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                                                                    EXHIBIT 10.2

                                                                  EXECUTION COPY

                                  $150,000,000

                         GENESIS HEALTHCARE CORPORATION

                 2.5% CONVERTIBLE SENIOR SUBORDINATED DEBENTURES
                                    DUE 2025

                               PURCHASE AGREEMENT

                                                               February 24, 2005

Wachovia Capital Markets, LLC
   As Representative of the Several
   Initial Purchasers named in Schedule
   I hereto
c/o Wachovia Capital Markets, LLC
301 South College Street, 4th Floor
Charlotte, North Carolina 28288-0735

Dear Sirs and Mesdames:

      Genesis HealthCare Corporation, a Pennsylvania corporation (the
"COMPANY"), confirms its agreement with respect to the proposed issuance and
sale to the several purchasers named in Schedule I hereto (the "INITIAL
PURCHASERS") of $150,000,000 principal amount of the Company's 2.5% Convertible
Senior Subordinated Debentures Due 2025 (the "FIRM SECURITIES") to be issued
pursuant to the provisions of an Indenture to be dated as of March 2, 2005 (the
"INDENTURE") among the Company, the Guarantors (as defined below), and The Bank
of New York, as Trustee (the "TRUSTEE"). The Company also proposes to issue and
sell to the Initial Purchasers not more than an additional $30,000,000 principal
amount of its 2.5% Convertible Senior Subordinated Debentures Due 2025 (the
"ADDITIONAL SECURITIES", and together with the Firm Securities, the
"SECURITIES") if and to the extent that you shall have determined to exercise,
on behalf of the Initial Purchasers, the right to purchase such Additional
Securities granted to the Initial Purchasers in Section 2 hereof. Subject to the
provisions of the Indenture, the Securities will be fully and unconditionally
guaranteed (the "SUBSIDIARY GUARANTEES") on an unsecured senior subordinated
basis by all of the domestic subsidiaries of the Company listed on the signature
pages to this Agreement and certain of the Company's future domestic
subsidiaries (collectively, the "GUARANTORS"). The Securities will be
convertible into shares of Common Stock, par value $0.01 per share, of the
Company (the "COMMON STOCK", and such shares into which the Securities are
convertible, the "UNDERLYING SECURITIES").

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      Wachovia Capital Markets, LLC has agreed to act as the sole book-running
manager and as Representative of the Initial Purchasers (in such capacity, the
"REPRESENTATIVE") in connection with the offering and sale of the Securities.

      The Securities, the Underlying Securities and the Subsidiary Guarantees
will be offered without being registered under the Securities Act of 1933, as
amended (the "SECURITIES ACT"), to qualified institutional buyers in compliance
with the exemption from registration provided by Rule 144A under the Securities
Act.

      The Initial Purchasers and their direct and indirect transferees will be
entitled to the benefits of a Registration Rights Agreement (the "REGISTRATION
RIGHTS AGREEMENT"), to be dated the Closing Date (as defined herein) among the
Company, the Guarantors and the Initial Purchasers.

      The Company has prepared and delivered to each Initial Purchaser copies of
a preliminary offering memorandum dated February 23, 2005 (the "PRELIMINARY
MEMORANDUM") and has prepared and will deliver to each Initial Purchaser, on the
date hereof or the next succeeding day, copies of a final offering memorandum
dated February 24, 2005 (the "FINAL MEMORANDUM"), each for use by such Initial
Purchaser in connection with its solicitation of purchases of, or offering of,
the Securities. "MEMORANDUM" means, with respect to any date or time referred to
in this Agreement, the most recent offering memorandum (whether the Preliminary
Memorandum or the Final Memorandum, or any amendment or supplement to either
such document), including exhibits thereto and any documents incorporated by
reference therein, which has been prepared and delivered by the Company to the
Initial Purchasers in connection with their solicitation of purchases of, or
offering of, the Securities. The terms "SUPPLEMENT", "AMENDMENT" and "AMEND" as
used herein with respect to a Memorandum shall include all documents
incorporated by reference in the Memorandum that are filed subsequent to the
date of the Memorandum with the Securities and Exchange Commission (the
"COMMISSION") pursuant to the Securities Exchange Act of 1934, as amended (the
"EXCHANGE ACT").

      All references in this Agreement to the Common Stock shall be deemed to
include the rights evidenced by such Common Stock to the extent provided in the
Rights Agreement dated as of November 18, 2003 between the Company and
StockTrans, Inc., as rights agent.

      1. Representations and Warranties. The Company and each of the Guarantors
jointly and severally represent and warrant to, and agree with, you that:

            (a) (i) Each document, if any, filed or to be filed pursuant to the
      Exchange Act and incorporated by reference in the Memorandum complied when
      filed or will comply when so filed in all material respects with the
      Exchange Act and the applicable rules and regulations of the

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      Commission thereunder and (ii) the Memorandum, in the form used by the
      Initial Purchasers to confirm sales, as of its date and the Closing Date
      (as defined in Section 4), will not contain any untrue statement of a
      material fact or omit to state a material fact necessary to make the
      statements therein, in the light of the circumstances under which they
      were made, not misleading, except that the representations and warranties
      set forth in this paragraph do not apply to statements or omissions in the
      Memorandum based upon information relating to any Initial Purchaser
      furnished to the Company in writing by such Initial Purchaser through you
      expressly for use therein.

            (b) The Memorandum has been prepared by the Company for use by the
      Initial Purchasers as contemplated herein. No order or decree preventing
      the use of the Memorandum, or any order asserting that the transactions
      contemplated by this Agreement are subject to the registration
      requirements of the Securities Act has been issued and no proceeding for
      that purpose has commenced or is pending or, to the knowledge of the
      Company or any of the Guarantors, is contemplated.

            (c) The Company has been duly incorporated, is validly existing as a
      corporation in good standing under the laws of the Commonwealth of
      Pennsylvania, has the corporate power and authority to own its property
      and to conduct its business as described in the Memorandum and is duly
      qualified to transact business and is in good standing in each
      jurisdiction in which the conduct of its business or its ownership or
      leasing of property requires such qualification, except to the extent that
      the failure to be so qualified or be in good standing would not have a
      material adverse effect on the condition, financial or otherwise, or in
      the earnings, business affairs or business prospects of the Company and
      its subsidiaries, considered together as one enterprise, whether or not
      arising in the ordinary course of business (a "MATERIAL ADVERSE EFFECT").

            (d) Each of the subsidiaries of the Company has been duly
      incorporated, organized or formed, as the case may be, and is validly
      existing as a corporation, limited liability company or limited
      partnership, as the case may be, in good standing under the laws of its
      jurisdiction of incorporation, organization or formation; each of the
      subsidiaries of the Company has power and authority to own, lease and
      operate its properties and to conduct its business as described in the
      Memorandum, is duly qualified as a foreign entity to transact business and
      is in good standing in each jurisdiction in which such qualification is
      required, whether by reason of the ownership or leasing of property or the
      conduct of business, except where the failure so to qualify or to be in
      good standing would not have a Material Adverse Effect; the issued and
      outstanding capital stock or ownership interests, as the case may be, of
      each of the Company's subsidiaries has been duly authorized and validly
      issued, is fully paid and non-assessable, and, other than those
      subsidiaries listed in Schedule 1(d),

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      is owned by the Company, directly or indirectly, free and clear of any
      security interest, mortgage, pledge, lien, encumbrance or claim, other
      than such security interests, mortgages, pledges, liens, encumbrances or
      claims pursuant to the Company's Senior Credit Agreement dated as of
      December 1, 2003, as amended; none of the outstanding shares of capital
      stock or ownership interests, as the case may be, of any of the Company's
      subsidiaries held directly or indirectly by the Company was issued in
      violation of the preemptive or similar rights of any securityholder of
      such subsidiary.

            (e) This Agreement has been duly authorized, executed and delivered
      by the Company and each of the Guarantors.

            (f) The authorized capital stock of the Company conforms as to legal
      matters to the description thereof contained in the Memorandum.

            (g) The shares of Common Stock outstanding prior to the issuance of
      the Securities have been duly authorized and are validly issued, fully
      paid and non-assessable.

            (h) The Company and each of the Guarantors have all requisite
      corporate, limited liability company, partnership or limited liability
      partnership, as the case may be, power and authority to enter into this
      Agreement and perform their respective obligations hereunder.

            (i) The Company has all requisite corporate power and authority to
      execute, issue and deliver the Securities and perform its obligations
      thereunder. The Firm Securities and the Additional Securities have been
      duly authorized and, when executed and authenticated in accordance with
      the provisions of the Indenture and delivered to and paid for by the
      Initial Purchasers in accordance with the terms of this Agreement, will be
      valid and binding obligations of the Company, enforceable in accordance
      with their terms, subject to applicable bankruptcy, fraudulent conveyance,
      insolvency, reorganization, moratorium and similar laws affecting
      creditors' rights generally and equitable principles of general
      applicability and an implied covenant of good faith and fair dealing, and
      will be entitled to the benefits of the Indenture and the Registration
      Rights Agreement.

            (j) The Company has all requisite corporate power and authority to
      execute, issue and deliver the Underlying Securities. The Underlying
      Securities issuable upon conversion of the Securities have been duly
      authorized and reserved and, when issued upon conversion of the Securities
      in accordance with the terms of the Securities, will be validly issued,
      fully paid and non-assessable, and the issuance of the Underlying
      Securities will not be subject to any preemptive or similar rights.

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            (k) Each of the Guarantors has all requisite corporate, limited
      liability company, partnership or limited liability partnership, as the
      case may be, power and authority to execute, issue and deliver the
      Subsidiary Guarantees and perform its obligations thereunder. The
      Subsidiary Guarantees have been duly authorized by each of the Guarantors
      and when the Subsidiary Guarantees are duly endorsed on the Securities in
      accordance with the terms of the Indenture and delivered to and paid for
      by the Initial Purchasers pursuant to this Agreement on the Closing Date,
      assuming due authorization of the Securities by the Trustee, such
      Subsidiary Guarantees will constitute legally valid and binding
      obligations of the respective Guarantors, entitled to the benefits of the
      Indenture and enforceable against the respective Guarantors in accordance
      with their terms, subject to applicable bankruptcy, fraudulent conveyance,
      insolvency, reorganization, moratorium and similar laws affecting
      creditors' rights generally and equitable principles of general
      applicability and an implied covenant of good faith and fair dealing.

            (l) The Company and each of the Guarantors have all requisite
      corporate, limited liability company, partnership or limited liability
      partnership, as the case may be, power and authority to enter into the
      Indenture and the Registration Rights Agreement, and to perform their
      respective obligations thereunder. Each of the Indenture and the
      Registration Rights Agreement has been duly authorized, and when executed
      and delivered by the Company and each of the Guarantors, will be a valid
      and binding agreement of the Company and each of the Guarantors,
      enforceable in accordance with its terms, subject to applicable
      bankruptcy, fraudulent conveyance, insolvency, reorganization, moratorium
      and similar laws affecting creditors' rights generally and equitable
      principles of general applicability and an implied covenant of good faith
      and fair dealing and except as rights to indemnification and contribution
      under the Registration Rights Agreement may be limited by applicable law.

            (m) The execution and delivery by the Company and each of the
      Guarantors, and the performance by the Company and each of the Guarantors,
      as the case may be, of their obligations under, this Agreement, the
      Indenture, the Registration Rights Agreement, the Securities and the
      Subsidiary Guarantees will not result in (i) the violation of any
      provision of applicable law or the certificate of incorporation or by-laws
      or other constitutive documents of the Company or any such Guarantor, or
      any judgment, order or decree of any governmental body, agency or court
      having jurisdiction over any such entity, or (ii) breach of, or default
      under, any agreement or other instrument binding upon any such entity that
      is material to the Company and its subsidiaries, considered together as
      one enterprise, or to which any of the property or assets of any such
      entity is subject, and no consent, approval, authorization or order of, or
      qualification with, any governmental body or agency is required for the

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      performance by any such entity of their respective obligations under this
      Agreement, the Indenture, the Registration Rights Agreement, the
      Securities and the Subsidiary Guarantees, as the case may be, except such
      as may be required by the securities or Blue Sky laws of the various
      states in connection with the offer and sale of the Securities, Subsidiary
      Guarantees and Underlying Securities and by Federal and state securities
      laws with respect to the conversion of the Securities and the obligations
      of the Company and the Guarantors under the Registration Rights Agreement.

            (n) The subsidiaries of the Company set forth on Schedule II hereto
      comprise approximately 64% of the Company's total revenue under generally
      accepted accounting principles in the United States for the fiscal year
      ended September 30, 2004, as reported in the Company's annual report on
      Form 10-K for such fiscal year, and no other subsidiary of the Company
      represented greater than 3% of the Company's total revenue under generally
      accepted accounting principles in the United States for such fiscal year.

            (o) Except for the registration rights contained in the Registration
      Rights Agreement, the Company has not granted or agreed to grant to any
      Person any rights (including "piggy-back" registration rights) to have any
      securities of the Company registered with the Commission or any other
      governmental authority that have not been satisfied.

            (p) There are no voting agreements, voting trusts, proxies or other
      agreements or understandings with respect to the voting of any capital
      stock of the Company or any of its subsidiaries to which the Company or
      any of its subsidiaries is a party.

            (q) Except as otherwise disclosed in the Memorandum, subsequent to
      the respective dates as of which information is given in the Memorandum,
      (i) there has not occurred any material adverse change in the condition,
      financial or otherwise, or in the earnings, business affairs or business
      prospects of the Company and its subsidiaries, considered together as one
      enterprise, whether or not arising in the ordinary course of business;
      (ii) the Company and its subsidiaries, considered as one entity, have not
      incurred any material liability or obligation, indirect, direct or
      contingent, not in the ordinary course of business nor entered into any
      material transaction or agreement not in the ordinary course of business;
      and (iii) there has been no dividend or distribution of any kind declared,
      paid or made by the Company or, except for dividends paid to the Company
      or its subsidiaries, any of its subsidiaries on any class of capital stock
      or repurchase or redemption by the Company or any of its subsidiaries of
      any class of capital stock.

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            (r) None of the Company or any of its subsidiaries is (i) in
      violation of its charter or by-laws or its partnership or operating
      agreement, as applicable; (ii) in default, and no event has occurred
      which, with notice or the lapse of time or both, would constitute such a
      default, in the due performance or observance of any obligation,
      agreement, covenant or condition contained in any indenture, loan
      agreement, mortgage, lease or other agreement or instrument that is
      material to the Company and its subsidiaries, considered together as one
      enterprise and to which such entity is a party or by which such entity or
      its property is bound; or (iii) to the knowledge of the Company, is in
      violation in any respect of any law, ordinance, governmental rule,
      regulation or court decree to which it or its property or assets may be
      subject, except for such defaults that would not, singly or in the
      aggregate, have a Material Adverse Effect.

            (s) No subsidiary of the Company is currently prohibited, directly
      or indirectly, from paying dividends to the Company, from making any other
      distribution on such subsidiary's capital stock, from repaying to the
      Company any loans or advances to such subsidiary from the Company or from
      transferring any of such subsidiary's property or assets to the Company or
      any other subsidiary of the Company, except as described in the
      Memorandum.

            (t) There are no legal or governmental proceedings pending or, to
      the knowledge of the Company, threatened to which the Company or any of
      its subsidiaries is a party or to which any of the properties of such
      entity is subject other than proceedings accurately described in all
      material respects in the Memorandum and proceedings that would not have a
      Material Adverse Effect or a material adverse effect on the ability of the
      Company or any of the Guarantors to perform their respective obligations
      under the Purchase Agreement, the Indenture, the Registration Rights
      Agreement, the Securities and the Subsidiary Guarantees or to consummate
      the transactions contemplated therein.

            (u) The Company and each of its subsidiaries (i) are in compliance
      with any and all applicable foreign, federal, state and local laws and
      regulations relating to the protection of human health and safety, the
      environment or hazardous or toxic substances or wastes, pollutants or
      contaminants ("ENVIRONMENTAL LAWS"), (ii) have received all permits,
      licenses or other approvals required of it under applicable Environmental
      Laws to conduct their respective businesses, (iii) are in compliance with
      all terms and conditions of any such permit, license or approval, (iv) are
      in compliance with any applicable provision of the Employee Retirement
      Income Security Act of 1974, as amended, ("ERISA") or the rules and
      regulations promulgated thereunder and (v) are in compliance with any
      applicable provision of the Foreign Corrupt Practice Act of 1977, as
      amended, or the rules and regulations promulgated thereunder, except where
      such noncompliance with Environmental Laws, failure to receive

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      required permits, licenses or other approvals, failure to comply with the
      terms and conditions of such permits, licenses or approvals, or
      noncompliance with ERISA or the Foreign Corrupt Practices Act of 1977, as
      amended, would not in each case, singly or in the aggregate, have a
      Material Adverse Effect.

            (v) There are no costs or liabilities associated with Environmental
      Laws (including, without limitation, any capital or operating expenditures
      required for clean-up, closure of properties or compliance with
      Environmental Laws or any permit, license or approval, any related
      constraints on operating activities and any potential liabilities to third
      parties) which would, singly or in the aggregate, have a Material Adverse
      Effect.

            (w) The Company is not, and after giving effect to the offering and
      sale of the Securities and the application of the proceeds thereof as
      described in the Memorandum will not be, an "investment company" as such
      term is defined in the Investment Company Act of 1940, as amended.

            (x) Neither the Company nor any of its affiliates (as defined in
      Rule 501(b) of Regulation D under the Securities Act, each an "AFFILIATE")
      has directly, or through any agent, (i) sold, offered for sale, solicited
      offers to buy or otherwise negotiated in respect of, any security (as
      defined in the Securities Act) which is or will be integrated with the
      sale of the Securities in a manner that would require the registration
      under the Securities Act of the Securities, the Underlying Securities and
      the Subsidiary Guarantees or (ii) offered, solicited offers to buy or sold
      the Securities by any form of general solicitation or general advertising
      (as those terms are used in Regulation D under the Securities Act) or in
      any manner involving a public offering within the meaning of Section 4(2)
      of the Securities Act.

            (y) Based on the representations and warranties of the Initial
      Purchasers and compliance with the covenants by the Initial Purchasers as
      set forth in Section 7 of this Agreement, it is not necessary in
      connection with the offer, sale and delivery of the Securities to the
      Initial Purchasers in the manner contemplated by this Agreement to
      register the Securities, the Subsidiary Guarantees or the Underlying
      Securities under the Securities Act or to qualify the Indenture under the
      Trust Indenture Act of 1939, as amended.

            (z) The Securities satisfy the requirements set forth in Rule
      144A(d)(3) under the Securities Act.

            (aa) The Company has established and maintained disclosure controls
      and procedures (as defined in Exchange Act Rules 13a-15 and 15d-15) which
      (i) are designed to ensure that material information relating to the
      Company and its subsidiaries is made known to its chief executive

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      officer and chief financial officer by others within the Company and its
      subsidiaries; (ii) have been evaluated for effectiveness as of the date of
      the most recent annual and quarterly reports of the Company; and (iii) are
      effective in all material respects to perform the functions for which they
      were established.

            (bb) Based on the evaluation of its disclosure controls and
      procedures, and other than as disclosed in the Company's quarterly report
      for the quarter ended December 31, 2004, the Company is not aware of (i)
      any significant deficiency in the design or operation of its internal
      controls which could adversely affect its ability to record, process,
      summarize and report financial data or any material weaknesses in internal
      controls; or (ii) any fraud, whether or not material, that involves
      management or other employees who have a significant role in its internal
      controls.

            (cc) Since the date of the most recent evaluation of such disclosure
      controls and procedures, and other than as disclosed in the Company's
      quarterly report for the quarter ended December 31, 2004, there have been
      no significant changes in internal controls or in other factors that could
      significantly affect internal controls, including any corrective actions
      with regard to significant deficiencies and material weaknesses.

            (dd) The Company has complied and will comply with the currently
      applicable provisions of the Sarbanes-Oxley Act of 2002, and to the best
      of the Company's knowledge, its directors and officers in their capacities
      as such have complied and will comply with the currently applicable
      provisions of the Sarbanes-Oxley Act of 2002.

            (ee) The books, records and accounts of the Company and each of its
      subsidiaries accurately and fairly reflect, in reasonable detail, the
      transactions in, and dispositions of, the assets of, and the results of
      operations of, such entity. The Company and each of its subsidiaries,
      taken as a whole, maintain a system of accounting controls sufficient to
      provide reasonable assurances that (a) transactions are executed in
      accordance with management's general or specific authorization, (b)
      transactions are recorded as necessary to permit preparation of financial
      statements in conformity with generally accepted accounting principles in
      the United States and to maintain accountability for assets and (c) access
      to assets is permitted only in accordance with management's general or
      specific authorization.

            (ff) The Company and each of its subsidiaries own or possess, or own
      or possess licenses or other rights to use, all material patents, patent
      rights, licenses, inventions, copyrights, know-how (including trade
      secrets and other unpatented and/or unpatentable proprietary or
      confidential information, systems or procedures), trademarks, service

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      marks and trade names (collectively, the "INTELLECTUAL PROPERTY")
      currently employed or required by such entity in connection with the
      business currently conducted by such entity as described in the
      Memorandum, except such as the failure to so own or possess would not
      have, singly or in the aggregate, a Material Adverse Effect.

            (gg) The Company and each of its subsidiaries have all material
      permits, licenses, consents, exemptions, franchises, authorizations and
      other approvals (each, an "AUTHORIZATION") of, and have made all filings
      with and notices to, all appropriate federal, state, local or foreign
      governmental or regulatory authorities and self regulatory organizations
      and all courts and other tribunals, as are necessary to own, lease,
      license and operate their respective properties and to conduct their
      respective businesses, except to the extent the failure to have any such
      Authorization or to make any such filing or notice would not, singly or in
      the aggregate, have a Material Adverse Effect. Each such Authorization is
      valid and in full force and effect and such entity is in compliance with
      all the terms and conditions thereof and with the rules and regulations of
      the authorities and governing bodies having jurisdiction with respect
      thereto; and no event has occurred (including, without limitation, the
      receipt of any notice from any authority or governing body) which allows
      or, after notice or lapse of time or both, would allow, revocation,
      suspension or termination of any such Authorization or results or, after
      notice or lapse of time or both, would result in any other impairment of
      the rights of the holder of any such Authorization; and such
      Authorizations contain no restrictions that are burdensome to such entity;
      except to the extent such failure to be valid and in full force and effect
      or to be in compliance, the occurrence of any such event or the presence
      of any such restriction would not, singly or in the aggregate, have a
      Material Adverse Effect.

            (hh) There are no outstanding subscriptions, rights, warrants,
      options, calls or convertible securities, granted or issued by the Company
      or any of its subsidiaries relating to or entitling any person to purchase
      or otherwise to acquire any shares of the capital stock of such entity,
      except for options and restricted stock granted to directors and employees
      of the Company in the ordinary course of business or as described in the
      Memorandum.

            (ii) The financial statements of the Company included or
      incorporated by reference in the Memorandum, together with related
      schedules and notes, present fairly the financial position, results of
      operations and changes in financial position of the Company on the basis
      stated therein at the respective dates or for the respective periods to
      which they apply; such statements and related schedules and notes have
      been prepared in accordance with generally accepted accounting principles
      in the United States consistently applied throughout the periods involved;
      and the other financial and statistical information and data of the
      Company

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      set forth in the Memorandum are, in all material respects, accurately
      presented and prepared on a basis consistent with such financial
      statements and the books and records of the Company. The financial
      information relating to the Company set forth under the captions "Summary-
      Summary Financial and Operating Data" and "Capitalization" in the
      Memorandum are derived from the accounting records of the Company and its
      subsidiaries and fairly present, on the basis stated in the Memorandum,
      the information included therein. The pro forma financial information of
      the Company and its subsidiaries included or incorporated by reference in
      the Memorandum present fairly the information contained therein, have been
      prepared in accordance with the Commission's rules and guidelines with
      respect to pro forma financial information and have been properly
      presented on the bases described therein, and the assumptions used in the
      preparation thereof are reasonable and the adjustments used therein are
      appropriate to give effect to the transactions and circumstances referred
      to therein.

            (jj) KPMG LLP, who have certified certain financial statements of
      the Company, whose reports appear or are incorporated by reference in the
      Memorandum and who have delivered the letters referred to in Section 7
      hereof, are independent public accountants as required by the Securities
      Act and the rules and regulations of the Commission.

            (kk) There are no existing or, to the knowledge of the Company,
      threatened labor disputes with the employees of the Company or any of its
      subsidiaries which would have a Material Adverse Effect.

            (ll) The statements relating to legal matters, documents or
      proceedings included in the Memorandum under the captions "Description of
      Capital Stock", "Business -- Revenue Sources" and "Business -- Government
      Regulation" and in "Item 3 -- Legal Proceedings" of the Company's most
      recent annual report on Form 10-K incorporated by reference in the
      Memorandum, and in "Part II Item 1 -- Legal Proceedings" of the Company's
      most recent quarterly report on Form 10-Q incorporated by reference in the
      Memorandum, insofar as such descriptions constitute a summary of the legal
      matters, documents or proceedings referred to therein, fairly summarize in
      all material respects such matters, documents or proceedings.

            (mm) Neither the Company, nor to its knowledge, any of its officers,
      directors or affiliates has taken, or will take, directly or indirectly,
      any action designed to or which might reasonably be expected to cause or
      result in, or which has constituted or which might reasonably be expected
      to constitute, the stabilization or manipulation of the price of the
      Common Stock or any security convertible into or exchangeable for Common
      Stock to facilitate the sale or resale of any of the Securities.

                                       11
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            (nn) The Company and each of its subsidiaries have filed all
      Federal, state, local and foreign tax returns which are required to be
      filed through the date hereof (except where the failure to so file would
      not be reasonably likely to have a Material Adverse Effect), which returns
      are true and correct in all material respects, or have received extensions
      thereof, and have paid all taxes shown on such returns and all assessments
      received by them to the extent that the same are material and have become
      due. There are no tax audits or investigations pending, which if adversely
      determined, would have a Material Adverse Effect.

            (oo) The Company and each of its subsidiaries are insured against
      such losses and risks and in such amounts containing such deductibles and
      covering such risks as are customary in the businesses in which they are
      engaged. None of the Company or any of its subsidiaries has reason to
      believe that it will not be able to renew its existing insurance coverage
      as and when such coverage expires or to obtain similar coverage from
      similar insurers as may be necessary to continue its business at a cost
      that would not have a Material Adverse Effect.

            (pp) None of the Company or any of its subsidiaries or, to the
      knowledge of the Company and its subsidiaries, any other person associated
      with or acting on behalf of such entity including, without limitation, any
      director, officer, agent or employee of such entity has, directly or
      indirectly, while acting on behalf of such entity (i) used any corporate
      funds for unlawful contributions, gifts, entertainment or other unlawful
      expenses relating to political activity; (ii) made any unlawful payment to
      foreign or domestic government officials or employees or to foreign or
      domestic political parties or campaigns from corporate funds; (iii)
      violated any provision of the Foreign Corrupt Practices Act of 1977, as
      amended; or (iv) made any other unlawful payment.

            (qq) The Company and each of its subsidiaries have good and
      marketable title in fee simple to all real property and good and
      marketable title to all personal property owned by such entity, in each
      case free and clear of all liens, encumbrances and defects, other than
      mortgages with respect to real property owned by the Company or its
      subsidiaries in the ordinary course of business, except such as are
      described in the Memorandum or such as would not have a Material Adverse
      Effect. Any real property and buildings held under lease by such entity is
      held by it under valid, subsisting and enforceable leases with such
      exceptions as are not material and do not interfere with the use made and
      proposed to be made of such property and buildings by such entity.

            (rr) The industry, statistical and market-related data included or
      incorporated by reference in the Memorandum are derived from sources that
      the Company reasonably and in good faith believes to be accurate,

                                       12
<PAGE>

      reasonable and reliable, and such data agrees with the sources from which
      they were derived.

            (ss) The Indenture, the Registration Rights Agreement, the
      Securities, the Underlying Securities and the Subsidiary Guarantees will
      conform as of the Closing Date in all material respects to the
      descriptions thereof contained in the Memorandum.

            (tt) There is no document, contract or other agreement of a
      character required to be filed under the Exchange Act which is not
      described or filed as required by the Exchange Act or the rules and
      regulations of the Commission thereunder. Each description of a contract,
      document or other agreement in the Memorandum fairly reflects in all
      respects the material terms of the underlying document, contract or
      agreement. Each agreement described in the Memorandum or incorporated by
      reference is in full force and effect and is valid and enforceable by and
      against the Company or a subsidiary, as the case may be, in accordance
      with its terms.

            (uu) Each certificate signed by any officer of the Company or any
      Guarantor and delivered to the Initial Purchasers or counsel to the
      Initial Purchasers shall be deemed to be a representation and warranty by
      the Company or such Guarantor to the Initial Purchasers as to the matters
      covered thereby.

      2. Agreements to Sell and Purchase. The Company hereby agrees to sell to
the several Initial Purchasers, and each Initial Purchaser, upon the basis of
the representations and warranties herein contained, but subject to the
conditions hereinafter stated, agrees, severally and not jointly, to purchase
from the Company the respective principal amount of Firm Securities set forth in
Schedule I hereto opposite its name at a purchase price of 97.3% of the
principal amount thereof (the "PURCHASE PRICE").

      On the basis of the representations and warranties contained in this
Agreement, and subject to its terms and conditions, the Company agrees to sell
to the Initial Purchasers the Additional Securities, and the Initial Purchasers
shall have the right to purchase, severally and not jointly, up to $30,000,000
principal amount of Additional Securities at the Purchase Price plus accrued
interest, if any, to the date of payment and delivery. You may exercise this
right on behalf of the Initial Purchasers in whole or from time to time in part
by giving written notice not later than 30 days after the Closing Date. Any
exercise notice shall specify the principal amount of Additional Securities to
be purchased by the Initial Purchasers and the date on which such Additional
Securities are to be purchased. Each purchase date must be at least one business
day after the written notice is given and may not be earlier than the closing
date for the Firm Securities nor later than ten business days after the date of
such notice. On each day, if any, that Additional Securities are to be purchased
(an "OPTION CLOSING DATE"), each

                                       13
<PAGE>

Initial Purchaser agrees, severally and not jointly, to purchase the principal
amount of Additional Securities (subject to such adjustments to eliminate
fractional Securities as you may determine) that bears the same proportion to
the total principal amount of Additional Securities to be purchased on such
Option Closing Date as the principal amount of Firm Securities set forth in
Schedule I opposite the name of such Initial Purchaser bears to the total
principal amount of Firm Securities.

      The Company hereby agrees that, without the prior written consent of the
Representative, on behalf of the Initial Purchasers, it will not, during the
period ending 90 days after the date of the Memorandum, (i) offer, pledge, sell,
contract to sell, sell any option or contract to purchase, purchase any option
or contract to sell, grant any option, right or warrant to purchase, lend, or
otherwise transfer or dispose of, directly or indirectly, any shares of Common
Stock or any securities convertible into or exercisable or exchangeable for
Common Stock or (ii) enter into any swap or other arrangement that transfers to
another, in whole or in part, any of the economic consequences of ownership of
the Common Stock, whether any such transaction described in clause (i) or (ii)
above is to be settled by delivery of Common Stock or such other securities, in
cash or otherwise. The foregoing sentence shall not apply to (A) the sale of the
Securities under this Agreement, (B) the granting of options and restricted
stock pursuant to the Company's employee benefit plans existing on the date
hereof or (C) the issuance by the Company of any shares of Common Stock upon the
exercise of an option or warrant or the conversion of a security outstanding on
the date hereof of which the Initial Purchasers have been advised in writing.

      3. Terms of Offering. You have advised the Company that the Initial
Purchasers will make an offering of the Securities purchased by the Initial
Purchasers hereunder on the terms to be set forth in the Memorandum, as soon as
practicable after this Agreement is entered into as in your judgment is
advisable.

      4. Payment and Delivery. Payment for the Firm Securities shall be made to
the Company in Federal or other funds immediately available in New York City
against delivery of such Firm Securities for the respective accounts of the
several Initial Purchasers at 10:00 a.m., New York City time, on March 2, 2005,
or at such other time on the same or such other date, not later than March 14,
2005, as shall be agreed upon by the Company and you. The time and date of such
payment are hereinafter referred to as the "CLOSING DATE."

      Payment for any Additional Securities shall be made to the Company in
Federal or other funds immediately available in New York City against delivery
of such Additional Securities for the respective accounts of the several Initial
Purchasers at 10:00 a.m., New York City time, on the date specified in the
corresponding notice described in Section 2 or at such other time on the same or
on such other date, in any event not later than April 11, 2005 as shall be
agreed upon by the Company and you.

                                       14
<PAGE>

      The Securities shall be in definitive form or global form, as specified by
you, and registered in such names and in such denominations ($1,000 or integral
multiples of $1,000 in excess thereof) as you shall request in writing not later
than one full business day prior to the Closing Date or the applicable Option
Closing Date, as the case may be. The Securities shall be delivered to you on
the Closing Date or an Option Closing Date, as the case may be, for the account
of the Initial Purchaser, with any transfer taxes payable in connection with the
transfer of the Securities to the Initial Purchaser duly paid, against payment
of the Purchase Price therefor plus accrued interest, if any, to the date of
payment and delivery.

      5. Conditions to the Initial Purchasers' Obligations. The several
obligations of the Initial Purchasers to purchase and pay for the Firm
Securities are subject to the accuracy, when made and on the Closing Date, of
the representations and warranties of the Company and each of the Guarantors, to
the performance by the Company and each of the Guarantors of their respective
obligations hereunder and to each of the following additional terms and
conditions:

            (a) Subsequent to the execution and delivery of this Agreement and
      prior to the Closing Date:

                  (i) there shall not have occurred any downgrading, nor shall
            any notice have been given of any intended or potential downgrading
            or of any review for a possible change that does not indicate the
            direction of the possible change, in the rating accorded the Company
            or any of the Company's securities or in the rating outlook for the
            Company by any "nationally recognized statistical rating
            organization," as such term is defined for purposes of Rule
            436(g)(2) under the Securities Act; and

                  (ii) there shall not have occurred any change, or any
            development involving a prospective change, in the condition,
            financial or otherwise, or in the earnings, business or operations
            of the Company and its subsidiaries taken as one enterprise, from
            that set forth in the Memorandum provided to prospective purchasers
            of the Securities that, in your judgment, is material and adverse
            and that makes it, in your judgment, impracticable to market the
            Securities on the terms and in the manner contemplated in the
            Memorandum.

            (b) The Initial Purchasers shall have received on the Closing Date a
      certificate, dated the Closing Date and signed by an executive officer of
      the Company, to the effect set forth in Section 5(a)(i) and to the effect
      that the representations and warranties of the Company and of the
      Guarantors contained in this Agreement are true and correct as of the
      Closing Date and that the Company and each of the Guarantors have complied
      with all of the agreements and satisfied all of the conditions on

                                       15
<PAGE>

      their part to be performed or satisfied hereunder on or before the Closing
      Date.

            The officer signing and delivering such certificate may rely upon
      the best of his or her knowledge as to proceedings threatened.

            (c) The Initial Purchasers shall have received on the Closing Date
      an opinion of (i) Blank Rome LLP, outside counsel for the Company, dated
      the Closing Date, to the effect set forth in Exhibit A and (ii) Murtha
      Cullina LLP, New Hampshire outside counsel for the Company, relating to
      certain matters regarding McKerley Health Care Centers, Inc. Such opinions
      shall be rendered to the Initial Purchasers at the request of the Company
      and shall so state therein.

            (d) The Initial Purchasers shall have received on the Closing Date
      an opinion of Davis Polk & Wardwell, counsel for the Initial Purchasers,
      dated the Closing Date, to the effect set forth in Exhibit B.

            (e) The Initial Purchasers shall have received on each of the date
      hereof and the Closing Date a letter, dated the date hereof or the Closing
      Date, as the case may be, in form and substance satisfactory to the
      Initial Purchasers, from KPMG LLP, independent public accountants, with
      respect to the financial information contained in the Memorandum relating
      to the Company, containing statements and information of the type
      ordinarily included in accountants' "comfort letters" to underwriters with
      respect to the financial statements and certain financial information
      contained in or incorporated by reference into each Memorandum; provided
      that, in the case of the letter delivered on the Closing Date, such letter
      shall use a "cut-off date" not earlier than the date hereof.

            (f) The "lock-up" agreements, each substantially in the form of
      Exhibit C hereto, between you and each of the executive officers of the
      Company listed on Schedule III hereto relating to sales and certain other
      dispositions of shares of Common Stock or certain other securities,
      delivered to you on or before the date hereof, shall be in full force and
      effect on the Closing Date.

            (g) The Company and the Trustee shall have entered into the
      Indenture, and the Initial Purchasers shall have received counterparts,
      conformed as executed, thereof, and the Securities shall have been duly
      executed and delivered by the Company and authenticated by the Trustee.

            (h) The Company, the Initial Purchasers and the Guarantors shall
      have entered into the Registration Rights Agreement.

            (i) The Company and the Lenders party thereto shall have entered
      into the Amended and Restated Credit Agreement (as defined in the
      Memorandum).

                                       16
<PAGE>

      The several obligations of the Initial Purchasers to purchase Additional
Securities hereunder are subject to the delivery to you on the applicable Option
Closing Date of such documents as you may reasonably request with respect to the
good standing of the Company and the Guarantors, the due authorization,
execution and authentication of the Additional Securities (including the
Subsidiary Guarantees) to be sold on such Option Closing Date and other matters
as you may reasonably request.

      6. Covenants of the Company. In further consideration of the agreements of
the Initial Purchasers contained in this Agreement, the Company and each of the
Guarantors covenant with each Initial Purchaser as follows:

            (a) The Company will furnish to you in New York City, without
      charge, as soon as available on the business day next succeeding the date
      of this Agreement and during the period mentioned in Section 6(b), as many
      copies of the Memorandum, any documents incorporated by reference therein
      and any supplements and amendments thereto as you may reasonably request.
      (b) Before amending or supplementing the Memorandum, the Company will
      furnish to you a copy of each such proposed amendment or supplement and
      will not use any such proposed amendment or supplement to which you
      reasonably object.

            (b) Before amending or supplementing the Memorandum, the Company
      will furnish to you a copy of each such proposed amendment or supplement
      and will not use any such proposed amendment or supplement to which you
      reasonably object.

            (c) If, during such period after the date hereof and prior to the
      date on which all of the Securities shall have been sold by the Initial
      Purchasers, any event shall occur or condition exist as a result of which
      it is necessary in the reasonable opinion of either the Company or the
      Initial Purchasers to amend or supplement the Memorandum in order to make
      the statements therein, in the light of the circumstances when the
      Memorandum is delivered to a purchaser, not misleading, or to amend or
      supplement the Memorandum to comply with applicable law, the Company will
      prepare and furnish, at its own expense, to the Initial Purchasers, either
      amendments or supplements to the Memorandum so that the statements in the
      Memorandum as so amended or supplemented will not, in the light of the
      circumstances when the Memorandum is delivered to a purchaser, be
      misleading or so that the Memorandum, as amended or supplemented, will
      comply with applicable law.

            (d) The Company will promptly from time to time take such action as
      the Initial Purchasers may reasonably request to qualify the Securities
      for offer and sale under the securities or Blue Sky laws of such
      jurisdictions as you shall reasonably request.

            (e) Whether or not the transactions contemplated in this Agreement
      are consummated or this Agreement is terminated, the Company shall pay or
      cause to be paid all expenses incident to the

                                       17
<PAGE>

      performance of its obligations under this Agreement, including: (i) the
      fees, disbursements and expenses of the Company's counsel and accountants
      in connection with the issuance and sale of the Securities and all other
      fees or expenses in connection with the preparation of each Memorandum and
      all amendments and supplements thereto, including all printing costs
      associated therewith, and the delivering of copies thereof to the Initial
      Purchasers, in the quantities herein above specified, (ii) all costs and
      expenses related to the transfer and delivery of the Securities to the
      Initial Purchasers, including any transfer or other taxes payable thereon,
      (iii) the cost of printing or producing any Blue Sky or legal investment
      memorandum in connection with the offer and sale of the Securities under
      state securities laws and all expenses in connection with the
      qualification of the Securities for offer and sale under state securities
      laws as provided in Section 6(d) hereof, including filing fees and the
      reasonable fees and disbursements of counsel for the Initial Purchasers in
      connection with such qualification and in connection with the Blue Sky or
      legal investment memorandum, (iv) any fees charged by rating agencies for
      the rating of the Securities, (v) the fees and expenses, if any, incurred
      in connection with the admission of the Securities for trading in PORTAL
      or any appropriate market system, (vi) the costs and charges of the
      Trustee and any transfer agent, registrar or depositary, (vii) the cost of
      the preparation, issuance and delivery of the Securities, (viii) the costs
      and expenses of the Company relating to investor presentations on any
      "road show" undertaken in connection with the marketing of the offering of
      the Securities, including, without limitation, expenses associated with
      the production of road show slides and graphics, fees and expenses of any
      consultants engaged in connection with the road show presentations with
      the prior approval of the Company, travel and lodging expenses of the
      representatives and officers of the Company and any such consultants, (ix)
      the document production charges and expenses associated with printing this
      Agreement and (x) all other costs and expenses incident to the performance
      of the obligations of the Company hereunder for which provision is not
      otherwise made in this Section. It is understood, however, that except as
      provided in this Section, Section 8, and the last paragraph of Section 10,
      the Initial Purchasers will pay all of their costs and expenses, including
      fees and disbursements of their counsel, transfer taxes payable on resale
      of any of the Securities by them and any advertising expenses connected
      with any offers they may make.

            (f) Neither the Company nor any affiliate will sell, offer for sale
      or solicit offers to buy or otherwise negotiate in respect of any security
      (as defined in the Securities Act) which could be integrated with the sale
      of the Securities in a manner which would require the registration under
      the Securities Act of the Securities.

            (g) The Company will not solicit any offer to buy or offer to sell
      the Securities, the Subsidiary Guarantees or the Underlying Securities

                                       18
<PAGE>

      by means of any form of general solicitation or general advertising (as
      those terms are used in Regulation D under the Securities Act) or in any
      manner involving a public offering within the meaning of Section 4(2) of
      the Securities Act.

            (h) While any of the Securities, the Subsidiary Guarantees or the
      Underlying Securities remain "restricted securities" within the meaning of
      the Securities Act, the Company will make available, upon request, to any
      seller of such securities the information specified in Rule 144A(d)(4)
      under the Securities Act, unless the Company is then subject to Section 13
      or 15(d) of the Exchange Act.

            (i) The Company will use its reasonable best efforts to permit the
      Securities to be designated PORTAL securities in accordance with the rules
      and regulations adopted by the National Association of Securities Dealers,
      Inc. relating to trading in the PORTAL Market and to permit the Securities
      to be eligible for clearance and settlement through the Depository Trust
      Company.

            (j) During the period of two years after the Closing Date or any
      Option Closing Date, if later, the Company will not, and will not permit
      any of its affiliates (as defined in Rule 144 under the Securities Act) to
      resell any of the Securities, the Subsidiary Guarantees or the Underlying
      Securities which constitute "restricted securities" under Rule 144 that
      have been reacquired by any of them.

            (k) The Company will apply the proceeds from the sale of the
      Securities as set forth under "Use of Proceeds" in the Offering
      Memorandum.

            (l) The Company will not take any action prohibited by Regulation M
      under the Exchange Act in connection with the distribution of the
      Securities contemplated hereby.

            (m) The Company and the Guarantors will do and perform all things
      required or necessary to be done and performed under this Agreement by
      them prior to the Closing Date, and to satisfy all conditions precedent to
      the Initial Purchasers' obligations hereunder to purchase the Securities.

      7. Offering of Securities; Restrictions on Transfer. Each Initial
Purchaser, severally and not jointly, represents and warrants that (i) such
Initial Purchaser is a qualified institutional buyer as defined in Rule 144A
under the Securities Act (a "QIB"), (ii) such Initial Purchaser is purchasing
the Securities pursuant to a private sale exemption from registration under the
Securities Act, and (iii) such Initial Purchaser is not acquiring the Securities
(a) with a view to any distribution thereof or (b) with any present intention of
offering or selling the

                                       19
<PAGE>

Securities, in the case of either (a) or (b), in a transaction that would
violate the Securities Act or any state securities laws. Each Initial Purchaser,
severally and not jointly, agrees with the Company that (i) it will not solicit
offers for, or offer or sell, such Securities by any form of general
solicitation or general advertising (as those terms are used in Regulation D
under the Securities Act) or in any manner involving a public offering within
the meaning of Section 4(2) of the Securities Act and (ii) it will solicit
offers for such Securities only from, and will offer such Securities only to,
persons that it reasonably believes to be QIBs that in purchasing such
Securities are deemed to have represented and agreed as provided in the
Memorandum under the caption "Transfer Restrictions".

      8. Indemnity and Contribution. (a) The Company and each of the Guarantors
agree to jointly and severally indemnify and hold harmless each Initial
Purchaser, its directors, officers and employees and each person, if any, who
controls any Initial Purchaser within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act, and each affiliate of any
Initial Purchaser within the meaning of Rule 405 under the Securities Act from
and against any and all losses, claims, damages and liabilities (including,
without limitation, any legal or other expenses reasonably incurred in
connection with defending or investigating any such action or claim) caused by
any untrue statement or alleged untrue statement of a material fact contained in
the Memorandum (as amended or supplemented if the Company shall have furnished
any amendments or supplements thereto), or caused by any omission or alleged
omission to state therein a material fact necessary to make the statements
therein in the light of the circumstances under which they were made not
misleading, except insofar as such losses, claims, damages or liabilities are
caused by any such untrue statement or omission or alleged untrue statement or
omission based upon information relating to any Initial Purchaser furnished to
the Company in writing by such Initial Purchaser through you expressly for use
therein, provided, however, that the foregoing indemnity agreement with respect
to any Preliminary Memorandum shall not inure to the benefit of the Initial
Purchaser from whom the person asserting any such losses, claims, damages or
liabilities purchased Securities, or any person controlling the Initial
Purchaser, if a copy of the Memorandum (as then amended or supplemented if the
Company shall have furnished any amendments or supplements thereto) was not sent
or given by or on behalf of the Initial Purchaser to such person, if required by
law so to have been delivered, at or prior to the written confirmation of the
sale of the Securities to such person, and if the Memorandum (as so amended or
supplemented) would have cured the defect giving rise to such losses, claims,
damages or liabilities, unless such failure is the result of noncompliance by
the Company with Section 6(c) hereof.

      (b) Each Initial Purchaser agrees, severally and not jointly, to indemnify
and hold harmless the Company and each Guarantor and their respective directors,
officers and employees and each person, if any, who controls the Company or any
such Guarantor within the meaning of either Section 15 of the Securities Act or
Section 20 of the Exchange Act to the same extent as the

                                       20
<PAGE>

foregoing indemnity from the Company and the Guarantors to such Initial
Purchaser, but only with reference to information relating to such Initial
Purchaser furnished to the Company and the Guarantors in writing by such Initial
Purchaser through you expressly for use in the Memorandum or any amendments or
supplements thereto.

      (c) In case any proceeding (including any governmental investigation)
shall be instituted involving any person in respect of which indemnity may be
sought pursuant to Section 8(a) or 8(b), such person (the "INDEMNIFIED PARTY")
shall promptly notify the person against whom such indemnity may be sought (the
"INDEMNIFYING PARTY") in writing and the indemnifying party, upon request of the
indemnified party, shall retain counsel reasonably satisfactory to the
indemnified party to represent the indemnified party and any others the
indemnifying party may designate in such proceeding and shall pay the fees and
disbursements of such counsel related to such proceeding. In any such
proceeding, any indemnified party shall have the right to retain its own
counsel, but the fees and expenses of such counsel shall be at the expense of
such indemnified party unless (i) the indemnifying party and the indemnified
party shall have mutually agreed to the retention of such counsel or (ii) the
named parties to any such proceeding (including any impleaded parties) include
both the indemnifying party and the indemnified party and representation of both
parties by the same counsel would be inappropriate due to actual or potential
differing interests between them. It is understood that the indemnifying party
shall not, in respect of the legal expenses of any indemnified party in
connection with any proceeding or related proceedings in the same jurisdiction,
be liable for the fees and expenses of more than one separate firm (in addition
to any local counsel) for all such indemnified parties and that all such fees
and expenses shall be reimbursed as they are incurred. Such firm shall be
designated in writing by the Representative, in the case of parties indemnified
pursuant to Section 8(a), and by the Company, in the case of parties indemnified
pursuant to Section 8(b). The indemnifying party shall not be liable for any
settlement of any proceeding effected without its written consent, but if
settled with such consent or if there be a final judgment for the plaintiff, the
indemnifying party agrees to indemnify the indemnified party from and against
any loss or liability by reason of such settlement or judgment. Notwithstanding
the foregoing sentence, if at any time an indemnified party shall have requested
an indemnifying party to reimburse the indemnified party for fees and expenses
of counsel as contemplated by the second and third sentences of this paragraph,
the indemnifying party agrees that it shall be liable for any settlement of any
proceeding effected without its written consent if (i) such settlement is
entered into more than 30 days after receipt by such indemnifying party of the
aforesaid request and (ii) such indemnifying party shall not have reimbursed the
indemnified party in accordance with such request prior to the date of such
settlement. No indemnifying party shall, without the prior written consent of
the indemnified party, effect any settlement of any pending or threatened
proceeding in respect of which any indemnified party is or could have been a
party and indemnity could have been sought hereunder by such indemnified party,
unless

                                       21
<PAGE>

such settlement includes an unconditional release of such indemnified party from
all liability on claims that are the subject matter of such proceeding.

      (d) To the extent the indemnification provided for in Section 8(a) or 8(b)
is unavailable to an indemnified party or insufficient in respect of any losses,
claims, damages or liabilities referred to therein, then each indemnifying party
under such paragraph, in lieu of indemnifying such indemnified party thereunder,
shall contribute to the amount paid or payable by such indemnified party as a
result of such losses, claims, damages or liabilities (i) in such proportion as
is appropriate to reflect the relative benefits received by the Company and each
of the Guarantors on the one hand and the Initial Purchasers on the other hand
from the offering of the Securities or (ii) if the allocation provided by clause
8(d)(i) above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause
8(d)(i) above but also the relative fault of the Company and each of the
Guarantors on the one hand and of the Initial Purchasers on the other hand in
connection with the statements or omissions that resulted in such losses,
claims, damages or liabilities, as well as any other relevant equitable
considerations. The relative benefits received by the Company and each of the
Guarantors on the one hand and the Initial Purchasers on the other hand in
connection with the offering of the Securities shall be deemed to be in the same
respective proportions as the net proceeds from the offering of the Securities
(before deducting expenses) received by the Company and each of the Guarantors
and the total discounts and commissions received by the Initial Purchasers, in
each case as set forth in the Memorandum, bear to the aggregate offering price
of the Securities. The relative fault of the Company and each of the Guarantors
on the one hand and of the Initial Purchasers on the other hand shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the Company or any Guarantor
or by the Initial Purchasers and the parties' relative intent, knowledge, access
to information and opportunity to correct or prevent such statement or omission.
The Initial Purchasers' respective obligations to contribute pursuant to this
Section 8 are several in proportion to the respective principal amount of
Securities they have purchased hereunder, and not joint.

      (e) The Company, the Guarantors and the Initial Purchasers agree that it
would not be just or equitable if contribution pursuant to this Section 8(d)
were determined by pro rata allocation (even if the Initial Purchasers were
treated as one entity for such purpose) or by any other method of allocation
that does not take account of the equitable considerations referred to in
Section 8(d). The amount paid or payable by an indemnified party as a result of
the losses, claims, damages and liabilities referred to in Section 8(d) shall be
deemed to include, subject to the limitations set forth above, any legal or
other expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this Section 8, no Initial Purchaser shall be required to
contribute any amount in excess of the amount by which the total price at which
the Securities resold by it in the initial

                                       22
<PAGE>

placement of such Securities were offered to investors exceeds the amount of any
damages that such Initial Purchaser has otherwise been required to pay by reason
of such untrue or alleged untrue statement or omission or alleged omission. No
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation. The remedies provided
for in this Section 8 are not exclusive and shall not limit any rights or
remedies which may otherwise be available to any indemnified party at law or in
equity.

      (f) The indemnity and contribution provisions contained in this Section 8
and the representations, warranties and other statements of the Company and the
Guarantors contained in this Agreement shall remain operative and in full force
and effect regardless of (i) any termination of this Agreement, (ii) any
investigation made by or on behalf of any Initial Purchaser, any person
controlling any Initial Purchaser or any affiliate of any Initial Purchaser or
by or on behalf of the Company, or any Guarantor or any of their respective
officers or directors or any person controlling the Company or any Guarantor and
(iii) acceptance of and payment for any of the Securities.

      9. Termination. The Initial Purchasers may terminate this Agreement by
notice given by you to the Company, if after the execution and delivery of this
Agreement and prior to the Closing Date (i) trading generally shall have been
suspended or materially limited on, or by, as the case may be, any of the New
York Stock Exchange, the American Stock Exchange, the Nasdaq National Market,
the Chicago Board of Options Exchange, the Chicago Mercantile Exchange or the
Chicago Board of Trade, (ii) trading of any securities of the Company shall have
been suspended on any exchange or in any over-the-counter market, (iii) a
material disruption in securities settlement, payment or clearance services in
the United States shall have occurred, (iv) any moratorium on commercial banking
activities shall have been declared by Federal or New York State authorities or
(v) there shall have occurred any outbreak or escalation of hostilities, or any
change in financial markets or any calamity or crisis that, in your judgment, is
material and adverse and which, singly or together with any other event
specified in this clause (v), makes it, in your reasonable judgment,
impracticable or inadvisable to proceed with the offer, sale or delivery of the
Securities on the terms and in the manner contemplated in the Memorandum.

      10. Effectiveness; Defaulting Initial Purchasers. This Agreement shall
become effective upon the execution and delivery hereof by the parties hereto.

      If, on the Closing Date, or an Option Closing Date, as the case may be,
any one or more of the Initial Purchasers shall fail or refuse to purchase
Securities that it or they have agreed to purchase hereunder on such date, and
the aggregate principal amount of Securities which such defaulting Initial
Purchaser or Initial Purchasers agreed but failed or refused to purchase is not
more than one-tenth of the aggregate principal amount of Securities to be
purchased on such date, the other Initial Purchasers shall be obligated
severally in the proportions that the

                                       23
<PAGE>

principal amount of Firm Securities set forth opposite their respective names in
Schedule I bears to the aggregate principal amount of Firm Securities set forth
opposite the names of all such non-defaulting Initial Purchasers, or in such
other proportions as you may specify, to purchase the Securities which such
defaulting Initial Purchaser or Initial Purchasers agreed but failed or refused
to purchase on such date; provided that in no event shall the principal amount
of Securities that any Initial Purchaser has agreed to purchase pursuant to this
Agreement be increased pursuant to this Section 10 by an amount in excess of
one-ninth of such principal amount of Securities without the written consent of
such Initial Purchaser. If, on the Closing Date any Initial Purchaser or Initial
Purchasers shall fail or refuse to purchase Firm Securities which it or they
have agreed to purchase hereunder on such date and the aggregate principal
amount of Securities with respect to which such default occurs is more than
one-tenth of the aggregate principal amount of Firm Securities to be purchased
on such date, and arrangements satisfactory to you and the Company for the
purchase of such Firm Securities are not made within 36 hours after such
default, this Agreement shall terminate without liability on the part of any
non-defaulting Initial Purchaser or of the Company. In any such case either you
or the Company shall have the right to postpone the Closing Date, but in no
event for longer than seven days, in order that the required changes, if any, in
the Memorandum or in any other documents or arrangements may be effected. If, on
an Option Closing Date, any Initial Purchaser or Initial Purchasers shall fail
or refuse to purchase Additional Securities and the aggregate principal amount
of Additional Securities with respect to which such default occurs is more than
one-tenth of the aggregate principal amount of Additional Securities to be
purchased on such Option Closing Date, the non-defaulting Initial Purchasers
shall have the option to (a) terminate their obligation hereunder to purchase
the Additional Securities to be sold on such Option Closing Date or (b) purchase
not less than the principal amount of Additional Securities that such
non-defaulting Initial Purchasers would have been obligated to purchase in the
absence of such default. Any action taken under this paragraph shall not relieve
any defaulting Initial Purchaser from liability in respect of any default of
such Initial Purchaser under this Agreement.

      If this Agreement shall be terminated by the Initial Purchasers, or any of
them, because of any failure or refusal on the part of the Company or any
Guarantor to comply with the terms or to fulfill any of the conditions of this
Agreement, or if for any reason the Company or any Guarantor shall be unable to
perform its obligations under this Agreement, the Company and each of the
Guarantors jointly and severally agree to reimburse the Initial Purchasers or
such Initial Purchasers as have so terminated this Agreement with respect to
themselves, severally, for all out-of-pocket expenses (including the fees and
disbursements of their counsel) reasonably incurred by such Initial Purchasers
in connection with this Agreement or the offering contemplated hereunder.

      11. Notices. All communications hereunder shall be in writing and shall be
mailed, hand delivered or telecopied and confirmed to the parties hereto as
follows:

                                       24
<PAGE>

         If to the Initial Purchasers:

            Wachovia Capital Markets, LLC
            301 South College Street, 4th Floor
            Charlotte, North Carolina 28288-0735
            Attention: Convertible Securities Syndication
            Telecopy No.: (704) 715-6099

         If to the Company and the Guarantors:

            Genesis HealthCare Corporation
            101 East State Street
            Kennett Square, Pennsylvania 19348
            Attention: General Counsel
            Telecopy No.: (610) 444-6350

      The parties hereto may change the address for receipt of communications by
giving written notice to each other.

      12. Counterparts. This Agreement may be signed in any number of
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.

      13. Applicable Law. This Agreement shall be governed by and construed in
accordance with the internal laws of the State of New York.

      14. Headings. The headings of the sections of this Agreement have been
inserted for convenience of reference only and shall not be deemed a part of
this Agreement.

                                       25
<PAGE>

                               Very truly yours,

                               THE COMPANY

                               GENESIS HEALTHCARE CORPORATION

                               By: /s/ James V. McKeon
                                   -----------------------------------------
                                    Name: James V. McKeon
                                    Title: Chief Financial Officer

                               THE GUARANTORS

                               ACADEMY NURSING HOME, INC.

                               ADS APPLE VALLEY, INC.

                               ADS CONSULTING, INC.

                               ADS DANVERS ALF, INC.

                               ADS DARTMOUTH ALF, INC.

                               ADS HINGHAM ALF, INC.

                               ADS HINGHAM NURSING FACILITY, INC.

                               ADS HOME HEALTH, INC.

                               ADS MANAGEMENT, INC.

                               ADS PALM CHELMSFORD, INC.

                               ADS RECUPERATIVE CENTER, INC.

                               ADS RESERVOIR WALTHAM, INC.

                               ADS SENIOR HOUSING, INC.

                               ADS/MULTICARE, INC.

                               ANR, INC.

                               APPLE VALLEY OPERATING CORP.

                               APPLEWOOD HEALTH RESOURCES, INC.

<PAGE>

                               ASL, INC.

                               ASSISTED LIVING ASSOCIATES OF BERKSHIRE, INC.

                               ASSISTED LIVING ASSOCIATES OF LEHIGH, INC.

                               ASSISTED LIVING ASSOCIATES OF SANATOGA, INC.

                               BERKS NURSING HOMES, INC.

                               BRIGHTWOOD PROPERTY, INC.

                               BRINTON MANOR, INC.

                               BURLINGTON WOODS CONVALESCENT CENTER,INC.

                               CAREFLEET, INC.

                               CENTURY CARE MANAGEMENT, INC.

                               CHATEAU VILLAGE HEALTH RESOURCES, INC.

                               CHELTENHAM LTC MANAGEMENT, INC.

                               CHG INVESTMENT CORP., INC.

                               CHNR-I, INC.

                               COLONIAL HALL HEALTH RESOURCES, INC.

                               CONCORD HEALTH GROUP, INC.

                               CONCORD SERVICE CORPORATION

                               CRESTVIEW CONVALESCENT HOME, INC.

                               CRESTVIEW NORTH, INC.

                               CRYSTAL CITY NURSING CENTER, INC.

                               CVNR, INC.

                               DAWN VIEW MANOR, INC.

                               DELM NURSING, INC.

<PAGE>

                               DIANE MORGAN AND ASSOCIATES, INC.

                               DOVER HEALTHCARE ASSOCIATES, INC.

                               EIDOS, INC.

                               ELDERCARE RESOURCES CORP.

                               ELMWOOD HEALTH RESOURCES, INC.

                               ENCARE OF PENNYPACK, INC.

                               ENCARE OF QUAKERTOWN, INC.

                               ENCARE OF WYNCOTE, INC.

                               ENR, INC.

                               GENESIS ELDERCARE CENTERS - BELVEDERE, INC.

                               GENESIS ELDERCARE CENTERS - CHAPEL MANOR, INC.

                               GENESIS ELDERCARE CENTERS-HARSTON, INC.

                               GENESIS ELDERCARE CENTERS - PENNSBURG, INC.

                               GENESIS ELDERCARE CORP.

                               GENESIS ELDERCARE DIAGNOSTIC SERVICES, INC.

                               GENESIS ELDERCARE HOME CARE SERVICES, INC.

                               GENESIS ELDERCARE HOSPITALITY SERVICES, INC.

                               GENESIS ELDERCARE LIVING FACILITIES, INC.

                               GENESIS ELDERCARE NATIONAL CENTERS, INC.

                               GENESIS ELDERCARE NETWORK SERVICES OF
                               MASSACHUSETTS, INC.

                               GENESIS ELDERCARE NETWORK SERVICES, INC.

<PAGE>

                               GENESIS ELDERCARE PARTNERSHIP CENTERS, INC.

                               GENESIS ELDERCARE PHYSICIAN SERVICES, INC.

                               GENESIS ELDERCARE PROPERTIES, INC.

                               GENESIS ELDERCARE REHABILITATION SERVICES, INC.

                               GENESIS ELDERCARE STAFFING SERVICES, INC.

                               GENESIS ELDERCARE TRANSPORTATION SERVICES, INC.

                               GENESIS HEALTH VENTURES OF ARLINGTON, INC.

                               GENESIS HEALTH VENTURES OF BLOOMFIELD, INC.

                               GENESIS HEALTH VENTURES OF CLARKS SUMMIT, INC.

                               GENESIS HEALTH VENTURES OF INDIANA, INC.

                               GENESIS HEALTH VENTURES OF LANHAM, INC.

                               GENESIS HEALTH VENTURES OF MASSACHUSETTS, INC.

                               GENESIS HEALTH VENTURES OF NAUGATUCK, INC.

                               GENESIS HEALTH VENTURES OF NEW GARDEN, INC.

                               GENESIS HEALTH VENTURES OF POINT PLEASANT, INC.

                               GENESIS HEALTH VENTURES OF SALISBURY, INC.

                               GENESIS HEALTH VENTURES OF WAYNE, INC.

                               GENESIS HEALTH VENTURES OF WEST VIRGINIA, INC.

<PAGE>

                               GENESIS HEALTH VENTURES OF WILKES-BARRE, INC.

                               GENESIS HEALTH VENTURES OF WINDSOR, INC.

                               GENESIS HEALTHCARE CENTERS HOLDINGS, INC.

                               GENESIS HEALTHCARE HOLDING COMPANY I, INC.

                               GENESIS HEALTHCARE HOLDING COMPANY II, INC.

                               GENESIS IMMEDIATE MED CENTER, INC.

                               GENESIS OF PALISADO AVENUE, INC.

                               GENESIS PROPERTIES OF DELAWARE CORPORATION

                               GENESIS SELECTCARE CORP.

                               GENESIS/VNA PARTNERSHIP HOLDING COMPANY, INC.

                               GERIATRIC & MEDICAL COMPANIES, INC.

                               GERIATRIC AND MEDICAL INVESTMENTS CORPORATION

                               GERIATRIC AND MEDICAL SERVICES, INC.

                               GERI-MED CORP.

                               GLENMARK ASSOCIATES - DAWN VIEW MANOR, INC.

                               GLENMARK ASSOCIATES, INC.

                               GLENMARK PROPERTIES, INC.

                               GMA-BRIGHTWOOD, INC.

                               GMA CONSTRUCTION, INC.

                               GMA-MADISON, INC.

<PAGE>

                               GMA - UNIONTOWN, INC.

                               GMA PARTNERSHIP HOLDING COMPANY, INC.

                               GMC LEASING CORPORATION

                               GMC-LTC MANAGEMENT, INC.

                               GMS INSURANCE SERVICES, INC.

                               GOVERNOR'S HOUSE NURSING HOME, INC.

                               HEALTH RESOURCES OF ACADEMY MANOR, INC.

                               HEALTH RESOURCES OF BOARDMAN, INC.

                               HEALTH RESOURCES OF BROOKLYN, INC.

                               HEALTH RESOURCES OF CEDAR GROVE, INC.

                               HEALTH RESOURCES OF CINNAMINSON, INC.

                               HEALTH RESOURCES OF COLCHESTER, INC.

                               HEALTH RESOURCES OF COLUMBUS, INC.

                               HEALTH RESOURCES OF CUMBERLAND, INC.

                               HEALTH RESOURCES OF ENGLEWOOD, INC.

                               HEALTH RESOURCES OF EWING, INC.

                               HEALTH RESOURCES OF FARMINGTON, INC.

                               HEALTH RESOURCES OF GARDNER, INC.

                               HEALTH RESOURCES OF GLASTONBURY, INC.

                               HEALTH RESOURCES OF GROTON, INC.

                               HEALTH RESOURCES OF LAKEVIEW, INC.

                               HEALTH RESOURCES OF LEMONT, INC.

                               HEALTH RESOURCES OF MARCELLA, INC.

                               HEALTH RESOURCES OF MIDDLETOWN (RI), INC.

<PAGE>

                               HEALTH RESOURCES OF MORRISTOWN, INC.

                               HEALTH RESOURCES OF NORTH ANDOVER, INC.

                               HEALTH RESOURCES OF ROCKVILLE, INC.

                               HEALTH RESOURCES OF TROY HILLS, INC.

                               HEALTH RESOURCES OF WALLINGFORD, INC.

                               HEALTH RESOURCES OF WARWICK, INC.

                               HEALTH RESOURCES OF WESTWOOD, INC.

                               HEALTHCARE RESOURCES CORP.

                               HELSTAT, INC.

                               HILLTOP HEALTH CARE CENTER, INC.

                               HMNH REALTY, INC.

                               HNCA, INC.

                               HORIZON ASSOCIATES, INC.

                               HORIZON MOBILE, INC.

                               HORIZON REHABILITATION, INC.

                               HR OF CHARLESTON, INC.

                               HRWV HUNTINGTON, INC.

                               INNOVATIVE HEALTH CARE MARKETING, INC.

                               KEYSTONE NURSING HOME, INC.

                               KNOLLWOOD MANOR, INC.

                               KNOLLWOOD NURSING HOME, INC.

                               LAKE MANOR, INC.

                               LAKEWOOD HEALTH RESOURCES, INC.

                               LAUREL HEALTH RESOURCES, INC.

                               LEHIGH NURSING HOMES, INC.

<PAGE>

                               LIFE SUPPORT MEDICAL EQUIPMENT, INC.

                               LIFE SUPPORT MEDICAL, INC.

                               LRC HOLDING COMPANY, INC.

                               LWNR, INC.

                               MABRI CONVALESCENT CENTER, INC.

                               MANOR MANAGEMENT CORP. OF GEORGIAN MANOR, INC.

                               MARLINTON ASSOCIATES, INC.

                               MARLINTON PARTNERSHIP HOLDING COMPANY, INC.

                               MCKERLEY HEALTH CARE CENTER-CONCORD, INC.

                               MCKERLEY HEALTH CARE CENTERS, INC.

                               MERIDIAN HEALTH, INC.

                               MERIDIAN HEALTHCARE INVESTMENTS, INC.

                               MERIDIAN HEALTHCARE, INC.

                               MHNR, INC.

                               MNR, INC.

                               MONTGOMERY NURSING HOMES, INC.

                               MULTICARE AMC, INC.

                               NURSING AND RETIREMENT CENTER OF THE
                                ANDOVERS, INC.

                               OAK HILL HEALTH CARE CENTER, INC.

                               PHC OPERATING CORP.

                               PHILADELPHIA AVENUE CORPORATION

                               POCAHONTAS CONTINUOUS CARE CENTER, INC.

<PAGE>

                               PRESCOTT NURSING HOME, INC.

                               PROSPECT PARK LTC MANAGEMENT, INC.

                               PROVIDENCE FUNDING CORPORATION

                               PROVIDENCE HEALTH CARE, INC.

                               REST HAVEN NURSING HOME, INC.

                               RHS MEMBERSHIP INTEREST HOLDING COMPANY

                               RIDGELAND HEALTH RESOURCES, INC.

                               RIVERSHORES HEALTH RESOURCES, INC.

                               RLNR, INC.

                               ROSE HEALTHCARE, INC.

                               ROSE VIEW MANOR, INC.

                               RSNR, INC.

                               RVNR, INC.

                               S. T. B. INVESTORS, LTD.

                               SCHUYLKILL NURSING HOMES, INC.

                               SENIOR LIVING VENTURES, INC.

                               SENIOR SOURCE, INC.

                               SNOW VALLEY HEALTH RESOURCES, INC.

                               SOLOMONT FAMILY MEDFORD VENTURE, INC.

                               STAFFORD CONVALESCENT CENTER, INC.

                               STATE STREET ASSOCIATES, INC.

                               SVNR, INC.

                               THE ADS GROUP, INC.

                               THE APPLE VALLEY PARTNERSHIP HOLDING
                                COMPANY, INC.

<PAGE>

                               THE HOUSE OF CAMPBELL, INC.

                               THE MULTICARE COMPANIES, INC.

                               THE SARAH BRAYTON PARTNERSHIP HOLDING
                                COMPANY, INC.

                               THE SOMERSET PARTNERSHIP HOLDING COMPANY, INC.

                               TMC ACQUISITION CORP.

                               TRI STATE MOBILE MEDICAL SERVICES, INC.

                               VALLEY MEDICAL SERVICES, INC.

                               VALLEY TRANSPORT AMBULANCE SERVICE, INC.

                               VERSALINK, INC.

                               VILLAS REALTY & INVESTMENTS, INC.

                               WALNUT LTC MANAGEMENT, INC.

                               WAYSIDE NURSING HOME, INC.

                               WEISENFLUH AMBULANCE SERVICE, INC.

                               WEST PHILA. LTC MANAGEMENT, INC.

                               WESTFORD NURSING AND RETIREMENT CENTER, INC.

                               WILLOW MANOR NURSING HOME, INC.

                               WYNCOTE HEALTHCARE CORP.

                               YE OLDE AMBULANCE COMPANY, INC.

                               YORK LTC MANAGEMENT, INC.

<PAGE>

                          By: /s/ James V. McKeon
                              ---------------------------------------------
                               Name: James V. McKeon
                               Title: Chief Financial Officer of each of
                                      the foregoing entities

                          ADS APPLE VALLEY LIMITED PARTNERSHIP
                               By: ADS Apple Valley, Inc., its general partner

                          ADS HINGHAM LIMITED PARTNERSHIP
                               By: ADS Hingham Nursing Facility, Inc., its
                                   general partner

                          ADS RECUPERATIVE CENTER LIMITED PARTNERSHIP
                               By: ADS Recuperative Center, Inc., its
                                   general partner

                          BREVARD MERIDIAN LIMITED PARTNERSHIP
                               By: Meridian Healthcare, Inc., its
                                   general partner

                          CARE HAVEN ASSOCIATES LIMITED PARTNERSHIP
                               By: Glenmark Associates, Inc., its
                                   general partner

                          CATONSVILLE MERIDIAN LIMITED PARTNERSHIP
                               By: Meridian Healthcare, Inc. and Meridian
                                   Health, Inc., its general partners

                          CUMBERLAND ASSOCIATES OF RHODE ISLAND, L.P.
                               By: Health Resources of Cumberland, Inc., its
                                   general partner

                          EASTON MERIDIAN LIMITED PARTNERSHIP
                               By: Meridian Healthcare, Inc. and Meridian
                                   Health, Inc., its general partners

                          EDELLA STREET ASSOCIATES
                               By: Genesis Health Ventures of Clarks Summit,
                                   Inc., its general partner

                          GENESIS ELDERCARE CENTERS I, L.P.
                               By: Genesis Eldercare Partnership Centers, Inc.,
                                   its general partner

<PAGE>

                          GENESIS ELDERCARE CENTERS II, L.P.
                               By: Genesis Eldercare Partnership Centers, Inc.,
                                   its general partner

                          GENESIS ELDERCARE CENTERS III, L.P.
                               By: Genesis Eldercare Partnership Centers, Inc.,
                                   its general partner

                          GENESIS HEALTH VENTURES OF WEST VIRGINIA, LIMITED
                            PARTNERSHIP
                               By: Genesis ElderCare Network Services, Inc. and
                                   Genesis ElderCare Rehabilitation Services,
                                   Inc., its general partners

                          GENESIS PROPERTIES LIMITED PARTNERSHIP
                               By: Genesis Health Ventures of Arlington, Inc.,
                                   its general partner

                          GENESIS PROPERTIES OF DELAWARE LTD. PARTNERSHIP, L.P.
                               By: Genesis Properties of Delaware Corporation,
                                   its general partner

                          GLENMARK PROPERTIES I, LIMITED PARTNERSHIP
                               By: Glenmark Associates, Inc., its general
                                   partner

                          GREENSPRING MERIDIAN LIMITED PARTNERSHIP
                               By: Meridian Healthcare, Inc., its general
                                   partner

                          GROTON ASSOCIATES OF CONNECTICUT, L.P.
                               By: Health Resources of Groton, Inc., its general
                                   partner

                          HAMMONDS LANE MERIDIAN LIMITED PARTNERSHIP
                               By: Meridian Healthcare, Inc. and Meridian
                                   Health, Inc., its general partners

                          LAKE WASHINGTON, LTD.
                               By: Lake Manor, Inc., its general partner

                          MCKERLEY HEALTH CARE CENTER-CONCORD LIMITED
                            PARTNERSHIP
                               By: McKerley Health Care Center-Concord, Inc.,
                                   its general partner

<PAGE>

                          MERIDIAN/CONSTELLATION LIMITED PARTNERSHIP
                               By: Meridian Healthcare, Inc., its general
                                   partner

                          MERIDIAN EDGEWOOD LIMITED PARTNERSHIP
                               By: Meridian Healthcare, Inc., its general
                                   partner

                          MERIDIAN PERRING LIMITED PARTNERSHIP
                               By: Meridian Healthcare, Inc., its general
                                   partner

                          MERIDIAN VALLEY LIMITED PARTNERSHIP
                               By: Meridian Healthcare, Inc., its general
                                   partner

                          MERIDIAN VALLEY VIEW LIMITED PARTNERSHIP
                               By: Meridian Healthcare, Inc., its general
                                   partner

                          MIDDLETOWN (RI) ASSOCIATES OF RHODE ISLAND, L.P.
                               By: Health Resources of Middletown (RI), Inc.,
                                   its general partner

                          MILLVILLE MERIDIAN LIMITED PARTNERSHIP
                               By: Meridian Healthcare, Inc., its general
                                   partner

                          NORTH CAPE CONVALESCENT CENTER ASSOCIATES, L.P.
                               By: Geriatric and Medical Services, Inc., its
                                   general partner

                          PHILADELPHIA AVENUE ASSOCIATES
                               By: Philadelphia Avenue Corporation, its general
                                   partner

                          POINT PLEASANT HAVEN LIMITED PARTNERSHIP
                               By: Glenmark Associates, Inc. and GMA Partnership
                                   Holding Company, Inc., its general partners

                          RALEIGH MANOR LIMITED PARTNERSHIP
                               By: Glenmark Associates, Inc., its general
                                   partner

<PAGE>

                          RIVER STREET ASSOCIATES
                               By: Genesis Health Ventures of Wilkes-Barre,
                                   Inc., its general partner

                          ROMNEY HEALTH CARE CENTER, LTD., LIMITED PARTNERSHIP
                               By: Glenmark Associates, Inc., its general
                                   partner

                          SEMINOLE MERIDIAN LIMITED PARTNERSHIP
                               By: Meridian Health, Inc., its general partner

                          SISTERVILLE HAVEN LIMITED PARTNERSHIP
                               By: Glenmark Associates, Inc., its general
                                   partner

                          STAFFORD ASSOCIATES OF N.J., L.P.
                               By: Southern Ocean GP, LLC, its general partner

                          STATE STREET ASSOCIATES, L.P.
                               By: State Street Associates, Inc., its general
                                   partner

                          TEAYS VALLEY HAVEN LIMITED PARTNERSHIP
                               By: Glenmark Associates, Inc., its general
                                   partner

                          THE APPLE VALLEY LIMITED PARTNERSHIP
                               By: The Apple Valley Partnership Holding Company,
                                   Inc. and Apple Valley Operating Corp., its
                                   general partners

                          THE STRAUS GROUP-HOPKINS HOUSE, L.P.
                               By: Encare of Wyncote, Inc., its general partner

                          THE STRAUS GROUP-QUAKERTOWN MANOR, L.P.
                               By: Encare of Quakertown, Inc., its general
                                   partner

                          THERAPY CARE SYSTEMS, L.P.
                               By: Genesis ElderCare Rehabilitation Services,
                                   Inc., its general partner

                          VOLUSIA MERIDIAN LIMITED PARTNERSHIP
                               By: Meridian Health, Inc., its general partner

                          WALLINGFORD ASSOCIATES OF CONNECTICUT, L.P.
                               By: Health Resources of Wallingford, Inc., its
                                   general partner

<PAGE>

                        WARWICK ASSOCIATES OF RHODE ISLAND, L.P.
                             By: Health Resources of Warwick, Inc., its
                                 general partner

                        WESTFORD NURSING AND RETIREMENT CENTER, LIMITED
                          PARTNERSHIP
                             By: Westford Nursing and Retirement Center, Inc.,
                                 its general partner

                        By: /s/ James V. McKeon
                            -------------------------------------------------
                             Name: James V. McKeon
                             Title: Chief Financial Officer of the respective
                                    general partners of each of the foregoing
                                    entities

                        HOLLY MANOR ASSOCIATES OF NEW JERSEY, L.P.
                             By: Encare of Mendham, L.L.C., its general partner

                        MERCERVILLE ASSOCIATES OF NEW JERSEY, L.P.
                             By: Breyut Convalescent Center, L.L.C., its general
                                 partner

                        POMPTON ASSOCIATES, L.P.
                             By: Pompton Care, L.L.C., its general partner

                        THE STRAUS GROUP-OLD BRIDGE, L.P.
                             By: Health Resources of Emery, L.L.C., its general
                                 partner

                        THE STRAUS GROUP-RIDGEWOOD, L.P.
                             By: Health Resources of Ridgewood, L.L.C., its
                                 general partner

<PAGE>

                        By: Century Care Management, Inc., the manager of the
                          respective general partners of each of the foregoing
                          entities

                       By: /s/ James V. McKeon
                           -----------------------------------------------
                            Name: James V. McKeon
                            Title: Chief Financial Officer

                       SOMERSET RIDGE LIMITED PARTNERSHIP
                        By: Somerset Ridge LLC, its general partner
                           By: Somerset Ridge General Partnership, its Manager
                           By: Solomont Family Fall River Venture, Inc., its
                               general partner

                       By: /s/ James V. McKeon
                           -----------------------------------------------
                            Name: James V. McKeon
                            Title: Chief Financial Officer

                       ARCADIA ASSOCIATES
                        By: ADS/Multicare, Inc., its managing partner

                       By: /s/ James V. McKeon
                           -----------------------------------------------
                            Name: James V. McKeon
                            Title: Chief Financial Officer

                       MCKERLEY HEALTH FACILITIES
                        By: Meridian Healthcare, Inc. and Meridian Health,
                            Inc., its partners

                       By: /s/ James V. McKeon
                           -----------------------------------------------
                            Name: James V. McKeon
                            Title: Chief Financial Officer

<PAGE>

                       SARAH BRAYTON GENERAL PARTNERSHIP

                        By: ADS Multicare Inc. and The Sarah Brayton
                            Partnership Holding Company, Inc., its general
                            partners

                       By: /s/ James V. McKeon
                           ----------------------------------------------
                            Name: James V. McKeon
                            Title: Chief Financial Officer

                       SOMERSET RIDGE GENERAL PARTNERSHIP

                        By: Solomont Family Fall River Venture, Inc. and
                        The Somerset Partnership Holding Company, Inc.,
                        its general partners

                       By: /s/ James V. McKeon
                           ----------------------------------------------
                            Name: James V. McKeon
                            Title: Chief Financial Officer

                        BREYUT CONVALESCENT CENTER, L.L.C.

                        ENCARE OF MENDHAM, L.L.C.

                        HEALTH RESOURCES OF BRIDGETON, L.L.C.

                        HEALTH RESOURCES OF CINNAMINSON, L.L.C.

                        HEALTH RESOURCES OF CRANBURY, L.L.C.

                        HEALTH RESOURCES OF EATONTOWN, L.L.C.

<PAGE>

                        HEALTH RESOURCES OF EMERY, L.L.C.

                        HEALTH RESOURCES OF ENGLEWOOD, L.L.C.

                        HEALTH RESOURCES OF EWING, L.L.C.

                        HEALTH RESOURCES OF FAIR LAWN, L.L.C.

                        HEALTH RESOURCES OF JACKSON, L.L.C.

                        HEALTH RESOURCES OF RIDGEWOOD, L.L.C.

                        HEALTH RESOURCES OF SOUTH BRUNSWICK, L.L.C.

                        HEALTH RESOURCES OF WEST ORANGE, L.L.C.

                        POMPTON CARE, L.L.C.

                        ROEPHEL CONVALESCENT CENTER, L.L.C.

                        By: Century Care Management, Inc., the manager of
                            each of the foregoing entities

                        By: /s/ James V. McKeon
                            --------------------------------------------
                             Name: James V. McKeon
                             Title: Chief Financial Officer

                        GENESIS-GEORGETOWN SNF/JV, LLC

                        GLENMARK LIMITED LIABILITY COMPANY I

                        MILFORD ALF, LLC

                        RESPIRATORY HEALTH SERVICES LLC

                        RIVERVIEW RIDGE LIMITED LIABILITY COMPANY

<PAGE>

                        SOUTHERN OCEAN GP, L.L.C.

                        By: /s/ James V. McKeon
                            ----------------------------------------------
                             Name: James V. McKeon
                             Title: Chief Financial Officer

                        SOMERSET RIDGE L.L.C.

                        By: Somerset Ridge General Partnership, its Manager
                           By: Solomont Family Fall River Venture, Inc., its
                               general partner
                           By: The Somerset Partnership Holding Company, Inc.,
                               its general partner

                           By: /s/ James V. McKeon
                               -------------------------------------------
                                Name: James V. McKeon
                                Title: Chief Financial Officer

<PAGE>

Accepted as of the date hereof

WACHOVIA CAPITAL MARKETS, LLC

Acting on behalf of itself and the several Initial
    Purchasers named in Schedule I hereto.

By: WACHOVIA CAPITAL MARKETS, LLC

By: /s/ Cathleen Burke
    ---------------------------------------------
     Name: Cathleen Burke
     Title:Director

<PAGE>

                                                                   SCHEDULE 1(D)

                          NON WHOLLY OWNED SUBSIDIARIES

ADS-NDNE Danvers, LLC
ADS-NDNE Dartmouth LLC
Atrium Village Development, LLC
Berkeley Haven Limited Partnership
Canterbury of Shepherdstown Limited Partnership
Capital Region/Genesis ElderCare L. L. C.
Care Haven Associates Limited Partnership
Caton Manor Meridian Limited Partnership
Community Provider Network of Central NH, LLC
Courtyard Nursing Care Center Partnership
Dartmouth Assisted Living LLC
Dover ALF LLC f/k/a Capitol SNF, L. L. C.
Franklin Health Care Associates
Franklin Square/Meridian Healthcare Nursing Home Limited Partnership
Frederick Meridian Limited Partnership
Genesis Atrium LLC
Genesis/Harbor LLC f/k/a Harbor/Genesis J. V., LLC
Gilcrest 1
Glenmark Properties I, Limited Partnership
Hamilton Meridian Limited Partnership
Heritage at Danvers, LLC
Kittarin, LLC
Magnolia Gardens L. L. C.
Markglen, Inc.
Marlinton Associates Limited Partnership
Meridian Healthcare Growth & Income Fund Limited Partnership
Mooresville Meridian Limited Partnership
Peninsula Regional/Genesis ElderCare, LLC f/k/a Wicomico/Genesis ElderCare
LLC f/k/a Peninsula Regional/Genesis ElderCare, LLC
Plainfield Meridian Limited Partnership
PRMC/GEC at Salisbury Center, LLC f/k/a GE at Salisbury, LLC f/k/a
PRMC/GEC at Salisbury Center, LLC
Randallstown Meridian Limited Partnership
SOG Drilling Program 1983-2
Spencer Meridian Limited Partnership

<PAGE>

                                                                      SCHEDULE I

<TABLE>
<CAPTION>
                                                             $150,000,000 OF FIRM
                                                               SECURITIES TO BE
                      INITIAL PURCHASER                           PURCHASED
-----------------------------------------------------------  --------------------
<S>                                                          <C>
Wachovia Capital Markets, LLC..............................      $ 89,732,000
Jefferies & Company, Inc...................................      $ 37,308,000
Citigroup Global Markets Inc...............................      $ 22,960,000
                                                                 ------------
         Total:............................................      $150,000,000
                                                                 ============
</TABLE>

<PAGE>

                                                                     SCHEDULE II

          SUBSIDIARIES DESCRIBED IN SECTION 1(n) OF PURCHASE AGREEMENT

Genesis Eldercare Rehabilitation Services, Inc.
Geriatric & Medical Services, Inc.
The Multicare Companies, Inc.
Genesis Eldercare Network Services, Inc.
Meridian Healthcare, Inc.
Meridian Health, Inc.
McKerley Health Care Centers, Inc.
Glenmark Associates, Inc.
Genesis Health Ventures of Massachusetts, Inc.
Genesis Health Ventures of Salisbury, Inc.
ADS/Multicare, Inc.
Genesis Health Ventures of Bloomfield, Inc.

<PAGE>

                                                                    SCHEDULE III

Officers of the Company to be subject to the Lock-Up Agreements with the Initial
                                   Purchasers

George V. Hager, Jr.
James V. McKeon
Robert A. Reitz
Eileen M. Coggins
Barbara J. Hauswald
Richard Pell, Jr.
Thomas DiVittorio

<PAGE>

                                                                       EXHIBIT A

                        FORM OF OPINION OF BLANK ROME LLP

      The opinion of Blank Rome LLP, to be delivered pursuant to Section 5(c) of
the Purchase Agreement shall be to the effect that:

      A. The Company is a corporation incorporated and existing under the laws
of the Commonwealth of Pennsylvania, has the corporate power and authority to
own its property and to conduct its business as described in the Memorandum and
is duly qualified to transact business and is in good standing in each
jurisdiction in which the conduct of its business or its ownership or leasing of
property requires such qualification, except to extent that the failure to be so
qualified or be in good standing would not have a Material Adverse Effect.

      B. The Company and each of the Significant Guarantors have corporate power
and authority to enter into and perform their respective obligations under each
of the Purchase Agreement, the Registration Rights Agreement, the Indenture, the
Securities, and the Subsidiary Guarantees to which it is a party.

      C. Each of the Significant Guarantors is a corporation validly existing
under the laws of its jurisdiction of incorporation; each of the Significant
Guarantors has the corporate power and authority to own, lease and operate its
properties and to conduct its business as described in the Memorandum, is duly
qualified as a foreign entity to transact business and is in good standing in
each jurisdiction in which the conduct of business or ownership or leasing of
property requires such qualification, except where the failure so to qualify or
to be in good standing would not have a Material Adverse Effect; the issued and
outstanding capital stock or ownership interests, as the case may be, of each of
the Significant Guarantors has been duly authorized and validly issued, is fully
paid and non-assessable, and is, to our knowledge after due inquiry, owned by
the Company, directly or indirectly.

      D. The shares of Common Stock outstanding prior to the issuance of the
Securities have been duly authorized and are validly issued, fully paid and
non-assessable.

      E. The Purchase Agreement has been duly authorized, executed and delivered
by the Company and each of the Significant Guarantors.

      F. The Securities have been duly authorized by the Company and, when
executed and authenticated in accordance with the provisions of the Indenture
and delivered to and paid for by the Initial Purchasers in accordance with the
terms of the Purchase Agreement, will be valid and binding obligations of the
Company, enforceable in accordance with their terms, subject to applicable
bankruptcy, fraudulent conveyance, insolvency and similar laws affecting

                                      A-1
<PAGE>

creditors' rights generally and equitable principles of general applicability
and an implied covenant of good faith and fair dealing.

      G. The Underlying Securities initially issuable upon conversion of the
Securities have been duly and validly authorized and reserved and, when issued
upon conversion of the Securities in accordance with the terms of the
Securities, will be validly issued, fully paid and non-assessable, and the
issuance of the Underlying Securities will not be subject to any preemptive or
similar rights under the Company's articles of incorporation or Pennsylvania
law.

      H. The Significant Guarantors' Guarantees have been duly and validly
authorized by each of the Significant Guarantors and when the Significant
Guarantors' Guarantees are duly endorsed on the Securities in accordance with
the terms of the Indenture and delivered to and paid for by the Initial
Purchasers pursuant to the Purchase Agreement on the Closing Date, assuming due
authentication of the Securities by the Trustee, such Significant Guarantors'
Guarantees will constitute legally valid and binding obligations of the
respective Significant Guarantors, entitled to the benefits of the Indenture and
enforceable against the respective Guarantors in accordance with their terms,
subject to the applicable bankruptcy, fraudulent conveyance, insolvency, and
similar laws affecting creditors' rights generally and equitable principles of
general applicability and an implied covenant of good faith and fair dealing.

      I. Each of the Indenture and the Registration Rights Agreement have been
duly authorized, executed and delivered by, and is a valid and binding agreement
of, the Company and each of the Significant Guarantors, enforceable in
accordance with its terms, subject to applicable bankruptcy, fraudulent
conveyance, insolvency and similar laws affecting creditors' rights generally
and equitable principles of general applicability and an implied covenant of
good faith and fair dealing.

      J. The execution and delivery by the Company and the Significant
Guarantors, and the performance by the Company and the Significant Guarantors of
their obligations under, the Purchase Agreement, the Indenture, the Registration
Rights Agreement, the Securities and the Subsidiary Guarantees will not result
in (i) the violation in any material respect of any provision of applicable law
or the certificate of incorporation or by-laws of the Company or any such
Significant Guarantor, or any judgment, order or decree of any governmental
body, agency or court having jurisdiction over such entity known to such
counsel, or (ii) breach of, or default under, any agreement or other instrument
binding upon any such entity that is filed as an exhibit to the Company's
periodic reports under the Exchange Act, and no consent, approval, authorization
or order of, or qualification with, any governmental body or agency is required
for the performance by the Company or any Significant Guarantor of its
respective obligations under the Purchase Agreement, the Indenture, the
Registration Rights Agreement, the Securities or the Subsidiary Guarantees, as
the case may be,

                                      A-2
<PAGE>

except such as may be required by the securities or Blue Sky laws of the various
states in connection with the offer and sale of the Securities, Subsidiary
Guarantees and Underlying Securities and by Federal and state securities laws
with respect to the conversion of the Securities and the Company's and the
Guarantors' obligations under the Registration Rights Agreement.

      K. Such counsel does not know of any legal or governmental proceedings
pending or threatened to which the Company or any of its subsidiaries is a party
or to which any of the properties of such entity is subject other than
proceedings summarized in the Memorandum and proceedings which such counsel
believes are not required to be described in the Company's periodic reports or
likely to have a material adverse effect on the power or ability of the Company
or any Guarantor to perform its respective obligations under the Purchase
Agreement, the Indenture, the Registration Rights Agreement, the Securities or
the Subsidiary Guarantees, as the case may be, or to consummate the transactions
contemplated therein.

      L. The Company is not, and after giving effect to the offering and sale of
the Securities and the application of the proceeds thereof as described in the
Memorandum will not be, an "investment company" as such term is defined in the
Investment Company Act of 1940, as amended.

      M. The statements relating to legal matters, documents or proceedings
included in the Memorandum under the captions "Description of the Debentures"
and "Description of Capital Stock" and "Business -- Revenue Sources" and
"Business -- Government Regulation", insofar as such descriptions constitute a
summary of the legal matters, documents or proceedings referred to therein,
fairly summarize in all material respects such matters, documents or
proceedings.

      N. Although the discussion set forth in the Memorandum under the caption
"Certain United States Federal Income Tax Considerations" does not purport to
summarize all possible United States federal income tax consequences of the
acquisition, ownership, and disposition of the Securities, such discussion
constitutes, in all material respects, a fair and accurate summary of the United
States federal income tax considerations that are anticipated to be material to
persons who purchase the Securities pursuant to the Memorandum.

      O. Based upon the representations, warranties and agreements of the
Company, the Guarantors and the Initial Purchasers in the Purchase Agreement, it
is not necessary in connection with the offer, sale and delivery of the
Securities to the Initial Purchasers under the Purchase Agreement or in
connection with the initial resale of such Securities by the Initial Purchasers
in accordance with the Purchase Agreement to register the Securities, the
Subsidiary Guarantees or the Underlying Securities under the Securities Act of
1933 or to qualify the Indenture under the Trust Indenture Act of 1939, it being
understood that no opinion is expressed as to any subsequent resale of any
Security, Subsidiary Guarantee or Underlying Security.

                                      A-3
<PAGE>

      Nothing has come to the attention of such counsel that causes such counsel
to believe that (i) any document incorporated by reference in the Memorandum
(except for the financial statements and financial schedules and other financial
and statistical data included therein, as to which such counsel need not express
any belief), did not comply as to form when filed with the Commission in all
material respects with the Exchange Act and the rules and regulations of the
Commission thereunder or (ii) the Memorandum (except for the financial
statements and financial schedules and other financial and statistical data, as
to which such counsel need not express any belief) when issued contained, or as
of the date such opinion is delivered contains, any untrue statement of a
material fact or omitted or omits to state a material fact necessary in order to
make the statements therein, in the light of the circumstances under which they
were made, not misleading.

      With respect to the matters referred to in the paragraph above, counsel
may state that his or her beliefs are based upon his or her participation in the
preparation of the Memorandum (and any amendments or supplements thereto) and
review and discussion of the contents thereof and review of the documents
incorporated by reference therein, but are without independent check or
verification except as specified.

                                      A-4
<PAGE>

                                                                       EXHIBIT B

                        OPINION OF DAVIS POLK & WARDWELL

      The opinion of Davis Polk & Wardwell to be delivered pursuant to Section
5(d) of the Purchase Agreement shall be to the effect that:

      A. Assuming that the Securities have been duly authorized by the Company,
the Securities, when executed and authenticated in accordance with the
provisions of the Indenture and delivered to and paid for by the Initial
Purchasers in accordance with the terms of the Purchase Agreement, will be valid
and binding obligations of the Company, enforceable in accordance with their
terms, subject to applicable bankruptcy, insolvency and similar laws affecting
creditors' rights generally and equitable principles of general applicability,
and will be entitled to the benefits of the Indenture and the Registration
Rights Agreement pursuant to which such Securities are to be issued.

      B. The Subsidiary Guarantees have been duly and validly authorized by each
of the Delaware Guarantors, and assuming that the Subsidiary Guarantees have
been duly and validly authorized by each other Guarantor, the Subsidiary
Guarantees, when duly endorsed on the Securities in accordance with the terms of
the Indenture and delivered to and paid for by the Initial Purchasers pursuant
to the Purchase Agreement on the Closing Date, will constitute legally valid and
binding obligations of each respective Guarantor, entitled to the benefits of
the Indenture and enforceable against such Guarantor in accordance with their
terms, subject to the applicable bankruptcy, insolvency, and similar laws
affecting creditors' rights generally and equitable principles of general
applicability.

      C. Each of the Indenture and the Registration Rights Agreement has been
duly authorized, executed and delivered by each of the Delaware Guarantors, and
assuming that each of the Indenture and Registration Rights Agreement has been
duly authorized, executed and delivered by the Company and each other Guarantor,
each of the Indenture and the Registration Rights Agreement is a valid and
binding agreement of the Company and each Guarantor, enforceable in accordance
with its terms, subject to applicable bankruptcy, insolvency and similar laws
affecting creditors' rights generally and equitable principles of general
applicability, and except as rights to indemnification and contribution under
the Registration Rights Agreement may be limited under applicable law.

      D. The statements relating to legal documents included in the Memorandum
under the captions "Description of the Debentures", "Plan of Distribution" and
"Transfer Restrictions", insofar as they summarize provisions of the Indenture,
the Securities and the Purchase Agreement, fairly summarize in all material
respects such documents.

                                      B-1
<PAGE>

      E. Nothing has come to the attention of such counsel to cause such counsel
to believe that (except for the financial statements and financial schedules and
other financial and statistical data, as to which such counsel need not express
any belief) the Memorandum when issued contained, or as of the date such opinion
is delivered contains, any untrue statement of a material fact or omitted or
omits to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading.

      With respect to the matters referred to in the paragraph above, Davis Polk
& Wardwell may state that their beliefs are based upon their participation in
the preparation of the Memorandum (and any amendments or supplements thereto)
and review and discussion of the contents thereof (including the review of, but
not participation in the preparation of, the incorporated documents), but are
without independent check or verification except as specified.

      F. Based upon the representations, warranties and agreements of the
Company, of the Guarantors and of the Initial Purchasers in the Purchase
Agreement, it is not necessary in connection with the offer, sale and delivery
of the Securities to the Initial Purchasers under the Purchase Agreement or in
connection with the initial resale of such Securities by the Initial Purchasers
in accordance with the Purchase Agreement to register the Securities, the
Subsidiary Guarantees or the Underlying Securities under the Securities Act of
1933 or to qualify the Indenture under the Trust Indenture Act of 1939, it being
understood that no opinion is expressed as to any subsequent resale of any
Security, Subsidiary Guarantee or Underlying Security.

                                      B-2
<PAGE>

                                                                       EXHIBIT C

                             FORM OF LOCK-UP LETTER

                                      February 24, 2005

Wachovia Capital Markets, LLC
c/o Wachovia Capital Markets, LLC
301 South College Street, 4th Floor
Charlotte, North Carolina 28288-0735

Dear Sirs and Mesdames:

      The undersigned understands that you propose to enter into a Purchase
Agreement (the "PURCHASE AGREEMENT") with Genesis HealthCare Corporation, a
Pennsylvania corporation (the "COMPANY"), providing for the offering (the
"OFFERING") by Wachovia Capital Markets, LLC, and such other initial purchasers
identified therein (collectively, the "INITIAL PURCHASERS") of the Company's
Convertible Senior Subordinated Debentures Due 2025 (the "SECURITIES"). The
Securities will be convertible into shares of common stock, par value $0.01, of
the Company (the "COMMON STOCK").

      To induce the Initial Purchasers to continue their efforts in connection
with the Offering, the undersigned hereby agrees that, without the prior written
consent of Wachovia Capital Markets, LLC on behalf of the Initial Purchasers, it
will not, during the period commencing on the date hereof and ending 90 days
after the date of the offering memorandum relating to the Offering (the
"MEMORANDUM"), (1) offer, pledge, sell, contract to sell, sell any option or
contract to purchase, purchase any option or contract to sell, grant any option,
right or warrant to purchase, lend, or otherwise transfer or dispose of,
directly or indirectly, any shares of Common Stock or any securities convertible
into or exercisable or exchangeable for Common Stock or (2) enter into any swap
or other arrangement that transfers to another, in whole or in part, any of the
economic consequences of ownership of the Common Stock, whether any such
transaction described in clause (1) or (2) above is to be settled by delivery of
Common Stock or such other securities, in cash or otherwise. The foregoing
sentence shall not apply to (i) transactions relating to shares of Common Stock
or other securities acquired in open market transactions after the completion of
the Offering, (ii) the sale, transfer or disposition of shares of the Common
Stock in an amount not to exceed, when aggregated with all sales, transfers or
dispositions of officers of the Company who have executed similar letter
agreements, 200,000

                                      C-1
<PAGE>

shares or (iii) the exercise of any options to acquire shares of Common Stock
pursuant to the Company's employee benefit plans existing on the date hereof. In
addition, the undersigned agrees that, without the prior written consent of
Wachovia Capital Markets, LLC on behalf of the Initial Purchasers, it will not,
during the period commencing on the date hereof and ending 90 days after the
date of the Memorandum, make any demand for or exercise any right with respect
to, the registration of any shares of Common Stock or any security convertible
into or exercisable or exchangeable for Common Stock. The undersigned also
agrees and consents to the entry of stop transfer instructions with the
Company's transfer agent and registrar against the transfer of the undersigned's
shares of Common Stock except in compliance with the foregoing restrictions.

      The undersigned understands that the Company and the Initial Purchasers
are relying upon this Lock-Up Agreement in proceeding toward consummation of the
Offering. The undersigned further understands that this Lock-Up Agreement is
irrevocable and shall be binding upon the undersigned's heirs, legal
representatives, successors and assigns.

      Whether or not the Offering actually occurs depends on a number of
factors, including market conditions. Any Offering will only be made pursuant to
a Purchase Agreement, the terms of which are subject to negotiation between the
Company and the Initial Purchasers. This Lock-Up Agreement shall terminate and
be of no further force and effect if the Offering has not been consummated on or
before April 1, 2005.

                                      C-2
<PAGE>

                                 Very truly yours,

                                 ___________________________________
                                 (Name)

                                 ___________________________________
                                 (Title)

                                      C-3