agreement.

         SECTION 13. MISCELLANEOUS.

                  (a) The Tenant agrees that its obligations and the rights of
the Secured Parties hereunder and in respect of the Obligations may be enforced
by specific performance hereof and thereof and by temporary, preliminary and/or
final injunctive relief relating hereto and thereto, without necessity for proof

                                      -17-
<PAGE>

by the Secured Parties or any holder of the Obligations that it would otherwise
suffer irreparable harm, and the Tenant hereby consents to the issuance of such
specific and injunctive relief.

                  (b) Any notice or demand upon the Tenant or the Secured
Parties shall be deemed to have been sufficiently given when given in accordance
with the provisions of the Master Lease.

                  (c) None of the terms and conditions of this Agreement may be
changed, waived, modified or varied in any manner whatsoever unless in writing
duly signed by the Tenant and the Secured Parties. No notice to or demand on the
Tenant in any case shall entitle the Tenant to any other or further notice or
demand in similar or other circumstances or constitute a waiver of any of the
rights of the Secured Parties to any other or further action in any
circumstances without notice or demand.

                  (d) The obligations of the Tenant hereunder shall remain in
full force and effect without regard to, and shall not be impaired by, (i) any
bankruptcy, insolvency, reorganization, arrangement, readjustment, composition,
liquidation or the like of the Tenant; (ii) any exercise or non-exercise, or any
waiver of, any right, remedy, power or privilege under or in respect of this
Agreement, the Master Lease or any document or agreement executed in connection
herewith or therewith, the Obligations or any security for any of the
Obligations; or (iii) any amendment to or modification of any of the Master
Lease or any document or agreement executed in connection herewith or therewith,
the Obligations or any security for any of the Obligations; whether or not the
Tenant shall have notice or knowledge of any of the foregoing. The rights and
remedies of the Secured Parties herein provided for are cumulative and not
exclusive of any rights or remedies which the Secured Parties would otherwise
have, including, without limitation, under the Master Lease or any document or
agreement executed in connection herewith or therewith. This Agreement is
intended as a supplement for and is not intended to supersede in any respect the
Master Lease or any document or agreement executed in connection herewith or
therewith.

                  (e) This Agreement shall be binding upon the Tenant and its
successors and assigns and shall inure to the benefit of the Secured Parties,
and its respective successors and assigns. All agreements, representations and
warranties made herein shall survive the execution and delivery of this
Agreement.

                                      -18-
<PAGE>

                  (f) The descriptive headings of the several sections of this
Agreement are inserted for convenience only and shall not in any way affect the
meaning or construction of any provision of this Agreement.

                  (g) Any provision of this Agreement which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibitions or unenforceability in
any jurisdiction shall not invalidate or render unenforceable such provision in
any other jurisdiction.

                  (h) This Agreement shall be interpreted, construed, applied
and enforced in accordance with the laws of the Commonwealth of Massachusetts
applicable to contracts between residents of Massachusetts which are to be
performed entirely within Massachusetts, regardless of (i) where this Agreement
is executed or delivered; or (ii) where any payment or other performance
required by this Agreement is made or required to be made; or (iii) where any
breach of any provision of this Agreement occurs, or any cause of action
otherwise accrues; or (iv) where any action or other proceeding is instituted or
pending; or (v) the nationality, citizenship, domicile, principle place of
business, or jurisdiction of organization or domestication of any party; or (vi)
whether the laws of the forum jurisdiction otherwise would apply the laws of a
jurisdiction other than the Commonwealth of Massachusetts; or (vii) any
combination of the foregoing. Notwithstanding the foregoing, to the extent that
matters of title, or creation, perfection and priority of the security interests
created hereby, or procedural issues of foreclosures are required to be governed
by the laws of the state in which the Collateral, or relevant part thereof, is
located, the laws of such State shall apply.

         SECTION 12. NONLIABILITY OF TRUSTEES. THE DECLARATIONS OF TRUST
ESTABLISHING THE SECURED PARTIES, COPIES OF WHICH, TOGETHER WITH ALL AMENDMENTS
THERETO (THE "DECLARATIONS"), ARE DULY FILED WITH THE DEPARTMENT OF ASSESSMENTS
AND TAXATION OF THE STATE OF MARYLAND, PROVIDE THAT THE NAMES "HRES2 PROPERTIES
TRUST," "SPTIHS PROPERTIES TRUST," "SPT-MICHIGAN TRUST" AND "SPTMNR PROPERTIES
TRUST" REFER TO THE TRUSTEES UNDER EACH DECLARATION COLLECTIVELY AS TRUSTEES,
BUT NOT INDIVIDUALLY OR PERSONALLY, AND THAT NO TRUSTEE, OFFICER, SHAREHOLDER,
EMPLOYEE OR AGENT OF THE SECURED PARTIES SHALL BE HELD TO ANY PERSONAL
LIABILITY, JOINTLY OR SEVERALLY, FOR ANY OBLIGATION OF OR CLAIM AGAINST, THE
SECURED PARTIES. ALL PERSONS DEALING WITH THE

                                      -19-
<PAGE>

SECURED PARTIES, IN ANY WAY, SHALL LOOK ONLY TO THE ASSETS OF THE SECURED
PARTIES FOR THE PAYMENT OF ANY SUM OR THE PERFORMANCE OF ANY OBLIGATION.

                                      -20-

<PAGE>

         IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed under seal as of the date first above written.

                                     TENANT:

                                     FIVE STAR QUALITY CARE TRUST

                                     By: /s/ Bruce J. Mackey Jr.
                                         ---------------------------------
                                         Treasurer and Chief Financial
                                         Officer

                                     Corporate Organizational Number:

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

                                     SECURED PARTIES:

                                     HRES2 PROPERTIES TRUST

                                     By: /s/ David J. Hegarty
                                         ---------------------------------
                                         Its: President
                                              ----------------------------

                                     SPTIHS PROPERTIES TRUST

                                     By: /s/ David J. Hegarty
                                         ---------------------------------
                                         Its: President
                                              ----------------------------

                                     SPT-MICHIGAN TRUST

                                     By: /s/ David J. Hegarty
                                         ---------------------------------
                                         Its: President
                                              ----------------------------

                                     SPTMNR PROPERTIES TRUST

                                     By: /s/ David J. Hegarty
                                         ---------------------------------
                                         Its: President
                                              ----------------------------

                                      -21-

<PAGE>

                                   SCHEDULE 1

CHIEF EXECUTIVE OFFICE:

                           400 Centre Street
                           Newton, Massachusetts  02458

PRINCIPAL PLACE OF BUSINESS:

                           400 Centre Street
                           Newton, Massachusetts  02458

<PAGE>

                                   SCHEDULE 2

                                 THE FACILITIES

ARIZONA:

         LA MESA HEALTHCARE CENTER
                  2470 S. Arizona Avenue
                  Yuma, Arizona  85364

         SUNQUEST VILLAGE OF YUMA
                  265 E. 24th Street
                  Yuma, Arizona  85364

         VILLAGE GREEN HEALTHCARE CENTER
                  2932 N. 14th Street
                  Phoenix, Arizona  85014

CALIFORNIA:

         LANCASTER HEALTHCARE CENTER
                  1642 West Avenue J
                  Lancaster, California  93534

         LA SALETTE HEALTH AND REHABILITATION CENTER
                  537 E. Fulton Street
                  Stockton, California  95204

         THOUSAND OAKS HEALTH CARE CENTER
                  93 W. Avenida de Los Arboles
                  Thousand Oaks, California  91360

         VALLEY VIEW
                  9120 Woodman Boulevard
                  Arleta, California  91331

         VAN NUYS HEALTH CARE CENTER
                  6835 Hazeltine Street
                  Van Nuys, California  91405

COLORADO:

         CEDARS HEALTHCARE CENTER
                  1599 Ingals Street
                  Lakewood, Colorado  80214

<PAGE>

         CHERRELYN HEALTHCARE CENTER
                  5555 South Elati Street
                  Littleton, Colorado  80120

         LA VILLA GRANDE CARE CENTER
                  2501 Little Bookcliff Drive
                  Grand Junction, Colorado  81501

         MANTEY HEIGHTS REHABILITATION & CARE CENTER
                  2835 Patterson Road
                  Grand Junction, Colorado  81501

         SKYLINE RIDGE NURSING & REHABILITATION CENTER
                  515 Fairview
                  Canon City, Colorado  81212

         SPRINGS VILLAGE CARE CENTER
                  110 West Van Buren
                  Colorado Springs, Colorado  80907

         WILLOW TREE CARE CENTER
                  2050 South Main
                  Delta, Colorado  81416

CONNECTICUT:

         CLIFTON HOUSE REHABILITATION CENTER
                  181 Clifton Street
                  New Haven, Connecticut  06513

         HEALTH CENTER OF GREATER WATERBURY
                  177 Whitewood Road
                  Waterbury, Connecticut  06705

<PAGE>

GEORGIA:

         AUTUMN BREEZE HEALTHCARE CENTER
                  1480 Sandtown Road
                  Marietta, Georgia  30060

         COLLEGE PARK HEALTHCARE CENTER
                  1765 Temple Avenue
                  College Park, Georgia  30337

         GLENWOOD CARE CENTER
                  303 Fifth Street N.P.O. Box 601
                  Glenwood, Georgia  30428

         SOUTHLAND CARE CENTER
                  606 Simmons Street
                  Dublin, Georgia  31021

IOWA:

         NORTHCREST CARE & REHABILITATION
                  34 Northcrest Drive
                  Council Bluffs, Iowa  51503

         PACIFIC PLACE
                  20937 State Highway 385
                  Pacific Junction, Iowa  51561

         PARK PLACE
                  114 East Green Street
                  Glenwood, Iowa  51534

         PRAIRIE RIDGE CARE & REHABILITATION
                  308 Prairie Street
                  Mediapolis, Iowa  52637

         UNION PARK HEALTH SERVICES
                  2348 East 9th Street
                  Des Moines, Iowa  50316

         WEST BRIDGE CARE & REHABILITATION
                  1015 West Summit
                  Winterset, Iowa  50273

         WESTRIDGE QUALITY CARE & REHABILITATION
                  600 Manor Drive
                  Clarinda, Iowa  51632

<PAGE>

KANSAS:

         WOODHAVEN CARE CENTER
                  510 W 7th Street
                  Ellinwood, Kansas  67526

MICHIGAN:

         FARMINGTON HEALTH CARE CENTER
                  34225 Grand River Avenue
                  Farmington, Michigan  48335

         HOWELL CARE CENTER
                  3003 West Grand River
                  Howell, Michigan  48843

MISSOURI:

         NORTHVIEW MANOR
                  300 Cedar Street
                  Tarkio, Missouri  64491

NEBRASKA:

         AINSWORTH CARE CENTER
                  143 North Fullerton
                  Ainsworth, Nebraska  69210

         ASHLAND CARE CENTER
                  1700 Furnace Street
                  Ashland, Nebraska  68003

         BLUE HILL CARE CENTER
                  414 North Wilson Street
                  Blue Hill, Nebraska  68930

         CENTRAL CITY CARE CENTER
                  2720 South 17th Avenue
                  Central City, Nebraska  68462

         CRESTVIEW HEALTHCARE CENTER
                  1100 West First Street
                  Milford, Nebraska  68405

<PAGE>

         EXETER CARE CENTER
                  425 South Empire Avenue
                  Exeter, Nebraska  68351

         GRANDVIEW MANOR
                  Broad Street and Highway 4
                  Campbell, Nebraska  68932

         GRETNA COMMUNITY CARE CENTER
                  700 South Highway 6
                  Gretna, Nebraska  68028

         LOGAN VALLEY MANOR
                  1035 Diamond Street
                  Lyons, Nebraska  68038

         MORYS HAVEN
                  1112 15th Street
                  Columbus, Nebraska  68601

         ROSE BROOK CARE CENTER
                  Route 1 Box 83A
                  Edgar, Nebraska  68935

         SUTHERLAND CARE CENTER
                  333 Maple
                  Sutherland, Nebraska  69165

         UTICA COMMUNITY CARE CENTER
                  1350 Centenial Avenue
                  Utica, Nebraska  68456

         WAVERLY CARE CENTER
                  11041 North 137th Street
                  Waverly, Nebraska  68462

         WEDGEWOOD CARE CENTER
                  800 Stoeger Drive
                  Grand Island, Nebraska  68803

WISCONSIN:

         CHRISTOPHER EAST HEALTH & REHABILITATION CENTER
                  1132 E. Knapp Street
                  Milwaukee, Wisconsin  53202

<PAGE>

         GREENTREE HEALTH & REHABILITATION CENTER
                  70 Greentree Road
                  Clintonville, Wisconsin  54929

         PINE MANOR HEALTHCARE CENTER
                  Route 4, Box 549
                  Clintonville, Wisconsin  54929

         RIVER HILLS WEST HEALTHCARE CENTER
                  321 Riverside Drive
                  Pewaukee, Wisconsin  53072

         SUNNY HILLS HEALTH CARE CENTER
                  4325 Nakoma Road
                  Madison, Wisconsin  53711

         THE VIRGINIA HEALTH & REHABILITATION CENTER
                  1451 Cleveland Avenue
                  Waukesha, Wisconsin  53186

         WOODLAND HEALTHCARE CENTER
                  18741 West Bluemound Road
                  Brookfield, Wisconsin  53045

WYOMING:

         LARAMIE CARE CENTER
                  503 South 18th Street
                  Laramie, Wyoming  82070

         WORLAND HEALTHCARE & REHABILITATION CENTER
                  1901 Howell Avenue
                  Worland, Wyoming  82401

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