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                                                                  Exhibit 10.11


                                                              December 10, 1996
Capstone Pharmacy Services, Inc.
2930 Washington Boulevard
Baltimore, Maryland 21230

Gentlemen:

         The purpose of this letter is to confirm the engagement of Adirondack
Capital Advisors, LLC ("ACA") to act as financial advisor to Capstone Pharmacy
Services, Inc. (together with its affiliates and subsidiaries the "Company" or
"Capstone") in connection with a possible negotiated Transaction with Pharmacy
Corporation of America ("PCA") a wholly owned subsidiary of Beverly Enterprises,
Inc. ("Beverly"). Such Transaction may include a merger, acquisition of stock,
acquisition of assets, reorganization, recapitalization, minority investment,
joint venture or otherwise in one or a series of transactions.

         1.   In connection with this possible transaction, ACA to date, and in
              consultation with Capstone and its legal advisors, has undertaken
              the following:

                  a.  Met with senior management of Beverly to review possible
                      transaction structures and determine their interest in
                      further discussions;

                  b.  Coordinated the receipt of internal information regarding
                      PCA from Beverly;

                  c.  Arranged for a subsequent meeting between senior Beverly
                      management and Capstone's Chairman.

         2. Moving forward, in connection with its engagement hereunder, ACA
            shall:

                  a.  Review the business and operations of PCA and its
                      historical and projected financial condition and analyze
                      the pro forma financial impact on the Company of
                      alternative Transaction structures;

                  b.  Evaluate and recommend financial alternatives to the
                      Transaction, and, if requested by the Company, participate
                      in negotiations relating thereto;

                  c.  Advise the Company as to the timing structure and pricing
                      of a Transaction;

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December 10, 1996
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                  d.  If requested by the Company, render an opinion to the
                      Board of Directors of the Company as to whether the
                      proposed Transaction is fair to the Company from a
                      financial point of view (an "Opinion"); and

                  e.  Provide such other financial advisory and investment
                      banking services as are customary for similar transactions
                      and as may be mutually agreed upon by the Company and ACA.

         3. As compensation for ACA's services hereunder, the Company hereby
            agrees to pay ACA:

              a.  Opinion Fee



                      An opinion fee equal to 25% of the Transaction Fee defined
                      below (the "Opinion Fee") for each Transaction for which
                      an Opinion is rendered, payable in cash promptly upon
                      delivery by ACA of such Opinion (whether oral or written,
                      as requested by the Company).

              b.  Transaction Fee

                      A transaction fee equal to four million ($4,000,000.00)
                      payable in cash promptly upon consummation of a
                      Transaction if, during the term of this agreement or
                      within 12 months thereafter, a Transaction is consummated
                      or a definitive agreement is entered into that
                      subsequently results in a Transaction.

              c.   Termination Fee

                      A termination fee equal to 15% (a "Termination Fee") of
                      any "termination fee," "break-up fee," "topping fee" or
                      other form of compensation payable to the Company or of
                      the value of any securities or assets which the Company
                      has been granted an option to purchase if, after the
                      execution of an agreement in principle, letter of intent,
                      definitive agreement or similar agreement in connection
                      with a Transaction, the Transaction fails to close and the
                      Company receives or is entitled to receive any such
                      compensation or exercise any such option. The Termination
                      Fee shall be payable promptly in cash when any such
                      compensation becomes due and payable to the Company or any
                      such option becomes exercisable.



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December 10, 1996
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              d.   Certain Fee Credits

                      The Opinion Fee, to the extent previously paid, will be
                      credited against the Transaction Fee or the Termination
                      Fee, as the case may be, relating to the Transaction for
                      which an Opinion was rendered.

         4.   In addition to any fees that may be payable to ACA hereunder (and
              regardless of whether a Transaction occurs), the Company hereby
              agrees, from time to time upon request, to reimburse ACA promptly
              for travel and other out-of-pocket expenses incurred in performing
              its services hereunder, including the fees and expenses of its
              legal counsel.

         5.   The term of ACA's engagement as financial advisor to the Company
              shall commence on the date hereof and continue until the earlier
              of the consummation of a Transaction and 12 months after the date
              hereof, unless extended by mutual written consent or earlier
              terminated by either party upon 30 days' prior written notice;
              provided however, that no such termination shall affect the
              indemnification, contribution and confidentially obligations of
              the Company, the right of ACA to receive any fees payable
              hereunder or fees that have accrued prior to such termination or
              the right of ACA to receive reimbursement for its out-of-pocket
              expenses as described above.

         6.   The Company agrees to indemnify ACA and related persons. In this
              regard, Capstone will indemnify and hold harmless ACA and its
              affiliates and each other person, if any, controlling ACA or any
              of its affiliates from and against any losses, claims, damages or
              liabilities (including reasonable counsel fees) or actions in
              respect thereof related to or arising out of such engagement or
              ACA's role in connection therewith. Capstone will not, however, be
              responsible for any claims, liabilities, losses, damage or
              expenses that result from the bad faith or negligence of ACA or
              any other party indemnified hereunder. Capstone also agrees that
              neither ACA, nor any of its affiliates, nor any person, director,
              employee or agent of ACA or any of its affiliates, nor any
              person controlling ACA or any of its affiliates shall have any
              liability (whether direct or indirect, in contract or tort or
              otherwise) to Capstone or in connection with such engagement
              except for any such liability for losses, claims, damages,
              liabilities or expenses incurred by Capstone that result from bad
              faith or negligence of ACA or any other party indemnified
              hereunder.

         7.   The Company recognizes and confirms that ACA in acting pursuant to
              this engagement will be using information in reports and other
              information provided by others including, without limitation,
              information provided by or
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December 10, 1996
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              on behalf of the Company and PCA and that ACA does not assume
              responsibility for and may rely, without independent verification,
              on the accuracy and completeness of any such reports and
              information. The Company hereby warrants that any information
              relating to the Company that is furnished to ACA by or on behalf
              of the Company will be fair, accurate and complete and will not
              contain any material omissions or misstatements of fact. The
              Company agrees that any information or advice (including, without
              limitation, any Opinion) rendered by ACA or its representatives in
              connection with this engagement is for the confidential use of the
              Company's Board of Directors only in its evaluation of a
              Transaction and, except as otherwise required by law, the Company
              will not and will not permit any third party to disclose or
              otherwise refer to any such Opinion, advice or information in any
              manner without ACA's prior written consent.

         8.   This agreement (a) has been duly authorized, executed and
              delivered on behalf of the Company and constitutes a legal, valid
              and binding obligation of the Company enforceable against the
              Company in accordance with its terms, (b) shall be governed by
              and construed in accordance with the laws of the State of New
              York, regardless of the laws that might otherwise govern under
              applicable principles of conflicts of law thereof, (c)
              incorporates the entire understanding of the parties with respect
              to the subject matter hereof and supersedes all previous
              agreements should they exists with respect thereto, (d) may not
              be amended or modified except in a writing executed by the
              Company and ACA and (e) shall be binding upon and inure to the
              benefit of the Company, ACA, the other indemnified parties and
              their respective successors and assigns. The Company and ACA
              agree to waive trial by jury in any action, proceeding or
              counterclaim brought by or an behalf of either party with respect
              to any matter whatsoever relating to or arising out of any actual
              or proposed Transaction or the engagement of or performance by
              ACA hereunder.


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December 10, 1996
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This agreement may be executed in two or more counterparts, each of which shall
be deemed to be an original, but all of which shall constitute one and the same
agreement. Please confirm that the foregoing is in accordance with your
understanding of our agreement by signing and returning to us a copy of this
letter.

                                             Very truly yours,

                                             ADIRONDACK CAPITAL ADVISORS LLC

                                             By:
                                                ------------------------------
                                                   Joseph F. Furlong


Accepted and agreed to as of the
date set forth above:

CAPSTONE PHARMACY SERVICES, INC.

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