Document:

EXHIBIT 10.5

                                PLEDGE AGREEMENT

                  PLEDGE  AGREEMENT dated as of October 24, 2002 among FIVE STAR
QUALITY CARE TRUST and FIVE STAR QUALITY CARE HOLDINGS CO., INC. (each, together
with its successors and assigns, a "Grantor" and, collectively, the "Grantors"),
FSQC FUNDING CO., LLC, a Delaware limited  liability  company (together with its
successors and assigns,  the  "Purchaser"),  and HFG HEALTHCO-4  LLC, a Delaware
limited  liability  company,  as Collateral Agent for the benefit of the Lenders
and as assignee of the Purchaser (together with its successors and assigns,  the
"Assignee")  under a  certain  Assignment  of  Contracts,  dated  as of the date
hereof.

                  PRELIMINARY  STATEMENTS.  The  Purchaser has entered into that
certain Receivables Purchase and Transfer Agreement, dated as of the date hereof
(as amended,  restated,  modified or supplemented from time to time, the "RPTA";
capitalized  terms used herein and not defined  herein  shall have the  meanings
attributed  thereto in the RPTA) with each of the  entities  parties  thereto as
providers  (each,  together with its successors and assigns,  a "Provider"  and,
collectively,  the  "Providers")  and Five Star Quality  Care,  Inc., as Primary
Servicer.

                  The Purchaser,  the Lenders,  Dresdner  Kleinwort  Wasserstein
LLC, as Co- Program  Manager,  Syndication  Agent and Lead Arranger,  Healthcare
Finance Group, Inc., as Co- Program Manager,  and the Assignee have entered into
that  certain  Loan and  Security  Agreement,  dated as of the date  hereof  (as
amended, restated, modified or supplemented from time to time, the "LSA").

                  In  connection  with the  RPTA,  the  Grantors  have made that
certain  Guaranty,  dated as of the date hereof,  in favor of the Purchaser (the
"Parent Guaranty").

                  It is a condition  precedent to the  effectiveness of the RPTA
and the LSA and the making of any financial  accommodations  thereunder that the
Grantors execute and deliver a pledge agreement in the form hereof to secure the
following (collectively, the "Obligations"): the full and prompt payment, at any
time and from time to time as and when due, of all  liabilities  and obligations
of the Grantors,  whether now existing or hereafter incurred, created or arising
and whether  direct or indirect,  absolute or  contingent,  due or to become due
under,  arising out of or in connection  with the Parent Guaranty or this Pledge
Agreement,  including, without limitation, any and all fees, costs and expenses,
(including  reasonable  counsel fees and expenses) paid or incurred in enforcing
any rights under the Parent Guaranty or this Pledge Agreement.  Without limiting
the generality of the  foregoing,  the Grantors'  liability  shall extend to all
amounts  that  constitute  part  of the  Obligations  and  would  be owed by the
Grantors  under the Parent  Guaranty or this Pledge  Agreement  but for the fact
that  they  are  unenforceable  or  not  allowable  due to  the  existence  of a
bankruptcy, reorganization or similar proceeding involving any of the Grantors.

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                  NOW, THEREFORE,  the Grantors,  the Purchaser and the Assignee
hereby agree as follows:

                  1. Defined Terms. For purposes of this Agreement,  in addition
to the terms  defined  elsewhere  herein,  the  following  terms  shall have the
meanings set forth below:

                  "Bankruptcy  Code" shall mean 11 U.S.C.  Sections 101 et seq.,
as amended from time to time, and any successor statute.

                  "Collateral"  shall  have the  meaning  given to such  term in
Section 2(a).

                  "Equity Interest" shall mean, collectively,  all of the issued
and outstanding  shares,  interests or other equivalents of capital stock of any
corporation  at any time now or hereafter  owned by any Grantor in any Provider,
whether voting or non-voting and whether common or preferred,  all  partnership,
joint  venture,  limited  liability  company or other  equity  interests  in any
Provider not a  corporation  at any time now or hereafter  owned by any Grantor,
all  options,   warrants  and  other  rights  to  acquire,  and  all  securities
convertible into, any of the foregoing, all rights to receive interest,  income,
dividends, distributions, returns of capital and other amounts (whether in cash,
securities,  property,  or a combination  thereof),  and all  additional  stock,
warrants, options,  securities,  interests and other property, from time to time
paid or  payable  or  distributed  or  distributable  in  respect  of any of the
foregoing (but subject to the provisions of Section  6(b)),  including,  without
limitation,  all rights of such Grantor to receive amounts due and to become due
under or in respect of any Investment Agreement or upon the termination thereof,
all  rights of access to the books and  records  of any such  Provider,  and all
other rights, powers,  privileges,  interests,  claims and other property in any
manner arising out of or relating to any of the  foregoing,  of whatever kind or
character  (including any tangible or intangible property or interests therein),
and whether provided by contract or granted or available under applicable law in
connection  therewith,  including,  without limitation,  such Grantor's right to
vote and to manage and administer the business of any such Provider  pursuant to
any applicable Investment Agreement, together with all certificates, instruments
and entries upon the books of securities  intermediaries  at any time evidencing
any of the  foregoing,  in each case  whether now owned or existing or hereafter
acquired or arising.

                  "Investment  Agreement" shall mean any articles or certificate
of  incorporation,  partnership  agreement,  joint  venture  agreement,  limited
liability company operating agreement, stockholders agreement or other agreement
creating,  governing or evidencing any Equity Interests and to which any Grantor
is now or  hereafter  becomes a party,  as any such  agreement  may be  amended,
modified, supplemented, restated or replaced from time to time.

                  "Obligations" shall have the meaning given to such term in the
Preliminary Statements.

                  "Partner  Obligations"  shall have the  meaning  given to such
term in Section 15.

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                  "Pledged Securities" shall have the meaning given to such term
in Section 2(a).

                  "Uniform  Commercial  Code" shall mean the Uniform  Commercial
Code as the same may be in  effect  from  time to time in the State of New York;
provided that if, by reason of applicable law, the validity or perfection or the
effect of perfection or  non-perfection or the priority of any security interest
in any  Collateral  granted  under this  Agreement  is  governed  by the Uniform
Commercial  Code as in effect in a jurisdiction  other than New York, then as to
the validity or perfection or the effect of perfection or  non-perfection or the
priority,  as the case may be, of such security  interest,  "Uniform  Commercial
Code"  shall  mean  the  Uniform  Commercial  Code as in  effect  in such  other
jurisdiction.

                  2. Pledge.  (a) As security for the payment and performance in
full of the Obligations, each Grantor hereby transfers, grants, bargains, sells,
conveys, hypothecates,  pledges, sets over, endorses over, and delivers unto the
Assignee,  and grants to the  Assignee,  for the  benefit of the Lenders and the
Purchaser,  a Lien upon and a security interest in, all of such Grantor's right,
title and  interest in and to the  following,  in each case whether now owned or
existing or hereafter acquired or arising or in which such Grantor now has or at
any time in the future may acquire any rights, title or interest  (collectively,
the "Collateral"):

                  (i) all Equity Interests; and

                  (ii) any and all  proceeds,  as such  term is  defined  in the
Uniform  Commercial  Code of or from  any of the  foregoing  including,  without
limitation,  all cash, securities or other property at any time and from time to
time receivable or otherwise distributed in respect of or in exchange for any of
or all such Equity Interests.

                  Each  Grantor   authorizes  the  Assignee  to  file  financing
statements under the Uniform Commercial Code describing the Collateral.

Upon  delivery  to the  Assignee,  any  securities  or  other  interests  now or
hereafter included in the Collateral including,  without limitation,  the Equity
Interests  (the  "Pledged  Securities")  shall  be  accompanied  (in the case of
Pledged Securities evidenced by certificates),  by undated stock powers, undated
equity interest powers or undated  beneficial  interest  powers,  as applicable,
duly  executed in blank or other  instruments  of transfer  satisfactory  to the
Assignee  and by such  other  instruments  and  documents  as the  Assignee  may
reasonably request.  Each delivery of Pledged Securities shall be accompanied by
a  schedule   showing  a  description  of  the  securities  or  other  interests
theretofore and then being pledged  hereunder,  which schedule shall be attached
hereto as Schedule I and made a part hereof.  Each  schedule so delivered  shall
supersede any prior schedules so delivered.

                  (b) If any Pledged Securities now or hereafter included in the
Collateral,  are  "uncertificated  securities" within the meaning of the Uniform
Commercial Code or are otherwise

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not  evidenced by any  certificate  or  instrument,  the Grantors  will promptly
notify the Assignee  thereof and will promptly  take and cause to be taken,  and
will (if the issuer of such  uncertificated  securities is a person other than a
subsidiary of a Grantor) use its  commercially  reasonable  efforts to cause the
issuer to take,  all  actions  required  under  Articles 8 and 9 of the  Uniform
Commercial Code and any other  applicable law, to enable the Assignee to acquire
"control" (within the meaning of such term under Section 8-106 (or its successor
provision) of the Uniform Commercial Code) of such uncertificated securities and
as may be otherwise  necessary or deemed  appropriate by the Assignee to perfect
the security interest of the Assignee therein.

                  3.  Delivery of  Collateral.  Each  Grantor  agrees to deliver
promptly or cause to be delivered to the Assignee any and all Pledged Securities
and any and all certificates or other instruments or documents  representing any
of the Collateral (together with any necessary endorsement).

                  4. Representations, Warranties. Each Grantor hereby represents
and warrants to and with the Purchaser and the Assignee that:

                  (a) except for the security  interest granted to the Purchaser
and assigned to the Assignee, such Grantor (i) is and will at all times continue
to be the direct owner, beneficially and of record, of the Equity Interests that
it is  pledging  hereunder,  (ii)  holds  the  Collateral  that  it is  pledging
hereunder  free and  clear of all  Liens,  charges,  encumbrances  and  security
interests of every kind and nature,  and the Equity  Interests are subject to no
options to  purchase or any  similar or other  rights of any person,  (iii) will
make no assignment, pledge, hypothecation or transfer of, or create any security
interest in, the Collateral  that it is pledging  hereunder  including,  without
limitation,  by virtue of becoming bound by any agreement which restricts in any
manner the rights of any present or future holder of any Equity  Interests  with
respect  thereto,  and (iv)  subject to Section 6 below,  will cause any and all
Collateral, whether for value paid by such Grantor or otherwise, to be forthwith
deposited with the Assignee and pledged or assigned hereunder;

                  (b) such  Grantor  (i) has good right and legal  authority  to
pledge the  Collateral  it is pledging  hereunder  in the manner  hereby done or
contemplated,  (ii) will not amend,  modify or supplement  any Pledged  Security
without the prior written consent of the Purchaser and the Assignee, nor forgive
any indebtedness  evidenced by any Pledged  Security,  and (iii) will defend its
title or interest  thereto or therein  against any and all  attachments,  Liens,
claims,  encumbrances,   security  interests or other impediments of any nature,
however arising, of all persons whomsoever;

                  (c) no  consent  or  approval  of  any  governmental  body  or
regulatory  authority  or any  securities  exchange  was or is  necessary to the
validity of the pledge effected hereby;

                  (d) by virtue of the execution and delivery by each Grantor of
this Pledge  Agreement,  when the  certificates,  instruments or other documents
representing or evidencing the

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<PAGE>

Collateral  are  delivered  to the  Assignee  in  accordance  with  this  Pledge
Agreement,  the  Purchaser  and the Assignee  will obtain a valid and  perfected
first Lien upon and  security  interest in such  Collateral  as security for the
repayment of the Obligations,  prior to all other Liens and encumbrances thereon
and security interests therein;

                  (e) the pledge  effected  hereby is  effective  to vest in the
Purchaser and the Assignee the rights in the Collateral as set forth herein; and

                  (f) all of the Equity  Interests have been duly authorized and
validly  issued  and are  fully  paid  and  nonassessable  (or,  in the  case of
partnership,  limited liability company or similar Equity Interests, not subject
to any capital call or other additional capital  requirement) and not subject to
any preemptive  rights,  warrants,  options or similar rights or restrictions in
favor of third parties or any contractual or other restrictions upon transfer.

                  (g) as at the date hereof, the Pledged  Securities  constitute
(i) all of the issued and outstanding shares of capital stock,  equity interests
or beneficial interests of the issuers listed on Schedule I annexed hereto owned
by the Grantor,  (ii) the percentage of the outstanding shares of capital stock,
equity interests or beneficial  interests of each issuer set forth on Schedule I
annexed hereto and (iii) all of the Equity  Interests of the Providers  owned by
the Grantor.

All representations,  warranties and covenants of the Grantors contained in this
Pledge  Agreement shall survive the execution,  delivery and performance of this
Pledge  Agreement  until the termi nation of this Pledge  Agreement  pursuant to
Section 17 hereof.

                  5.  Registration  in  Nominee  Name;  Denominations.  Upon the
occurrence and during the continuance of an Event of Termination,  the Purchaser
and the  Assignee  shall have the right (in their sole and  absolute  discretion
with  subsequent  notice to the  Grantors)  to transfer  to or to  register  the
Pledged Securities in their own name or the name of their nominee.  In addition,
the Purchaser and the Assignee shall at all times have the right to exchange the
certificates  representing  Pledged  Securities for  certificates  of smaller or
larger denominations for any purpose consistent with this Pledge Agreement.

                  6.  Voting  Rights;  Dividends;  etc.  (a) Unless and until an
Event of Termination under the RPTA shall have occurred and be continuing:

                  (i) Each  Grantor  shall be entitled  to exercise  any and all
voting  and/or  consensual  rights  and powers  accruing  to an owner of Pledged
Securities or any part thereof for any purpose not  inconsistent  with the terms
of this Pledge Agreement and the Parent Guaranty provided that such action would
not adversely  affect the rights  inuring to the  Purchaser and its  successors,
transferees and assigns, including, without limitation, the Assignee, under this
Pledge  Agreement  or the Parent  Guaranty  or  adversely  affect the rights and
remedies of the  Purchaser  or the Assignee  under this Pledge  Agreement or the
Parent  Guaranty or the ability of the Purchaser or the Assignee to exercise the
same.

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                  (ii) The Purchaser and the Assignee  shall execute and deliver
to the Grantors, or cause to be executed and delivered to the Grantors, all such
proxies,  powers  of  attorney,  and  other  instruments  as  the  Grantors  may
reasonably  request  for the purpose of enabling  the  Grantors to exercise  the
voting and/or  consensual  rights and powers which they are entitled to exercise
pursuant to subparagraph (i) above.

                  (iii) The Grantors shall be entitled to receive and retain any
and all cash  dividends paid on the Pledged  Securities  only to the extent that
such cash dividends are permitted by, and otherwise paid in accordance  with the
terms and conditions of, the Parent Guaranty and applicable laws. Any and all

                    a. noncash dividends,

                    b. stock equity interests, beneficial interests or dividends
paid or  payable  in cash or  otherwise  in  connection  with a partial or total
liquidation or dissolution, and

                    c. instruments, securities, other distributions in property,
return of capital,  capital  surplus or paid-in  surplus or other  distributions
made on or in respect of Pledged  Securities (other than dividends  permitted by
this Section 6(a)(iii)),  whether paid or payable in cash or otherwise,  whether
resulting from a subdivision, combination or reclassification of the outstanding
capital  stock,  equity  interest  or  beneficial  interest of the issuer of any
Pledged  Securities  or received in exchange for Pledged  Securities or any part
thereof,  or in redemption  thereof,  as a result of any merger,  consolidation,
acquisition  or other  exchange of assets to which such issuer may be a party or
otherwise,

shall be and become part of the  Collateral,  and,  if received by any  Grantor,
shall not be  commingled by such Grantor with any of its other funds or property
but shall be held separate and apart  therefrom,  shall be held in trust for the
benefit of the  Purchaser  and the Assignee and shall be forthwith  delivered to
the Assignee in the same form as so received (with any necessary endorsement).

                  (a) Upon the occurrence and during the continuance of an Event
of  Termination,  all rights of the  Grantors to receive any  dividends,  stock,
instruments,  securities and other distributions which any Grantor is authorized
to receive pursuant to paragraph (a)(iii) of this Section 6 shall cease, and all
such rights shall  thereupon  become  vested in the  Purchaser and the Assignee,
which  shall have the sole and  exclusive  right and  authority  to receive  and
retain such dividends.  All dividends which are received by any Grantor contrary
to the  provisions  of this  Section  6(b)  shall be  received  in trust for the
benefit  of the  Purchaser  and the  Assignee,  shall be  segregated  from other
property  or funds of such  Grantor  and  shall be  forthwith  delivered  to the
Assignee  as  Collateral  in the same form as so  received  (with any  necessary
endorsement).  Any and all money and other  property paid over to or received by
the Assignee  pursuant to the  provisions of this Section 6(b) shall be retained
by the Assignee in an account to be established

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by the  Assignee  upon  receipt  of such  money or other  property  and shall be
applied in accordance with the provisions of Section 9 hereof.

                  (b) Upon the occurrence and during the continuance of an Event
of Termination, all rights of each Grantor to exercise the voting and consensual
rights and pursuant to the irrevocable proxy granted herein,  powers which it is
entitled  to exercise  pursuant to Section  6(a)(i)  shall  cease,  and all such
rights shall  thereupon  become  vested in the  Assignee,  which,  to the extent
permitted  by  applicable  law,  shall  have the sole and  exclusive  right  and
authority  to exercise  (i) all voting,  consensual  and other rights and powers
pertaining to the Equity Interests  (whether or not transferred into the name of
the Assignee), at any meeting of shareholders,  partners,  members or otherwise,
and (ii) any and all rights of conversion,  exchange, subscription and any other
rights,  privileges or options  pertaining to the Equity Interests as if it were
the absolute owner thereof (including, without limitation, the right to exchange
at its  discretion  any  and  all of  the  Equity  Interests  upon  the  merger,
consolidation,  reorganization,   reclassification,  combination  of  shares  or
interests,  similar  rearrangement  or other similar  fundamental  change in the
structure of the applicable  issuer,  or upon the exercise by any Grantor or the
Assignee of any right, privilege or option pertaining to such Equity Interests),
and in connection therewith, the right to deposit and deliver any and all of the
Equity Interests with any committee,  depositary,  transfer agent,  registrar or
other  designated  agency upon such terms and  conditions  as the  Assignee  may
determine,  and give all consents,  waivers and  ratifications in respect of the
Equity  Interests,  all without  liability  except to account  for any  property
actually  received by it, but the  Assignee  shall have no duty to exercise  any
such right, privilege or option or give any such consent, waiver or ratification
and shall not be responsible for any failure to do so or delay in so doing

                  (c) In order to permit the Assignee to exercise the voting and
other consensual rights which it may be entitled to exercise pursuant to Section
6(c) and to  receive  all  dividends  and  other  distributions  which it may be
entitled to receive under Section  6(a)(iii) or Section 6(b), each Grantor shall
promptly  execute and deliver (or cause to be  executed  and  delivered)  to the
Assignee all such proxies,  dividend payment orders and other instruments as the
Assignee may from time to time reasonably request.

                  Without  limiting  the effect of the  foregoing,  each Grantor
does hereby  constitute and appoint the Assignee as its proxy,  and the Assignee
shall have the right, upon the occurrence and during the continuance of an Event
of Termination, to exercise all rights, benefits, privileges and powers accruing
to  such  Grantor,  as  owner  of  the  Pledged  Securities  including,  without
limitation, giving or withholding consent, calling and attending shareholders or
members  meetings  to be held from time to time with full  power to vote and act
for and in the name, place, and stead of such Grantor and in the same manner, to
the same extent,  and with the same effect that such Grantor would if personally
present at such meetings,  giving to the Assignee full power of substitution and
revocation,  which  proxy  shall be  effective,  automatically  and  without the
necessity of any action (including any transfer of any Pledged Securities on the
record books of

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the  issuer  thereof)  by any  person  (including  the  issuer  of  the  Pledged
Securities or any officer or agent thereof).

                            THIS PROXY IS IRREVOCABLE

                  Any proxy or proxies  heretofore  given by any  Grantor to any
person or persons  whatsoever are hereby  revoked.  This proxy shall continue in
full force and effect until such time as all  Obligations are paid and satisfied
in full in accordance with the terms of the Parent Guaranty.

                  7. Issuance of Additional Interests.  Each Grantor agrees that
it will  cause  each  of its  subsidiaries  not to  issue  any  stock  or  other
securities  or  interests,   whether  in  addition  to,  by  dividend  or  other
distribution upon, or in substitution for, the Pledged Securities or otherwise.

                  8. Ownership; After-Acquired Equity Interests.

                  (a) Each Grantor will cause the Equity Interests pledged by it
hereunder to  constitute  at all times 100% of the capital stock or other Equity
Interests  in each issuer  held by such  Grantor  thereof,  such that the issuer
thereof  shall be a wholly  owned  subsidiary  of such  Grantor,  and unless the
Assignee  shall have given its prior written  consent,  no Grantor will cause or
permit any such issuer to issue or sell any new  capital  stock,  any  warrants,
options or rights to acquire the same,  or other Equity  Interests of any nature
to any  person  other  than such  Grantor,  or cause,  permit or  consent to the
admission  of any other person as a  stockholder,  partner or member of any such
issuer.

                  (b) If any  Grantor  shall,  at any time and from time to time
after the date  hereof,  acquire any  additional  capital  stock or other Equity
Interests  in any person of the types  described in the  definition  of the term
"Equity  Interests,"  the  same  shall  be  automatically  deemed  to be  Equity
Interests, and to be pledged to the Assignee, for the benefit of the Lenders and
the Purchaser  pursuant to Section 2, and such Grantor will forthwith pledge and
deposit the same with the Assignee and deliver to the Assignee any  certificates
or instruments  therefor,  together with the endorsement of such Grantor (in the
case of any promissory notes or other instruments), undated stock powers (in the
case  of  Equity  Interests   evidenced  by  certificates)  or  other  necessary
instruments  of transfer or  assignment,  duly executed in blank and in form and
substance  satisfactory to the Assignee,  together with such other  certificates
and  instruments  as the  Assignee may  reasonably  request  (including  Uniform
Commercial Code financing  statements or appropriate  amendments  thereto),  and
will  promptly  thereafter  deliver to the Assignee a fully  completed  and duly
executed  amendment to this  Agreement in the form of Exhibit A (each, a "Pledge
Amendment") in respect thereof.  Each Grantor hereby  authorizes the Assignee to
attach each such Pledge  Amendment to this  Agreement,  and agrees that all such
Collateral  listed on any  Pledge  Amendment  shall for all  purposes  be deemed
Collateral  hereunder and shall be subject to the  provisions  hereof;  provided
that the failure of any Grantor to execute and deliver any Pledge Amendment with
respect to any such additional Collateral as

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required hereinabove shall not impair the security interest of the Assignee, for
the benefit of the Lender and the  Purchaser,  in such  Collateral  or otherwise
adversely,  affect the rights and  remedies of the  Assignee,  the Lender or the
Purchaser hereunder with respect thereto.

                  9. Remedies upon Event of Default.  If an Event of Termination
shall have occurred and be  continuing,  subject to strict  compliance  with all
applicable federal and state securities laws, the Assignee may sell or otherwise
dispose of all or any part of the  Collateral,  at public or private  sale or at
any broker's board or on any securities  exchange,  for cash, upon credit or for
future delivery as the Assignee shall deem  appropriate.  Each such purchaser at
any such sale shall hold the property  sold  absolutely,  free from any claim or
right on the part of any Grantor,  and each Grantor hereby waives (to the extent
permitted by law) all rights of redemption, stay and appraisal which the Grantor
now has or may at any time in the  future  have under any rule of law or statute
now existing or hereafter enacted.

                  The Assignee  shall give the Grantors 30 days' written  notice
(which each Grantor agrees is reasonable  notice within the meaning of Article 9
of the  Uniform  Commercial  Code as in effect  in New  York) of the  Assignee's
intention to make any sale of Collateral.  Such notice,  in the case of a public
sale, shall state the time and place for such sale and, in the case of a sale at
a broker's board or on a securities exchange,  shall state the board or exchange
at which such sale is to be made and the day on which the Collateral, or portion
thereof,  will first be offered  for sale at such  board or  exchange.  Any such
public sale shall be held at such time or times within  ordinary  business hours
and at such place or places as the  Assignee may fix and state in the notice (if
any) of such sale. At any such sale, the Collateral,  or portion thereof,  to be
sold  may be sold in one  lot as an  entirety  or in  separate  parcels,  as the
Assignee may (in its sole and absolute discretion) determine. The Assignee shall
not be obligated to make any sale of any Collateral if it shall determine not to
do so,  regardless of the fact that notice of sale of such Collateral shall have
been given. The Assignee may, without notice or publication,  adjourn any public
or  private  sale  or  cause  the  same  to be  adjourned  from  time to time by
announcement  at the time and place fixed for sale,  and such sale may,  without
further  notice,  be made at the  time  and  place  to  which  the  same  was so
adjourned.  In case  any sale of all or any  part of the  Collateral  is made on
credit or for future  delivery,  the  Collateral  so sold may be retained by the
Assignee  until the sale price is paid by the purchaser or  purchasers  thereof,
but the Assignee  shall not incur any  liability  in case any such  purchaser or
purchasers shall fail to take up and pay for the Collateral so sold and, in case
of any such failure,  such Collateral may be sold again upon like notice. At any
public  sale  made  pursuant  to this  Section  9, the  Assignee  may bid for or
purchase,  free (to the extent  permitted by law) from any right of  redemption,
stay or appraisal on the part of the Grantors (all said rights being also hereby
waived  and  released  to the  extent  permitted  by law),  with  respect to the
Collateral  or any part  thereof  offered  for sale  and the  Assignee  may make
payment  on  account  thereof  by using any claim  then due and  payable  to the
Purchaser  or the Assignee  from the  Grantors as a credit  against the purchase
price,  and the Assignee  may,  upon  compliance  with the terms of sale,  hold,
retain and  dispose  of such  property  without  further  accountability  to the
Grantors  therefor.  For purposes  hereof,  a written  agreement to purchase the
Collateral  or any  portion  thereof  shall be  treated as a sale  thereof;  the
Purchaser  and the  Assignee  shall be free to carry out such sale and  purchase
pursuant to such agreement, and the Grantors shall

                                        9
<PAGE>

not be entitled to the return of the Collateral or any portion  thereof  subject
thereto,  notwithstanding  the fact that after the  Assignee  shall have entered
into such an agreement all defaults  under the Parent  Guaranty  shall have been
remedied and the  Obligations  paid in full. The Grantors shall remain,  jointly
and severally,  liable for any  deficiency.  As an alternative to exercising the
power of sale herein  conferred  upon it, the  Assignee may proceed by a suit or
suits at law or in equity to  foreclose  this Pledge  Agreement  and to sell the
Collateral or any portion thereof pursuant to a judgment or decree of a court or
courts  having  competent   jurisdiction  or  pursuant  to  a  proceeding  by  a
court-appointed receiver.

                  10.  Application of Proceeds of Sale. The proceeds of any sale
of Collateral, as well as any Collateral consisting of cash, shall be applied by
the Assignee promptly as follows:

                  FIRST,  to the  payment of all costs and  expenses  reasonably
         incurred by the Purchaser and the Assignee in connection with such sale
         or otherwise  in  connection  with this Pledge  Agreement or any of the
         Obligations,  including,  but not  limited  to, all court costs and the
         reasonable fees and expenses of the Assignee and its legal counsel, the
         repayment of all  advances  made by the  Purchaser  and the Assignee on
         behalf of the  Grantors  and as specified to the Grantors and any other
         reasonable  costs or expenses  incurred in connection with the exercise
         of any right or remedy hereunder;

                  SECOND,  pro  rata to the  payment  in full of  principal  and
         interest in respect of any  Revolving  Loans  outstanding  (pro rata as
         among the Lenders in accordance with the amounts of the Revolving Loans
         made by them pursuant to the LSA);

                  THIRD,  pro  rata to the  payment  in full of all  Obligations
         (other than those  referred to above) owed to the Lenders  (pro rata as
         among  the  Lenders  in  accordance  with  their  respective  Revolving
         Commitment); and

                  LAST, to the Grantors,  their  successors or assigns,  or as a
court of competent jurisdiction may otherwise direct.

                  11. The  Assignee  Appointed  Attorney-in-Fact.  Each  Grantor
hereby  appoints the Assignee its  attorney-in-fact  for the purpose of carrying
out the provisions of this Pledge  Agreement and taking any action and executing
any instrument  which the Assignee may deem necessary or advisable to accomplish
the  purposes  hereof,  which  appointment  is  irrevocable  and coupled with an
interest.  Without  limiting the  generality of the foregoing the Assignee shall
have the right,  upon the occurrence  and during the  continuance of an Event of
Termination,  with full power of substitution  either in the Purchaser's name or
in the name of any  Grantor,  to ask for,  demand,  sue  for,  collect,  receive
receipt  and give  acquittance  for any and all  moneys due or to become due and
under and by virtue of any  Collateral,  to endorse checks,  drafts,  orders and
other  instruments for the payment of money payable to any Grantor  representing
any  interest  or  dividend,  or other  distribution  payable  in respect of the
Collateral or any part thereof or on account  thereof and to give full discharge
for the same, to settle,  compromise,  prosecute or defend any action,  claim or
proceeding with respect

                                       10
<PAGE>

thereto, and to sell, assign,  endorse,  pledge, transfer and make any agreement
respecting,  or otherwise deal with, the same; provided,  however,  that nothing
herein  contained  shall be construed as requiring or obligating the Assignee to
make any  commitment or to make any inquiry as to the nature or  sufficiency  of
any payment received by the Assignee, or to present or file any claim or notice,
or to take any action with respect to the  Collateral or any part thereof or the
moneys due or to become due in respect thereof or any property  covered thereby,
and no action  taken by the  Assignee or the  Purchaser,  or omitted to be taken
with  respect  to the  Collateral  or any part  thereof  shall  give rise to any
defense,  counterclaim  or  offset  in favor of the  Grantor  or to any claim or
action  against the  Assignee in the absence of the gross  negligence  or wilful
misconduct of the Assignee.

                  12. No Waiver.  No failure on the part of the Purchaser or the
Assignee to exercise,  and no delay in  exercising,  any right,  power or remedy
hereunder  shall  operate as a waiver  thereof,  nor shall any single or partial
exercise of any such right,  power or remedy by the  Purchaser  or the  Assignee
preclude  any other or further  exercise  thereof or the  exercise  of any other
right,  power or remedy.  All  remedies  hereunder  are  cumulative  and are not
exclusive of any other remedies  provided by law. The Purchaser and the Assignee
shall not be deemed  to have  waived  any  rights  hereunder  or under any other
agreement  or  instrument  unless such waiver  shall be in writing and signed by
such parties.

                  13. Registration, etc. Each Grantor recognizes that, by reason
of certain  prohibitions  contained in the Securities  Act and applicable  state
securities  laws as in effect from time to time,  the Assignee may be compelled,
with  respect to any sale of all or any part of the Equity  Interests  conducted
without  registration or  qualification  under the Securities Act and such state
securities  laws,  to  limit  purchasers  to any one or more  persons  who  will
represent and agree,  among other things,  to acquire such Equity  Interests for
their own account,  for  investment and not with a view to the  distribution  or
resale  thereof.  Each Grantor  acknowledges  that any such private sales may be
made in such  manner  and under  such  circumstances  as the  Assignee  may deem
necessary or advisable in its sole and absolute discretion,  including at prices
and on terms less favorable than those obtainable  through a public sale without
such  restrictions  (including,  without  limitation,  a  public  offering  made
pursuant  to  a  registration   statement   under  the  Securities   Act),  and,
notwithstanding  such circumstances,  agrees that any such private sale shall be
deemed to have been made in a commercially reasonable manner and agrees that the
Assignee  shall have no obligation to conduct any public sales and no obligation
to delay the sale of any Equity  Interests  for the period of time  necessary to
permit its  registration for public sale under the Securities Act and applicable
state securities laws, and shall not have any  responsibility  or liability as a
result of its election so not to conduct any such public sales or delay the sale
of any Equity  Interests,  notwithstanding  the possibility that a substantially
higher  price  might be  realized  if the sale were  deferred  until  after such
registration.  Each Grantor hereby waives any claims  against the Assignee,  the
Lenders or the  Purchaser  arising by reason of the fact that the price at which
any Equity  Interests  may have been sold at any private  sale was less than the
price  that  might  have  been  obtained  at a public  sale or was less than the
aggregate  amount of the  Obligations,  even if the  Assignee  accepts the first
offer  received  and does not  offer  such  Equity  Interests  to more  than one
offeree.

                                       11
<PAGE>

                  14. Security  Interest  Absolute.  All rights of the Purchaser
and the Assignee  hereunder,  the grant of a security interest in the Collateral
and  all  obligations  of  the  Grantors   hereunder,   shall  be  absolute  and
unconditional  irrespective of (i) any lack of validity or enforceability of the
Parent  Guaranty,  the RPTA,  the LSA, any agreement  with respect to any of the
Obligations  or  any  other  agreement  or  instrument  relating  to  any of the
foregoing,  (ii) any change in time,  manner or place of  payment  of, or in any
other term of, all or any of the  Obligations,  or any other amendment or waiver
of or any consent to any departure from the Parent  Guaranty,  the RPTA, the LSA
or  any  other  agreement  or  instrument,   (iii)  any  exchange,   release  or
nonperfection of any other collateral,  or any release or amendment or waiver of
or consent to or departure from any guarantee, for all or any of the Obligations
or (iv) any  other  circumstance  which  might  otherwise  constitute  a defense
available to, or a discharge of, the Grantors in respect of the  Obligations  or
in respect of this Pledge Agreement.

                  15.  The  Grantors  Remain  Liable.  Notwithstanding  anything
herein  to the  contrary,  (i)  each  Grantor  shall  remain  liable  under  all
Investment  Agreements to perform all of its obligations  thereunder to the same
extent as if this  Agreement  had not been  executed,  (ii) the  exercise by the
Assignee  of any of its  rights or  remedies  hereunder  shall not  release  any
Grantor from any of its obligations under any of such Investment Agreements, and
(iii) except as specifically provided for hereinbelow, none of the Assignee, the
Lenders or the  Purchaser  shall have any  obligation  or liability by reason of
this Agreement under any of such Investment  Agreements,  nor shall the Assignee
or any Lender be  obligated to perform any of the  obligations  or duties of any
Grantor  thereunder  or to take any action to  collect or enforce  any claim for
payment  assigned  hereunder.  This Agreement  shall not in any way be deemed to
obligate the Assignee,  any Lender,  the  Purchaser or any other  purchaser at a
foreclosure sale under this Agreement to assume any of a Grantor's  obligations,
duties  or  liabilities  under  any  Investment  Agreement,  including,  without
limitation,  any  Grantor's  obligations,  if any,  to manage the  business  and
affairs of the applicable partnership, joint venture, limited liability company,
limited  liability  partnership  or other  issuer  (collectively,  the  "Partner
Obligations"),  unless the  Assignee,  any Lender,  the  Purchaser  or any other
purchaser  otherwise  agrees in  writing  to assume  any or all of such  Partner
Obligations.  In the event of foreclosure by the Assignee hereunder, then except
as provided in the  preceding  sentence,  each  applicable  Grantor shall remain
bound and obligated to perform its Partner Obligations and none of the Assignee,
any  Lender  or the  Purchaser  shall be  deemed  to have  assumed  any  Partner
Obligations.  In the event the Assignee,  any Lender, the Purchaser or any other
purchaser at a foreclosure sale elects to become a substitute  partner or member
in place of a Grantor,  the party  making such  election  shall adopt in writing
such  Investment  Agreement  and agree to be bound by the  terms and  provisions
thereof;  and subject to the execution of such written  agreement,  each Pledgor
hereby  irrevocably  consents in advance to the admission of the  Assignee,  any
Lender,  the Purchaser or such other purchaser as a substitute partner or member
to the extent of the Equity Interests acquired pursuant to such sale, and agrees
to execute any  documents  or  instruments  and take any other  action as may be
necessary or as may be reasonably requested in connection therewith. The powers,
rights and remedies  conferred on the Assignee  hereunder  are solely to protect
its interest and privilege in such  Investment  Agreements,  as Collateral,  and
shall  not  impose  any duty  upon it to  exercise  any such  powers,  rights or
remedies.

                                       12
<PAGE>

                  16.  Purchaser's  and  Assignee's  Fees  and  Expenses.   Each
Grantor,  jointly and severally,  shall be obligated to, upon demand, pay to the
Purchaser  and the  Assignee  the  amount  of any and all  reasonable  expenses,
including the reasonable  fees and expenses of their  respective  counsel and of
any  experts  or  agents  which  the  Purchaser  or the  Assignee  may  incur in
connection  with  (i) the  administration  of this  Pledge  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 Purchaser or the Assignee hereunder or (iv) the failure
by a Grantor to perform or observe any of the  provisions  hereof.  In addition,
each Grantor, jointly and severally, indemnifies and holds the Purchaser and the
Assignee  harmless  from  and  against  any and all  liability  incurred  by the
Purchaser  or the  Assignee  hereunder or in  connection  herewith,  unless such
liability  shall be due to the  gross  negligence  or wilful  misconduct  of the
Purchaser  or the  Assignee,  as the case may be.  Any such  amounts  payable as
provided hereunder or thereunder shall be additional Obligations secured hereby.

                  17.  Termination.  This Pledge  Agreement shall terminate when
(a) all of the Obligations have been fully paid in cash and (b) the Lenders have
no further  commitment  to make any  advances  under the LSA,  at which time the
Purchaser and the Assignee  shall  reassign and deliver to each  Grantor,  or to
such person or persons as the Grantors shall designate, against receipt, such of
the Collateral  (if any) as shall not have been sold or otherwise  still be held
by it hereunder,  together with  appropriate  instruments  of  reassignment  and
release,  including delivery of Uniform  Commercial Code termination  statements
and similar documents reasonably requested by the Grantors;  provided,  however,
that all  indemnities of the Grantors  contained in this Pledge  Agreement shall
survive,  and remain  operative and in full force and effect  regardless of, the
termination of this Pledge  Agreement.  Any such  reassignment  shall be without
recourse to or warranty by the  Purchaser and the Assignee and at the expense of
the Grantors.

                  18. Notices. All communications and notices hereunder shall be
in writing and given as provided in the RPTA.

                  19. Further Assurances. Each Grantor agrees to do such further
acts and  things,  and to  execute  and  deliver  such  additional  conveyances,
assignments,  agreements and instruments,  as the Purchaser and the Assignee may
at any  time  reasonably  request  in  connection  with the  administration  and
enforcement  of this Pledge  Agreement or with respect to the  Collateral or any
part thereof or in order better to assure and confirm unto the Purchaser and the
Assignee their rights and remedies hereunder.

                  20. ASSIGNABILITY. SUBJECT TO SECTION 5.03(a) OF THE LSA, THIS
PLEDGE  AGREEMENT AND THE  PURCHASER'S  RIGHTS AND  OBLIGATIONS  HEREIN SHALL BE
ASSIGNABLE BY THE PURCHASER AND ITS SUCCESSORS AND ASSIGNS.  EACH GRANTOR HEREBY
ACKNOWLEDGES  AND  CONFIRMS  THAT,  AS  COLLATERAL  SECURITY  FOR  ANY  AND  ALL
OBLIGATIONS  OF THE PURCHASER  PURSUANT TO THE LSA, THE PURCHASER IS GRANTING TO
THE ASSIGNEE, FOR THE BENEFIT OF THE

                                       13

<PAGE>

LENDERS,  A SECURITY  INTEREST  IN, AND  COLLATERAL  ASSIGNMENT  OF, THIS PLEDGE
AGREEMENT AND ALL OF THE  PURCHASER'S  RIGHTS,  TITLE AND  INTERESTS  HEREUNDER,
INCLUDING,  ALL  MONIES  DUE OR TO  BECOME  DUE TO THE  PURCHASER,  UNDER  OR IN
CONNECTION WITH THIS PLEDGE AGREEMENT.

                  21. Binding Agreement; Assignments. This Pledge Agreement, and
the terms,  covenants and conditions hereof,  shall be binding upon and inure to
the benefit of the parties hereto and their  respective  successors and assigns,
except that the Grantors shall not be permitted to assign this Pledge  Agreement
or any interest herein or in the Collateral,  or any part thereof,  or otherwise
pledge, encumber or grant any option with respect to the Collateral, or any part
thereof,  or any cash or property held by the Assignee as Collateral  under this
Pledge Agreement.

                  22.  GOVERNING LAW. THIS PLEDGE AGREEMENT SHALL, IN ACCORDANCE
WITH SECTION  5-1401 OF THE GENERAL  OBLIGATION LAW OF THE STATE OF NEW YORK, BE
GOVERNED BY THE LAWS OF THE STATE OF NEW YORK,  WITHOUT  REGARD TO ANY CONFLICTS
OF LAWS PRINCIPLES THEREOF.

                  23.  Severability.  In case any one or more of the  provisions
contained in this Pledge 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.

                  24. Counterparts. This Pledge Agreement may be executed in two
or more  counterparts,  each of which shall  constitute an original,  but all of
which,  when taken together,  shall  constitute but one instrument.  This Pledge
Agreement shall be effective when counterparts  which bear the signature of each
Grantor shall have been delivered to the Assignee.

                  25.  Section  Headings.  Section  headings used herein are for
convenience  only and are not to affect  the  construction  of, or be taken into
consideration in interpreting, this Pledge Agreement.

                [Remainder of this page intentionally left blank]

                                       14

<PAGE>

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

                                     FIVE STAR QUALITY CARE TRUST

                                     By  /s/ Bruce J. Mackey, Jr.
                                     Name:   Bruce J. Mackey, Jr.
                                     Title:  Chief Financial Officer, Treasurer
                                             and Assistant Secretary

                                     FIVE STAR QUALITY CARE HOLDING CO., INC.

                                     By  /s/ Bruce J. Mackey, Jr.
                                     Name:   Bruce J. Mackey, Jr.
                                     Title:  Chief Financial Officer, Treasurer
                                             and Assistant Secretary

                                     FSQC FUNDING CO., LLC

                                     By /s/ Bruce J. Mackey, Jr.
                                     Name:  Bruce J. Mackey, Jr.
                                     Title: Chief Financial Officer, Treasurer
                                            and Assistant Secretary

                                     HFG HEALTHCO-4, LLC, as Collateral Agent
                                     and as Assignee

                                     By:  HFG Healthco-4, Inc.

                                     By /s/ Orlando Figueroa
                                     Name:  Orlando Figueroa
                                     Title: Vice President

<PAGE>
<TABLE>
<CAPTION>

                                                    SCHEDULE I
                                                to Pledge Agreement

                                                                                                             Percentage
                                                                                            Number of           of
                   Name of           Type of           Certificate      Par Value, if     Shares/Units      Outstanding
  Grantor          Issuer           Interests             No(s).         applicable      if applicable       Interests
--------------------------------------------------------------------------------------------------------------------------
<S>              <C>               <C>                     <C>               <C>              <C>               <C>
Five Star         Five Star         Company                 N/A               N/A              N/A               100%
Quality Care      Quality Care-     Interests
Trust             AZ, LLC

Five Star         Five Star         Company                 N/A               N/A              N/A               100%
Quality Care      Quality Care-     Interests
Trust             CA, LLC

Five Star         Five Star         Company                 N/A               N/A              N/A               100%
Quality Care      Quality Care-     Interests
Trust             Colorado,
                  LLC
Five Star         Five Star         Company                 N/A               N/A              N/A               100%
Quality Care      Quality Care-     Interests
Trust             CT, LLC

Five Star         Five Star         Company                 N/A               N/A              N/A               100%
Quality Care      Quality Care-     Interests
Trust             GA, LLC

Five Star         Five Star         Company                 N/A               N/A              N/A               100%
Quality Care      Quality Care-     Interests
Trust             IA, LLC

Five Star         Five Star         Company                 N/A               N/A              N/A               100%
Quality Care      Quality Care-     Interests
Trust             KS, LLC

Five Star         Five Star         Company                 N/A               N/A              N/A               100%
Quality Care      Quality Care-     Interests
Trust             MI, LLC

Five Star         Five Star         Company                 N/A               N/A              N/A               100%
Quality Care      Quality Care-     Interests
Trust             MO, LLC

Five Star         Five Star         Company                 N/A               N/A              N/A               100%
Quality Care      Quality Care-     Interests
Trust             NE, LLC

Five Star         Five Star         Company                 N/A               N/A              N/A               100%
Quality Care      Quality Care-     Interests
Trust             WI, LLC

</TABLE>

<PAGE>
<TABLE>
<CAPTION>

                                                                                                             Percentage
                                                                                            Number of           of
                   Name of           Type of           Certificate      Par Value, if     Shares/Units      Outstanding
  Grantor          Issuer           Interests             No(s).         applicable      if applicable       Interests
--------------------------------------------------------------------------------------------------------------------------
<S>              <C>               <C>                     <C>               <C>              <C>               <C>
Five Star         Five Star         Company                 N/A               N/A              N/A               100%
Quality Care      Quality Care-     Interests
Trust             WY, LLC

Five Star         Five Star         Shares of                2                $0.01 per         1,000          100%
Quality Care      Quality Care-     Common                                    share
Holding Co.,      CA, Inc.          Stock
Inc.

Five Star         Five Star         Shares of                2                $0.01 per         1,000          100%
Quality Care      Quality Care-     Common                                    share
Holding Co.,      IA, Inc.          Stock
Inc.

Five Star         Five Star         Shares of                2                $0.01 per         1,000          100%
Quality Care      Quality Care-     Common                                    share
Holding Co.,      MI, Inc.          Stock
Inc.

Five Star         Five Star         Shares of                2                $0.01 per         1,000          100%
Quality Care      Quality Care-     Common                                    share
Holding Co.,      NE, Inc.          Stock
Inc.
</TABLE>

<PAGE>

                                    EXHIBIT A

                                PLEDGE AMENDMENT

                  THIS AMENDMENT,  dated as of ____________,  200_, is delivered
by [NAME OF  PLEDGOR]  (the  "Pledgor")  pursuant  to  Section  8 of the  Pledge
Agreement referred to hereinbelow. The Pledgor hereby agrees that this Amendment
may be attached to the Pledge  Agreement,  dated as of October __, 2002, made by
the Pledgor and certain other  pledgors named therein in favor of HFG HEALTHCO-4
LLC, a Delaware limited liability  company,  as Collateral Agent for the benefit
of the Lenders and as assignee of the Purchaser  (together  with its  successors
and assigns,  the "Assignee") under a certain Assignment of Contracts,  dated as
of the date hereof. (as amended, modified or supplemented from time to time, the
"Pledge  Agreement,"  capitalized  terms  defined  therein  being used herein as
therein  defined),  and  that the  Equity  Interests  listed  on Annex A to this
Amendment shall be deemed to be part of the Equity  Interests within the meaning
of the Pledge Agreement and shall become part of the Collateral and shall secure
all of the Obligations as provided in the Pledge  Agreement.  This Amendment and
its attachments  are hereby  incorporated  into the Pledge  Agreement and made a
part thereof.

                                     [NAME OF PLEDGOR]

                                     By:______________________________

                                     Title:_____________________________

<PAGE>

                                                                         Annex A
                                                to Amendment to Pledge Agreement

<TABLE>
<CAPTION>

                                Equity Interests

                                                                                No. of                Percentage of
                                                   Certificate No.           Shares/Units              Outstanding
    Name of Issuer      Type of Interests          (if applicable)          (if applicable)        Interests in Issuer
    --------------      -----------------          ---------------          ---------------        -------------------
<S>                     <C>                        <C>                      <C>                    <C>

</TABLE>EXHIBIT 10.6

                             ASSIGNMENT OF CONTRACTS
                             AS COLLATERAL SECURITY

         FOR VALUE  RECEIVED,  FSQC FUNDING CO.,  LLC (the  "Assignor"),  hereby
grants a security  interest in and assigns and transfers to HFG HEALTHCO-4  LLC,
as the Collateral  Agent, for the benefit of the Lenders (the  "Assignee"),  all
right,  title and  interest  of the  Assignor  in and to,  all  benefits  of the
Assignor under,  and all monies due or to become due to the Assignor under or in
connection with, each of the agreements more particularly described as follows:

                  (i) that certain Receivables  Purchase and Transfer Agreement,
         dated as of October 24, 2002, among Five Star Quality Care, Inc. ("Five
         Star"),  as  Primary  Servicer,   certain  parties  named  therein,  as
         Providers,  and the Assignor,  as Purchaser  (as such  agreement may be
         amended,  restated,  modified  or  supplemented  from  time  to time in
         accordance   with  the  terms   thereof  and  hereof,   the   "Transfer
         Agreement");

                  (ii) that certain Guaranty, dated as of October 24, 2002, made
         by Five Star,  FSQ,  Inc.,  Five Star  Quality Care Trust and Five Star
         Quality Care Holding Co., Inc. (collectively, "Guarantors") in favor of
         the Assignor (as such agreement may be amended,  restated,  modified or
         supplemented from time to time in accordance with the terms thereof and
         hereof, the "Guaranty"); and

                  (iii) that certain Pledge  Agreement,  dated as of October 24,
         2002, among the Guarantors,  as Pledgors,  and the Assignor, as Pledgee
         (as such agreement may be amended,  restated,  modified or supplemented
         from time to time in accordance with the provisions thereof and hereof,
         the "Pledge  Agreement" and,  collectively with the Transfer  Agreement
         and the Guaranty, the "Documents"),

as collateral security for any and all Lender Debt as arising under, and defined
in, that  certain  Loan and  Security  Agreement,  dated as of October 24, 2002,
among the Assignor,  the Lenders party thereto,  Dresdner Kleinwort  Wasserstein
LLC,  as a Program  Manager,  Syndication  Agent and Lead  Arranger,  Healthcare
Finance Group, Inc., as a Program Manager, and the Assignee, as Collateral Agent
(as such may be amended,  modified or supplemented  from time to time, the "Loan
Agreement",  the terms defined  therein and not otherwise  defined  herein being
used herein as therein defined),  whether at stated maturity, by acceleration or
otherwise (including, without limitation, all interest thereon, whether accruing
prior or subsequent to the  commencement  of a bankruptcy or similar  proceeding
involving the Assignor as a debtor),  and all present and future  obligations of
the Assignor under this Assignment,  whether at stated maturity, by acceleration
or  otherwise   (all  of  the  foregoing   being  herein   referred  to  as  the
"Obligations").
<PAGE>
                  The Assignor agrees, covenants, represents and warrants that:

                  1. The  Assignor's  right,  title and  interest in each of the
         Documents  is  owned by the  Assignor  free  and  clear of all  claims,
         mortgages, pledges, liens, encumbrances and security interests of every
         nature  whatsoever,  except  in  favor  of the  Assignee.  Without  the
         Assignee's prior written consent, the Assignor will not sell, transfer,
         assign,  pledge or grant a security  interest  in any  Document  to any
         other person. Any such sale, transfer, assignment,  mortgage, pledge or
         encumbrance without the Assignee's written consent shall be void and of
         no force and effect.

                  2. Without the Assignee's prior written consent,  the Assignor
         will not amend  (directly or  indirectly),  modify,  supplement,  waive
         compliance   with,   seek  or  grant  a  waiver   under  or  assent  to
         non-compliance with any of the Documents.

                  3. The Assignor specifically  acknowledges and agrees that the
         Assignee  does not assume,  and shall have no  responsibility  for, the
         payment of any sums due or to become due under any of the  Documents by
         the  Assignor or the  performance  of any  obligations  to be performed
         under or with respect to any of the Documents by the Assignor,  and the
         Assignor hereby agrees to indemnify and hold the Assignee harmless with
         respect  to any and all  claims by any  person  relating  thereto.  The
         Assignee, in its discretion, may file or record this Assignment.

                  4. If an Event of Default  shall occur and be  continuing,  in
         addition to all other rights and  remedies of the Assignee  pursuant to
         any  agreements  of the Assignor in favor of or assigned to and held by
         the Assignee or pursuant to applicable  law or otherwise,  the Assignee
         or  its  successor  shall  have  all  rights  and  benefits  under  the
         Documents,  including,  without  limitation,  any  and  all  rights  to
         indemnification,   without   modifying  or   discharging   any  of  the
         Obligations,  except  to the  extent  payment  in  respect  thereof  is
         received.  Upon the occurrence and  continuance of an Event of Default,
         the Assignor  agrees to execute any and all documents  requested by the
         Assignee in its sole  discretion to enable the Assignee to exercise all
         of the  rights  of the  Assignor  under  each  of  the  Documents.  The
         specified  remedies to which the Assignee may resort under the terms of
         this  Assignment are cumulative and are not intended to be exclusive of
         any other  remedies  or means of redress to which the  Assignee  may be
         lawfully  entitled  in case of any breach or  threatened  breach by the
         Assignor of any provision hereof or of any of the Obligations.  Nothing
         contained in this Assignment, and no act or action taken or done by the
         Assignee pursuant to the powers and rights granted to it hereunder,  or
         under any instrument  collateral  hereto shall be deemed to be a waiver
         by the Assignee of any of its rights and remedies  against the Assignor
         in connection with, or in respect of, any of the Obligations. The right
         of the Assignee to collect and enforce  collection  of the  Obligations
         and to enforce any security and collateral  held by it may be exercised
         by the Assignee  prior to,  simultaneously  with,  or subsequent to any
         action taken by the Assignee hereunder.

                  5. Upon the  payment  and  satisfaction  in full of all of the
         Obligations  and the  termination  of any commitment by the Assignee to
         make loans or other financial

                                        2
<PAGE>
         accommodations  to or for the  benefit of the  Assignor  under the Loan
         Agreement,  this  Assignment  shall be  terminated  by the Assignee and
         shall be of no further force or effect, but the affidavit, certificate,
         letter or statement  of any officer,  agent or attorney of the Assignee
         showing that any part of the Obligations  remains unpaid or unsatisfied
         shall  be  and  constitute   prima  facie  evidence  of  the  validity,
         effectiveness  and continuing  force of this  Assignment and any person
         may, and is hereby authorized to, rely thereon.

                  6. The  Assignee  may take,  or release,  in whole or in part,
         other  security  which it may hold for the payment of the  Obligations,
         may release any party primarily or secondarily liable therefor, and may
         apply any other  security  held by it to the  satisfaction,  or partial
         satisfaction,  of such  Obligations,  without  prejudice  to any of its
         rights under this Assignment.

                  7. This Assignment  shall inure to the benefit of the Assignee
         and its  successors,  assigns and designees,  and shall be binding upon
         any  subsequent  owner  of  the  Assignor's  interest  in  and  to  the
         Documents.

                  8. The  Assignor  covenants  to  execute  and  deliver  to the
         Assignee,  upon demand, such additional  assurances,  writings or other
         instruments as may be reasonably required by the Assignee to effectuate
         the purpose hereof. This Assignment may not be changed orally and is to
         be governed by the internal laws of the State of New York applicable to
         contracts executed and to be performed in such State.

                  9. The Assignor hereby irrevocably designates and appoints the
         Assignee   as   attorney-in-fact   of  the   Assignor   with  power  of
         substitution,  and  with  authority  from  and  after  and  during  the
         continuance  of an Event of Default:  to execute and deliver for and on
         behalf of the Assignor any and all instruments,  documents,  agreements
         and other writings necessary or advisable for the exercise on behalf of
         the Assignor pursuant hereto of any rights, benefits or options created
         or existing  under or pursuant to the Documents and in this regard;  to
         endorse  the name of the  Assignor  on its behalf on any and all notes,
         acceptances,   checks,  drafts,  money  orders,  instruments  or  other
         evidences of collateral,  that may come into the Assignee's possession;
         to  execute  proofs  of  claim  and  loss;  to  execute   endorsements,
         assignments or other instruments of conveyance and transfer; to execute
         releases;  and, to do all other acts and things necessary and advisable
         in the  discretion  of the  Assignee  to  carry  out and  enforce  this
         Assignment or the Obligations.  All acts done by the Assignee under the
         foregoing  authorization are hereby ratified and approved,  and neither
         the Assignee or its  successors nor any designee or agent thereof shall
         be liable  for any acts of  commission  or  omission  (other  than acts
         committed or omitted  through bad faith,  gross  negligence  or willful
         misconduct),  for any error of judgment or for mistake of facts or law.
         This power of attorney  being  coupled with an interest is  irrevocable
         while any of the Obligations shall remain unpaid and unperformed.

                  10. If an Event of Default shall occur and be continuing,  the
         Assignee may, in its discretion, in its name or the Assignor's,  notify
         any obligor  under the Documents to make payment to the Assignee of all
         amounts due or to become due under the Documents.

                                        3
<PAGE>
                  11. If an Event of Default shall occur and be continuing,  the
         Assignee may, in its discretion,  demand,  sue for,  collect or receive
         any money or property at any time payable or  receivable  on account of
         or in exchange for the  Documents,  or, with respect to payments  which
         have become due and payable under the Documents, make any compromise or
         settlement deemed desirable by the Assignee.

                  12.  The  Assignor  agrees  that any  copy of this  Assignment
         signed by the Assignor and  transmitted  by telefax for delivery to the
         Assignee shall be admissible in evidence as the original  itself in any
         judicial or administrative  proceeding,  whether or not the original is
         in existence.

                  13. This Assignment may be executed in  counterparts,  each of
         which when so  executed  shall be deemed to be an  original  and all of
         which when taken together shall constitute one and the same agreement.

                [Remainder of this page intentionally left blank]

                                        4

<PAGE>

         IN WITNESS  WHEREOF,  the  undersigned has caused this Assignment to be
executed this 24th day of October, 2002.

                                    FSQC FUNDING CO., LLC

                                    By:   /s/ Bruce J. Mackey Jr.
                                          Bruce J. Mackey, Jr.
                                          Chief Financial Officer

                                    HFG HEALTHCO-4 LLC, as Collateral Agent

                                    By:   HFG Healthco-4, Inc., a member

                                    By:    /s/ Orlando Figueroa
                                    Name:  Orlando Figueroa
                                    Title: Vice President

Acknowledged:
PRIMARY SERVICER:                   FIVE STAR QUALITY CARE, INC.

                                    By:   /s/ Bruce J. Mackey Jr.
                                          Bruce J. Mackey Jr.
                                          Chief Financial Officer, Treasurer
                                          and Assistant Secretary

                           [Signature page continued]

<PAGE>

PROVIDERS:                          FIVE STAR QUALITY CARE-AZ, LLC
                                    FIVE STAR QUALITY CARE-CA, LLC
                                    FIVE STAR QUALITY CARE-COLORADO, LLC
                                    FIVE STAR QUALITY CARE-CT, LLC
                                    FIVE STAR QUALITY CARE-GA, LLC
                                    FIVE STAR QUALITY CARE-IA, LLC
                                    FIVE STAR QUALITY CARE-KS, LLC
                                    FIVE STAR QUALITY CARE-MI, LLC
                                    FIVE STAR QUALITY CARE-MO, LLC
                                    FIVE STAR QUALITY CARE-NE, LLC
                                    FIVE STAR QUALITY CARE-WI, LLC
                                    FIVE STAR QUALITY CARE-WY, LLC
                                    FIVE STAR QUALITY CARE - CA, INC.
                                    FIVE STAR QUALITY CARE - IA, INC.
                                    FIVE STAR QUALITY CARE - MI, INC.
                                    FIVE STAR QUALITY CARE - NE, INC.

                                    By:   /s/ Bruce J. Mackey Jr.
                                          Bruce J. Mackey, Jr.
                                          Chief Financial Officer, Treasurer
                                          and Assistant Secretary

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