Document:

EXHIBIT 10.5

                        AMENDMENT TO SETTLEMENT AGRFEMENT

         Amendment  (this  "Amendment"),  dated  as  of  June  29,  2000,  among
Integrated Health Services, Inc. and each of its direct or indirect subsidiaries
executing this Amendment,  and Senior Housing  Properties  Trust and each of its
direct or indirect  subsidiaries  executing this Amendment,  Advisors Healthcare
Group, Inc. and Five Star Quality Care, Inc.

                                   BACKGROUND

         WHEREAS,  the  parties  hereto are all of the  parties to a  Settlement
Agreement,  dated as of April 11.  2000 (the  "Settlement  Agreement"),  and the
parties  desire  to  clarify  and amend  certain  provisions  of the  Settlement
Agreement; and

         WHEREAS,  concurrently  herewith the parties hereto are entering into a
Stipulation  with the United  States  Department  of Health  and Human  Services
Regarding  Treatment  of  Medicare  Provider  Agreements  Pertaining  to Certain
"Transfer Facilities" and Order Thereon (the "Stipulation");

         NOW THEREFORE, in consideration of the premises, and for other good and
valuable  consideration,   the  receipt  and  sufficiency  of  which  is  hereby
acknowledged by the parties hereto,  the parties hereto,  intending to be bound,
hereby agree as follows:

         1. Capitalized  terms used herein and not otherwise  defined herein are
used with the meanings ascribed to such terms in the Settlement Agreement.

         2. The Settlement Agreement,  including without limitation,  Exhibits C
and D and all other  exhibits and  schedules  to the  Settlement  Agreement,  is
hereby amended to the extent necessary, to reflect that:

              (a) instead of entering into a Sublease with  Shopco-KS,  LLC (the
"Proposed New Kansas  Operator") of the Demised Premises  relating to the IHS of
Woodhaven Facility, in Ellinwood,  Kansas (the "Kansas Facility"), ECA Holdings,
Inc.  ("ECA") will directly lease said Demised  Premises from SPTIHS  Properties
Trust (the "Kansas Landlord") pursuant to a lease that will have all of the same
substance as the Sublease  except that ECA will be the direct tenant  thereunder
(instead of the Sublessee) and the Kansas  Landlord shall be the direct landlord
thereunder  (instead  of the  Proposed  New  Kansas  Operator  as the  Sublessor
thereunder);

              (b) instead of the Manager subcontracting obligations with respect
to the  Kansas  Facility  to  ECA in the  capacity  as the  Servicer  under  the
Management  Agreement,  ECA shall retain such obligations in its capacity as the
Relevant  Licensee until such time as the Proposed New Kansas  Operator  becomes
the Relevant  Licensee with respect to the Kansas  Facility,  in which case, ECA
shall  thereafter  satisfy only such  obligations in its capacity as Servicer as
shall not require a license  under the  applicable  laws of the State of Kansas;
provided, however, that the foregoing amendment shall not be deemed to change in
any respect any of the  obligations  of any of the parties under the  Management
Agreement,  but shall only serve to clarify  the  capacity in which ECA shall be
acting;
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                                      -2-

              (c) the Demised  Premises to be sublet  pursuant to the  Subleases
and the Kansas Lease shall  include all of the personal  property  necessary for
the  operation of the Facility to which the Sublease or Kansas Lease  relates to
the extent that the  applicable  Sublessor  or, in the case of the Kansas Lease,
the Kansas Landlord, has any right, title or interest therein;

              (d) that neither CCA  Acquisition  1, Inc. nor  Community  Care of
America,  Inc. shall be a party to the Settlement  Agreement and neither of them
shall be deemed to be an IHS Acquisition Subsidiary;

              (e) Section 12.1 of the Management and Servicing  Agreement  shall
be  amended  in full to  provide  that  neither  the  Management  and  Servicing
Agreement nor any of the terms thereof may be terminated, amended, supplemented,
waived or modified  orally,  but only by an instrument in writing signed by each
party (x)against whom the enforcement of the termination, amendment, supplement,
waiver or modification  shall be sought or (y) who is affected (or whose rights,
obligations   or  remedies  are  affected)  by  such   termination,   amendment,
supplement, waiver or modification;

              (f) under Section 3.2.5(i) of the Settlement Agreement,  if SPTIHS
or HRES1  designates  a New LLC  Operator  as the  entity  to  which a  relevant
Mortgaged Facility is to be conveyed as provided therein, then the instrument of
conveyance  shall be a quitclaim  deed (rather than a quitclaim  deed in lieu of
foreclosure);

              (g) no recoupment,  offset or other payment of the Cure Amount (as
such  term is  defined  in the  Stipulation),  and no  release  or waiver of any
underpayment  claim pursuant to the  Stipulation,  shall  constitute a Reduction
Claim (as such term is defined in the Management and Servicing  Agreement),  and
no IHS Entity shall have any liability with respect thereto;

              (h) the amount of the monthly  payment  referred to in Section 3.3
of the Settlement Agreement shall be $600,000 in lieu of $500,000;

              (i) the SNH  Entities  acknowledge  that the  Facility  located in
Palmer,  Nebraska  has been closed and the SNH  Entities  waive any  breaches of
representations,  warranties and covenants and any closing conditions that arise
by reason of such closure;

              (j) the IHS Entities shall withdraw the Debtors' motions described
on  Schedule  A hereto  promptly  after  the  Closing  documents  are  executed,
delivered and the Closing  occurred,  and the SNH Entities  shall withdraw SNH's
motions  described on Schedule B hereto promptly after the Closing documents are
executed, delivered and the Closing occurred;

              (k) the  Closing  Date for the  transactions  contemplated  by the
Settlement  Agreement shall be deemed to be June 30, 2000 and the Effective Time
will be deemed to be 12:01 a.m.  (Boston  time) on July 1, 2000  notwithstanding
that the Closing documents may be executed,  delivered, and the Closing occur on
a later date; provided, however, that this subsection (k) shall have no force or
effect if the Closing  documents  are not, in all material  respects,  executed,
delivered and the Closing occur on or prior to July 15, 2000;

<PAGE>

                                      -3-

              (l) subject to the  occurrence  of the  Closing,  the IHS Entities
assign,  set over,  and convey to such  entities as SNH may designate any right,
title and  interest  any of them may have to any  underpayment  claim  under the
Nebraska  Medicaid  program (or if such claim  cannot be assigned in  accordance
with applicable law, the proceeds  thereof) arising out of any services provided
by any  Facility  in  Nebraska  on or prior  to the  Effective  Time  and  shall
cooperate  fully and take all reasonable  actions  requested by the SNH Entities
with regard to the collection of such funds,  provided that any reasonable  cost
or  expense  incurred  by the IHS  Entities  in  connection  therewith  shall be
reimbursed to them by the SNH Entities; and

              (m) at such  time as the  relevant  SNH  Entity  for any  Transfer
Facility has all  necessary  licenses and the relevant IHS Entity  transfers the
patient  trust  accounts  held for the  benefit  of  residents  of the  relevant
Facility to such SNH Entity,  the relevant IHS Entity shall  provide to such SNH
Entity all records and an accounting regarding such patient trust accounts.

         3. Except as expressly amended hereby,  all of the terms and conditions
of the Settlement Agreement shall remain in full force and effect.

         4. This Amendment may be executed in counterparts,  each of which shall
be deemed an original and all of which,  when taken together,  shall  constitute
one and the same agreement.  Signatures sent by telefacsimile transmission shall
be deemed to constitute delivery for purposes of creating a binding agreement.

                            [SIGNATURES ON NEXT PAGE]

<PAGE>

                                      -4-

         IN WITNESS WHEREOF,  each of the undersigned has executed and delivered
this Amendment as of the date first above written.

INTEGRATED HEALTH SERVICES, INC.
COMMUNITY INC.
COMMUNITY CARE OF AMERICA, INC.
ECA HOLDINGS, INC.
COMMUNITY CARE OF NEBRASKA, INC.
W.S.T. CARE, INC.
QUALITY CARE OF LYONS, INC.
CCA ACQUISITION I, INC.
MARIETTA/SCC INC.
GLENWOOD/SCC, INC.
DUBLIN/SCC, INC.
COLLEGE PARK/SCC, INC.
IHS ACQUISITION NO. 108, INC.
IHS ACQUISITION NO. 112, INC.
IHS ACQUISITION NO. 113, INC.
IHS ACQUISITION NO. 135, INC.
IHS ACQUISITION NO. 148, INC.
IHS ACQUISITION NO. 152, INC.
IHS ACQUISITION NO. 153, INC.
IHS ACQUISITION NO. 154, INC.
IHS ACQUISITION NO. 155, INC.
IHS ACQUISITION NO. 175, INC.
INTEGRATED HEALTH SERVICES AT GRANDVIEW CARE CENTER, INC.
ECA PROPERTIES, INC.
CCA OF MIDWEST, INC.
QUALITY CARE OF COLUMBUS, INC.

By:   /s/ Daniel J. Booth
Its:  Senior Vice President

<PAGE>

                                      -5-

SENIOR HOUSING PROPERTIES TRUST
SPTIHS PROPERTIES TRUST
HRES1 PROPERTIES TRUST
HRES2 PROPERTIES TRUST
SHOPCO-COLORADO, LLC
SHOPCO-CT, LLC
SHOPCO-GA, LLC
SHOPCO-IA, LLC
SHOPCO-KS, LLC
SHOPCO-MA, LLC
SHOPCO-MI, LLC
SHOPCO-MO, LLC
SHOPCO-NE, LLC
SHOPCO-WY, LLC
SNH-NEBRASKA, INC.
SNH-IOWA, INC.
SNH-MASSACHUSETTS, INC.
SNH-MICHIGAN, INC.

By:   /s/Ajay Saini
Its:  Treasurer

ADVISORS HEALTHCARE GROUP, INC.

By:   /s/Jennifer B. Clark
Its:  Assistant Secretary

FIVE STAR QUALITY CARE, INC.

By:   /s/Ajay Saini
Its:  Treasurer

<PAGE>

                                      -6-

                                   SCHEDULE A

Motion  Pursuant  to  Section  365(d)(4)  of the  Bankruptcy  Code  for an Order
Extending the Time to Assume or Reject Unexpired Leases of  Nonresidential  Real
Property

Motion to Reject that Certain  Management  Agreement Between IHS Acquisition No.
175 and  Advisors  Healthcare  Group,  Inc.  Pursuant  to Section  365(a) of the
Bankruptcy Code and Rule 6006 of the Federal Rules of Bankruptcy Procedure

<PAGE>

                                      -7-

                                   SCHEDULE B

Motion of Senior Housing Properties Trust and Related Entities to Compel Debtors
to pay Postpetition rent or Use and Occupancy and for Other ReliefEXHIBIT 10.6

                       MANAGEMENT AND SERVICING AGREEMENT

         THIS MANAGEMENT AND SERVICING  AGREEMENT (this  "Agreement") is made as
of this  10th day of July  2000,  among  INTEGRATED  HEALTH  SERVICES,  INC.,  a
Delaware  corporation  ("IHS"),  the entities  identified on the signature pages
hereto as "IHS Licensees"  (collectively,  the "IHS Licensees" and together with
IHS, the "Relevant IHS Entities," and in their capacity as "Servicer" hereunder,
"Servicer"),  SENIOR HOUSING PROPERTIES TRUST, a Maryland real estate investment
trust ("SNH"), FIVE STAR QUALITY CARE, INC., a Delaware corporation ("Manager"),
the entities  identified on the signature  pages hereto as "Proposed  Operators"
(collectively, the "Proposed Operators"), and ADVISORS HEALTHCARE GROUP, INC., a
Delaware corporation (f/k/a "Connecticut  Subacute Corporation II") ("Advisors",
and together with the IHS Licensees, collectively, the "Licensees").

                              W I T N E S S E T H:

         WHEREAS,  each of the IHS Licensees  holds a license to operate each of
the skilled nursing,  intermediate care or residential  facilities identified on
Schedule A-1 as being licensed to it (the "IHS Facilities"),  and Advisors holds
a license to operate  the  skilled  nursing,  intermediate  care or  residential
facilities listed on Schedule A-2 (the "Advisors  Facilities," together with the
IHS Facilities, collectively, the "Facilities"); and

         WHEREAS,  Servicer has, prior to the date hereof,  provided  management
services  of the  nature  set forth in  Sections  1 and 2 hereof for each of the
Facilities; and

         WHEREAS,  Manager  has agreed to provide  management  services  to each
Proposed Operator and Advisors with respect to each of the Facilities; and

         WHEREAS, each of the Proposed Operators and Advisors leases, as tenant,
the Facilities identified as being leased by it on Schedule A; and

         WHEREAS, each of the IHS Licensees has entered into an Interim Sublease
Agreement  dated  as  of  even  date  herewith   (collectively,   the  "Sublease
Agreements")  with the  relevant  Proposed  Operator  pursuant to which such IHS
Licensee, as subtenant of such Proposed Operator, occupies its IHS Facility; and

         WHEREAS,  each IHS  Licensee  wishes to  delegate  to  Manager  certain
authority and responsibility to manage its IHS Facility,  and Advisors wishes to
delegate to Manager certain authority and responsibility to manage each Advisors
Facility, in each case pending and in anticipation of receipt by the appropriate
Proposed Operator of the licenses and  determinations of need and suitability of
the types listed on Schedule B-1 necessary for the Proposed  Operator to operate
such  IHS  Facility  or  Advisors  Facility,  as the case  may be,  as  licensee
(individually, a "Necessary License" and collectively, the "Necessary Licenses,"
and together with all provider agreements and certifications of the types listed
on Schedule B-2  necessary  for such  Proposed  Operator of such IHS Facility or
Advisors  Facility,  as the  case  may be,  to  receive  Medicare  and  Medicaid
reimbursement for the services provided therein,  individually,  a "License" and

<PAGE>

collectively,  the "Licenses";  and as used herein, the term "Relevant Licensee"
shall mean (a) with respect to any Advisors Facility (i) Advisors,  prior to the
receipt  of all  Necessary  Licenses  for such  Advisors  Facility  and (ii) the
Proposed Operator for such Advisors Facility, after the receipt of all Necessary
Licenses for such  Advisors  Facility;  and (b) with respect to any IHS Facility
(i) the IHS  Licensee  for  such  IHS  Facility,  prior  to the  receipt  of all
Necessary Licenses for such IHS Facility and (ii) the Proposed Operator for such
IHS  Facility,  after  the  receipt  of all  Necessary  Licenses  for  such  IHS
Facility); and

         WHEREAS,  Manager is willing to assume such responsibilities,  provided
that it is permitted to delegate to Servicer,  and that Servicer assume, certain
authority and responsibility to manage the Facilities; and

         WHEREAS,   Servicer   is  willing   to  assume   such   authority   and
responsibility, all on the terms and conditions set forth herein;

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

1.  General  Duties.  To the fullest  extent  permitted by  applicable  law, and
subject to the control and  direction  of the  Relevant  Licensees,  each of the
Licensees and Proposed  Operators  hereby  engages  Manager,  and Manager hereby
delegates  to Servicer  (subject to the  assumption  by Manager of the duties of
Servicer  as  provided in the last  sentence  of this  Section 1), and  Servicer
hereby  assumes  (subject as provided in the last sentence of this Section 1 and
as provided in Section  8.1),  the  responsibility  to manage and  supervise the
day-to day operation of the Facilities  with the objective of providing  skilled
nursing, intermediate care and residential services to patients and residents of
the Facilities and to carry out general management functions with respect to the
Facilities,  including,  but  not  limited  to,  the  following:  supervise  the
performance  of  all  administrative  functions  as  may  be  necessary  in  the
management and operation of the  Facilities;  select,  hire,  train,  supervise,
monitor the performance of, and terminate or fire, all personnel involved in the
administration and day-to-day operations of the Facilities,  including,  without
limitation,  professional personnel, custodial, cleaning, maintenance, and other
operational  personnel,  and  secretarial  and  bookkeeping  personnel;  provide
accounting,  billing,  purchasing and bill payment functions for the Facilities;
establish systems of accounts and supervise the maintenance of ledgers and other
primary  accounting  records  by  personnel  of the  Facilities;  supervise  the
financial affairs of the Facilities;  establish and supervise the implementation
of operating budgets,  and establish and administer  financial controls over the
operations and  management of the  Facilities;  develop and establish  financial
standards and norms by which the income, costs, and operations of the Facilities
may be evaluated;  serve as advisor and  consultant  in  connection  with policy
decisions  to be  made  by the  Relevant  Licensee;  to  operate,  maintain  and
administer the information  management  systems of the  Facilities;  prepare and
furnish reports and economic and statistical data in connection with or relative
to the  management of the  Facilities  to the Relevant  Licensee as the Relevant
Licensee  may request in order to comply with  applicable  law and  regulations;
represent the Facilities in its dealings with  creditors,  patients,  personnel,
agents for collection and insurers; file with applicable state Medicaid programs
and  the  Medicare  programs  and all  other  public  and  private  third  party
reimbursement programs (collectively,  "third party payors") all required claims
for  payment  and

                                      -2-
<PAGE>

cost  reports;  administer  trust  funds for the  benefit  of  residents  of the
Facilities  and  prepare  and  file all  accounts  for such  funds  required  by
applicable  law;  maintain  listings of all residents of the  Facilities and the
persons or third party payors  responsible  for their charges;  act as agent for
Relevant  Licensee in disbursing or collecting the funds of the Facilities,  and
in paying the debts and  fulfilling the  obligations of the Facilities  incurred
subsequent to the Effective Time (as hereafter defined);  market the services of
the  Facilities;  and  generally  see to the  operations  and  management of the
Facilities, the marketing of their services, planning for future operations, and
the  establishment  and  implementation  of  policies  for  the  Facilities.  In
addition,  each of the Licensees and Proposed Operators hereby engage Manager to
secure such engineering, legal, and other specialized technical and professional
services  as may be  necessary  to  advise or to  represent  the  Licensees  and
Proposed  Operators for each Facility in connection with any matter involving or
arising out of the operation of the Facilities or the conduct of the Facilities.
Manager  shall,  at all times during the term of this  Agreement  keep  Servicer
reasonably   informed  as  to  any  matters  with  respect  to  which  any  such
engineering, legal or other services are retained and with respect to the advice
rendered  and actions  taken with respect to such  matters.  Servicer is neither
authorized nor obligated to perform such  functions.  If, as provided in Section
8.2 hereof,  Manager  advises  Servicer in writing that Servicer may discontinue
the  provision of certain  described  services to be provided by Servicer  under
this Section 1 and/or Section 2 hereof, Manager shall automatically be deemed to
have assumed full  responsibility  for  providing  such services to the Relevant
Licensee  under the terms of this Section 1 and/or  Section 2 as if Manager were
the "Servicer" referred to herein or therein.

2. Specific  Duties.  To the fullest  extent  permitted by  applicable  law, and
subject to the control  and  direction  of the  Relevant  Licensee,  and without
limiting the  generality  of the  foregoing,  Servicer  shall have the following
specific duties:

         2.1 Employees. Servicer shall recruit, evaluate, and select, subject to
such review by Relevant  Licensee  as shall be  required by  applicable  law and
regulations,  qualified nursing home administrators who shall be responsible for
the functional  operation of the Facilities and  supervision of personnel at the
Facilities,  on a  day-to-day  basis,  as  well  as  all  on-site  professional,
custodial,  food  service,   cleaning,   maintenance,   clerical,   secretarial,
bookkeeping,  management, collection, and other administrative personnel for the
day-to-day  operations  of  the  Facilities  (collectively,  "Personnel").  Such
Personnel  shall be employees of Servicer  (subject to the following  sentence),
provided  Manager,  Advisors and the Proposed  Operator of the relevant Facility
shall have full responsibility for payment of their wages,  salaries,  and other
compensation  and benefits  (in  accordance  with  Section 4).  Anything in this
Section 2.1 to the contrary  notwithstanding,  Manager shall offer employment to
all such  Personnel  at or as soon  after the  Effective  Time as is  reasonably
practicable, but not later than sixty (60) days after the Effective Time, in any
event.  Servicer shall establish such personnel policies,  wage structures,  and
staff  schedules  as  it  deems  necessary  and  advisable  in  accordance  with
applicable  law.  Servicer shall have authority to hire and discharge  employees
who,  immediately  prior to the Effective Time, were employed at the Facilities.
Servicer  shall  maintain  payroll  records and shall prepare weekly and monthly
payrolls,  and returns of  withholding  taxes.  Servicer  acknowledges  that the
ability  of  Manager  to make any such  offer may be  subject  to receipt of the
Necessary  Licenses and that in any event,  Manager will first have to implement
an appropriate  accounting and payroll  function.  Servicer  agrees to cooperate
with Manager in  connection  with such offers of  employment  and to release any
Personnel to whom Manager  offers  employment

                                      -3-
<PAGE>

from  any   employment   agreements,   non-competition,   non-solicitation   and
non-disclosure  agreements or common law  obligations to which they may be party
or  subject.   Notwithstanding  anything  to  the  contrary  contained  in  this
Agreement, Servicer shall have no liability whatsoever to or with respect to any
of the  Personnel  or by reason of any  actions  taken or  omitted by any of the
Personnel,  in each case relating to any period on or after the  Effective  Time
(regardless  of the fact  that the  Personnel  may be  employees  of  Servicer).
Notwithstanding  anything  to the  contrary  contained  in this  Agreement,  the
Manager  shall not be required or permitted to offer  employment  at any time to
any person then employed as a member of the IHS corporate  staff ("IHS Corporate
Staff")  (excluding,  however,  regional  vice  presidents  and their staff (the
"RVPs")  as to which  Manager  has  provided  reasonable  prior  notice to IHS),
without  the  prior  consent  of IHS  (which  consent  will not be  unreasonably
withheld).  If IHS  shall  consent  to the  making  of any such  offer,  it will
cooperate with Manager with respect  thereto,  and if any such member of the IHS
Corporate Staff or any RVP shall become an employee of any SNH Entity, he or she
shall be deemed to belong to Personnel.

         2.2  Purchasing.   Servicer  shall  (subject  to  Section  4)  purchase
substantially all necessary supplies, foodstuffs,  materials, appliances, tools,
and  equipment  customarily  used in the operation of the  Facilities.  Servicer
shall use  commercially  reasonable  efforts  to limit  purchasing  costs and to
maintain such costs at a level reasonably  calculated to allow the Facilities to
operate  profitably.  Servicer  may,  but shall not be  obligated  to, make such
purchases in bulk under a centralized  purchasing  system  established by it for
other facilities under its management in order to minimize costs. Servicer shall
arrange  contracts for  electricity,  gas,  telephone,  and any other utility or
service necessary to the operation of the Facilities.  Servicer shall, on behalf
of the Proposed  Operator and/or the owner of the buildings and real property in
and on which the Facilities are located (the "Real  Property  Owner"),  contract
for  and  supervise  the  making  of any  necessary  repairs,  alterations,  and
improvements  to the  Facilities,  provided  that  in the  case  of any  repair,
alteration or  improvement,  the cost of which exceeds  $5,000,  Servicer  shall
obtain the prior approval of Manager and the Relevant  Licensee,  except that no
such  prior  approval  shall  be  required  if the  expenditure  is  made  under
circumstances  reasonably  requiring  emergency  action.  Without  limiting  the
provisions of Sections 2.4 and 4, Servicer shall,  upon written request,  submit
to the Proposed Operator and Licensee such certification as to expenses incurred
in the operation of the Facilities as may be reasonably required by the Proposed
Operator or Licensee in order to comply  with  applicable  law and  regulations,
including, without limitation, law and regulations applicable to preparation and
submission of cost reports.

         2.3  Bookkeeping.  Servicer  shall  establish and maintain a record and
bookkeeping system for the operation and conduct of the Facilities in accordance
with  generally  accepted  accounting  principles.  Full books of  account  with
entries of all receipts and  expenditures  of the  Facilities  shall be open for
inspection by  representatives  of Licensee,  Manager and Proposed Operator upon
reasonable  notice and at reasonable  times, to the extent required by Licensee,
Manager  or  Proposed  Operator  in  order to  comply  with  applicable  law and
regulations,  including,  without limitation,  law and regulations applicable to
preparation and submission of cost reports.

         2.4  Financial  Reports.  Servicer  shall:  (a) as soon  as  reasonably
possible  after  the close of each  calendar  month  (and as soon as  reasonably
possible after the  termination of the

                                      -4-
<PAGE>

obligations  of the  Relevant IHS  Entities,  as Servicer,  in  accordance  with
Section 8.1) furnish to the Relevant  Licensee and Manager a statement of income
for the month (or portion  thereof)  and for the year to date,  together  with a
detailed statement of billings,  receipts,  disbursements,  accounts payable and
accounts  receivable;  (b) in the event the  Relevant  Licensee  is  required by
applicable law,  regulations or the provisions of any material contract to which
it is a party or by which it is bound to  conduct  or  submit to an audit of the
Facilities'  financial  performance relative to the period during which Servicer
performed services under this Agreement, make available all books and records of
the  Facilities  on a timely  basis and  cooperate  fully with any  auditors  or
accountants  designated  by the  Relevant  Licensee;  (c) as soon as  reasonably
possible after the close of each  applicable  reporting  period for rate setting
purposes, and not later than the applicable deadline,  prepare for submission by
the  Relevant  Licensee a cost report for each  Facility  (and  including in any
event,  any short-year  cost report required to be submitted by the IHS Licensee
after receipt of the Necessary Licenses and provider  agreements by the Proposed
Operator), showing the costs and expenditures relating to resident care for such
Facility  and  such  other   information   as  is  required  by  the  applicable
governmental authority, such report being in all material respects (including as
to form) in compliance with the  requirements  of such  applicable  governmental
authority;  and (d)  cooperate  with and furnish  information  to each  Proposed
Operator and Manager in a timely manner in connection  with the  preparation  of
applications  by such  Proposed  Operator for any  Licenses  with respect to the
Facilities.  Servicer  shall  supply all  information,  reports,  forms and data
required to be provided by it pursuant to this Section 2.4 in electronic or hard
copy form (and, in the case of clause (a) above,  if such  information  and data
are  provided in hard copy form,  Servicer  shall  provide such  information  to
Manager in  electronic  form also,  if  available in the  ordinary  course),  as
determined by Servicer consistent with its ordinary practice,  unless applicable
law shall require that any such information,  report,  form or data be submitted
in a particular form, in which case,  Servicer shall comply with such applicable
law.

         The provisions of paragraphs (b), (c) and (d) of this Section 2.4 shall
survive the  termination  of the  obligation  of the  Relevant  IHS  Entities as
Servicer under Section 8.1, to the extent such  provisions  relate to the period
prior to such termination.

         2.5 Marketing.  Servicer shall use commercially  reasonable  efforts to
market the  services  of the  Facilities  in order to  maintain  the  patient or
resident  census at the Facilities in such numbers and of such categories as, in
Servicer's  judgment,  will tend to  maintain  the  financial  stability  of the
Facilities and to ensure compliance with laws, regulations, orders and judgments
applicable to the  Facilities.  Servicer may design and implement  programs with
third party payors, such as insurance companies,  federal agencies and state and
local agencies, for services to patients on a contract basis, for the purpose of
improving the financial stability of the Facilities.

         2.6 Notices of  Proceedings.  Each of  Servicer,  Manager and  Relevant
Licensee shall promptly  inform the others of the  commencement of any formal or
informal  investigations  or  proceedings  known to it before any and all local,
state and federal  agencies which purport to regulate any Facility to the extent
such proceeding may have a material impact upon the operation of any Facility.

                                      -5-
<PAGE>

         2.7 Insurance.

                  (a)  Manager  shall  obtain on behalf of itself and  Servicer,
         Licensee,  Proposed  Operator  and the Real  Property  Owners  for each
         Facility, as their interests may appear,  commercial general liability,
         all risk property,  professional or malpractice  liability and worker's
         compensation  insurance covering the Facilities,  any equipment used in
         connection with the  Facilities,  the Personnel and any other employees
         located at the Facilities, and Manager, Servicer,  Licensees,  Proposed
         Operator  and the Real  Property  Owners  for each  Facility,  as their
         interests may appear, in such amounts and with such deductibles as are,
         in  each  case,  described  in  Schedule  2.7  hereto,  and  with  such
         additional  provisions or coverage as may be determined by Manager.

                  (b) All  insurance  provided  under this  Section 2.7 shall be
         issued by insurance companies with an A.M. Best Rating of not less than
         A-VI and that are licensed and qualified to do business in the state of
         operation of the relevant Facility.

                  (c)  Notwithstanding the provisions for deductibles in Section
         2.7,  it is  understood  and  agreed  that the  policies  of  insurance
         provided  for in this Section 2.7 may contain  deductible  or retention
         provisions  in such amounts as are  maintained  with respect to similar
         type facilities in the industry.  In addition to premiums,  Manager and
         SNH shall be responsible for all  deductibles,  retentions,  collateral
         and expenses associated with such insurance.

                  (d) Each of the policies of liability insurance referred to in
         this Section 2.7 (including the umbrella coverage,  and, for as long as
         any Personnel  remain  employees of any Relevant IHS Entity,  workman's
         compensation  insurance)  shall name IHS,  Servicer and each applicable
         IHS  Licensee  as an insured or  additional  insured,  as  appropriate.
         Manager shall provide  Servicer with a Certificate  of Insurance at the
         Effective Time naming IHS, Servicer and each applicable IHS Licensee as
         an  insured  or  additional  insured  with  respect  to such  liability
         insurance,  as  appropriate,  and  within  two  Business  Days  of  any
         subsequent request. Manager shall notify Servicer at least (30) days in
         advance of a cancellation or expiration of such policies. It is further
         understood  that Manager shall provide all  necessary  risk  management
         services.

         2.8 Collections, Accounts, Disbursements and Termination Accounting.

                  (a) Billing.  Servicer  shall prepare and submit bills for all
         moneys owing to the Relevant  Licensee,  whether from patients or third
         party  payors,  for services  provided by or at the  Facilities  at any
         time,  whether  prior to 12:01 A.M.  (Boston time) on the day following
         the Closing (the "Effective Time") or after the Effective Time.

                  (b) Collection of Accounts Receivable.

                  (i) (i) Each IHS Licensee and Relevant IHS Entity acknowledges
         that,  pursuant to the provisions of the Settlement  Agreement dated as
         of April 11, 2000, as amended,  among,  inter alia,  Integrated  Health
         Services,  Inc., SNH, SPTIHS Properties  Trust,  HRES1 Properties Trust
         and HRES2  Properties  Trust,  each a Maryland  real estate  investment
         trust  ("SPTIHS,"  "HRES1" and  "HRES2,"  respectively),  Manager,  the

                                      -6-
<PAGE>

         Proposed Operators and the Licensees (the "Settlement Agreement"),  the
         Proposed  Operators  (to the extent  permitted by  applicable  law) and
         Advisors  own  all  accounts  receivable  to the  extent  arising  from
         services provided by or at its respective  Facility after the Effective
         Time  (the  "Post-Effective  Time  Receivables").  Servicer  is  hereby
         authorized  and  directed  to  make  and  effect   collections  of  all
         Post-Effective   Time   Receivables.   With   respect   to   all   such
         Post-Effective  Time  Receivables with respect to any Facility that are
         owed by a Medicaid  program or the Medicare program or other federal or
         state programs  (collectively,  "Government  Receivables") and that are
         payable  under  the  existing  Provider  Agreements  of  any  Licensee,
         Servicer  shall  endorse and deposit into the Licensee bank account for
         such  Facility  under the name and  control  of the  Licensee  for such
         Facility (a "Licensee Account"),  any and all monies, checks, drafts or
         other  instruments  or items  received as payment  for such  Government
         Receivables.  With respect to all Post-Effective  Time Receivables with
         respect   to   any   Facility   other   than   Government   Receivables
         (collectively,   "Other  Receivables"),   Servicer  shall,  subject  to
         paragraph (ii) below, endorse and deposit into a bank account under the
         name and  control of the  Proposed  Operator of such  Facility  that is
         designated in writing from time to time by the Proposed  Operator (each
         a "Proposed Operator Account"),  any and all monies,  checks, drafts or
         other   instruments  or  items  received  as  payment  for  such  Other
         Receivables. Each IHS Licensee or Relevant IHS Entity that receives any
         proceeds  of  Post-Effective  Time  Receivables  with  respect  to  any
         Facility,  whether as a deposit  in the  relevant  Licensee  Account or
         otherwise,  and whether such proceeds are of Government  Receivables or
         Other Receivables,  acknowledges that, subject to paragraph (ii) below,
         it has no right to use any such  proceeds  for any  purpose,  and shall
         hold any and all such  proceeds in trust for the  Proposed  Operator of
         such  Facility or Advisors,  as the case may be, and shall prior to the
         close of business on the Business Day on which it receives such amount,
         cause  such  funds to be paid  into the  applicable  Proposed  Operator
         Account  for the  account  of the  Proposed  Operator  or the  Licensee
         Account of Advisors,  as the case may be. As soon as practicable  after
         the Effective  Time,  Servicer  shall (to the extent  permitted by law)
         instruct account debtors of each Facility to make payment directly into
         the relevant  Proposed  Operator  Account for such IHS Facility and the
         Licensee  Account of Advisors,  as the case may be.  During the term of
         this  Agreement,  Servicer  shall keep accurate and complete  books and
         records  of  all  receipts  with  respect  to  all  billing,   accounts
         receivable,   all  deposits  and  other   transactions   affecting  any
         Post-Effective  Time Receivable  whether to the Licensee  Account,  the
         Proposed  Operator Account or to other checking  accounts,  which books
         and records shall be made available to Licensee,  Proposed Operator and
         Manager upon request,  and after  termination of this  Agreement  shall
         make such books and records available to Licensee, Manager and Proposed
         Operator  to the  extent  necessary  to enable  Licensee,  Manager  and
         Proposed  Operator to comply with all applicable laws and  regulations,
         including regulations governing  preparation,  submission and audits of
         cost reports. If any amount shall be collected within the first 60 days
         after  the  Effective   Time  from  an  account   debtor  that  is  not
         identifiable,  using reasonable best efforts,  as being in payment of a
         Post-Effective  Time  Receivable,  then  100% of such  amount  shall be
         deemed to have been collected in respect of an account  receivable that
         was due to the  Servicer  or an IHS  Licensee  in respect  of  services
         provided  prior to the  Effective  Time (and the  Servicer  or such IHS
         Licensee   shall  be  permitted  to  retain  such   proceeds,   without
         limitation). If any amount shall be

                                      -7-
<PAGE>

         collected  during the  period  from the 61st to the 120th day after the
         Effective Time from an account debtor that is not  identifiable,  using
         reasonable best efforts,  as being in payment of a Post-Effective  Time
         Receivable,  then 50% of such  amount  shall  be  deemed  to have  been
         collected  in  respect  of an  account  receivable  that was due to the
         Servicer or an IHS  Licensee in respect of services  provided  prior to
         the  Effective  Time (and the  Servicer or such IHS  Licensee  shall be
         permitted to retain such proceeds  without  limitation),  and the other
         50% of such amount shall be deemed to have been collected in respect of
         a Post-Effective  Time Receivable (and such Proposed  Operator shall be
         permitted to retain such proceeds  without  limitation).  If any amount
         shall be collected after the 120th day after the Effective Time from an
         account debtor that is not identifiable, using reasonable best efforts,
         as being in payment of a Post-Effective  Time Receivable,  then 100% of
         such  amount  shall be deemed to have been  collected  in  respect of a
         Post-Effective  Time  Receivable  (and the Proposed  Operator  shall be
         permitted  to retain such  proceeds,  without  limitation).  Each party
         hereto agrees to provide  written notice to each other party hereto not
         affiliated  with it,  promptly  following the last Business Day of each
         calendar  month,  if such  party has  received  a payment  during  such
         calendar month that is not identifiable, using reasonable best efforts,
         as being in payment of a Post-Effective  Time Receivable.  Such written
         notice shall set out the amount of the payment and the person or entity
         that  made  the  payment.  If and to the  extent  that  Manager  or any
         Proposed  Operator or any of their respective  affiliates shall collect
         any account  receivable  owned (or deemed to be owned) by any  Relevant
         IHS Entity,  such person or entity shall immediately pay such amount to
         such  Relevant IHS Entity,  and until such payment is so made,  Manager
         shall hold such  amount in trust for the benefit of such  Relevant  IHS
         Entity.

                  (ii)  Notwithstanding  anything to the  contrary  contained in
         this  Agreement,  if the Manager,  SNH, or any Proposed  Operator shall
         fail to make any payment to the Servicer or any IHS  Licensee  pursuant
         to Section 4 hereof when and as due in accordance  with Section 4, then
         Servicer and such IHS Licensee  shall be entitled to collect and retain
         any amounts due in respect of  Post-Effective  Time  Receivables to the
         extent necessary to offset such amount due under Section 4. Servicer or
         the applicable  IHS Licensee  shall promptly  notify the Manager of any
         such offset.  The rights and remedies of Servicer and the IHS Licensees
         under this  paragraph  (ii) shall be in  addition  to, and shall not be
         exclusive  of, any other  rights or remedies  that may be  available to
         Servicer or the IHS Licensee under this Agreement,  any other agreement
         between the  parties,  at law, in equity,  or  otherwise,  all of which
         rights may be exercised concurrently or in any order or priority.

                  (iii)  IHS  shall  cause  exclusive  control  of the  Licensee
         Account for the Facilities  located in Connecticut to be transferred to
         Advisors effective as of the Closing Date.

                  (c) Reduction Claims.

                  (i) If and to the extent that there  shall be a  reduction  (a
         "Reduction") in the amount to be paid on any account  receivable due to
         any IHS  Licensee  by a Medicaid  program or the  Medicare  program for
         services rendered at any Facility from and after the

                                      -8-
<PAGE>

         Effective  Time (an  "IHS  Government  Receivable")  by  reason  of any
         withholding,  freeze, restriction, offset or recoupment applied against
         such IHS Government  Receivable for an amount payable by any IHS Entity
         to the  applicable  Third  Party  Payor (as such term is defined in the
         Settlement  Agreement) with respect to services provided on or prior to
         the Effective  Time (a  "Pre-Effective  Date Third Party Payor Claim"),
         then the SNH  Entities  shall have a claim  against the IHS Entities (a
         "Reduction Claim") that is: (1) in the amount of the Reduction; and (2)
         of equal  priority to the priority that would have been accorded to the
         Pre-Effective  Date  Third  Party  Payor  Claim  in the  IHS  Entities'
         bankruptcies,  under  bankruptcy or other  applicable law, or if and to
         the extent the Third Party Payor is not subject to the  jurisdiction of
         the Court or limited in its recourse by the filing of the Case (as such
         term is defined in the Settlement Agreement),  such other rights as the
         Third Party Payor may exercise.

                  (ii) The Manager shall give notice of any Reduction Claim (the
         "Manager's Notice") to the Senior Vice  President-Finance  of IHS, with
         such Manager's  Notice to set forth the amount of such  Reduction,  the
         basis for the Pre-Effective Date Third Party Payor Claim (to the extent
         known to Manager),  and the Reduction  Claim that the Manager  believes
         that is  payable  by the IHS  Entities  to the  SNH  Entities.  The IHS
         Entities  shall then have thirty (30) days from the date of the receipt
         of the  Manager's  Notice to pay the amount of the Reduction to the SNH
         Entities.  The payment by the IHS Entities of any amount in  accordance
         with the preceding  sentence shall be without prejudice to the right of
         the IHS Entities to dispute, at any time, the SNH Entities' entitlement
         to any such payment, as follows:

                           (A) If the IHS Entities shall dispute the Third Party
                  Payor's  basis for the  Pre-Effective  Date Third  Party Payor
                  Claim or the amount of such  Pre-Effective  Date  Third  Party
                  Payor  Claim,  then the  applicable  IHS Entity shall have the
                  sole  authority to dispute or settle such  Pre-Effective  Date
                  Third Party Payor Claim,  and the IHS Entities  shall bear the
                  costs and expenses of such  efforts.  The SNH  Entities  shall
                  cooperate in all reasonable  respects with the IHS Entities in
                  connection with the IHS Entities' efforts to resolve or settle
                  such  dispute.   Notwithstanding   anything  to  the  contrary
                  contained  in  this  Agreement  or  in  any  other  Settlement
                  Document,  the IHS Entities  shall be deemed to own (and shall
                  be entitled to collect,  retain and/or  assign) any funds that
                  are collected in respect of any Pre-Effective Date Third Party
                  Payor Claim  disputed in  accordance  with this clause (A). If
                  any SNH  Entity  shall  collect  any  such  amount,  it  shall
                  immediately pay such amount to the applicable IHS Entity.

                           (B) If the IHS Entities  shall  dispute the amount or
                  priority of the Reduction Claim to which the Manager  believes
                  the SNH Entities are entitled in  accordance  with  subsection
                  (c)(i) above, then the parties shall  immediately  submit such
                  dispute  to  binding   arbitration  in  accordance   with  the
                  Commercial  Arbitration  Rules  then in force of the  American
                  Arbitration Association,  and judgment upon the award rendered
                  by the  arbitrator(s)  may be  entered  in  any  court  having
                  jurisdiction  thereof. The SNH Entities shall forthwith return
                  to the  applicable  IHS Entity any amount that the  arbitrator
                  determines  to be in  excess  of the  amount  to which the SNH
                  Entities were entitled in accordance  with  subsection  (c)(i)
                  above.

                                      -9-
<PAGE>

                  In any such dispute, the prevailing party shall be entitled to
                  reimbursement  of its related  costs and  expenses,  including
                  reasonable attorney's fees. Moreover, if it is determined that
                  the SNH Entities  asserted a Reduction  Claim in excess of the
                  amount to which they were entitled, they shall be obligated to
                  pay to the  applicable  IHS Entity  interest on such excess at
                  the rate of eight  percent  (8%) per annum  from the date such
                  amount was paid to the SNH Entities until the date paid by the
                  SNH Entities to the applicable IHS Entity.

                           (d) The  provisions of paragraphs (b) and (c) of this
                  Section 2.8 shall survive the  termination of the  obligations
                  of the Relevant IHS Entities under Section 8.

         2.9 Patient-Trust Accounts. At such time as a Proposed Operator for any
Facility has all Necessary  Licenses,  Servicer and the applicable Licensee will
transfer  the patient  trust  accounts  held for the benefit of residents of the
relevant  Facility  to  the  Proposed   Operator  of  that  Facility.   Promptly
thereafter,  Servicer and the applicable  Licensee will furnish to such Proposed
Operator  current bank statements  with respect to such accounts.  Such Proposed
Operator shall thereupon  assume all liabilities  arising  thereunder other than
liabilities for acts or omissions by the Licensee prior to the Effective Time or
arising out of gross  negligence  or willful  misconduct of Servicer or Licensee
after the Effective Time.

3. Servicer Consideration.  The Relevant IHS Entities have agreed to perform the
services that are  contemplated  to be rendered by them  hereunder as "Servicer"
during the five (5) month period provided in Section 8.1 and as "Servicer" under
the Servicing  Agreement dated as of even date among SNH,  Manager,  IHS and IHS
152 (the "Other Servicing  Agreement"),  in consideration of the release by SNH,
SPTIHS,  HRES1,  HRES2,  Advisors  and the other SNH Entities (as defined in the
Settlement  Agreement)  of their  claims  against  Servicer  and the  other  IHS
Entities (as defined in the Settlement  Agreement) under the Existing  Documents
(as defined in the Settlement  Agreement) pursuant to the Settlement  Agreement.
Such releases shall not be affected if, during the first five (5) full months of
the term of this Agreement,  Manager advises Servicer,  pursuant to Section 8.2,
to  discontinue  provision of any portion of the  services  provided by Servicer
hereunder  or if any  Facility  is sold or its  operation  discontinued  for any
reason whatsoever.

4.       Expenses.

         4.1 For purposes of this Agreement, "Expenses" shall mean, liabilities,
costs and expenses of the type listed below to the extent incurred in connection
with the  operation and  management  of such Facility in the ordinary  course of
business after the Effective Time:

                  (a) salary and related costs (including,  without  limitation,
         payroll taxes, workers' compensation,  costs of employee benefit plans,
         travel,  insurance,  and fidelity bonds) of Personnel at such Facility,
         including, without limitation, administrative, professional, custodial,
         food service,  cleaning and maintenance,  operational,  secretarial and
         bookkeeping personnel (collectively, "Payroll Expenses");

                  (b) the cost of all supplies and  equipment  necessary for the
         continued  operation of such  Existing  Facility as a skilled  nursing,
         intermediate  care and for

                                      -10-
<PAGE>

         residential facility in the ordinary course of its business,  including
         without  limitation,  the  cost  of all  pharmaceuticals,  food,  fuel,
         kitchen and food service equipment,  linens, beds, furniture,  clothing
         and other supplies and equipment used in supplying services to patients
         in the ordinary course;

                  (c) expenses  attributable to the maintenance and operation of
         real and personal property  devoted,  used or consumed in the operation
         of such Facility in the ordinary course, including, without limitation,
         expenses  incurred in connection  with  maintenance  and repair of such
         Facility,  and  insurance  premiums,  deductibles  and  retentions  for
         insurance obtained pursuant to Section 2.7;

                  (d) all  liabilities  incurred  after the Effective Time under
         any  Contracts  (as such term is defined in the  Settlement  Agreement)
         that any IHS  Entity  is  required  not to reject  in  accordance  with
         Section 7.6 of the Settlement Agreement (but specifically excluding any
         Pre-Effective  Time  Obligations  (as  such  term  is  defined  in  the
         Settlement Agreement)); and

                  (e) all other costs,  expenses and liabilities  arising out of
         the ownership, operation, maintenance and management of the Facilities,
         including,  without  limitation,  real  estate,  income and other taxes
         payable in connection  with the operation of the Facilities  (the costs
         and expenses  referred to in  paragraphs  (b), (c), (d) and (e) hereof,
         collectively, "A/P Expenses");

provided,  however,  that the following expenses of the Relevant IHS Entities as
"Servicer" hereunder shall be for the sole account of the Relevant IHS Entities,
shall not be subject to  reimbursement  hereunder,  and shall be deemed excluded
from the term  "Expenses":  (i) the Relevant IHS Entities  overhead and ordinary
administrative  expenses,  and salary (including,  without  limitation,  payroll
taxes, workers' compensation, costs of employee benefit plans, travel, insurance
and fidelity bonds) of financial, accounting and other personnel employed by the
Relevant IHS Entities  (other than  Personnel) to provide  centralized  billing,
collection,  bill paying,  accounting,  record keeping,  information management,
purchasing,  personnel and policy  planning  services to any Facility,  it being
understood  that in no event  shall  the  salary  or other  compensation  of any
Personnel be an expense of Servicer;  (ii) the cost of obtaining and maintaining
insurance  outside of that described in Section 2.7; and (iii) any loss, cost or
expense for which Servicer is liable under Section 10.

         4.2 SNH, Manager,  Advisors and the Proposed Operators shall be jointly
and severally liable for the payment and satisfaction of all Expenses,  when and
as the same shall become due in accordance with the terms hereof. In furtherance
thereof, Manager shall establish separate bank accounts ("Expense Accounts") for
Payroll  Expense and A/P Expense  under its name and  control,  with  respect to
which  Servicer  shall have signing  authority in order to pay Expenses.  At the
close  of the last  Business  Day of each  calendar  week  (commencing  with the
calendar week in which the Closing Date occurs),  Servicer shall provide Manager
with a check  register  showing the payee  name,  the amount of such check (with
deductions, if any), the payee code and the check number for each check drawn on
the Expense Accounts during such week. On the day preceding the Closing Date and
at the  close  of  business  on the  last  Business  Day of each  calendar  week
thereafter, Servicer shall provide Manager with a statement (the "Cash

                                      -11-
<PAGE>

Projection")  setting  forth the  aggregate  Dollar  amount of the  checks  that
Servicer  then  expects to draw on the  Expense  Accounts  during the  following
calendar  week  (the  projected  Dollar  amount  for such  following  week,  the
"Projected Cash  Requirement") and setting forth the amount to be deposited into
the Expense Accounts in accordance with the following sentence.  By the close of
business on the Closing Date and on the second  Business  Day of such  following
calendar  week,  SNH or the Proposed  Operators  shall  deposit into the Expense
Accounts  such amounts as shall be necessary so that the  Aggregate  Balance (as
hereinafter defined) of the Expense Accounts on such Business Day shall at least
equal the sum of: (x) the Projected Cash  Requirement  for the current  calendar
week plus (y) $1,000,000.  As used herein,  the term  "Aggregate  Balance" shall
mean,  as of the date of  determination,  the sum of all  amounts  deposited  in
either Expense  Account,  less the aggregate dollar amount of all checks written
on either  Expense  Account and  reflected  in the check  registers  theretofore
furnished  to  Manager  (whether  or not such  checks  have  been paid from such
Expense  Accounts).  The monies so deposited  by SNH or the  Proposed  Operators
shall be allocated  between the two Expense Accounts as Servicer may direct from
time to time, based on its Cash Projections. Servicer shall provide Manager with
a list of its payee  codes (with  descriptions  identifying  these  codes) on or
prior to the Closing Date, and shall  promptly  inform Manager of any subsequent
modifications  thereto.  The Servicer shall promptly  reimburse the SNH Entities
for any amounts paid out of the Expense  Accounts to satisfy  obligations of any
IHS Entity that are not  required to be paid by any SNH Entity  pursuant to this
Agreement or the Settlement  Agreement or any other of the Settlement  Documents
(as such term is defined in the Settlement Agreement).  Nothing contained in the
foregoing  sentence  shall be deemed to permit the  Servicer to use funds in the
Expense  Accounts to satisfy its own obligations  except to the extent expressly
provided in this Agreement. The provisions of the first sentence of this Section
4.2 shall survive the termination of this Agreement.

         4.3 The parties  acknowledge that Servicer and the Licensees shall have
no obligation to advance any funds on behalf of any of the  Facilities,  Manager
or the  Proposed  Operators.  If  Servicer  does  advance  its own funds for any
Expense,  SNH and the  Proposed  Operators  shall  promptly  reimburse  Servicer
therefor.  Moreover,  Manager  and SNH assume all risk of loss to third  parties
arising out of the failure to make any payment of any Expense. The provisions of
this Section 4.3 shall survive the termination of this Agreement.

         4.4 [intentionally omitted].

5.       Access to Records, Etc.

         5.1 For the time and to the extent required by applicable law, Servicer
shall retain, and shall permit the Comptroller General of the United States, the
U.S. Department of Health and Human Services and duly authorized state agencies,
and their respective duly authorized  representatives  access to examine or copy
this Agreement and such books, documents, and records as are necessary to verify
the  nature  and  extent  of the  costs  of the  services  supplied  under  this
Agreement.  In the  event  Servicer  provides  any of its  services  under  this
Agreement pursuant to a subcontract and if (i) the services provided pursuant to
the subcontract have a value or cost of $10,000 or more over a twelve (12) month
period and (ii) the  subcontract is with a related  organization,  then Servicer
agrees that the subcontract  shall contain a clause requiring the  subcontractor
to retain and allow  access to its records on the same terms and  conditions  as
required  by  Servicer.  This  provision  shall be null and  void  should  it be
determined  that  Section

                                      -12-
<PAGE>

1861(v)(1)(I)  of the Social  Security Act is not applicable to this  Agreement.
The  provisions  of this  Section  5.1  shall  survive  the  termination  of the
obligations of the Relevant IHS Entities as Servicer under Section 8.1.

         5.2 For the time and to the extent required by applicable law,  Manager
shall retain, and shall permit the Comptroller General of the United States, the
U.S.  Department of Health and Human Services and duly authorized state agencies
and their respective duly authorized  representatives  access to examine or copy
this Agreement and such books, documents, and records as are necessary to verify
the  nature  and  extent  of the  costs  of the  services  supplied  under  this
Agreement.  In  the  event  Manager  provides  any of its  services  under  this
Agreement pursuant to a subcontract and if (i) the services provided pursuant to
the subcontract have a value or cost of $10,000 or more over a twelve (12) month
period and (ii) the  subcontract  is with a related  organization,  then Manager
agrees that the subcontract  shall contain a clause requiring the  subcontractor
to retain and allow  access to its records on the same terms and  conditions  as
required  by  Manager.  This  provision  shall  be null and  void  should  it be
determined  that  Section  1861(v)(1)(I)  of  the  Social  Security  Act  is not
applicable to this Agreement.

         5.3 As soon as reasonably  possible  after the close of each  reporting
period for rate setting  purposes,  and not later than the applicable  deadline,
the Relevant IHS Entities  shall prepare for  submission  by the IHS  Licensees,
Medicare and/or Medicaid cost reports, as applicable,  for each Facility for the
reporting  period  during which such IHS  Licensee  provided  facility  services
(regardless  whether such services  were provided  before or after the Effective
Date)  showing the costs and  expenditures  relating  to resident  care for such
Facility  and  such  other   information   as  is  required  by  the  applicable
governmental authority, such report being in all material respects (including as
to form) in compliance with the  requirements  of such  applicable  governmental
authority.  The provisions of this Section 5.3 shall survive the  termination of
the obligations of the Relevant IHS Entities as Servicer under Section 8.1.

         5.4 The  Proposed  Operators  agree to use their best efforts to obtain
all  Necessary  Licenses  as  promptly as  possible,  and to use all  reasonable
efforts to obtain all other Licenses as promptly as possible.  Upon receipt by a
Proposed  Operator of the  Necessary  Licenses  with respect to an IHS Facility,
Manager shall give Servicer and each IHS Licensee prompt written notice thereof.

         5.5 Subject to the provisions of Section 12.10 hereof,  each of the IHS
Licensees  and Servicer  agrees to  cooperate  with the Manager and the Proposed
Operators in their efforts to obtain all Licenses,  such cooperation to include,
without  limitation,  the IHS Licensees  taking all action that is necessary and
reasonable  to  ensure  that  there is no period  during  which  neither  an IHS
Licensee  nor a Proposed  Operator  is entitled to  reimbursement  for  services
provided at the Facilities.  Without  limiting the foregoing,  each Relevant IHS
Entity and IHS  Licensee  agrees to use all  reasonable  efforts to assist  each
Proposed  Operator in obtaining  all Licenses as soon as possible.  Such efforts
shall include (i) (to the extent  required as a condition to the issuance of any
License with respect to any Facility) the  preparation and filing of terminating
cost reports with respect to the Facility in compliance in all material respects
with applicable law, (ii) promptly  furnishing to such Proposed  Operator,  upon
its  request,  all  information  and  materials  required  to be  (or  that  any
governmental agency or official has requested be) furnished as a condition to or
in connection with the issuance of any Licenses (including any financial, census

                                      -13-
<PAGE>

and staffing data,  information  regarding  special services and programs,  Life
Safety Code Waivers and other waiver  history,  facility plans of correction and
compliance  status, to the extent required or requested by the applicable agency
or official),  in each case to the extent  available to such Relevant IHS Entity
or IHS  Licensee  or  Affiliate  thereof,  (iii) the filing of such  notices and
documents with such agencies or officials as such agency or official may require
or request.  Notwithstanding  the  foregoing,  the SNH Entities  shall  promptly
reimburse the IHS Licensees and the Servicer for all  third-party  out-of-pocket
costs and expenses  incurred in  connection  with this  Section 5.5,  including,
without limitation,  reasonable attorneys' fees and expenses.  The provisions of
this  Section  5.5 shall  survive  the  termination  of the  obligations  of the
Relevant IHS Entities and IHS Licensees under Section 8.

         5.6 Each party hereto  agrees to comply in all material  respects  with
all provisions of federal and state law applicable to it in connection  with the
operation of the Facilities.

6. Duty of Servicer; Indemnity; Prohibited Transactions.

         6.1 Servicer  shall render the  services  called for  hereunder in good
faith.

         6.2 SNH,  Manager,  Advisors  and the Proposed  Operators,  jointly and
severally,  agree to indemnify and hold Servicer, IHS and each subsidiary of IHS
and  their  respective  shareholders,  officers,  directors,  advisors,  agents,
representatives  and employees (each an "Indemnified  Party")  harmless from and
against all Damages (as hereinafter  defined),  arising out of (i) any action or
omission of Servicer in  connection  with the  provision of services  under this
Agreement  taken or omitted to be taken in good faith after the Effective  Time,
(ii) any injury to any person  suffered at any Facility,  or the rendering of or
the  failure to render  services  by, any  Personnel,  Manager,  Advisors or any
Proposed Operator or their respective  employees,  agents or  representatives or
any other person  performing  services for or on behalf of Manager,  Advisors or
any Proposed  Operator  (including,  without  limitation,  any obligations under
Section 1 above),  or the operation of any Facility  after the  Effective  Time,
(iii) the employment or termination of any of the Personnel  after the Effective
Time,  including  without  limitation,   any  wages,  salaries,  payroll  taxes,
reimbursements,  sick pay, paid time off or other vacation  benefits,  severance
and all other  compensation and benefits  incurred,  earned or accrued after the
Effective  Time,  whether  under any  agreement,  benefit  plan or as imposed by
applicable law, (iv) arising out of any action taken or omitted by any Personnel
after the Effective  Time, or (v) arising out of any failure to make any payment
when due  under  Section  4 above or any  refusal  to  approve  any  payment  in
accordance  with Section 4 above;  provided that no  Indemnified  Party shall be
entitled to  indemnification  for any action taken or omitted to be taken to the
extent  resulting  from  such  Indemnified  Party's  gross  negligence,  willful
misconduct or fraud, provided further that it is understood that the actions and
omissions of the Personnel shall not be deemed to be the actions or omissions of
any IHS Entity,  notwithstanding  that such Personnel may be employees of an IHS
Entity or under the supervision of any IHS Entity. The term "Damages" shall mean
all actual monetary and non-consequential losses, damages, liabilities,  claims,
demands,   penalties,   judgments,  costs  and  expenses,   including,   without
limitation,  reasonable legal fees,  suffered by an Indemnified Party, but shall
not, in any event,  include any Pre-Effective Time Obligation (as defined in the
Settlement  Agreement).  The  provisions  of this Section 6.2 shall  survive the
termination of this Agreement.

                                      -14-
<PAGE>

         6.3  Neither  Servicer  nor  any  person,  firm or  corporation  which,
directly or indirectly owns or controls,  is owned or controlled by, or is under
direct or  indirect  common  ownership  or control  with  Servicer or any person
related by blood or marriage  within the third degree to persons in such control
(an  "Affiliate"),  shall receive any remuneration  (other than  reimbursement),
whether  direct or  indirect,  for any  purchases  of goods or services  made on
behalf of the Relevant Licensee,  the Proposed Operator or Manager,  and neither
Servicer nor any  Affiliate  shall  markup,  increase  the price,  or obtain any
premium  for goods or  services  purchased  by  Servicer on behalf of or for the
benefit of Relevant Licensee, Proposed Operator or Manager.

7.  Relationship  of Parties.  No party to this  Agreement is a partner or joint
venturer  with any other party,  and nothing  herein shall be construed so as to
make  them  such  partners  or  joint  venturers  or  impose  on any of them any
liability as partners or joint venturers.

8. Term and Termination.

         8.1 Unless the Relevant IHS Entities shall  otherwise agree in writing,
on the five-month  anniversary of the date hereof, their obligations as Servicer
hereunder shall be deemed to have been satisfied, terminated and discontinued in
full,  and  Manager  shall be  deemed  to have  assumed  responsibility  for the
performance  thereof.  Servicer and Manager  agree to negotiate any extension of
such five month period in good faith;  provided that in no event shall  Servicer
be required to negotiate any  extension to perform any services  after the first
anniversary of the Effective Time.

         8.2 It is the intention of Manager to assume responsibility for many of
the services  provided by Servicer and  described in Sections 1 and 2 during the
term of this Agreement.  In connection  therewith,  at any time and from time to
time after the date hereof, Manager may advise Servicer, by written notice, that
Servicer may  discontinue  the provision of certain  services  described in such
notice,   in  which  event   Manager  shall  be  deemed  to  have  assumed  full
responsibility  for  providing  such service  hereunder in lieu of Servicer (but
such  discontinuance  of services  shall not  constitute a  termination  of this
Agreement or affect the release referred to in Section 3 above).

         8.3 Subject to the provisions of Section 8.1 that limit the obligations
of Servicer under this  Agreement,  the term of this Agreement shall commence at
the  Effective  Time and shall  terminate on the third  anniversary  of the date
hereof;  provided that Manager or SNH may terminate this Agreement upon not less
than 10 days' prior written notice to the other parties hereto.  Notwithstanding
anything to the contrary  contained in this  Agreement or any Sublease,  on such
date (a "Sublease  Termination  Date") as any IHS Licensee shall receive written
notice from Manager under  Section 5.4  confirming  that the Necessary  Licenses
shall  have  been  obtained  by a  Proposed  Operator  with  respect  to any IHS
Facility,  all of the  obligations  of the  applicable  IHS Licensee  under this
Agreement  (other  than in its  capacity as  "Servicer",  subject to Section 8.1
above and the last  sentence  of  Section 1 above) and the  applicable  Sublease
shall terminate with respect to such IHS Facility.  After the first  anniversary
of the Effective  Time,  Manager shall be obligated to pay a fee (the  "Sublease
Extension  Fee") to IHS at the rate of  $2,000  per month per State in which the
Sublease Termination Date has not occurred with respect to all IHS Facilities in
such State;  provided,  however,  that until the Sublease Termination Date shall
have occurred with respect to all of the IHS  Facilities,  the minimum  Sublease

                                      -15-
<PAGE>

Extension  Fee  shall  be at the  rate of  $10,000  per  month.  Notwithstanding
anything to the contrary  contained in this Agreement or any Sublease,  each IHS
Licensee shall have the right, at any time after the earlier to occur of (x) the
termination  of this  Agreement and (y) the first  anniversary  of the Effective
Time, to terminate the obligations of such IHS Licensee under this Agreement and
each applicable  Sublease (by giving notice of such  termination to the Manager)
on the earlier to occur of: (x) the last  administrative bar date established by
order of the Court (as such term is defined in the Settlement  Agreement) and of
which the SNH  Entities  shall  have  received  timely  notice,  (y) the  second
anniversary  of the  Effective  Time,  and (z) such  date as this  Agreement  is
terminated.  Notwithstanding  the  foregoing,  if Manager shall receive  written
notice from the applicable  governmental licensing authority with respect to the
Necessary  Licenses for any IHS Facility  that the  Proposed  Operator  shall be
denied any Necessary  License with respect to such IHS  Facility,  then such IHS
Facility shall not  thereafter be included for purposes of  determining  whether
any  Sublease  Extension  Fee shall be payable.  If the Manager or the  Proposed
Operator shall be in default of their  obligations  hereunder to Servicer or the
IHS  Licensees  for more than 30 days  after  written  notice  thereof  from the
Servicer or the IHS  Licensees  to Manager and the Proposed  Operator,  then the
Servicer  and/or the IHS Licensees shall be entitled to terminate this Agreement
and/or any of the Sublease Agreements.

         8.4 Upon the effective date of  termination  of the  obligations of the
Relevant IHS Entities, as Servicer, in accordance with Section 8.1, the Relevant
IHS Entities shall forthwith:

                  (a) pay  over to the  relevant  Proposed  Operator  all  money
         collected  pursuant to this Agreement owned by the Proposed Operator or
         to which the Proposed  Operator is otherwise  entitled pursuant to this
         Agreement or the Settlement Agreement;

                  (b) deliver to Manager, the Relevant Licensee and the Proposed
         Operator a full accounting for all monies then held by the Relevant IHS
         Entities; and

                  (c)  deliver to  Manager,  the  Relevant  Licensee or Proposed
         Operator, as the case may be, all property and documents of any of them
         then in the custody of the Relevant IHS Entity.

9. Notices. All notices and other communications provided for hereunder shall be
in  writing  (including  telecopy  communication)  and  mailed,   telecopied  or
delivered addressed as follows:

                  (a) if to SNH or any Proposed Operator, to it at:

                           400 Centre Street
                           Newton, MA  02458
                           Telecopy no.:  (617) 796-8349
                           Attention:  President

                                      -16-
<PAGE>

                  (b) with copy to:

                           SULLIVAN & WORCESTER LLP
                           One Post Office Square
                           Boston, MA 02109
                           Telecopy no.:  (617) 338-2880
                           Attention:  Alexander A. Notopoulos, Jr., Esq.

                  (c) if to Manager, to it at:

                           400 Centre Street
                           Newton, MA 02458
                           Telecopy no.:  (617) 332-2261
                           Attention:  Treasurer

                  (d) if to any Relevant IHS Entity or any IHS  Licensee,  to it
                      at:

                           c/o Integrated Health Services, Inc.
                           The Highlands
                           910 Ridgebrook Road
                           Sparks, MD 21152
                           Telecopy no.:  (410) 773-1020
                           Attention:  Daniel J. Booth, Senior Vice President,
                                       Finance

                  (e) with a copy to:

                           Parker Chapin LLP
                           The Chrysler Building
                           405 Lexington Avenue
                           New York, NY  10174
                           Telecopy no.:  (212) 704-6137
                           Attention:  Charles P. Greenman, Esq.

                           and to

                           Blass & Driggs
                           461 Fifth Avenue
                           New York, NY  10017
                           Telecopy no.:  (212) 447-5428
                           Attention:  Andrew S. Bogen, Esq.

or to such other  address as may  hereafter be  designated by any party for such
purpose.  Each such  notice  shall be  effective  (i) upon  receipt  and written
acknowledgment,  if hand  delivered,  (ii) upon the first Business Day following
the day when  telecopied,  if  transmitted  by  telecopier,  (iii) upon the next
Business Day after being  placed in the  possession  of a  recognized  overnight
delivery service,  if sent by a recognized  overnight delivery service,  or (iv)
upon the  expiration  of the fifth  Business  Day after being  deposited  in the
mails, if mailed.

                                      -17-
<PAGE>

10.  Liability of IHS Entity.  No IHS Entity shall have any liability for breach
of any of its obligations  under this Agreement,  except for breaches  resulting
from  fraud,  bad  faith,  gross  negligence  or  willful  misconduct;  it being
understood  that the actions and omissions of the Personnel  shall not be deemed
to be the  actions or  omissions  of any IHS Entity,  notwithstanding  that such
Personnel may be employees of an IHS Entity or under the  supervision of any IHS
Entity.  The  liability  of  Servicer  shall  survive  the  termination  of this
Agreement.

11. Proprietary Material. The Manager and the Proposed Operators acknowledge and
agree that the Proprietary Property (as defined in the Settlement  Agreement) is
and shall remain (along with any corresponding copyrights or similar rights) the
sole  property of Servicer  and shall not at any time be directly or  indirectly
used, distributed, disclosed, copied or otherwise employed by the Manager or any
Proposed  Operator,  except in the  provision  of the  services by the  Servicer
during  the  term  of  this  Agreement  or to  the  extent  contemplated  by the
Settlement  Agreement.  Upon termination of this Agreement,  the Manager and the
Proposed Operators shall return to the Servicer all such Proprietary Property in
their  possession  or control,  and use their best  efforts to ensure that their
employees  have not  retained  any  Proprietary  Property  and upon  request  by
Servicer,  confirm  compliance with the foregoing in writing.  The provisions of
this Section 11 shall survive the termination of this Agreement.

12. Miscellaneous.

         12.1  Amendments.  Neither this  Agreement nor any of the terms thereof
may be terminated, amended, supplemented, waived or modified orally, but only by
an instrument in writing  signed by each party (x) against whom the  enforcement
of the  termination,  amendment,  supplement,  waiver or  modification  shall be
sought or (y) who is affected  (or whose  rights,  obligations  or remedies  are
affected) by such termination, amendment, supplement, waiver or modification.

         12.2  Non-Assignability.  This  Agreement  shall not be assigned by any
party without the consent of each other party hereto,  and this Agreement  shall
be binding upon and shall inure to the benefit of consented  to  successors  and
assigns.

         12.3  GOVERNING  LAW.  THE  PROVISIONS  OF  THIS  AGREEMENT   SHALL  BE
CONSTRUED,  INTERPRETED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
NEW YORK.

         12.4  Entire  Agreement.  This  Agreement,   together  with  the  other
agreements  contemplated  by,  referred  to in, or  contemplated  by  agreements
referred to herein,  together  constitute  the entire  agreement  of the parties
hereto with respect to the subject  matter  hereof and  supersede and cancel any
preexisting agreements with respect to such subject matter.

         12.5  Headings.  The  headings of the various  articles,  sections  and
subsections  of this Agreement have been inserted for the purpose of convenience
of reference  only,  are not a part of this Agreement and shall not be deemed in
any manner to modify, explain, enlarge or restrict any of the provisions of this
Agreement.

         12.6  Attorney's  Fees and  Costs.  If any  action is  brought  for the
enforcement  of this  Agreement,  or because of a  dispute,  breach,  default or
misrepresentation  in connection  with any

                                      -18-
<PAGE>

of the provisions of this Agreement,  the prevailing  party shall be entitled to
recover  reasonable  attorneys'  fees and other costs incurred in that action in
addition to any other relief to which it may be entitled.

         12.7 Confidentiality. The parties agree not to disclose or permit their
respective representatives, attorneys, auditors or agents to disclose, except as
may be required by law or performance  hereunder,  any  confidential  non-public
information  of the others which is obtained by any of them in  connection  with
the transactions contemplated by this Agreement.

         12.8 Cooperation;  Commercially  Reasonable Efforts.  The parties shall
cooperate in good faith in connection with all actions to be taken to consummate
the  transactions  contemplated  by,  and to enforce  the rights  created by and
perform the responsibilities imposed by, this Agreement.

         12.9   Counterparts.   This   Agreement  may  be  executed  in  several
counterparts,  each of which shall be deemed an original,  but such counterparts
together shall constitute one and the same instrument.

         12.10  Responsibility  for Compliance with Law, Etc. During the term of
this Agreement, each Relevant Licensee will use reasonable commercial efforts to
keep in full force and effect all licenses, permits, approvals,  authorizations,
provider  agreements,  and certificates or  determinations of need necessary for
such  Relevant  Licensee  to occupy and operate  its  Facilities  and to receive
Medicare   and   Medicaid   reimbursement   for   services   provided   therein.
Notwithstanding  anything to the  contrary  contained  in this  Agreement or the
Settlement  Agreement,  each of the SNH Entities agrees and acknowledges that no
IHS Licensee  shall be obligated to assume  and/or  assign to any SNH Entity any
Medicare  or  Medicaid  provider  numbers  or  agreements;   provided  that  the
applicable  IHS Licensees  shall use their  commercially  reasonable  efforts to
maintain  such  provider  agreements  and numbers  until they no longer hold the
applicable licenses (so long as maintaining such provider agreements and numbers
do not require  that the IHS  Licensees  assume  such  provider  agreements  and
numbers). The SNH Entities are assuming all risk arising out of their failure to
obtain Medicare and/or Medicaid  provider  numbers or agreements with respect to
any Facilities.  SNH,  Manager and each Proposed  Operator jointly and severally
agree to indemnify each IHS Licensee and Relevant IHS Entity against all Damages
incurred  by such  IHS  Licensee  or  Relevant  IHS  Entity  arising  out of the
discharge from any IHS Facility of any Medicare or Medicaid  beneficiary who was
a resident or patient of such IHS  Facility  immediately  prior to the time that
the  applicable  IHS  Licensee  ceases to hold a Medicare or Medicaid  number or
provider agreement,  resulting from the applicable Proposed Operator's inability
to timely  obtain a Medicare or Medicaid  provider  number or agreement  (to the
extent that such failure to obtain such provider number or agreement was not due
to the act or omission of any IHS Entity).  The provisions of this Section 12.10
shall survive the termination of this Agreement.

         12.11 THE  DECLARATION OF TRUST OF SNH, DATED DECEMBER 16, 1998, A COPY
OF WHICH,  TOGETHER WITH ALL  AMENDMENTS  THERETO (THE  "DECLARATION"),  IS DULY
FILED IN THE OFFICE OF THE DEPARTMENT OF  ASSESSMENTS  AND TAXATION OF THE STATE
OF MARYLAND,  PROVIDES THAT THE NAME "SENIOR HOUSING PROPERTIES TRUST" REFERS TO
THE TRUSTEES

                                      -19-
<PAGE>

UNDER  THE  DECLARATION  COLLECTIVELY  AS  TRUSTEES,  BUT  NOT  INDIVIDUALLY  OR
PERSONALLY, AND THAT NO TRUSTEE, OFFICER, SHAREHOLDER,  EMPLOYEE OR AGENT OF SNH
SHALL  BE  HELD  TO ANY  PERSONAL  LIABILITY,  JOINTLY  OR  SEVERALLY,  FOR  ANY
OBLIGATION OF, OR CLAIM AGAINST,  SNH. ALL PERSONS DEALING WITH SNH, IN ANY WAY,
SHALL  LOOK  ONLY TO THE  ASSETS  OF  SNH,  FOR  THE  PAYMENT  OF ANY SUM OR THE
PERFORMANCE OF ANY OBLIGATION.

         12.12 Amendment to Settlement  Agreement.  This Agreement is subject to
the terms of an  Amendment  to  Settlement  Agreement  dated as of June 29, 2000
among,  inter alia,  Integrated  Health Services,  Inc., SNH, SPTIHS,  HRES1 and
HRES2, the Manager, the Proposed Operators and the Licensees.

                                      -20-
<PAGE>

         IN WITNESS  WHEREOF,  the  parties  have caused  this  Agreement  to be
executed under seal by their duly  authorized  officers as of the date first set
forth above.

                                 IHS:

                                 INTEGRATED HEALTH SERVICES, INC., a
                                 Delaware Corporation

                                 By:  /s/ Daniel J. Booth
                                      Its:

                                 IHS LICENSEES:

                                 ECA HOLDINGS, INC., a Delaware corporation
                                 ECA PROPERTIES, INC., a Delaware corporation
                                 COMMUNITY CARE OF NEBRASKA, INC., a
                                   Delaware corporation,
                                 W.S.T. CARE, INC., a Nebraska corporation
                                 QUALITY CARE OF LYONS, INC., a Nebraska
                                   corporation
                                 INTEGRATED HEALTH SERVICES AT
                                   GRANDVIEW CARE CENTER, INC.,
                                   a Delaware corporation
                                 QUALITY CARE OF COLUMBUS, INC., a
                                   Nebraska corporation
                                 MARIETTA/SCC, INC., a Georgia corporation
                                 GLENWOOD/SCC, INC., a Georgia corporation
                                 DUBLIN/SCC, INC., a Georgia corporation
                                 COLLEGE PARK/SCC, INC., a Georgia
                                   corporation
                                 IHS ACQUISITION NO. 112, INC., a Delaware
                                   corporation
                                 IHS ACQUISITION NO. 113, INC., a Delaware
                                   corporation
                                 IHS ACQUISITION NO. 175, INC., a Delaware
                                   corporation

                                 By:  /s/ Daniel J. Booth
                                          Its:

                                      -21-
<PAGE>

                                 SNH:

                                 SENIOR HOUSING PROPERTIES TRUST, a
                                 real estate investment trust

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

                                 MANAGER:

                                 FIVE STAR QUALITY CARE, INC., a Delaware
                                 corporation

                                 By:  /s/ Ajay Saini
                                      Its Treasurer

                                      -22-
<PAGE>

                                 PROPOSED OPERATORS:

                                 SHOPCO-COLORADO, LLC
                                 SHOPCO-CT, LLC
                                 SHOPCO-GA, LLC
                                 SHOPCO-IA, LLC
                                 SHOPCO-KS, LLC
                                 SHOPCO-MI, LLC
                                 SHOPCO-MO, LLC
                                 SHOPCO-NE, LLC
                                 SHOPCO-WY, LLC, each a Delaware limited
                                 liability company

                                 By:  /s/ Jennifer B. Clark
                                      Its: Assistant Secretary

                                 SNH-NEBRASKA, INC.,
                                 SNH-IOWA, INC.,
                                 SNH-MICHIGAN, INC., each a Delaware
                                 corporation

                                 By:  /s/ Jennifer B. Clark
                                      Its: Assistant Secretary

                                 ADVISORS:

                                 ADVISORS HEALTHCARE GROUP, INC, a
                                 Delaware corporation

                                 By:   /s/ Jennifer B. Clark
                                       Its: Assistant Secretary

                                      -23-
<PAGE>
<TABLE>
<CAPTION>

                                                  Schedule A-1

                                                 IHS Facilities

                               Facility                                      Licensee           Proposed Operator
------------------------------------------------------------------------ ------------------ --------------------------
<S>                                                                       <C>                <C>

Integrated Health Services at Canon City                                   ECA Holdings,      Shopco-Colorado, LLC
515 Fairview Street                                                        Inc. ("ECA")         ("Colorado LLC")
Canon City, CO 81212

Integrated Health Services at Springs Village                                   ECA               Colorado LLC
110 W. Van Buren
Colorado Springs, CO 80907

Integrated Health Services at Delta                                             ECA               Colorado LLC
2050 South Main Street
Delta, CO 81416

Integrated Health Services at Mantey Heights                                    ECA               Colorado LLC
2823 Patterson Road
Grand Junction, CO 81506

Integrated Health Services at LaVilla Grande                                 ECA (DBA,            Colorado LLC
2501 Little Bookcliff Drive                                                 Integrated
Grand Junction, CO 81501                                                  Health Services
                                                                            at LaVilla
                                                                              Grande)

College Park Health Care Center                                            College Park/         Shopco-GA, LLC
1765 Temple Avenue                                                           SCC, Inc.             ("GA LLC")
College Park, GA 30337

Community Care of America at Dublin                                      Dublin/SCC, Inc.            GA LLC
606 Simmons Street, Box 549
Dublin, GA 31040

Community Care of America at Conner                                          Glenwood/               GA LLC
303 Fifth Street, P.O. Box 618                                               SCC, Inc.
Glenwood, GA 30428

Community Care of America at Marietta                                        Marietta/               GA LLC
1480 Sandtown Road                                                           SCC, Inc.
Marietta, GA 30060

Integrated Health Services of Clarinda                                          ECA               Shopco-IA LLC
600 Manor Drive                                                                                    ("IA LLC")
Clarinda, IA 51632

Integrated Health Services of Council Bluffs South                              ECA                  IA LLC
34 Northcrest Drive
<PAGE>
<CAPTION>
                               Facility                                      Licensee           Proposed Operator
------------------------------------------------------------------------ ------------------ --------------------------
<S>                                                                       <C>                <C>

Council Bluffs, IA 51501

Integrated Health Services at Mediapolis                                        ECA                  IA LLC
608 Prairie Street
Mediapolis, IA 52637

IHS at Pacific Place                                                            ECA                  IA LLC
20937 Hwy. 385 West
Pacific Junction, IA 51561

Integrated Health Services of Winterset                                         ECA                  IA LLC
1015 West Summit
Winterset, IA 50273

Integrated Health Services of Iowa at Des Moines                            Integrated           SNH-IOWA, Inc.
2348 E. Ninth Street                                                     Health Services,          ("IA INC.")
Des Moines, IA 50316                                                           Inc.

IHS at Park Place                                                               ECA                  IA INC
114 East Green Street
Glenwood, IA 51534

Integrated Health Services of Woodhaven                                         ECA              Shopco-KS, LLC
510 W. 7th Street
Ellinwood, KS 67526

Farmington Health Care Center                                             IHS Acquisition        Shopco-MI, LLC
34225 Grand River                                                          No. 112, Inc.           ("MI LLC")
Farmington, MI 48335-3512

IHS of Michigan at Howell                                                       IHS                  MI LLC
3003 W. Grand River Avenue                                                Acquisition No.
Howell, MI 48843-8539                                                        113, Inc.

IHS at Tarkio                                                                   ECA              Shopco-MO, LLC
300 Cedar Street
Tarkio, MO 64491

Ainsworth Care Center                                                     Community Care         Shopco-NE, LLC
143 N. Fullerton Street                                                  of Nebraska, Inc.         ("NE LLC")
Ainsworth, NE 69210                                                           ("CCN")

IHS at Ashland                                                                  CCN                  NE LLC
1700 Furnas Street
Ashland, NE 68003

                                                       -2-
<PAGE>
<CAPTION>
                               Facility                                      Licensee           Proposed Operator
------------------------------------------------------------------------ ------------------ --------------------------
<S>                                                                       <C>                <C>
Blue Hill Care Center                                                           CCN                  NE LLC
P.O. Box 156, 414 N. Wilson
Blue Hill, NE 68930

IHS at Edgar                                                                    CCN                  NE INC
RR 1 Box 83A, 106 5th Street
Edgar, NE 68935

Wedgewood Care Center                                                           ECA                  NE LLC
800 Stoeger Drive
Grand Island, NE 68803

IHS at Gretna                                                                   CCN                  NE LLC
700 Highway 6
Gretna, NE 68028

IHS at Lyons                                                              Quality Care of            NE LLC
1035 Diamond Street                                                         Lyons, Inc.
Lyons, NE 68038

IHS at Milford                                                             W.S.T. Care,              NE LLC
P.O. Box D, 1100 W. First Street                                               Inc.
Milford, NE 68405

IHS at Sutherland                                                               CCN                  NE LLC
P.O. Box 307, 333 Maple Street
Sutherland, NE 69165

IHS of Waverly                                                                  CCN                  NE LLC
P.O. Box 160, 11041 N. 137th Street
Waverly, NE 68462

Grandview Manor                                                           ECA Properties,         SNH-Nebraska
Broad Street & Highway 4                                                       Inc.                ("NE INC")
Campbell, NE 68932

Integrated Health Services of Central City                                      CCN                  NE INC
2720 South 17th Avenue
Central City, NE 68826

Mory's Haven                                                              Quality Care of            NE INC
1112 Fifteenth Street                                                     Columbus, Inc.
Columbus, NE 68601

Exeter Care Center                                                              CCN                  NE INC
425 South Empire Avenue, P.O. Box 59
Exeter, NE 68351

                                                      -3-
<PAGE>
<CAPTION>
                               Facility                                      Licensee           Proposed Operator
------------------------------------------------------------------------ ------------------ --------------------------
<S>                                                                       <C>                <C>

Utica Community Center                                                          CCN                  NE INC
1350 Centennial Avenue
Utica, NE 68456

IHS at Laramie                                                                  ECA              Shopco-WY, LLC
503 South 18th Street                                                                              ("WY LLC")
Laramie, WY 82070

Community Care of America at Worland                                            ECA                  WY LLC
1901 Howell
Worland, WY 82401
</TABLE>

                                                      -4-

<PAGE>
<TABLE>
<CAPTION>

                                                  Schedule A-2

                                               Advisors Facilities

                        Facility                                     Licensee                  Proposed Operator
---------------------------------------------------------- ------------------------------ ----------------------------
<S>                                                                <C>                    <C>

Clifton House Rehabilitation Center                                  Advisors              SHOPCO-CT, LLC ("CT LLC")
181 Clifton Street, New Haven, CT 06513

Greenery Rehabilitation Center at Waterbury                          Advisors                       CT-LLC
177 Whitewood Road, Waterbury, CT 06708

Greenery Extended Care Center at Cheshire                            Advisors                       CT-LLC
50 Hazel Drive, Cheshire, CT 06410

</TABLE>

<PAGE>
<TABLE>
<CAPTION>
                                                      Schedule B-1

                                                   Necessary Licenses

                           Facility                                              Necessary Licenses
--------------------------------------------------------------- ------------------------------------------------------
<S>                                                            <C>
Integrated Health Services at Canon City                        License to Operate an 85-bed Long-Term Care Facility
515 Fairview Street
Canon City, CO 81212

Integrated Health Services at Springs Village                   License to Operate a 100-bed Long-Term Care Facility
110 W. Van Buren
Colorado Springs, CO 80907

Integrated Health Services at Delta                             License to Operate a 90-bed Long-Term Care Facility
2050 South Main Street                                          License to Operate a 6-bed Personal Care Boarding
Delta, CO 81416                                                 Home

Integrated Health Services at Mantey Heights                    License to Operate an 82-bed Long-Term Care Facility
2825 Patterson Road
Grand Junction, CO 81506

Integrated Health Services at LaVilla Grande                    License to Operate a 96-bed Long-Term Care Facility
2501 Little Bookcliff Drive
Grand Junction, CO 81501

College Park Health Care Center                                 Permit to Operate a 100-bed Nursing Home
1765 Temple Avenue
College Park, GA 30337

Community Care of America at Dublin                             Permit to Operate a 130-bed Nursing Home
606 Simmons Street, Box 549
Dublin, GA 31040

Community Care of America at Conner                             Permit to Operate a 62-bed Nursing Home
303 Fifth Street, P.O. Box 618
Glenwood, GA 30428

Community Care of America at Marietta                           Permit to Operate a 109-bed Nursing Home
1480 Sandtown Road
Marietta, GA 30060

Integrated Health Services of Clarinda                          License to Operate a 117-bed Nursing Facility
600 Manor Drive
Clarinda, IA 51632

Integrated Health Services of Council Bluffs South              License to Operate a 62-bed Nursing Facility
34 Northcrest Drive
Council Bluffs, IA 51501

Integrated Health Services at Mediapolis                        License to Operate a 62-bed Nursing Facility
608 Prairie Street
Mediapolis, IA 52637

                                                          -1-
<PAGE>
<CAPTION>

                           Facility                                              Necessary Licenses
--------------------------------------------------------------- ------------------------------------------------------
<S>                                                            <C>
IHS at Pacific Place                                            License to Operate a 12-bed Intermediate Care
20937 Hwy. 385 West                                             Facility for the Mentally Retarded
Pacific Junction, IA 51561

Integrated Health Services of Winterset                         License to Operate an 80-bed Nursing Facility
1015 West Summit                                                License to Operate a 19-bed Residential Care Facility
Winterset, IA 50273

Integrated Health Services of Iowa at Des Moines                License to Operate a 93-bed Nursing Facility
2348 E. Ninth Street
Des Moines, IA 50316

IHS at Park Place                                               License to Operate a 128-bed Intermediate Care
114 East Green Street                                           Facility for the Mentally Retarded
Glenwood, IA 51534

Integrated Health Services of Woodhaven                         License to Operate a 54-bed Adult Care Home
510 W. 7th Street
Ellinwood, KS 67526

Farmington Health Care Center                                   Certificate of Need
34225 Grand River                                               License to Operate a 153-bed Nursing Home (Long Term
Farmington, MI 48335-3512                                       Care)

IHS of Michigan at Howell                                       Certificate of Need
3003 W. Grand River Avenue                                      License to Operate a 176-bed Nursing Home (Long Term
Howell, MI 48843-8539                                           Care)

IHS at Tarkio                                                   License to Operate a 95-bed Skilled Nursing Facility
300 Cedar Street
Tarkio, MO 64491

Ainsworth Care Center                                           License to Operate a 50-bed Skilled Nursing Facility
143 N. Fullerton Street                                         (Distinct Part) (Outpatient PT/Rehab)
Ainsworth, NE 69210

IHS at Ashland                                                  License to Operate a 101-bed Skilled Nursing/NSG
1700 Furnas Street                                              Facility (Distinct Part)
Ashland, NE 68003                                               (Outpatient PT/Rehab, Alzheimer Unit)

Blue Hill Care Center                                           License to Operate a 68-bed Skilled Nursing/NSG
P.O. Box 156                                                    Facility (Distinct part)(Alzheimer Unit)
414 N. Wilson
Blue Hill, NE 68930

IHS at Edgar                                                    License to Operate a 54-bed Skilled Nursing/NSG
RR 1 Box 83A                                                    Facility (Distinct Part)
106 5th Street
Edgar, NE 68935

Wedgewood Care Center                                           License to Operate a 74-bed Skilled Nursing/NSG
800 Stoeger Drive                                               Facility (Outpatient Rehab, Alzheimer Unit)
Grand Island, NE 68803

                                                          -2-
<PAGE>
<CAPTION>

                           Facility                                              Necessary Licenses
--------------------------------------------------------------- ------------------------------------------------------
<S>                                                            <C>
IHS at Gretna                                                   License to Operate a 63-bed Skilled Nursing Facility
700 Highway 6
Gretna, NE 68028

IHS at Lyons                                                    License to Operate an 82-bed Skilled Nursing Facility
1035 Diamond Street
Lyons, NE 68038

IHS at Milford                                                  License to Operate a 60-bed Skilled Nursing/NSG
P.O. Box D                                                      Facility (Distinct Part)
1100 W. First Street
Milford, NE 68405

IHS at Sutherland                                               License to Operate a 62-bed Skilled Nursing/NSG
P.O. Box 307                                                    Facility (Distinct Part)
333 Maple Street                                                (Alzheimer Unit)
Sutherland, NE 69165

IHS of Waverly                                                  License to Operate a 51-bed Skilled Nursing Facility
P.O. Box 160
11041 N. 137th Street
Waverly, NE 68462

Grandview Manor                                                 License to Operate a 45-bed Skilled Nursing Facility
Broad Street & Highway 4
Campbell, NE 68932

Integrated Health Services of Central City                      License to Operate a 70-bed Skilled Nursing
2720 South 17th Avenue                                          Facility/Nursing Facility Distinct Part
Central City, NE 68826

Mory's Haven                                                    License to Operate a 48-bed Skilled Nursing Facility
1112 Fifteenth Street                                           Dual
Columbus, NE 68601

Exeter Care Center                                              License to Operate a 56-bed Skilled Nursing
425 South Empire Avenue                                         Facility/Nursing Facility Distinct Part
P.O. Box 59
Exeter, NE 68351

Utica Community Care Center                                     License to Operate a 41-bed Skilled Nursing Facility
1350 Centennial Avenue                                          Dual
Utica NE 68456

IHS at Laramie                                                  License to Operate a 144-bed Nursing Care Facility
503 South 18th St.
Laramie, WY 82070

Community Care of America at Worland                            License to Operate an 87-bed Nursing Facility
1901 Howell
Worland, WY 82401

                                                          -3-
<PAGE>
<CAPTION>

                           Facility                                              Necessary Licenses
--------------------------------------------------------------- ------------------------------------------------------
<S>                                                            <C>

Clifton House Rehabilitation Center                              License to operate a 195 bed chronic and 181
Clifton Street, New Haven, CT 06513                              convalescent nursing home

Greenery Rehabilitation Center at Waterbury                     License to operate a 180 bed chronic and
177 Whitewood Road, Waterbury, CT 06708                         convalescent nursing home

Greenery Extended Care Center at Cheshire                       License to operate 210 bed chronic and convalescent
50 Hazel Drive, Cheshire, CT 06410                              nursing home

</TABLE>

                                                          -4-
<PAGE>
<TABLE>
<CAPTION>

                                                      Schedule B-2

                                                     Other Licenses

                           Facility                                                 Other Licenses
---------------------------------------------------------------- -----------------------------------------------------
<S>                                                             <C>

Integrated Health Services at Canon City                         Medicare/Medicaid certification
515 Fairview Street                                              Medicare provider agreement
Canon City, CO 81212                                             Medicaid provider agreement

Integrated Health Services at Springs Village                    Medicare/Medicaid certification
110 W. Van Buren                                                 Medicare provider agreement
Colorado Springs, CO 80907                                       Medicaid provider agreement

Integrated Health Services at Delta                              Medicare/Medicaid certification
2050 South Main Street                                           Medicare provider agreement
Delta, CO 81416                                                  Medicaid provider agreement

Integrated Health Services at Mantey Heights                     Medicare/Medicaid certification
2823 Patterson Road                                              Medicare provider agreement
Grand Junction, CO 81506                                         Medicaid provider agreement

Integrated  Health  Services at LaVilla Grande                   Medicare/Medicaid  certification
2501 Little Bookcliff Drive                                      Medicare provider agreement
Grand Junction, CO 81501                                         Medicaid provider agreement

College Park Health Care Center                                  Medicare/Medicaid certification
1765 Temple Avenue                                               Medicare provider agreement
College Park, GA 30337                                           Medicaid provider agreement

Community Care of America at  Dublin                             Medicare/Medicaid certification
606 Simmons Street, Box 549                                      Medicare provider agreement
Dublin, GA 31040                                                 Medicaid provider agreement

Community Care of America at Conner                              Medicare/Medicaid certification
303 Fifth Street, P.O. Box 618                                   Medicare provider agreement
Glenwood, GA 30428                                               Medicaid provider agreement

Community Care of America at Marietta                            Medicare/Medicaid certification
1480 Sandtown Road                                               Medicare provider agreement
Marietta, GA 30060                                               Medicaid provider agreement

Integrated Health Services of Clarinda                           Medicare/Medicaid certification
600 Manor Drive                                                  Medicare provider agreement
Clarinda, IA 51632                                               Medicaid provider agreement

Integrated Health Services of Council Bluffs South               Medicare/Medicaid certification
34 Northcrest Drive                                              Medicare provider agreement
Council Bluffs, IA 51501                                         Medicaid provider agreement
-
Integrated Health Services at Mediapolis                         Medicare/Medicaid certification
608 Prairie Street                                               Medicare provider agreement
Mediapolis, IA 52637                                             Medicaid provider agreement

IHS at Pacific Place                                             Medicaid certification
20937 Hwy. 385 West                                              Medicaid provider agreement
Pacific Junction, IA 51561

                                                          -1-
<PAGE>
<CAPTION>

                           Facility                                              Other Licenses
--------------------------------------------------------------- ------------------------------------------------------
<S>                                                            <C>

Integrated Health Services of Winterset                          Medicare/Medicaid certification
1015 West Summit                                                 Medicare provider agreement
Winterset, IA 50273                                              Medicaid provider agreement

Integrated Health Services of Iowa at Des Moines                 Medicare/Medicaid certification
2348 E. Ninth Street                                             Medicare provider agreement
Des Moines, IA 50316                                             Medicaid provider agreement

IHS at Park Place                                                Medicaid certification
114 East Green Street                                            Medicaid provider agreement
Glenwood, IA 51534

Integrated Health Services of Woodhaven                          Medicare/Medicaid certification
510 W. 7th Street                                                Medicare provider agreement
Ellinwood, KS 67526                                              Medicaid provider agreement

Farmington Health Care Center                                    Medicare/Medicaid certification
34225 Grand River                                                Medicare provider agreement
Farmington, MI 48335-3512                                        Medicaid provider agreement

IHS of Michigan at Howell                                        Medicare/Medicaid certification
3003 W. Grand River Avenue                                       Medicare provider agreement
Howell, MI 48843-8539                                            Medicaid provider agreement

IHS at Tarkio                                                    Medicare/Medicaid certification
300 Cedar Street                                                 Medicare provider agreement
Tarkio, MO 64491                                                 Medicaid provider agreement

Ainsworth Care Center                                            Medicare/Medicaid certification
143 N. Fullerton Street                                          Medicare provider agreement
Ainsworth, NE 69210                                              Medicaid provider agreement

IHS at Ashland                                                   Medicare/Medicaid certification
1700 Furnas Street                                               Medicare provider agreement
Ashland, NE 68003                                                Medicaid provider agreement

Blue Hill Care Center                                            Medicare/Medicaid certification
P.O. Box 156                                                     Medicare provider agreement
414 N. Wilson                                                    Medicaid provider agreement
Blue Hill, NE 68930

IHS at Edgar                                                     Medicare/Medicaid certification
RR 1 Box 83A                                                     Medicare provider agreement
106 5th Street                                                   Medicaid provider agreement
Edgar, NE 68935

Wedgewood Care Center                                            Medicare/Medicaid certification
800 Stoeger Drive                                                Medicare provider agreement
Grand Island, NE 68803                                           Medicaid provider agreement

IHS at Gretna                                                    Medicare/Medicaid certification
700 Highway 6                                                    Medicare provider agreement
Gretna, NE 68028                                                 Medicaid provider agreement

                                                          -2-
<PAGE>
<CAPTION>

                           Facility                                              Other Licenses
--------------------------------------------------------------- ------------------------------------------------------
<S>                                                            <C>

IHS at Lyons                                                     Medicare/Medicaid certification
1035 Diamond Street                                              Medicare provider agreement
Lyons, NE 68038                                                  Medicaid provider agreement

IHS at Milford                                                   Medicare/Medicaid certification
P.O. Box D                                                       Medicare provider agreement
1100 W. First Street                                             Medicaid provider agreement
Milford, NE 68405

IHS at Sutherland                                                Medicare/Medicaid certification
P.O. Box 307                                                     Medicare provider agreement
333 Maple Street                                                 Medicaid provider agreement
Sutherland, NE 69165

IHS of Waverly                                                   Medicare/Medicaid certification
P.O. Box 160                                                     Medicare provider agreement
11041 N. 137th Street                                            Medicaid provider agreement
Waverly, NE 68462

Grandview Manor                                                  Medicare/Medicaid certification
Broad Street & Highway 4                                         Medicare provider agreement
Campbell, NE 68932                                               Medicaid provider agreement

Integrated Health Services of Central City                       Medicare/Medicaid certification
2720 South 17th Avenue                                           Medicare provider agreement
Central City, NE 68826                                           Medicaid provider agreement

Mory's Haven                                                     Medicare/Medicaid certification
1112 Fifteenth Street                                            Medicare provider agreement
Columbus, NE 68601                                               Medicaid provider agreement

Exeter Care Center                                               Medicare/Medicaid certification
425 South Empire Avenue                                          Medicare provider agreement
P.O. Box 59                                                      Medicaid provider agreement
Exeter, NE 68351

Utica Community Center                                           Medicare/Medicaid certification
1350 Centennial Avenue                                           Medicare provider agreement
Utica NE 68456                                                   Medicaid provider agreement

IHS at Laramie                                                   Medicare/Medicaid certification
503 South 18th St.                                               Medicare provider agreement
Laramie, WY 82070                                                Medicaid provider agreement

Community Care of America at Worland                             Medicare/Medicaid certification
1901 Howell                                                      Medicare provider agreement
Worland, WY 82401                                                Medicaid provider agreement

Clifton House Rehabilitation Center                              Medicare/Medicaid certification
181 Clifton Street, New Haven, CT 06513                          Medicare provider agreement
                                                                 Medicaid provider agreement

                                      -3-
<PAGE>
<CAPTION>

                           Facility                                              Other Licenses
--------------------------------------------------------------- ------------------------------------------------------
<S>                                                            <C>

Greenery Rehabilitation Center at Waterbury                      Medicare/Medicaid certification
177 Whitewood Road, Waterbury, CT 06708                          Medicare provider agreement
                                                                 Medicaid provider agreement

Greenery Extended Care Center at Cheshire                        Medicare/Medicaid certification
50 Hazel Drive, Cheshire, CT 06410                               Medicare provider agreement
                                                                 Medicaid provider agreement
</TABLE>

                                      -4-
<PAGE>
<TABLE>
<CAPTION>

                                               Schedule 2.7

                                                Insurance

             Coverage Type                              Limits                               Deductible
-----------------------------------------------------------------------------------------------------------
<S>                                             <C>                                           <C>

All Risk Property  (bldg & contents)                 $140,000,000                              $10,000

All Risk Property (BI)                                $82,000,000                              $10,000

General/Professional Liability                   $1,000,000/$3,000,000                         $50,000

Workers' Comp                                          Statutory                                  0

Umbrella                                       $10,000,000 per location                          NA

</TABLE>

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