Document:

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                                                                    EXHIBIT 10.2

                                                                EXECUTED VERSION

                          REGISTRATION RIGHTS AGREEMENT

                                  BY AND AMONG

                            BEVERLY ENTERPRISES, INC.

                                 AS THE COMPANY,

                       EACH OF THE GUARANTORS PARTY HERETO

                                       AND

              LEHMAN BROTHERS INC. AND J.P. MORGAN SECURITIES INC.

                            AS THE INITIAL PURCHASERS

                            DATED AS OF JUNE 25, 2004

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                                TABLE OF CONTENTS

<Table>
<Caption>
                                                                          PAGE
                                                                          ----
<S>                                                                       <C>
1.       Definitions ...................................................   1

2.       Registered Exchange Offer .....................................   4

3.       Shelf Registration ............................................   5

4.       Liquidated Damages ............................................   7

5.       Registration Procedures .......................................   8

6.       Registration Expenses .........................................  17

7.       Indemnification and Contribution ..............................  18

8.       Rule 144A and Rule 144 ........................................  21

9.       Future Subsidiary Guarantees ..................................  21

10.      Miscellaneous .................................................  21
</Table>

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                  This Registration Rights Agreement (this "AGREEMENT") is dated
as of June 25, 2004, by and among Beverly Enterprises, Inc., a Delaware
corporation (together with any successor entity, herein referred to as the
"COMPANY"), each of the guarantors listed on Schedule I hereto (collectively
referred to as the "Guarantors"), Lehman Brothers Inc. and J.P. Morgan
Securities (collectively referred to as the "INITIAL Purchasers").

                  This Agreement is made pursuant to the Purchase Agreement,
dated as of June 18, 2004, by and among the Company, the Guarantors and the
Initial Purchasers (the "PURCHASE AGREEMENT"), whereby the Initial Purchasers
have agreed to purchase from the Company $215,000,000 aggregate principal amount
of 7 7/8% Senior Subordinated Notes due 2014 (the "NOTES"). The Notes are being
issued pursuant to an indenture (the "Indenture"), dated the date hereof, among
the Company, the Guarantors and The Bank of New York, as Trustee (the
"TRUSTEE"). The Notes will have terms and provisions as described in the
Indenture and will be unconditionally guaranteed on an unsecured, senior
subordinated basis (the "SUBSIDIARY GUARANTEES" and together with the Notes,
collectively referred to as the "SECURITIES" ) by the Guarantors. To induce the
Initial Purchasers to purchase the Securities, the Company and the Guarantors
have agreed to provide the registration rights set forth in this Agreement
pursuant to the Purchase Agreement. Capitalized terms used herein and not
otherwise defined shall have the meanings assigned to them in the Indenture.

                  The parties hereby agree as follows:

                  1. DEFINITIONS. As used in this Agreement, the following
capitalized terms shall have the following meanings:

                  AFFILIATE: As such term is defined in Rule 144 under the
Securities Act.

                  AGREEMENT: This Registration Rights Agreement, as amended,
modified or otherwise supplemented from time to time in accordance with the
terms hereof.

                  BLACKOUT PERIOD: As defined in Section 4 hereof.

                  BROKER-DEALER: Any broker or dealer registered under the
Exchange Act.

                  BUSINESS DAY: A day other than a Saturday or Sunday or any day
on which banking institutions in The City of New York are authorized or
obligated by law to close.

                  CLOSING DATE: The date of this Agreement.

                  COMMISSION: The U.S. Securities and Exchange Commission.

                  COMPANY: As defined in the preamble hereto.

                  CONSUMMATE: An Exchange Offer shall be deemed "Consummated"
for purposes of this Agreement upon the occurrence of (a) the filing and
effectiveness under the Securities Act of the Exchange Offer Registration
Statement relating to the Exchange Securities to be issued in the Exchange
Offer, (b) the maintenance of such Exchange Offer Registration Statement
continuously effective and the keeping of the Exchange Offer open for a period
not

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less than the period required pursuant to Section 2(b) hereof and (c) the
delivery by the Company and the Guarantors to the registrar under the Indenture
of Exchange Securities in the same aggregate principal amount as the aggregate
principal amount of Securities tendered by Holders thereof pursuant to the
Exchange Offer.

                  CONSUMMATION DEADLINE: As defined in Section 2(b) hereof.

                  EFFECTIVENESS DEADLINE: As defined in Section 2(a)(ii) and
3(a) hereof.

                  EXCHANGE ACT: The U.S. Securities Exchange Act of 1934, as
amended.

                  EXCHANGE GUARANTEES: The Subsidiary Guarantees, registered
under the Securities Act, to be issued pursuant to the Indenture (a) in the
Exchange Offer or (b) as contemplated by Section 3 hereof.

                  EXCHANGE NOTES: The Company's 7 7/8% Senior Subordinated Notes
due 2014, registered under the Securities Act, to be issued pursuant to the
Indenture (a) in the Exchange Offer or (b) as contemplated by Section 3 hereof.

                  EXCHANGE OFFER: The exchange and issuance by the Company and
the Guarantors of a principal amount of Exchange Securities (which shall be
registered pursuant to the Exchange Offer Registration Statement) equal to the
outstanding principal amount of Securities that are tendered by such Holders in
connection with such exchange and issuance.

                  EXCHANGE OFFER REGISTRATION STATEMENT: The Registration
Statement relating to the Exchange Offer, including the related Prospectus.

                  EXCHANGE SECURITIES: Collectively refers to the Exchange Notes
and the related Exchange Guarantees.

                  FILING DEADLINE: As defined in Sections 2(a)(i) and 3(a)
hereof.

                  GUARANTORS: As defined in the preamble hereto.

                  HOLDER: A Person who owns, beneficially or otherwise, Transfer
Restricted Securities.

                  INDENTURE: As defined in the preamble hereto.

                  INITIAL PURCHASERS: As defined in the preamble hereto.

                  INTEREST PAYMENT DATE: Each June 15 and December 15 of each
year, commencing December 15, 2004.

                  MAJORITY OF HOLDERS: Holders holding more than 50% of the
aggregate principal amount of Notes outstanding.

                  NOTES: As defined in the preamble hereto.

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                  PERSON: Any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, unincorporated organization,
limited liability company, or government or other entity.

                  PROSPECTUS: The prospectus included in a Registration
Statement at the time such Registration Statement is declared effective, as
amended or supplemented by any prospectus supplement and by all other amendments
thereto, including post-effective amendments, and all material incorporated by
reference into such Prospectus.

                  PURCHASE AGREEMENT: As defined in the preamble hereto.

                  REGISTRATION DEFAULT: As defined in Section 4 hereof.

                  REGISTRATION STATEMENT: Any registration statement of the
Company and the Guarantors relating to (a) an offering of Exchange Securities
pursuant to an Exchange Offer or (b) the registration for resale of Transfer
Restricted Securities pursuant to the Shelf Registration Statement, in each case
(i) that is filed pursuant to the provisions of this Agreement and (ii)
including the Prospectus included therein, all amendments and supplements
thereto (including post-effective amendments) and all exhibits and material
incorporated by reference therein.

                  SECURITIES: As defined in the preamble hereto.

                  SECURITIES ACT: The U.S. Securities Act of 1933, as amended.

                  SHELF REGISTRATION STATEMENT: As defined in Section 3(a)
hereof.

                  SUBSIDIARY GUARANTEE: As defined in the preamble hereto.

                  SUSPENSION NOTICE: As defined in Section 5(e) hereof.

                  TIA: The Trust Indenture Act of 1939, as amended, and the
rules and regulations of the Commission thereunder, in each case, as in effect
on the date the Indenture is qualified under the TIA.

                  TRANSFER RESTRICTED SECURITIES: (a) Each Security, until the
earliest to occur of (i) the date on which such Security has been exchanged by a
Person other than a Broker-Dealer for an Exchange Security in the Exchange Offer
and entitled to be resold to the public by such Person without complying with
the prospectus delivery requirements of the Securities Act, (ii) the date on
which such Security has been effectively registered under the Securities Act and
sold or otherwise disposed of in accordance with a Shelf Registration Statement
or (iii) the date on which such Security is eligible to be distributed to the
public pursuant to Rule 144(k) under the Securities Act; and (b) each Exchange
Security acquired by the Broker-Dealer in the Exchange Offer of a Security for
such Exchange Security, until the date on which such Exchange Security is sold
to a purchaser who receives from such Broker-Dealer on or prior to the date of
such sale a copy of the Prospectus contained in the Exchange Offer Registration
Statement.

                  UNDERWRITTEN REGISTRATION or UNDERWRITTEN OFFERING: A
registration in which securities of the Company are sold to an underwriter for
reoffering to the public.

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                  2. REGISTERED EXCHANGE OFFER.

                  (a) Unless the Exchange Offer shall not be permitted by
applicable federal law or Commission policy (after the procedures set forth in
Sections 5(a)(i) hereof have been complied with), the Company and the Guarantors
shall (i) cause the Exchange Offer Registration Statement to be filed with the
Commission on or prior to 90 days after the Closing Date (such 90th day being
the "FILING DEADLINE"), (ii) use all commercially reasonable efforts to cause
such Exchange Offer Registration Statement to be declared effective on or prior
to 270 days after the Closing Date (such 270th day being the "EFFECTIVENESS
DEADLINE"), (iii) in connection with the foregoing, (A) file all pre-effective
amendments to such Exchange Offer Registration Statement as may be necessary in
order to cause it to become effective, (B) file, if applicable, a post-effective
amendment to such Exchange Offer Registration Statement pursuant to Rule 430A
under the Securities Act and (C) cause all necessary filings, if any, in
connection with the registration and qualification of the Exchange Securities to
be made under the Blue Sky laws of such jurisdictions as are necessary to permit
Consummation of the Exchange Offer and (iv) upon the effectiveness of such
Exchange Offer Registration Statement, commence and Consummate the Exchange
Offer. The Exchange Offer Registration Statement shall be on the appropriate
form permitting (I) registration of the Exchange Securities to be offered in
exchange for the Securities that are Transfer Restricted Securities and (II)
resales of Exchange Securities held by Broker-Dealers that tendered into the
Exchange Offer Securities that such Broker-Dealer acquired for its own account
as a result of market-making activities or other trading activities (other than
Securities acquired directly from the Company or any of its Affiliates) as
contemplated by Section 2(c) hereof.

                  (b) The Company and the Guarantors shall use all commercially
reasonable efforts to cause the Exchange Offer Registration Statement to be
effective continuously and shall keep the Exchange Offer open for a period of
not less than the minimum period required under applicable federal and state
securities laws to Consummate the Exchange Offer; provided, however, that in no
event shall such period be less than 20 Business Days. The Company and the
Guarantors shall cause the Exchange Offer to comply with all applicable federal
and state securities laws. No securities other than the Exchange Securities
shall be included in the Exchange Offer Registration Statement. The Company and
the Guarantors shall use all commercially reasonable efforts to cause the
Exchange Offer to be Consummated on or prior to 30 Business Days, or longer, if
required by the federal securities laws, after the date on which the Exchange
Offer Registration Statement has been declared effective (the "CONSUMMATION
DEADLINE") and to issue Exchange Securities in exchange for all Securities
tendered prior thereto in the Exchange Offer.

                  (c) The Company and the Guarantors shall include a "Plan of
Distribution" section in the Prospectus contained in the Exchange Offer
Registration Statement and indicate therein that any Broker-Dealer who holds
Transfer Restricted Securities that were acquired for the account of such
Broker-Dealer as a result of market-making activities or other trading
activities (other than Securities acquired directly from the Company or any
Affiliate of the Company), may exchange such Transfer Restricted Securities
pursuant to the Exchange Offer. Such "Plan of Distribution" section shall also
contain all other information with respect to such sales by such Broker-Dealers
that the Commission may require in order to permit such sales pursuant thereto,
but such "Plan of Distribution" shall not name any such Broker-Dealer or

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disclose the amount of Transfer Restricted Securities held by any such
Broker-Dealer, except to the extent required by the Commission as a result of a
change in policy, rules or regulations after the date of this Agreement.

                  Because such Broker-Dealer may be deemed to be an
"underwriter" within the meaning of the Securities Act and must, therefore,
deliver a prospectus meeting the requirements of the Securities Act in
connection with its initial sale of any Exchange Securities received by such
Broker-Dealer in the Exchange Offer, the Company and the Guarantors shall permit
the use of the Prospectus contained in the Exchange Offer Registration Statement
by such Broker-Dealer to satisfy such prospectus delivery requirement. To the
extent necessary to ensure that the Prospectus contained in the Exchange Offer
Registration Statement is available for sales of Exchange Securities by
Broker-Dealers, the Company and the Guarantors agree to use all commercially
reasonable efforts to keep the Exchange Offer Registration Statement
continuously effective, supplemented and amended as required by and subject to
the provisions of Sections 5(a) and 5(c) hereof and subject to any Blackout
Period (as defined below) and in conformity with the requirements of this
Agreement, the Securities Act and the policies, rules and regulations of the
Commission as announced from time to time, for a period of 270 days from the
date on which the Exchange Offer Registration Statement is declared effective or
such shorter period as will terminate when all Transfer Restricted Securities
covered by such Registration Statement have been sold pursuant thereto. The
Company shall provide sufficient copies of the latest version of such Prospectus
to such Broker-Dealers, promptly upon request at any time during such 270-day
period (or shorter as provided in the foregoing sentence) in order to facilitate
resales.

                  3. SHELF REGISTRATION.

                  (a) If (i) the Company and the Guarantors are not required to
file the Exchange Offer Registration Statement, (ii) the consummation of the
Exchange Offer is not permitted by applicable law or Commission policy (after
the Company and the Guarantors have complied with the procedures set forth in
Section 5(a)(i) hereof) or (iii) any Holder of Transfer Restricted Securities
notifies the Company prior to the 20th Business Day following the Consummation
of the Exchange Offer that (x) such Holder was prohibited by applicable law or
Commission policy from participating in the Exchange Offer, (y) such Holder may
not resell the Exchange Securities acquired by it in the Exchange Offer to the
public without delivering a prospectus and the Prospectus contained in the
Exchange Offer Registration Statement is not appropriate or available for such
resales by such Holder or (z) such Holder is a Broker-Dealer and holds
Securities acquired directly from the Company or any of its Affiliates, then the
Company and the Guarantors shall:

                  (I) use all commercially reasonable efforts to cause to be
filed on or prior to 30 days after the earlier of, (x) the date on which the
Company determines that the Exchange Offer Registration Statement cannot be
filed as a result of clause (a)(ii) of this Section or (y) the date on which the
Company receives the notice specified in clause (a)(iii) of this Section, but in
no event shall the Company be required to file a Shelf Registration Statement
earlier than the Consummation of the Exchange Offer (such earlier date, the
"FILING DEADLINE"), a shelf registration statement pursuant to Rule 415 under
the Securities Act (which may be an amendment to the Exchange Offer Registration
Statement (in either event, together with any

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amendments thereto, and including any documents incorporated by reference
therein, the "SHELF REGISTRATION STATEMENT")), which Shelf Registration
Statement shall provide for resales of all Transfer Restricted Securities held
by Holders that have provided the information required pursuant to the terms of
Section 3(b) hereof; and

                           (II) use all commercially reasonable efforts to cause
such Shelf Registration Statement to become effective on or prior to the later
of (x) 270 days after the Closing Date or (y) 30 days after the Filing Deadline
for the Shelf Registration Statement (such later date, the "EFFECTIVENESS
DEADLINE").

                  If, after the Company and the Guarantors have filed an
Exchange Offer Registration Statement that satisfies the requirements of Section
2(a) hereof, the Company and the Guarantors are required to file and make
effective a Shelf Registration Statement solely because the Exchange Offer is
not permitted under applicable federal law (i.e., clause (a)(i) of this
Section), then the filing of the Exchange Offer Registration Statement shall be
deemed to satisfy the requirements of clause (I) above; provided that, in such
event, the Company and the Guarantors shall remain obligated to meet the
Effectiveness Deadline set forth in clause (II) above.

To the extent necessary to ensure that the Shelf Registration Statement is
available for sales of Transfer Restricted Securities by the Holders thereof
entitled to the benefit of this Section 3(a) and the other securities required
to be registered therein pursuant to Section 5(b)(ii) hereof, the Company and
the Guarantors shall use all commercially reasonable efforts to keep any Shelf
Registration Statement required by this Section 3(a) continuously effective,
supplemented, amended and current as required by and subject to the provisions
of Sections 5(b) and (c) hereof and subject to any Blackout Period and in
conformity with the requirements of this Agreement, the Securities Act and the
policies, rules and regulations of the Commission as announced from time to
time, for a period of at least two years (as extended pursuant to Section
5(c)(i)hereof) following the Closing Date, or such shorter period as will
terminate when all Transfer Restricted Securities covered by such Shelf
Registration Statement have been sold pursuant thereto, including any update to
such relevant information, if any, necessary to cure the condition described in
clause (d) of Section 4 below.

                  (b) No Holder of Transfer Restricted Securities may include
any of its Transfer Restricted Securities in any Shelf Registration Statement
pursuant to this Agreement unless and until such Holder furnishes to the Company
in writing, within 20 Business Days after receipt of a request therefore, such
information as the Company may reasonably request in connection with any Shelf
Registration Statement or Prospectus or preliminary Prospectus included therein,
including, but not limited to, the information specified in Item 507 or 508 of
Regulation S-K, as applicable, of the Securities Act for use in connection with
any Shelf Registration Statement or Prospectus or preliminary Prospectus
included therein. No Holder of Transfer Restricted Securities shall be entitled
to liquidated damages pursuant to Section 4 hereof unless and until such Holder
shall have provided all such information. By its acceptance of Transfer
Restricted Securities, each Holder agrees to notify the Company promptly if any
of the information previously furnished is misleading or inaccurate in any
material respect and to promptly furnish additional information required to be
disclosed in order to make the information previously furnished to the Company
by such Holder not materially misleading.

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                  4. LIQUIDATED DAMAGES.

                  If (a) any Registration Statement required by this Agreement
is not filed with the Commission on or prior to the applicable Filing Deadline,
(b) any such Registration Statement has not been declared effective by the
Commission prior to or on the applicable Effectiveness Deadline, (c) the
Exchange Offer has not been Consummated on or prior to the Consummation
Deadline, or (d) any Registration Statement required by this Agreement is filed
and declared effective but shall thereafter cease to be effective or fail to be
usable for its intended purpose during the period required by this Agreement
without being succeeded within two Business Days by a post-effective amendment
to such Registration Statement that cures such failure and that is itself
declared effective within five Business Days of filing such post-effective
amendment, except in the case of this clause (d) under the circumstances set
forth in the following paragraph (each such event referred to in clauses (a)
through (d), a "REGISTRATION DEFAULT"); then the Company and the Guarantors
hereby jointly and severally agree to pay to each holder of Notes, liquidated
damages in the form of an increase in the interest rate borne by the Notes in an
amount equal to, with respect to the first 90-day period immediately following
the occurrence of the first Registration Default, to 0.50% per annum per $1,000
principal amount of Notes held by such holder of notes; and the amount of the
liquidated damages will increase by an additional 0.50% per annum per $1,000
principal amount of Notes with respect to each subsequent 90-day period until
all Registration Defaults have been cured, up to a maximum amount of liquidated
damages for all Registration Defaults equal to 1.00% per annum; provided that
the Company and the Guarantors shall in no event be required to pay liquidated
damages for more than one Registration Default at any given time. Following the
cure of all Registration Defaults, the accrual of liquidated damages will cease.
Notwithstanding anything to the contrary set forth herein, (i) upon filing of
the Exchange Offer Registration Statement (and/or, if applicable, the Shelf
Registration Statement), in the case of clause (a) above, (ii) upon the
effectiveness of the Exchange Offer Registration Statement (and/or, if
applicable, the Shelf Registration Statement), in the case of clause (b) above,
(iii) upon Consummation of the Exchange Offer, in the case of clause (c) above,
or (iv) upon the filing of a post-effective amendment to the Registration
Statement or an additional Registration Statement that causes the Exchange Offer
Registration Statement (and/or, if applicable, the Shelf Registration Statement)
to again be declared effective or made usable, in the case of (d) above, the
liquidated damages payable with respect to the Notes as a result of such clause
(a), (b), (c) or (d), as applicable, shall cease.

A Registration Default referred to in clause (d) above shall be deemed not to
have occurred and be continuing in respect of (x) a Shelf Registration Statement
or (y) after the date on which the Exchange Offer is Consummated, the Exchange
Offer Registration Statement that is required to be effective to permit resales
of Exchange Notes by Broker-Dealers as contemplated by Section 2(c) below or the
related Prospectus if (A) such period of time during which the Shelf
Registration Statement is not effective or such Shelf Registration Statement or
the related Prospectus is not useable ( the "BLACKOUT PERIOD") occurred solely
as a result of (x) the filing of a post-effective amendment to such Registration
Statement to incorporate annual audited financial information with respect to
the Company and the Guarantors where such post-effective amendment is not yet
effective and needs to be declared effective to permit Holders to use the
related Prospectus or (y) the occurrence of other material events with respect
to the Company and the Guarantors that would need to be described in such Shelf
Registration Statement or the

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related Prospectus and (B) in the case of clause (y), the Company and the
Guarantors are proceeding promptly and in good faith to amend or supplement
(including by way of filing documents under the Exchange Act which are
incorporated by reference into the Shelf Registration Statement) such Shelf
Registration Statement and the related Prospectus to describe such events;
provided, however, that in the event a Blackout Period exceeds an aggregate of
60 days in any 90-day period, a Registration Default shall be deemed to have
occurred on the 61st day of such Blackout Period and liquidated damages shall be
payable in accordance with the above paragraph from the day such Registration
Default occurs until such Registration Default is cured or until the Company and
the Guarantors are no longer required pursuant to this Agreement to keep such
Registration Statement effective or such Registration Statement or the related
Prospectus usable; provided that in the event a disclosure under clause (y)
above relates to a previously undisclosed proposed or pending material
transaction, the disclosure of which would impede the Company's or such
Guarantors ability to consummate such transaction, the Blackout Period may be
extended from 60 days to 90 days; provided, however, that Blackout Period shall
not exceed an aggregate of 120 days in any 360-day period.

                  All accrued liquidated damages shall be paid to the holders of
notes entitled thereto, in the manner provided for the payment of interest in
the Indenture, on each Interest Payment Date, as more fully set forth in the
Indenture and the Notes. Notwithstanding the fact that any Securities for which
liquidated damages are due cease to be Transfer Restricted Securities, all
obligations of the Company and the Guarantors to pay liquidated damages with
respect to Securities shall survive until such time as such obligations with
respect to such Securities shall have been satisfied in full.

                  5. REGISTRATION PROCEDURES.

                  (a) EXCHANGE OFFER REGISTRATION STATEMENT. In connection with
the Exchange Offer, the Company and the Guarantors shall (i) comply with all
applicable provisions of Section 5(c) hereof and Section 5(d) hereof with
respect to certain exchange offer prospectuses as described therein, (ii) use
all commercially reasonable efforts to effect such exchange and to permit the
resale of Exchange Securities by any Broker-Dealer that tendered Securities in
the Exchange Offer that such Broker-Dealer acquired for its own account as a
result of its market-making activities or other trading activities (other than
Securities acquired directly from the Company or any of its Affiliates) being
sold in accordance with the intended method or methods of distribution thereof;
and (iii) comply with all of the following provisions:

                  (A) If, following the Closing Date, there has been announced a
                  change in Commission policy with respect to exchange offers
                  such as the Exchange Offer, that in the reasonable opinion of
                  counsel to the Company raises a question as to whether the
                  Exchange Offer is permitted by applicable federal law, the
                  Company and the Guarantors hereby agree to seek a no-action
                  letter or other favorable decision from the Commission
                  allowing the Company and the Guarantors to Consummate an
                  Exchange Offer for such Transfer Restricted Securities. The
                  Company and the Guarantors hereby agree to pursue the issuance
                  of such a decision to the Commission staff level, but shall
                  not be required to take commercially unreasonable action to
                  effect a change of Commission policy. The Company and the
                  Guarantors hereby agree to (I) participate in telephonic

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                  conferences with the Commission staff, (II) deliver to the
                  Commission staff an analysis prepared by counsel to the
                  Company setting forth the legal basis, if any, upon which such
                  counsel has concluded that such an Exchange Offer should be
                  permitted and (III) diligently pursue a resolution (which need
                  not be favorable) by the Commission staff.

                  (B) As a condition to its participation in the Exchange Offer,
                  each Holder of Transfer Restricted Securities (including,
                  without limitation, any Holder who is a Broker-Dealer) shall
                  furnish, upon the request of the Company, prior to the
                  Consummation of the Exchange Offer, a written representation
                  to the Company and the Guarantors (which may be contained in
                  the letter of transmittal contemplated by the Exchange Offer
                  Registration Statement) to the effect that (I) it is not an
                  Affiliate of the Company, (II) it is not engaged in, does not
                  intend to engage in, and has no arrangement or understanding
                  with any Person to participate in, a distribution of the
                  Exchange Securities to be issued in the Exchange Offer, (III)
                  it is acquiring the Exchange Securities in its ordinary course
                  of business and (IV) if such Holder is a Broker-Dealer, that
                  it will receive Exchange Securities for its own account in
                  exchange for Securities that were acquired as a result of
                  market-making activities or other trading activities and that
                  it will deliver a Prospectus in connection with any resale of
                  such Exchange Securities. Each Holder shall be required to
                  make such other representations as may be reasonably necessary
                  under applicable Commission rules, regulations or
                  interpretations to render the use of Form S-4 or another
                  appropriate form under the Securities Act available and will
                  be required to agree to comply with their agreements and
                  covenants set forth in this Agreement. Each Holder using the
                  Exchange Offer to participate in a distribution of the
                  Exchange Securities will be required to acknowledge and agree
                  that, if the resales are of Exchange Securities obtained by
                  such Holder in exchange for Securities acquired directly from
                  the Company or an Affiliate thereof, it (1) could not, under
                  Commission policy as in effect on the date of this Agreement,
                  rely on the position of the Commission enunciated in Morgan
                  Stanley and Co., Inc. (available June 5, 1991) and Exxon
                  Capital Holdings Corporation (available May 13, 1988), as
                  interpreted in the Commission's letter to Shearman & Sterling
                  dated July 2, 1993, and similar no-action letters (including,
                  if applicable, any no-action letter obtained pursuant to
                  clause (A) above), and (2) must comply with the registration
                  and prospectus delivery requirements of the Securities Act in
                  connection with a secondary resale transaction and that such a
                  secondary resale transaction must be covered by an effective
                  Registration Statement containing the selling security holder
                  information required by Item 507 or 508, as applicable, of
                  Regulation S-K.

                  (C) Prior to effectiveness of the Exchange Offer Registration
                  Statement, the Company and the Guarantors shall, if requested
                  by the Commission, provide a supplemental letter to the
                  Commission (I) stating that the Company and the Guarantors are
                  registering the Exchange Offer in reliance on the position of
                  the Commission enunciated in Exxon Capital Holdings
                  Corporation (available May 13, 1988), Morgan Stanley and Co.,
                  Inc. (available June 5, 1991) as interpreted in the
                  Commission's letter to Shearman & Sterling dated July 2, 1993,

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                  and, if applicable, any no-action letter obtained pursuant to
                  clause (A) above, (II) including a representation that neither
                  the Company nor any Guarantor has entered into any arrangement
                  or understanding with any Person to distribute the Exchange
                  Securities to be received in the Exchange Offer and that, to
                  the best of the Company's and each Guarantor's information and
                  belief, each Holder (other than the Initial Purchasers)
                  participating in the Exchange Offer is acquiring the Exchange
                  Securities in its ordinary course of business and has no
                  arrangement or understanding with any Person to participate in
                  the distribution of the Exchange Securities received in the
                  Exchange Offer and (III) including any other undertaking or
                  representation required by the Commission as set forth in any
                  no-action letter obtained pursuant to clause (A) above, if
                  applicable.

                  (b) SHELF REGISTRATION STATEMENT. In connection with the Shelf
Registration Statement, the Company and the Guarantors shall:

                           (i) comply with all the provisions of Section 5(c)
                  and (d) below and use all commercially reasonable efforts to
                  effect such registration to permit the sale of the Transfer
                  Restricted Securities being sold in accordance with the
                  intended method or methods of distribution thereof (as
                  indicated in the information furnished to the Company pursuant
                  to Section 3(b) hereof), and pursuant thereto, prepare and
                  file with the Commission a Registration Statement relating to
                  the registration on any appropriate form under the Securities
                  Act, which form shall be available for the sale of the
                  Transfer Restricted Securities in accordance with the intended
                  method or methods of distribution thereof within the time
                  periods and otherwise in accordance with the provisions
                  hereof; and

                           (ii) issue, upon the request of any Holder or
                  purchaser of Securities covered by any Shelf Registration
                  Statement contemplated by this Agreement, Exchange Securities,
                  having an aggregate principal amount equal to the aggregate
                  principal amount of Securities sold pursuant to the Shelf
                  Registration Statement and surrendered to the Company for
                  cancellation; and the Company and the Guarantors shall
                  register Exchange Securities on the Shelf Registration
                  Statement for this purpose and issue the Exchange Securities
                  to the purchaser(s) of securities subject to the Shelf
                  Registration Statement in the names as such purchaser(s) shall
                  designate.

                  (c) GENERAL PROVISIONS. In connection with any Registration
Statement and any related Prospectus required by this Agreement to permit the
sale or resale of Transfer Restricted Securities, the Company and the Guarantors
shall:

                  (i) use all commercially reasonable efforts to keep such
         Registration Statement continuously effective and provide all requisite
         financial statements for the period specified in Section 2 or 3 hereof,
         as applicable. Upon the occurrence of any event that would cause any
         such Registration Statement or the Prospectus contained therein (A) to
         contain an untrue statement of material fact or omit to state any
         material fact necessary to make the statements therein (and, in the
         case of a Prospectus, in the light of the circumstances under which it
         was made) not

                                       10
<PAGE>

         misleading or (B) not to be effective and usable for resale of Transfer
         Restricted Securities during the period required by this Agreement, the
         Company and the Guarantors shall file promptly, subject to any Blackout
         Period an appropriate amendment to such Registration Statement curing
         such defect, and, if Commission review is required, use all
         commercially reasonable efforts to cause such amendment to be declared
         effective as soon as practicable; if at any time the Commission shall
         issue any stop order suspending the effectiveness of any Registration
         Statement, or any state securities commission or other regulatory
         authority shall issue an order suspending the qualification or
         exemption from qualification of the Transfer Restricted Securities
         under state securities or Blue Sky laws, the Company and the Guarantors
         shall use all commercially reasonable efforts to obtain the withdrawal
         or lifting of such order at the earliest possible time;

                  (ii) use all commercially reasonable efforts to (A) prepare
         and file with the Commission such amendments and post-effective
         amendments to the applicable Registration Statement as may be necessary
         to keep such Registration Statement effective for the applicable period
         set forth in Section 2 or 3 hereof, as the case may be, subject to any
         applicable Blackout Period, (B) cause the Prospectus to be supplemented
         by any required Prospectus supplement, and as so supplemented to be
         filed pursuant to Rule 424 under the Securities Act and to comply fully
         with Rules 424, 430A and 462, as applicable, under the Securities Act
         in a timely manner, and (C) comply with the provisions of the
         Securities Act with respect to the disposition of all securities
         covered by such Registration Statement during the applicable period in
         accordance with the intended method or methods of distribution by the
         sellers thereof set forth in such Registration Statement or supplement
         to the Prospectus;

                  (iii) in connection with any sale of Transfer Restricted
         Securities that will result in such securities no longer being Transfer
         Restricted Securities, cooperate with the Holders to facilitate the
         timely preparation and delivery of certificates representing Transfer
         Restricted Securities to be sold and not bearing any restrictive
         legends and enable such Transfer Restricted Securities to be registered
         in such denominations and such names as the selling Holders may request
         at least two Business Days prior to such sale of Transfer Restricted
         Securities;

                  (iv) use all commercially reasonable efforts to cause the
         disposition of the Transfer Restricted Securities covered by such
         Registration Statement to be registered with or approved by such other
         U.S. governmental agencies or authorities as may be necessary to enable
         the seller or sellers thereof to consummate the disposition of such
         Transfer Restricted Securities; provided, however, that neither the
         Company nor any Guarantor shall be required to register or qualify as a
         foreign corporation or as a dealer in securities in any jurisdiction
         where it is not now so qualified or to take any action that would
         subject it to the service of process in suits or to taxation, other
         than as to matters and transactions

                                       11
<PAGE>

         relating to the Registration Statement, in any jurisdiction where it is
         not now so subject;

                  (v) provide CUSIP numbers for all Transfer Restricted
         Securities or Exchange Securities, as the case may be, not later than
         the effective date of such Registration Statement covering such
         Transfer Restricted Securities or Exchange Securities, as the case may
         be, and provide the Trustee under the Indenture with certificates for
         the Transfer Restricted Securities or Exchange Securities, as the case
         may be, which are in a form eligible for deposit with The Depository
         Trust Company;

                  (vi) otherwise use all commercially reasonable efforts to
         comply with all applicable rules and regulations of the Commission, and
         make generally available to Holders with regard to any applicable
         Registration Statement, as soon as practicable, a consolidated earnings
         statement meeting the requirements of Rule 158 (which need not be
         audited) covering a twelve-month period beginning with the first month
         of the Company's first fiscal quarter commencing after the effective
         date of the Registration Statement (as such term is defined in
         paragraph (c) of Rule 158 under the Securities Act; and

                  (vii) cause the Indenture to be qualified under the TIA not
         later than the applicable Effectiveness Date of the first Registration
         Statement required by this Agreement, and, in connection therewith,
         cooperate with the Trustee and the Holders to effect such changes to
         the Indenture as may be required for such Indenture to be so qualified
         in accordance with the terms of the TIA; and execute and use all
         commercially reasonable efforts to cause the Trustee thereunder to
         execute all documents that may be required to effect such changes and
         all other forms and documents required to be filed with the Commission
         to enable such Indenture to be so qualified in a timely manner.

                  (d) ADDITIONAL PROVISIONS APPLICABLE TO SHELF REGISTRATION
STATEMENTS AND CERTAIN EXCHANGE OFFER Prospectuses. In connection with (1) each
Shelf Registration Statement, and (2) each Exchange Offer Registration Statement
if and to the extent that an Initial Purchaser has notified the Company in
accordance with Section 3(a)(iii) hereof that it is a holder of Exchange
Securities that are Transfer Restricted Securities (for so long as such Exchange
Securities are Transfer Restricted Securities or for the 270-day period provided
in Section 2 hereof, whichever is shorter); the Company and the Guarantors
shall:

                  (i) advise each Holder promptly (but in any event within three
         Business Days) and, if requested by such Persons, to confirm such
         advice in writing, (A) when the Prospectus or any Prospectus supplement
         or post-effective amendment has been filed, and, with respect to any
         applicable Registration Statement or any post-effective amendment
         thereto, when the same has become effective, (B) of any request by the
         Commission for amendments to the Registration Statement or amendments
         or supplements to the Prospectus or for additional information relating
         thereto, (C) of the issuance by the Commission of any stop order
         suspending the effectiveness of the Registration Statement under

                                       12
<PAGE>

         the Securities Act or of the suspension by any state securities
         commission of the qualification of the Transfer Restricted Securities
         for offering or sale in any jurisdiction, or the initiation of any
         proceeding for any of the preceding purposes or (D) of the existence of
         any fact or the happening of any event that makes any statement of a
         material fact made in the Registration Statement, the Prospectus, any
         amendment or supplement thereto, or any document incorporated by
         reference therein untrue, or that requires the making of any additions
         to or changes in the Registration Statement in order to make the
         statements therein not misleading, or that requires the making of any
         additions to or changes in the Prospectus in order to make the
         statements therein, in the light of the circumstances under which it
         was made, not misleading; and if at any time the Commission shall issue
         any stop order suspending the effectiveness of the Registration
         Statement, or any state securities commission or other regulatory
         authority shall issue an order suspending the qualification or
         exemption from qualification of the Transfer Restricted Securities
         under state securities or Blue Sky laws, the Company and Guarantors
         shall use all commercially reasonable efforts to obtain the withdrawal
         or lifting of such order at the earliest possible time and will provide
         to the Initial Purchasers and each Holder who is named in the
         Registration Statement prompt notice of the withdrawal of any such
         order;

                  (ii) subject to 5(c)(i), if any fact or event contemplated by
         Section 5(d)(i)(D) hereof shall exist or have occurred, use all
         commercially reasonable efforts to prepare a supplement or
         post-effective amendment to the Registration Statement or related
         Prospectus or any document incorporated therein by reference or file
         any other required document so that, as thereafter delivered to the
         purchasers of Transfer Restricted Securities, the Prospectus will not
         contain an untrue statement of a material fact or omit to state any
         material fact necessary to make the statements therein, in the light of
         the circumstances under which they were made, not misleading;

                  (iii) furnish to each Holder in connection with such exchange
         or sale, if any (or, in connection with any Exchange Offer Registration
         Statement, furnish to counsel for the Initial Purchasers), before
         filing with the Commission, copies of any Registration Statement or any
         Prospectus included therein (except the Prospectus included in the
         Exchange Offer Registration Statement at the time it was declared
         effective) or any amendments or supplements to any such Registration
         Statement or Prospectus (but excluding any documents incorporated by
         reference as a result of the Company's or any Guarantor's periodic
         reporting requirements, as the case may be, under the Exchange Act),
         which documents will be subject to the reasonable review and comment of
         such Holders (and counsel, as the case may be) in connection with such
         sale, if any, for a period of at least four Business Days, and the
         Company will not file any such Registration Statement or Prospectus or
         any amendment or supplement to any such Registration Statement or
         Prospectus (excluding all such documents incorporated by reference as a
         result of the Company's or any Guarantor's periodic reporting
         requirements, as the case may be, under the Exchange Act) to which such
         Holders (or counsel, as the case may be) shall reasonably object within
         five Business Days after the receipt

                                       13
<PAGE>

         thereof; a Holder shall be deemed to have reasonably objected to such
         filing if such Registration Statement, amendment, Prospectus or
         supplement, as applicable, as proposed to be filed, contains an untrue
         statement of a material fact or omits to state any material fact
         necessary to make the statements therein, in light of the circumstances
         under which it was made, not misleading or fails to comply with the
         applicable requirements of the Securities Act;

                  (iv) prior to the filing of any document that is to be
         incorporated by reference into a Registration Statement or Prospectus,
         provide copies of such document to each Holder (or, in connection with
         any Exchange Offer Registration Statement, furnish to counsel for the
         Initial Purchasers) in connection with such exchange or sale, if any,
         make the Company's and any Guarantors' representatives, as the case may
         be, available as may be reasonably necessary for discussion of such
         document and other customary due diligence matters, and include such
         information in such document prior to the filing thereof as such
         Holders (and counsel, as the case may be) may reasonably request;

                  (v) make available, at reasonable times, for inspection by
         each Holder in connection with any Shelf Registration Statement or
         Exchange Offer Registration Statement and any attorney or accountant
         retained by such Holders in connection with such Registration
         Statement, all relevant financial and other records, pertinent
         corporate documents of the Company and the Guarantors, subject to
         customary confidentiality agreements, and cause the Company's and any
         Guarantor's officers, directors and employees to supply all information
         reasonably requested by any such Holder, attorney or accountant in
         connection with such Registration Statement or any post-effective
         amendment thereto subsequent to the filing thereof and prior to its
         effectiveness and which is customarily furnished in transactions of the
         type contemplated by such Registration Statement; provided, however,
         that the foregoing inspection and information gathering (A) shall be
         coordinated on behalf of the selling Holders, underwriters or any
         representative thereof by one counsel, who shall be Milbank, Tweed,
         Hadley & McCloy LLP or such other counsel as may be chosen by the
         Holders of a majority in principal amount of Transfer Restricted
         Securities and (B) shall not be available to any such Holder who does
         not agree to hold such information in confidence;

                  (vi) if requested by any Holders (or, in connection with any
         Exchange Offer Registration Statement, the Initial Purchasers and their
         counsel) in connection with such exchange or sale, use all commercially
         reasonable efforts to include promptly in any Registration Statement or
         Prospectus, pursuant to a supplement or post-effective amendment if
         necessary, such information as such Holders may reasonably request to
         have included therein, including, without limitation, information
         relating to the "Plan of Distribution" of the Transfer Restricted
         Securities; and make all required filings of such Prospectus supplement
         or post-effective amendment as soon as practicable after the Company is
         notified of the matters to be included in such Prospectus supplement or
         post-effective amendment;

                                       14
<PAGE>

                  (vii) make available upon request to each Holder (or, in
         connection with any Exchange Offer Registration Statement, counsel for
         the Initial Purchasers) in connection with such exchange or sale
         without charge, at least one copy of the Registration Statement, as
         first filed with the Commission, and of each amendment thereto, and
         upon request all documents incorporated by reference therein and all
         exhibits (including exhibits incorporated therein by reference);

                  (viii) deliver to each Holder (or, in connection with any
         Exchange Offer Registration Statement, the Initial Purchasers and their
         counsel) without charge, as many copies of the Prospectus (including
         each preliminary prospectus) and any amendment or supplement thereto as
         such Holder (or, in connection with any Exchange Offer Registration
         Statement, the Initial Purchasers and their counsel) reasonably may
         request; the Company and the Guarantors hereby consent to the use (in
         accordance with law) of the Prospectus and any amendment or supplement
         thereto by each selling Holder in connection with the offering and the
         sale of the Transfer Restricted Securities covered by the Prospectus or
         any amendment or supplement thereto; provided that such use of the
         Prospectus and any amendment or supplement thereto and such offering
         and sale conforms to the "Plan of Distribution" section set forth in
         the Prospectus and complies with the terms of this Agreement and all
         applicable laws and regulations thereunder;

                  (ix) upon the request of any Holder in connection with any
         Registration Statement, enter into such customary agreements (including
         an underwriting agreement) and make such customary representations and
         warranties and take all such other customary actions in connection
         therewith in order to expedite or facilitate the disposition of the
         Transfer Restricted Securities pursuant to any applicable Registration
         Statement contemplated by this Agreement as may be reasonably requested
         by any Holder in connection with any sale or resale pursuant to any
         applicable Registration Statement. In such connection, the Company and
         the Guarantors shall have no obligation to enter into an underwriting
         agreement or permit an Underwritten Offering unless a request therefore
         shall have been received from Holders of not less than 33% of the
         aggregate principal amount of Transfer Restricted Securities then
         outstanding; and whether or not an underwriting agreement is entered
         into and whether or not the registration is an Underwritten
         Registration, the Company and the Guarantors shall:

                           (A) upon request of the underwriters in connection
                  with any Underwritten Registration under any Registration
                  Statement, furnish (or in the case of paragraphs (2) and (3)
                  below, use all commercially reasonable efforts to cause to be
                  furnished) to each Holder, upon the effectiveness of the such
                  Registration Statement:

                           (1) a certificate, dated such date, signed on behalf
                  of the Company and each Guarantor by (x) the President or any
                  Vice President of the Company and (y) a principal financial or
                  accounting officer of the Company and such Guarantor,
                  confirming, to the best of their knowledge after reasonable
                  investigation, as of the date thereof, the matters set forth

                                       15
<PAGE>

                  in Sections 7(g) of the Purchase Agreement and such other
                  similar matters as such Holders may reasonably request;

                           (2) in connection with any Underwritten Registration
                  or Underwritten Offering, an opinion, dated the date of the
                  closing of the Underwritten Offering, of general counsel for
                  the Company and the Guarantors covering the matters set forth
                  in Sections 7(b) of the Purchase Agreement and such other
                  matters as such Holder may reasonably request;

                           (3) in connection with any Underwritten Registration
                  or Underwritten Offering, opinions, dated the date of the
                  closing of the Underwritten Offering, of special counsels for
                  the Company and the Guarantors covering the matters set forth
                  in Sections 7(c) and 7(o) of the Purchase Agreement and such
                  other matters as such Holder may reasonably request, as well
                  as a letter from one of such counsel including a
                  representation to the effect that such counsel has
                  participated in conferences with officers and other
                  representatives of the Company and the Guarantors,
                  representatives of the independent public accountant for the
                  Company and the Guarantors and has considered the matters
                  required to be stated therein and the statements contained
                  therein, although such counsel has not independently verified
                  the accuracy, completeness or fairness of such statements; and
                  that such counsel advises that, on the basis of the foregoing,
                  no facts came to such counsel's attention that caused such
                  counsel to believe that the applicable Registration Statement,
                  at the time the Shelf Registration Statement or any
                  post-effective amendment thereto became effective and, in the
                  case of the Exchange Offer Registration Statement, as of the
                  date of Consummation of the Exchange Offer, contained an
                  untrue statement of a material fact or omitted to state a
                  material fact required to be stated therein or necessary to
                  make the statements therein not misleading, or that the
                  Prospectus contained in the Shelf Registration Statement as of
                  its date and, in the case of the opinion dated the date of
                  Consummation of the Exchange Offer, as of the date of
                  Consummation, contained an untrue statement of a material fact
                  or omitted to state a material fact necessary in order to make
                  the statements therein, in the light of the circumstances
                  under which they were made, not misleading. Such counsel may
                  state further that such counsel assumes no responsibility for,
                  and has not independently verified, the accuracy, completeness
                  or fairness of the financial statements, notes and schedules
                  and other financial data included in any Registration
                  Statement contemplated by this Agreement or the related
                  Prospectus; and

                           (4) in connection with any Underwritten Registration
                  or Underwritten Offering, customary comfort letter(s), dated
                  as of the date of the closing of the Underwritten Offering,
                  from the Company's independent accountants, in the customary
                  form and covering matters of the type customarily covered in
                  comfort letters to underwriters in connection with
                  underwritten offerings, and affirming the matters set forth

                                       16
<PAGE>

                  in the comfort letter(s) delivered pursuant to Sections 7(e)
                  and 7(f) of the Purchase Agreement; and

                                    (B) deliver such other documents and
                           certificates as may be reasonably requested by the
                           selling Holders to evidence compliance with the
                           matters covered in clause (A) above and with any
                           customary conditions contained in any agreement
                           entered into by the Company and the Guarantors
                           pursuant to this clause (ix);

                           (x) prior to any public offering of Transfer
                  Restricted Securities, cooperate with the selling Holders and
                  their counsel in connection with the registration and
                  qualification of the Transfer Restricted Securities under the
                  securities or Blue Sky laws of such jurisdictions as the
                  selling Holders may reasonably request and do any and all
                  other acts or things reasonably necessary or advisable to
                  enable the disposition in such jurisdictions of the Transfer
                  Restricted Securities covered by the applicable Registration
                  Statement; provided, however, that neither the Company nor any
                  Guarantor shall be required to register or qualify as a
                  foreign corporation or as a dealer in securities in any
                  jurisdiction where it is not now so qualified or to take any
                  action that would subject it to the service of process in
                  suits or to taxation, other than as to matters and
                  transactions relating to the Registration Statement, in any
                  jurisdiction where it is not now so subject; and

                           (xi) provide promptly to each Holder, upon written
                  request, each document filed with the Commission pursuant to
                  the requirements of Section 13 or Section 15(d) of the
                  Exchange Act.

                  (e) Each Holder's acquisition of a Transfer Restricted
Security constitutes such Holder's agreement that, upon receipt of the notice
referred to in Section 5(d)(i)(C) or any notice from the Company of the
existence of any fact of the kind described in Section 5(d)(i)(D) hereof (in
each case, a "SUSPENSION NOTICE"), such Holder will forthwith discontinue
disposition of Transfer Restricted Securities pursuant to the applicable
Registration Statement until (i) such Holder has received copies of the
supplemented or amended Prospectus contemplated by Section 5(d)(ii) hereof, or
(ii) such Holder is advised in writing by the Company that the use of the
Prospectus may be resumed, and has received copies of any additional or
supplemental filings that are incorporated by reference in the Prospectus (the
"ADVICE"). Each Holder receiving a Suspension Notice shall be required to either
(I) destroy any Prospectuses, other than permanent file copies, then in such
Holder's possession that have been replaced by the Company with a more recently
dated Prospectus or (II) deliver to the Company (at the Company's expense) all
copies, other than permanent file copies, then in such Holder's possession of
the Prospectuses covering such Transfer Restricted Securities that was current
at the time of receipt of the Suspension Notice. The time period regarding the
effectiveness of such Registration Statement set forth in Section 2 or 3 hereof,
as applicable, shall be extended by a number of days equal to the number of days
in the period from and including the date of delivery of the Suspension Notice
to the date of delivery of the Advice.

                  6. REGISTRATION EXPENSES.

                                       17
<PAGE>

                  (a) All expenses incident to the Company's and each
Guarantor's performance of or compliance with this Agreement shall be borne,
jointly and severally, by the Company and the Guarantors regardless of whether a
Registration Statement becomes effective, including, without limitation: (i) all
registration and filing fees and expenses; (ii) all fees and expenses of
compliance with federal securities and state Blue Sky or securities laws; (iii)
all expenses of printing (including certificates for the Exchange Securities to
be issued in the Exchange Offer and printing the Prospectuses) and the Company's
expenses for messenger and delivery services and telephone; (iv) all fees and
disbursements of counsel for the Company and the Guarantors, and one counsel for
the Holders of Transfer Restricted Securities as described in Section 6(b)
below; and (v) all fees and disbursements of independent certified public
accountants of the Company and the Guarantors, if applicable (including the
expenses of any special audit and comfort letters required by or incident to
such performance).

                  The Company shall bear its and each Guarantor's internal
expenses (including, without limitation, all salaries and expenses of its
officers and employees performing legal, accounting or other duties), the
expenses of any annual audit and the fees and expenses of any Person, including
special experts, retained by the Company or the Guarantors.

                  (b) In connection with any Registration Statement required by
this Agreement (including, without limitation, the Exchange Offer Registration
Statement and the Shelf Registration Statement), including any amendment or
supplement thereto, and any other documents delivered to any Holders, the
Company and the Guarantors shall reimburse the Initial Purchasers and the
Holders of Transfer Restricted Securities who are tendering Securities in the
Exchange Offer and/or selling or reselling Securities or Exchange Securities
pursuant to the "Plan of Distribution" section contained in the Exchange Offer
Registration Statement or the Shelf Registration Statement, as applicable, for
the reasonable fees and disbursements of not more than one counsel (who shall be
Milbank, Tweed, Hadley & McCloy LLP unless another firm shall be chosen by the
Holders of a majority in principal amount of the Transfer Restricted Securities
for whose benefit such Registration Statement is being prepared).

                  7. INDEMNIFICATION AND CONTRIBUTION.

                  (a) The Company and the Guarantors agree, jointly and
severally, to indemnify and hold harmless each Holder, its directors, officers
and each Person, if any, who controls such Holder (within the meaning of Section
15 of the Securities Act or Section 20 of the Exchange Act), from and against
any and all losses, claims, damages, liabilities or judgments (including without
limitation, any reasonable legal or other expenses incurred in connection with
investigating or defending any matter, including any action that could give rise
to any such losses, claims, damages, liabilities or judgments) caused by any
untrue statement or alleged untrue statement of a material fact contained in any
Registration Statement or Prospectus (or any amendment or supplement thereto)
provided by the Company to any Holder or any prospective purchaser of Exchange
Securities or registered Securities, or caused by any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, except insofar as such
losses, claims, damages, liabilities or judgments are caused by an untrue
statement or omission or alleged untrue statement or omission

                                       18
<PAGE>

that is based upon information relating to any of the Holders furnished in
writing to the Company by any of the Holders.

                  (b) By its acquisition of Transfer Restricted Securities, each
Holder of Transfer Restricted Securities agrees, severally and not jointly, to
indemnify and hold harmless the Company and the Guarantors, and their respective
directors and officers, and each Person, if any, who controls (within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act)
the Company or the Guarantors to the same extent as the foregoing indemnity from
the Company and the Guarantors set forth in Section 7(a) hereof, but only with
reference to information relating to such Holder furnished in writing to the
Company by such Holder expressly for use in any Registration Statement or in any
amendment or supplement thereto. In no event shall any Holder, its directors,
officers or any Person who controls such Holder be liable or responsible for any
amount in excess of the total amount received by such Holder with respect to its
sale of Transfer Restricted Securities pursuant to a Registration Statement.

                  (c) In case any action shall be commenced involving any Person
in respect of which indemnity may be sought pursuant to Section 7(a) or (b)
hereof (the "INDEMNIFIED PARTY") the indemnified party shall promptly notify the
Person against whom such indemnity may be sought (the "INDEMNIFYING PERSON") in
writing and the indemnifying party shall assume the defense of such action,
including the employment of counsel reasonably satisfactory to the indemnified
party and the payment of all fees and expenses of such counsel, as incurred
(except that in the case of any action in respect of which indemnity may be
sought pursuant to both Sections 7(a) and (b) hereof, a Holder shall not be
required to assume the defense of such action pursuant to this Section 7(c), but
may employ separate counsel and participate in the defense thereof, but the fees
and expenses of such counsel, except as provided below, shall be at the expense
of the Holder). Any indemnified party shall have the right to employ separate
counsel in any such action and participate in the defense thereof, but the fees
and expenses of such counsel shall be at the expense of the indemnified party
unless (i) the employment of such counsel shall have been specifically
authorized in writing by the indemnifying party, (ii) the indemnifying party
shall have failed to assume the defense of such action or employ counsel
reasonably satisfactory to the indemnified party or (iii) the named parties to
any such action (including any impleaded parties) include both the indemnified
party and the indemnifying party, and the indemnified party shall have been
advised by such counsel that there may be one or more legal defenses available
to it which are different from or additional to those available to the
indemnifying party (in which case the indemnifying party shall not have the
right to assume the defense of such action on behalf of the indemnified party).
In any such case, the indemnifying party shall not, in connection with any one
action or separate but substantially similar or related actions in the same
jurisdiction arising out of the same general allegations or circumstances, be
liable for the fees and expenses of more than one separate firm of attorneys (in
addition to any local counsel) for all indemnified parties and all such fees and
expenses shall be reimbursed as they are incurred. Such firm shall be designated
in writing by a majority of the Holders, in the case of the parties indemnified,
pursuant to Section 7(a) hereof, and by the Company and the Guarantors, in the
case of parties indemnified, pursuant to Section 7(b) hereof. The indemnifying
party shall indemnify and hold harmless the indemnified party from and against
any and all losses, claims, damages, liabilities and judgments by reason of any
settlement of any action (A) effected with its written consent or (B) effected
without its written consent if the settlement is entered into more than 30
Business Days after the indemnifying party shall have

                                       19
<PAGE>

received a request from the indemnified party for reimbursement for the fees and
expenses of counsel (in any case where such fees and expenses are at the expense
of the indemnifying party) and, prior to the date of such settlement, the
indemnifying party shall have failed to comply with such reimbursement request.
No indemnifying party shall, without the prior written consent of the
indemnified party, effect any settlement or compromise of, or consent to the
entry of judgment with respect to, any pending or threatened action in respect
of which the indemnified party is or could have been a party and indemnity or
contribution may be or could have been sought hereunder by the indemnified
party, unless such settlement, compromise or judgment (I) includes an
unconditional release of the indemnified party from all liability on claims that
are or could have been the subject matter of such action and (II) does not
include a statement as to or an admission of fault, culpability or a failure to
act, by or on behalf of the indemnified party.

                  (d) To the extent that the indemnification provided for in
this Section 7 is unavailable to an indemnified party in respect of any losses,
claims, damages, liabilities or judgments referred to therein, then each
indemnifying party, in lieu of indemnifying such indemnified party, shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages, liabilities or judgments (i) in such proportion
as is appropriate to reflect the relative benefits received by the Company and
the Guarantors, on the one hand, and the Holders, on the other hand, from their
initial sale of Transfer Restricted Securities (or, in the case of Exchange
Securities that are Transfer Restricted Securities, the sale of the Securities
for which such Exchange Securities were exchanged) or (ii) if the allocation
provided by clause 7(d)(i) above is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits referred
to in such clause 7(d)(i) but also the relative fault of the Company and the
Guarantors, on the one hand, and of the Holder, on the other hand, in connection
with the statements or omissions which resulted in such losses, claims, damages,
liabilities or judgments, as well as any other relevant equitable
considerations. The relative fault of the Company and the Guarantors, on the one
hand, and of the Holder, on the other hand, shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of a material
fact or the omission or alleged omission to state a material fact relates to
information supplied by the Company or such Guarantor, on the one hand, or by
the Holder, on the other hand, and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission. The amount paid or payable by a party as a result of the losses,
claims, damages, liabilities and judgments referred to above shall be deemed to
include, subject to the limitations set forth in Section 7(c) hereof, any legal
or other fees or expenses reasonably incurred by such party in connection with
investigating or defending any action or claim.

The Company, the Guarantors and, by its acquisition of Transfer Restricted
Securities, each Holder agree that it would not be just and equitable if
contribution pursuant to this Section 7(d) were determined by pro rata
allocation (even if the Holders were treated as one entity for such purpose) or
by any other method of allocation which does not take account of the equitable
considerations referred to in the immediately preceding paragraph. The amount
paid or payable by an indemnified party as a result of the losses, claims,
damages, liabilities or judgments referred to in the immediately preceding
paragraph shall be deemed to include, subject to the limitations set forth
above, any legal or other expenses reasonably incurred by such indemnified party
in connection with investigating or defending any matter, including any action
that could have given rise to such losses, claims, damages, liabilities or
judgments. Notwithstanding the

                                       20
<PAGE>

provisions of this Section 7, no Holder, its directors, its officers or any
Person, if any, who controls such Holder shall be required to contribute, in the
aggregate, any amount in excess of the total amount received by such Holder with
respect to the sale of Transfer Restricted Securities pursuant to a Registration
Statement. 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 Holders'
obligations to contribute pursuant to this Section 7(d) are several in
proportion to the respective principal amount of Transfer Restricted Securities
held by each Holder hereunder and not joint.

                  8. RULE 144A AND RULE 144.

                  The Company and each Guarantor agrees with each Holder that,
from and after the Closing Date, for so long as any Transfer Restricted
Securities remain outstanding or, if earlier, until two years after the Closing
Date, if the Company (a) shall cease to file reports under Sections 13 and 15(d)
of the Exchange Act with the Commission, the Company shall furnish to holders of
the Notes and prospective purchasers of Notes designated by such holders, upon
request of such holders or such prospective purchasers, the information required
to be delivered pursuant to Rule 144A(d)(4) under the Securities Act to permit
compliance with Rule 144A in connection with resales of the Notes, and (b) is
subject to Section 13 or 15(d) of the Exchange Act, the Company will use all
commercially reasonable efforts to make all filings required thereby in a timely
manner in order to permit resales of such Transfer Restricted Securities
pursuant to Rule 144.

                  9. FUTURE SUBSIDIARY GUARANTEES.

                  If, prior to the Consummation of the Exchange Offer or prior
to the effectiveness of the Shelf Registration Statement, as the case may be,
any subsidiary of the Company executes a Subsidiary Guarantee in accordance with
the terms and provisions of the Indenture, the Company shall cause such
subsidiary to execute and deliver to the parties hereto a counterpart signature
page to this Agreement and such subsidiary shall be bound by all the provisions
of this Agreement as a "Guarantor."

                  10. MISCELLANEOUS.

                  (a) REMEDIES. The Company and the Guarantors acknowledge and
agree that monetary damages (including the liquidated damages contemplated by
Section 4 hereof) would not be adequate compensation for any loss incurred by
reason of a breach by the Company or the Guarantors of the provisions of this
Agreement and the Company and the Guarantors hereby agree to waive the defense
in any action for specific performance that a remedy at law would be adequate;
provided that the liquidated damages contemplated by Section 4 hereof shall be
the exclusive remedy for any such breach of Section 2 or 3 of this Agreement.

                  (b) ACTIONS AFFECTING TRANSFER RESTRICTED SECURITIES. The
Company and the Guarantors shall not, directly or indirectly, take any action
with respect to the Transfer Restricted Securities as a class that would
adversely affect the ability of the Holders of Transfer Restricted

                                       21
<PAGE>

Securities to include such Transfer Restricted Securities in a registration
undertaken pursuant to this Agreement.

                  (c) NO INCONSISTENT AGREEMENTS. The Company and the Guarantors
will not, on or after the date of this Agreement, enter into any agreement with
respect to their respective securities that is inconsistent with the rights
granted to the Holders in this Agreement or otherwise conflicts with the
provisions hereof. In addition, the Company and the Guarantors shall not grant
to any of its security holders (other than the Holders of Transfer Restricted
Securities in such capacity) the right to include any of its securities in the
Registration Statement provided for in this Agreement other than the Transfer
Restricted Securities. The Company has not previously entered into any agreement
(which has not expired or been terminated) granting any registration rights with
respect to its securities to any Person which rights conflict with the
provisions hereof.

                  (d) AMENDMENTS AND WAIVERS. This Agreement may not be amended,
modified or supplemented, and waivers or consents to or departures from the
provisions hereof may not be given, unless (i) in the case of Section 4 hereof
and this Section 11(d)(i), the Company has obtained the written consent of
Holders of all outstanding Transfer Restricted Securities and (ii) in the case
of all other provisions hereof, the Company has obtained the written consent of
a Majority of Holders (excluding Transfer Restricted Securities held by the
Company and its Affiliates) or such greater percentage of the Holders as
required by the Indenture. Notwithstanding the foregoing, a waiver or consent to
depart from the provisions of this Agreement with respect to a matter that
relates exclusively to the rights of Holders whose Transfer Restricted
Securities are being tendered pursuant to the Exchange Offer and thereby does
not directly or indirectly affect the rights of other Holders may be given by a
majority of Holders of the Transfer Restricted Securities being tendered or
registered pursuant to such Exchange Offer.

                  (e) THIRD PARTY BENEFICIARY. The Holders shall be third party
beneficiaries to the agreements made hereunder between the Company and the
Guarantors, on the one hand, and the Initial Purchasers, on the other hand, and
shall have the right to enforce such agreements directly to the extent they may
deem such enforcement necessary or advisable to protect their rights hereunder.

                  (f) NOTICES. All notices and other communications provided for
or permitted hereunder shall be made in writing by hand-delivery, first-class
mail (registered or certified, return receipt requested), telex, facsimile
transmission, or air courier guaranteeing overnight delivery:

                           (i) if to a Holder, at the address set forth on the
                  records of the registrar under the Indenture, as the case may
                  be; and

                          (ii) if to the Company or any of the
                           Guarantors:

                                    Beverly Enterprises, Inc.
                                    Attention:  Corporate Secretary
                                    One Thousand Beverly Way

                                       22
<PAGE>

                                    Fort Smith, Arkansas 72919
                                    Telephone:  (479) 201-2000

                  All such notices and communications shall be deemed to have
been duly given: at the time delivered by hand, if personally delivered; two
Business Days after being deposited in the mail, postage prepaid, if mailed;
when answered back, if telexed; when receipt is acknowledged, if transmitted by
facsimile; and on the next Business Day, if timely delivered to an air courier
guaranteeing overnight delivery.

                  Copies of all such notices, demands or other communications
shall be concurrently delivered by the Person giving the same to the Trustee at
the address specified in the Indenture.

                  (g) SUCCESSORS AND ASSIGNS. This Agreement shall inure to the
benefit of and be binding upon the successors and assigns of each of the
parties, including without limitation and without the need for an express
assignment, subsequent Holders; provided, however, that (i) this Agreement shall
not inure to the benefit of or be binding upon a successor or assign of a Holder
unless and to the extent such successor or assign acquired Transfer Restricted
Securities from such Holder and (ii) nothing contained herein shall be deemed to
permit any assignment, transfer or other disposition of Transfer Restricted
Securities in violation of the terms of the Purchase Agreement or the Indenture.
If any transferee of any Holder shall acquire Transfer Restricted Securities, in
any manner, whether by operation of law or otherwise, such Transfer Restricted
Securities shall be held subject to all of the terms of this Agreement, and by
taking and holding such Transfer Restricted Securities such Person shall be
conclusively deemed to have agreed to be bound by and to perform all of the
terms and provisions of this Agreement, including the restrictions set forth in
this Agreement and, if applicable, the Purchase Agreement, and such Person shall
be entitled to receive the benefits hereof.

                  (h) COUNTERPARTS. This Agreement may be executed in any number
of counterparts and by the parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.

                  (i) SECURITIES HELD BY THE COMPANY OR ITS AFFILIATES. Whenever
the consent or approval of Holders of a specified percentage of Transfer
Restricted Securities is required hereunder, Transfer Restricted Securities held
by the Company or its Affiliates shall not be counted in determining whether
such consent or approval was given by the Holders of such required percentage.

                  (j) HEADINGS. The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise affect the
meaning hereof.

                  (k) GOVERNING LAW. This Agreement shall be governed by, and
construed in accordance with, the law of the State of New York.

                  (l) SEVERABILITY. If any one or more of the provisions
contained herein, or the application thereof in any circumstance, is held
invalid, illegal or unenforceable, the validity,

                                       23
<PAGE>

legality and enforceability of any such provision in every other respect and of
the remaining provisions contained herein shall not be affected or impaired
thereby.

                  (m) ENTIRE AGREEMENT. This Agreement is intended by the
parties as a final expression of their agreement and intended to be a complete
and exclusive statement of the agreement and understanding of the parties hereto
in respect of the subject matter contained herein. There are no restrictions,
promises, warranties or undertakings, other than those set forth or referred to
herein with respect to the registration rights granted by the Company with
respect to the Transfer Restricted Securities. This Agreement supersedes all
prior agreements and understandings between the parties with respect to such
subject matter.

                                       24
<PAGE>

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

                                BEVERLY ENTERPRISES, INC.

                                By: /s/ RICHARD D. SKELLY, JR.
                                    --------------------------
                                Name: Richard D. Skelly, Jr.
                                Title: Sr. VP & Treasurer

                          Registration Rights Agreement

<PAGE>

                          4F FUNDING, INC.
                          AEDON HOMECARE - HOUSTON, LLC
                          AEDON HOMECARE - MINNESOTA, LLC
                          AEDON HOMECARE, LLC
                          AEDON STAFFING, LLC
                          AEGIS THERAPIES - OREGON, INC.
                          AEGIS THERAPIES - WISCONSIN, INC.
                          AEGIS THERAPIES, INC.
                          AEGIS THERAPIES - FLORIDA, INC.
                          AFFIRMACARE, LLC
                          AGI-CAMELOT, INC.
                          ASERACARE HOSPICE - BIRMINGHAM, LLC
                          ASERACARE HOSPICE - CORINTH, LLC
                          ASERACARE HOSPICE - DEMOPOLIS, LLC
                          ASERACARE HOSPICE - HAMILTON, LLC
                          ASERACARE HOSPICE - JACKSON, LLC
                          ASERACARE HOSPICE - MARSHALL COUNTY, LLC
                          ASERACARE HOSPICE - MEMPHIS, LLC
                          ASERACARE HOSPICE - MERIDIAN, LLC
                          ASERACARE HOSPICE - MONROEVILLE, LLC
                          ASERACARE HOSPICE - NEW ALBANY, LLC
                          ASERACARE HOSPICE - NEW HORIZONS, LLC
                          ASERACARE HOSPICE - PHILADELPHIA, LLC
                          ASERACARE HOSPICE - RUSSELLVILLE, LLC
                          ASERACARE HOSPICE - SENATOBIA, LLC
                          ASERACARE HOSPICE - TENNESSEE, LLC
                          BEVERLY - BELLA VISTA HOLDING, INC.
                          BEVERLY - MISSOURI VALLEY HOLDING, INC.
                          BEVERLY - RAPID CITY HOLDING, INC.
                          BEVERLY ENTERPRISES - ALABAMA, INC.
                          BEVERLY ENTERPRISES -ARIZONA, INC.
                          BEVERLY ENTERPRISES - ARKANSAS, INC.
                          BEVERLY ENTERPRISES - CALIFORNIA, INC.
                          BEVERLY ENTERPRISES - DELAWARE, INC.
                          BEVERLY ENTERPRISES - DISTRICT OF COLUMBIA, INC.
                          BEVERLY ENTERPRISES - FLORIDA, INC.
                          BEVERLY ENTERPRISES - GARDEN TERRACE, INC.
                          BEVERLY ENTERPRISES - GEORGIA, INC.
                          BEVERLY ENTERPRISES - HAWAII, INC.
                          BEVERLY ENTERPRISES - ILLINOIS, INC.
                          BEVERLY ENTERPRISES - INDIANA, INC.
                          BEVERLY ENTERPRISES - KANSAS, LLC
                          BEVERLY ENTERPRISES - KENTUCKY, INC.

                          Registration Rights Agreement

<PAGE>

                          BEVERLY ENTERPRISES - MARYLAND, INC.
                          BEVERLY ENTERPRISES - MASSACHUSETTS, INC.
                          BEVERLY ENTERPRISES - MINNESOTA, LLC
                          BEVERLY ENTERPRISES - MISSISSIPPI, INC.
                          BEVERLY ENTERPRISES - MISSOURI, INC.
                          BEVERLY ENTERPRISES - NEBRASKA, INC.
                          BEVERLY ENTERPRISES - NEW JERSEY, INC.
                          BEVERLY ENTERPRISES - NORTH CAROLINA, INC.
                          BEVERLY ENTERPRISES - OHIO, INC.
                          BEVERLY ENTERPRISES - OREGON, INC.
                          BEVERLY ENTERPRISES - PENNSYLVANIA, INC.
                          BEVERLY ENTERPRISES - SOUTH CAROLINA, INC.
                          BEVERLY ENTERPRISES - TENNESSEE, INC.
                          BEVERLY ENTERPRISES - TEXAS, INC.
                          BEVERLY ENTERPRISES - VIRGINIA, INC.
                          BEVERLY ENTERPRISES - WASHINGTON, INC.
                          BEVERLY ENTERPRISES - WEST VIRGINIA, INC.
                          BEVERLY ENTERPRISES - WISCONSIN, INC.
                          BEVERLY ENTERPRISES INTERNATIONAL LIMITED
                          BEVERLY HEALTH AND REHABILITATION SERVICES, INC.
                          BEVERLY HEALTHCARE - CALIFORNIA, INC.
                          BEVERLY HEALTHCARE - ROCHESTER MN, LLC
                          BEVERLY HEALTHCARE MANAGEMENT - MN, LLC
                          BEVERLY HEALTHCARE, LLC
                          BEVERLY MANOR INC. OF HAWAII
                          BEVERLY SAVANA CAY MANOR, INC.
                          BEVERLY-INDIANAPOLIS, LLC
                          BEVRD, LLC
                          CERES SELECT, LLC
                          CERES STRATEGIES MEDICAL SERVICES, LLC
                          CERES STRATEGIES, INC.
                          COMMERCIAL MANAGEMENT, INC.
                          COMMUNITY CARE, INC.
                          COMPASSION AND PERSONAL CARE SERVICES, INC.
                          EASTERN HOME HEALTH SUPPLY & EQUIPMENT CO., INC.
                          HALE NANI, INC.
                          HALLMARK CONVALESCENT HOMES, INC.
                          HOMECARE PREFERRED CHOICE, INC.
                          HOSPICE OF EASTERN CAROLINA, INC.
                          HOSPICE PREFERRED CHOICE, INC.
                          LARES CARE RESOURCE, LLC
                          LIBERTY NURSING HOMES, INCORPORATED
                          MATRIX OCCUPATIONAL HEALTH, INC.

                          Registration Rights Agreement
<PAGE>

                          MATRIX WELLNESS, LLC
                          MEDICAL ARTS HEALTH FACILITY OF LAWRENCEVILLE, INC.
                          MODERNCARE OF LUMBERTON, INC.
                          NEBRASKA CITY S-C-H, INC.
                          NURSING HOME OPERATORS, INC.
                          PETERSEN HEALTH CARE, INC.
                          SOUTH ALABAMA NURSING HOME, INC.
                          SOUTH DAKOTA - BEVERLY ENTERPRISES, INC.
                          SOUTHEASTERN HOME MEDICAL EQUIPMENT -
                            ALABAMA, LLC
                          SOUTHEASTERN HOME MEDICAL EQUIPMENT -
                            MISSISSIPPI, LLC
                          SOUTHEASTERN HOME MEDICAL EQUIPMENT -
                            TENNESSEE, LLC
                          SPECTRA HEALTHCARE ALLIANCE, INC.
                          TAR HEEL INFUSION COMPANY, INC.
                          TMD DISPOSITION COMPANY
                          VANTAGE HEALTHCARE CORPORATION
                          VIZIA HEALTHCARE DESIGN GROUP, LLC

                          By: /s/ JOHN G. ARENA
                              --------------------------
                          Name:   John G. Arena
                          Title:  Secretary

                          Registration Rights Agreement

<PAGE>

Accepted and agreed by:

LEHMAN BROTHERS INC.
J.P. MORGAN SECURITIES INC.

By: LEHMAN BROTHERS INC.

By: /s/ STEPHEN MEHOS
    --------------------------
Authorized Representative

                          Registration Rights Agreement

<PAGE>

                                   SCHEDULE I

<Table>
<Caption>
ENTITY                                                             JURISDICTION OF ORGANIZATION
------                                                             ----------------------------
<S>                                                                <C>
4F Funding, Inc.                                                               California
AEDON HomeCare, LLC                                                            Delaware
AEDON HomeCare - Houston, LLC                                                  Delaware
AEDON Staffing, LLC                                                            Delaware
AEGIS Therapies, Inc.                                                          Delaware
AEGIS Therapies - Florida, Inc.                                                Delaware
AEGIS Therapies - Wisconsin, Inc.                                              Delaware
Affirmacare, LLC                                                               Delaware
AGI-Camelot, Inc.                                                              Missouri
AseraCare Hospice - Birmingham, LLC                                            Delaware
AseraCare Hospice - Corinth, LLC                                               Delaware
AseraCare Hospice - Demopolis, LLC                                             Delaware
AseraCare Hospice - Hamilton, LLC                                              Delaware
AseraCare Hospice - Jackson, LLC                                               Delaware
AseraCare Hospice - Marshall County, LLC                                       Delaware
AseraCare Hospice - Memphis, LLC                                               Delaware
AseraCare Hospice - Meridian, LLC                                              Delaware
AseraCare Hospice - Monroeville, LLC                                           Delaware
AseraCare Hospice - New Albany, LLC                                            Delaware
AseraCare Hospice - New Horizons, LLC                                          Delaware
AseraCare Hospice - Philadelphia, LLC                                          Delaware
AseraCare Hospice - Russellville, LLC                                          Delaware
AseraCare Hospice - Senatobia, LLC                                             Delaware
AseraCare Hospice - Tennessee, LLC                                             Delaware
Beverly - Bella Vista Holding, Inc.                                            Delaware
Beverly - Missouri Valley Holding, Inc.                                        Delaware
Beverly - Rapid City Holding, Inc.                                             Delaware
Beverly Enterprises - Alabama, Inc.                                            California
Beverly Enterprises - Arizona, Inc.                                            California
Beverly Enterprises - Arkansas, Inc.                                           California
Beverly Enterprises - California, Inc.                                         California
Beverly Enterprises - Delaware, Inc.                                           California
Beverly Enterprises - District of Columbia, Inc.                               California
Beverly Enterprises - Florida, Inc.                                            California
Beverly Enterprises - Garden Terrace, Inc.                                     California
Beverly Enterprises - Georgia, Inc.                                            California
Beverly Enterprises - Hawaii, Inc.                                             California
Beverly Enterprises - Illinois, Inc.                                           California
</Table>

                          Registration Rights Agreement

<PAGE>

<Table>
<Caption>
ENTITY                                                             JURISDICTION OF ORGANIZATION
------                                                             ----------------------------
<S>                                                                <C>
Beverly Enterprises - Indiana, Inc.                                            California
Beverly Enterprises - Kansas, LLC                                              Delaware
Beverly Enterprises - Kentucky, Inc.                                           California
Beverly Enterprises - Maryland, Inc.                                           California
Beverly Enterprises - Massachusetts, Inc.                                      California
Beverly Enterprises - Minnesota, LLC                                           Delaware
Beverly Enterprises - Mississippi, Inc.                                        California
Beverly Enterprises - Missouri, Inc.                                           California
Beverly Enterprises - Nebraska, Inc.                                           California
Beverly Enterprises - New Jersey, Inc.                                         California
Beverly Enterprises - North Carolina, Inc.                                     California
Beverly Enterprises - Ohio, Inc.                                               California
Beverly Enterprises - Oregon, Inc.                                             California
Beverly Enterprises - Pennsylvania, Inc.                                       California
Beverly Enterprises - South Carolina, Inc.                                     California
Beverly Enterprises - Tennessee, Inc.                                          California
Beverly Enterprises - Texas, Inc.                                              California
Beverly Enterprises - Virginia, Inc.                                           California
Beverly Enterprises - Washington, Inc.                                         California
Beverly Enterprises - West Virginia, Inc.                                      California
Beverly Enterprises - Wisconsin, Inc.                                          California
Beverly Enterprises International Limited                                      California
Beverly Health and Rehabilitation Services, Inc.                               California
Beverly Healthcare - California, Inc.                                          California
Beverly Healthcare - Rochester MN, LLC                                         Delaware
Beverly Healthcare Management - MN, LLC                                        Delaware
Beverly Healthcare, LLC                                                        Indiana
Beverly Manor Inc. of Hawaii                                                   California
Beverly Savana Cay Manor, Inc.                                                 California
Beverly-Indianapolis, LLC                                                      Indiana
BEVRD, LLC                                                                     Delaware
CERES Select, LLC                                                              Delaware
CERES Strategies Medical Services, LLC                                         Delaware
CERES Strategies, Inc.                                                         Delaware
Commercial Management, Inc.                                                    Iowa
Community Care, Inc.                                                           North Carolina
Compassion and Personal Care Services, Inc.                                    North Carolina
Eastern Home Health Supply & Equipment Co., Inc.                               North Carolina
Hale Nani, Inc.                                                                California
Hallmark Convalescent Homes, Inc.                                              Michigan
</Table>

                          Registration Rights Agreement

<PAGE>

<Table>
<Caption>
ENTITY                                                             JURISDICTION OF ORGANIZATION
------                                                             ----------------------------
<S>                                                                <C>
HomeCare Preferred Choice, Inc.                                                Delaware
Hospice of Eastern Carolina, Inc.                                              North Carolina
Hospice Preferred Choice, Inc.                                                 Delaware
LARES Care Resource, LLC                                                       Delaware
Liberty Nursing Homes, Incorporated                                            Virginia
MATRIX Occupational Health, Inc.                                               Delaware
MATRIX Wellness, LLC                                                           Delaware
Medical Arts Health Facility of Lawrenceville, Inc.                            Georgia
Moderncare of Lumberton, Inc.                                                  North Carolina
Nebraska City S-C-H, Inc.                                                      Nebraska
Nursing Home Operators, Inc.                                                   Ohio
Petersen Health Care, Inc.                                                     Florida
South Alabama Nursing Home, Inc.                                               Alabama
South Dakota - Beverly Enterprises, Inc.                                       California
Southeastern Home Medical Equipment - Alabama, LLC                             Delaware
Southeastern Home Medical Equipment - Mississippi, LLC                         Delaware
Southeastern Home Medical Equipment - Tennessee, LLC                           Delaware
Spectra Healthcare Alliance, Inc.                                              Delaware
Tar Heel Infusion Company, Inc.                                                North Carolina
TMD Disposition Company                                                        Florida
Vantage Healthcare Corporation                                                 Delaware
VIZIA Healthcare Design Group, LLC                                             Delaware
</Table>

                          Registration Rights Agreement<PAGE>
                                                                    EXHIBIT 10.3

                                                               EXECUTION VERSION

                 DEALER-MANAGER AND SOLICITATION AGENT AGREEMENT

                            BEVERLY ENTERPRISES, INC.

                                                                    June 8, 2004

LEHMAN BROTHERS INC.
745 Seventh Avenue - Floor 3
New York, New York  10019

Dear Ladies and Gentlemen:

                  1. THE TENDER OFFER AND CONSENT SOLICITATION. Beverly
Enterprises, Inc., a Delaware corporation (the "COMPANY"), intends to make a
tender offer (together with any amendments and extensions thereof, the "TENDER
Offer") to purchase any and all of its $200,000,000 principal amount outstanding
9 5/8% Senior Notes due 2009 (the "NOTES") and to engage in a related
solicitation (together with any amendments and extensions thereof, the
"SOLICITATION") of consents (the "CONSENTS") of the holders of the Notes (the
"HOLDERS") to certain amendments to the Indenture dated as of April 25, 2001
among the Company, its subsidiary guarantors (the "GUARANTORS") and The Bank of
New York, as trustee (the "TRUSTEE"), relating to the Notes (the "INDENTURE"),
in each case, on the terms and subject to the conditions set forth in the forms
of Offer to Purchase and Consent Solicitation Statement and related Letter of
Transmittal and Consent attached hereto as Exhibits A and B, respectively. Such
Offer to Purchase and Consent Solicitation Statement, (i) including (A) any
documents incorporated by reference therein and (B) any exhibits or annexes
thereto and (ii) as the same may be amended or supplemented from time to time,
and the Letter of Transmittal and Consent, as the same may be amended or
supplemented from time to time, are referred to herein as the "OFFER TO
PURCHASE" and "LETTER OF TRANSMITTAL" respectively. The Offer to Purchase, the
Letter of Transmittal, all statements and other documents filed or to be filed
with any federal, state or local governmental or regulatory agency or authority
and such other documents (including, but not limited to, any advertisements,
press releases or summaries relating to the Tender Offer and/or Solicitation and
any forms of letters to brokers, dealers, banks, trust companies and other
nominees relating to the Tender Offer and/or the Solicitation) as the Company
may authorize for use in connection with the Tender Offer and/or the
Solicitation, as amended or supplemented from time to time, are collectively
referred to as the "TENDER OFFER AND SOLICITATION MATERIALS".

                  2. APPOINTMENT AS DEALER-MANAGER. The Company hereby appoints
Lehman Brothers Inc. ("LEHMAN BROTHERS") as sole dealer-manager in connection
with the Tender Offer and as sole solicitation agent in connection with the
Solicitation (in such capacities, the "DEALER-MANAGER"), and the Company hereby
authorizes Lehman Brothers to act as such in connection with the Tender Offer
and Solicitation. On the basis of the representations and warranties and
agreements of the Company contained in this Agreement and subject to and in
accordance with the terms and conditions hereof, Lehman Brothers agrees in
accordance with its customary practice to use its reasonable best efforts to
solicit tenders of Notes and delivery of Consents pursuant to the Tender Offer
and Solicitation, respectively, and to communicate with

<PAGE>

                                                                               2

brokers, dealers, banks, trust companies, nominees and other persons with
respect to the Tender Offer and Solicitation.

                  3. NO LIABILITY FOR ACTS OF BROKERS, DEALERS, BANKS, TRUST
COMPANIES, NOMINEES AND OTHERS. Lehman Brothers shall not be subject to any
loss, claim, damage, liability or expense owed to the Company or any of the
Company's affiliates or subsidiaries for any act or omission on the part of any
broker or dealer in securities (other than Lehman Brothers), bank, trust
company, nominee or any other person, and Lehman Brothers shall not be liable
for its own acts or omissions in performing its obligations as Dealer-Manager
except for any losses, claims, damages, liabilities and expenses determined in a
final judgment by a court of competent jurisdiction to have resulted directly
from any such acts or omissions undertaken or omitted to be taken by Lehman
Brothers through its gross negligence or willful misconduct. In soliciting or
obtaining tenders of Notes and deliveries of Consents, the Company hereby
acknowledges that Lehman Brothers, as Dealer-Manager, is acting as independent
contractor and shall not be deemed to be acting as the agent of the Company or
as the agent of any broker, dealer, bank, trust company, nominee or other person
and no broker, dealer, bank, trust company, nominee or other person shall be
deemed to be acting as the agent of Lehman Brothers, the Company or any of the
Company's affiliates or subsidiaries.

                  4. THE TENDER OFFER AND SOLICITATION MATERIALS; COMMENCEMENT;
WITHDRAWAL.

                  (a) The Company hereby (i) agrees to furnish Lehman Brothers
with as many copies as Lehman Brothers may reasonably request of the final forms
of the Tender Offer and Solicitation Materials and, upon its request, any other
documents filed or to be filed with any federal, state or local governmental or
regulatory agency or authority, any stock exchange or any court, (ii) authorizes
Lehman Brothers to use copies of the Tender Offer and Solicitation Materials in
connection with the Tender Offer and Solicitation and (iii) acknowledges that
the Tender Offer and Solicitation Materials have been, or will be, prepared and
approved by the Company and are the Company's sole responsibility with respect
to their accuracy and completeness (other than statements or omissions made in
reliance upon and in conformity with information relating to Lehman Brothers as
Dealer-Manager furnished by Lehman Brothers in writing to the Company expressly
for use therein). Lehman Brothers hereby agrees that it will not disseminate any
written materials in connection with the Tender Offer and Solicitation other
than the Tender Offer and Solicitation Materials, information consistent with
the Tender Offer and Solicitation Materials or information otherwise authorized
by the Company.

                  (b) The Company hereby represents and warrants that it will
commence the Tender Offer and Solicitation as soon as practicable by publicly
announcing its commencement and by distributing, mailing, or causing to be
mailed on its behalf, copies of the Tender Offer and Solicitation Materials
(excluding the documents incorporated by reference in the Tender Offer and
Solicitation Materials) to the Holders for delivery, where necessary to the
beneficial holders of the Notes (the date of such announcement and of the
commencement of such distribution, the "COMMENCEMENT DATE").

                  (c) The Company hereby represents and agrees that no
solicitation material in addition to the Tender Offer and Solicitation
Materials, each of which shall be in the form which

<PAGE>
                                                                               3

has been approved by Lehman Brothers, will be used in connection with the Tender
Offer and Solicitation or filed with any federal, state or local governmental or
regulatory agency or authority, including the Securities and Exchange Commission
(the "COMMISSION"), by or on behalf of the Company without Lehman Brothers'
prior approval, which approval will not be unreasonably withheld. In the event
that (i) the Company uses or permits the use of any such solicitation material
in connection with the Tender Offer or the Solicitation or files any such
solicitation material with any such federal, state or local governmental or
regulatory agency or authority without Lehman Brothers' prior approval, (ii) the
Company withdraws, terminates or cancels the Tender Offer and Solicitation or
(iii) if at any time Lehman Brothers shall determine that any condition set
forth in Section 9 shall not be satisfied, then Lehman Brothers (A) shall have a
reasonable period of time after discovering or being informed of such event to
elect whether to continue to act as Dealer-Manager and shall be entitled to
withdraw as Dealer-Manager in connection with the Tender Offer and Solicitation
without any liability or penalty to Lehman Brothers or any other person defined
in Section 11 as an "Indemnified Person," (B) shall be entitled promptly to
receive the payment of all fees and expenses payable to it under this Agreement
which have accrued to the date of such withdrawal or which otherwise thereafter
become payable and (C) shall continue to be entitled to the indemnification and
contribution provisions contained in Section 11.

                  5. COMPENSATION. The Company hereby agrees to pay Lehman
Brothers as compensation for its services as Dealer-Manager, upon the acceptance
by the Company for payment of Notes tendered pursuant to the Tender Offer and
upon acceptance by the Company for payment of Consents delivered pursuant to the
Solicitation, a fee equal to $2.50 per $1,000 principal amount of Note accepted
for payment by the Company; provided, however, that in no event shall such fee
exceed $500,000. The fee set forth in this Section shall be paid within three
business days after the Expiration Date.

                  6. REIMBURSEMENT OF EXPENSES AND PAYMENT OF OTHER COSTS. The
Company hereby agrees (a) to reimburse Lehman Brothers in connection with its
services as Dealer-Manager for any expenses incurred by Lehman Brothers in
connection with the preparation, printing, filing, mailing and publishing of the
Tender Offer and Solicitation Materials and for all out-of-pocket expenses
incurred by Lehman Brothers as Dealer-Manager, including, without limitation,
the reasonable fees and disbursements of Lehman Brothers' legal counsel,
Milbank, Tweed, Hadley & McCloy LLP, (b) to pay all fees and expenses of the
Depositary (as defined below) and the Information Agent (as defined below), in
each case, in connection with the Tender Offer and Solicitation, (c) to pay any
fees payable to brokers, dealers, banks, trust companies and nominees as
reimbursement for their customary mailing and handling expenses incurred in
forwarding the Tender Offer and Solicitation Materials to their customers, if
any, and (d) to pay any advertising and public relations charges pertaining to
the Tender Offer and Solicitation. The Company shall promptly reimburse Lehman
Brothers for all amounts owing under this Section after such expenses have been
made or have accrued and an invoice therefor has been sent by Lehman Brothers to
the Company, which may be sent from time to time as such expenses are made or
accrued, whether or not the Tender Offer and Solicitation is consummated and in
addition to the amounts owing to Lehman Brothers under the preceding Section.

<PAGE>
                                                                               4

                  7. THE DEPOSITARY; THE INFORMATION AGENT; NOTEHOLDER LISTS.
(a) The Company (i) has arranged for D.F. King & Co., Inc. to serve as
depositary in connection with the Tender Offer and Solicitation (the
"DEPOSITARY"), (ii) will arrange for the Depositary to advise Lehman Brothers
daily as to such matters as Lehman Brothers may reasonably request, including
the aggregate principal amount of Notes that have been tendered and for which
Consents have been delivered pursuant to the Tender Offer and Solicitation,
respectively, and (iii) will arrange for the Depositary to be responsible for
the payment of the consideration offered by the Company to the Holders in
connection with the Tender Offer and Solicitation pursuant and subject to the
Offer to Purchase.

                  (a) The Company has arranged for D.F. King & Co., Inc. to
serve as information agent in connection with the Tender Offer and Solicitation
(the "INFORMATION AGENT") and to perform services in connection with the Tender
Offer and Solicitation that are customary for an information agent.

                  (b) The Company will provide, or will cause the Depositary and
Information Agent, as applicable, to provide, Lehman Brothers with the security
listing position (or other cards or lists) containing the names and addresses
of, and the aggregate principal amount of Notes held by, the Holders as of a
recent date and will use its best efforts to cause Lehman Brothers to be
advised, from time to time as Lehman Brothers may request, during the period of
the Tender Offer and Solicitation as to any transfers of record of Notes. In
addition, the Company hereby authorizes Lehman Brothers to communicate with the
Trustee, the Depositary and the Information Agent with respect to matters
relating to the Tender Offer and Solicitation and to cause the Depositary to
advise Lehman Brothers daily as to such matters as Lehman Brothers may
reasonably request, including the aggregate principal amount of Notes that have
been tendered and for which Consents have been delivered pursuant to the Tender
Offer and Solicitation, respectively.

                  8. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. In addition
to the other representations and warranties made by the Company contained in
this Agreement, the Company represents and warrants to Lehman Brothers, and
agrees with Lehman Brothers, that:

                  (a) Each of the Company and its subsidiaries has been duly
organized and is validly existing and in good standing under the laws of its
jurisdiction of organization, is duly qualified to do business and is in good
standing in each jurisdiction in which its ownership or lease of property or the
conduct of its businesses requires such qualification, and has all power and
authority necessary to own, lease or hold its properties and to conduct the
businesses in which it is engaged, except where the failure to so qualify would
not be reasonably expected to have a material adverse effect on the consolidated
financial position, stockholders' equity, results of operations, business or
prospects of the Company and its subsidiaries taken as a whole (a "MATERIAL
ADVERSE EFFECT")

                  (b) The Company has all necessary power and authority to
execute and deliver and perform this Agreement, to make and consummate the
Tender Offer and Solicitation, including, but not limited to, by purchasing the
Notes, by making any related borrowings by the Company or any of its affiliates,
by effecting the proposed amendments to the Indenture as set forth in the Offer
to Purchase by executing and delivering a supplemental indenture between the

<PAGE>
                                                                               5

Company and the Trustee supplementing the Indenture (the "SUPPLEMENTAL
INDENTURE"), and by paying a consent fee in connection with the Solicitation, in
each case, pursuant to the Tender Offer and Solicitation Materials, and to
consummate the other transactions contemplated by this Agreement and by the
Offer to Purchase (other than the New Financing and the Amendment to the Bank
Facility (as such terms are defined in the Offer to Purchase)) and the other
Tender Offer and Solicitation Materials (collectively, the "TRANSACTIONS"); and
all necessary action has been duly taken by the Company to authorize the making,
execution, delivery, performance and consummation, as the case may be, of the
Transactions.

                  (c) This Agreement has been duly authorized, executed and
delivered by the Company.

                  (d) The Tender Offer and Solicitation Materials (including any
documents incorporated therein by reference) do not and will not contain any
untrue statement of a material fact or omit to state any material fact necessary
in order to make the statements therein, in the light of the circumstances under
which they were made, not misleading; provided, however, that no representation
is made with respect to statements contained in the Tender Offer and
Solicitation Materials furnished in writing by or on behalf of Lehman Brothers
relating to Lehman Brothers as Dealer-Manager.

                  (e) The documents incorporated by reference in the Tender
Offer and Solicitation Materials, as of each of their respective filing dates,
complied as to form in all material respects with the Securities Exchange Act of
1934, as amended, and the rules and regulations of the Commission thereunder
(collectively the "EXCHANGE ACT").

                  (f) The execution, delivery, performance, making and
consummation, as the case may be, of the Transactions will comply in all
material respects with all applicable requirements of law, including the
Exchange Act and any applicable rules or regulations of any governmental or
regulatory agency or authority, including, without limitation those of the
Commission.

                  (g) The execution, delivery, performance of this Agreement and
the consummation of the Transactions will not (i) conflict with or result in a
breach or violation of any of the terms or provisions of, or constitute a
default under, any indenture, mortgage, deed of trust, loan agreement, lease or
other agreement or instrument to which the Company or any of its subsidiaries is
a party or by which the Company or any of its subsidiaries is bound or to which
any of the properties or assets of the Company or any of its subsidiaries is
subject, except for (y) such conflicts, breaches, violations or defaults that,
individually or in the aggregate, would not reasonably be expected to have a
Material Adverse Effect and (z) any conflicts, breaches, violations or defaults
that would not have occurred if the Bank Condition (as such term is defined in
the Offer to Purchase) had been satisfied on the date hereof, (ii) result in any
violation of the provisions of the charter or by-laws or other constituent
document of the Company or any of its subsidiaries or any statute or any order,
rule or regulation of any court or governmental agency or body having
jurisdiction over the Company or any of its subsidiaries or any of their
respective properties or assets, (iii) result in any violation of any judgment,
order, decree, law, statute, rule or regulation of any court, governmental or
regulatory agency or authority to which the Company or any of its affiliates or
subsidiaries is a party or by which the Company or any of

<PAGE>
                                                                               6

its affiliates or subsidiaries or assets or properties is bound (iv) result in
the suspension, termination or revocation of any material permits, licenses,
consents, exemptions, franchises, authorizations and other approvals or (v)
result in the creation or imposition of any lien, charge, claim or encumbrance
on any material asset or property of the Company or any of its affiliates or
subsidiaries.

                  (h) No consent, approval, authorization or order of, or filing
or registration with, any court or governmental agency or body is required in
connection with the execution, delivery, performance, making and consummation,
as the case may be, of the Transactions other than any post-closing filings to
be made pursuant to the Exchange Act.

                  (i) There are no actions, lawsuits, claims or governmental or
administrative proceedings pending (including any stop order, restraining order
or denial of an application for approval), or to the best knowledge of the
Company after due inquiry, threatened against the Company or any of its
affiliates or subsidiaries which would, if adversely determined, affect or
impair the execution, delivery, performance, making or consummation, as the case
may be, of the Transactions.

                  (j) The New Financing (as such term is defined in the Offer to
Purchase) will provide sufficient funds which, together with funds presently
available or committed to it, will enable the Company to pay, and the Company
hereby agrees that the Company will pay promptly, in accordance with the terms
and subject to the conditions of the Tender Offer and Solicitation as set forth
in the Tender Offer and Solicitation Materials and this Agreement, (i) the full
purchase price (and related costs) of the Notes pursuant to the Tender Offer,
plus accrued and unpaid interest on the Notes until but not including the date
of payment for the Tender Offer, (ii) the consent fee relating to the
Solicitation and (iii) all related fees and expenses, including, but not limited
to, fees and expenses payable hereunder.

                  (k) The Indenture has been duly authorized, executed and
delivered by the Company and, assuming that the Indenture is the valid and
legally binding obligation of the Trustee, constitutes a valid and legally
binding obligation of the Company, enforceable against the Company in accordance
with its terms except as such enforceability may be limited by bankruptcy,
insolvency, fraudulent conveyance or transfer, reorganization, liquidation,
moratorium or other similar laws affecting the rights and remedies of creditors
generally and except as may be subject to general principles of equity
(regardless of whether such enforceability is considered in a proceeding in
equity or at law) and by an implied covenant of good faith and fair dealing.

                  (l) The Supplemental Indenture has been duly authorized and,
on or promptly following the satisfaction of the Required Consents Condition,
the Financing Condition, the Bank Condition and the General Conditions (as
defined in the Offer to Purchase and subject to the Company's right to terminate
the Tender Offer and Solicitation at any time prior to the expiration of the
Tender Offer and Solicitation), will be duly executed and delivered by the
Company and, assuming that the Supplemental Indenture will be a valid and legal
binding obligation of the Trustee, will constitute a valid and binding
obligation of the Company, enforceable against the Company in accordance with
its terms except as such enforceability may be limited by bankruptcy,
insolvency, fraudulent conveyance or transfer, reorganization,

<PAGE>
                                                                               7

liquidation, moratorium or other similar laws affecting the rights and remedies
of creditors generally and except as may be subject to general principles of
equity (regardless of whether such enforceability is considered in a proceeding
in equity or at law) and by an implied covenant of good faith and fair dealing.

                  (m) The Supplemental Indenture conforms to the description
thereof contained in the Offer to Purchase and complies in all material respects
with the Trust Indenture Act of 1939, as amended, and the rules and regulations
of the Commission thereunder (collectively, the "TRUST INDENTURE ACT").

                  (n) Reserved.

                  (o) Neither the Company nor any of its subsidiaries has
sustained, since the date of the latest financial statements included or
incorporated by reference in the Tender Offer and Solicitation Materials, any
material 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, other than as set forth or
contemplated in the Tender Offer and Solicitation Materials; and, since such
date, there has not been any change in the capital stock or long-term debt of
the Company or any of its subsidiaries or any material adverse change, or any
development involving a prospective material adverse change, in or affecting the
general affairs, management, consolidated financial position, stockholders'
equity, results of operations, business or prospects of the Company and its
subsidiaries taken as a whole, other than as set forth or contemplated in the
Tender Offer and Solicitation Materials.

                  (p) The financial statements (including the related notes and
supporting schedules) incorporated by reference in the Tender Offer and
Solicitation Materials present fairly in all material respects the financial
position, the results of operations and cash flows of the Company and its
subsidiaries on the basis stated therein at the respective dates or for the
respective periods to which they apply (subject, in the case of the interim
financial statements only, to normal year-end audit adjustments); such
statements and related schedules and notes have been prepared in accordance with
generally accepted accounting principles consistently applied throughout the
periods involved; the supporting schedules, if any, included or incorporated by
reference in the Tender Offer and Solicitation Materials present fairly, in all
material respects, in accordance with generally accepted accounting principles
the information required to be stated therein; and the other financial and
statistical information and data set forth in the Tender Offer and Solicitation
Materials (and any amendment or supplement thereto) are, in all material
respects, accurately presented and prepared on a basis consistent with such
financial statements and the books and records of the Company.

                  (q) Ernst & Young LLP, who have certified the financial
statements of the Company incorporated by reference into the Tender Offer and
Solicitation Materials, are independent public accountants as required by the
Securities Act and were independent accountants as required by the Securities
Act during the periods covered by the financial statements on which they
reported.

                  (r) The Company has established and maintains disclosure
controls and procedures (as such term is defined in Rule 13a-14 under the
Exchange Act), which (i) are

<PAGE>
                                                                               8

designed to ensure that material information relating to the Company, including
its consolidated subsidiaries, is made known to the Company's principal
executive officer and its principal financial officer by others within those
entities, particularly during the periods in which the periodic reports required
under the Exchange Act are being prepared; (ii) have been evaluated for
effectiveness as of March 31, 2004; and (iii) are effective to provide
reasonable assurance that they perform the functions for which they were
established.

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

                  (t) Since the date of the most recent evaluation of such
disclosure controls and procedures, there have been no significant changes in
internal controls or in other factors that could significantly affect internal
controls, including any corrective actions with regard to significant
deficiencies and material weaknesses.

                  (u) Each of the Company and its subsidiaries (i) makes and
keeps books and records and (ii) maintains internal accounting controls which
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 United States
generally accepted accounting principles and to maintain accountability for its
assets, (C) access to the Company's assets is permitted only in accordance with
management's authorization and (D) the reported accountability for its assets is
compared with existing assets at reasonable intervals and appropriate action is
taken with respect to any differences.

                  (v) There is and has been no failure on the part of the
Company and any of the Company's directors or officers, in their capacities as
such, to comply, in all material respects, with any applicable provision of the
U.S. Sarbanes Oxley Act of 2002 and the rules and regulations promulgated in
connection therewith.

                  9. CONDITIONS TO THE DEALER-MANAGER'S OBLIGATIONS. Lehman
Brothers' obligation to act as Dealer-Manager shall at all times be subject to
the performance by the Company in all material respects of its obligations
herein and to the following additional conditions:

                  (a) At all times from the Commencement Date to and including
each date on which the Company makes payment for validly tendered Notes that it
has accepted in accordance with the terms of the Tender Offer (each, a "PAYMENT
DATE"), the Company's representations and warranties contained herein shall be
true and correct in all material respects and the Company shall have performed
in all material respects all of the agreements contained in this Agreement and
as set forth in the Tender Offer and Solicitation Materials theretofore required
by it to have been performed; and Lehman Brothers shall have received
certificates to that effect, dated each of the Commencement Date and each
Payment Date, signed by the Chief Executive Officer, the Chief Financial Officer
or the Treasurer of the Company. The Company acknowledges that

<PAGE>
                                                                               9

Lehman Brothers' agreement to act, or to continue to act, as Dealer-Manager at a
time when it knows or should know that any such representation, warranty and
agreement is or may be untrue or incorrect or not performed, as the case may be,
in a material respect shall be without prejudice to its right subsequently to
cease so to act by reason of such untruth, incorrectness or nonperformance, as
the case may be.

                  (b) No stop order or restraining order shall have been issued
and no action, lawsuit, claim or governmental or administrative proceeding shall
have been commenced or, to the best of the Company's knowledge, threatened with
respect to the Tender Offer or Solicitation or the other Transactions before any
court, agency or other governmental regulatory body of any jurisdiction that
Lehman Brothers, in good faith after consultation with counsel, believes renders
it inadvisable for Lehman Brothers to continue to act hereunder as
Dealer-Manager.

                  (c) The Company will furnish to Lehman Brothers on the date
hereof and on each Payment Date (i) an opinion of Weil, Gotshal & Manges LLP,
counsel to the Company, addressed to Lehman Brothers, in the form attached
hereto as Schedule I, (ii) an opinion of Latham & Watkins LLP, counsel to the
Company, addressed to Lehman Brothers, in the form attached hereto as Schedule
II and (iii) an opinion of John Arena, Esq., General Counsel of the Company,
addressed to Lehman Brothers, in the form attached hereto as Schedule III.

                  (d) All opinions and certificates required to be delivered
pursuant to the terms hereof shall be in a form and substance reasonably
satisfactory to counsel for Lehman Brothers.

                  10. ADDITIONAL AGREEMENTS. In addition to the other agreements
of the Company contained elsewhere in this Agreement, the Company hereby agrees
and acknowledges, as applicable, that:

                  (a) It will advise Lehman Brothers promptly of any of the
following: (i) the occurrence of any event which may cause the Company to
withdraw, terminate or cancel the Tender Offer and Solicitation or would permit
the Company to exercise any right not to purchase Notes validly tendered in the
Tender Offer and Solicitation, (ii) the occurrence of any event or the discovery
of any fact, the occurrence or existence of which it believes would require the
making of any material change in the Tender Offer and Solicitation Materials
then being used or would cause any representation or warranty contained in this
Agreement to be untrue or inaccurate in any material respect, (iii) any proposal
or requirement to amend or supplement the Tender Offer and Solicitation
Materials or to make any other filing pursuant to any applicable law, regulation
or other rule, (iv) the issuance by the Commission or any other governmental or
regulatory agency or authority of any comment or order concerning the Tender
Offer and Solicitation, (v) any material development in connection with the
Tender Offer and Solicitation or the other transactions contemplated by the
Offer to Purchase or (vi) any other information relating to the Tender Offer and
Solicitation which Lehman Brothers may from time to time reasonably request.

                  (b) In the event that the Company is required, or considers it
advisable, to amend or supplement the Tender Offer and Solicitation Materials or
make any additional filings related to the Tender Offer and Solicitation with
any governmental or regulatory agency or

<PAGE>
                                                                              10

authority, then it shall not make such amendment or supplement or filing without
Lehman Brothers' prior approval, which shall not be unreasonably withheld.

                  (c) It will file and disseminate, as required, any necessary
amendments or supplements to the Tender Offer and Solicitation Materials and
other documents that are filed with any governmental or regulatory agency or
authority relating to the Tender Offer and Solicitation, and, if there is any
such filing, it will promptly furnish to Lehman Brothers an accurate and
complete copy of each such amendment or supplement upon the filing thereof.

                  (d) It will comply in all material respects with the Exchange
Act relating to the Tender Offer and Solicitation in the future, to the extent
applicable.

                  (e) It will perform the agreements and obligations it has that
are set forth in or contemplated by the Tender Offer and Solicitation Materials,
including, but not limited to, accepting for payment Notes that have been
validly tendered and not withdrawn in accordance with and subject to the terms
and conditions of the Tender Offer, paying a consent fee, as set forth in the
Offer to Purchase, for Consents delivered prior to the Consent Date and not
revoked, in accordance with and subject to the terms and conditions of the
Solicitation and, after receiving the requisite Consents, duly executing and
delivering to the Trustee the Supplemental Indenture and furnishing the Trustee
any officers' certificates or other documents required or reasonably requested
by the Trustee in connection with the execution and delivery of the Supplemental
Indenture by the Trustee.

                  (f) The Dealer-Manager, with the prior written consent of the
Company, which consent shall not be unreasonably withheld, and at the
Dealer-Manager's expense, may place an announcement in any newspapers and
periodicals as it may choose, stating that Lehman Brothers is acting as
Dealer-Manager in connection with the Tender Offer and Solicitation.

                  (g) In performing the services contemplated by this Agreement,
Lehman Brothers will be relying on the information furnished by the Company, its
officers, attorneys and other agents and information available from generally
recognized public sources without independent verification.

                  11. INDEMNIFICATION AND CONTRIBUTION.

                  (a) The Company hereby agrees to hold harmless and indemnify
Lehman Brothers and its affiliates and any officer, director, employee or agent
of Lehman Brothers or any such affiliates and any person controlling (within the
meaning of Section 20(a) of the Exchange Act) Lehman Brothers or any such
affiliates (collectively, the "INDEMNIFIED PERSONS") from and against any loss,
claim, damage, liability and expense whatsoever (as incurred or suffered, and
including, but not limited to, any and all legal or other expenses incurred in
connection with investigating, preparing to defend or defending any lawsuit,
claim or other proceeding, commenced or threatened, whether or not resulting in
any liability, which legal or other expenses shall be reimbursed by the Company
promptly after receipt of any invoices therefor from Lehman Brothers or such
other Indemnified Person), (i) arising out of or based upon (a) any untrue
statement or alleged untrue statement of a material fact contained in the Tender
Offer and Solicitation Materials or in any other solicitation material used by
the Company or authorized by

<PAGE>
                                                                              11

it for use in connection with the Tender Offer or Solicitation, or arising out
of or based upon the omission or alleged omission to state in any such document
a material fact necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading (other than
statements or omissions made in reliance upon and in conformity with information
relating to Lehman Brothers as Dealer-Manager furnished by Lehman Brothers in
writing to the Company expressly for use therein), (b) any withdrawal,
termination or cancellation by the Company of, or failure by the Company to make
or consummate, the Tender Offer or Solicitation, (c) any actions taken or
omitted to be taken by an Indemnified Person pursuant to this Agreement or with
the consent of the Company or in conformity with actions taken or omitted to be
taken by the Company or (d) any breach by the Company of any representation or
warranty, or any failure by the Company to comply with any agreement contained
in this Agreement or (ii) arising out of, relating to or in connection with or
alleged to arise out of, relate to or be in connection with the Tender Offer or
Solicitation, any of the other Transactions or the performance of Lehman
Brothers' services as Dealer-Manager. However, the Company will not be obligated
to indemnify an Indemnified Person for any loss, claim, damage, liability or
expense pursuant to clause (ii) of the preceding sentence, which has been
determined in a final judgment by a court of competent jurisdiction to have
resulted directly from the willful misconduct or gross negligence on the part of
such Indemnified Person. The foregoing indemnity agreement is in addition to any
liability which the Company may otherwise have to the Indemnified Person or to
any director, officer, employee or controlling person of the Indemnified Person.

                  (b) If any lawsuit, claim or proceeding is brought against any
Indemnified Person in respect of which indemnification may be sought against the
Company pursuant to this Section 11, such Indemnified Person shall promptly
notify the Company of the commencement of such lawsuit, claim or proceeding
after receipt by such Indemnified Person of notice of such lawsuit, claim or
proceeding; provided, however, that the failure to so notify the Company shall
not relieve the Company from any obligation or liability which it may have under
this Section 11 except to the extent that it has been prejudiced in any material
respect by such failure and in any event shall not relieve the Company from any
other obligation or liability which it may have to such Indemnified Person
otherwise than under this Section 11. In case any such lawsuit, claim or
proceeding shall be brought against any Indemnified Person and such Indemnified
Person shall notify the Company of the commencement of such lawsuit, claim or
proceeding, the Company shall be entitled to participate in such lawsuit, claim
or proceeding, and, after written notice from the Company to such Indemnified
Person, to assume the defense of such lawsuit, claim or proceeding with counsel
of its choice at its expense; provided, however, that such counsel shall be
satisfactory to the Indemnified Person in the exercise of its reasonable
judgment. Notwithstanding the election of the Company to assume the defense of
such lawsuit, claim or proceeding, such Indemnified Person shall have the right
to employ separate counsel and to participate in the defense of such lawsuit,
claim or proceeding, and the Company shall bear the reasonable fees, costs and
expenses of such separate counsel (and shall pay such fees, costs and expenses
promptly after receipt of any invoice therefor from Lehman Brothers) if (i) the
use of counsel chosen by the Company to represent such Indemnified Person would
present such counsel with a conflict of interest; (ii) the defendants in, or
targets of, any such lawsuit, claim or proceeding include both an Indemnified
Person and the Company, and such Indemnified Person shall have reasonably
concluded that there may be legal defenses available to it or to other
Indemnified Persons which are different from or in addition to those available
to the Company

<PAGE>
                                                                              12

(in which case the Company shall not have the right to direct the defense of
such action on behalf of the Indemnified Person); (iii) the Company shall not
have employed counsel satisfactory to such Indemnified Person, in the exercise
of such Indemnified Person's reasonable judgment, to represent such Indemnified
Person within a reasonable time after notice of the institution of any such
lawsuit, claim or proceeding; or (iv) the Company shall authorize such
Indemnified Person to employ separate counsel at the expense of the Company. The
foregoing indemnification commitments shall apply whether or not the Indemnified
Person is a formal party to any such lawsuit, claim or proceeding. The Company
shall not be liable for any settlement of any lawsuit, claim or proceeding
effected without its consent (which consent will not be unreasonably withheld),
but if settled with such consent, or if there be a final judgment of the
plaintiff in any such action, the Company agrees, subject to the provisions of
this Section 11, to indemnify the Indemnified Person from and against any loss,
damage or liability by reason of such settlement or final judgment, as the case
may be. The Company agrees to notify Lehman Brothers promptly, or cause Lehman
Brothers to be notified promptly, of the assertion of any lawsuit, claim or
proceeding against the Company, any of its officers or directors or any person
who controls any of the foregoing within the meaning of Section 20(a) of the
Exchange Act, arising out of or relating to the Tender Offer and Solicitation.
The Company further agrees that any settlement of a lawsuit, claim or proceeding
against it arising out of or relating to the Tender Offer or Solicitation or the
consent to the entry of any judgment with respect to any pending or threatened
lawsuit, claim or proceeding in respect of which indemnification or contribution
may be sought under this Agreement (whether or not the Indemnified Person is an
actual or potential party to such claim or action) shall include an explicit and
unconditional release from the parties bringing such lawsuit, claim or
proceeding of all Indemnified Persons who are or could have been a party to such
lawsuit, claim or proceeding if such Indemnified Persons could have sought
indemnification hereunder, which release shall be reasonably satisfactory to
Lehman Brothers (unless otherwise previously consented to by Lehman in writing).

                  (c) The Company and Lehman Brothers agree that if any
indemnification sought by any Indemnified Person pursuant to this Section 11 is
unavailable or is insufficient for any reason, other than that specified in the
second sentence of this Section 11, then (whether or not Lehman Brothers is the
Indemnified Person) the Company, on the one hand, and Lehman Brothers, on the
other hand, shall contribute to the losses, claims, damages, liabilities and
expenses for which such indemnification is held unavailable (i) in such
proportion as is appropriate to reflect the relative benefits to the Company, on
one hand, and Lehman Brothers, on the other hand, in connection with the matter
giving rise to such losses, claims, damages, liabilities and expenses, or (ii)
if the allocation provided by the foregoing clause (i) is not permitted by
applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in the foregoing clause (i) but also the relative
faults of the Company, on the one hand, and Lehman Brothers, on the other, in
connection with the matter giving rise to such losses, claims, damages,
liabilities and expenses, and other equitable considerations, subject to the
limitation that in any event Lehman Brothers' aggregate contribution to all
losses, claims, damages, liabilities and expenses with respect to which
contribution is available hereunder shall not exceed the amount of fees actually
received by Lehman Brothers pursuant to this Agreement. It is hereby agreed by
the parties hereto that the relative benefits to the Company, on the one hand,
and Lehman Brothers, on the other hand, with respect to the Tender Offer and
Solicitation and the other Transactions shall be deemed to be in the same
proportion as (i) the aggregate value of the consideration paid or proposed to
be paid to the beneficial holders of the Notes of

<PAGE>
                                                                              13

the Company pursuant to the Tender Offer and Solicitation and the other
Transactions (whether or not the Tender Offer and Solicitation and the other
Transactions are consummated) bears to (ii) the fees payable to Lehman Brothers
with respect to the Tender Offer and Solicitation and the other Transactions
pursuant to Section 5. It is further agreed that the relative faults of the
Company, on the one hand, and Lehman Brothers, on the other hand, (i) in the
case of an untrue or alleged untrue statement of a material fact or an omission
or alleged omission to state a material fact, shall be determined by reference
to, among other things, whether such statement or omission relates to
information supplied by the Company or by Lehman Brothers and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission and (ii) in the case of any other action or
omission, shall be determined by reference to, among other things, whether such
action or omission was taken or omitted to be taken by the Company or Lehman
Brothers and the parties' relative intent, knowledge, access to information and
opportunity to prevent such action or omission. The amount paid or payable by an
Indemnified Person as a result of the losses, claims, damages, liabilities or
expenses referred to in this Section shall be deemed to include, subject to the
limitations set forth above, any legal or other expenses reasonably incurred by
such Indemnified Person in connection with investigating, preparing to defend or
defending any such action or claim.

                  (d) In the event an Indemnified Person appears as a witness in
any action brought by or on behalf of or against the Company (other than an
action brought by the Company against any Indemnified Person or an action
brought by an Indemnified Person against the Company) in which such Indemnified
Person is not named as defendant, the Company agrees to reimburse such
Indemnified Person for all reasonable expenses incurred by it in connection with
such Indemnified Person's appearing and preparing to appear as such a witness,
including, without limitation, the reasonable fees and disbursements of its
legal counsel.

                  (e) The Company also agrees that no Indemnified Person shall
have any liability to the Company or any person asserting claims on behalf of or
in right of the Company in connection with this Agreement or Lehman Brothers'
acting as Dealer-Manager hereunder, except for liabilities determined in a final
judgment by a court of competent jurisdiction to have resulted directly from any
acts or omissions undertaken or omitted to be taken by such Indemnified Person
through its or his, as the case may be, gross negligence or willful misconduct.

                  (f) The foregoing rights to indemnification and contribution
shall be in addition to any other rights which Lehman Brothers and the other
Indemnified Persons may have against the Company under common law or otherwise.

                  12. INDEMNIFICATION, REPRESENTATIONS AND WARRANTIES TO REMAIN
OPERATIVE. The rights to indemnification, contribution and exculpation contained
in Section 11 and the representations, warranties and agreements of the Company
set forth in this Agreement shall survive and remain operative and in full force
and effect regardless of (a) the failure to commence the Tender Offer and
Solicitation, the consummation of the Tender Offer and Solicitation, any
withdrawal, termination or cancellation of the Tender Offer and Solicitation for
any reason whatsoever, the purchase of Notes pursuant to the Tender Offer and
Solicitation or any withdrawal by Lehman Brothers pursuant to Section 4, (b) any
investigation made by or on behalf of any party hereto or any person controlling
any party hereto within the meaning of

<PAGE>
                                                                              14

Section 20(a) of the Exchange Act and (c) the completion of Lehman Brothers'
services under this Agreement.

                  13. TERMINATION. This Agreement shall terminate upon the
earliest to occur of (a) the consummation or the termination, withdrawal or
cancellation of the Tender Offer and Solicitation by the Company, (b) the
withdrawal by Lehman Brothers as the Dealer-Manager pursuant to Section 4 hereof
and (c) the date that is one year from the date hereof; provided that, Sections
3, 5, 6, 8, 11-22 hereof shall survive the termination of this Agreement.

                  14. NOTICES. All notices and other communications required or
permitted to be provided under this Agreement shall be in writing and shall be
deemed to have been duly given if (a) delivered personally, (b) sent by
facsimile with immediate telephonic confirmation or (c) sent by registered or
certified mail, return receipt requested, postage prepaid, to the parties hereto
as follows:

                 (a)      if to Lehman Brothers:

                          Lehman Brothers Inc.
                          745 Seventh Avenue
                          New York, New York  10019
                          Attention:  Liability Management Group, 3rd Floor
                          Facsimile:  (212) 526-1244
                          Telephone:  (212) 528-7581

                 with a copy to:

                          Milbank, Tweed, Hadley & McCloy
                          1 Chase Manhattan Plaza
                          New York, New York  10005
                          Attention:  Marcelo A. Mottesi
                          Facsimile:  (212) 822-5602
                          Telephone:  (212) 530-5602

                 (b)      if to the Company:

                          Beverly Enterprises, Inc.
                          One Thousand Beverly Way
                          Fort Smith, Arkansas 72919
                          Attention:  Chief Financial Officer
                          Facsimile:  (479) 201-5501
                          Telephone:  (479) 201-5510

                          with a copy to:

                          Beverly Enterprises, Inc.
                          One Thousand Beverly Way
                          Fort Smith, Arkansas 72919

<PAGE>
                                                                              15

                          Attention:   John Arena,
                                         General Counsel - Corporate
                          Facsimile:  (479) 478-1883
                          Telephone:  (479) 201-4813

                  15. MODIFICATIONS. This Agreement may not be amended or
modified except in writing signed by each of the parties hereto.

                  16. CONSENT TO JURISDICTION; FORUM SELECTION; APPOINTMENT OF
AGENT FOR SERVICE OF PROCESS; WAIVER OF JURY TRIAL.

                  (a) The Company hereby submits to the jurisdiction of the
courts of the State of New York and the courts of the United States of America
located in the State of New York over any suit, action or proceeding with
respect to this Agreement or the transactions contemplated hereby.

                  (b) Any action, lawsuit or proceeding with respect to this
Agreement or the transactions contemplated hereby may be brought only in the
courts of the State of New York or the courts of the United States of America
located in the State of New York, in each case, located in the Borough of
Manhattan, City of New York, State of New York. The Company waives any objection
that it may have to the venue of such action, lawsuit or proceeding in any such
court or that such action, lawsuit or proceeding in such court was brought in an
inconvenient court and agrees not to plead or claim the same.

                  (c) Any right to trial by jury with respect to any action,
lawsuit, claim or other proceeding arising out of or relating to this Agreement
or the services to be rendered by Lehman Brothers hereunder is expressly and
irrevocably waived.

                  17. GOVERNING LAW. The terms of this Agreement shall be
governed by, and construed in accordance with, the laws of the State of New
York.

                  18. COUNTERPARTS. This Agreement may be executed in one or
more counterparts, and by different parties hereto on separate counterparts,
each of such counterparts, when so executed and delivered, shall be deemed to be
an original, and all of such counterparts, taken together, shall constitute one
and the same Agreement.

                  19. SEVERABILITY. If any term or provision of this Agreement
is deemed or rendered invalid or unenforceable in any jurisdiction, then such
term or provision shall, as to such jurisdiction, be ineffective to the extent
of such invalidity or unenforceability without rendering invalid or
unenforceable the remaining terms and provisions of this Agreement or affecting
the validity or enforceability of any of the terms or provisions of this
Agreement in any other jurisdiction, which shall remain in full force and
effect.

                  20. SUCCESSORS. This Agreement is made solely for the benefit
of Lehman Brothers and the Company and, to the extent expressly set forth
herein, the Indemnified Persons

<PAGE>
                                                                              16

and their executors, administrators, successors and assigns, and no other person
shall acquire or have any right under or by virtue of this Agreement.

                  21. ENTIRE AGREEMENT. This Agreement constitutes the entire
agreement by and among the parties hereto with respect to the subject matter
thereof and supersedes all prior agreements and undertakings, both written and
oral, among the parties, or any of them, with respect to the subject matter
hereof.

                  22. HEADINGS. The headings to sections contained in this
Agreement are included for ease of reference only, and the parties hereto agree
that they are not to be given substantive meaning or otherwise affect each
party's rights and duties hereunder.

                  [The rest of this page has been left blank intentionally; the
signature page follows.]

<PAGE>
                                                                              17

                  Please indicate Lehman Brothers' willingness to act as
Dealer-Manager and Lehman Brothers' acceptance of the foregoing provisions by
signing in the space provided below for that purpose and returning to us a copy
of this letter so signed, whereupon this letter and Lehman Brothers' acceptance
shall constitute a valid and legally binding agreement between us.

                                                Very truly yours,

                                                BEVERLY ENTERPRISES, INC.

                                                By: /s/ RICHARD D. SKELLY, JR.
                                                   ----------------------------
                                                   Name: Richard D. Skelly
                                                   Title: SVP - Treasurer

Accepted and agreed as of the date first above written:

LEHMAN BROTHERS INC.

By: /s/ STEVEN DELANEY
   -----------------------------
     Authorized Representative

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