April 14, 1997

Community Care of America, Inc.
3050 N. Horseshoe Drive, Suite 260
Naples,  FL    33942

Attn.:   Deborah A. Lau
         President and Chief Executive Officer

Gentlemen:

         Community  Care of America,  Inc. and its  subsidiaries  (collectively,
"CCA") have  entered  into  certain  loan and lease  financings  with Health and
Retirement  Properties Trust ("HRP").  CCA has requested that HRP (a) consent to
the waiver  through  February  28, 1998 of the  covenants  in the loan and lease
documentation  with HRP (the "CCA  Documents")  requiring  CCA (i) to maintain a
ratio of current  assets to current  liabilities of at least 1.0 to 1.0 and (ii)
not to permit its tangible net worth to be less than $5,000,000 and (b) agree to
apply a portion of the $6,185,000 security deposit held by HRP as collateral for
the  obligations of CCA under the CCA Documents (the "Security  Deposit") to the
payment of existing  arrearages under the CCA Documents,  to pay a restructuring
fee  to  HRP  and  to  pay  50%  of  monthly  payments  of  regularly  scheduled
installments  of Minimum  and  Additional  Rent,  Mortgage  Facilities  Fees and
principal and interest on loans by HRP, as and when due.

         After consideration, HRP is willing to agree as follows:

         1. Waiver. Subject to the effectiveness hereof as provided in paragraph
3 below,

                  (a) HRP hereby agrees,  during the period from the date hereof
         through  February  28,  1998,  to  waive  compliance  by CCA  with  the
         covenants in the CCA Documents that require CCA (a) to maintain a ratio
         of current assets to current liabilities of at least 1.0 to 1.0 and (b)
         not to  permit  its  tangible  net  worth  to be less  than  $5,000,000
         (provided  that in no event may the  tangible  net worth of CCA be less
         than $1,000,000 at any time, and provided  further that HRP shall treat
         that  certain  note  receivable  from a  shareholder  in the  amount of
         $1,444,000,  as a tangible asset of CCA for the purposes of determining
         CCA's compliance with such tangible net worth covenant); and


<PAGE>


Community Care of America, Inc.
April 14, 1997

Page 2

                  (b) CCA and HRP agree that HRP shall apply  $5,035,000  of the
         Security  Deposit  (the  "Relevant  Amount")  to  the  payment  of  the
         following obligations, at the times set forth below:

                           (i) First, upon the effectiveness  hereof as provided
                  in  paragraph 3 below,  to the payment of all past due amounts
                  payable to HRP under the CCA Documents as of the date hereof;

                           (ii)  Second,   upon  the  effectiveness   hereof  as
                  provided  in  paragraph  3  below,  to  pay  a  non-refundable
                  restructuring fee to HRP in the amount of $865,732; and

                           (iii) Third, as and when such instalments  become due
                  under the CCA  Documents,  HRP shall  apply the balance of the
                  Relevant  Amount  to the  payment  of 50%  of  each  regularly
                  scheduled installment of Minimum and Additional Rent, Mortgage
                  Facilities  Fees and  principal  and interest on loans by HRP;
                  and each such  application  by HRP shall reduce the obligation
                  of CCA to pay such installment on a dollar-for-dollar basis.

         2. Amendment to CCA Documents.  Subject to the effectiveness  hereof as
provided in paragraph 3 below, the IHS Guaranty (as defined below), as in effect
from  time to time,  shall  be  deemed  included  within  the term  "Transaction
Documents"  (and  in  other  terms  of like  import)  used  in the  various  CCA
Documents.

         3.  Effectiveness.  Paragraphs  1 and 2 of  this  letter  shall  become
effective on the date and time that a counterpart to this letter shall have been
accepted by CCA, and each of the following conditions shall have been satisfied:

                  (a) Integrated Health Services,  Inc., a Delaware  corporation
         ("IHS") shall have executed and delivered to HRP a Guaranty in the form
         attached hereto as Exhibit A (the "IHS Guaranty");

                  (b) giving  effect to the  effectiveness  of this  letter,  no
         Event of Default under and as defined in the CCA Documents, or event or
         condition that with the giving of notice or lapse of time or both could
         become such an Event of Default, shall have occurred and be continuing,
         and the  representations  contained in the CCA Documents and in the IHS
         Guaranty  shall be true and  correct  on the date of the  effectiveness
         hereof as if made on and as of such date  (except  to the  extent  that
         such  representation  and  warranties  expressly  related to an earlier
         date);

                  (c)  HRP  shall  have  received  a  certificate  of  a  senior
         executive  officer  of  CCA  and  IHS  confirming  satisfaction  of the
         condition described in paragraph (b) above; and

                  (d) HRP shall have received such other documents, opinions and
         certificates (including without limitation,  opinions of counsel to IHS
         and CCA, and certificates of public


<PAGE>


Community Care of America, Inc.
April 14, 1997
Page 3

         officials and of officers of IHS and CCA) as HRP shall have  requested,
         each of which shall be in form and substance satisfactory to HRP in its
         sole discretion

         4.  Confirmation.  All CCA  Documents  shall  remain in full  force and
effect, as specifically  modified hereby, and are hereby ratified and confirmed.
The waivers and  modifications  set forth  herein do not  constitute  waivers or
modifications of any term, condition or covenant of the CCA Documents other than
as expressly set forth herein,  and shall not prejudice any rights which HRP may
now or hereafter have under or in connection with any CCA Documents.

         5. No Counterclaims,  Etc.; Release.  CCA acknowledges that immediately
prior to its acceptance of this letter,  it is obligated to pay all indebtedness
and  obligations  arising  under the CCA  Documents  without a right of set-off,
counterclaim  or  defense  with  respect  thereto.  In  consideration  of  HRP's
agreements  contained herein,  CCA does hereby release and forever discharge HRP
and  its  affiliates,   officers,   directors,  agents,  attorneys,   employees,
successors  and  assigns,  of and from all manner of actions,  causes of action,
suits, judgments, claims and demands whatsoever, in law or in equity, which have
arisen from the  beginning of time up and  including  the date  hereof,  whether
arising in connection with the  transactions  contemplated  hereby or by the CCA
Documents, or otherwise.

         6.  Expenses.  You agree to pay on demand all costs and expenses of HRP
in connection with the preparation, reproduction, execution and delivery of this
letter,  including the reasonable fees and out-of-pocket  expenses of Sullivan &
Worcester LLP, special counsel for HRP with respect thereto.  This letter may be
signed in one or more counterparts each of which taken together shall constitute
one and the same instrument.

         7.  GOVERNING  LAW.  THIS LETTER SHALL BE GOVERNED BY AND  CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS.

         8. NO LIABILITY OF TRUSTEES, ETC. THE DECLARATION OF TRUST ESTABLISHING
HRP,  DATED  OCTOBER  9, 1986,  A COPY OF WHICH,  TOGETHER  WITH ALL  AMENDMENTS
THERETO (THE  "DECLARATION"),  IS DULY FILED WITH THE  DEPARTMENT OF ASSESSMENTS
AND  TAXATION  OF THE STATE OF  MARYLAND,  PROVIDES  THAT THE NAME  "HEALTH  AND
RETIREMENT  PROPERTIES  TRUST"  REFERS TO THE  TRUSTEES  UNDER  THE  DECLARATION
COLLECTIVELY  AS  TRUSTEES,  BUT NOT  INDIVIDUALLY  OR  PERSONALLY,  AND THAT NO
TRUSTEE,  OFFICER,  SHAREHOLDER,  EMPLOYEE  OR AGENT OF HRP SHALL BE HELD TO ANY
PERSONAL  LIABILITY,  JOINTLY  OR  SEVERALLY,  FOR ANY  OBLIGATION  OF, OR CLAIM
AGAINST,  HRP.  ALL PERSONS  DEALING  WITH HRP IN ANY WAY SHALL LOOK ONLY TO THE
ASSETS OF HRP FOR THE PAYMENT OF ANY SUM OR THE PERFORMANCE OF ANY OBLIGATION.


<PAGE>


Community Care of America, Inc.
April 14, 1997
Page 4

                                                HEALTH AND RETIREMENT
                                                PROPERTIES TRUST

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

ACCEPTED

COMMUNITY CARE OF AMERICA, INC.

By /s/ Deborah Lau
   ---------------------------
Deborah Lau
President

ECA HOLDINGS, INC.
ECA PROPERTIES, INC.
CCA ACQUISITION I, INC.
MARIETTA/SCC, INC.,
GLENWOOD/SCC, INC.
DUBLIN/SCC, INC.
MACON/SCC, INC.
COLLEGE PARK/SCC, INC.

COMMUNITY CARE OF NEBRASKA, INC.,
W.S.T. CARE, INC.
QUALITY CARE OF LYONS, INC.
QUALITY CARE OF COLUMBUS, INC.


By /s/ Deborah Lau
   ---------------------------
Deborah Lau
President

By  signing  above  the  foregoing
officers  certify that this action
has been duly authorized.

<PAGE>



                                    EXHIBIT A



<PAGE>