<PAGE>   1
                            ASSET PURCHASE AGREEMENT

                                    BETWEEN

                        ALBERT GALLATIN HOME CARE, INC.

                                      and

               ALBERT GALLATIN VISITING NURSE ASSOCIATION, INC.


<PAGE>   2
                               TABLE OF CONTENTS

<TABLE>
<CAPTION>

                                                                            Page
                                                                            ----
<S>                                                                         <C>
ARTICLE 1.   ASSETS ACQUIRED
      1.1    Sale and Purchase of Assets ............................         1
      1.2    Excluded Assets ........................................         1

ARTICLE 2.   CLOSING DATE; TRANSFER OF ASSETS .......................         2
      2.1    Closing and Closing Date................................         2
      2.2    Transfer of Assets .....................................         2

ARTICLE 3.   CONSIDERATION FOR THE ASSETS; ASSUMPTION
               OF LIABILITIES; EXCLUDED LIABILITIES .................         2
      3.1    Assumption of Liabilities ..............................         2
      3.2    Excluded Liabilities ...................................         4
      3.3    Buyer's Indemnification of Seller and other
               Indemnitees ..........................................         4
      3.4    Defense of Pending Litigation and Investigations .......         9

ARTICLE 4.   REPRESENTATIONS AND WARRANTIES OF SELLER ...............        10
      4.1    Organization of Seller; Good Standing; Qualifications;
               Charter and By-Laws ..................................        10
      4.2    Authority ..............................................        10
      4.3    Approvals, Licenses and Other Authorizations ...........        11
      4.4    Financial Statements; Liabilities ......................        11
      4.5    Absence of Certain Events ..............................        12
      4.6    Title to and Condition of Properties ...................        13
      4.7    Intangible Properties ..................................        15
      4.8    Contracts and Commitments ..............................        15
      4.9    Tax Returns and Tax Audits .............................        16
      4.10   Insurance ..............................................        17
      4.11   No Litigation, Adverse Events or Violations ............        17
      4.12   Labor Agreements .......................................        17
      4.13   Employee Benefit Plans .................................        17
      4.14   Trade Names ............................................        20
      4.15   Bank Accounts ..........................................        20
      4.16   Accounts Receivable and Notes Receivable ...............        20
      4.17   Joint Ventures; No Subsidiaries ........................        21
      4.18   Licenses and Permits ...................................        21
      4.19   Employees ..............................................        21
      4.20   Discharge Fees .........................................        21
      4.21   No Adverse Action ......................................        21
      4.22   Full Disclosure ........................................        21
      4.23   Ownership of Necessary Assets ..........................        22
      4.24   Severance Pay ..........................................        22
</TABLE>



                                      (i)
<PAGE>   3

<TABLE>
<S>                                                                         <C>
ARTICLE 5.   REPRESENTATIONS AND WARRANTIES OF BUYER ................        22
      5.1    Organization of Buyer; Good Standing ...................        22
      5.2    Authority ..............................................        22
      5.3    No Adverse Action ......................................        23

ARTICLE 6.   COVENANTS AND AGREEMENTS OF SELLER .....................        23
      6.1    Actions Pending Closing ................................        23
      6.2    Consents ...............................................        25

ARTICLE 7.   COVENANTS AND AGREEMENTS OF BUYER ......................        26
      7.1    Consents ...............................................        26
      7.2    Employees ..............................................        26
      7.3    Post-Closing Access to Information .....................        26

ARTICLE 8.   CONDITIONS TO BUYER'S OBLIGATION TO CONSUMMATE
                 THE TRANSACTION.....................................        27
      8.1    Compliance with Agreement ..............................        27
      8.2    Representations and Warranties .........................        27
      8.3    Approvals and Consents .................................        27
      8.4    No Litigation ..........................................        27
      8.5    Closing of Other Transactions ..........................        27
      8.6    No Material Adverse Change .............................        28
      8.7    Opinion of Counsel .....................................        28
      8.8    Key Employee Certificates ..............................        28
      8.9    Noncompetition Agreement ...............................        28
      8.10   Deliveries .............................................        28
      8.11   Release of Certain Liens ...............................        28

ARTICLE 9.   CONDITIONS TO SELLER'S OBLIGATION TO CONSUMMATE
                 THE TRANSACTION ....................................        28
      9.1    Compliance with Agreement ..............................        28
      9.2    Representations and Warranties .........................        29
      9.3    Approvals and Consents .................................        29
      9.4    No Litigation ..........................................        29
      9.5    Closing of Other Transactions ..........................        29
      9.6    Guaranty of Staff Builders, Inc.........................        29
      9.7    Deliveries .............................................        29

ARTICLE 10.  TERMINATION ............................................        30
     10.1    Termination Prior to the Closing Date ..................        30

ARTICLE 11.  DELIVERIES AT AND AFTER CLOSING ........................        31
     11.1    Deliveries at Closing ..................................        31
     11.2    Deliveries after Closing ...............................        33
</TABLE>


                                      (ii)
<PAGE>   4


<TABLE>
<S>                                                                         <C>
ARTICLE 12.  MISCELLANEOUS ..........................................        33
     12.1    Survival ...............................................        33
     12.2    Expenses ...............................................        33
     12.3    Notices ................................................        33
     12.4    Parties in Interest and Assignment .....................        34
     12.5    Modification ...........................................        35
     12.6    Entire Agreement .......................................        35
     12.7    Execution in Multiple Counterparts .....................        35
     12.8    Headings................................................        35
     12.9    Governing Law ..........................................        35
     12.10   Schedules ..............................................        35
     12.11   Severability ...........................................        35
</TABLE>


                                     (iii)
<PAGE>   5


                                   SCHEDULES

<TABLE>
<S>                     <C>
Schedule 1.0            Communities Served by Seller

Schedule 1.2            Excluded Assets

Schedule 3.1            Summary of Joint Investigation

Schedule 4.2            Required Consents

Schedule 4.3            Approvals and Consents; Certain Matters Regarding
                        Licenses

Schedule 4.4(b)         Liabilities of Seller as of April 30, 1993

Schedule 4.5            Certain Changes in Seller's Business

Schedule 4.5(a)         Certain Accounts of Seller to be Contributed to
                        AGP&D

Schedule 4.6            Owned and Leased Real Property; Liens and
                        Encumbrances; Certain Tangible Personal Property

Schedule 4.7            Patents, Trademarks, etc.

Schedule 4.8            Material Contracts

Schedule 4.10           Insurance

Schedule 4.11           Litigation

Schedule 4.13           Employee Benefit Plans

Schedule 4.14           Trade Names

Schedule 4.15           Bank Accounts

Schedule 4.18           Material Licenses, Permits, Certificates of Need
                        and Approvals

Schedule 4.19           Employees; Employment Agreements

Schedule 6.1            Permitted Liens and Security Interests

Schedule 8.3            Material Consents, Approvals and Waivers Required
                        to be Obtained Prior to Closing
</TABLE>


                              (iv)
<PAGE>   6

                                    EXHIBITS

<TABLE>
<S>                     <C>
Exhibit I               Opinion of Seller's Counsel
Exhibit II              Key Employee Certificate
Exhibit III             Noncompetition Agreement
Exhibit IV              Intentionally Omitted
Exhibit V               Guaranty of Staff Builders, Inc.
Exhibit VI              Power of Attorney
Exhibit VII             Assumption Agreement Regarding Employment
                        Agreements
Exhibit VIII            Assumption and Substitution Agreement (Regarding
                        Profit Sharing Plan and Flex Plan)
Exhibit IX              Assignment and Bill of Sale
Exhibit X               Assumption Agreement
</TABLE>



                            (v)
<PAGE>   7
                           ASSET PURCHASE AGREEMENT

         THIS ASSET PURCHASE AGREEMENT (hereinafter referred to as the
"Agreement") is made and entered into as of the 22nd day of June, 1993, by and
between ALBERT GALLATIN HOME CARE, INC., a Delaware corporation (the "Buyer"),
and ALBERT GALLATIN VISITING NURSE ASSOCIATION, INC., a Pennsylvania nonprofit
corporation (the "Seller").

                                   BACKGROUND

         WHEREAS, Seller owns and operates a visiting nurse association
throughout portions of Pennsylvania and West Virginia as more fully described
on Schedule 1.0 hereto; and

         WHEREAS, Seller desires to transfer and sell to Buyer substantially
all of the assets of Seller, and Buyer desires to purchase and acquire such
assets, in accordance with the terms and provisions hereinafter set forth.

         NOW, THEREFORE, for and in consideration of the mutual agreements
contained herein, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, and intending to be legally bound
hereby, Seller and Buyer covenant, represent, warrant, stipulate and agree as
follows:

                           ARTICLE 1. ASSETS ACQUIRED

         1.1  Sale and Purchase of Assets. Subject to the terms and conditions
of this Agreement, Seller agrees to sell, transfer and assign to Buyer all
assets of Seller of any nature, whether real, personal or mixed, tangible and
intangible, owned or leased (other than the Excluded Assets, as hereinafter
defined in Section 1.2), wherever located, including, without limitation, all
real estate and interests therein, buildings, equipment, cash, bank accounts,
accounts receivable, inventory, supplies, prepaid items, licenses, contracts,
franchises, leases, choses in action, all rights of appeal as to cost reports
(including but not limited to the 1990 Provider Reimbursement Review Board
appeal), books, records, security deposits, customer lists, contract rights,
trade secrets, the trade names "Albert Gallatin" and "BAHRD Home Health
Services" and all other tangible and intangible assets of Seller, as reflected
in the balance sheet of Seller as of December 31, 1992, and any assets of Seller
acquired subsequent thereto (collectively the "Assets"), in the manner and for
the consideration hereinafter set forth.

         1.2  Excluded Assets. The following shall be excluded from the Assets
of Seller transferred and sold to Buyer:


<PAGE>   8
         (a)  All properties and interests in properties of Seller which have
been or will be sold or consumed by Seller in the ordinary course of business
from December 31, 1992 through the Closing Date;

         (b)  Minute books, stock books and other books and records pertaining
to the corporate existence of Seller;

         (c)  Seller's rights under and in respect of this Agreement and the
transaction contemplated hereby;

         (d)  The assets described on Schedule 1.2 hereto;

         (e)  The names "Albert Gallatin Planning and Development Corporation"
and "Albert Gallatin Human Services Agency, Inc."; and

         (f)  That certain account receivable of Seller from Albert Gallatin
Planning and Development Corporation, in the outstanding principal amount of
$65,650, and all rights thereto or related thereto.

         The assets described in this Section 1.2 are collectively referred to
in this Agreement as the "Excluded Assets."

                  ARTICLE 2. CLOSING DATE; TRANSFER OF ASSETS
         2.1  Closing and Closing Date. The closing hereunder (the "Closing")
shall take place at such place and time and on such date as may be agreed to in
writing by Seller and Buyer. The date upon which the Closing occurs shall be
the "Closing Date."

         2.2  Transfer of Assets. Seller shall, at the Closing on the Closing
Date, by general warranty deeds, bill of sale and other appropriate documents,
transfer the Assets to Buyer.

                   ARTICLE 3. CONSIDERATION FOR THE ASSETS;
                ASSUMPTION OF LIABILITIES; EXCLUDED LIABILITIES

         3.1  Assumption of Liabilities. (a) In consideration of the sale of
the Assets to Buyer, at the Closing on the Closing Date, Buyer shall assume, by
Assumption Agreement in the form of Exhibit X hereto, and discharge as they
become due, all of the liabilities of Seller arising out of, in connection
with, in respect of or attributable to Seller's operations prior to Closing,
known or unknown, contingent, or otherwise (the


                                      -2-
<PAGE>   9
liabilities described in this Section 3.1 are hereinafter collectively referred
to as the "Assumed Liabilities"), including without limitation all liabilities
of Seller: (i) as set forth in the balance sheet of Seller as of December 31,
1992, (ii) for any monetary Loss or other monetary expenses (including without
limitation with respect to civil or criminal legal proceedings) in connection
with the joint investigation by the United States Attorney for the Eastern
District of Pennsylvania and the Office of the Inspector General of the
Department of Health and Human Services of the United States of America (as such
investigation is more fully described on Schedule 3.1 of this Agreement),
including without limitation any monetary Loss or other monetary expenses,
arising out of or in connection therewith (including without limitation with
respect to criminal or civil legal proceedings); (iii) under or arising out of
the Material Contracts (as hereinafter defined in Section 4.8) and all other
immaterial contracts and agreements to which Seller is a party or by which
Seller is bound on the Closing Date, (iv) in connection with all cost reports
(settled and unsettled, filed, or unfiled); (v) for the payment required to be
made on or before September 15, 1993 to the Albert Gallatin Visiting Nurse
Association, Inc. Profit Sharing Plan (the "Profit Sharing Plan"), established
for Seller's employees; and (vi) for the payment required to be made to the
Profit Sharing Plan with respect to the contribution for the period January 1,
1993 through the Closing Date.

         (b)  Buyer and Seller acknowledge that Seller will remain in existence
following the Closing for the purpose of winding up its affairs, but not to
otherwise engage in any active business, and that certain administrative and
other filings will need to be made to maintain Seller's existence. It is
expressly agreed that the acknowledgments and undertakings by Seller set forth
in this Section 3.1(b) do not in any way modify the other obligations of Buyer
in this Agreement, including, without limitation, the obligations set forth in
Sections 3.3 and 3.4. Buyer acknowledges that following the Closing, Seller
will need to file federal, state and local tax returns, cost reports, reports
in respect of employee benefit plans and other similar administrative or
governmental reports, notices, or filings attributable to the period prior to
the Closing Date, and Buyer agrees that at reasonable times employees and
facilities of Buyer shall be made available to Seller for the preparation of
such tax returns, reports, notices and filings. Buyer further agrees that the
preparation of such tax returns, reports, notices and filings shall be at
Buyer's expense and paid by Buyer and that any taxes, fees, payments or
liabilities payable by Seller with respect to such tax returns, reports,
notices and filings attributable to the period prior to the Closing Date or for
sales or transfer taxes with respect to the transfer of the Assets of Seller to



                                      -3-
<PAGE>   10

Buyer shall be the sole expense of Buyer and timely paid by Buyer on behalf of
Seller.

         3.2  Excluded Liabilities. It is expressly agreed that Buyer shall not
assume and shall have no liability for: (i) any and all liabilities of Seller
arising out of, in connection with, in respect of or attributable to Seller's
operations following the Closing Date, except for those liabilities assumed by
Buyer in clause 3.1(b) above; (ii) any and all liabilities in connection with
any of the Excluded Assets; (iii) any and all indebtedness and other
liabilities of Seller incurred by Seller during the period of December 31, 1992
through the Closing Date, other than in the ordinary course of business, other
than as otherwise permitted to be incurred by Seller in accordance with this
Agreement or other than as set forth in Schedule 4.4(b) of this Agreement; (iv)
any and all liabilities arising out of a material breach by Seller of a
representation, warranty, covenant or agreement made by Seller to Buyer in this
Agreement or any other Transaction Documents or a breach by a Key Employee (as
hereinafter defined) of a representation made in a Key Employee Certificate
delivered by such Key Employee to Buyer, such Certificate to be in the form of
Exhibit II hereto (each a "Key Employee Certificate"); (v) any liability of
Seller outstanding on the Closing Date of which Seller had knowledge and did
not disclose to Buyer or which a Key Employee had knowledge and failed to
disclose in a Key Employee Certificate; and (vi) any obligation of a
nonmonetary nature arising out of the Joint Investigation. "Key Employee" shall
have the meaning as set forth in Section 8.8 of this Agreement. For purposes of
clause (iv) of this Section 3.2, any liability in excess of $25,000 arising out
of a breach by Seller of a representation, warranty, covenant or agreement made
by Seller to Buyer in this Agreement or any other Transaction Documents to
which Buyer is a party or a breach by a Key Employee of a representation made
in a Key Employee Certificate shall be deemed a "material breach."

         3.3  Buyer's Indemnification of Seller and other Indemnitees. (a)
Following the Closing, subject to the limitations on indemnification provided
in Sections 3.3(b), (c) and (d) below, Buyer shall defend, indemnify and hold
harmless Seller and any person who was or is prior to Closing a director,
officer, employee or representative of Seller (hereinafter Seller and such
persons are collectively referred to as the "Indemnitees" and individually as
an "Indemnitee"), from and against:

              (i) any Loss (as hereinafter defined) suffered, sustained,
         incurred or required to be paid by any Indemnitee or to be suffered,
         sustained, incurred or paid in the future (following the Closing) by
         any Indemnitee arising out of any and all breaches of


                                      -4-
<PAGE>   11
         Buyer's covenants, agreements, representations and warranties under
         this Agreement or the other Transaction Documents (as hereinafter
         defined) including without limitation, any acts or omissions of Buyer
         in connection with any of the Assumed Liabilities (as defined in
         Section 3.1 hereof);

              (ii) as to an Indemnitee other than Seller, any Loss suffered,
         sustained, incurred or required to be paid by any Indemnitee (other
         than Seller) arising out of any threatened, pending or completed
         action, suit or proceeding, whether civil, criminal, administrative or
         investigative (other than an action by or in the right of Seller), by
         reason of any Indemnitee (other than Seller) serving prior to Closing
         as a director, officer, employee or representative of Seller prior to
         Closing or any Indemnitee (other than Seller) serving at the request
         of Seller prior to Closing as a representative of another corporation,
         partnership, joint venture, trust or other enterprise, including,
         without limitation (a) any Loss suffered, sustained, incurred or
         required to be paid by an Indemnitee (other than Seller) arising out
         of an action or proceeding seeking rescission, by a court of
         appropriate jurisdiction, of the sale of the Assets of Seller to Buyer
         pursuant to this Agreement and the other Transaction Documents, and
         (b) any Loss suffered, sustained, incurred or required to be paid by
         any Indemnitee (other than Seller) arising out of any suit, action or
         proceeding arising out of, in connection with or as a result of the
         Joint Investigation (as described on Schedule 3.1 hereto) or the
         subject matter thereof; and

              (iii) any and all reasonable costs and expenses of any Indemnitee
         related to the foregoing clauses (i) or (ii), including reasonable
         attorney's fees in connection with the prosecution, defense or appeal
         of, or participation in, any suit, action, arbitration or legal
         proceeding in connection therewith.

For purposes of this Agreement, "Loss" shall mean collectively any and all
monetary damages, losses, obligations, liabilities, claims, actions, causes of
action, costs, assessments, expenses, judgments, fines, penalties,
reimbursement recoupments or other monetary expenses and in the case of any of
the foregoing, including without limitation with respect to civil or criminal
legal proceedings.

         (b)  With respect to indemnification under Section 3.3(a)(ii), each
Indemnitee (other than Seller) shall be entitled to indemnification to the
fullest extent that such Indemnitee



                                      -5-
<PAGE>   12
would have been entitled to be indemnified pursuant to the Pennsylvania
Nonprofit Corporation Law, including all presumptions thereunder permitted by
law.

         (c)  The obligation of Buyer to indemnify an Indemnitee pursuant to
Section 3.3 of this Agreement is subject to the following limitations:

              (i) In the event any Indemnitee suffers, sustains or incurs any
         Loss arising out of a (a) breach of warranty, representation, covenant
         or agreement of Seller in this Agreement or the other Transaction
         Documents, (b) any liability of Seller outstanding on the Closing Date
         of which Seller had knowledge and did not disclose to Buyer or which a
         Key Employee had knowledge and failed to disclose in a Key Employee
         Certificate, or (c) a breach by a Key Employee of a representation made
         in a Key Employee Certificate, no Indemnitee shall be entitled to
         indemnification pursuant to Section 3.3(a) of this Agreement with
         respect to any Loss arising out of or related to such breach of
         warranty, representation, agreement or covenant or with respect to such
         undisclosed liability; provided, however, that: (x) notwithstanding the
         foregoing, an Indemnitee who is or was a director of Seller prior to
         Closing and who was not at any time prior to Closing an officer,
         employee or representative of Seller (each such person for purposes of
         this subsection (i) is sometimes referred to as a "Nonemployee
         Director," and it is specifically agreed that the term Nonemployee
         Director shall specifically exclude the Key Employees), shall be
         entitled to indemnification pursuant to Section 3.3(a) of this
         Agreement for any Loss arising out of any matter described in clauses
         (a), (b) and (c) of this subsection (i); provided, further, that
         nothing in clause (x) above shall be deemed to be a waiver of any
         rights of Buyer to limit indemnification as to any Indemnitee other
         than a Nonemployee Director with respect to a breach described in
         clause (a), (b) or (c) of this subsection (i);

              (ii) Buyer shall have no obligation to indemnify an Indemnitee
         for any Loss incurred, suffered or sustained by an Indemnitee (a)
         arising out of or in connection with the transfer of the Assets of
         Seller to Buyer pursuant to this Agreement and the other Transaction
         Documents, other than arising out of an action or proceeding seeking
         rescission, by a court of appropriate jurisdiction, of the sale of the
         Assets of Seller to Buyer pursuant to this Agreement and the other
         Transaction Documents; (b) arising out of or in



                                      -6-
<PAGE>   13

         connection with any of the Excluded Liabilities; and (c) which is not
         of a monetary nature (such as nonmonetary criminal sanctions,
         imprisonment, debarment or exclusion), including but not limited to
         any Loss not of a monetary nature arising out of the Joint
         Investigation;

              (iii) In order to satisfy any indemnity payments Buyer is
         required to make to an Indemnitee pursuant to Section 3.3 of this
         Agreement, it is agreed that any applicable insurance proceeds shall
         first be used to satisfy such a claim, with any deductible amount
         applicable to such insurance payment to be paid by Buyer.

              (iv) Buyer shall have no obligation to indemnify an Indemnitee
         for any Loss incurred, suffered or sustained by an Indemnitee in
         connection with any claim or action against a third party (other than
         a claim against Buyer pursuant to this Agreement or the other
         Transaction Documents) where such Indemnitee is the plaintiff;
         provided however that Buyer shall be obligated to indemnify an
         Indemnitee for any Loss arising out of any claims or actions against a
         third party where such Indemnitee is the plaintiff if the nature of
         the claim or action is a cross claim, counterclaim or any other claim
         or action initiated by an Indemnitee (which in each case Buyer has
         reasonably approved), as the moving party, arising out of any claim,
         action, suit or proceeding by a third party against an Indemnitee for
         which such Indemnitee is entitled to indemnification from Buyer
         pursuant to this Agreement. The provisions of this Section shall not
         modify Buyer's obligations pursuant to Section 3.3(a)(i) of this
         Agreement.

              (v) The indemnification provisions of Section 3.3 of this
         Agreement are for indemnification of an Indemnitee for actual damages
         (including Losses) suffered, sustained, incurred or to be suffered,
         sustained or incurred in the future, by an Indemnitee, and Buyer shall
         have no obligation to indemnify an Indemnitee for any consequential
         damages.

              (vi) It is expressly agreed that Buyer shall have no obligation
         to indemnify Seller's outside, independent auditors pursuant to this
         Agreement.

         (d)  The indemnification obligations of Buyer pursuant to this Section
3.3 with respect to claims resulting from the



                                      -7-
<PAGE>   14
assertion of liability by third parties shall be subject to the following terms
and conditions:

              (i) Each Indemnitee shall give prompt written notice as provided
         below to Buyer, with a copy to Seller, of any claim which might give
         rise to a claim by such Indemnitee against Buyer based on the
         provisions of Section 3.3, stating the nature and basis of said claims
         and the amount thereof, to the extent known. Each Indemnitee shall
         provide the notice required to be given by such Indemnitee to Buyer
         hereunder within ten (10) business days following the day such
         Indemnitee becomes aware that it has a claim for indemnification from
         Buyer under this Agreement;

              (ii) In the event that any action, suit or proceeding is brought
         against any Indemnitee, with respect to which Buyer may have liability
         under this Section 3.3, the action, suit, or proceeding shall be
         defended (including all proceedings on appeal or for review which
         counsel for the defendant shall deem appropriate) by legal counsel
         reasonably acceptable to Buyer and such Indemnitee (such consent of
         the Indemnitee not to be unreasonably withheld), at Buyer's expense.
         An Indemnitee shall have the right to employ its own counsel in any
         such case, in addition to counsel provided by Buyer, and the fees and
         expenses of such additional counsel shall be at the expense of such
         Indemnitee unless the employment of such counsel shall have been
         authorized, in writing, by Buyer in connection with the defense of
         such action, suit or proceeding. In any event, such Indemnitee shall
         keep Seller fully informed of each such action, suit or proceeding at
         all stages thereof. Subject to applicable privileges or protections,
         Buyer shall make available to Seller or such Indemnitee and their
         attorneys and accountants, all books and records of Buyer relating to
         such proceedings or litigation (which shall be kept confidential), and
         Buyer and the Indemnitees agree to render to each other such
         assistance as they may reasonably require of each other in order to
         insure the proper and adequate defense of any such action, suit or
         proceeding;

              If Buyer believes in good faith that a reasonable basis exists
         for a counterclaim by an Indemnitee with respect to a Loss as to which
         indemnification has been asserted against Buyer by such Indemnitee,
         such Indemnitee shall cooperate with Buyer in respect of the bringing
         of such counterclaim. The costs and expenses, including attorneys
         fees, shall be borne by the Buyer in respect of such counterclaim. In



                                      -8-
<PAGE>   15
         the event of a favorable result, the proceeds, award or judgment
         thereof shall be assigned by such Indemnitee to Buyer or any
         proceeds thereof received by such Indemnitee shall be paid over by
         such Indemnitee to Buyer. Buyer shall indemnify such Indemnitee for
         any Loss suffered, sustained or incurred by such Indemnitee resulting
         from the counterclaim. Further, the participation of such Indemnitee
         in any counterclaim pursuant to this Section, shall not in any way
         modify Buyer's other indemnification obligations set forth in Section
         3.3(a).

              (iii) Buyer shall have the right to settle, in good faith, any
         Loss against an Indemnitee which Buyer is defending pursuant to this
         Section 3.3 without such Indemnitee's consent; provided, however, that
         Buyer shall not make any monetary settlement of any claims which would
         require as a condition of such monetary settlement the imposition of
         nonmonetary sanctions (such as imprisonment, debarment or exclusion) on
         an Indemnitee, would require the entering of a plea by an Indemnitee,
         would require an admission of guilt by an Indemnitee, would require a
         plea of nolo contendre by an Indemnitee, or would require an Indemnitee
         to consent to exclusion from government programs, without the prior
         written consent of such Indemnitee, which consent shall not be
         unreasonably withheld or delayed; provided, further, that in the event
         the consent of an Indemnitee is unreasonably withheld or delayed, Buyer
         shall have no further obligation to indemnify such Indemnitee with
         respect to the matter for which the requested consent was unreasonably
         withheld or delayed; and

              (iv) If Buyer, in violation of this Agreement, fails or refuses
         to defend any action referred to in this Section 3.3, one or more of
         the Indemnitees may defend such action and the indemnity obligations
         of this Section 3.3 shall remain in full force and effect.

         3.4  Defense of Pending Litigation and Investigations.

         Schedule 4.11 hereto sets forth pending litigation and investigations
involving Seller. Following the Closing, without limiting the generality of
Section 3.3, subject to the provisions of Section 3.3(b), (c) and (d) Buyer
agrees to engage legal counsel reasonably satisfactory to Buyer and Seller
(such consent of Seller not to be unreasonably withheld) at Buyer's expense, to
continue representation of Seller and the other Indemnitees in connection
with such pending litigation and investigation, including without limitation,
with respect to all criminal and



                                      -9-
<PAGE>   16

civil legal proceedings arising out off, in connection with or as a result of
the Joint Investigation commenced against an Indemnitee, appeals thereof, and
any actions in connection with any sanctions, fines, or penalties imposed or
assessed or to be imposed upon or assessed against any Indemnitee.

              ARTICLE 4. REPRESENTATIONS AND WARRANTIES OF SELLER

         Seller hereby represents and warrants to Buyer both as of the date
hereof and the Closing Date as follows:

         4.1  Organization of Seller; Good Standing; Qualifications; Charter
and By-Laws. Seller is a nonprofit corporation, duly organized, validly
existing and in good standing under the laws of the Commonwealth of
Pennsylvania. Seller has the requisite corporate power and authority to own,
lease and operate its properties and to conduct its business as currently
conducted. Seller is duly qualified to do business and is in good standing in
the State of West Virginia. No actions or proceedings to dissolve Seller are
pending. Seller has delivered to Buyer an accurate and complete copy of the
Articles of Incorporation and Bylaws of Seller as currently in effect. Seller
is not in violation of any provision of its Articles of Incorporation or
Bylaws.

         4.2  Authority. (a) Seller has full corporate power and has taken all
corporate action necessary to execute, deliver and perform this Agreement and
the other Transaction Documents (as hereinafter defined) to which Seller is a
party and to carry out the transactions contemplated hereby and thereby. The
execution, delivery and performance of this Agreement and the other
Transaction Documents to which Seller is a party constitute the legal, valid
and binding obligation of Seller enforceable against Seller in accordance with
its terms, except to the extent that such enforceability may be limited by (i)
applicable bankruptcy, insolvency, reorganization, moratorium, and similar laws
affecting creditors' rights generally, and (ii) equitable principles which may
limit the availability of certain equitable remedies (such as specific
performance) in certain instances. For purposes of this Agreement, "Transaction
Documents" shall mean this Agreement and the schedules hereto, each certificate
delivered pursuant hereto, each exhibit hereto in executed form and all other
documents and agreements executed and delivered to Buyer pursuant hereto at the
Closing.

         (b)  Neither the execution or delivery of this Agreement and other
Transaction Documents nor the consummation of the transactions contemplated
hereby will (i) except for obtaining the required consents as set forth on
Schedule 4.2 and except for obtaining any consent where the failure to obtain
such



                                     -10-
<PAGE>   17
consent would not materially and adversely affect the Assets or the financial
condition of Seller, conflict with, constitute a breach, violation or
termination of any provision of any contracts and other agreements to which
Seller is a party or by which it or the Assets are bound, (ii) conflict with or
violate the Articles of Incorporation or Bylaws of Seller, or (iii) to the best
of Seller's knowledge, violate any statute, law, regulation, judgment, rule,
order or any other restriction of any kind or character applicable to Seller or
any of its properties or the Assets, except for any statute, law, regulation,
judgment, rule, order or any other restriction where the violation thereof would
not materially and adversely effect the Assets or the financial condition of
Seller.

         4.3  Approvals, Licenses and Other Authorizations. (a) Except as set
forth on Schedule 4.3 hereto, no consent, waiver, authorization or approval of,
giving of notice to, or registration or filing or taking of any other action in
connection with, any governmental authority or other person is necessary in
connection with the execution and delivery of this Agreement or the other
Transaction Documents by Seller and the consummation of the transactions
contemplated hereby. All licenses, permits and other governmental
authorizations and approvals of all federal, state and local governmental
authorities required or necessary for Seller to operate have been duly obtained
and are in full force and effect, except where the failure to so comply would
not have a material adverse effect upon the Assets or upon the financial
condition of Seller. The consummation of the transaction contemplated by this
Agreement and the other Transaction Documents will not result in the
termination or revocation of any such license, permit or other governmental
authorizations or approvals of any federal, state or local governmental
authority.

         (b)  Except as may be found as a result of the matters set forth on
Schedule 4.3, Seller has operated its business in accordance with all
applicable federal, state and local laws, rules and regulations except where
noncompliance would not have a material adverse effect on the financial
condition or operations of the Seller.

         (c)  Except as set forth on Schedule 4.3, there are no proceedings
pending or, to the best of Seller's knowledge, threatened to restrict, revoke
or modify such licenses or to the best of Seller's knowledge, matters which
could give rise to such proceedings.

         4.4  Financial Statements; Liabilities. (a) Seller has delivered to
Buyer a copy of the audited balance sheet of Seller as of December 31, 1992,
and the related audited statement of revenues and expenses, changes in fund
balances and statement



                                      -11-
<PAGE>   18

of cash flows (the "Financial Statements"). The Financial Statements have been
prepared from the books and records of Seller on a consistent basis in
accordance with generally accepted accounting principles, as of the date and
for the period then ended.

         (b)  Attached hereto as Schedule 4.4(b) is a true and complete list of
Seller's liabilities as of April 30, 1993. Since December 31, 1992, Seller has
not incurred any liabilities, except: (i) in the ordinary course of business,
(ii) as set forth in Schedule 4.4(b) of this Agreement, or (iii) as permitted
by this Agreement. Other than as disclosed in the Financial Statements and in
Schedule 4.4(b) hereto, Seller has no outstanding liabilities as of April 30,
1993 and, subject to the following sentence, no knowledge of any threatened
claims, actions or investigations which would result in the incurrence of any
additional liabilities by Seller. The Joint Investigation, as described on
Schedule 3.1, is ongoing and Seller makes no representation or warranty as to
any claims or liabilities which might result from or arise out of the Joint
Investigation.

         (c)  Except as may be found as a result of the matters set forth on
Schedules 4.3 and 4.11 of this Agreement, there are no claims or statements of
fact, known to Seller which would be the basis of an indemnity claim under this
Agreement.

         4.5  Absence of Certain Events. Since December 31, 1992, Seller has
operated its business in the ordinary and normal course and there has not been:

         (a)  any damage, destruction or loss, whether covered by insurance or
not, adversely affecting the Assets of Seller;

         (b)  except as set forth on Schedule 4.5, any increase or decrease in
the compensation payable or to become payable to any of Seller's officers or
management employees or material change in any insurance, pension or other
benefit plan, payment or arrangement made to, for or with any of Seller's
officers or management employees or any commission or bonus paid to any of such
officers or management employees;

         (c)  except as set forth on Schedule 4.5, any sale, assignment,
transfer, lease or other disposition of any Asset, other than in the ordinary
course of business consistent with past practices;

         (d)  any acquisition of any assets, other than in the ordinary course
of business consistent with past practices;

         (e)  any transaction, contract or commitment entered into which is not
in the ordinary course of business and consistent with past practices; or



                                     -12-
<PAGE>   19
         (f)  any material adverse chance in the Assets, business or financial
condition of Seller; provided however that projected losses of up to $250,000
from Seller's operations for the period beginning January 1, 1993 through June
30, 1993 and any of the matters disclosed in this Agreement or the Schedules
hereto shall not be deemed a material adverse change in the financial condition
of Seller, of the Assets or of the business of Seller.

Notwithstanding the foregoing clauses (a) through (f), Buyer acknowledges and
agrees that on or before the Closing Date, Seller shall contribute to its
affiliate, Albert Gallatin Planning and Development Corporation, a Pennsylvania
nonprofit corporation ("AGP&D") an amount equal to the cash balances in those
accounts listed on Schedule 4.5(a) hereto which shall not exceed $20,000,
including, without limitation, amounts received by Seller from The United Way
and other charitable sources. It is acknowledged that such funds were intended
to be used for charitable purposes.

         4.6  Title to and Condition of Properties.

         (a)  Schedule 4.6 hereto contains a list of all real property owned or
leased by Seller, and a true and complete copy of the deed therefor and each
such lease with respect thereto has been delivered to Buyer. Seller has good
and valid title to all of its properties, free and clear of liens and security
interests except as set forth on Schedule 4.6 hereto. Without limiting the
generality of the foregoing, as to leasehold estates leased by Seller, as
lessee, Seller warrants that it has quiet and peaceable possession of each of
the leased properties. Except for obtaining the consents as set forth on
Schedule 4.2, Seller warrants that all leases and subleases to which it is a
party are in full force and effect and that there are no defaults thereunder
which would result in the termination or cancellation of any such lease.

         (b)  A list of all tangible personal property included in the Assets
having a book value in excess of $500 is included on Schedule 4.6. Schedule 4.6
also contains a list of all leases of personal property under which Seller is a
lessee or lessor involving tangible personal property requiring annual lease
payments or revenue in excess of $1,000 (true, accurate and complete copies of
which leases have been previously delivered to Buyer).

         (c)  Seller has good and valid title to all of the Assets, including
without limitation all owned and leased real estate of Seller, free and clear
of all liens, security interests, and other encumbrances, except as set forth
on Schedule 4.6 hereto.



                                     -13-
<PAGE>   20

         (d)  The Assets including, but not limited to, the machinery,
equipment, furniture and fixtures are in good operating condition and repair
for assets of such age and type, subject to ordinary wear and tear and the use
to which such assets have been employed. Seller makes no other warranties with
respect to the Assets as to merchantability or fitness for any particular
purpose. The Assets are transferred "As is, where is."

         (e)  Seller has not received any notice from any federal, state or
local governmental agency requiring any repairs or alterations to any owned
real estate of Seller.

         (f)  At Closing, Seller will transfer to Buyer good and valid title to
the Assets, free and clear of all liens, security interests and other
encumbrances except for those liens, security interests and encumbrances set
forth on Schedule 4.6 hereto.

         (g)  All of the real property (including, but not limited to, the
buildings and improvements thereon) and the easements, rights of way and other
similar interests in real property of third parties, in any case, owned by
Seller (the "Owned Real Property") is listed and described on Schedule 4.6, and
the Seller has good and marketable title in fee simple to the Owned Real
Property, including all plants, buildings and improvements thereon, free and
clear of any mortgage, lien (including mechanics, or similar liens or claims
which have been filed for work, labor or material), claim, charge, exception,
imperfection of title, encroachment, easement, right-of-way, squatters' right,
lease or encumbrance (collectively, "Impairments"), except for those
Impairments which are described on Schedule 4.6. No rights are outstanding that
under law could give rise to any mechanics' or similar liens or claims for
work, labor or material. All of the improvements located on the Owned Real
Property lie wholly within the boundaries and building restriction lines of
such property, and no improvements on adjoining properties encroach upon the
Owned Real Property. True and complete copies of title insurance policies,
surveys, mortgages, agreements and other documents granting rights in or
relating to the Seller's ownership of such Owned Real Property, if any, have
previously been delivered to the Buyer. The legal descriptions of the Owned
Real Property set forth in the deeds delivered to Buyer are complete and
correct descriptions of such real property, its location and limits, and the
Seller's rights therein and are in each case sufficient to locate the records
pertaining to such Owned Real Property in the offices in the jurisdictions
where such Owned Real Property is located where public records concerning Owned
Real Property are kept.



                                     -14-
<PAGE>   21
         (h)  With respect to the leases, mortgages and other agreements
referred to on Schedule 4.6 and except as set forth on Schedule 4.6 no default
or event of default on the part of the Seller as lessee or as mortgagor, and,
to the knowledge of the Seller, no default or event of default on the part of
the lessor or mortgagee, under the provisions of any of said leases, mortgages
or other agreements, and no event which with the giving of notice or passage of
time, or both, would constitute such default or event of default on the part of
the Seller, or to the knowledge of the Seller, on the part of any such lessor
or mortgagee, has occurred and is continuing unremedied or unwaived. Except as
set forth on Schedule 4.6, no notes secured by a mortgage have been secured by
any collateral, pledged account or other security except the lien of the
corresponding mortgage.

         (i)  None of the real property listed on Schedule 4.6 is located
within a flood hazard area as described in the Flood Disaster Protection Act of
1973, as amended, and the National Flood Insurance Act of 1968, as amended, or
if any such property is so located, then proper federal insurance has been
obtained in the maximum amount permitted respecting such risk and is in full
force and effect. The plants, buildings and improvements owned or leased by the
Seller, and the operation or maintenance thereof as now operated and
maintained, do not (i) to Seller's knowledge, contravene any zoning or building
or other law, regulation, or order, (ii) violate any covenant, agreement or
restriction, the effect of which materially interferes with or prevents the
continued use of such properties for the purposes for which they are now being
used, or would materially and adversely affect the value thereof, or (iii) to
Seller's knowledge, violate any applicable health and environmental laws and
regulations or any other applicable laws, rules and regulations.

         (j)  Except as set forth on Schedule 4.6, there exists no pending or,
to the knowledge of the Seller, threatened, condemnation, eminent domain or
similar proceeding with respect to, or which could affect, any Owned Real
Property or any leased real property of Seller, including the plants, buildings
or improvements thereon.

         4.7  Intangible Properties. Schedule 4.7 hereto contains a list of all
patents and applications therefor, trademarks, trademark registrations and
applications therefor, trade names, service marks, copyrights, copyright
registrations and applications therefor, owned or used by Seller.

         4.8  Contracts and Commitments.

         (a)  To the extent not listed on Schedule 4.6 hereto, Schedule 4.8
hereto lists all Material Contracts (as hereinafter defined) to which Seller is
a party or by which it is bound. A



                                      -15-
<PAGE>   22

true and complete copy of each Material Contract has been delivered to Buyer.
For purposes of this Agreement, the term "Material Contract" means all leases,
agreements, contracts and commitments of seller with annual payments or revenue
of at least $5,000. Each Material Contract is in full force and effect, and
there exists no default or event of default thereunder which would cause the
termination of such contract. Seller has not received any notice that any person
party to a Material Contract intends to cancel, modify or terminate any Material
Contract, and Seller has not given any notice of cancellation, modification or
termination of any Material Contract. Each Material Contract is a valid and
binding agreement of Seller enforceable against Seller in accordance with its
terms, and no consent or approval of the other parties to any Material Contract
or any person pursuant to any Material Contract is required for the assignment
of such Material Contract to Buyer, other than the consents and approvals set
forth on Schedule 4.3 hereto.

         (b)  As of the date hereof, Seller has not made any other contract or
agreement or granted any option to sell or otherwise transfer any part of the
Assets of Seller or entered into any understanding or agreement in principle
respecting any such transaction with anyone other than Buyer.

         (c)  There are no contracts or commitments between Seller and any
affiliate other than those specifically identified on Schedule 4.8 attached
hereto.

         4.9  Tax Returns and Tax Audits.

         (a)  Seller is a not-for-profit corporation exempt from taxation under
Section 501(c)(3) of the Internal Revenue Code of 1986, as amended, and Seller
is a nonprofit corporation under the Pennsylvania Nonprofit Corporation Law of
1988, as amended, and the regulations promulgated thereunder. Seller has filed
with all appropriate governmental agencies all tax or information returns and
tax reports required to be filed and has paid all federal, state and local
income, franchise, sales, property, excise, ad valorem, employment (including
applicable withholdings for FICA, FUTA, and other required federal, state or
municipal withholdings) or other taxes, and all interest, penalties,
assessments or deficiencies claimed to be due by any such taxing authority for
all periods prior to the current taxable period.

         (b)  Seller is not a party to any pending or threatened action or
proceeding by any governmental taxing authority for assessment or collection
of taxes, and no claim for assessment or collection of taxes has been asserted
against Seller.



                                     -16-
<PAGE>   23
         4.10 Insurance. Attached hereto as Schedule 4.10 is a list and
description of all general liability, director and officer, property and
casualty insurance policies currently in force providing coverage on behalf of
Seller including, without limitation, for the following: malpractice or
negligent or grossly negligent acts or omissions by Seller or its employees or
agents and for general liability of Seller, general casualty, property damage
and flood insurance. All of such insurance is now in full force and effect and
premiums with respect to such policies have been paid to keep such insurance in
full force and effect through the dates set forth on Schedule 4.11. True and
complete copies of all such policies and any endorsements thereof have been
delivered to Buyer.

         4.11 No Litigation, Adverse Events or Violations.

         (a) Except as set forth on Schedule 4.11 hereto, there is no action,
suit, claim, investigation or other proceeding pending or, to the best of
Seller's knowledge, threatened, or any injunction or orders entered, pending
or, to the best of Seller's knowledge, threatened against Seller or any of the
Assets.

         (b) Except as may be found as a result of the matters set forth on
Schedule 4.11, Seller is in compliance with applicable federal, state and local
law, relating or applicable to it, or to any of the Assets, where the violation
of or noncompliance with which would have a material adverse effect on the
financial condition or operations of Seller.

         (c) There are no actions, suits, claims or proceedings pending, or to
the knowledge of Seller threatened, except as set forth on Schedule 4.11 hereto,
that would give rise to any right of indemnification on the part of any
director, officer, employee or representative of Seller or the heirs, executors
or administrators of any such director, officer, employee or representative,
against the Seller. There are no written or oral agreements or understandings
with respect to indemnification of any director, officer, employee or
representative of Seller, except as set forth in this Agreement, in the other
Transaction Documents and in the By-laws of the Seller.

         4.12 Labor Agreements. Seller is not and has never been a party to and
is not bound by any collective bargaining agreement.

         4.13 Employee Benefit Plans.

         (a) Except as set forth on Schedule 4.13 hereto, Seller does not have
any Benefit Plans, as defined in paragraph


                                    -17-


<PAGE>   24
(m) below, nor has Seller maintained or contributed to any Benefit Plans
subject to Title IV of ERISA.

         (b) All persons who participate in the operations of each Benefit Plan
(including but not limited to the members of any plan committee, all plan
fiduciaries, all plan administrators, Seller, its Board of Directors, and all
relevant employees of the Seller) act and have always acted with respect to
each Benefit Plan in all material respects in accordance with the requirements
of all applicable laws (including but not limited to the Employee Retirement
Income Security Act of 1974, as amended, and any rules and regulations
promulgated thereunder ("ERISA") and the Internal Revenue Code of 1986, as
amended, and any rules and regulations promulgated thereunder (the "Code")) and
in accordance with the terms and conditions of each such Benefit Plan.

         (c) All Benefit Plans are now, and have always been established,
maintained and operated in all material respects in accordance with all
applicable laws (including but not limited to ERISA and the Code) and in
accordance with the terms and conditions of each such Plan.

         (d) Except as set forth on Schedule 4.13, all returns, reports,
disclosure statements and elections required to be made under all applicable
laws (including but not limited to ERISA and the Code) with respect to the
Benefit Plans have been timely and accurately filed, delivered, or made.

         (e) With respect to any of the Benefit Plans, no reportable events
(within the meaning of ERISA and the Code, respectively), prohibited
transactions (within the meaning of Section 4975 of the Code) or
party-in-interest transactions (within the meaning of Section 406 of ERISA)
have occurred.

         (f) Except as described on Schedule 4.13 hereto and except with
respect to income taxes on benefits paid or provided, no income, excise or
other tax or penalty (federal or state) has been waived or excused, has been
paid or is owed by any person (including but not limited to any Benefit Plan,
any plan fiduciary and the Seller) with respect to the operations of, or any
transactions with respect to, any Benefit Plan. No action has been taken, nor
has there been any failure to take any action, nor is any action or failure to
take action contemplated, that would subject any person or entity to any
liability for any tax or penalty in connection with any Benefit Plan (including
but not limited to any tax or penalty for the failure to withhold income taxes
in connection with fringe benefits).

         (g) Except as described in paragraph (l)(iv) of this Section 4.13, all
contributions required to be made to or with

                                    -18-


<PAGE>   25




respect to each Benefit Plan have been completely and timely made.

         (h) All benefits or other payments required to be made under or by any
Benefit Plan have been completely and timely paid.

         (i) There has been no merger, consolidation or transfer of assets or
liabilities (including but not limited to a split up or split off) with respect
to any Benefit Plan.

         (j) There are no actions, suits or claims (other than routine claims
for benefits) pending or threatened against the Benefit Plans or their assets,
or arising out of such Benefit Plans, including but not limited to any action,
suit or claim by or on behalf of the Benefit Plans or by any employee of the
Seller alleging a breach or breaches of fiduciary duties or violations of
applicable state or federal law which could result in liability on the part of
either Seller or the Benefit Plans under ERISA or any other law, and, to the
Seller's best knowledge, no facts exist which could give rise to any such
actions, suits or claims.

         (k) Seller has delivered to Buyer true and complete copies of all
current and prior material documents, including all amendments thereto, with
respect to each of the Benefit Plans set forth on Schedule 4.13 hereto, and
Seller hereby agrees to transfer to Buyer, upon Closing, all records in
connection with each Benefit Plan to be assumed by Buyer hereunder. All such
records shall accurately state the history of each participant and beneficiary
in connection with each Benefit Plan and accurately state the benefits earned
by and/or owed to each such person under each Benefit Plan.

         (1) With respect to the Benefit Plan listed on Schedule 4.13 hereto as
the Albert Gallatin Visiting Nurse Association, Inc. Profit Sharing Plan (the
"Profit Sharing Plan"),

               (i) such Plan which is intended to qualify as a tax-qualified
          retirement plan under Code Seller 401(a) has received a favorable
          determination letter from the Internal Revenue Service as to
          qualification of such Plan; and the trust thereunder is exempt from
          tax pursuant to Code Section 501(a);

               (ii) no event has occurred that will or could give rise to the
          disqualification of such Plan or loss of the tax-exempt status of the
          trust created thereunder under the aforesaid Sections of the Code;


                                     -19-


<PAGE>   26





               (iii) no event has occurred that will or could subject such Plan
          to tax under section 511 of the Code; and

               (iv) all contributions have been made to such Plan in a complete
          and timely fashion pursuant to the applicable provisions of the Code
          with respect to all plan years, other than the contribution for the
          plan year ended December 31, 1992.

         (m) For purposes of this Section 4.13, the term "Benefit Plan"
includes but is not limited to (i) pension, retirement, profit sharing, stock
bonus, and nonqualified deferred compensation plans, (ii) disability, medical,
dental, worker's compensation, health insurance, life insurance, and incentive
plans, (iii) vacation benefits and fringe benefits, (iv) any other employee
benefit plan as such term is defined in Section 3(3) of ERISA, and (v) any
cafeteria plan, accident and health plan (including self-insured medical
reimbursement plan), or dependent care assistance program (as such terms are
defined in Sections 125, 105 and 129, respectively of the Code).

         (n) Seller has complied in all material respects with the continuation
coverage requirements of Section 4980B of the Code which applies to any
employees of the Seller prior to the Closing.

         4.14 Trade Names. Seller does not conduct business in the Commonwealth
of Pennsylvania or the State of West Virginia under any name other than those
listed on Schedule 4.14.

         4.15 Bank Accounts. Schedule 4.15 contains a list setting forth the
name of each bank, savings and loan or other financial institution in which
Seller has any account, safe deposit box, holds any certificates of deposit or
other investments, including the type of each such account, the names in which
each account, safe deposit box, certificates of deposit or other investments
are held, the names of each person authorized to draw thereon or have access
thereto, and the amounts held in such accounts or such boxes or the fair market
value of such certificates of deposit or other investments as of the date
designated on Schedule 4.15.

         4.16 Accounts Receivable and Notes Receivable. All accounts receivable
and notes receivable of Seller represent and constitute bona fide indebtedness
owing to Seller in the amounts indicated in the Financial Statements of Seller,
with no known setoffs (other than Seller's customary allowances for
uncollectible accounts and contractual adjustments as indicated thereon and
adjusted for estimated recovery of bad debt). seller has provided buyer with a
complete and accurate aging report of

                                     -20-


<PAGE>   27




all the accounts receivable as of December 31, 1992 and with a schedule of all
accounts receivable of Seller as of December 31, 1992 which since December 31,
1992 have been assigned to collection agencies or are otherwise held or assigned
for collection.

         4.17 Joint Ventures; No Subsidiaries. Seller is not a party to any
joint venture agreement or partnership agreement. Seller has no subsidiary
corporations or interest in any other business organizations, partnerships,
corporations or joint ventures. At the date hereof, no director, officer or
employee of Seller serves at the request of Seller, as a representative of
Seller to another corporation, partnership, joint venture, trust or other
enterprise.

         4.18 Licenses and Permits. Set forth on Schedule 4.18 is a true and
complete listing of all material licenses, permits, certificates of need and
approvals from any governmental authority required for the operation of
Seller's business as conducted at present. Each such license, permit,
certificate of need and approval is in full force and effect, Seller is in
compliance with all of its obligations with respect thereto, and to the best
knowledge of Seller, no event has occurred which permits or with the giving of
notice or the passage of time or both would permit, the revocation or
termination of any thereof, except as may be found as a result of the matters
set forth on Schedule 4.18 hereto.

         4.19 Employees. Set forth on Schedule 4.19 is a true and complete list
of each employee, director and officer of Seller, together with the current
position of each such person and the current amount of salaries and bonuses of
each such person. Schedule 4.19 also sets forth whether Seller has entered into
a written employment agreement or arrangement with any such person, and a true
and complete copy of each such employment agreement has been delivered to Buyer.

         4.20 Discharge Fees. Seller has not, directly or indirectly, retained
any financial advisor, broker, agent or finder or paid or agreed to pay any
financial advisor, broker, agent or finder on account of this Agreement or the
transaction contemplated thereby.

         4.21 No Adverse Action. There are no actions, suits, claims or other
proceedings pending or, to the best of Seller's knowledge, threatened or
injunctions or orders entered, pending or, to the best of Seller's knowledge,
threatened against Seller, to restrain or prohibit the consummation of the
transactions contemplated hereby.

         4.22 Full Disclosure. Seller has disclosed to Buyer all material facts
relating to Seller and its operations and has

                                     -21-





<PAGE>   28



not omitted to disclose to Buyer any material fact relating to Seller, or its
operations, necessary to make the statements made herein not misleading.
Without limiting the generality of the foregoing, Seller has disclosed to Buyer
all material facts of which Seller has knowledge related to the Joint
Investigation and has delivered to Buyer or granted access to Buyer to all
documents of Seller related to the Joint Investigation. Notwithstanding
anything in this Agreement to the contrary, none of the representations of
Seller are made as to any computer software utilized by Seller other than
software which Seller is using pursuant to license agreements between Seller
and Atlantic West Services, Inc.

         4.23 Ownership of Necessary Assets. The real and other properties and
assets owned or leased by Seller constitute all such properties and assets
which are necessary to the business of Seller as conducted at present and all
such assets of Seller (other than the Excluded Assets) are being transferred to
Buyer on the Closing Date.

         4.24 Severance Pay. The Closing of the transaction contemplated
hereunder and the subsequent employment of Seller's employees by Buyer pursuant
to the terms of this Agreement shall not result in any severance obligations of
Buyer with respect to Seller's employees who become employees of Buyer.

       ARTICLE 5. REPRESENTATIONS AND WARRANTIES OF BUYER

         Buyer represents and warrants to Seller, both as of the date hereof
and as of the Closing Date, as follows:

         5.1 Organization of Buyer; Good Standing. Buyer is a corporation, duly
organized, validly existing and in good standing under the laws of the State of
Delaware. Buyer has the requisite corporate power and authority to own, lease
and operate its properties and to conduct its business as currently conducted.
Buyer is duly qualified to do business and is in good standing in the State of
West Virginia and Buyer has filed an application for qualification to do
business with the Office of the Secretary of the Commonwealth of Pennsylvania.

         5.2 Authority. (a) Buyer has full corporate power and has taken all
action necessary to execute, deliver and perform this Agreement and to carry
out the transactions contemplated hereby. The execution, delivery and
performance of this Agreement and the other Transaction Documents to which
Buyer is a party constitute legal, valid and binding obligations of Buyer
enforceable against Buyer in accordance with its terms, except to the extent
that such enforceability may be limited by (i) applicable bankruptcy,
insolvency, reorganization,

                                   -22-


<PAGE>   29
moratorium, and similar laws affecting creditors' rights generally, and (ii)
equitable principles which may limit the availability of certain equitable
remedies (such as specific performance) in certain instances.

         (b) Neither the execution or delivery of this Agreement or the other
Transaction Documents nor the consummation of the transactions contemplated
hereby will (i) except for obtaining any consent, where the failure to obtain
such consent would not materially or adversely affect the assets or the
financial condition of Buyer, conflict with, constitute a breach, violation or
termination of any provision of any contracts and other agreements to which
Buyer is a party or by which it is bound, (ii) conflict with or violate the
Articles of Incorporation or Bylaws of Buyer, or (iii) to the best of Buyer's
knowledge, violate any law, regulation, judgment, rule, order or any other
restriction of any kind or character applicable to Buyer or any of its
properties or assets, the violation of which could have a material adverse
effect on the financial condition or business operations of Buyer.

         5.3 No Adverse Action. There are no actions, suits, claims or other
proceedings pending or, to the best of Buyer's knowledge, threatened or
injunctions or orders entered, pending or, to the best of Buyer's knowledge,
threatened against Buyer, to restrain or prohibit the consummation of the
transactions contemplated hereby.

         ARTICLE 6. COVENANTS AND AGREEMENTS OF SELLER

         6.1 Actions Pending Closing. From the date hereof to the Closing,
except as otherwise contemplated by this Agreement, Seller covenants and agrees
as follows; provided that Buyer acknowledges that Seller is in a troubled
financial condition which may alter its normal operations and operating
procedures:

         (a) Seller will be operated in the usual and ordinary manner
consistent with past practices and will use good faith efforts to preserve its
present business organization intact, and preserve its present relationships
with persons having business dealings with it and to take such actions as are
necessary and to use Seller's good faith efforts to cause the transition of
such business operations and employee and other relationships to Buyer as of
the Closing Date.

         (b) Seller will not, without Buyer's consent, increase or decrease the
compensation payable or to become payable by Seller to any officer or employee
of Seller, or make any change in any insurance, pension or other employee
benefit

                                   -23-


<PAGE>   30
plan, nor pay any commission or bonus to any of such officers or employees,
other than in the normal course of business consistent with existing personnel
policies, nor amend any employment agreement between Seller and any employee of
Seller. Further, without Buyer's prior consent, Seller will not hire or engage
any off employees, officers or representatives, nor will Seller appoint any new
directors; provided, however, should a vacancy be mandated by the By-laws of
Seller, either by death or resignation of a director, such vacancy may be filled
and a new director may be appointed without Buyer's consent but in accordance
with Seller's bylaws, and Seller shall promptly give notice thereof to Buyer.

         (c) Except as otherwise provided herein, Seller will not (i) mortgage,
pledge, create or permit to exist any lien or security interest against any of
the Assets, except for the liens and security interests set forth on Schedule
6.1 hereto and except for liens securing property acquired by Seller in the
ordinary course of business and as otherwise permitted pursuant to this
Agreement (the "Permitted Exceptions"); (ii) fail to maintain the Assets in the
usual and ordinary course of business consistent with past practices; (iii)
sell, assign, transfer, lease or otherwise dispose of any of the Assets or
acquire any assets or any interest therein, except in each case in the usual
and ordinary course of business; (iv) terminate, modify or change any of the
Material Contracts; and (v) enter into any transaction, contract or commitment
obligating Seller in excess of $5,000 which is not in the usual and ordinary
course of the Seller's business.

         (d) All Assets will be used, operated, maintained and repaired in the
usual and ordinary course of Seller's business consistent with past practices.

         (e) Seller will not permit any insurance policy naming it as a
beneficiary or a loss payable payee covering any of the Assets or its
operations to be canceled, terminated or modified or any of the coverage
thereunder to lapse unless simultaneously with such termination or
cancellation, replacement policies providing substantially the same coverage
are in full force and effect.

         (f) Seller will timely file (including all applicable extensions) all
tax returns and reports required to be filed with any federal, state or local
governments or governmental agencies, and Seller will pay all taxes due with
respect thereto.

         (g) Seller shall not make or institute any methods of collection,
credit, billing, management, accounting or operation which are not in the usual
and customary course of its business, consistent with seller's past practices.

                                  -24-


<PAGE>   31


         (h) Seller shall not transfer any Assets, other than in the ordinary
course of business.

         (i) Seller shall use its good faith efforts in taking all actions
necessary and appropriate to render title to the Assets free and clear of all
liens, security agreements, and encumbrances (except for the Permitted
Exceptions) and to obtain appropriate consents, as are required by this
Agreement.

         (j) With respect to any Material Contracts of Seller which, in
accordance with their terms, will terminate due to the expiration of the term
thereof prior to the Closing Date, Seller shall use good faith efforts to
extend such Material Contracts; provided, however, that in the event any such
extension would require payment of rentals or other compensation by Seller in
excess of that currently paid or would require Seller to agree to terms which
are materially and adversely different from the present terms of such Material
Contract, then Seller shall not extend such Material Contract without obtaining
Buyer's prior written consent to such terms and extension.

         (k) From the date hereof, through and including the Closing Date,
Seller shall not amend its Articles of Incorporation or By-laws.

         (l) Seller will operate its business through the Closing Date so that
the representations and warranties of Seller made to Buyer in this Agreement
shall be true and correct on the Closing Date as if made on the Closing Date
(except for representations and warranties made in Section 4.4, 4.15 and 4.16
with respect to financial statements and other financial information of Seller
which expressly relate to an earlier date or time, which representations shall
be true and correct on and as of the specific date or times referred to
therein); provided however that Seller shall promptly disclose to Buyer any
information contained in the Schedules to this Agreement which, because of an
event occurring after the date hereof, is incomplete or is no longer correct as
of all times after the date hereof until the Closing Date and was incorrect
when made; provided, however, that none of such disclosures shall be deemed to
modify, amend or supplement the representations and warranties of Seller in the
Schedules hereto, unless Buyer shall have consented thereto in writing.

         6.2 Consents. Seller shall use good faith efforts and cooperate with
Buyer in obtaining all necessary consents required for the transfer of the
Assets to Buyer and for the assumption of the Assumed Liabilities by Buyer on
the Closing Date.


                                     -25-


<PAGE>   32


                  ARTICLE 7. COVENANTS AND AGREEMENTS OF BUYER

         Buyer hereby covenants and agrees with Seller as follows:

         7.1 Consents. From and after the date hereof, Buyer shall use good
faith efforts and cooperate with Seller in obtaining all necessary consents
required for the transfer of the Assets to Buyer and for the assumption of the
Assumed Liabilities by Buyer on the Closing Date.

         7.2 Employees. (a) Following the Closing Date, Buyer agrees to assume
the employment agreements between Seller and each of the Key Employees. At
Closing, Buyer and each Key Employee shall execute an assumption agreement, in
the form of Exhibit VII hereto, to such effect. Buyer will endeavor to offer to
the other employees of Seller, to employ such other employees of Seller
following the Closing for the same salaries and benefits currently paid to and
afforded such employees; provided, however, Buyer shall have the right to amend
or modify any future compensation or benefits. This Section 7.2 shall not
create any rights in favor of any third party beneficiary.

         (b) Subject to Section 7.2(a) above, Buyer will further credit each
employee of Seller for all purposes of employment as an employee of Buyer, or
as applicable under Buyer's employee benefit plans or programs (including as
applicable but without limitation, compensation, vacation, fringe benefits,
retirement plan benefit accrual, vesting, commencement of retirement benefits,
and other benefit entitlement), with all service credited to each such employee
of Seller as of the Closing. Seller will endeavor to provide Buyer a list of
such service credits of each employee as of the most recent practical date
prior to Closing.

         (c) At Closing, pursuant to an Assumption and Substitution Agreement
in the form of Exhibit VIII hereto, Buyer shall assume all obligations of
Seller under Seller's Profit Sharing Plan and Flex Plan for employees of
Seller.

         7.3 Post-Closing Access to Information. Seller and Buyer acknowledge
that subsequent to Closing each party may need access to information or
documents in the control or possession of the other party for the purposes of
concluding the transactions herein contemplated, audits, compliance with
governmental requirements and regulations, and the prosecution or defense of
third party claims. Accordingly, Seller and Buyer agree that after Closing each
will make reasonably available to the other such documents and information as
may be available relating to the Assets for periods prior and subsequent to
Closing any minute book and other organizational documents of

                                    -26-




<PAGE>   33




Seller for periods prior to the Closing, to the extent necessary to facilitate
concluding the transactions herein contemplated, audits, compliance with
governmental requirements and regulations and the prosecution or defense of
claims.

                 ARTICLE 8. CONDITIONS TO BUYER'S OBLIGATION TO
                              CONSUMMATE THE TRANSACTION

         Each and every obligation of Buyer to be performed hereunder is
subject to the satisfaction on or prior to the Closing Date of the conditions
set forth below, any one or more of which may be waived by Buyer.

         8.1 Compliance with Agreement. Seller shall have performed all of its
obligations and agreements, and complied, in all material respects, with all
covenants, warranties and conditions contained in this Agreement which are
required to be performed or complied with by it on or prior to the Closing
Date, and the Chief Executive Officer of Seller shall have delivered a
Certificate to such effect to Buyer at Closing.

         8.2 Representations and Warranties. The representations and warranties
of Seller contained in this Agreement, the Schedules hereto and in the other
Transaction Documents shall be true, complete and correct, in all material
respects, on and as of the date made and as of the Closing Date with the same
force and effect as though such representations and warranties had been made or
given on the Closing Date, and the Chief Executive Officer of Seller shall have
delivered a Certificate to such effect to Buyer at Closing.

         8.3 Approvals and Consents. The material consents, approvals and
waivers as set forth on Schedule 8.3 hereto necessary in order to consummate
the transactions contemplated hereby shall have been obtained.

         8.4 No Litigation. No action or proceeding before a court or any other
governmental agency or body shall have been instituted or threatened to
restrain or prohibit the transactions herein contemplated or which would
prohibit Buyer's purchase of the Assets.

         8.5 Closing of Other Transactions. Simultaneous with the Closing
hereunder:

               (i) the Closing shall occur in accordance with that certain
          Stock Purchase Agreement by and between Staff Builders, Inc., a New
          York corporation, and Albert Gallatin Planning and Development
          Corporation ("AGP&D") dated as of the date hereof; and

                                     -27-



<PAGE>   34


               (ii) Buyer (or appropriate affiliate) and Albert Gallatin
          Management Company shall have entered mutually satisfactory franchise
          and management agreements.

         8.6 No Material Adverse Change. No event or condition resulting in a
materially adverse change in the financial condition of Seller or the Assets
shall have occurred and be continuing; provided however that projected losses
of $250,000 from Seller's operations for the period beginning January 1, 1993
through June 30, 1993 and any of the matters disclosed in this Agreement or the
Schedules hereto shall not be deemed a material adverse change in the financial
condition of Seller or the Assets.

         8.7 Opinion of Counsel. Buyer shall have received an opinion of
Seller's legal counsel, dated the Closing Date, substantially in the form of
Exhibit I hereto.

         8.8 Key Employee Certificates. Buyer shall have received from each of
Gerald Shuttlesworth, Bonita Campbell, Frank Ovial and Patricia Check
(collectively the "Key Employees") a certificate in the form of Exhibit II
hereto.

         8.9 Noncompetition Agreement. Buyer shall have received the
Noncompetition Agreement substantially in the form of Exhibit III hereto duly
executed by Seller and AGP&D, and such Noncompetition Agreement shall be in
full force and effect and constitute a legal, valid and binding obligation of
each of Seller and AGP&D, enforceable against them in accordance with its
terms.

         8.10 Deliveries. Buyer shall have received from Seller all of the
other documents required to be delivered by Seller pursuant to Section 11.1(a)
of this Agreement.

         8.11 Release of Certain Liens. Prior to or simultaneous with the
Closing, all liens against Seller's accounts receivable shall be released.

                       ARTICLE 9. CONDITIONS TO SELLER'S
                    OBLIGATION TO CONSUMMATE THE TRANSACTION

         Each and every obligation of Seller to be performed at or before the
Closing hereunder is subject to the satisfaction on or prior to the Closing
Date of the conditions set forth below, any one or more of which may be waived
by Seller.

         9.1 Compliance with Agreement. Buyer shall have performed all of its
obligations and agreements and complied, in all material respects, with all
covenants, warranties and

                                     -28-


<PAGE>   35


conditions contained in this Agreement which are required to be performed or
complied with by Buyer on or prior to the Closing Date, and an authorized
officer or the Buyer shall have delivered a Certificate to such effect to
Seller on the Closing Date.

         9.2 Representations and Warranties. The representations and warranties
of Buyer contained in this Agreement and the other Transaction Documents shall
be true, complete and correct, in all material respects, on and as of the date
made and as of the Closing Date with the same force and effect as though such
representations and warranties had been given on the Closing Date, and an
authorized officer of Buyer shall have delivered a certificate to such effect
to Seller at closing.

         9.3 Approvals and Consents. The material consents, approvals and
waivers as set forth on Schedule 8.3 hereto necessary in order to consummate
the transactions contemplated hereby shall have been obtained.

         9.4 No Litigation. No action or proceeding before a court or any other
governmental agency or body shall have been instituted or threatened to
restrain or prohibit the transactions herein contemplated or which would
prohibit Buyer's purchase of the Assets.

         9.5 Closing of Other Transactions. Simultaneous with the Closing
hereunder:

               (i) the Closing shall occur in accordance with that certain
          Stock Purchase Agreement by and between Staff Builders, Inc., a New
          York corporation, and AGP&D dated as of the date hereof; and

               (ii) Buyer (or appropriate affiliate) and Albert Gallatin
          Management Company shall have entered into mutually satisfactory
          franchise and management agreements.

         9.6 Guaranty of Staff Builders, Inc. Seller shall have received from
Staff Builders, Inc. a duly authorized and executed Guaranty in the form of
Exhibit V hereto, and such Guaranty shall be in full force and effect and
constitute a legal, valid and binding obligation of Staff Builders, Inc.,
enforceable against Staff Builders, Inc., in accordance with its terms.

         9.7 Deliveries. Seller shall have received from Buyer all of the other
documents required to be delivered by Buyer pursuant to Section 11.1(b) of
this Agreement.



                                     -29-


<PAGE>   36


                            ARTICLE 10. TERMINATION

         10.1 Termination Prior to the Closing Date. Notwithstanding anything
herein to the contrary, this Agreement may be terminated as follows:

               (i) On or prior to the Closing Date by mutual written consent of
          Buyer and Seller;

               (ii) By Buyer, if the conditions specified in Article 8 have not
          been satisfied or waived by Buyer as of the Closing Date;

               (iii) By Seller, if the conditions specified in Article 9 hereof
          have not been satisfied or waived by Seller as of the Closing Date;

               (iv) By Buyer or Seller, on July 31, 1993, if the Closing has
          not occurred by such date;

               (v) At the election of the Seller prior to the Closing Date, if
          the Buyer has breached any representation, warranty, covenant or
          agreement contained in this Agreement;

               (vi) At the election of the Buyer prior to the Closing Date, if
          the Seller has breached any representation, warranty, covenant or
          agreement contained in this Agreement;

               (vii) At the election of the Seller or the Buyer, if any legal
          proceeding is commenced or threatened by any court or governmental
          agency directed against the consummation of the Closing or any other
          transaction contemplated under this Agreement; or

               (viii) By Buyer or Seller if the Stock Purchase Agreement
          between Staff Builders, Inc. and Albert Gallatin Planning and
          Development Corporation, of even date, is terminated in accordance
          with the terms thereof.

In the event of the termination of this Agreement pursuant to this Section
10.1, this Agreement shall automatically terminate and be of no further force
and effect, and there shall be no liability hereunder (except if termination
occurs pursuant to clauses (v) or (vi) above) or in respect of the transaction
contemplated hereby.

                                    -30-



<PAGE>   37


                 ARTICLE 11. DELIVERIES AT AND AFTER CLOSING

         11.1 Deliveries at Closing. (a) At Closing, Seller shall deliver to
Buyer:

               (i) An Assignment and Bill of Sale in the form Of Exhibit IX
          hereto and such bills of sale, endorsements, assignments, deeds and
          other good and sufficient instruments of transfer and conveyance as
          shall be reasonably deemed necessary or appropriate by Buyer to vest
          in Buyer good and valid title to the Assets, together with the Power
          of Attorney in the form of Exhibit VI hereto;

               (ii) actual possession and operating control of the Assets;

               (iii) Certificates, dated the Closing Date, required to be
          delivered by Seller to Buyer pursuant to Sections 8.1 and 8.2 hereof;

               (iv) a Certificate of an authorized officer of Seller
          certifying: (a) as to Seller's Articles of Incorporation and By-laws,
          and attaching a true and complete copy of each thereto; and (b) that
          all necessary corporate action by the Board of Directors of Seller
          has been taken to authorize the consummation of the transactions
          provided for in this Agreement. Such certificate shall attach or set
          forth verbatim the resolutions adopted by the Board of Directors of
          Seller;

               (v) a Certificate of an authorized officer of AGP&D certifying:
          (a) as to AGP&D's Articles of Incorporation and By-laws, and
          attaching a true and complete copy of each thereto; and (b) that all
          necessary corporate action by the Board of Directors of AGP&D has
          been taken to authorize the consummation of the transactions provided
          for in this Agreement. Such certificate shall attach or set forth
          verbatim the resolutions adopted by the Board of Directors of AGP&D;

               (vi) a list, certified by the Chief Financial Officer of Seller,
          of the accounts payable and accounts receivable of Seller as of the
          Closing Date;

               (vii) with respect to Seller, good standing certificate and tax
          clearance letter from the Commonwealth of Pennsylvania and a good
          standing certificate from the State of West Virginia;

                                      -31-



<PAGE>   38


               (viii) the opinion of Seller's counsel required pursuant to
          Section 8.7 hereof;

               (ix) the Key Employee Certificates required pursuant to Section
          8.8 hereof;

               (x) the Noncompetition Agreement required pursuant to Section
          8.9 hereof; and

               (xi) the Assumption Agreements Regarding Employment Agreements,
          in the form of Exhibit VII hereto, executed by Seller and each Key
          Employee with respect to the employment agreement of each Key
          Employee.

          (b) At Closing, Buyer shall deliver to Seller:

               (i) The Assumption Agreement in the Form of Exhibit X hereto,
          the Assumption and Substitution Agreement in the form of Exhibit VIII
          hereto and such other documents of assumption as shall be reasonably
          deemed necessary or appropriate by Seller and Buyer for the
          assumption by Buyer of all of the Assumed Liabilities;

               (ii) Certificates, dated the Closing Date, required to be
          delivered by Buyer to Seller pursuant to Sections 9.1 and 9.2 hereof;

               (iii) Certificate of an authorized officer of Buyer certifying:
          (a) as to Buyer's Articles of Incorporation and By-laws and attaching
          a true and complete copy of each thereto; (b) that all consents,
          certifications, certificates of need and approvals set forth on
          Schedule 8.3 of this Agreement have been obtained by Buyer; and (c)
          that all necessary corporate action by the Board of Directors of
          Buyer has been taken to authorize the consummation of the
          transactions provided for in this Agreement. Such certificate shall
          attach or set forth verbatim the resolutions adopted by the Board of
          Directors of Buyer;

               (iv) the Guaranty required pursuant to Section 9.6 hereof; and

               (v) the Assumption Agreements Regarding Employment Agreements,
          in the form of Exhibit VII hereto, executed by Buyer with respect to
          the employment agreement of each Key Employee.

                                      -32-


<PAGE>   39

         11.2 . Deliveries After Closing. From time to time after the Closing
Date, without further consideration from Buyer, Seller shall cause to be
executed and delivered to Buyer, such further instruments of sale, assignment,
transfer and delivery, and take such other actions as Buyer may reasonably
request in order to more effectively sell, assign transfer and deliver, and
reduce to the possession of Buyer, any and all of the Assets and to consummate
the transactions contemplated herein, and Buyer, without further consideration
from Seller, shall cause to be executed and delivered to Seller such further
instruments, agreements and assumptions and take such other actions as Seller
may reasonably request in order to effect Buyer's assumption of the Assumed
Liabilities.

                           ARTICLE 12. MISCELLANEOUS

         12.1 Survival. The representations, warranties, covenants and
agreements made by the parties in this Agreement shall survive the Closing and
expire thirty (30) days after the expiration of all applicable statutes of
limitation, including, without limitation any applicable statute of limitation
permitting any third party to commence any claim or cause of action against any
Indemnitee. This Section 12.1 is not intended to create any rights in any third
party beneficiaries (other than in Indemnitees other than Seller, as such
rights with respect to Indemnitees are provided in Section 3.3 of this
Agreement). Notwithstanding any rights of Buyer to fully investigate the
business and operations of the Seller or the Assets, the Buyer shall be
entitled to rely fully on the representations, warranties, covenants and
agreements of Seller contained in this Agreement and the other Transaction
Documents.

         12.2 Expenses. At the Closing Buyer shall be solely responsible for
and shall pay all reasonable costs incurred by Buyer or Seller incident to the
preparation and execution of this Agreement, to include the reasonable fees and
disbursements of legal counsel, accountants and consultants employed by the
respective parties in connection with the transactions contemplated by this
Agreement, unless otherwise agreed by the parties.

         12.3 Notices. Any notice, request, consent or communication under this
Agreement shall be effective only if it is in writing and personally delivered
or sent by a nationally recognized overnight delivery service, with delivery
confirmed, or telexed or telecopied with receipt confirmed (provided that if
telexed or telecopied, with a copy also sent by regular United States Mail), or
deposited in the United States mail, with

                                      -33-


<PAGE>   40


postage prepaid thereon, certified or registered mail, return receipt
requested, addressed as follows:

<TABLE>
<S>                                                           <C>
If to Seller or an Indemnitee:                                With Copy To:

Albert Gallatin Visiting Nurse                                Thomas E. Boyle, Esquire
Association, Inc.                                             Buchanan Ingersoll Professional
20 Highland Park Drive                                          Corporation
Suite 203                                                     5700 - 600 Grant Street
Uniontown, PA 15401                                           Pittsburgh, PA 15219

Fax No.: (412) 438-4468                                       Fax No.: (412) 562-1041

If to Buyer:
                                                              With Copy To:
Albert Gallatin Home Care, Inc.                               Albert Gallatin Home Care, Inc.
1981 Marcus Avenue                                            1981 Marcus Avenue
Suite C115                                                    Suite C115
Lake Success, NY 11042                                        Lake Success, NY 11042
Attention: Stephen Savitsky,                                  Attention: Mark Meirowitz,
Chief Executive Officer                                       Vice President & General Counsel

Fax No.: (516) 358-1036                                       Fax No.: (516) 358-1036
</TABLE>

or such other persons and/or addresses as shall be furnished in writing by any
party to the other party, and shall be deemed to have been given as of the date
when so personally delivered, or the next day when delivered during business
hours to such overnight delivery service properly addressed or when receipt of
a telex or telecopy is confirmed, or upon the earlier to occur of receipt or
five (5) business days after mailed as provided above, as the case may be,
unless the sending party has actual knowledge that such notice was not received
by the intended recipient.

         12.4 Parties in Interest and Assignment.

         (a) This Agreement is binding upon and is for the benefit of Buyer and
its successors and assigns. This Agreement is binding upon and is solely for
the benefit of Seller.

         (b) This Agreement and Transaction Documents do not create any third
party beneficiary rights, with the sole exception being rights of Indemnitees
(other than Seller) under Section 3.3 hereof.

         (c) Neither this Agreement nor any of the rights or duties of any
party hereto may be transferred or assigned to any person except by a written
agreement executed by Buyer and Seller; provided, however, that Buyer may
assign its rights or

                                   -34-


<PAGE>   41


delegate its duties hereunder to a wholly owned subsidiary of Buyer.

         12.5 Modification. This Agreement may not be amended or modified
except by writing signed by an authorized officer of Buyer and Seller. No
waiver of the performance or breach of, or default under, any condition or
obligation hereof shall be deemed to be a waiver of any other performance, or
breach of, or default under the same or any other condition or obligation of
this Agreement.

         12.6 Entire Agreement. This Agreement, together with the other
Transaction Documents, embodies the entire agreement between the parties hereto
and cancels and supersedes all previous agreements and understandings relating
to the subject matter of this Agreement and the other Transaction Documents,
written or oral, between the parties hereto, including without limitation, the
Letter of Intent dated as of May 11, 1993. There are no agreements,
representations, or warranties between the parties other than those set forth
or provided herein and in the other Transaction Documents.

         12.7 Execution in Multiple Counterparts. This Agreement may be
executed in multiple counterparts, each of which shall be deemed an original
but all of which together shall constitute one and the same instrument.

         12.8 Headings. The headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.

         12.9 Governing Law. This Agreement shall be governed by and construed,
interpreted and enforced in accordance with the laws of the Commonwealth of
Pennsylvania applicable to agreements made and to be performed entirely within
such Commonwealth, including all matters of enforcement, validity and
performance. All litigation brought or held on the basis of this Agreement
shall be brought and held in the appropriate state or federal court for
Allegheny County or Fayette County, Pennsylvania.

         12.10 Schedules. All of the Schedules attached hereto are incorporated
herein and made a part of this Agreement by this reference thereto.

         12.11 Severability. In case one or more of the provisions contained
in this Agreement shall for any reason be held to be invalid, illegal or
unenforceable in any respect, the invalidity or illegality or unenforceability
shall not affect any other provision and this Agreement shall be construed as
if the

                                      -35-



<PAGE>   42


invalid, illegal or unenforceable provision had never been contained in it.

         IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the date first above written.

                                        ALBERT GALLATIN HOME CARE, INC.

                                        By:     Gary Tighe
                                           ------------------------------------
                                                Chief Financial Officer

                                        ALBERT GALLATIN VISITING NURSE
                                        ASSOCIATION, INC.

                                        By:     Gerald L. Shuttlesworth
                                           ------------------------------------
                                                Chief Executive Officer


                                      -36-