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                                                                     EXHIBIT 4.5

                                                               EXECUTION VERSION

                        EXTENDICARE HEALTH SERVICES, INC.

                                  $125,000,000

                    6 7/8% SENIOR SUBORDINATED NOTES DUE 2014

                               PURCHASE AGREEMENT

                                                                  April 15, 2004

Lehman Brothers Inc.
Piper Jaffray & Co.
ABN AMRO Incorporated

c/o Lehman Brothers Inc.
745 Seventh Avenue, 19th Floor
New York, New York 10019

Ladies and Gentlemen:

            Extendicare Health Services, Inc., a Delaware corporation (the
"COMPANY"), proposes to issue and sell to the several Initial Purchasers named
in Schedule 1 hereto (the "INITIAL PURCHASERS") $125,000,000 aggregate principal
amount of its 6 7/8% Senior Subordinated Notes due 2014 (the "NOTES") guaranteed
(the "GUARANTEES") by the Company's domestic subsidiaries signatory hereto
(collectively, the "SUBSIDIARY GUARANTORS") pursuant to the terms of an
indenture (the "INDENTURE"), to be dated as of April 22, 2004, among the
Company, the Subsidiary Guarantors and U.S. Bank, N.A., as trustee (the
"TRUSTEE").

            The Notes will be offered and sold to you pursuant to an exemption
from the registration requirements under the Securities Act of 1933, as amended
(the "SECURITIES ACT"). The Company has prepared a preliminary offering
memorandum, dated April 9, 2004 (as amended or supplemented, the "PRELIMINARY
OFFERING MEMORANDUM"), and will prepare a final offering memorandum (as amended
or supplemented, the "OFFERING MEMORANDUM"), to be dated April 15, 2004,
relating to the Company, the Notes and the Guarantees.

            Upon original issuance thereof, and until such time as the same is
no longer required under the applicable requirements of the Securities Act, the
Notes (and all securities issued in exchange therefor or in substitution
therefor) shall bear substantially the following legend:

      THE NOTES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
      ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND MAY NOT BE OFFERED,
      SOLD, PLEDGED OR OTHERWISE TRANSFERRED, IN THE ABSENCE OF SUCH
      REGISTRATION, UNLESS THE TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO,
      THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. THE HOLDER OF THIS
      NOTE BY ITS ACCEPTANCE HEREOF (1) REPRESENTS THAT (A) IT IS A "QUALIFIED

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      INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) OR
      (B) IT IS NOT A U.S. PERSON AND IS ACQUIRING THIS NOTE IN AN "OFFSHORE
      TRANSACTION" PURSUANT TO RULE 904 OF REGULATION S UNDER THE SECURITIES
      ACT, (2) AGREES THAT IT WILL NOT PRIOR TO (A) THE DATE WHICH IS TWO YEARS
      (OR SUCH SHORTER PERIOD OF TIME AS PERMITTED BY RULE 144(k) UNDER THE
      SECURITIES ACT OR ANY SUCCESSOR PROVISION THEREUNDER) AFTER THE LATER OF
      THE ORIGINAL ISSUE DATE HEREOF (OR OF ANY PREDECESSOR OF THIS NOTE) OR THE
      LAST DAY ON WHICH THE COMPANY OR ANY AFFILIATE OF THE COMPANY WERE THE
      OWNERS OF THIS NOTE (OR ANY PREDECESSOR OF THIS NOTE) AND (B) SUCH LATER
      DATE, IF ANY, AS MAY BE REQUIRED BY APPLICABLE LAW (THE "RESALE
      RESTRICTION TERMINATION DATE"), OFFER, SELL OR OTHERWISE TRANSFER THIS
      NOTE EXCEPT (I) TO THE COMPANY, (II) PURSUANT TO A REGISTRATION STATEMENT
      WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (III) FOR SO
      LONG AS THE NOTES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A, TO A
      PERSON IT REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" AS
      DEFINED IN RULE 144A UNDER THE SECURITIES ACT THAT PURCHASES FOR ITS OWN
      ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM
      NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A,
      (IV) PURSUANT TO OFFERS AND SALES TO NON-U.S. PERSONS THAT OCCUR OUTSIDE
      THE UNITED STATES WITHIN THE MEANING OF REGULATION S UNDER THE SECURITIES
      ACT OR (V) PURSUANT TO ANY OTHER AVAILABLE EXEMPTION FROM THE REGISTRATION
      REQUIREMENTS OF THE SECURITIES ACT AND (3) AGREES THAT IT WILL GIVE TO
      EACH PERSON TO WHOM THIS NOTE IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE
      EFFECT OF THIS LEGEND; PROVIDED THAT THE COMPANY, THE TRUSTEE AND THE
      REGISTRAR SHALL HAVE THE RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER
      PURSUANT TO CLAUSE (IV) OR (V) TO REQUIRE THAT AN OPINION OF COUNSEL,
      CERTIFICATIONS AND/OR OTHER INFORMATION SATISFACTORY TO THE COMPANY, THE
      TRUSTEE AND THE REGISTRAR IS COMPLETED AND DELIVERED BY THE TRANSFEROR.
      THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF THE HOLDER AFTER THE
      RESALE RESTRICTION TERMINATION DATE. AS USED HEREIN, THE TERMS "OFFSHORE
      TRANSACTION," "UNITED STATES" AND "U.S. PERSON" HAVE THE MEANINGS GIVEN TO
      THEM BY REGULATION S UNDER THE SECURITIES ACT.

            You have advised the Company that you will make offers and sales
(the "EXEMPT RESALES") of the Notes purchased hereunder on the terms set forth
in the Offering Memorandum solely to (i) persons whom you reasonably believe to
be "qualified institutional buyers" as defined in Rule 144A under the Securities
Act ("QIBs") and (ii) outside the United States to

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persons other than U.S. persons in offshore transactions meeting the
requirements of Regulation S under the Securities Act ("REGULATION S") (such
persons specified in clauses (i) and (ii) being referred to herein as the
"ELIGIBLE PURCHASERS"). As used herein, the terms "offshore transaction,"
"United States" and "U.S. person" have the respective meanings given to them in
Regulation S. You will offer the Notes to Eligible Purchasers initially at a
price equal to 97.5001% of the principal amount thereof. Thereafter, the
offering price may be changed at any time without notice.

            In connection with the offering of the Notes, the Company and the
Subsidiary Guarantors will enter into an amended and restated credit facility in
the amount of up to $155.0 million pursuant to a second amended and restated
credit agreement among Extendicare Holdings, Inc., the Company, the Subsidiary
Guarantors, Lehman Commercial Paper Inc., as the administrative agent, and the
other lenders thereto (the "NEW CREDIT FACILITY") to amend and restate the
credit agreement, dated as of June 28, 2002, among Extendicare Holdings, Inc.,
the Company, the Subsidiary Guarantors, Lehman Commercial Paper Inc., as the
administrative agent, and the other lenders thereto (the "EXISTING CREDIT
FACILITY"). The net proceeds from the sale of the Notes will be used to
refinance all the Company's $200.0 million outstanding 9.35% Senior Subordinated
Notes Due 2007 and to pay related fees and expenses, as described in the "Use of
Proceeds" section of the Offering Memorandum. The entering into of the New
Credit Facility, the offering of the Notes and the use of the net proceeds from
the sale of the Notes as provided in the "Use of Proceeds" section of the
Offering Memorandum are collectively referred to herein as the "TRANSACTIONS."

            Holders (including subsequent transferees) of the Notes will have
the registration rights set forth in the registration rights agreement (the
"REGISTRATION RIGHTS AGREEMENT") among the Company, the Subsidiary Guarantors
and the Initial Purchasers, to be dated as of the Closing Date (as defined
below), in the form of Exhibit A hereto, for so long as such Notes constitute
"TRANSFER RESTRICTED SECURITIES" (as defined in the Registration Rights
Agreement). Pursuant to the Registration Rights Agreement, the Company and the
Subsidiary Guarantors will agree to file with the Securities and Exchange
Commission (the "COMMISSION") under the circumstances set forth therein, (i) a
registration statement under the Securities Act (the "EXCHANGE OFFER
REGISTRATION STATEMENT") relating to a separate series of the Company's 6 7/8%
Senior Subordinated Notes due 2014 (the "EXCHANGE NOTES") to be offered in
exchange for the Notes (such offer to exchange being referred to collectively as
the "REGISTERED EXCHANGE OFFER") and (ii) if required by the terms of the
Registration Rights Agreement, a shelf registration statement pursuant to Rule
415 under the Securities Act (the "SHELF REGISTRATION STATEMENT") relating to
the resale by certain holders of the Notes, and to use their reasonable best
efforts to cause such Registration Statements to be declared effective. This
Agreement, the Notes, the Exchange Notes, the Guarantees, the Exchange Note
Guarantees (as defined below), the Indenture and Registration Rights Agreement
are hereinafter referred to collectively as the "OPERATIVE DOCUMENTS." This is
to confirm the agreements concerning the purchase of the Notes from the Company
by the Initial Purchasers.

            SECTION 1. Representations, Warranties and Agreements of the Company
and the Subsidiary Guarantors. The Company and the Subsidiary Guarantors,
jointly and severally, represent, warrant and agree that:

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            (a) The Preliminary Offering Memorandum and the Offering Memorandum
      have been or will be prepared by the Company and Subsidiary Guarantors for
      use by the Initial Purchasers in connection with the Exempt Resales. No
      order or decree preventing the use of the Preliminary Offering Memorandum
      or the Offering Memorandum, or any order asserting that the transactions
      contemplated by this Agreement are subject to the registration
      requirements of the Securities Act has been issued and no proceeding for
      that purpose has commenced or is pending or, to the knowledge of the
      Company and Subsidiary Guarantors, is contemplated.

            (b) The Preliminary Offering Memorandum and the Offering Memorandum
      as of their respective dates did not, and the Offering Memorandum as of
      the Closing Date will not, contain an untrue statement of a material fact
      or omit to state a material fact necessary, in order to make the
      statements made therein, in the light of the circumstances under which
      they were made, not misleading, except that this representation and
      warranty does not apply to statements in or omissions from the Preliminary
      Offering Memorandum and the Offering Memorandum made in reliance upon and
      in conformity with information relating to the Initial Purchasers
      furnished to the Company in writing by or on behalf of the Initial
      Purchasers expressly for use therein, as specifically identified in
      Section 8(e) hereof.

            (c) The Company and each of the Subsidiary Guarantors (i) have been
      duly organized or formed, are validly existing and are in good standing
      under the laws of their respective jurisdictions of organization, and (ii)
      are duly qualified to do business and are in good standing in each
      jurisdiction in which their respective ownership or lease of property or
      the conduct of their respective businesses requires such qualification,
      except where the failure to so qualify or to be in good standing would not
      have a material adverse effect on the general affairs, management,
      consolidated financial position, shareholders' equity, results of
      operations, business or prospects of the Company and its subsidiaries
      taken as a whole (a "MATERIAL ADVERSE EFFECT"). The Company and each of
      the Subsidiary Guarantors have all power and authority necessary to own or
      hold their respective properties and to conduct the businesses in which
      they are engaged, and none of the subsidiaries of the Company, other than
      Extendicare Homes, Inc., Northern Health Facilities, Inc., Extendicare
      Health Network, Inc., Extendicare Health Facility Holdings, Inc. and
      Extendicare Health Facilities, Inc., is a "significant subsidiary," as
      such term is defined in Rule 405 under the Securities Act.

            (d) The Subsidiary Guarantors constitute all of the active
      subsidiaries of the Company and each of the Company's other subsidiaries
      are individually and in the aggregate inactive and immaterial.

            (e) The Company has an authorized capitalization as set forth in the
      Offering Memorandum. All of the issued shares of capital stock of the
      Company have been duly and validly authorized and issued and are fully
      paid and non-assessable; and all of the issued shares of capital stock and
      limited partner or limited liability company interests of each of the
      Subsidiary Guarantors have been duly and validly authorized and issued and
      are fully paid and non-assessable (except, in the case of such Subsidiary
      Guarantors that are Wisconsin corporations, for certain statutory
      liabilities that may be imposed by

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      Section 180.0622(2)(b) of the Wisconsin Business Corporation Law for
      unpaid employee wages) and are owned directly or indirectly by the
      Company, free and clear of all liens, encumbrances, equities or claims,
      other than liens, encumbrances, equities or claims under the Existing
      Credit Facility and contemplated under the New Credit Facility or
      otherwise described in the Offering Memorandum, and none of such shares of
      capital stock, or limited partner or limited liability company interests
      were issued in violation of preemptive or other similar rights arising by
      operation of law, under the charter and bylaws of the Company or under any
      agreement to which the Company or any Subsidiary Guarantor is a party or
      otherwise.

            (f) Each of the Company and the Subsidiary Guarantors has all
      requisite power and authority to execute, deliver and perform its
      respective obligations under this Agreement and each of the other
      Operative Documents to which it is a party.

            (g) This Agreement has been duly and validly authorized, executed
      and delivered by the Company and the Subsidiary Guarantors.

            (h) The Registration Rights Agreement has been duly and validly
      authorized by the Company and each of the Subsidiary Guarantors, and when
      duly executed by the proper officers of the Company and each of the
      Subsidiary Guarantors (assuming due authorization, execution and delivery
      by the Initial Purchasers) and delivered by the Company and each of the
      Subsidiary Guarantors, will constitute a legal, valid and binding
      agreement of the Company and each of the Subsidiary Guarantors,
      enforceable against the Company and each of the Subsidiary Guarantors in
      accordance with its terms, subject to applicable bankruptcy, insolvency,
      fraudulent conveyance, reorganization, moratorium and other similar laws
      relating to or affecting creditors' rights and remedies generally, and
      subject, as to enforceability, to general principles of equity, including
      principles of commercial reasonableness, good faith and fair dealing
      (regardless of whether enforcement is sought in a proceeding at law or in
      equity), and except that rights to indemnification and contribution
      thereunder may be limited by federal or state securities laws or public
      policy relating thereto.

            (i) The Indenture has been duly and validly authorized by the
      Company and each of the Subsidiary Guarantors, and when duly executed by
      the proper officers of the Company and each of the Subsidiary Guarantors
      (assuming due authorization, execution and delivery by the Trustee) and
      delivered by the Company and each of the Subsidiary Guarantors, will
      constitute a legal, valid and binding agreement of the Company and each of
      the Subsidiary Guarantors enforceable against the Company and each of the
      Subsidiary Guarantors in accordance with its terms, subject to applicable
      bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium
      and other similar laws relating to or affecting creditors' rights and
      remedies generally, and subject, as to enforceability, to general
      principles of equity, including principles of commercial reasonableness,
      good faith and fair dealing (regardless of whether enforcement is sought
      in a proceeding at law or in equity). No qualification of the Indenture
      under the Trust Indenture Act of 1939, as amended (the "TRUST INDENTURE
      ACT"), is required in connection with the offer and sale of the Notes
      contemplated hereby or in connection with the Exempt Resales. The
      Indenture

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      conforms to the requirements of the Trust Indenture Act and the rules and
      regulations thereunder applicable to an indenture that is qualified
      thereunder.

            (j) The Notes have been duly and validly authorized by the Company
      and when duly issued by the Company in accordance with the terms of the
      Indenture and, assuming due authentication of the Notes by the Trustee,
      when delivered to the Initial Purchasers against payment therefor in
      accordance with the terms hereof, will have been validly issued and
      delivered, and will constitute legal, valid and binding obligations of the
      Company entitled to the benefits of the Indenture and enforceable against
      the Company in accordance with their terms, subject to applicable
      bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium
      and other similar laws relating to or affecting creditors' rights and
      remedies generally, and subject, as to enforceability, to general
      principles of equity, including principles of commercial reasonableness,
      good faith and fair dealing (regardless of whether enforcement is sought
      in a proceeding at law or in equity).

            (k) The Guarantees have been duly and validly authorized by each of
      the Subsidiary Guarantors and when duly endorsed on the Notes in
      accordance with the terms of the Indenture and, assuming due
      authentication of the Notes by the Trustee, upon delivery to the Initial
      Purchasers against payment therefor in accordance with the terms hereof
      will constitute legal, valid and binding obligations of each of the
      Subsidiary Guarantors entitled to the benefits of the Indenture and
      enforceable against each of the Subsidiary Guarantors in accordance with
      their terms, subject to applicable bankruptcy, insolvency, fraudulent
      conveyance, reorganization, moratorium and other similar laws relating to
      or affecting creditors' rights and remedies generally, and subject, as to
      enforceability, to general principles of equity, including principles of
      commercial reasonableness, good faith and fair dealing (regardless of
      whether enforcement is sought in a proceeding at law or in equity).

            (l) The Exchange Notes have been duly and validly authorized by the
      Company and if and when duly issued by the Company in accordance with the
      terms of the Indenture and, assuming due authentication of the Exchange
      Notes by the Trustee, if and when delivered in accordance with the
      Registered Exchange Offer contemplated by the Registration Rights
      Agreement, will constitute legal, valid and binding obligations of the
      Company entitled to the benefits of the Indenture and enforceable against
      the Company in accordance with their terms, subject to applicable
      bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium
      and other similar laws relating to or affecting creditors' rights and
      remedies generally, and subject, as to enforceability, to general
      principles of equity, including principles of commercial reasonableness,
      good faith and fair dealing (regardless of whether enforcement is sought
      in a proceeding at law or in equity).

            (m) The guarantees of the Exchange Notes (the "EXCHANGE NOTE
      GUARANTEES") have been duly and validly authorized by each of the
      Subsidiary Guarantors and if and when duly endorsed on the Exchange Notes
      in accordance with the terms of the Indenture and, assuming due
      authentication of the Exchange Notes by the Trustee, if and when the
      Exchange Notes are delivered in accordance with the Registered

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      Exchange Offer contemplated by the Registration Rights Agreement, will
      constitute legal, valid and binding obligations of each of the Subsidiary
      Guarantors entitled to the benefits of the Indenture and enforceable
      against each of the Subsidiary Guarantors in accordance with their terms,
      subject to applicable bankruptcy, insolvency, fraudulent conveyance,
      reorganization, moratorium and other similar laws relating to or affecting
      creditors' rights and remedies generally, and subject, as to
      enforceability, to general principles of equity, including principles of
      commercial reasonableness, good faith and fair dealing (regardless of
      whether enforcement is sought in a proceeding at law or in equity).

            (n) The Company and the Subsidiary Guarantors have all requisite
      corporate power and authority to enter into (A) the New Credit Facility
      and (B) any and all other agreements and instruments ancillary to or
      entered into in connection with the transaction contemplated by the New
      Credit Facility (items (A) and (B) are referred to collectively as the
      "CREDIT DOCUMENTS").

            (o) Each of the New Credit Facility and the other Credit Documents
      has been duly and validly authorized by the Company and the Subsidiary
      Guarantors, to the extent they are a party thereto, and when duly executed
      by the proper officers of the Company and each of the Subsidiary
      Guarantors (assuming due authorization, execution and delivery by the
      other parties thereto) and delivered by the Company and each of the
      Subsidiary Guarantors, to the extent they are a party thereto, will
      constitute a legal, valid and binding agreement of each of the Company and
      the Subsidiary Guarantors, enforceable against the Company and each of the
      Subsidiary Guarantors in accordance with its terms, subject to applicable
      bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium
      and other similar laws relating to or affecting creditors' rights and
      remedies generally, and subject, as to enforceability, to general
      principles of equity, including principles of commercial reasonableness,
      good faith and fair dealing (regardless of whether enforcement is sought
      in a proceeding at law or in equity). As of December 31, 2003, after
      giving effect to the closing of the sale of the Notes, the receipt by the
      Company of the proceeds therefrom, the closing of the New Credit Facility,
      anticipated borrowings of $30.0 million under the New Credit Facility, the
      $45.3 million of letters of credit outstanding under the New Credit
      Facility and the application of the proceeds from the Notes and the New
      Credit Facility as described under the caption "Use of Proceeds" in the
      Offering Memorandum, the Company would have had $79.7 million of
      borrowings available to it under the New Credit Facility. All
      representations and warranties made by the Company in the New Credit
      Facility and the other Credit Documents will be true and correct in all
      material respects as of the date thereof.

            (p) The Indenture, the Notes, the Guarantees, the Registration
      Rights Agreement and the Credit Documents conform in all material respects
      to the descriptions thereof in the Offering Memorandum.

            (q) The execution, delivery and performance of this Agreement, the
      other Operative Documents, the New Credit Facility and the other Credit
      Documents by the Company and the Subsidiary Guarantors and the
      consummation of the Transactions will not conflict with or result in a
      breach or violation of any of the terms or provisions of, or

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      constitute a default under, (i) any indenture, mortgage, deed of trust,
      loan agreement or other agreement, license or instrument to which the
      Company or any of the Subsidiary Guarantors is a party or by which the
      Company or any of the Subsidiary Guarantors is bound or to which any of
      the property or assets of the Company or any of the Subsidiary Guarantors
      is subject, (ii) the provisions of the charter or bylaws of the Company or
      the charter, bylaws or other organizational documents of any of the
      Subsidiary Guarantors or (iii) any statute or any order, rule or
      regulation of any court or governmental agency or body having jurisdiction
      over the Company or any of the Subsidiary Guarantors or any of their
      properties or assets, except, in the case of clauses (i) and (iii) for
      such conflicts, breaches, violations or defaults that would not have a
      Material Adverse Effect. Except as may be required in connection with (1)
      the registration of the Notes, the Exchange Notes, the Guarantees and/or
      the Exchange Note Guarantees under the Securities Act in accordance with
      the Registration Rights Agreement, (2) qualification of the Indenture
      under the Trust Indenture Act, (3) compliance with the securities or blue
      sky laws of various jurisdictions and (4) filings required by the terms of
      the Credit Documents, no consent, approval, authorization or order of, or
      filing or registration with, any such court or governmental agency or body
      is required for the execution, delivery and performance of this Agreement,
      any of the other Operative Documents, the New Credit Facility and the
      other Credit Documents by the Company and the Subsidiary Guarantors and
      the consummation of the Transactions.

            (r) The financial statements (including the related notes and
      supporting schedules) included in the Offering Memorandum comply as to
      form in all material respects with the requirements of Regulation S-X
      under the Securities Act and present fairly the financial condition and
      results of operations and cash flows of the entities purported to be shown
      thereby, at the dates and for the periods indicated, and have been
      prepared in conformity with generally accepted accounting principles
      applied on a consistent basis throughout the periods involved. The other
      financial data, selected pro forma ratios, operating data and statistical
      information and data, including EBITDA (as defined in the Offering
      Memorandum), included in the Offering Memorandum is presented fairly and
      has been prepared on a basis consistent with such financial statements and
      the books and records of the Company.

            (s) Except as set forth in the Offering Memorandum, there are no
      legal or governmental proceedings pending to which the Company or any of
      the Subsidiary Guarantors is a party or of which any property or assets of
      the Company or any of the Subsidiary Guarantors is the subject which, if
      determined adversely to the Company or any of the Subsidiary Guarantors,
      would have a Material Adverse Effect, and to the Company's knowledge, no
      such proceedings are threatened or contemplated by governmental
      authorities or others.

            (t) Except as set forth in the Offering Memorandum, there are no
      contracts, agreements or understandings between the Company and/or the
      Subsidiary Guarantors and any person granting such person the right to
      require the Company or the Subsidiary Guarantors to file a registration
      statement under the Securities Act with respect to any securities of the
      Company or the Subsidiary Guarantors owned or to be owned by such person
      or to require the Company or the Subsidiary Guarantors to include such
      securities

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      in the securities to be registered pursuant to the Exchange Offer
      Registration Statement or the Shelf Registration Statement or in any
      securities registered or to be registered pursuant to any other
      registration statement filed by or required to be filed by the Company or
      the Subsidiary Guarantors under the Securities Act.

            (u) Except as disclosed in the Offering Memorandum, since the date
      of the latest audited consolidated financial statements of the Company
      included in the Offering Memorandum, none of the Company or the Subsidiary
      Guarantors has incurred any liability or obligation, direct or contingent,
      or entered into any transaction, in each case not in the ordinary course
      of business, that is material to the Company or the Subsidiary Guarantors,
      taken as a whole, and there has not occurred, to the knowledge of the
      Company and the Subsidiary Guarantors, any development or event involving
      a Material Adverse Effect and, except as disclosed in or contemplated by
      the Offering Memorandum, there has been no (i) dividend or distribution of
      any kind declared, paid or made by the Company or its affiliates on any
      class of its respective capital stock, (ii) issuance of securities by the
      Company or its affiliates (other than the Notes and the Guarantees offered
      thereby or pursuant to an issuance by the Company or its affiliates of
      options to purchase the capital stock of the Company or its affiliates) or
      (iii) material increase in short-term or long-term debt of the Company or
      the Subsidiary Guarantors.

            (v) The Company is in full compliance with the reporting
      requirements of Section 13 or 15(d) of the Exchange Act. All reports filed
      by the Company with the Commission pursuant to Section 13 or 15(d) of the
      Exchange Act comply as to form with the Exchange Act and the rules and
      regulations of the Commission thereunder and when filed did not include
      any untrue statement of a material fact or omit to state any material fact
      necessary to make the statements therein not misleading.

            (w) The Company and each Subsidiary Guarantor (i) makes and keeps
      accurate books and records and (ii) maintains a system of internal
      accounting controls sufficient to provide reasonable assurance that (A)
      transactions are executed in accordance with management's authorization,
      (B) transactions are recorded as necessary to permit preparation of its
      financial statements in conformity with generally accepted accounting
      principles and to maintain accountability for its assets, (C) access to
      its assets is permitted only in accordance with management's authorization
      and (D) the recorded accountability for its assets is compared with
      existing assets at reasonable intervals and appropriate action is taken
      with respect to any differences.

            (x) KPMG LLP, who have certified certain financial statements of the
      Company, whose report appears in the Offering Memorandum and who have
      delivered the initial letter referred to in Section 7(j) hereof, are
      independent public accountants under rule 101 of the AICPA's Code of
      Professional Conduct and its interpretations and rulings.

            (y) The statistical and market-related data included in the Offering
      Memorandum are based on or derived from sources that the Company and the
      subsidiaries believe to be reliable and accurate.

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            (z) Except as disclosed in or specifically contemplated by the
      Offering Memorandum, each of the Company and the Subsidiary Guarantors has
      such permits, licenses, patents, franchises, certificates of need and
      other approvals or authorizations of governmental or regulatory
      authorities ("PERMITS") as are necessary under applicable law to own its
      properties and to conduct its businesses in the manner described in the
      Offering Memorandum, except where the failure to have any such Permit
      would not, individually or in the aggregate, have a Material Adverse
      Effect; each of the Company and the Subsidiary Guarantors has fulfilled
      and performed all of its obligations with respect to the Permits, except
      where the failure to so fulfill and/or perform such obligations would not
      have a Material Adverse Effect; and, except as disclosed in or
      specifically contemplated by the Offering Memorandum, no event has
      occurred which allows, or after notice or lapse of time would allow,
      revocation or termination thereof or results in any other impairment of
      the rights of the holder of any such Permit, except where any such
      revocations, terminations or impairments would not, individually or in the
      aggregate, have a Material Adverse Effect. Except as disclosed in or
      specifically contemplated by the Offering Memorandum, none of the Permits
      contains any restriction that is materially burdensome (other than such
      burdens as are common or customary to such Permits) to any of the Company
      or the Subsidiary Guarantors.

            (aa) The Company and each of the Subsidiary Guarantors carry, or are
      covered by, insurance in such amounts and covering such risks as is
      adequate for the conduct of their respective businesses and the value of
      their respective properties and as is customary for companies engaged in
      similar businesses in similar industries.

            (bb) The Company and each of the Subsidiary Guarantors own or
      possess adequate rights to use all patents, patent applications,
      trademarks, service marks, trade names, trademark registrations, service
      mark registrations, copyrights and licenses necessary for the conduct of
      their respective businesses and have no reason to believe that the conduct
      of their respective businesses will conflict with, and have not received
      any notice of any claim of conflict with, any such rights of others, and
      the Company and the Subsidiary Guarantors are not aware of any pending or
      threatened claim to the contrary or any pending or threatened challenge by
      any other person to the rights of the Company and the Subsidiary
      Guarantors with respect to the foregoing which, if determined adversely to
      any of the Company or the Subsidiary Guarantors, would have a Material
      Adverse Effect.

            (cc) There are no contracts or other documents which would be
      required to be described in a prospectus included in or filed as an
      exhibit to a registration statement on Form S-1 under the Securities Act
      that have not been described in the Offering Memorandum or filed with the
      Commission.

            (dd) No relationship, direct or indirect, exists between or among
      the Company and the Subsidiary Guarantors, on the one hand, and the
      directors, officers, shareholders, customers or suppliers of the Company
      or the Subsidiary Guarantors, on the other hand, which would be required
      to be described in a prospectus included in a registration statement on
      Form S-1 under the Securities Act that is not described in the Offering
      Memorandum.

                                       10

<PAGE>

            (ee) No labor disturbance by the employees of the Company or any of
      the Subsidiary Guarantors exists or, to the knowledge of the Company, is
      imminent which would have a Material Adverse Effect.

            (ff) The Company is in compliance in all material respects with all
      presently applicable provisions of the Employee Retirement Income Security
      Act of 1974, as amended, including the regulations and published
      interpretations thereunder ("ERISA"); no "reportable event" (as defined in
      ERISA) has occurred with respect to any "pension plan" (as defined in
      ERISA) for which the Company would have any material liability; the
      Company has not incurred and does not expect to incur any material
      liability under (i) Title IV of ERISA with respect to termination of, or
      withdrawal from, any "pension plan" or (ii) Sections 412 or 4971 of the
      Internal Revenue Code of 1986, as amended, including the regulations and
      published interpretations thereunder (the "CODE"); and each "pension plan"
      for which the Company would have any liability that is intended to be
      qualified under Section 401(a) of the Code is so qualified in all material
      respects and nothing has occurred, whether by action or by failure to act,
      which would cause the loss of such qualification.

            (gg) The Company and the Subsidiary Guarantors have filed all
      federal, state and local income and franchise tax returns required to be
      filed through the date hereof, other than those being contested in good
      faith, and paid all taxes due thereon, other than those being contested in
      good faith, and no tax deficiency has been determined adversely to the
      Company or any of the Subsidiary Guarantors, nor does the Company have any
      knowledge of any tax deficiency which, if determined adversely to the
      Company or any of the Subsidiary Guarantors, would have a Material Adverse
      Effect.

            (hh) Neither the Company nor any of the Subsidiary Guarantors (i) is
      in violation of its charter, bylaws or other organizational documents,
      (ii) is in default, and no event has occurred which, with notice or lapse
      of time or both, would constitute such a default, in the due performance
      or observance of any term, covenant or condition contained in any material
      indenture, mortgage, deed of trust, loan agreement or other agreement or
      instrument to which it is a party or by which it is bound or to which any
      of its properties or assets is subject, except for such defaults that
      would not have a Material Adverse Effect, or (iii) is in violation of any
      law, ordinance, governmental rule, regulation or court decree to which it
      or its property or assets may be subject, except for such violations that
      would not have a Material Adverse Effect.

            (ii) Neither the Company nor any of the Subsidiary Guarantors, nor
      any current director or officer, or to the Company's knowledge, any
      current agent, employee or other person associated with or acting on
      behalf of the Company or any of the Subsidiary Guarantors, has used any
      corporate funds for any unlawful contribution, gift, entertainment or
      other unlawful expense relating to political activity; made any direct or
      indirect unlawful payment to any foreign or domestic government official
      or employee from corporate funds; violated or is in violation of any
      provision of the Foreign Corrupt Practices Act of 1977; or made any bribe,
      rebate, payoff, influence payment, kickback or other unlawful payment.

                                       11

<PAGE>

            (jj) Neither the Company nor the Subsidiary Guarantors has stored,
      disposed of, generated, manufactured, refined, transported, handled or
      treated toxic wastes, medical wastes, solid wastes, hazardous wastes or
      hazardous substances or other similar materials ("HAZARDOUS MATERIALS")
      and, to the knowledge of the Company, there has been no storage, disposal,
      generation, manufacture, refinement, transportation, handling or treatment
      of Hazardous Materials by any other person at, upon or from any of the
      properties now owned or leased by the Company or the Subsidiary Guarantors
      in violation of any applicable law, ordinance, rule, regulation, order,
      judgment, decree or permit which could reasonably be expected to have,
      individually or in the aggregate with all such violations and remedial
      actions, a Material Adverse Effect; there has been no material spill,
      discharge, leak, emission, injection, escape, dumping or release of any
      kind onto such property or into the environment surrounding such property
      of any toxic wastes, medical wastes, solid wastes, hazardous wastes or
      hazardous substances due to or caused by the Company or any of the
      Subsidiary Guarantors or with respect to which the Company or any of the
      Subsidiary Guarantors have knowledge, which could reasonably be expected
      to have, individually or in the aggregate with all such spills,
      discharges, leaks, emissions, injections, escapes, dumpings and releases,
      a Material Adverse Effect; and the terms "hazardous wastes," "toxic
      wastes," "hazardous substances," "solid wastes" and "medical wastes" shall
      have the meanings specified in any applicable local, state, federal and
      foreign laws or regulations with respect to environmental protection.

            (kk) The Company and each of the Subsidiary Guarantors have good and
      marketable title in fee simple to all real property and good and
      marketable title to all personal property owned by them, in each case,
      free and clear of all liens, encumbrances and defects except such as are
      existing under the Existing Credit Facility and contemplated under the New
      Credit Facility or otherwise described in the Offering Memorandum or such
      as do not materially affect the value of such property and do not
      materially interfere with the use made and proposed to be made of such
      property by the Company and the Subsidiary Guarantors; and all assets held
      under lease by the Company and the Subsidiary Guarantors are held by them
      under valid, subsisting and enforceable leases, with such exceptions as
      are not material and do not interfere with the use made and proposed to be
      made of such assets by the Company and the Subsidiary Guarantors.

            (ll) Immediately after the consummation of the Transactions, the
      fair value and present fair saleable value of the assets of the Company
      and each of the Subsidiary Guarantors (each on a consolidated basis) will
      exceed the sum of its stated liabilities and identified contingent
      liabilities; none of the Company nor any of the Subsidiary Guarantors
      (each on a consolidated basis) is, nor will any of the Company or any of
      the Subsidiary Guarantors (each on a consolidated basis) be, after giving
      effect to the execution, delivery and performance of this Agreement and
      the other Operative Documents and the New Credit Facility and the other
      Credit Documents and the consummation of the Transactions, (A) left with
      unreasonably small capital with which to carry on its business as it is
      proposed to be conducted, (B) unable to pay its debts (contingent or
      otherwise) as they mature or (C) otherwise insolvent.

            (mm) Neither the Company nor any Subsidiary Guarantor is, or, as of
      the Closing Date after giving effect to the Transactions and the
      application of the proceeds as

                                       12

<PAGE>

      described in the Offering Memorandum under the section entitled "Use of
      Proceeds," will be, an "investment company" within the meaning of such
      term under the Investment Company Act of 1940, as amended (the "INVESTMENT
      COMPANY ACT").

            (nn) Except as set forth in the Offering Memorandum, neither the
      Company nor any of the Subsidiary Guarantors nor, to the knowledge of the
      Company, any other person who has a direct or indirect ownership or
      control interest in the Company or any of the Subsidiary Guarantors or who
      is an officer, director, agent or managing employee of the Company or any
      Subsidiary Guarantor: (1) has engaged in any activities which are
      prohibited, or are cause for criminal or civil penalties and/or mandatory
      or permissive exclusion from Medicare or Medicaid, under Section 1320a-7,
      1320a-7a, 1320a-7b, or 1395nn of Title 42 of the United States Code, the
      federal TRICARE statute, the Federal False Claims Act 31
      U.S.C.Section 3729-3733, or the regulations promulgated pursuant to such
      statutes or regulations or related state or local statutes or by generally
      recognized professional standards of care or conduct; (2) has had a civil
      monetary penalty assessed against it under Section 1128A of the Social
      Security Act ("SSA"); (3) is currently excluded from participation under
      the Medicare program or a Federal Health Care Program (as that term is
      defined in SSA Section 1128(B)(f)); or (4) has been convicted (as that
      term is defined in 42 C.F.R. Section 1001.2) of any of the categories of
      offenses described in SSA Section 1128(a) and (b)(1), (2) and (3).

            (oo) Neither the Company nor any other affiliate (as defined in Rule
      501(b) of Regulation D under the Securities Act ("REGULATION D")) of the
      Company has directly, or through any agent (provided that no
      representation is made as to the Initial Purchasers or any person acting
      on their behalf), (i) sold, offered for sale, solicited offers to buy or
      otherwise negotiated in respect of, any security (as defined in the
      Securities Act) which is or could be integrated with the offering and sale
      of the Notes and the Guarantees in a manner that would require the
      registration of the Notes and the Guarantees under the Securities Act or
      (ii) engaged in any form of general solicitation or general advertising
      (within the meaning of Regulation D, including, but not limited to,
      advertisements, articles, notices or other communications published in any
      newspaper, magazine, or similar medium or broadcast over television or
      radio, or any seminar or meeting whose attendees have been invited by any
      general solicitation or general advertising) in connection with the
      offering of the Notes and the Guarantees. Neither the Company nor any
      Subsidiary Guarantor has offered, sold or issued any securities, or
      securities that are convertible into other securities, with terms that are
      substantially similar to the Notes and the Guarantees during the six-month
      period preceding the date of the Offering Memorandum, including any sales
      pursuant to Section 4(2) of the Securities Act or Regulation D or
      Regulation S under the Securities Act.

            (pp) Each of the Preliminary Offering Memorandum and the Offering
      Memorandum and each amendment or supplement thereto, as of its date,
      contains the information specified in, and meets the requirements of, Rule
      144A(d)(4) under the Act.

            (qq) Neither the Company nor any Subsidiary Guarantor has
      distributed and, prior to the later to occur of the Closing Date and
      completion of the distribution of the Notes and the Guarantees, will not
      distribute any offering material in connection with the

                                       13

<PAGE>

      offering and sale of the Notes other than the Preliminary Offering
      Memorandum and the Offering Memorandum.

            (rr) When issued and delivered pursuant to this Agreement, the Notes
      will not be of the same class (within the meaning of Rule 144A under the
      Securities Act) as securities of the Company that are listed on a national
      securities exchange registered under Section 6 of the Exchange Act or that
      are quoted in a U.S. automated inter-dealer quotation system.

            (ss) Assuming (i) that your representations and warranties in
      Section 2 of this Agreement are true, (ii) compliance by you with the
      covenants set forth herein and (iii) that each of the Eligible Purchasers
      is a QIB or a person who acquires the Notes and the Guarantees outside the
      United States in an "offshore transaction" and is not a "U.S. person"
      (within the meaning of Rule 904 of Regulation S), it is not necessary in
      connection with the purchase of the Notes and the Guarantees and the offer
      and initial resale of the Notes and the Guarantees by you in the manner
      contemplated by this Agreement and the Offering Memorandum, to register
      the Notes and the Guarantees under the Securities Act or to qualify the
      Indenture under the Trust Indenture Act.

            (tt) None of the Company, any Subsidiary Guarantor or any of their
      affiliates or any person acting on their behalf (provided that no
      representation is made as to the Initial Purchasers or any person acting
      on their behalf) has engaged or will engage in any directed selling
      efforts within the meaning of Rule 902(c) of Regulation S with respect to
      the Notes, and the Company, the Subsidiary Guarantors and their other
      affiliates and all persons acting on their behalf (provided that no
      representation is made as to the Initial Purchasers or any person acting
      on their behalf) have complied with and will comply with the offering
      restrictions requirements of Regulation S in connection with the offering
      of the Notes outside of the United States and, in connection therewith,
      the Offering Memorandum will contain the disclosure required by Rule
      902(g). The sales of the Notes pursuant to Regulation S are not part of a
      plan or scheme to evade the registration provision of the Securities Act.

            (uu) The Notes sold in reliance on Regulation S will be represented
      upon issuance by a temporary global security that may not be exchanged for
      definitive securities until the expiration of the 40-day restricted period
      referred to in Rule 903(b)(2) of the Securities Act and only upon
      certification of beneficial ownership of such Notes by non-U.S. persons or
      U.S. persons who purchased such Notes in transactions that were exempt
      from the registration requirements of the Securities Act.

            (vv) In connection with the distribution of the Notes and the
      Guarantees, neither the Company nor any of its subsidiaries has taken or
      will take, directly or indirectly, any action designed to cause or result
      in, or which has constituted or which might reasonably be expected to
      constitute, the stabilization or manipulation of the price of the Notes
      and the Guarantees to facilitate the sale or resale of the Notes and the
      Guarantees.

                                       14

<PAGE>

            (ww) No "nationally recognized statistical rating organization" as
      such term is defined for purposes of Rule 436(g)(2) under the Securities
      Act (i) has imposed (or has informed the Company that it is considering
      imposing) any condition (financial or otherwise) on the Company's
      retaining any rating assigned as of the date hereof to the Company or any
      of their respective securities or (ii) has indicated to the Company that
      it is considering (A) the downgrading, suspension or withdrawal of, or any
      review for a possible change that does not indicate the direction of the
      possible change in, any rating so assigned or (B) any negative change in
      the outlook for any rating of the Company.

            (xx) The Company has not taken, and will not take, any action that
      might cause this Agreement or the issuance or sale of the Notes and the
      Guarantees to violate Regulation T (12 C.F.R. Part 220), Regulation U (12
      C.F.R. Part 221) or Regulation X (12 C.F.R. Part 224) of the Board of
      Governors of the Federal Reserve System.

            (yy) The Company and each Subsidiary Guarantor understands that the
      Initial Purchaser and, for purposes of the opinions to be delivered to the
      Initial Purchaser pursuant to Section 7 hereof, counsel to the Company and
      counsel to the Initial Purchasers will rely upon the accuracy and truth of
      the foregoing representations and hereby consents to such reliance.

            SECTION 2. Representations, Warranties and Agreements of the Initial
Purchasers. Each of the Initial Purchasers, severally and not jointly,
represents and warrants to, and agrees with, the Company and the Subsidiary
Guarantors, that:

            (a) Such Initial Purchaser is a QIB with such knowledge and
      experience in financial and business matters as are necessary in order to
      evaluate the merits and risks of an investment in the Notes and the
      Guarantees.

            (b) Such Initial Purchaser (i) is not acquiring the Notes and the
      Guarantees with a view to any distribution thereof or with any present
      intention of offering or selling any of the Notes and the Guarantees in a
      transaction that would violate the Securities Act or any state securities
      laws or any other applicable jurisdiction; (ii) in connection with the
      Exempt Resales, will solicit offers to buy the Notes and the Guarantees
      only from, and will offer to sell the Notes and the Guarantees only to,
      the Eligible Purchasers in accordance with this Agreement and on the terms
      contemplated by the Offering Memorandum; and (iii) will not offer or sell
      the Notes and the Guarantees, nor has it offered or sold the Notes and the
      Guarantees by, or otherwise engaged in, any form of general solicitation
      in connection with the offering of the Notes and the Guarantees.

            (c) The Notes and the Guarantees have not been and will not be
      registered under the Securities Act and may not be offered or sold within
      the United States or to, or for the account or benefit of, U.S. persons
      except in accordance with Regulation S under the Securities Act or
      pursuant to an exemption from the registration requirements of the
      Securities Act. Such Initial Purchaser represents that it has not offered,
      sold or delivered the Notes and the Guarantees, and will not offer, sell
      or deliver the Notes and the Guarantees (i) as part of their distribution
      at any time or (ii) otherwise until 40 days after the later of the
      commencement of the offering of the Notes and the Guarantees and the

                                       15

<PAGE>

      Closing Date (such period, the "DISTRIBUTION COMPLIANCE PERIOD"), within
      the United States or to, or for the account or benefit of U.S. persons,
      except in accordance with Rule 144A under the Securities Act. Accordingly,
      such Initial Purchaser represents and agrees that neither it, its
      affiliates nor any persons acting on its behalf have engaged or will
      engage in any directed selling efforts within the meaning of Rule 902(c)
      of Regulation S with respect to the Notes and the Guarantees, and its
      affiliates and all persons acting on its behalf have complied and will
      comply with the offering restrictions requirements of Regulation S.

            (d) Such Initial Purchaser agrees that, at or prior to confirmation
      of a sale of Notes and Guarantees (other than a sale pursuant to Rule
      144A), it will have sent to each distributor, dealer or person receiving a
      selling concession, fee or other remuneration that purchases Notes and
      Guarantees from them during the Distribution Compliance Period a
      confirmation or notice substantially to the following effect:

            "The Notes covered hereby have not been registered under the
            Securities Act of 1933 (the "Securities Act") and may not be offered
            and sold within the United States or to, or for the account or
            benefit of, U.S. persons (i) as part of their distribution at any
            time or (ii) otherwise until 40 days after the later of the
            commencement of the offering or the closing date, except in either
            case in accordance with Regulation S (or Rule 144A if available)
            under the Securities Act, and in connection with any subsequent sale
            by you of the Notes covered hereby in reliance on Regulation S
            during the period referred to above to any distributor, dealer or
            person receiving a selling concession, fee or other remuneration,
            you must deliver a notice substantially to the foregoing effect.
            Terms used above have the meanings assigned to them in Regulation
            S."

            (e) All offers and sales of the Notes and the Guarantees by such
      Initial Purchaser pursuant to Regulation S are and will be "offshore
      transactions" within the meaning of Regulation S and are not and will not
      be part of a plan or scheme to evade the registration provisions of the
      Securities Act.

            (f) Such Initial Purchaser (i) has not offered or sold, and prior to
      the six months after the date of the issue of the Notes will not offer or
      sell, any Notes to persons in the United Kingdom except to persons whose
      ordinary activities involve them in acquiring, holding, managing or
      disposing of investments (as principal or agent) for purposes of their
      businesses or otherwise in circumstances which have not resulted and will
      not result in an offer to the public in the United Kingdom within the
      meaning of the Public Offers of Securities Regulations 1995, (ii) has
      complied with and will comply with all applicable provisions of the
      Financial Services and Markets Act 2000, or the FSMA, with respect to
      anything done by it in relation to the Notes in, from or otherwise
      involving the United Kingdom and (iii) has only communicated or caused to
      be communicated and will only communicate and cause to be communicated any
      invitation or inducement to engage in investment activity (within the
      meaning of Section 21 of the FSMA) received by it in connection with the
      issue or sale of any Notes in circumstances in which Section 21(1) of the
      FSMA would not apply to the Company.

                                       16

<PAGE>

            (g) Such Initial Purchaser understands that the Company and, for
      purposes of the opinions to be delivered to you pursuant to Section 7
      hereof, counsel to the Company and counsel to the Initial Purchasers will
      rely upon the accuracy and truth of the foregoing representations and
      hereby consents to such reliance.

            The terms used in this Section 2 that have meanings assigned to them
in Regulation S are used herein as so defined.

            SECTION 3. Purchase of the Notes and the Guarantees by the Initial
Purchasers. On the basis of the representations and warranties contained in, and
subject to the terms and conditions of, this Agreement, the Company agrees to
sell the Notes (and cause the Subsidiary Guarantors to issue the Guarantees) to
the several Initial Purchasers and each of the Initial Purchasers, severally and
not jointly, agrees to purchase the amount of Notes set opposite that Initial
Purchaser's name in Schedule 1 hereto. Each Initial Purchaser will purchase such
aggregate principal amount of Notes at an aggregate purchase price equal to
95.0001% of the principal amount thereof (the "PURCHASE PRICE").

            The Company shall not be obligated to deliver any of the Notes to be
delivered on the Closing Date, except upon payment for all the Notes and the
Guarantees to be purchased on the Closing Date as provided herein.

            SECTION 4. Delivery of and Payment for the Notes and the Guarantees.

            (a) Delivery of and payment for the Notes and the Guarantees shall
      be made at the offices of Weil, Gotshal & Manges LLP, 767 Fifth Avenue,
      New York, New York 10153, at 9:00 A.M., New York City time, on the fifth
      full business day following the date of this Agreement or at such other
      date or place as shall be determined by agreement between Lehman Brothers
      and the Company. This date and time are sometimes referred to as the
      "CLOSING DATE."

            (b) On the Closing Date, one or more Notes in definitive form,
      registered in the name of Cede & Co., as nominee of The Depository Trust
      Company ("DTC"), having an aggregate principal amount corresponding to the
      aggregate principal amount of the Notes (collectively, the "GLOBAL
      NOTES"), shall be delivered by the Company to the Initial Purchasers
      against payment by the Initial Purchasers of the purchase price thereof by
      wire transfer of immediately available funds as the Company may direct by
      written notice delivered to you no later than two business days prior to
      the Closing Date. The Global Notes in definitive form shall be made
      available to the Initial Purchasers for inspection not later than 2:00
      p.m. on the business day prior to the Closing Date.

            SECTION 5. Further Agreements of the Company. The Company agrees:

            (a) To advise you promptly and, if requested by you, to confirm such
      advice in writing, (i) of the issuance by the Commission or any state
      securities commission of any stop order suspending the qualification or
      exemption from qualification of the Notes and the Guarantees for offering
      or sale in any jurisdiction, or the initiation or threatening of any
      proceeding for such purpose by the Commission or any state securities
      commission or other regulatory authority, and (ii) the happening of any
      event that makes

                                       17

<PAGE>

      any statement of a material fact made in the Preliminary Offering
      Memorandum or the Offering Memorandum untrue or which requires the making
      of any additions to or changes in the Preliminary Offering Memorandum or
      Offering Memorandum in order to make the statements therein, in the light
      of the circumstances under which they were made, not misleading. The
      Company shall use all reasonable efforts to prevent the issuance of any
      stop order or order suspending the qualification or exemption of the Notes
      and the Guarantees under any state securities or blue sky laws and, if at
      any time any state securities commission shall issue any stop order
      suspending the qualification or exemption of the Notes and the Guarantees
      under any state securities or blue sky laws, the Company shall use all
      reasonable efforts to obtain the withdrawal or lifting of such order at
      the earliest possible time.

            (b) To furnish to you without charge, as many copies of the
      Preliminary Offering Memorandum and the Offering Memorandum, and any
      amendments or supplements thereto, as you may reasonably request. The
      Company consents to the use of the Preliminary Offering Memorandum and the
      Offering Memorandum, and any amendments and supplements thereto required
      pursuant to this Agreement, by you in connection with the Exempt Resales
      that are in compliance with this Agreement.

            (c) Not to amend or supplement the Offering Memorandum prior to the
      Closing Date or during the period referred to in (d) below unless you
      shall previously have been advised of, and shall not have reasonably
      objected to, such amendment or supplement within a reasonable time, but in
      any event not longer than three days after being furnished a copy of such
      amendment or supplement. The Company shall promptly prepare, upon any
      reasonable request by you, any amendment or supplement to the Offering
      Memorandum that may be necessary or advisable in connection with Exempt
      Resales.

            (d) If, in connection with any Exempt Resales or market making
      transactions after the date of this Agreement and prior to the
      consummation of the Registered Exchange Offer, any event shall occur that,
      in the judgment of the Company or in your judgment or the judgment of
      counsel to you, makes any statement of a material fact in the Offering
      Memorandum untrue or that requires the making of any additions to or
      changes in the Offering Memorandum in order to make the statements in the
      Offering Memorandum, in the light of the circumstances at the time that
      the Offering Memorandum is delivered to prospective Eligible Purchasers,
      not misleading, or if it is necessary to amend or supplement the Offering
      Memorandum to comply with applicable law, the Company will promptly notify
      you of such event and prepare an appropriate amendment or supplement to
      the Offering Memorandum so that, at the time that the Offering Memorandum
      is delivered to prospective Eligible Purchasers, (i) the statements in the
      Offering Memorandum as amended or supplemented, in the light of the
      circumstances under which they were made, will not be misleading and (ii)
      the Offering Memorandum will comply with applicable law.

            (e) Promptly from time to time to take such action as you may
      reasonably request to qualify the Notes and the Guarantees for offering
      and sale under the state securities or blue sky laws of such jurisdictions
      as you may request (provided, however,

                                       18

<PAGE>

      that the Company shall not be obligated to qualify as a foreign
      corporation in any jurisdiction in which it is not now so qualified or to
      take any action that would subject it to general consent to service of
      process in any jurisdiction in which it is not now so subject) and to
      comply with such laws so as to permit the continuance of sales and
      dealings therein in such jurisdictions for as long as may be necessary to
      complete the distribution of the Notes and the Guarantees.

            (f) To use all reasonable best efforts to do and perform all things
      required to be done and performed under this Agreement by it prior to or
      after the Closing Date and to satisfy all conditions precedent on its part
      to the delivery of the Notes and the Guarantees.

            (g) Except as contemplated in the Registration Rights Agreement, not
      to sell, offer for sale or solicit offers to buy or otherwise negotiate in
      respect of any security (as defined in the Securities Act) that would be
      integrated with the sale of the Notes and the Guarantees in a manner that
      would require the registration under the Securities Act of the sale to you
      or the Eligible Purchasers of the Notes and the Guarantees.

            (h) For so long as any Notes remain outstanding and are "restricted
      securities" within the meaning of Rule 144(a)(3) under the Securities Act
      and during any period in which the Company is not subject to Section 13 or
      15(d) of the Exchange Act, to make available upon request to any
      registered holder or beneficial owner of Notes in connection with any sale
      thereof and any prospective purchaser of Notes from such registered holder
      or beneficial owner, the information required by Rule 144A(d)(4) under the
      Securities Act.

            (i) To use its reasonable best efforts to cause the Notes to be
      eligible for trading in The PORTAL(R) Market ("PORTAL"), a subsidiary of
      The Nasdaq Stock Market, Inc., and to permit the Notes to be eligible for
      clearance and settlement through DTC.

            (j) To apply the net proceeds from the sale of the Notes as set
      forth in the Offering Memorandum under the section entitled "Use of
      Proceeds."

            (k) To take such steps as shall be necessary to ensure that neither
      the Company nor any subsidiary of the Company shall become an "investment
      company" within the meaning of such term under the Investment Company Act
      and the rules and regulations of the Commission thereunder.

            (l) Except for borrowings under the New Credit Facility and a
      potential exchange by the Company of a note payable to Extendicare Inc.
      for the 9.35% Senior Subordinated Notes Due 2007 currently held by
      Extendicare Inc., for a period of 180 days from the date of the Offering
      Memorandum, not to, directly or indirectly, sell, contract to sell, grant
      any option to purchase, issue any instrument convertible into or
      exchangeable for, or otherwise transfer or dispose of, any debt securities
      of the Company or any Subsidiary Guarantor in a public or private offering
      for cash having a maturity of more than one year from the date of issue of
      such securities, except (i) for the Exchange

                                       19

<PAGE>

      Notes and the Exchange Note Guarantees in connection with the Exchange
      Offer or (ii) with the prior consent of the Initial Purchasers, which
      consent shall not be unreasonably withheld.

            (m) For a period of three years following the Closing Date, to
      furnish to you copies of all materials furnished by the Company to holders
      of Notes and all public reports and all reports and financial statements
      furnished by the Company to the principal national securities exchange
      upon which the Company's common stock or Notes may be listed pursuant to
      requirements of or agreements with such exchange or to the Commission
      pursuant to the Exchange Act or any rule or regulation of the Commission
      thereunder.

            SECTION 6. Expenses. The Company agrees that, whether or not the
transactions contemplated by this Agreement are consummated or this Agreement
becomes effective or is terminated, to pay all costs, expenses, fees and taxes
incident to and in connection with: (i) the preparation, printing, filing and
distribution of the Preliminary Offering Memorandum and the Offering Memorandum
(including, without limitation, financial statements) and all amendments and
supplements thereto (but not, however, legal fees and expenses of your counsel
incurred in connection therewith), (ii) the preparation, printing (including,
without limitation, word processing and duplication costs) and delivery of this
Agreement, the Indenture, the Registration Rights Agreement, all blue sky
memoranda and all other agreements, memoranda, correspondence and other
documents printed and delivered in connection herewith and with the Exempt
Resales (but not, however, legal fees and expenses of your counsel incurred in
connection with any of the foregoing other than fees of such counsel plus
reasonable disbursements incurred in connection with the preparation, printing
and delivery of such blue sky memoranda), (iii) the issuance and delivery by the
Company and the Subsidiary Guarantors of the Notes and the Guarantees, (iv) the
qualification of the Notes for offer and sale under the securities or blue sky
laws of the several states (including, without limitation, the reasonable fees
and disbursements of your counsel relating to such registration or
qualification), (v) furnishing such copies of the Preliminary Offering
Memorandum and the Offering Memorandum, and all amendments and supplements
thereto, as may be reasonably requested for use in connection with the Exempt
Resales, (vi) the preparation of certificates for the Notes (including, without
limitation, printing and engraving thereof), (vii) the fees, disbursements and
expenses of the Company's counsel and accountants, (viii) all expenses and
listing fees in connection with the application for quotation of the Notes in
PORTAL, (ix) the costs and expenses of the Company relating to investor
presentations on any road show undertaken in connection with the offering of the
Notes, including without limitation, expenses associated with the production of
road show slides and graphics, fees and expenses of any consultants engaged in
connection with the road show presentations with the prior approval of the
Company, travel and lodging expenses of the representatives and officers of the
Company and any such consultants, and the cost of any aircraft chartered in
connection with the road show; (x) all fees and expenses of the Company
(including fees and expenses of its counsel) and the Initial Purchasers (but not
including fees and expenses of their counsel) in connection with approval of the
Notes by DTC for "book-entry" transfer and (xi) the performance by the Company
and the Subsidiary Guarantors of its other obligations under this Agreement.

                                       20

<PAGE>

            SECTION 7. Conditions of Initial Purchasers' Obligations. The
respective obligations of the Initial Purchasers hereunder are subject to the
accuracy, when made and on the Closing Date, of the representations and
warranties of the Company contained herein, to the performance by the Company of
its obligations hereunder, and to each of the following additional terms and
conditions.

            (a) The Offering Memorandum shall have been printed and copies
      distributed to you not later than 9:00 A.M., New York City time, on April
      20, 2004, or at such later date and time as you may approve in writing,
      and no stop order suspending the qualification or exemption from
      qualification of the Notes in any jurisdiction shall have been issued and
      no proceeding for that purpose shall have been commenced or shall be
      pending or threatened.

            (b) No Initial Purchaser shall have discovered and disclosed to the
      Company on or prior to such Closing Date that the Offering Memorandum or
      any amendment or supplement thereto contains an untrue statement of a fact
      which, in the opinion of Weil, Gotshal & Manges LLP, counsel for the
      Initial Purchasers, is material or omits to state a fact which, in the
      opinion of such counsel, is material and is required to be stated therein
      or is necessary to make the statements therein not misleading.

            (c) All corporate proceedings and other legal matters incident to
      the authorization, form and validity of this Agreement, the other
      Operative Documents, the Credit Documents and the Offering Memorandum, and
      all other legal matters relating to this Agreement and the Transactions
      shall be reasonably satisfactory in all material respects to counsel for
      the Initial Purchasers, and the Company shall have furnished to such
      counsel all documents and information that they may reasonably request to
      enable them to pass upon such matters.

            (d) Foley & Lardner shall have furnished to the Initial Purchasers
      its written opinion, as counsel to the Company and the Subsidiary
      Guarantors, addressed to the Initial Purchasers and dated as of the
      Closing Date, in form and substance reasonably satisfactory to the Initial
      Purchasers and its counsel, substantially in the form attached hereto as
      Exhibit B.

            (e) Roch Carter, Esq., General Counsel of the Company, shall have
      furnished to the Initial Purchasers his written opinion, as counsel to the
      Company and the Subsidiary Guarantors, addressed to the Initial Purchasers
      and dated as of the Closing Date, in form and substance reasonably
      satisfactory to the Initial Purchasers and its counsel, substantially in
      the form attached hereto as Exhibit C.

            (f) The Initial Purchasers shall have received from Weil, Gotshal &
      Manges LLP, counsel for the Initial Purchasers, such opinion or opinions,
      dated as of the Closing Date, with respect to the issuance and sale of the
      Notes and the Guarantees, the Offering Memorandum and other related
      matters as the Initial Purchasers may reasonably require, and the Company
      shall have furnished to such counsel such documents as they reasonably
      request for the purpose of enabling them to pass upon such matters.

                                       21

<PAGE>

            (g) Each of the Company, the Subsidiary Guarantors and the Trustee
      shall have entered into the Indenture and the Initial Purchasers shall
      have received counterparts, conformed as executed, thereof.

            (h) Each of the Company, the Subsidiary Guarantors and the Initial
      Purchasers shall have entered into the Registration Rights Agreement and
      the Initial Purchasers shall have received counterparts, conformed as
      executed, thereof.

            (i) The Notes shall have been approved for trading in PORTAL and
      shall be eligible for clearance and settlement through The Depository
      Trust Company.

            (j) At the time of execution of this Agreement, the Initial
      Purchasers shall have received from KPMG LLP, a letter, in form and
      substance satisfactory to the Initial Purchasers, addressed to the Initial
      Purchasers and dated the date hereof (i) confirming that they are
      independent public accountants under rule 101 of the AICPA's Code of
      Professional Conduct and its interpretations and rulings, (ii) stating, as
      of the date hereof (or, with respect to matters involving changes or
      developments since the respective dates as of which specified financial
      information is given in the Offering Memorandum, as of a date not more
      than five days prior to the date hereof), the conclusions and findings of
      such firm with respect to the financial information and other matters
      ordinarily covered by accountants' "comfort letters" to initial
      purchasers.

            (k) With respect to the letter of KPMG LLP, referred to in the
      preceding paragraph and delivered to the Initial Purchasers concurrently
      with the execution of this Agreement (the "INITIAL LETTER"), the Initial
      Purchasers shall have received a letter (the "BRING-DOWN LETTER") of such
      accountants, addressed to the Initial Purchasers and dated as of the
      Closing Date (i) confirming that they are independent public accountants
      under rule 101 of the AICPA's Code of Professional Conduct and its
      interpretations and rulings, (ii) stating, as of the date of the
      bring-down letter (or, with respect to matters involving changes or
      developments since the respective dates as of which specified financial
      information is given in the Offering Memorandum, as of a date not more
      than five days prior to the date of the bring-down letter), the
      conclusions and findings of such firm with respect to the financial
      information and other matters covered by the initial letter and (iii)
      confirming in all material respects the conclusions and findings set forth
      in the initial letter.

            (l) The Initial Purchasers shall have received an executed copy of
      the Credit Documents, with all schedules, exhibits and amendments thereto.

            (m) The Initial Purchasers shall have received (i) a certificate
      from the Company, dated the Closing Date, signed by its Chairman of the
      Board or Chief Executive Officer and its Chief Financial Officer or
      Treasurer and (ii) a certificate from each Subsidiary Guarantor, dated as
      of the Closing Date, signed by its President, other executive officer or
      authorized signatory stating, as applicable, that:

                        (A) The representations and warranties of the Company
                  and the Subsidiary Guarantors, as applicable, are true and
                  correct as if made on

                                       22

<PAGE>

                  and as of the Closing Date (other than to the extent any such
                  representation or warranty is made expressly to a certain
                  date), and the Company and the Subsidiary Guarantors, as
                  applicable, have performed all covenants and agreements and
                  satisfied all conditions on their part to be performed or
                  satisfied hereunder, to the extent a party hereto, at or prior
                  to the Closing Date;

                        (B) At the Closing Date, since the date hereof, except
                  as described in the Offering Memorandum, no event or events
                  have occurred, nor has any information become known that,
                  individually or in the aggregate, would have a Material
                  Adverse Effect;

                        (C) They have carefully examined the Preliminary
                  Offering Memorandum and the Offering Memorandum and, in their
                  opinion, the Preliminary Offering Memorandum and Offering
                  Memorandum, as of their respective dates, did not, and the
                  Offering Memorandum, as of the Closing Date, does not include
                  any untrue statement of a material fact and did not omit to
                  state a material fact required to be stated therein or
                  necessary to make the statements therein not misleading, and
                  since the date of the Offering Memorandum, no event has
                  occurred which should have been set forth in a supplement or
                  amendment to Offering Memorandum; and

                        (D) The issuance and sale of the Notes and Guarantees by
                  the Company and the Subsidiary Guarantors hereunder has not
                  been enjoined (temporarily or permanently) by any court or
                  governmental body or agency.

            (n) (i) Neither the Company nor any of the Subsidiary Guarantors
      shall have sustained since the date of the latest audited financial
      statements included in the Offering Memorandum (exclusive of any amendment
      or supplement thereto after the date hereof) any loss or interference with
      its business from fire, explosion, flood or other calamity, whether or not
      covered by insurance, or from any labor dispute or court or governmental
      action, order or decree, otherwise than as set forth or contemplated in
      the Offering Memorandum or (ii) since such date there shall not have been
      any change in the capital stock or long-term debt of the Company or any of
      the Subsidiary Guarantors or any change, or any development involving a
      prospective change, in or affecting the general affairs, management,
      financial position, shareholders' equity or results of operations of the
      Company and the Subsidiary Guarantors taken as a whole, otherwise than as
      set forth or contemplated in the Offering Memorandum, the effect of which,
      in any such case described in clause (i) or (ii), is, in the judgment of
      Lehman Brothers, so material and adverse as to make it impracticable or
      inadvisable to proceed with the offering or the delivery of the Notes and
      the Guarantees being delivered on such Closing Date on the terms and in
      the manner contemplated in the Offering Memorandum.

            (o) Subsequent to the execution and delivery of this Agreement (i)
      no downgrading shall have occurred in the rating accorded the Company's
      debt securities by

                                       23

<PAGE>

      any "nationally recognized statistical rating organization," as that term
      is defined by the Commission for purposes of Rule 436(g)(2) of the
      Securities Act and (ii) no such organization shall have publicly announced
      or privately informed the Company that it has under surveillance or
      review, with possible negative implications, its rating of any of the
      Company's debt securities.

            (p) Subsequent to the execution and delivery of this Agreement there
      shall not have occurred any of the following: (i) trading in securities
      generally on the New York Stock Exchange, the Toronto Stock Exchange or
      the Nasdaq National Market shall have been suspended or the settlement of
      such trading generally shall have been materially disrupted or minimum
      prices shall have been established on any such exchange or such market by
      the Commission, by such exchange or by any other regulatory body or
      governmental authority having jurisdiction, (ii) a general banking
      moratorium shall have been declared by Federal or state authorities, (iii)
      the United States shall have become engaged in hostilities, there shall
      have been an escalation in hostilities involving the United States or
      there shall have been a declaration of a national emergency or war by the
      United States or (iv) there shall have occurred such a material adverse
      change in general economic, political or financial conditions (or the
      effect of international conditions on the financial markets in the United
      States shall be such) or there shall have occurred any other calamity or
      crisis, including without limitation as a result of terrorist activities
      after the date hereof, as to make it, in the judgment of Lehman Brothers,
      impracticable or inadvisable to proceed with the offering or delivery of
      the Notes and the Guarantees being delivered on such Closing Date on the
      terms and in the manner contemplated in the Offering Memorandum.

            All opinions, letters, evidence and certificates mentioned above or
elsewhere in this Agreement shall be deemed to be in compliance with the
provisions hereof only if they are in form and substance reasonably satisfactory
to counsel for the Initial Purchasers.

            SECTION 8. Indemnification and Contribution.

            (a) The Company and the Subsidiary Guarantors shall jointly and
      severally indemnify and hold harmless each Initial Purchaser, its
      directors, officers and employees and each person, if any, who controls
      any Initial Purchaser within the meaning of the Securities Act, from and
      against any loss, claim, damage or liability, joint or several, or any
      action in respect thereof (including, but not limited to, any loss, claim,
      damage, liability or action relating to purchases and sales of the Notes
      and the Guarantees), to which that Initial Purchaser, director, officer,
      employee or controlling person may become subject, under the Securities
      Act or otherwise, insofar as such loss, claim, damage, liability or action
      arises out of, or is based upon, (i) any untrue statement or alleged
      untrue statement of a material fact contained (A) in any Preliminary
      Offering Memorandum, the Offering Memorandum or in any amendment or
      supplement thereto or (B) in any blue sky application or other document
      prepared or executed by the Company or the Subsidiary Guarantors (or based
      upon any written information furnished by the Company or the Subsidiary
      Guarantors) specifically for the purpose of qualifying any or all of the
      Notes under the securities laws of any state or other jurisdiction (any
      such application, document or information being hereinafter called a "BLUE
      SKY APPLICATION")

                                       24

<PAGE>

      or (C) in any materials or information provided to investors by, or with
      the approval of, the Company in connection with the marketing of the
      offering of the Notes ("MARKETING MATERIALS"), including any roadshow or
      investor presentations made to investors by the Company (whether in person
      or electronically), (ii) the omission or alleged omission to state in any
      Preliminary Offering Memorandum, the Offering Memorandum or in any
      amendment or supplement thereto, or in any Blue Sky Application or
      Marketing Materials, any material fact required to be stated therein or
      necessary to make the statements therein not misleading or (iii) any act
      or failure to act or any alleged act or failure to act by any Initial
      Purchaser in connection with, or relating in any manner to, the Notes and
      the Guarantees or the offering contemplated hereby, and which is included
      as part of or referred to in any loss, claim, damage, liability or action
      arising out of or based upon matters covered by clause (i) or (ii) above
      (provided that the Company and the Subsidiary Guarantors shall not be
      liable under this clause (iii) to the extent that it is determined in a
      final judgment by a court of competent jurisdiction that such loss, claim,
      damage, liability or action resulted directly from any such acts or
      failures to act undertaken or omitted to be taken by such Initial
      Purchaser through its gross negligence or willful misconduct), and shall
      reimburse each Initial Purchaser and each such director, officer, employee
      or controlling person promptly upon demand for any legal or other expenses
      reasonably incurred by that Initial Purchaser, director, officer, employee
      or controlling person in connection with investigating or defending or
      preparing to defend against any such loss, claim, damage, liability or
      action as such expenses are incurred; provided, however that the Company
      and the Subsidiary Guarantors will not be liable in any such case to the
      extent that any such loss, claim, damage, liability or action arises out
      of or is based upon any such untrue statement or alleged untrue statement
      or omission or alleged omission made in reliance upon and in conformity
      with written information furnished to the Company through Lehman Brothers
      by or on behalf of such Initial Purchaser expressly for inclusion therein.
      The foregoing indemnity agreement is in addition to any liability which
      the Company and the Subsidiary Guarantors may otherwise have to any
      Initial Purchaser or to any director, officer, employee or controlling
      person of that Initial Purchaser.

            (b) Each Initial Purchaser shall, severally and not jointly,
      indemnify and hold harmless the Company, the Subsidiary Guarantors, their
      officers, each of their directors, and each person, if any, who controls
      the Company within the meaning of the Securities Act, from and against any
      loss, claim, damage or liability, joint or several, or any action in
      respect thereof, to which the Company, the Subsidiary Guarantors or any
      such director, officer or controlling person may become subject, under the
      Securities Act or otherwise, insofar as such loss, claim, damage,
      liability or action arises out of, or is based upon, (i) any untrue
      statement or alleged untrue statement of a material fact contained in any
      Preliminary Offering Memorandum, the Offering Memorandum or in any
      amendment or supplement thereto, or in any Blue Sky Application or (ii)
      the omission or alleged omission to state in any Preliminary Offering
      Memorandum, the Offering Memorandum or in any amendment or supplement
      thereto, or in any Blue Sky Application any material fact required to be
      stated therein or necessary to make the statements therein not misleading,
      but in each case only to the extent that the untrue statement or alleged
      untrue statement or omission or alleged omission was made in reliance upon
      and in conformity with written information concerning such Initial
      Purchaser furnished to the Company

                                       25

<PAGE>

      through Lehman Brothers by or on behalf of that Initial Purchaser
      specifically for inclusion therein, and shall reimburse the Company, the
      Subsidiary Guarantors and any such director, officer or controlling person
      promptly upon demand for any legal or other expenses reasonably incurred
      by the Company or any such director, officer or controlling person in
      connection with investigating or defending or preparing to defend against
      any such loss, claim, damage, liability or action as such expenses are
      incurred. The foregoing indemnity agreement is in addition to any
      liability which any Initial Purchaser may otherwise have to the Company,
      the Subsidiary Guarantors or any such director, officer, employee or
      controlling person.

            (c) Promptly after receipt by an indemnified party under this
      Section 8 of notice of any claim or the commencement of any action, the
      indemnified party shall, if a claim in respect thereof is to be made
      against the indemnifying party under this Section 8, notify the
      indemnifying party in writing of the claim or the commencement of that
      action; provided, however, that the failure to notify the indemnifying
      party shall not relieve it from any liability which it may have under this
      Section 8 except to the extent it has been materially prejudiced by such
      failure and, provided further, that the failure to notify the indemnifying
      party shall not relieve it from any liability which it may have to an
      indemnified party otherwise than under this Section 8. If any such claim
      or action shall be brought against an indemnified party, and it shall
      notify the indemnifying party thereof, the indemnifying party shall be
      entitled to participate therein and, to the extent that it wishes, jointly
      with any other similarly notified indemnifying party, to assume the
      defense thereof with counsel reasonably satisfactory to the indemnified
      party. After notice from the indemnifying party to the indemnified party
      of its election to assume the defense of such claim or action, the
      indemnifying party shall not be liable to the indemnified party under this
      Section 8 for any legal or other expenses subsequently incurred by the
      indemnified party in connection with the defense thereof other than
      reasonable costs of investigation; provided, however, that Lehman Brothers
      shall have the right to employ one counsel (and one local counsel) to
      represent jointly Lehman Brothers and those other Initial Purchasers and
      their respective directors, officers, employees and controlling persons
      who may be subject to liability arising out of any claim in respect of
      which indemnity may be sought by the Initial Purchasers against the
      Company under this Section 8 if, in the reasonable judgment of Lehman
      Brothers, it is advisable for Lehman Brothers and those Initial
      Purchasers, directors, officers, employees and controlling persons to be
      jointly represented by separate counsel, and in that event the fees and
      expenses of such separate counsel shall be paid by the Company. No
      indemnifying party shall (i) without the prior written consent of the
      indemnified parties (which consent shall not be unreasonably withheld),
      settle or compromise or consent to the entry of any judgment with respect
      to any pending or threatened claim, action, suit or proceeding in respect
      of which indemnification or contribution may be sought hereunder (whether
      or not the indemnified parties are actual or potential parties to such
      claim or action) unless such settlement, compromise or consent includes an
      unconditional release of each indemnified party from all liability arising
      out of such claim, action, suit or proceeding and does not include any
      findings of fact or admissions of fault or culpability as to the
      indemnified party or (ii) be liable for any settlement of any such action
      effected without its written consent (which consent shall not be
      unreasonably withheld), but if settled with the consent of the
      indemnifying party or if there be a final judgment of the plaintiff in any

                                       26

<PAGE>

      such action, the indemnifying party agrees to indemnify and hold harmless
      any indemnified party from and against any loss or liability by reason of
      such settlement or judgment.

            (d) If the indemnification provided for in this Section 8 shall for
      any reason be unavailable to or insufficient to hold harmless an
      indemnified party under Section 8(a) or 8(b) in respect of any loss,
      claim, damage or liability, or any action in respect thereof, referred to
      therein, then each indemnifying party shall, in lieu of indemnifying such
      indemnified party, contribute to the amount paid or payable by such
      indemnified party as a result of such loss, claim, damage or liability, or
      action in respect thereof, (i) in such proportion as shall be appropriate
      to reflect the relative benefits received by the Company on the one hand
      and the Initial Purchasers on the other from the offering of the Notes and
      the Guarantees or (ii) if the allocation provided by clause (i) above is
      not permitted by applicable law, in such proportion as is appropriate to
      reflect not only the relative benefits referred to in clause (i) above but
      also the relative fault of the Company, on the one hand, and the Initial
      Purchasers, on the other, with respect to the statements or omissions
      which resulted in such loss, claim, damage or liability, or action in
      respect thereof, as well as any other relevant equitable considerations.
      The relative benefits received by the Company, on the one hand, and the
      Initial Purchasers, on the other, with respect to such offering shall be
      deemed to be in the same proportion as the total net proceeds from the
      offering of the Notes and the Guarantees purchased under this Agreement
      (before deducting expenses) received by the Company, on the one hand, and
      the total discounts and commissions received by the Initial Purchasers
      with respect to the Notes and the Guarantees purchased under this
      Agreement, on the other hand, bear to the total gross proceeds from the
      offering of the Notes and the Guarantees under this Agreement. The
      relative fault shall be determined by reference to whether the untrue or
      alleged untrue statement of a material fact or omission or alleged
      omission to state a material fact relates to information supplied by the
      Company or the Initial Purchasers, the intent of the parties and their
      relative knowledge, access to information and opportunity to correct or
      prevent such statement or omission. The Company, the Subsidiary Guarantors
      and the Initial Purchasers agree that it would not be just and equitable
      if contributions pursuant to this Section 8 were to be determined by pro
      rata allocation (even if the Initial Purchasers were treated as one entity
      for such purpose) or by any other method of allocation which does not take
      into account the equitable considerations referred to herein. The amount
      paid or payable by an indemnified party as a result of the loss, claim,
      damage or liability, or action in respect thereof, referred to above in
      this Section 8 shall be deemed to include, for purposes of this Section
      8(d), any legal or other expenses reasonably incurred by such indemnified
      party in connection with investigating or defending or preparing to defend
      any such action or claim. Notwithstanding the provisions of this Section
      8(d), no Initial Purchaser shall be required to contribute any amount in
      excess of the amount by which the total price at which the Notes purchased
      by it was resold to Eligible Purchasers exceeds the amount of any damages
      which such Initial Purchaser has otherwise paid or become liable to pay by
      reason of any untrue or alleged untrue statement or omission or alleged
      omission. No person guilty of fraudulent misrepresentation (within the
      meaning of Section 11(f) of the Securities Act) shall be entitled to
      contribution from any person who was not guilty of such fraudulent
      misrepresentation. The Initial Purchasers'

                                       27

<PAGE>

      obligations to contribute as provided in this Section 8(d) are several in
      proportion to their respective Purchase obligations and not joint.

            (e) The Initial Purchasers severally confirm and the Company and the
      Subsidiary Guarantors acknowledge that the last sentence on the cover page
      of the Offering Memorandum, and the first sentence of the fifth, sixth,
      seventh and ninth paragraphs, the second sentence of the seventh
      paragraph, the sixth and seventh sentences of the tenth paragraph and the
      eleventh paragraph under the section entitled "Plan of Distribution" in
      the Offering Memorandum constitute the only information concerning the
      Initial Purchasers furnished in writing to the Company by or on behalf of
      the Initial Purchasers specifically for inclusion in the Offering
      Memorandum.

            SECTION 9. Defaulting Initial Purchasers.

            If, on the Closing Date, any Initial Purchaser defaults in the
performance of its obligations under this Agreement, the remaining
non-defaulting Initial Purchasers shall be obligated to purchase the Notes that
the defaulting Initial Purchaser agreed but failed to purchase on such Closing
Date in the respective proportions which the amount of the Notes set forth
opposite the name of each remaining non-defaulting Initial Purchaser in Schedule
1 hereto bears to the total amount of Notes set forth opposite the names of all
the remaining non-defaulting Initial Purchasers in Schedule 1 hereto; provided,
however, that the remaining non-defaulting Initial Purchasers shall not be
obligated to purchase any of the Notes on such Closing Date if the total amount
of the Notes which the defaulting Initial Purchaser or Initial Purchasers agreed
but failed to purchase on such date exceeds 10% of the total amount of Notes to
be purchased on such Closing Date, and any remaining non-defaulting Initial
Purchaser shall not be obligated to purchase more than 110% of the amount of
Notes which it agreed to purchase on such Closing Date pursuant to the terms of
Section 2. If the foregoing maximums are exceeded, the remaining non-defaulting
Initial Purchasers, or those other Initial Purchasers satisfactory to Lehman
Brothers who so agree, shall have the right, but shall not be obligated, to
purchase, in such proportion as may be agreed upon among them, all of the Notes
to be purchased on such Closing Date. If the remaining Initial Purchasers or
other Initial Purchasers satisfactory to Lehman Brothers do not elect to
purchase the Notes which the defaulting Initial Purchaser or Initial Purchasers
agreed but failed to purchase on such Closing Date, this Agreement shall
terminate without liability on the part of any non-defaulting Initial Purchaser
or the Company, except that the Company will continue to be liable for the
payment of expenses to the extent set forth in Sections 6 and 11. As used in
this Agreement, the term "INITIAL PURCHASER" includes, for all purposes of this
Agreement unless the context requires otherwise, any party not listed in
Schedule 1 hereto who, pursuant to this Section 9, purchases the Notes which a
defaulting Initial Purchaser agreed but failed to purchase.

            Nothing contained herein shall relieve a defaulting Initial
Purchaser of any liability it may have to the Company and the Subsidiary
Guarantors for damages caused by its default. If other Initial Purchasers are
obligated or agree to purchase the Notes of a defaulting or withdrawing Initial
Purchaser, either the Lehman Brothers or the Company may postpone the Closing
Date for up to seven full business days in order to effect any changes that in
the opinion of counsel for the Company or counsel for the Initial Purchasers may
be necessary in the Offering Memorandum or in any other document or arrangement.

                                       28

<PAGE>

            SECTION 10. Termination. The obligations of the Initial Purchasers
hereunder may be terminated by Lehman Brothers by notice given to and received
by the Company prior to delivery of and payment for the Notes if, prior to that
time, any of the events described in Sections 7(n), 7(o) and 7(p) shall have
occurred or if the Initial Purchasers shall decline to purchase the Notes for
any reason permitted under this Agreement.

            SECTION 11. Reimbursement of Initial Purchasers' Expenses. If the
Company and the Subsidiary Guarantors shall fail to deliver the Notes and the
Guarantees to the Initial Purchasers by reason of any failure, refusal or
inability on the part of the Company and the Subsidiary Guarantors to perform
any agreement on its part to be performed, or because any other condition of the
Initial Purchasers' obligations hereunder required to be fulfilled by the
Company and the Subsidiary Guarantors is not fulfilled, the Company and the
Subsidiary Guarantors will reimburse the Initial Purchasers for all reasonable
out-of-pocket expenses (including reasonable fees and disbursements of counsel)
incurred by the Initial Purchasers in connection with this Agreement and the
proposed purchase of the Notes and the Guarantees, and upon demand the Company
and the Subsidiary Guarantors shall pay the full amount thereof to Lehman
Brothers.

            SECTION 12. Notices, etc. All statements, requests, notices and
agreements hereunder shall be in writing, and:

            (a) if to the Initial Purchasers, shall be delivered or sent by
      mail, telex or facsimile transmission to the care of Lehman Brothers Inc.,
      745 Seventh Avenue, 19th Floor, Attention: Michael Konigsburg (Fax: (646)
      758-4247), with a copy to Weil, Gotshal & Manges LLP, 767 Fifth Avenue,
      New York, New York 10153, Attention: Rod Miller, Esq. (Fax: 212-310-8007)
      and, in the case of any notice pursuant to Section 8(d), to the Director
      of Litigation, Office of the General Counsel, Lehman Brothers Inc., 399
      Park Avenue, New York, New York (Fax: (212) 526-2648);

            (b) if to the Company and the Subsidiary Guarantors, shall be
      delivered or sent by mail, telex or facsimile transmission to the Company,
      111 West Michigan Street, Milwaukee, Wisconsin 53203-290, Attention:
      Melvin A. Rhinelander, (Fax: (414) 908-8111), with a copy to Foley &
      Lardner LLP, 777 East Wisconsin Avenue, Milwaukee, Wisconsin 53202-5306,
      Attention: Russell E. Ryba, Esq. (Fax: (414) 297-4900);

provided, however, that any notice to an Initial Purchaser pursuant to Section
8(d) shall be delivered or sent by mail, telex or facsimile transmission to such
Initial Purchaser at its address set forth in its acceptance telex to Lehman
Brothers, which address will be supplied to any other party hereto by Lehman
Brothers upon request. Any such statements, requests, notices or agreements
shall take effect at the time of receipt thereof. The Company shall be entitled
to act and rely upon any request, consent, notice or agreement given or made on
behalf of the Initial Purchasers by Lehman Brothers.

            SECTION 13. Persons Entitled to Benefit of Agreement. This Agreement
shall inure to the benefit of and be binding upon the Initial Purchasers, the
Company, the Subsidiary Guarantors and their respective personal representatives
and successors. This Agreement and the terms and provisions hereof are for the
sole benefit of only those persons,

                                       29

<PAGE>

except that (a) the representations, warranties, indemnities and agreements of
the Company and the Subsidiary Guarantors contained in this Agreement shall also
be deemed to be for the benefit of the directors, officers, employees of the
Initial Purchasers and each person or persons, if any, who control any Initial
Purchasers within the meaning of Section 15 of the Securities Act and (b) the
indemnity agreement of the Initial Purchasers contained in Section 8(b) of this
Agreement shall be deemed to be for the benefit of directors, officers and any
person controlling the Company and the Subsidiary Guarantors within the meaning
of Section 15 of the Securities Act. Nothing in this Agreement is intended or
shall be construed to give any person, other than the persons referred to in
this Section 13, any legal or equitable right, remedy or claim under or in
respect of this Agreement or any provision contained herein.

            SECTION 14. Survival. The respective indemnities, representations,
warranties and agreements of the Company, the Subsidiary Guarantors and the
Initial Purchasers contained in this Agreement or made by or on behalf on them,
respectively, pursuant to this Agreement, shall survive the delivery of and
payment for the Notes and the Guarantees and shall remain in full force and
effect, regardless of any investigation made by or on behalf of any of them or
any person controlling any of them.

            SECTION 15. Definition of the Term "Business Day." For purposes of
this Agreement, "BUSINESS DAY" means each Monday, Tuesday, Wednesday, Thursday
or Friday which is not a day on which banking institutions in New York are
generally authorized or obligated by law or executive order to close.

            SECTION 16. Jurisdiction. Each of the parties hereto irrevocably
consents to the jurisdiction of the courts of the State of New York and the
courts of the United States of America located in the Borough of Manhattan, City
and State of New York, over any suit, action or proceeding with respect to this
Agreement or the transactions contemplated hereby. Each of the parties hereto
waives any objection that it may have to the venue of any suit, action or
proceeding with respect to this Agreement or the transactions contemplated
hereby in the courts of the State of New York or the courts of the United States
of America, in each case, located in the Borough of Manhattan, City and State of
New York or that such suit, action or proceeding brought in the courts of the
State of New York or United States of America, in each case, located in the
Borough of Manhattan, City and State of New York was brought in an inconvenient
court and agrees not to plead or claim the same.

            SECTION 17. Governing Law. This Agreement shall be governed by and
construed in accordance with the internal laws of the State of New York, without
regard to the principles of choice of law thereof.

            SECTION 18. Counterparts. This Agreement may be executed in multiple
counterparts and, if executed in counterparts, the executed counterparts shall
each be deemed to be an original but all such counterparts shall together
constitute one and the same instrument.

            SECTION 19. Headings. The headings herein are inserted for
convenience of reference only and are not intended to be part of, or to affect
the meaning or interpretation of, this Agreement.

                                       30

<PAGE>

            If the foregoing correctly sets forth the agreement among the
Company, the Subsidiary Guarantors and the Initial Purchasers, please indicate
your acceptance in the space provided for that purpose below.

                                     Very truly yours,

                                     EXTENDICARE HEALTH SERVICES, INC.

                                     By:_____________________________________
                                     Name:
                                     Title:

                                     EXTENDICARE HEALTH FACILITY HOLDINGS, INC.
                                     EXTENDICARE HEALTH FACILITIES, INC.
                                     NORTHERN HEALTH FACILITIES, INC.
                                     EXTENDICARE HOMES, INC.
                                     EXTENDICARE HEALTH NETWORK, INC.
                                     THE PROGRESSIVE STEP CORPORATION
                                     EXTENDICARE OF INDIANA, INC.
                                     EXTENDICARE GREAT TRAIL, INC.
                                     FIR LANE TERRACE CONVALESCENT CENTER, INC.
                                     ADULT SERVICES UNLIMITED, INC.
                                     ARBORS EAST, INC.
                                     ARBORS AT TOLEDO, INC.
                                     HEALTH POCONOS, INC.
                                     MARSHALL PROPERTIES, INC.

                                     By:________________________________________

                                     Name: Mark W. Durishan
                                     Title: Vice President, Chief Financial
                                            Officer and Treasurer

                                            SIGNATURE PAGE TO PURCHASE AGREEMENT

<PAGE>

                                     INDIANA HEALTH AND REHABILITATION CENTERS
                                        PARTNERSHIP

                                     BY: EXTENDICARE HOMES, INC., AS GENERAL
                                        PARTNER

                                     By:________________________________________
                                     Name: Mark W. Durishan
                                     Title: Vice President, Chief Financial
                                            Officer and Treasurer

                                     BY: EXTENDICARE OF INDIANA, INC., AS
                                        GENERAL PARTNER

                                     By:________________________________________

                                     Name: Mark W. Durishan
                                     Title: Vice President, Chief Financial
                                            Officer and Treasurer

                                     CONCORDIA MANOR, LLC
                                     FIRST COAST HEALTH AND REHABILITATION
                                        CENTER, LLC
                                     JACKSON HEIGHTS REHABILITATION CENTER, LLC
                                     TREASURE ISLE CARE CENTER, LLC

                                     BY: EXTENDICARE HOMES, INC., AS SOLE MEMBER

                                     By:________________________________________

                                     Name: Mark W. Durishan
                                     Title: Vice President, Chief Financial
                                            Officer and Treasurer

                                            SIGNATURE PAGE TO PURCHASE AGREEMENT

<PAGE>

                           KAUFMAN STREET, WV, LLC
                           NEW CASTLE CARE, LLC

                           BY: FIR LANE TERRACE CONVALESCENT CENTER,
                               INC., AS SOLE MEMBER

                           By:________________________________________
                           Name: Mark W. Durishan
                           Title: Vice President, Chief Financial
                                  Officer and Treasurer

                           ALPINE HEALTH AND REHABILITATION CENTER,
                              LLC
                           COLONIAL CARE, LLC
                           GREENBRIAR CARE, LLC
                           GREENBROOK CARE, LLC
                           HERITAGE CARE, LLC
                           LADY LAKE CARE, LLC
                           NEW HORIZON CARE, LLC
                           NORTH REHABILITATION CARE, LLC
                           PALM COURT CARE, LLC
                           RICHEY MANOR, LLC
                           ROCKLEDGE CARE, LLC
                           SOUTH HERITAGE HEALTH AND REHABILITATION
                              CENTER, LLC
                           THE OAKS RESIDENTIAL AND REHABILITATION
                              CENTER, LLC
                           WINTER HAVEN HEALTH AND REHABILITATION
                              CENTER, LLC

                           BY: EXTENDICARE HEALTH FACILITIES, INC.,
                              AS SOLE MEMBER

                           By:________________________________________
                           Name: Mark W. Durishan
                           Title: Vice President, Chief Financial Officer and
                                  Treasurer

                                  SIGNATURE PAGE TO PURCHASE AGREEMENT

<PAGE>

                                     ARBORS AT TAMPA, LLC
                                     ARBORS AT BAYONET POINT, LLC
                                     ARBORS AT FAIRLAWN CARE, LLC
                                     ARBORS AT FAIRLAWN REALTY OH, LLC
                                     ARBORS AT SYLVANIA CARE, LLC
                                     ARBORS AT SYLVANIA REALTY OH, LLC
                                     ARBORS WEST CARE, LLC
                                     ARBORS WEST REALTY OH, LLC
                                     COLUMBUS REHABILITATION REALTY OH, LLC
                                     JACKSONVILLE CARE, LLC
                                     SAFETY HARBOR CARE, LLC
                                     KISSIMMEE CARE, LLC
                                     ORANGE PARK CARE, LLC
                                     OREGON CARE, LLC
                                     PORT CHARLOTTE CARE, LLC
                                     SARASOTA CARE, LLC
                                     SEMINOLE CARE, LLC
                                     WINTER HAVEN CARE, LLC
                                     BLANCHESTER CARE, LLC
                                     CANTON CARE, LLC
                                     COLUMBUS REHABILITATION CARE, LLC
                                     DAYTON CARE, LLC
                                     DELAWARE CARE, LLC
                                     GALLIPOLIS CARE, LLC
                                     HILLIARD CARE, LLC
                                     LONDON CARE, LLC
                                     MARIETTA CARE, LLC
                                     ROCKMILL CARE, LLC
                                     ROCKSPRINGS CARE, LLC
                                     WATERVILLE CARE, LLC
                                     WOODSFIELD CARE, LLC

                                     BY: NORTHERN HEALTH FACILITIES, INC.,
                                      AS SOLE MEMBER

                                     By:________________________________________
                                     Name: Mark W. Durishan
                                     Title: Vice President, Chief Financial
                                            Officer and Treasurer

                                            SIGNATURE PAGE TO PURCHASE AGREEMENT

<PAGE>

                                     GREAT TRAIL CARE, LLC

                                     BY: EXTENDICARE GREAT TRAIL, INC., AS
                                      SOLE MEMBER

                                     By:________________________________________
                                     Name: Richard L. Bertrand
                                     Title: Senior Vice President - Development

                                     FISCAL SERVICES GROUP, LLC
                                     PARTNERS HEALTH GROUP, LLC
                                     STAR PURCHASING SERVICES, LLC

                                     BY: EXTENDICARE HEALTH NETWORK, INC.,
                                      AS SOLE MEMBER

                                     By:________________________________________
                                     Name: Richard L. Bertrand
                                     Title: Senior Vice President - Development

                                     MILFORD CARE, LLC
                                     PRAIRIE VILLAGE CARE, LLC
                                     SCOTT VILLA CARE, LLC
                                     SWISS VILLA CARE, LLC
                                     VILLA PINES CARE, LLC

                                     BY: MARSHALL PROPERTIES, INC., AS
                                      SOLE MEMBER

                                     By:________________________________________
                                     Name: Richard L. Bertrand
                                     Title: Senior Vice President - Development

                                            SIGNATURE PAGE TO PURCHASE AGREEMENT

<PAGE>

                                     PARTNERS HEALTH GROUP - FLORIDA, LLC
                                     PARTNERS HEALTH GROUP - LOUISIANA, LLC
                                     PARTNERS HEALTH GROUP - TEXAS, LLC

                                     BY: PARTNERS HEALTH GROUP, LLC

                                     BY: EXTENDICARE HEALTH NETWORK, INC., AS
                                      SOLE MEMBER

                                     By:________________________________________

                                     Name: Richard L. Bertrand
                                     Title: Senior Vice President - Development

                                            SIGNATURE PAGE TO PURCHASE AGREEMENT

<PAGE>

Accepted:

LEHMAN BROTHERS INC.

By:__________________________________
   Authorized Representative

For itself and as representative
of the several Initial Purchasers named
in Schedule 1 hereto

                                            SIGNATURE PAGE TO PURCHASE AGREEMENT

<PAGE>

                                   SCHEDULE 1

<TABLE>
<CAPTION>
                                                     Principal Amount
                Initial Purchasers                       of Notes
--------------------------------------------------   ----------------
<S>                                                  <C>
   Lehman Brothers Inc. ..........................     $114,062,500

   Piper Jaffray & Co. ...........................        6,875,000

   ABN AMRO Incorporated .........................        4,062,500
                                                       ------------
Total.............................................     $125,000,000
                                                       ============
</TABLE>

<PAGE>

                                    EXHIBIT A

                          REGISTRATION RIGHTS AGREEMENT

<PAGE>

                                    EXHIBIT B

                       FORM OF FOLEY & LARDNER LLP OPINION

1.    The Company and each of the Subsidiary Guarantors (i) are validly existing
      and in good standing under the laws of their respective jurisdictions of
      organization and (ii) are duly qualified to do business and are in good
      standing in each jurisdiction in which their respective ownership or lease
      of property or the conduct of their respective businesses requires such
      qualification, except where the failure to so qualify or to be in good
      standing would not have a material adverse effect on the general affairs,
      management, consolidated financial position, shareholders' equity, results
      of operations or business of the Company and its subsidiaries taken as a
      whole (a "MATERIAL ADVERSE EFFECT"); and the Company and each of the
      Subsidiary Guarantors have all requisite power and authority to own, lease
      and operate its properties and carry on its business as such business is
      described in the Offering Memorandum.

2.    The Company and each of the Subsidiary Guarantors has all requisite
      corporate power and authority to execute and deliver each of the Operative
      Documents to which it is a party and to perform its respective obligations
      thereunder. The execution, delivery and performance of each of the
      Operative Documents by the Company and each of the Subsidiary Guarantors
      have been duly authorized by all necessary corporate action on the part of
      the Company and each of the Subsidiary Guarantors.

3.    The Agreement has been duly and validly authorized, executed and delivered
      by the Company and each of the Subsidiary Guarantors.

4.    The Indenture has been duly and validly authorized, executed and delivered
      by the Company and each of the Subsidiary Guarantors and, assuming due
      authorization, execution and delivery thereof by the Trustee, constitutes
      a legal, valid and binding obligation of the Company and each of the
      Subsidiary Guarantors enforceable against the Company and each of the
      Subsidiary Guarantors in accordance with its terms, subject to applicable
      bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium
      and other similar laws relating to or affecting creditors' rights and
      remedies generally, and subject, as to enforceability, to general
      principles of equity, including principles of commercial reasonableness,
      good faith and fair dealing (regardless of whether enforcement is sought
      in a proceeding at law or in equity).

5.    The Registration Rights Agreement has been duly and validly authorized,
      executed and delivered by the Company and each of the Subsidiary
      Guarantors and, assuming due authorization, execution and delivery thereof
      by the Initial Purchasers, constitutes a legal, valid and binding
      obligation of the Company and each of the Subsidiary Guarantors
      enforceable against the Company and each of the Subsidiary Guarantors in
      accordance with its terms, subject to applicable bankruptcy, insolvency,
      fraudulent conveyance, reorganization, moratorium and other similar laws
      relating to or affecting creditors' rights and remedies generally, and
      subject, as to enforceability, to general principles of equity, including
      principles of commercial reasonableness, good faith and fair dealing
      (regardless of

<PAGE>

      whether enforcement is sought in a proceeding at law or in equity), and
      except that rights to indemnification and contribution thereunder may be
      limited by federal or state securities laws or public policy relating
      thereto.

6.    The Company and the Subsidiary Guarantors, to the extent they are parties
      thereto, have all requisite power and authority to enter into the New
      Credit Facility and the other Credit Documents. The New Credit Facility
      and the other Credit Documents have been duly and validly authorized,
      executed and delivered by the Company and/or each of the Subsidiary
      Guarantors, to the extent they are parties thereto, and, assuming due
      authorization, execution and delivery thereof by the other parties
      thereto, constitute legal, valid and binding obligations of the Company
      and/or each of the Subsidiary Guarantors, to the extent they are parties
      thereto, enforceable against the Company and/or each of the Subsidiary
      Guarantors, to the extent they are parties thereto, in accordance with
      their terms, subject to applicable bankruptcy, insolvency, fraudulent
      conveyance, reorganization, moratorium and other similar laws relating to
      or affecting creditors' rights and remedies generally, and subject, as to
      enforceability, to general principles of equity, including principles of
      commercial reasonableness, good faith and fair dealing (regardless of
      whether enforcement is sought in a proceeding at law or in equity).

7.    The Notes are in the form contemplated by the Indenture. The Notes have
      been duly authorized, executed and issued by the Company and, assuming due
      authentication thereof by the Trustee and upon payment and delivery in
      accordance with the terms of the Agreement, will constitute legal, valid
      and binding obligations of the Company, entitled to the benefits of the
      Indenture, and enforceable against the Company in accordance with their
      terms, subject to applicable bankruptcy, insolvency, fraudulent
      conveyance, reorganization, moratorium and other similar laws relating to
      or affecting creditors' rights and remedies generally, and subject, as to
      enforceability, to general principles of equity, including principles of
      commercial reasonableness, good faith and fair dealing (regardless of
      whether enforcement is sought in a proceeding at law or in equity).

8.    The issuance of the Exchange Notes has been duly and validly authorized by
      the Company, and when executed, issued, authenticated and delivered in
      exchange for the Notes in accordance with the terms of the Registration
      Rights Agreement, the Exchange Offer and the Indenture, will constitute
      legal, valid and binding obligations of the Company, entitled to the
      benefits of the Indenture, and enforceable against the Company in
      accordance with their terms and entitled to the benefits of the Indenture,
      subject to applicable bankruptcy, insolvency, fraudulent conveyance,
      reorganization, moratorium and other similar laws relating to or affecting
      creditors' rights and remedies generally, and subject, as to
      enforceability, to general principles of equity, including principles of
      commercial reasonableness, good faith and fair dealing (regardless of
      whether enforcement is sought in a proceeding at law or in equity).

9.    The Guarantees have been duly authorized, executed and issued by the
      respective Subsidiary Guarantors and, assuming due authentication of the
      Notes by the Trustee, upon payment and delivery in accordance with the
      terms of this Agreement will constitute legal, valid and binding
      obligations of the Subsidiary Guarantors enforceable in accordance with
      their terms, subject to applicable bankruptcy, insolvency, fraudulent
      conveyance, reorganization,

<PAGE>

      moratorium and other similar laws relating to or affecting creditors'
      rights and remedies generally, and subject, as to enforceability, to
      general principles of equity, including principles of commercial
      reasonableness, good faith and fair dealing (regardless of whether
      enforcement is sought in a proceeding at law or in equity).

10.   The Exchange Note Guarantees have been duly and validly authorized by the
      Subsidiary Guarantors, and when executed, issued and delivered in exchange
      for the Guarantees in accordance with the terms of the Registration Rights
      Agreement, the Exchange Offer and the Indenture, will constitute legal,
      valid and binding obligations of each of the Subsidiary Guarantors
      enforceable against each of the Subsidiary Guarantors in accordance with
      their terms, subject to applicable bankruptcy, insolvency, fraudulent
      conveyance, reorganization, moratorium and other similar laws relating to
      or affecting creditors' rights and remedies generally, and subject, as to
      enforceability, to general principles of equity, including principles of
      commercial reasonableness, good faith and fair dealing (regardless of
      whether enforcement is sought in a proceeding at law or in equity).

11.   The Indenture, the Notes, the Guarantees, the Registration Rights
      Agreement, the New Credit Facility and the other Credit Documents conform
      in all material respects to the descriptions thereof contained in the
      Offering Memorandum.

12.   None of the Company or the Subsidiary Guarantors (i) is in violation of
      its certificate of incorporation or bylaws (or similar organizational
      document), (ii) to such counsel's knowledge, in breach or violation of any
      applicable statute, judgment, decree, order, rule or regulation, except
      for any such breach or violation which would not, individually or in the
      aggregate, have a Material Adverse Effect, or (iii) in breach or default
      under (nor has any event occurred which, with notice or passage of time or
      both, would constitute a default under) or in violation of any of the
      terms or provisions of any of the agreements set forth on Schedule A(1)
      hereto, except for any such breach, default, violation or event which
      would not, individually or in the aggregate, have a Material Adverse
      Effect.

13.   The execution, delivery and performance by the Company and each of the
      Subsidiary Guarantors of the Operative Documents, the New Credit Facility
      and the other Credit Documents to which it is a party, compliance by the
      Company and each of the Subsidiary Guarantors with the provisions thereof,
      the consummation of the Transactions and the issuance and sale of the
      Notes and the Guarantees as provided pursuant to the Agreement, will not
      conflict with, constitute a default under or violate (a) any of the terms,
      conditions or provisions of the certificate of incorporation or bylaws (or
      similar organizational document) of the Company and each of the Subsidiary
      Guarantors, (b) any of the terms, conditions or provisions of any of the
      agreements set forth on Schedule A hereto, (c) any Delaware corporate or
      federal law or regulation (other than federal securities laws, as to which
      we express no opinion in this paragraph and state securities or blue sky
      laws, as to which we express no opinion), or (d) any judgment, writ,
      injunction, decree, order or ruling of any court or governmental authority
      binding on the Company or any of the Subsidiary Guarantors

----------------
(1) Schedule A will include all agreements filed by EHSI as Exhibit 4 or 10 with
their 12/31/03 Form 10-K including the existing indenture, but excluding the
Existing Credit Facility).

<PAGE>

      which is known to us, except, in the case of this clause (d) for such
      conflicts, defaults or violations that would not have a Material Adverse
      Effect.

14.   No consent, approval, waiver, license or authorization or other action by
      or filing with any governmental authority is required in connection with
      the execution and delivery by the Company and each of the Subsidiary
      Guarantors of the Operative Documents, the New Credit Facility and the
      other Credit Documents to which it is a party or the consummation by the
      Company and each of the Subsidiary Guarantors of the Transactions, or the
      issuance and sale by the Company of the Notes and the Guarantees as
      provided in the Agreement, except for (a) federal securities laws (as to
      which we express no opinion in this paragraph) and state securities or
      blue sky laws (as to which we express no opinion), (b) those already
      obtained and which are in full force and effect and (c) those required by
      the terms of the New Credit Facility.

15.   Assuming (i) the representations of the Initial Purchasers contained in
      the Agreement are true, correct and complete, (ii) compliance by the
      Initial Purchasers with their covenants set forth in the Agreement and
      (iii) that each of the Eligible Purchasers is a QIB or a person who
      acquires the Notes and the Guarantees outside the United States in an
      "offshore transaction" and is not a "U.S. person" (within the meaning of
      Rule 904 of Regulation S), it is not necessary in connection with the
      offer, sale and delivery of the Notes to the Initial Purchasers pursuant
      to the Agreement or the offer and resales of the Notes by the Initial
      Purchasers, in the manner contemplated by the Agreement and described in
      the Offering Memorandum, to register the Notes under the Securities Act or
      to qualify the Indenture under the Trust Indenture Act.

16.   Neither the consummation of the Transactions nor the sale, issuance,
      execution or delivery of the Notes will violate Regulation T, U or X of
      the Board of Governors of the Federal Reserve System.

17.   The statements made in the Offering Memorandum under the heading "Certain
      U.S. Federal Income Tax Considerations" insofar as such statements purport
      to constitute statements of law or legal conclusions are accurate in all
      material respects.

18.   The statements made in the Offering Memorandum under the captions
      "Description of Other Indebtedness," "Description of the Notes," "Business
      -- Legal Proceedings," "Certain Relationships and Related Party
      Transactions," "Notice to Investors" and "Plan of Distribution," in each
      case insofar as such statements constitute summaries of legal matters,
      documents or proceedings referred to therein, fairly present the
      information called for which respect to such legal matters, documents and
      proceedings and fairly summarize the matters referred to therein in all
      material respects.

19.   The Company and each of the Subsidiary Guarantors is not and, after giving
      effect to the issuance and sale of the Notes in accordance with the terms
      of the Agreement and the application of the net proceeds therefrom, will
      not be, an "investment company" within the meaning of the Investment
      Company Act of 1940, as amended.

<PAGE>

20.   Each of the Preliminary Offering Memorandum and the Offering Memorandum,
      as of its date (except for the financial statements, including the notes
      thereto, pro forma financial statements and other financial and
      statistical data included or incorporated by reference therein, as to
      which we express no opinion), contains the information specified in, and
      meets the requirements of, Rule 144A(d)(4) under the Securities Act.

21.   When the Notes and the Guarantees are issued and delivered pursuant to the
      Agreement, no securities of the same class (within the meaning of Rule
      144A(d)(3) under the Securities Act) as the Notes or the Guarantees of the
      Company or the Subsidiary Guarantors will be listed on any national
      securities exchange or registered under Section 6 of the Securities
      Exchange Act of 1934, as amended, or quoted on an automated inter-dealer
      quotation system.

            We have participated in conferences with the officers and other
representatives of the Company and the Subsidiary Guarantors, representatives of
the independent public accountants for the Company and the Subsidiary
Guarantors, the Initial Purchasers and counsel for the Initial Purchasers in
connection with the preparation of the Offering Memorandum and although we have
not independently verified and are not passing upon and assume no responsibility
for the accuracy, completeness or fairness of the statements contained in the
Offering Memorandum (except to the extent specified in paragraphs 17 and 18
above), no facts have come to our attention which lead us to believe that the
Offering Memorandum, at the time the Offering Memorandum was issued or at the
Closing Date, contained any untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary to make the
statements contained therein, in light of the circumstances under which they
were made, not misleading (it being understood that we express no view with
respect to the financial statements and related notes, the financial
projections, the other financial, statistical and accounting data included in or
appended as exhibits to the Offering Memorandum).

<PAGE>

                                    EXHIBIT C

                         FORM OF GENERAL COUNSEL OPINION

1.    The Company has an authorized capitalization as set forth in the Offering
      Memorandum. All of the issued shares of capital stock of the Company have
      been duly and validly authorized and issued, are fully paid and
      non-assessable and all of the issued shares of capital stock, limited
      partner or limited liability company interests of each of the Subsidiary
      Guarantors have been duly and validly authorized and issued and are fully
      paid, non-assessable (except, in the case of such subsidiaries that are
      Wisconsin corporations, for certain statutory liabilities that may be
      imposed by Section 180.0622(2)(b) of the Wisconsin Business Corporation
      Law for unpaid employee wages) and are owned directly or indirectly by the
      Company, free and clear of all liens, encumbrances, equities or claims,
      other than liens encumbrances, equities or claims under the Existing
      Credit Facility and contemplated under the New Credit Facility or
      otherwise described in the Offering Memorandum.

2.    The Company and the Subsidiary Guarantors have obtained all Permits
      necessary to conduct the businesses now or proposed to be conducted by
      them as described in the Offering Memorandum, the lack of which would,
      individually or in the aggregate, have a Material Adverse Effect; and each
      of the Company and the Subsidiary Guarantors has fulfilled and performed
      all of its obligations with respect to such Permits, except where the
      failure to so fulfill and/or perform would not have a Material Adverse
      Effect; and no event has occurred which allows, or after notice or lapse
      of time would allow, revocation or termination thereof or results in any
      other material impairment of the rights of the holder of any such Permit,
      except where any such revocations, terminations or impairments would not,
      singly or in the aggregate, have a Material Adverse Effect.

3.    To the best of such counsel's knowledge, the Company and the Subsidiary
      Guarantors own or possess adequate licenses or other rights to use all
      patents, trademarks, service marks, trade names, copyrights and know-how
      necessary to conduct the businesses now or proposed to be operated by them
      as described in the Offering Memorandum, and none of the Company or the
      Subsidiary Guarantors has received any notice of infringement of or
      conflict with asserted rights of others with respect to any patents,
      trademarks, service marks, trade names, copyrights or know-how which, if
      such assertion of infringement or conflict were sustained, would have a
      Material Adverse Effect.

4.    To such counsel's knowledge, there are no holders of securities of the
      Company or any of the Subsidiary Guarantors who, by reason of the
      execution by the Company and each of the Subsidiary Guarantors of the
      Agreement or the consummation by the Company and each of the Subsidiary
      Guarantors of the transactions contemplated thereby, have the right,
      pursuant to any material document, agreement or other instrument to which
      either the Company or any of the Subsidiary Guarantors is a party, to
      request or demand that the Company or any of the Subsidiary Guarantors
      register under the Securities Act securities held by them.

5.    To such counsel's knowledge, there are no legal or governmental
      proceedings pending or overtly threatened to which the Company or any of
      the Subsidiary Guarantors is a party or of

<PAGE>

      which any property or assets of the Company or any of the Subsidiary
      Guarantors is the subject which, if determined adversely to the Company or
      any of the Subsidiary Guarantors, would have a Material Adverse Effect.

6.    The statements made in the Offering Memorandum under the caption "Business
      -- Government Regulation" insofar as such statements constitute summaries
      of legal matters, documents or proceedings referred to therein, fairly
      present the information called for which respect to such legal matters,
      documents and proceedings and fairly summarize the matters referred to
      therein in all material respects.

7.    To such counsel's knowledge, there are no legal or governmental
      proceedings involving or affecting the Company or the Subsidiary
      Guarantors or any of their respective properties or assets which would be
      required to be described in a prospectus pursuant to the Act that are not
      described in the Offering Memorandum, nor are there any material contracts
      or other documents which would be required to be described in a prospectus
      pursuant to the Act that are not described in the Offering Memorandum