Document:

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                                                                     EXHIBIT 4.4

                            BEVERLY ENTERPRISES, INC.

                                  $200,000,000

                          9 5/8% Senior Notes due 2009

                   EXCHANGE AND REGISTRATION RIGHTS AGREEMENT

                                                                  April 25, 2001

JPMORGAN, a division of
CHASE SECURITIES INC.
BANC OF AMERICA SECURITIES LLC
BNY CAPITAL MARKETS, INC.
BMO NESBITT BURNS CORP.
c/o Chase Securities Inc.
270 Park Avenue, 4th floor
New York, New York 10017

Ladies and Gentlemen:

          Beverly Enterprises, Inc., a Delaware corporation (the "Company"),
proposes to issue and sell to JPMorgan, a division of Chase Securities Inc.,
Banc of America Securities LLC, BNY Capital Markets, Inc. and BMO Nesbitt Burns
Corp. (together, the "Initial Purchasers"), upon the terms and subject to the
conditions set forth in a purchase agreement dated April 18, 2001 (the "Purchase
Agreement"), $200,000,000 aggregate principal amount of its 9 5/8% Senior Notes
due 2009 (the "Securities") to be jointly and severally guaranteed (the
"Guarantees") by the subsidiaries of the Company listed on Schedule 1 and
signatories hereto (collectively, the "Guarantors"). Capitalized terms used but
not defined herein shall have the meanings given to such terms in the Purchase
Agreement.

          As an inducement to the Initial Purchasers to enter into the Purchase
Agreement and in satisfaction of a condition to the obligations of the Initial
Purchasers thereunder, the Company and the Guarantors agree with the Initial
Purchasers, for the benefit of the holders (including the Initial Purchasers) of
the Securities, the Exchange Securities (as defined herein) and the Private
Exchange Securities (as defined herein) (collectively, the "Holders"), as
follows:
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          1. Registered Exchange Offer. Unless the Registered Exchange Offer (as
defined herein) shall not be permitted by applicable federal law, the Company
shall (i) prepare and, not later than 60 days following the date of original
issuance of the Securities (the "Issue Date"), file with the Commission a
registration statement (the "Exchange Offer Registration Statement") on an
appropriate form under the Securities Act with respect to a proposed offer to
the Holders of the Securities and the Guarantees (the "Registered Exchange
Offer") to issue and deliver to such Holders, in exchange for the Securities and
the Guarantees, a like aggregate principal amount of debt securities of the
Company and guarantees thereof by the Guarantors (the "Exchange Securities")
that are identical in all material respects to the Securities, except for the
transfer restrictions relating to the Securities, (ii) use its commercially
reasonable efforts to cause the Exchange Offer Registration Statement to become
effective under the Securities Act no later than 120 days after the Issue Date
and the Registered Exchange Offer to be consummated no later than 150 days after
the Issue Date and (iii) keep the Exchange Offer Registration Statement
effective for not less than 20 business days (or longer, if required by
applicable law) after the date on which notice of the Registered Exchange Offer
is mailed to the Holders (such period being called the "Exchange Offer
Registration Period"). The Exchange Securities will be issued under the
Indenture or an indenture (the "Exchange Securities Indenture") between the
Company, the Guarantors and the Trustee or such other bank or trust company that
is reasonably satisfactory to the Initial Purchasers, as trustee (the "Exchange
Securities Trustee"), such indenture to be identical in all material respects to
the Indenture, except for the transfer restrictions relating to the Securities
(as described above).

          As soon as practicable after the effectiveness of the Exchange Offer
Registration Statement, the Company shall promptly commence the Registered
Exchange Offer, it being the objective of such Registered Exchange Offer to
enable each Holder electing to exchange Securities for Exchange Securities
(assuming that such Holder (a) is not an affiliate of the Company or an
Exchanging Dealer (as defined herein) not complying with the requirements of the
next sentence, (b) is not an Initial Purchaser holding Securities that have, or
that are reasonably likely to have, the status of an unsold allotment in an
initial distribution, (c) acquires the Exchange Securities in the ordinary
course of such Holder's business and (d) has no arrangements or understandings
with any person to participate in the distribution of the Exchange Securities)
and to trade such Exchange Securities from and after their receipt without any
limitations or restrictions under the Securities Act and without material
restrictions under the securities laws of the several states of the United
States. The Company, the Guarantors, the Initial Purchasers and each Exchanging
Dealer acknowledge that, pursuant to current interpretations by the Commission's
staff of Section 5 of the Securities Act, each Holder that is a broker-dealer
electing to exchange Securities, acquired for its own account as a result of
market-making activities or other trading activities, for Exchange Securities
(an "Exchanging Dealer"), is required to deliver a prospectus containing
substantially the information set forth in Annex A hereto on the cover, in Annex
B hereto in the "Exchange Offer Procedures" section and the "Purpose of the
Exchange Offer" section and in Annex C hereto in the "Plan of Distribution"

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section of such prospectus in connection with a sale of any such Exchange
Securities received by such Exchanging Dealer pursuant to the Registered
Exchange Offer.

          If, prior to the consummation of the Registered Exchange Offer, any
Holder holds any Securities acquired by it that have, or that are reasonably
likely to be determined to have, the status of an unsold allotment in an initial
distribution, or any Holder is not entitled to participate in the Registered
Exchange Offer, the Company shall, upon the request of any such Holder, by
notice to the Company within 30 days of the Registered Exchange Offer, no later
than 30 days after the delivery of the Exchange Securities in the Registered
Exchange Offer, issue and deliver to any such Holder, in exchange for the
Securities held by such Holder (the "Private Exchange"), a like aggregate
principal amount of debt securities of the Company and guarantees thereof by the
Guarantors (the "Private Exchange Securities") that are identical in all
material respects to the Exchange Securities, except for the transfer
restrictions relating to such Private Exchange Securities. The Private Exchange
Securities will be issued under the same indenture as the Exchange Securities,
and the Company shall use its reasonable best efforts to cause the Private
Exchange Securities to bear the same CUSIP number as the Exchange Securities.

          In connection with the Registered Exchange Offer, the Company shall:

          (a) mail to each Holder a copy of the prospectus forming part of the
     Exchange Offer Registration Statement, together with an appropriate letter
     of transmittal and related documents;

          (b) keep the Registered Exchange Offer open for not less than 20
     business days (or longer, if required by applicable law) after the date on
     which notice of the Registered Exchange Offer is mailed to the Holders;

          (c) utilize the services of a depositary for the Registered Exchange
     Offer with an address in the Borough of Manhattan, The City of New York;

          (d) permit Holders to withdraw tendered Securities at any time prior
     to the close of business, New York City time, on the last business day on
     which the Registered Exchange Offer shall remain open; and

          (e) otherwise comply in all respects with all laws that are applicable
     to the Registered Exchange Offer.

          As soon as practicable after the close of the Registered Exchange
Offer and any Private Exchange, as the case may be, the Company shall:
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          (a) accept for exchange all Securities tendered and not validly
     withdrawn pursuant to the Registered Exchange Offer and the Private
     Exchange;

          (b) deliver to the Trustee for cancellation all Securities so accepted
     for exchange; and

          (c) cause the Trustee or the Exchange Securities Trustee, as the case
     may be, promptly to authenticate and deliver to each Holder, Exchange
     Securities or Private Exchange Securities, as the case may be, equal in
     principal amount to the Securities of such Holder so accepted for exchange.

          The Company shall use its reasonable best efforts to keep the Exchange
Offer Registration Statement effective and to amend and supplement the
prospectus contained therein in order to permit such prospectus to be used by
all persons subject to the prospectus delivery requirements of the Securities
Act for such period of time as such persons must comply with such requirements
in order to resell the Exchange Securities; provided that (i) in the case where
such prospectus and any amendment or supplement thereto must be delivered by an
Exchanging Dealer, such period shall be the lesser of 180 days and the date on
which all Exchanging Dealers have sold all Exchange Securities held by them and
(ii) the Company shall make such prospectus and any amendment or supplement
thereto available to any broker-dealer for use in connection with any resale of
any Exchange Securities for a period of not less than 90 days after the
consummation of the Registered Exchange Offer.

          The Indenture or the Exchange Securities Indenture, as the case may
be, shall provide that the Securities, the Exchange Securities and the Private
Exchange Securities shall vote and consent together on all matters as one class
and that none of the Securities, the Exchange Securities or the Private Exchange
Securities will have the right to vote or consent as a separate class on any
matter.

          Interest on each Exchange Security and Private Exchange Security
issued pursuant to the Registered Exchange Offer and in the Private Exchange
will accrue from the last interest payment date on which interest was paid on
the Securities surrendered in exchange therefor or, if no interest has been paid
on the Securities, from the Issue Date.

          Each Holder participating in the Registered Exchange Offer shall be
required to represent to the Company that at the time of the consummation of the
Registered Exchange Offer (i) any Exchange Securities received by such Holder
will be acquired in the ordinary course of business, (ii) such Holder will have
no arrangements or understanding with any person to participate in the
distribution of the Securities or the Exchange Securities within the meaning of
the Securities Act and (iii) such Holder is not an affiliate of the Company or,
if it is such an affiliate, such Holder will comply with the registration and
prospectus delivery requirements of the Securities Act to the extent applicable.
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          Notwithstanding any other provisions hereof, the Company and the
Guarantors will ensure that (i) any Exchange Offer Registration Statement and
any amendment thereto and any prospectus forming part thereof and any supplement
thereto complies in all material respects with the Securities Act and the rules
and regulations of the Commission thereunder, (ii) any Exchange Offer
Registration Statement and any amendment thereto does not, when it becomes
effective, contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading and (iii) any prospectus forming part of any Exchange
Offer Registration Statement, and any supplement to such prospectus, does not,
as of the consummation of the Registered Exchange Offer, include an untrue
statement of a material fact or omit 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.

          2. Shelf Registration. If (i) because of any change in law or
applicable interpretations thereof by the Commission's staff the Company is not
permitted to effect the Registered Exchange Offer as contemplated by Section 1
hereof, or (ii) for any other reason the Registered Exchange Offer is not
consummated within 150 days after the Issue Date, or (iii) any Initial Purchaser
so requests with respect to Securities or Private Exchange Securities not
eligible to be exchanged for Exchange Securities in the Registered Exchange
Offer and held by it following the consummation of the Registered Exchange
Offer, or (iv) any applicable law or interpretations do not permit any Holder to
participate in the Registered Exchange Offer, or (v) any Holder that
participates in the Registered Exchange Offer does not receive freely
transferable Exchange Securities in exchange for tendered Securities, or (vi)
the Company so elects, then the following provisions shall apply:

          (a) The Company and the Guarantors shall use their reasonable best
efforts to file as promptly as practicable (but in no event more than 20
business days after so required or requested pursuant to this Section 2) with
the Commission (the "Shelf Filing Date"), and thereafter shall use their
commercially reasonable efforts to cause to be declared effective, a shelf
registration statement on an appropriate form under the Securities Act relating
to the offer and sale of the Transfer Restricted Securities (as defined below)
by the Holders thereof from time to time in accordance with the methods of
distribution set forth in such registration statement (hereafter, a "Shelf
Registration Statement" and, together with any Exchange Offer Registration
Statement, a "Registration Statement").

          (b) The Company and the Guarantors shall use their reasonable best
efforts to keep the Shelf Registration Statement continuously effective in order
to permit the prospectus forming part thereof to be used by Holders of Transfer
Restricted Securities for a period ending on the earlier of (i) two years from
the Issue Date or such shorter period that will terminate when all the Transfer
Restricted Securities covered by the Shelf Registration Statement have been sold
pursuant thereto and (ii) the date on which the Securities become eligible

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for resale without volume restrictions pursuant to Rule 144 under the Securities
Act (in any such case, such period being called the "Shelf Registration
Period"). The Company and the Guarantors shall be deemed not to have used their
reasonable best efforts to keep the Shelf Registration Statement effective
during the requisite period if they voluntarily take any action that would
result in Holders of Transfer Restricted Securities covered thereby not being
able to offer and sell such Transfer Restricted Securities during that period,
unless such action is required by applicable law.

          (c) Notwithstanding any other provisions hereof, the Company will
ensure that (i) any Shelf Registration Statement and any amendment thereto and
any prospectus forming part thereof and any supplement thereto complies in all
material respects with the Securities Act and the rules and regulations of the
Commission thereunder, (ii) any Shelf Registration Statement and any amendment
thereto (in either case, other than with respect to information included therein
in reliance upon or in conformity with written information furnished to the
Company by or on behalf of any Holder specifically for use therein (the
"Holders' Information")) does not contain an untrue statement of a material fact
or omit to state a material fact required to be stated therein or necessary to
make the statements therein not misleading and (iii) any prospectus forming part
of any Shelf Registration Statement, and any supplement to such prospectus (in
either case, other than with respect to Holders' Information), does not include
an untrue statement of a material fact or omit 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.

          (d) In the absence of the events described in clauses (i) through (vi)
of the first paragraph of this Section 2, the Company and the Guarantors shall
not be permitted to discharge its obligations hereunder by means of the filing
of a Shelf Registration Statement.

          3. Additional Interest. The parties hereto agree that the Holders of
Transfer Restricted Securities will suffer damages if the Company and the
Guarantors fail to fulfill their obligations under Section 1 or Section 2, as
applicable, and that it would not be feasible to ascertain the extent of such
damages. Accordingly, if (i) the Exchange Offer Registration Statement is not
filed with the Commission on or prior to 60 days after the Issue Date or the
Shelf Registration Statement is not filed with the Commission on or before the
Shelf Filing Date, (ii) the Exchange Offer Registration Statement is not
declared effective within 120 days after the Issue Date or the Shelf
Registration Statement is not declared effective within 90 days of the Shelf
Filing Date, (iii) the Registered Exchange Offer is not consummated on or prior
to 150 days after the Issue Date, or (iv) the Shelf Registration Statement is
filed and declared effective within 90 days after the Shelf Filing Date but
shall thereafter cease to be effective (at any time that the Company and the
Guarantors are obligated to maintain the effectiveness thereof) without being
succeeded within 30 days by an additional Registration Statement filed and
declared effective (each such event referred to in clauses (i) through (iv), a

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"Registration Default"), the Company and the Guarantors will be jointly and
severally obligated to pay additional interest to each Holder of Transfer
Restricted Securities, during the period of one or more such Registration
Defaults, in an amount equal to $0.05 per week per $1,000 principal amount of
Transfer Restricted Securities held by such Holder until (i) the applicable
Registration Statement is filed, (ii) the Exchange Offer Registration Statement
is declared effective and the Registered Exchange Offer is consummated, (iii)
the Shelf Registration Statement is declared effective or (iv) the Shelf
Registration Statement again becomes effective, as the case may be, which rate
will be increased by an additional $ 0.05 per week per $1,000 principal amount
of Transfer Restricted Securities for each 90 day period that any additional
interest described in this Section 3 continues to accrue; provided that the rate
for additional interest will not exceed $0.15 per week per $1,000 principal
amount of Transfer Restricted Securities. All accrued additional interest will
be paid to each Holder in the same manner as interest payments on the Transfer
Restricted Securities on semi-annual payment dates that correspond to interest
payment dates for the Transfer Restricted Securities. Additional interest only
accrues during a Registration Default. Following the cure of all Registration
Defaults, the accrual of additional interest will cease. As used herein, the
term "Transfer Restricted Securities" means each Security or Private Exchange
Security, until the earliest to occur of: (i) the date on which such Security
has been exchanged for a freely transferable Exchange Security in the Registered
Exchange Offer, (ii) the date on which such Security or Private Exchange
Security has been effectively registered under the Securities Act and disposed
of in accordance with the Shelf Registration Statement or (iii) the date on
which such Security or Private Exchange Security is distributed to the public
pursuant to Rule 144 under the Securities Act or is saleable pursuant to Rule
144(k) under the Securities Act. Notwithstanding anything to the contrary in
this Section 3(a), neither the Company nor the Guarantors shall be required to
pay additional interest to a Holder of Transfer Restricted Securities if such
Holder failed to comply with its obligations to make the representations set
forth in the second to last paragraph of Section 1 or failed to provide the
information required to be provided by it, if any, pursuant to Section 4(n).

          (a) The Company shall notify the Trustee and the Paying Agent under
the Indenture immediately upon the happening of each and every Registration
Default. The Company and the Guarantors shall pay the additional interest due on
the Transfer Restricted Securities by depositing with the Paying Agent (which
may not be the Company for these purposes), in trust, for the benefit of the
Holders thereof, prior to 10:00 a.m., New York City time, on the next interest
payment date specified by the Indenture and the Securities, sums sufficient to
pay the additional interest then due. The additional interest due shall be
payable on each interest payment date specified by the Indenture and the
Securities to the record holder entitled to receive the interest payment to be
made on such date. Each obligation to pay additional interest shall be deemed to
accrue from and including the date of the applicable Registration Default.
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                                      -8-

          (b) The parties hereto agree that the additional interest provided for
in this Section 3 constitute a reasonable estimate of and are intended to
constitute the sole damages that will be suffered by Holders of Transfer
Restricted Securities by reason of the failure of (i) the Shelf Registration
Statement or the Exchange Offer Registration Statement to be filed, (ii) the
Shelf Registration Statement to remain effective or (iii) the Exchange Offer
Registration Statement to be declared effective and the Registered Exchange
Offer to be consummated, in each case to the extent required by this Agreement.

          4. Registration Procedures. In connection with any Registration
Statement, the following provisions shall apply:

          (a) The Company shall (i) furnish to each Initial Purchaser, prior to
the filing thereof with the Commission, a copy of the Registration Statement and
each amendment thereof and each supplement, if any, to the prospectus included
therein and shall use its reasonable best efforts to reflect in each such
document, when so filed with the Commission, such comments as any Initial
Purchaser may reasonably propose within five business days after the delivery of
such document to such Initial Purchaser; (ii) include the information set forth
in Annex A hereto on the cover, in Annex B hereto in the "Exchange Offer
Procedures" section and the "Purpose of the Exchange Offer" section and in Annex
C hereto in the "Plan of Distribution" section of the prospectus forming a part
of the Exchange Offer Registration Statement, and include the information set
forth in Annex D hereto in the Letter of Transmittal delivered pursuant to the
Registered Exchange Offer; and (iii) if requested by any Initial Purchaser,
include the information required by Items 507 or 508 of Regulation S-K, as
applicable, in the prospectus forming a part of the Exchange Offer Registration
Statement.

          (b) The Company shall advise each Initial Purchaser, each Exchanging
Dealer and the Holders (if applicable) and, if requested by any such person,
confirm such advice in writing (which advice pursuant to clauses (ii)-(v) hereof
shall be accompanied by an instruction to suspend the use of the prospectus
until the requisite changes have been made):

               (i) when any Registration Statement and any amendment thereto has
          been filed with the Commission and when such Registration Statement or
          any post-effective amendment thereto has become effective;

               (ii) of any request by the Commission for amendments or
          supplements to any Registration Statement or the prospectus included
          therein or for additional information;

               (iii) of the issuance by the Commission of any stop order
          suspending the effectiveness of any Registration Statement or the
          initiation of any proceedings for that purpose;
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               (iv) of the receipt by the Company of any notification with
          respect to the suspension of the qualification of the Securities, the
          Exchange Securities or the Private Exchange Securities for sale in any
          jurisdiction or the initiation or threatening of any proceeding for
          such purpose; and

               (v) of the happening of any event that requires the making of any
          changes in any Registration Statement or the prospectus included
          therein in order that the statements therein are not misleading and do
          not omit to state a material fact required to be stated therein or
          necessary to make the statements therein not misleading.

          (c) The Company and the Guarantors will make every reasonable effort
to obtain the withdrawal at the earliest possible time of any order suspending
the effectiveness of any Registration Statement.

          (d) The Company will furnish to each Holder of Transfer Restricted
Securities included within the coverage of any Shelf Registration Statement,
without charge, at least one conformed copy of such Shelf Registration Statement
and any post-effective amendment thereto, including financial statements and
schedules and, if any such Holder so requests in writing, all exhibits thereto
(including those, if any, incorporated by reference).

          (e) The Company will, during the Shelf Registration Period, promptly
deliver to each Holder of Transfer Restricted Securities included within the
coverage of any Shelf Registration Statement, without charge, as many copies of
the prospectus (including each preliminary prospectus) included in such Shelf
Registration Statement and any amendment or supplement thereto as such Holder
may reasonably request; and the Company consents to the use of such prospectus
or any amendment or supplement thereto by each of the selling Holders of
Transfer Restricted Securities in connection with the offer and sale of the
Transfer Restricted Securities covered by such prospectus or any amendment or
supplement thereto.

          (f) The Company will furnish to each Initial Purchaser and each
Exchanging Dealer, and to any other Holder who so requests, without charge, at
least one conformed copy of the Exchange Offer Registration Statement and any
post-effective amendment thereto, including financial statements and schedules
and, if any Initial Purchaser or Exchanging Dealer or any such Holder so
requests in writing, all exhibits thereto (including those, if any, incorporated
by reference).

          (g) The Company will, during the Exchange Offer Registration Period or
the Shelf Registration Period, as applicable, promptly deliver to each Initial
Purchaser, each Exchanging Dealer and such other persons that are required to
deliver a prospectus following the Registered Exchange Offer, without charge, as
many copies of the final prospectus in-

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cluded in the Exchange Offer Registration Statement or the Shelf Registration
Statement and any amendment or supplement thereto as such Initial Purchaser,
Exchanging Dealer or other persons may reasonably request; and the Company and
the Guarantors consent to the use of such prospectus or any amendment or
supplement thereto by any such Initial Purchaser, Exchanging Dealer or other
persons, as applicable, as aforesaid.

          (h) Prior to the effective date of any Registration Statement, the
Company and the Guarantors will use their reasonable best efforts to register or
qualify, or cooperate with the Holders of Securities, Exchange Securities or
Private Exchange Securities included therein and their respective counsel in
connection with the registration or qualification of, such Securities, Exchange
Securities or Private Exchange Securities for offer and sale under the
securities or blue sky laws of such jurisdictions as any such Holder reasonably
requests in writing and do any and all other acts or things necessary or
advisable to enable the offer and sale in such jurisdictions of the Securities,
Exchange Securities or Private Exchange Securities covered by such Registration
Statement; provided that the Company and the Guarantors will not be required to
qualify generally to do business in any jurisdiction where it is not then so
qualified or to take any action which would subject it to general service of
process or to taxation in any such jurisdiction where it is not then so subject.

          (i) The Company and the Guarantors will cooperate with the Holders of
Securities, Exchange Securities or Private Exchange Securities to facilitate the
timely preparation and delivery of certificates representing Securities,
Exchange Securities or Private Exchange Securities to be sold pursuant to any
Registration Statement free of any restrictive legends and in such denominations
and registered in such names as the Holders thereof may request in writing at
least two business days prior to sales of Securities, Exchange Securities or
Private Exchange Securities pursuant to such Registration Statement.

          (j) If any event contemplated by Section 4(b)(ii) through (v) occurs
during the period for which the Company and the Guarantors are required to
maintain an effective Registration Statement, the Company will promptly prepare
and file with the Commission a post-effective amendment to the Registration
Statement or a supplement to the related prospectus or file any other required
document so that, as thereafter delivered to purchasers of the Securities,
Exchange Securities or Private Exchange Securities from a Holder, the prospectus
will not include an untrue statement of a material fact or omit 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.

          (k) Not later than the effective date of the applicable Registration
Statement, the Company will provide a CUSIP number for the Securities, the
Exchange Securities and the Private Exchange Securities, as the case may be, and
provide the applicable trustee

<PAGE>   11
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with the Securities, the Exchange Securities or the Private Exchange Securities,
as the case may be, in a form eligible for deposit with The Depository Trust
Company.

          (l) The Company and the Guarantors will comply with all applicable
rules and regulations of the Commission and will make generally available to its
security holders as soon as practicable after the effective date of the
applicable Registration Statement an earning statement satisfying the provisions
of Section 11(a) of the Securities Act covering a twelve month period beginning
after the effective date of the Registration Statement (as such term is defined
in paragraph (c) of Rule 158 under the Act); provided that in no event shall
such earning statement be delivered later than 45 days after the end of a
12-month period (or 90 days, if such period is a fiscal year) beginning with the
first month of the Company's first fiscal quarter commencing after the effective
date of the applicable Registration Statement, which statement shall cover such
12-month period.

          (m) The Company and the Guarantors will cause the Indenture or the
Exchange Securities Indenture, as the case may be, to be qualified under the
Trust Indenture Act as required by applicable law in a timely manner.

          (n) The Company may require each Holder of Transfer Restricted
Securities to be registered pursuant to any Shelf Registration Statement to
furnish to the Company such information concerning the Holder and the
distribution of such Transfer Restricted Securities as the Company may from time
to time reasonably require for inclusion in such Shelf Registration Statement,
and the Company may exclude from such registration the Transfer Restricted
Securities of any Holder that fails to furnish such information within a
reasonable time after receiving such request.

          (o) In the case of a Shelf Registration Statement, each Holder of
Transfer Restricted Securities to be registered pursuant thereto agrees by
acquisition of such Transfer Restricted Securities that, upon receipt of any
notice from the Company pursuant to Section 4(b)(ii) through (v) (a "Suspension
Notice"), such Holder will discontinue disposition of such Transfer Restricted
Securities until such Holder's receipt of copies of the supplemental or amended
prospectus contemplated by Section 4(j) or until advised in writing (the
"Advice") by the Company that the use of the applicable prospectus may be
resumed. Each Holder receiving a Suspension Notice hereby agrees that it will
either (i) destroy any prospectuses, other than permanent file copies, then in
such Holder's possession which have been replaced by the Company with more
recently dated prospectuses 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 prospectus covering such Transfer Restricted Securities that
was current at the time of receipt of the Suspension Notice. If the Company
shall give any notice under Section 4(b)(ii) through (v) during the period that
the Company is required to maintain an effective Registration Statement (the
"Effectiveness Period"), such Effectiveness Period shall be extended by

<PAGE>   12
                                      -12-

the number of days during such period from and including the date of the giving
of such notice to and including the date when each seller of Transfer Restricted
Securities covered by such Registration Statement shall have received (x) the
copies of the supplemental or amended prospectus contemplated by Section 4(j)
(if an amended or supplemental prospectus is required) or (y) the Advice (if no
amended or supplemental prospectus is required).

          (p) In the case of a Shelf Registration Statement, the Company and the
Guarantors shall enter into such customary agreements (including, if requested,
an underwriting agreement in customary form) and take all such other action, if
any, as Holders of a majority in aggregate principal amount of the Securities,
Exchange Securities and Private Exchange Securities being sold or the managing
underwriters (if any) shall reasonably request in order to facilitate any
disposition of Securities, Exchange Securities or Private Exchange Securities
pursuant to such Shelf Registration Statement.

          (q) In the case of a Shelf Registration Statement, the Company shall
(i) make reasonably available for inspection by a representative of, and Special
Counsel (as defined below) acting for, Holders of a majority in aggregate
principal amount of the Securities, Exchange Securities and Private Exchange
Securities being sold and any underwriter participating in any disposition of
Securities, Exchange Securities or Private Exchange Securities pursuant to such
Shelf Registration Statement, all relevant financial and other records,
pertinent corporate documents and properties of the Company and its subsidiaries
and (ii) use its reasonable best efforts to have its officers, directors,
employees, accountants and counsel supply all relevant information reasonably
requested by such representative, Special Counsel or any such underwriter (an
"Inspector") in connection with such Shelf Registration Statement.

          (r) In the case of a Shelf Registration Statement, the Company shall,
if requested by Holders of a majority in aggregate principal amount of the
Securities, Exchange Securities and Private Exchange Securities being sold,
their Special Counsel or the managing underwriters (if any) in connection with
such Shelf Registration Statement, use its reasonable best efforts to cause (i)
its counsel to deliver an opinion relating to the Shelf Registration Statement
and the Securities, Exchange Securities or Private Exchange Securities, as
applicable, in customary form, (ii) its officers to execute and deliver all
customary documents and certificates requested by Holders of a majority in
aggregate principal amount of the Securities, Exchange Securities and Private
Exchange Securities being sold, their Special Counsel or the managing
underwriters (if any) and (iii) its independent public accountants to provide a
comfort letter or letters in customary form, subject to receipt of appropriate
documentation as contemplated, and only if permitted, by Statement of Auditing
Standards No

          5.  Registration Expenses. The Company and the Guarantors will bear
all expenses incurred in connection with the performance of its obligations
under Sections 1, 2, 3 and 4 and the Company will reimburse the Initial
Purchasers and the Holders for the reason-
<PAGE>   13
                                      -13-

able fees and disbursements of one firm of attorneys (in addition to any local
counsel) chosen by the Holders of a majority in aggregate principal amount of
the Securities, the Exchange Securities and the Private Exchange Securities to
be sold pursuant to each Registration Statement (the "Special Counsel") acting
for the Initial Purchasers or Holders in connection therewith.

          6. Indemnification. In the event of a Shelf Registration Statement or
in connection with any prospectus delivery pursuant to an Exchange Offer
Registration Statement by an Initial Purchaser or Exchanging Dealer, as
applicable, the Company and each of the Guarantors shall jointly and severally
indemnify and hold harmless each Holder (including, without limitation, any such
Initial Purchaser or Exchanging Dealer), its affiliates, their respective
officers, directors, employees, representatives and agents, and each person, if
any, who controls such Holder within the meaning of the Securities Act or the
Exchange Act (collectively referred to for purposes of this Section 6 and
Section 7 as a Holder) from and against any loss, claim, damage or liability,
joint or several, or any action in respect thereof (including, without
limitation, any loss, claim, damage, liability or action relating to purchases
and sales of Securities, Exchange Securities or Private Exchange Securities), to
which that Holder may become subject, whether commenced or threatened, under the
Securities Act, the Exchange Act, any other federal or state statutory law or
regulation, at common law or otherwise, insofar as such loss, claim, damage,
liability or action arises out of, or is based upon, (i) any untrue statement or
alleged untrue statement of a material fact contained in any such Registration
Statement or any prospectus forming part thereof or in any amendment or
supplement thereto or (ii) the omission or alleged omission to state therein a
material fact required to be stated therein or necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, and shall reimburse each Holder promptly upon demand for
any legal or other expenses reasonably incurred by that Holder in connection
with investigating or defending or preparing to defend against or appearing as a
third party witness in connection with any such loss, claim, damage, liability
or action as such expenses are incurred; provided, however, that the Company and
the Guarantors shall not be liable in any such case to the extent that any such
loss, claim, damage, liability or action arises out of, or is based upon, an
untrue statement or alleged untrue statement in or omission or alleged omission
from any of such documents in reliance upon and in conformity with any Holders'
Information; and provided, further, that with respect to any such untrue
statement in or omission from any related preliminary prospectus, the indemnity
agreement contained in this Section 6(a) shall not inure to the benefit of any
Holder from whom the person asserting any such loss, claim, damage, liability or
action received Securities, Exchange Securities or Private Exchange Securities
to the extent that such loss, claim, damage, liability or action of or with
respect to such Holder results from the fact that both (A) a copy of the final
prospectus was not sent or given to such person at or prior to the written
confirmation of the sale of such Securities, Exchange Securities or Private
Exchange Securities to such person and (B) the untrue statement in or omission
from the related preliminary prospectus was corrected in the final prospectus
unless, in either case, such failure to deliver the final prospectus was a
result of non-compliance by the Company with Section 4(d), 4(e), 4(f) or 4(g).
<PAGE>   14
                                      -14-

          (a) In the event of a Shelf Registration Statement, each Holder shall
indemnify and hold harmless the Company, each Guarantor and their respective
affiliates, their respective officers, directors, employees, representatives and
agents, and each person, if any, who controls the Company or any Guarantor
within the meaning of the Securities Act or the Exchange Act (collectively
referred to for purposes of this Section 6(b) and Section 7 as the Company),
from and against any loss, claim, damage or liability, joint or several, or any
action in respect thereof, to which the Company may become subject, whether
commenced or threatened, under the Securities Act, the Exchange Act, any other
federal or state statutory law or regulation, at common law or otherwise,
insofar as such loss, claim, damage, liability or action arises out of, or is
based upon, (i) any untrue statement or alleged untrue statement of a material
fact contained in any such Registration Statement or any prospectus forming part
thereof or in any amendment or supplement thereto or (ii) the omission or
alleged omission to state therein a material fact required to be stated therein
or necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading, but in each case only
to the extent that the untrue statement or alleged untrue statement or omission
or alleged omission was made in reliance upon and in conformity with any
Holders' Information furnished to the Company by such Holder, and shall
reimburse the Company for any legal or other expenses reasonably incurred by the
Company in connection with investigating or defending or preparing to defend
against or appearing as a third party witness in connection with any such loss,
claim, damage, liability or action as such expenses are incurred; provided,
however, that no such Holder shall be liable for any indemnity claims hereunder
in excess of the amount of net proceeds received by such Holder from the sale of
Securities, Exchange Securities or Private Exchange Securities pursuant to such
Shelf Registration Statement.

          (b) Promptly after receipt by an indemnified party under this Section
6 of notice of any claim or the commencement of any action, the indemnified
party shall, if a claim in respect thereof is to be made against the
indemnifying party pursuant to Section 6(a) or 6(b), notify the indemnifying
party in writing of the claim or the commencement of that action; provided,
however, that the failure to notify the indemnifying party shall not relieve it
from any liability which it may have under this Section 6 except to the extent
that it has been materially prejudiced (through the forfeiture of substantive
rights or defenses) by such failure; and provided, further, that the failure to
notify the indemnifying party shall not relieve it from any liability which it
may have to an indemnified party otherwise than under this Section 6. If any
such claim or action shall be brought against an indemnified party, and it shall
notify the indemnifying party thereof, the indemnifying party shall be entitled
to participate therein and, to the extent that it wishes, jointly with any other
similarly notified indemnifying party, to assume the defense thereof with
counsel reasonably satisfactory to the indemnified party. After
<PAGE>   15
                                      -15-

notice from the indemnifying party to the indemnified party of its election to
assume the defense of such claim or action, the indemnifying party shall not be
liable to the indemnified party under this Section 6 for any legal or other
expenses subsequently incurred by the indemnified party in connection with the
defense thereof other than the reasonable costs of investigation; provided,
however, that an indemnified party shall have the right to employ its own
counsel in any such action, but the fees, expenses and other charges of such
counsel for the indemnified party will be at the expense of such indemnified
party unless (1) the employment of counsel by the indemnified party has been
authorized in writing by the indemnifying party, (2) the indemnified party has
reasonably concluded (based upon advice of counsel to the indemnified party)
that there may be legal defenses available to it or other indemnified parties
that are different from or in addition to those available to the indemnifying
party, (3) a conflict or potential conflict exists (based upon advice of counsel
to the indemnified party) between the indemnified party and the indemnifying
party (in which case the indemnifying party will not have the right to direct
the defense of such action on behalf of the indemnified party) or (4) the
indemnifying party has not in fact employed counsel reasonably satisfactory to
the indemnified party to assume the defense of such action within a reasonable
time after receiving notice of the commencement of the action, in each of which
cases the reasonable fees, disbursements and other charges of counsel will be at
the expense of the indemnifying party or parties. It is understood that the
indemnifying party or parties shall not, in connection with any proceeding or
related proceedings in the same jurisdiction, be liable for the reasonable fees,
disbursements and other charges of more than one separate firm of attorneys (in
addition to any local counsel) at any one time for all such indemnified party or
parties. Each indemnified party, as a condition of the indemnity agreements
contained in Sections 6(a) and 6(b), shall use all reasonable efforts to
cooperate with the indemnifying party in the defense of any such action or
claim. No indemnifying party shall be liable for any settlement of any such
action effected without its written consent (which consent shall not be
unreasonably withheld), but if settled with its written consent or if there be a
final judgment for the plaintiff in any such action, the indemnifying party
agrees to indemnify and hold harmless any indemnified party from and against any
loss or liability by reason of such settlement or judgment or if the
indemnifying party has not paid the expenses and fees for which it is liable 20
days after notice by the indemnified party of request for reimbursement. No
indemnifying party shall, without the prior written consent of the indemnified
party (which consent shall not be unreasonably withheld), effect any settlement
of any pending or threatened proceeding in respect of which any indemnified
party is or could have been a party and indemnity could have been sought
hereunder by such indemnified party, unless such settlement (i) includes an
unconditional release of such indemnified party from all liability on claims
that are the subject matter of such proceeding and (ii) does not include a
statement or admission of fault, culpability or a failure to act, by or on
behalf of the indemnified party.

          7. Contribution. If the indemnification provided for in Section 6 is
unavailable or insufficient to hold harmless an indemnified party under Section
6(a) or 6(b),
<PAGE>   16
                                      -16-

then each indemnifying party shall, in lieu of indemnifying such indemnified
party, contribute to the amount paid or payable by such indemnified party as a
result of such loss, claim, damage or liability, or action in respect thereof,
(i) in such proportion as shall be appropriate to reflect the relative benefits
received by the Company and the Guarantors from the offering and sale of the
Securities, on the one hand, and a Holder with respect to the sale by such
Holder of Securities, Exchange Securities or Private Exchange Securities, on the
other, or (ii) if the allocation provided by clause (i) above is not permitted
by applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (i) above but also the relative fault of
the Company and each of the Guarantors on the one hand and such Holder on the
other with respect to the statements or omissions that resulted in such loss,
claim, damage or liability, or action in respect thereof, as well as any other
relevant equitable considerations. The relative benefits received by the Company
and each of the Guarantors on the one hand and a Holder on the other with
respect to such offering and such sale shall be deemed to be in the same
proportion as the total net proceeds from the offering of the Securities (before
deducting expenses) received by or on behalf of the Company and each of the
Guarantors, on the one hand, and the total discounts and commissions received by
such Holder with respect to the Securities, Exchange Securities or Private
Exchange Securities, on the other, bear to the total gross proceeds from the
sale of Securities, Exchange Securities or Private Exchange Securities. The
relative fault 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 the Company and each of the
Guarantors or information supplied by the Company and each of the Guarantors on
the one hand or to any Holders' Information supplied by such Holder on the
other, the intent of the parties and their relative knowledge, access to
information and opportunity to correct or prevent such untrue statement or
omission. The parties hereto agree that it would not be just and equitable if
contributions pursuant to this Section 7 were to be determined by pro rata
allocation or by any other method of allocation that does not take into account
the equitable considerations referred to herein. The amount paid or payable by
an indemnified party as a result of the loss, claim, damage or liability, or
action in respect thereof, referred to above in this Section 7 shall be deemed
to include, for purposes of this Section 7, any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending or preparing to defend any such action or claim. Notwithstanding
the provisions of this Section 7, an indemnifying party that is a Holder of
Securities, Exchange Securities or Private Exchange Securities shall not be
required to contribute any amount in excess of the amount by which the total
price at which the Securities, Exchange Securities or Private Exchange
Securities sold by such indemnifying party to any purchaser exceeds the amount
of any damages which such indemnifying party has otherwise paid or become liable
to pay by reason of any untrue or alleged untrue statement or omission or
alleged omission. No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation.

<PAGE>   17
                                      -17-

          8. Rules 144 and 144A. So long as any Transfer Restricted Securities
remain outstanding, the Company shall use its reasonable best efforts to file
the reports required to be filed by it under Rule 144A(d)(4) under the
Securities Act and the Exchange Act in a timely manner and, if at any time the
Company is not required to file such reports, it will, upon the written request
of any Holder of Transfer Restricted Securities, make publicly available other
information so long as necessary to permit sales of such Holder's securities
pursuant to Rules 144 and 144A. The Company and the Guarantors covenant that
they will take such further action as any Holder of Transfer Restricted
Securities may reasonably request, all to the extent required from time to time
to enable such Holder to sell Transfer Restricted Securities without
registration under the Securities Act within the limitation of the exemptions
provided by Rules 144 and 144A (including, without limitation, the requirements
of Rule 144A(d)(4)). Upon the written request of any Holder of Transfer
Restricted Securities, the Company and the Guarantors shall deliver to such
Holder a written statement as to whether it has complied with such requirements.
Notwithstanding the foregoing, nothing in this Section 8 shall be deemed to
require the Company to register any of its securities pursuant to the Exchange
Act.

          9. Underwritten Registrations. If any of the Transfer Restricted
Securities covered by any Shelf Registration Statement are to be sold in an
underwritten offering, the investment banker or investment bankers and manager
or managers that will administer the offering will be selected by the Holders of
a majority in aggregate principal amount of such Transfer Restricted Securities
included in such offering, subject to the consent of the Company (which shall
not be unreasonably withheld or delayed), and such Holders shall be responsible
for all underwriting commissions and discounts in connection therewith.

          No person may participate in any underwritten registration hereunder
unless such person (i) agrees to sell such person's Transfer Restricted
Securities on the basis reasonably provided in any underwriting arrangements
approved by the persons entitled hereunder to approve such arrangements and (ii)
completes and executes all questionnaires, powers of attorney, indemnities,
underwriting agreements and other documents reasonably required under the terms
of such underwriting arrangements.

          10. Miscellaneous; Amendments and Waivers. The provisions of this
Agreement may not be amended, modified or supplemented, and waivers or consents
to departures from the provisions hereof may not be given, unless the Company
has obtained the written consent of Holders of a majority in aggregate principal
amount of the Securities, the Exchange Securities and the Private Exchange
Securities, taken as a single class. Notwithstanding the foregoing, a waiver or
consent to depart from the provisions hereof with respect to a matter that
relates exclusively to the rights of Holders whose Securities, Exchange
Securities or Private Exchange Securities are being sold pursuant to a
Registration Statement and that does not directly or indirectly affect the
rights of other Holders may be given by Holders
<PAGE>   18
                                      -18-

of a majority in aggregate principal amount of the Securities, the Exchange
Securities and the Private Exchange Securities being sold by such Holders
pursuant to such Registration Statement.

          (a) Notices. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand-delivery, first-class mail,
telecopier or air courier guaranteeing next-day delivery:

               (1) if to a Holder, at the most current address given by such
          Holder to the Company in accordance with the provisions of this
          Section 10(b), which address initially is, with respect to each
          Holder, the address of such Holder maintained by the Registrar under
          the Indenture, with a copy in like manner to JPMorgan, a division of
          Chase Securities Inc., Banc of America Securities LLC, BNY Capital
          Markets, Inc. and BMO Nesbitt Burns Corp.;

               (2) if to an Initial Purchaser, initially at its address set
          forth in the Purchase Agreement;

               (3) if to the Company, initially at the address of the Company
          set forth in the Purchase Agreement; and

               (4) if to the Guarantors, initially at the address of the
          Guarantors set forth in the Purchase Agreement.

          All such notices and communications shall be deemed to have been duly
given: when delivered by hand, if personally delivered; one business day after
being delivered to a next-day air courier; five business days after being
deposited in the mail; and when receipt is acknowledged by the recipient's
telecopier machine, if sent by telecopier.

          (b) Successors and Assigns. This Agreement shall be binding upon the
Company, the Guarantors and their respective successors and assigns.

          (c) Counterparts. This Agreement may be executed in any number of
counterparts (which may be delivered in original form or by telecopier) 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.

          (d) Definition of Terms. For purposes of this Agreement, (a) the term
"business day" means any day on which the New York Stock Exchange, Inc. is open
for trading, (b) the term "subsidiary" has the meaning set forth in Rule 405
under the Securities Act and (c) except where otherwise expressly provided, the
term "affiliate" has the meaning set forth in Rule 405 under the Securities Act.
<PAGE>   19
                                      -19-

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

          (f) Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of New York.

          (g) Remedies. In the event of a breach by the Company or any of the
Guarantors or by any Holder of any of their respective obligations under this
Agreement, each Holder or the Company or any Guarantor, as the case may be, in
addition to being entitled to exercise all rights granted by law, including
recovery of damages (other than the recovery of damages for a breach by the
Company or any Guarantor of their obligations under Sections 1 or 2 hereof for
which additional interest has been paid pursuant to Section 3 hereof), will be
entitled to specific performance of its rights under this Agreement. The
Company, each Guarantor and each Holder agree that monetary damages would not be
adequate compensation for any loss incurred by reason of a breach by it of any
of the provisions of this Agreement and hereby further agree that, in the event
of any action for specific performance in respect of such breach, it shall waive
the defense that a remedy at law would be adequate.

          (h) No Inconsistent Agreements. Each of the Company and each Guarantor
represents, warrants and agrees that (i) it has not entered into, shall not, on
or after the date of this Agreement, enter into any agreement that is
inconsistent with the rights granted to the Holders in this Agreement or
otherwise conflicts with the provisions hereof, (ii) it has not previously
entered into any agreement which remains in effect granting any registration
rights with respect to any of its debt securities to any person and (iii)
without limiting the generality of the foregoing, without the written consent of
the Holders of a majority in aggregate principal amount of the then outstanding
Transfer Restricted Securities, it shall not grant to any person the right to
request the Company to register any debt securities of the Company under the
Securities Act unless the rights so granted are not in conflict or inconsistent
with the provisions of this Agreement.

          (i) No Piggyback on Registrations. Neither the Company nor the
Guarantors nor any of its security holders (other than the Holders of Transfer
Restricted Securities in such capacity) shall have the right to include any
securities of the Company in any Shelf Registration or Registered Exchange Offer
other than Transfer Restricted Securities.

          (j) Severability. The remedies provided herein are cumulative and not
exclusive of any remedies provided by law. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction to be
invalid, illegal, void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions set forth herein shall remain in full force and
effect and shall in no way be affected, impaired or invalidated, and the parties
hereto shall use their reasonable best efforts to find and employ an alternative
means to achieve the same or substantially the same result as that contemplated
by such term,
<PAGE>   20
                                      -20-

provision, covenant or restriction. It is hereby stipulated and declared to be
the intention of the parties that they would have executed the remaining terms,
provisions, covenants and restrictions without including any of such that may be
hereafter declared invalid, illegal, void or unenforceable.

                            [Signature Pages Follow]

<PAGE>   21
                                      -21-

          Please confirm that the foregoing correctly sets forth the agreement
among the Company, the Guarantors and the Initial Purchasers.

                                 Very truly yours,

                                 BEVERLY ENTERPRISES, INC.

                                 By: /s/ Schuyler Hollingsworth, Jr.
                                    -------------------------------------
                                    Name:  Schuyler Hollingsworth, Jr.
                                    Title: Senior Vice President and Treasurer

                                 GUARANTORS listed on Schedule 1 attached hereto

                                  By: /s/ John W. MacKenzie
                                      -------------------------------------
                                      Name:  John W. MacKenzie
                                      Title: Vice President and Secretary of
                                      each of the Guarantors

Accepted:

CHASE SECURITIES INC.
BANC OF AMERICA SECURITIES LLC
BNY CAPITAL MARKETS, INC.
BMO NESBITT BURNS CORP.

By:  CHASE SECURITIES INC., as
Representative of the Initial Purchasers
listed on Schedule 3 of the Purchase Agreement

By: /s/ Christopher Boege
    -------------------------------------
    Name:  Christopher Boege
    Title: Vice President

<PAGE>   22
                                                                      SCHEDULE 1

                                   GUARANTORS

<TABLE>
<CAPTION>
                                                                         Employer             State of
Corporation                                                              ID Number            Incorporation

<S>                                                                      <C>                  <C>
AEGIS Therapies, Inc. (f/k/a Beverly Rehabilitation, Inc.)               71-0811574           Delaware

AGI-Camelot, Inc.                                                        43-1253376           Missouri

Arborland Management Company, Inc.                                       58-2340689           South Carolina

Associated Physical Therapy Practitioners, Inc.                          23-2638708           Pennsylvania

Beverly Assisted Living, Inc.                                            71-0777901           Delaware

Beverly - Bella Vista Holding, Inc.                                      71-0797481           Delaware

Beverly - Branson Holdings, Inc.                                         71-0817008           Delaware

Beverly-Indianapolis, LLC                                                71-0824184           Indiana

Beverly - Missouri Valley Holding, Inc.                                  71-0797485           Delaware

Beverly - Plant City Holdings, Inc.                                      71-0817010           Delaware

Beverly - Rapid City Holding, Inc.                                       71-0797483           Delaware

Beverly - Tamarac Holdings, Inc.                                         71-0817009           Delaware

Beverly - Tampa Holdings, Inc.                                           71-0817007           Delaware

Beverly Clinical, Inc.                                                   71-0796035           Delaware

Beverly Enterprises International Limited                                95-3982125           California

Beverly Enterprises - Alabama, Inc.                                      95-3742145           California

Beverly Enterprises - Arizona, Inc.                                      95-3750871           California
</TABLE>
<PAGE>   23
                                      -2-
<TABLE>
<CAPTION>
                                                                         Employer             State of
Corporation                                                              ID Number            Incorporation
<S>                                                                      <C>                  <C>
Beverly Enterprises - Arkansas, Inc.                                     95-3751272           California

Beverly Enterprises - California, Inc.                                   95-2499218           California

Beverly Enterprises - Colorado, Inc.                                     95-3750882           California

Beverly Enterprises - Connecticut, Inc.                                  95-3849642           California

Beverly Enterprises - Delaware, Inc.                                     95-3849628           California

Beverly Enterprises - Distribution Services, Inc.                        95-4081567           California

Beverly Enterprises - District of Columbia, Inc.                         95-3750889           California

Beverly Enterprises - Florida, Inc.                                      95-3742251           California

Beverly Enterprises - Garden Terrace, Inc.                               95-3849648           California

Beverly Enterprises - Georgia, Inc.                                      95-3750880           California

Beverly Enterprises - Hawaii, Inc.                                       95-3750890           California

Beverly Enterprises - Idaho, Inc.                                        95-3750886           California

Beverly Enterprises - Illinois, Inc.                                     95-3750883           California

Beverly Enterprises - Indiana, Inc.                                      95-3744258           California

Beverly Enterprises - Iowa, Inc.                                         95-3751271           California

Beverly Enterprises - Kansas, Inc.                                       95-3751269           California

Beverly Enterprises - Kentucky, Inc.                                     95-3750894           California

Beverly Enterprises - Louisiana, Inc.                                    95-3849633           California

Beverly Enterprises - Maine, Inc.                                        95-3849627           California

Beverly Enterprises - Maryland, Inc.                                     95-3750892           California
</TABLE>

<PAGE>   24
                                      -3-
<TABLE>
<CAPTION>
                                                                         Employer             State of
Corporation                                                              ID Number            Incorporation
<S>                                                                      <C>                  <C>
Beverly Enterprises - Massachusetts, Inc.                                95-3750893           California

Beverly Enterprises - Michigan, Inc.                                     95-3898661           California

Beverly Enterprises - Minnesota, Inc.                                    95-3742698           California

Beverly Enterprises - Mississippi, Inc.                                  95-3742144           California

Beverly Enterprises - Missouri, Inc.                                     95-3750895           California

Beverly Enterprises - Montana, Inc.                                      95-3849636           California

Beverly Enterprises - Nebraska, Inc.                                     95-3750873           California

Beverly Enterprises - Nevada, Inc.                                       95-3750896           California

Beverly Enterprises - New Hampshire, Inc.                                95-3849630           California

Beverly Enterprises - New Jersey, Inc.                                   95-3750884           California

Beverly Enterprises - New Mexico, Inc.                                   95-3750869           California

Beverly Enterprises - North Carolina, Inc.                               95-3742257           California

Beverly Enterprises - North Dakota, Inc.                                 95-3751270           California

Beverly Enterprises - Ohio, Inc.                                         95-3750867           California

Beverly Enterprises - Oklahoma, Inc.                                     95-3849624           California

Beverly Enterprises - Oregon, Inc.                                       95-3750881           California

Beverly Enterprises - Pennsylvania, Inc.                                 95-3750870           California

Beverly Enterprises - Rhode Island, Inc.                                 95-3849621           California

Beverly Enterprises - South Carolina, Inc.                               95-3750866           California

Beverly Enterprises - Tennessee, Inc.                                    95-3742261           California
</TABLE>
<PAGE>   25
                                      -4-
<TABLE>
<CAPTION>
                                                                         Employer             State of
Corporation                                                              ID Number            Incorporation
<S>                                                                      <C>                  <C>
Beverly Enterprises - Texas, Inc.                                        95-3744256           California

Beverly Enterprises - Utah, Inc.                                         95-3751089           California

Beverly Enterprises - Vermont, Inc.                                      95-3750885           California

Beverly Enterprises - Virginia, Inc.                                     95-3742694           California

Beverly Enterprises - Washington, Inc.                                   95-3750868           California

Beverly Enterprises - West Virginia, Inc.                                95-3750888           California

Beverly Enterprises - Wisconsin, Inc.                                    95-3742696           California

Beverly Enterprises - Wyoming, Inc.                                      95-3849638           California

Beverly Health and Rehabilitation Services, Inc.                         95-2301514           California

Beverly Healthcare, LLC                                                  71-0817438           Indiana

Beverly Healthcare Acquisition, Inc.                                     71-0812407           Delaware

Beverly Healthcare - California, Inc.                                    95-3750879           California

Beverly Holdings I, Inc.                                                 71-0768985           Delaware

Beverly Indemnity, Ltd.                                                  71-0712927           Vermont

Beverly Manor Inc. of Hawaii                                             99-0144750           California

Beverly Real Estate Holdings, Inc.                                       71-0768984           Delaware

Beverly Savana Cay Manor, Inc.                                           95-4217381           California

Carrollton Physical Therapy Clinic, Inc.                                 75-2102832           Texas

Commercial Management, Inc.                                              42-0891358           Iowa

Community Care, Inc.                                                     56-1487367           North Carolina
</TABLE>

<PAGE>   26
                                      -5-
<TABLE>
<CAPTION>
                                                                         Employer             State of
Corporation                                                              ID Number            Incorporation
<S>                                                                      <C>                  <C>
Compassion and Personal Care Services, Inc.                              56-1904822           North Carolina

Eastern Home Health Supply & Equipment Co., Inc.                         56-1581980           North Carolina

Greenville Rehabilitation Services, Inc.                                 75-2059145           Texas

Hallmark Convalescent Homes, Inc.                                        41-1413478           Michigan

HomeCare Preferred Choice, Inc.                                          62-1702864           Delaware

Home Health and Rehabilitation Services, Inc.                            75-2012280           Texas

Hospice of Eastern Carolina, Inc.                                        56-1951841           North Carolina

Hospice Preferred Choice, Inc.                                           71-0761314           Delaware

HTHC Holdings, Inc.                                                      71-0807323           Delaware

Las Colinas Physical Therapy Center, Inc.                                75-2402177           Texas

Liberty Nursing Homes, Incorporated                                      54-0784334           Virginia

MATRIX Occupational Health, Inc.                                         58-2380955           Delaware

MATRIX Rehabilitation, Inc.                                              71-0783147           Delaware

MATRIX Rehabilitation - Delaware, Inc.                                   71-0842504           Delaware

MATRIX Rehabilitation - Georgia, Inc.                                    58-2554073           Delaware

MATRIX Rehabilitation - Maryland, Inc.                                   71-0842503           Delaware

MATRIX Rehabilitation - Ohio, Inc.                                       71-0842505           Delaware

MATRIX Rehabilitation - South Carolina, Inc.                             73-1575603           Delaware

MATRIX Rehabilitation - Texas, Inc.                                      73-1589542           Delaware

MATRIX Rehabilitation - Washington, Inc.                                 58-2554074           Delaware
</TABLE>
<PAGE>   27
                                      -6-

<TABLE>
<CAPTION>
                                                                         Employer             State of
Corporation                                                              ID Number            Incorporation
<S>                                                                      <C>                  <C>
Medical Arts Health Facility of Lawrenceville, Inc.                      58-1329700           Georgia

Moderncare of Lumberton, Inc.                                            56-1217025           North Carolina

Nebraska City S-C-H, Inc.                                                41-1413481           Nebraska

Network for Physical Therapy, Inc.                                       74-2453469           Texas

North Dallas Physical Therapy Associates, Inc.                           75-2075331           Texas

Nursing Home Operators, Inc.                                             34-0949279           Ohio

Petersen Health Care, Inc.                                               59-2043392           Florida

PT NET, Inc.                                                             62-1575533           Tennessee

PT Net (Colorado), Inc.                                                  84-1277912           Colorado

Rehabilitation Associates of Lafayette, Inc.                             72-1118473           Louisiana

South Alabama Nursing Home, Inc.                                         95-3809397           Alabama

South Dakota - Beverly Enterprises, Inc.                                 95-3750887           California

Spectra Healthcare Alliance, Inc.                                        71-0759298           Delaware

Tar Heel Infusion Company, Inc.                                          56-1767308           North Carolina

The Parks Physical Therapy and Work Hardening Center, Inc.               75-2452926           Texas

Theraphysics Corp.                                                       13-3643705           Delaware

Theraphysics of New York IPA, Inc.                                       71-0817011           New York

Theraphysics Partners of Colorado, Inc.                                  51-0372115           Delaware

Theraphysics Partners of Texas, Inc.                                     62-1659976           Delaware

Theraphysics Partners of Western Pennsylvania, Inc.                      23-2901884           Delaware
</TABLE>

<PAGE>   28
                                      -7-

<TABLE>
<CAPTION>
                                                                         Employer             State of
Corporation                                                              ID Number            Incorporation
<S>                                                                      <C>                  <C>
TMD Disposition Company                                                  59-3151568           Florida

Vantage Healthcare Corporation                                           35-1572998           Delaware
</TABLE>

<PAGE>   29

                                                                         ANNEX A

          Each broker-dealer that receives Exchange Securities for its own
account pursuant to the Registered Exchange Offer must acknowledge that it will
deliver a prospectus in connection with any resale of such Exchange Securities.
The Letter of Transmittal states that by so acknowledging and by delivering a
prospectus, a broker-dealer will not be deemed to admit that it is an
"underwriter" within the meaning of the Securities Act. This Prospectus, as it
may be amended or supplemented from time to time, may be used by a broker-dealer
in connection with resales of Exchange Securities received in exchange for
Securities where such Securities were acquired by such broker-dealer as a result
of market-making activities or other trading activities. The Company has agreed
that, for a period of 180 days after the Expiration Date (as defined herein), it
will make this Prospectus available to any broker-dealer for use in connection
with any such resale. See "Plan of Distribution".

<PAGE>   30

                                                                         ANNEX B

          Each broker-dealer that receives Exchange Securities for its own
account in exchange for Securities, where such Securities were acquired by such
broker-dealer as a result of market-making activities or other trading
activities, must acknowledge that it will deliver a prospectus in connection
with any resale of such Exchange Securities. See "Plan of Distribution".

<PAGE>   31

                                                                         ANNEX C

                              PLAN OF DISTRIBUTION

          Each broker-dealer that receives Exchange Securities for its own
account pursuant to the Registered Exchange Offer must acknowledge that it will
deliver a prospectus in connection with any resale of such Exchange Securities.
This Prospectus, as it may be amended or supplemented from time to time, may be
used by a broker-dealer in connection with resales of Exchange Securities
received in exchange for Securities where such Securities were acquired as a
result of market-making activities or other trading activities. The Company has
agreed that, for a period of 180 days after the Expiration Date, it will make
this prospectus, as amended or supplemented, available to any broker-dealer for
use in connection with any such resale. In addition, until ______, 2009, all
dealers effecting transactions in the Exchange Securities may be required to
deliver a prospectus.

          The Company will not receive any proceeds from any sale of Exchange
Securities by broker-dealers. Exchange Securities received by broker-dealers for
their own account pursuant to the Registered Exchange Offer may be sold from
time to time in one or more transactions in the over-the-counter market, in
negotiated transactions, through the writing of options on the Exchange
Securities or a combination of such methods of resale, at market prices
prevailing at the time of resale, at prices related to such prevailing market
prices or at negotiated prices. Any such resale may be made directly to
purchasers or to or through brokers or dealers who may receive compensation in
the form of commissions or concessions from any such broker-dealer or the
purchasers of any such Exchange Securities. Any broker-dealer that resells
Exchange Securities that were received by it for its own account pursuant to the
Registered Exchange Offer and any broker or dealer that participates in a
distribution of such Exchange Securities may be deemed to be an "underwriter"
within the meaning of the Securities Act and any profit on any such resale of
Exchange Securities and any commission or concessions received by any such
persons may be deemed to be underwriting compensation under the Securities Act.
The Letter of Transmittal states that, by acknowledging that it will deliver and
by delivering a prospectus, a broker-dealer will not be deemed to admit that it
is an "underwriter" within the meaning of the Securities Act.

          For a period of 180 days after the Expiration Date the Company will
promptly send additional copies of this Prospectus and any amendment or
supplement to this Prospectus to any broker-dealer that requests such documents
in the Letter of Transmittal. The Company has agreed to pay all expenses
incident to the Registered Exchange Offer (including the expenses of one counsel
for the Holders of the Securities) other than commissions or concessions of any
broker-dealers and will indemnify the Holders of the Securities (including any
broker-dealers) against certain liabilities, including liabilities under the
Securities Act.

<PAGE>   32

                                                                         ANNEX D

     -         CHECK HERE IF YOU ARE A BROKER-DEALER AND WISH TO RECEIVE 10
          ADDITIONAL COPIES OF THE PROSPECTS AND 10 COPIES OF ANY AMENDMENTS OR
          SUPPLEMENTS THERETO.

If the undersigned is not a broker-dealer, the undersigned represents that it is
not engaged in, and does not intend to engage in, a distribution of Exchange
Securities. If the undersigned is a broker-dealer that 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, it
acknowledges that it will deliver a prospectus in connection with any resale of
such Exchange Securities; however, by so acknowledging and by delivering a
prospectus, the undersigned will not be deemed to admit that it is an
"underwriter" within the meaning of the Securities Act.<PAGE>   1
                                                                    EXHIBIT 10.1

                            BEVERLY ENTERPRISES, INC.

                                  $200,000,000

                          9 5/8% SENIOR NOTES DUE 2009

                               PURCHASE AGREEMENT

                                                                  April 18, 2001

JPMORGAN, a division of
   CHASE SECURITIES INC.
BANC OF AMERICA SECURITIES LLC
BNY CAPITAL MARKETS, INC.
BMO NESBITT BURNS CORP.
c/o Chase Securities Inc.
270 Park Avenue, 4th floor
New York, Now York  10017

Ladies and Gentlemen:

          Beverly Enterprises, Inc., a Delaware corporation (the "Company"),
proposes to issue, and sell $200,000,000 aggregate principal amount of its 9
5/8% Senior Notes due 2009 (the "Securities"). The Securities will be issued
pursuant to an indenture to be dated as of April 25, 2001 (the "Indenture")
between the Company, each of the subsidiaries of the Company listed on Schedule
1 hereto (each a "Guarantor" and together, the "Guarantors") and The Bank of New
York, as trustee (the "Trustee"). The Securities will be guaranteed (the
"Guarantees" and each a "Guarantee") jointly and severally by each of the
Guarantors. The Company hereby confirms its agreement with JPMorgan, a division
of Chase Securities, Inc. ("JPMorgan"), Banc of America Securities LLC, BNY
Capital Markets, Inc. and BMO Nesbitt Burns Corp. (together the "Initial
Purchasers") concerning the purchase of the Securities from the Company by the
several Initial Purchasers.

          The Securities will be offered and sold to the Initial Purchasers
without being, registered under the Securities Act of 1933, as amended (the
"Securities Act"), in reliance upon an exemption therefrom. The Company has
prepared a preliminary offering memorandum dated April 6, 2001 (the "Preliminary
Offering Memorandum") and will prepare an offering memorandum dated the date
hereof (the "Offering Memorandum") setting forth information concerning the
Company and the Securities. Copies of the Preliminary Offering Memorandum have
been, and copies of the Offering Memorandum will be, delivered by the

<PAGE>   2
                                      -2-

Company to the Initial Purchasers pursuant to the terms of this Agreement. Any
reference herein to the Preliminary Offering Memorandum and the Offering
Memorandum shall be deemed to include all amendments and supplements thereto,
unless otherwise noted. This Company hereby confirms that it has authorized the
use of the Preliminary Offering Memorandum and the Offering Memorandum in
connection with the offering and resale of the Securities by the Initial
Purchasers in accordance with Section 2.

          Holders of the Securities (including the Initial Purchasers and their
direct and indirect transferees) will be entitled to the benefits of an Exchange
and Registration Rights Agreement, substantially in the form attached hereto as
Annex A (the "Registration Rights Agreement", pursuant to which the Company will
agree to file with the Securities and Exchange Commission (the "Commission") a
registration statement under the Securities Act (the "Exchange Offer
Registration Statement") registering an issue of senior notes of the Company and
guarantees of each of the Guarantors (the "Exchange Securities") which are
identical in all material respects to the Securities (except that the Exchange
Securities will not contain terms with respect to transfer restrictions) and the
Guarantees and under certain circumstances, a shelf registration statement
pursuant to Rule 415 under the Securities Act (the "Shelf Registration
Statement").

          Capitalized terms used but not defined herein shall have the meanings
given to such terms in the Offering Memorandum.

          1.  Representations, Warranties and Agreements of the Company and each
of the Guarantors. Company and the Guarantors jointly and severally represent
and warrant to, and agree with, the several Initial Purchasers on and as of the
date hereof and the Closing Date (as defined in Section 3) that:

          (a) Each of the Preliminary Offering Memorandum and the Offering
     Memorandum, as of its respective date, did not, and on the Closing Date the
     Offering Memorandum will not, contain any untrue statement of a material
     fact or omit to state a material fact required to be stated therein or
     necessary in order to make the statements therein, in light of the
     circumstances under which they were made, not misleading; provided that the
     Company and each of the Guarantors make no representation or warranty as to
     information contained in or omitted from the Preliminary Offering
     Memorandum or the Offering Memorandum in reliance upon and in conformity
     with written information relating to the Initial Purchasers furnished to
     the Company or the Guarantors by or on behalf of any Initial Purchaser
     specifically for use therein as specified in Section 16 hereof (the
     "Initial Purchasers' Information").

          (b) Each of the Preliminary Offering Memorandum and the Offering
     Memorandum, as of its respective date, contains all of the information
     that, if

<PAGE>   3
                                      -3-

     requested by a prospective purchaser of the Securities, would be required
     to be provided to such prospective purchaser pursuant to Rule 144A(d)(4)
     under the Securities Act.

          (c) Assuming the accuracy of the representations and warranties of the
     Initial Purchasers contained in Section 2 and their compliance with the
     agreements set forth therein, it is not necessary, in connection with the
     issuance and sale of the Securities to the Initial Purchasers and the
     offer, resale and delivery of the Securities by the Initial Purchasers in
     the manner contemplated by this Agreement and the Offering Memorandum, to
     register the Securities under the Securities Act or, until such time as the
     Exchange Securities are issued pursuant to an effective registration
     statement, to qualify the Indenture under the Trust Indenture Act of 1939,
     as amended (the "Trust Indenture Act").

          (d) The Company and each of its subsidiaries have been duly
     incorporated or formed, as the case may be, and are validly existing
     corporations or limited liability companies, as the case may be, in good
     standing under the laws of their respective jurisdictions of incorporation
     or formation, as the case may be, are duly qualified to do business and are
     in good standing as foreign corporations or foreign limited liability
     companies, as the case may be, in each jurisdiction in which their
     respective ownership or lease of property or the conduct of their
     respective businesses requires such qualification, and have all power and
     authority necessary to own or hold their respective properties and to
     conduct the businesses in which they are engaged, except where the failure
     to so qualify or have such power or authority would not, singularly or in
     the aggregate, reasonably be expected to result in a material adverse
     effect on the condition (financial or otherwise), results of operations or
     business or prospects of the Company and its subsidiaries taken as a whole
     (a "Material Adverse Effect").

          (e) The Company has a capitalization as set forth in the Offering
     Memorandum under the heading "Capitalization"; all of the outstanding
     shares of capital stock of the Company have been duly and validly
     authorized and issued and are fully paid and non-assessable. All the
     outstanding shares of capital stock or membership interests, as the case
     may be, of each subsidiary of the Company have been duly and validly
     authorized and issued, are fully paid and nonassessable and are owned
     directly or indirectly by the Company, and except as noted on Schedule 3,
     are owned free and clear of any lien, charge, encumbrance, security
     interest, restriction upon voting or transfer or any other claim of any
     third party.

          (f) The Company and each of the Guarantors has full right and
     authority to execute and deliver this Agreement, the Indenture (including
     the Guarantees set forth therein), the Registration Rights Agreement and
     the Securities (in the case of the Company only) (collectively, the
     "Transaction Documents") and to perform their respective

<PAGE>   4
                                      -4-

     obligations hereunder and thereunder and, as of the Closing Date, all
     corporate or limited liability company action required to be taken by the
     Company and the Guarantors for the due and proper authorization, execution
     and delivery of each of the Transaction Documents and the consummation of
     the transactions contemplated thereby will have been duly and validly
     taken.

          (g) This Agreement has been duly authorized, executed and delivered by
     the Company and each of the Guarantors and, when duly executed and
     delivered in accordance with its terms by each of the parties thereto, will
     constitute a valid and legally binding agreement of the Company and each of
     the Guarantors, except as rights to indemnification and contribution may be
     limited by public policy considerations or applicable law, and, except to
     the extent that such enforceability may be limited by applicable
     bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium
     and other similar laws affecting creditors' rights generally and by general
     equitable principles (whether considered in a proceeding in equity or at
     law).

          (h) The Registration Rights Agreement has been duly authorized by the
     Company and each of the Guarantors and, when duly executed and delivered in
     accordance with its terms by each of the parties thereto, will constitute a
     valid and legally binding agreement of the Company and each of the
     Guarantors, enforceable against the Company and each of the Guarantors in
     accordance with its terms, except to the extent that such enforceability
     may be limited by applicable bankruptcy, insolvency, fraudulent conveyance,
     reorganization, moratorium and other similar laws affecting creditors'
     rights generally and by general equitable principles (whether considered in
     a proceeding in equity or at law).

          (i) The Indenture has been duly authorized by the Company and each of
     the Guarantors and, when duly executed and delivered in accordance with its
     terms by each of the parties thereto, will constitute a valid and legally
     binding agreement of the Company and each of the Guarantors enforceable
     against the Company and each of the Guarantors in accordance with its
     terms, except to the extent that such enforceability may be limited by
     applicable bankruptcy, insolvency, fraudulent conveyance, reorganization,
     moratorium and other similar laws affecting creditors' rights generally and
     by general equitable principles (whether considered in a proceeding in
     equity or at law). On the Closing Date, the Indenture will conform in all
     material respects to the requirements of the Trust Indenture Act and the
     rules and regulations of the Commission applicable to an indenture which is
     qualified thereunder.

          (j) The Securities have been duly authorized by the Company and, when
     duly executed, authenticated, issued and delivered as provided in the
     Indenture (assuming the Indenture is the valid and legally binding
     obligation of the Trustee and due

<PAGE>   5
                                      -5-

     authentication of the Securities by the Trustee) and paid for as provided
     herein, will be duly and validly issued and outstanding and will constitute
     valid and legally binding obligations of the Company, as issuer, and each
     of the Guarantors, as guarantors, entitled to the benefits of the Indenture
     and enforceable against the Company, as issuer, and each of the Guarantors,
     as guarantors in accordance with their terms, except to the extent that
     such enforceability may be limited by applicable bankruptcy, insolvency,
     fraudulent conveyance reorganization, moratorium and other similar laws
     affecting creditors' rights generally and by general equitable principles
     (whether considered in a proceeding in equity or at law).

          (k) Each of the guarantors that, as of the date of the Guarantees, is
     a guarantor of the $180,000,000 of 9% Senior Notes due 2006 issued by
     Beverly Enterprises, Inc. is also a Guarantor of the Securities. Schedule 1
     attached hereto sets forth all the subsidiaries of the Company that are
     Guarantors of the Securities. The Guarantees have been duly authorized by
     each of the Guarantors and, when the Securities have been duly executed,
     authenticated, issued and delivered as provided in the Indenture and paid
     for as provided herein (assuming due authorization, execution and delivery
     of the Indenture by the Trustee and due authentication of the Securities by
     the Trustee), will constitute valid and legally binding obligations of each
     of the Guarantors, enforceable against the Guarantors in accordance with
     their terms, subject to bankruptcy, insolvency, fraudulent conveyance,
     reorganization, moratorium and other similar laws affecting creditors'
     rights generally and to general equitable principles (whether considered in
     a proceeding in equity or at law).

          (l) The Exchange Securities have been duly authorized by the Company
     and the related guarantees have been duly authorized by each of the
     Guarantors and, when duly executed, authenticated, issued and delivered as
     provided in the Indenture and the Registration Rights Agreement (assuming
     the Indenture is the valid and legally binding obligation of the Trustee)
     will constitute a valid and legally binding obligation of the Company, as
     issuer, and each of the Guarantors, as guarantors, enforceable against the
     Company, as issuer, and each of the Guarantors, as guarantors, in
     accordance with its terms, except to the extent that such enforceability
     may be limited by applicable bankruptcy, insolvency, fraudulent conveyance,
     reorganization, moratorium and other similar laws affecting creditors'
     rights generally and by general equitable principles (whether considered in
     a proceeding in equity or at law).

          (m) Each of the Indenture and the Registration Rights Agreement
     conforms in all material respects to the description thereof contained in
     the Offering Memorandum.

<PAGE>   6
                                      -6-

          (n) The execution, delivery and performance by the Company and each of
     the Guarantors of each of the Transaction Documents to which it is a party,
     the issuance, authentication sale and delivery of the Securities and
     compliance by the Company and each of the Guarantors with the terms thereof
     and the consummation of the transactions as contemplated by the Transaction
     Documents will not conflict with or result in a breach or violation of any
     of the terms or provisions of, or constitute a default under, or result in
     the creation or imposition of any lien, charge or encumbrance upon any
     property or assets of the Company or any of its subsidiaries pursuant to,
     any material indenture, mortgage, deed of trust, loan agreement or other
     material 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 property or assets of the Company or any of
     its subsidiaries is subject, nor will such actions result in any violation
     of the provisions of the charter or by-laws (or any other comparable
     organizational documents) of the Company or any of its subsidiaries or any
     statute or any judgment, order, decree, rule, or regulation of any court or
     arbitrator or governmental agency or body having jurisdiction over the
     Company or any of its subsidiaries or any of their properties or assets;
     and no consent, approval, authorization or order of, or filing or
     registration with, any such court or arbitrator or governmental agency or
     body under any such statute, judgment, order, decree, rule or regulation is
     required for the execution, delivery and performance by the Company and
     each of the Guarantors of each of the Transaction Documents to which each
     is a party, the issuance, authentication, sale and delivery of the
     Securities, the issuance of the Guarantees and compliance by the Company
     and each of the Guarantors with the terms thereof and the consummation of
     the transactions contemplated by the Transaction Documents, except for such
     consents, approvals, authorizations, filings, registrations or
     qualifications which shall have been obtained or made prior to the Closing
     Date or as may be required to be obtained or made under the Securities Act
     and applicable state securities laws as provided in the Registration Rights
     Agreement.

          (o) Ernst & Young LLP are independent certified public accountants
     with respect to the Company and its subsidiaries (i) as required by the
     Securities Act and the rules and regulations of the Commission thereunder
     and (ii) within the meaning of Rule 101 of the Code of Professional Conduct
     of the American Institute of Certified Public Accountants ("AICPA") and its
     interpretations and rulings thereunder. The historical financial statements
     (including the related notes) contained in the Offering Memorandum comply
     as to form in all material respects with the requirements applicable to a
     registration statement on Form S-1 under the Securities Act (except that
     certain supporting schedules are omitted); such financial statements have
     been prepared in accordance with generally accepted accounting principles
     consistently applied throughout the periods covered thereby and fairly
     present the financial position of the entities purported to be covered
     thereby at the respective dates indicated and the results

<PAGE>   7
                                      -7-

     of their operations and their cash flows for the respective periods
     indicated; and the financial information contained in the Offering
     Memorandum under the headings "Offering Memorandum Summary--Summary
     Consolidated Financial Data", "Capitalization of the Company", "Selected
     Historical Consolidated Financial Data", and "Management's Discussion and
     Analysis of Financial Condition and Results of Operations" are derived from
     the accounting records of the Company and its subsidiaries and fairly
     present the information purported to be shown thereby. The as adjusted
     financial information contained in the Offering Memorandum has been
     prepared on a basis consistent with the historical financial statements
     contained in the Offering Memorandum (except for the adjustments specified
     therein). The other historical financial and statistical information and
     data included in the Offering Memorandum are, in all material respects,
     accurately presented and prepared on a basis consistent with such financial
     statements and the books and records of the Company.

          (p) Except as otherwise disclosed in the Offering Memorandum, there
     are no legal or governmental proceedings pending to which the Company or
     any of its subsidiaries is a party or of which any property or assets of
     the Company or any of its subsidiaries is the subject which, singularly or
     in the aggregate, if determined adversely to the Company or any of its
     subsidiaries, could reasonably be expected to have a Material Adverse
     Effect, and to the best knowledge of the Company, no such proceedings are
     threatened or contemplated by governmental authorities or threatened by
     others.

          (q) No action has been taken and no statute, rule, regulation or order
     has been enacted, adopted or issued by any governmental agency or body
     which prevents the issuance of the Securities or the issuance of the
     Guarantees, or suspends the sale of the Securities in any jurisdiction; no
     injunction, restraining order or order of any nature by any federal or
     state court of competent jurisdiction has been issued with respect to the
     Company or any of its subsidiaries which would prevent or suspend the
     issuance or sale of the Securities or the issuance of the Guarantees or the
     use of the Preliminary Offering Memorandum or the Offering Memorandum in
     any jurisdiction; no action, suit or proceeding is pending against or, to
     the best knowledge of the Company, threatened against or affecting the
     Company or any of its subsidiaries before any court or arbitrator or any
     governmental agency, body or official, domestic or foreign, which could
     reasonably be expected to interfere with or adversely affect the issuance
     of the Securities or the issuance of the Guarantees in any manner or draw
     into question the validity or enforceability of any of the Transaction
     Documents or any action taken or to be taken pursuant thereto; and the
     Company has complied with any and all requests by any securities authority
     in any jurisdiction for additional information to be included in the
     Preliminary Offering Memorandum and the Offering Memorandum.

<PAGE>   8
                                      -8-

          (r) Neither the Company nor any of its subsidiaries is (i) in
     violation of its charter or by-laws (or other comparable organizational
     documents), (ii) in default, and no event has occurred which, with notice
     or lapse of time or both, would constitute such a default, in the due
     performance or observance of any term, covenant or condition contained in
     any indenture, mortgage, deed of trust, loan agreement or other agreement
     or instrument to which it is a party or by which it is bound or to which
     any of its property or assets is subject, which, singularly or in the
     aggregate, could reasonably be expected to have a Material Adverse Effect,
     or (iii) in violation of any law, ordinance, governmental rule, regulation
     or court decree to which it or its property or assets may be subject which,
     singularly or in the aggregate, could reasonably be expected to have a
     Material Adverse Effect.

          (s) The Company and each of its subsidiaries possess all material
     licenses, certificates, authorizations and permits issued by, and have made
     all declarations and filings with, the appropriate federal, state or
     foreign regulatory agencies or bodies which are necessary for the ownership
     of their respective properties or the conduct of their respective
     businesses as described in the Offering Memorandum, except where the
     failure to possess or make the same could not, singularly or in the
     aggregate, reasonably be expected to have a Material Adverse Effect, and
     neither the Company nor any of its subsidiaries has received notification
     of any revocation or modification of any such license, certificate,
     authorization or permit or has any reason to believe that any such license,
     certificate, authorization or permit will not be renewed in the ordinary
     course.

          (t) The Company and each of its subsidiaries have filed all material
     federal, state, local and foreign income and franchise tax returns required
     to be filed through the date hereof and have paid all taxes due and owing
     thereon, other than those being contested in good faith and for which
     adequate reserves have been provided. No tax deficiency has been determined
     adversely to the Company or any of its subsidiaries which has had (nor does
     the Company or any of its subsidiaries have any knowledge of any tax
     deficiency which, if determined adversely to the Company or any of its
     subsidiaries, could reasonably be expected to have) a Material Adverse
     Effect, except those deficiencies for which adequate reserves have been
     established.

          (u) Neither the Company nor any of its subsidiaries is an "investment
     company" or a company "controlled by" an investment company within the
     meaning of the Investment Company Act of 1940, as amended (the "Investment
     Company Act"), and the rules and regulations of the Commission thereunder.

          (v) The Company and each of its subsidiaries maintain a system of
     internal accounting controls sufficient to provide reasonable assurance
     that (i) transactions are

<PAGE>   9
                                      -9-

     executed in accordance with management's general or specific
     authorizations; (ii) transactions are recorded as necessary to permit
     preparation of financial statements in conformity with generally accepted
     accounting principles and to maintain asset accountability; (iii) access to
     assets is permitted only in accordance with management's general or
     specific authorization and (iv) the recorded accountability for assets is
     compared with the existing assets at reasonable intervals and appropriate
     action is taken with respect to any differences.

          (w) The Company and each of its subsidiaries have insurance covering
     their respective properties, operations, personnel and businesses, as are
     consistent with industry practice to protect the Company and its
     subsidiaries and their respective businesses. Neither the Company nor any
     of its subsidiaries has received notice from any insurer or agent of such
     insurer that capital improvements or other similar expenditures are
     required or necessary to be made in order to continue such insurance.

          (x) The Company and each of its subsidiaries own or possess adequate
     rights to use all material patents, patent applications, trademarks,
     service marks, trade names, trademark registrations, service mark
     registrations, copyrights, licenses and know-how (including trade secrets
     and other unpatented and/or unpatentable proprietary or confidential
     information, systems or procedures) presently employed by them in
     connection with the respective businesses now operated by them; and the use
     of such rights in connection with their respective businesses will not
     conflict in any material respect with, and the Company and its subsidiaries
     have not received any notice of any claim of conflict with, any such rights
     of others, except such conflicts which, singularly or in the aggregate,
     could not reasonably be expected to have a Material Adverse Effect.

          (y) The Company and each of its subsidiaries have good and marketable
     title in fee simple to, or have valid, rights to lease or otherwise use,
     all items of real and personal property which are material to the business
     of the Company and its subsidiaries, in each case free and clear of all
     liens, encumbrances, claims and defects and imperfections of title except
     such as do not materially interfere with the use made and proposed to be
     made of such property by the Company and its subsidiaries or could not
     reasonably be expected to have a Material Adverse Effect, except with
     respect to secured debt described in the Offering Memorandum.

          (z) Except for those that could not reasonably be expected to have a
     Material Adverse Effect, no labor disturbance by or dispute with the
     employees of the Company or any of its subsidiaries exists or, to the best
     knowledge of the Company, is contemplated or threatened.

<PAGE>   10
                                      -10-

          (aa) Except to the extent such events could not reasonably be expected
     to have a Material Adverse Effect: (i) no "prohibited transaction" (as
     defined in Section 406 of the Employee Retirement Income Security Act of
     1974, as amended, including the regulations and published interpretations
     thereunder "ERISA"), or Section 4975 of the Internal Revenue Code of 1986,
     as amended from time to time (the "Code"), or "accumulated funding
     deficiency" (as defined in Section 302 of ERISA) or any of the events set
     forth in Section 4043(b) of ERISA (other than events with respect to which
     the 30-day notice requirement under Section 4043 of ERISA has been waived)
     has occurred with respect to any employee benefit plan of the Company or
     any of its subsidiaries; (ii) each such employee benefit plan is in
     compliance with applicable law, including ERISA and the Code; (iii) the
     Company and each of its subsidiaries have not incurred and do not expect to
     incur liability under Title IV of ERISA with respect to the termination of,
     or withdrawal from, any pension plan for which the Company or any of its
     subsidiaries would have any liability; and (iv) each such pension plan that
     is intended to be qualified under Section 401 (a) of the Code is so
     qualified and nothing has occurred whether by action or by failure to act,
     which could cause the loss of such qualification.

          (bb) Except as described in the Offering Memorandum, there has been no
     storage, generation, transportation, handling, treatment, disposal,
     discharge, emission or other release of any kind of toxic or other wastes
     or other hazardous substances by, due to or caused by the Company or any of
     its subsidiaries (or, to the best knowledge of the Company, any other
     entity (including any predecessor) for whose acts or omissions the Company
     or any of its subsidiaries is or could reasonably be expected to be liable)
     upon any of the property now or previously owned or leased by the Company
     or any of its subsidiaries, or upon any other property, in violation of any
     statute or any ordinance, rule, regulation, order, judgment, decree or
     permit or which would, under any statute or any ordinance, rule (including
     rule of common law), regulation, order, judgment, decree or permit give
     rise to any liability, except for any violation or liability that could not
     reasonably be expected to have, singularly or in the aggregate with all
     such violation and liabilities, a Material Adverse Effect; and there has
     been no disposal, discharge, emission or other release of any kind onto
     such property or into the environment surrounding such property of any
     toxic or other wastes or other hazardous substances with respect to which
     the Company or any of its subsidiaries has any knowledge, except for any
     such disposal, discharge, emission or other release of any kind which could
     not reasonably be expected to have, singularly or in the aggregate with all
     such discharges and other releases, a Material Adverse Effect.

          (cc) On and immediately after the Closing Date, the Company and its
     subsidiaries, on a consolidated basis, (after giving effect to the issuance
     of the Securities and to the other transactions related thereto as
     described in the Offering Memorandum)

<PAGE>   11
                                      -11-

     will be Solvent. As used in this paragraph, the term "Solvent" means, with
     respect to a particular date that on such date the present fair market
     value (or present fair saleable value) of the assets of the Company and its
     consolidated subsidiaries are not less than the total amount required to
     pay the probable liabilities of the Company and its consolidated
     subsidiaries on their total existing debts and liabilities (including
     contingent liabilities) as they become absolute and matured, the Company
     and its consolidated subsidiaries are able to realize upon their assets and
     pay their debts and other liabilities, contingent obligations and
     commitments as they mature and become due in the normal course of business,
     assuming the sale of the Securities as contemplated by this Agreement and
     the Offering Memorandum, the Company and its consolidated subsidiaries are
     not incurring debts or liabilities beyond their ability to pay as such
     debts and liabilities mature and the Company and its consolidated
     subsidiaries are not engaged in any business or transaction, and are not
     about to engage in any business or transaction, for which their property
     would constitute unreasonably small capital after giving due consideration
     to the prevailing practice in the industry in which the Company and its
     consolidated subsidiaries are engaged. In computing the amount of such
     contingent liabilities at any time, it is intended that such liabilities
     will be computed at the amount that, in light of all the facts and
     circumstances existing at such time, represents the amount that can
     reasonably be expected to become an actual or matured liability.

          (dd) Except as described in the Offering Memorandum, there are no
     outstanding subscriptions, rights, warrants, calls or options to acquire,
     or instruments convertible into or exchangeable for, or agreements or
     understandings with respect to the sale or issuance of, any shares of
     capital stock of or other equity or other ownership interest in the Company
     or any of its subsidiaries.

          (ee) Neither the Company nor any of its subsidiaries or agents has
     taken, and none of them will take, any action that might cause this
     Agreement or the issuance and sale of the Securities or the issuance of the
     Guarantees to violate Regulation T, U or X of the Board of Governors of the
     Federal Reserve System.

          (ff) Neither the Company nor any of its subsidiaries is a party to any
     contract, agreement or understanding with any person that would give rise
     to a valid claim against the Company or the Initial Purchasers for a
     brokerage commission, finder's fee or like payment in connection with the
     offering and sale of the Securities.

          (gg) The Securities satisfy the eligibility requirements of Rule
     144A(d)(3) under the Securities Act.

          (hh) Exclusive of the Initial Purchasers (as to which we make no
     representation or warranty), none of the Company, any of its affiliates or
     any person acting on its or their behalf has engaged or will engage in any
     directed selling efforts (as such term

<PAGE>   12
                                      -12-

     is defined in Regulation S under the Securities Act ("Regulation S")), and
     all such persons have complied and will comply with the offering
     restrictions requirement of Regulation S to the extent applicable.

          (ii) Exclusive of the Initial Purchasers (as to which we make no
     representation or warranty), neither the Company nor any of its affiliates
     has, directly or through any agent, sold, offered for sale, solicited
     offers to buy or otherwise negotiated in respect of, any security (as such
     term is defined in the Securities Act), which is or will be integrated with
     the sale of the Securities in a manner that would require registration of
     the Securities under the Securities Act.

          (jj) Exclusive of the Initial Purchasers (as to which we make no
     representation or warranty), none of the Company or any of its affiliates
     or any other person acting on its or their behalf has engaged, in
     connection with the offering of the Securities, in any form of general
     solicitation or general advertising within the meaning of Rule 502(c) under
     the Securities Act.

          (kk) Neither the Company nor any of its affiliates has taken and will
     not take, directly or indirectly, any action prohibited by Regulation M
     under the Exchange Act in connection with the offering of the Securities.

          (ll) No forward-looking statement (within the meaning of Section 27A
     of the Securities Act and Section 21E of the Exchange Act) contained in the
     Preliminary Offering Memorandum or the Offering Memorandum has been made or
     reaffirmed without a reasonable basis or has been disclosed other than in
     good faith.

          (mm) Since the date as of which information is given in the Offering
     Memorandum (exclusive of amendments or supplements after the date hereof),
     except as otherwise stated therein, (i) there has been no material adverse
     change or any development involving a prospective material adverse change
     in the condition, financial or otherwise, or in the earnings, business
     affairs, management or business prospects of the Company, whether or not
     arising in the ordinary course of business, (ii) none of the Company or any
     of its subsidiaries has incurred any material liability or obligation,
     direct or contingent, other than in the ordinary course of business, (iii)
     none of the Company or any of its subsidiaries has entered into any
     material transaction other than in the ordinary course of business and (iv)
     there has not been any change in the capital stock or long-term debt of the
     Company or any of its subsidiaries, or any dividend or distribution of any
     kind declared, paid or made by the Company or any of its subsidiaries on
     any class of its capital stock, or any redemption in respect thereof.

          2.   Purchase and Resale of the Securities. (a) On the basis of the
representations, warranties and agreements contained herein, and subject to the
terms and

<PAGE>   13
                                      -13-

conditions set forth herein, the Company agrees to issue and sell to each of the
Initial Purchasers, severally and not jointly, and each of the Initial
Purchasers, severally and not jointly, agrees to purchase from the Company, the
principal amount of Securities set forth opposite the name of such Initial
Purchaser on Schedule 2 hereto at a purchase price equal to 97.5% of the
principal amount thereof. The Company shall not be obligated to deliver any of
the Securities except upon its receipt of payment for all of the Securities to
be purchased as provided herein.

          (b) The Initial Purchasers have advised the Company that they propose
to offer the Securities for resale upon the terms and subject to the conditions
set forth herein and in the Offering Memorandum. Each Initial Purchaser,
severally and not jointly, represents, warrants to and agrees with the Company
that (i) it is purchasing the Securities pursuant to an exemption from
registration under the Securities Act, (ii) it has not solicited offers for, or
offered or sold, and will not solicit offers for, or offer or sell, the
Securities by means of any form of general solicitation or general advertising
within the meaning of Rule 502(c) of Regulation D under the Securities Act
("Regulation D"), and (iii) it has solicited and will solicit offers for the
Securities only from, and has offered or sold and will offer, sell or deliver
the Securities, as part of their initial offering, only (A) within the United
States to persons whom it reasonably believes to be qualified institutional
buyers ("Qualified Institutional Buyers"), as defined in Rule 144A under the
Securities Act ("Rule 144A"), or if any such person is buying for one or more
institutional accounts for which such person is acting as fiduciary or agent,
only when such person has represented to it that each such account is a
Qualified Institutional Buyer to whom notice has been given that such sale or
delivery is being made in reliance on Rule 144A and (B) outside the United
States to persons other than U.S. persons in reliance on Regulation S under the
Securities Act ("Regulation S").

          (c) In connection with the offer and sale of Securities in reliance on
Regulation S, each Initial Purchaser, severally and not jointly, represents,
warrants and agrees that:

          (i) such Initial Purchaser is a Qualified Institutional Buyer, with
     such knowledge and experience in financial and business matters as are
     necessary in order to evaluate the merits and risks of an investment in the
     Securities.

          (ii) the Securities have not been registered under the Securities Act
     and may not be offered or sold within the United States or to or for the
     account or benefit of U.S. persons except pursuant to an exemption from, or
     in transactions not subject to, the registration requirements of the
     Securities Act.

          (iii) such Initial Purchaser has offered and sold the Securities, and
     will offer and sell the Securities, (A) as part of its distribution at any
     time and (B) otherwise until 40 days after the later of the commencement of
     the offering of the Securities and the

<PAGE>   14
                                      -14-

     Closing Date, only in accordance with Regulation S or Rule 144A or any
     other available exemption from registration under the Securities Act.

          (iv) none of such Initial Purchasers or any of their respective
     affiliates or any other person acting on its or their behalf has engaged or
     will engage in any directed selling efforts (as such term is defined in
     Regulation S) with respect to the Securities or the Guarantees, and all
     such persons have complied and will comply with the offering restrictions
     requirement of Regulation S.

          (v) at or prior to the confirmation of sale of any Securities sold in
     reliance on Regulation S, it will have sent to each distributor, dealer or
     other person receiving a selling concession, fee or other remuneration,
     that purchases Securities from it during the restricted period a
     confirmation or notice to substantially the following effect:

          "The Securities covered hereby have not been registered
          under the U.S. Securities Act of 1933, as amended (the
          "Securities Act"), and may not be offered or sold within the
          United States or to or for the account or benefit of U.S.
          persons (i) as part of their distribution at any time or
          (ii) otherwise until 40 days after the later of the
          commencement of the offering of the Securities and the date
          of original issuance of the Securities, except in accordance
          with Regulation S or Rule 144A or any other available
          exemption from registration under the Securities Act. Terms
          used above have the meanings given to them by Regulation S."

          (vi) it has not and will not enter into any contractual arrangement
     with any distributor with respect to the distribution of the Securities,
     except with its affiliates or with the prior written consent of the
     Company.

Terms used in this Section 2(c) have the meanings given to them by Regulation S.

          (d) Each Initial Purchaser, severally and not jointly, represents,
warrants and agrees that (i) it has not offered or sold and prior to the date
six months after the Closing Date will not offer or sell any Securities to
persons in the United Kingdom except to persons whose ordinary activities
involve them in acquiring, holding, managing or disposing of investments (as
principal or agent) for the purposes of their businesses or otherwise in
circumstances which have not resulted and will not result in an offer to the
public in the United Kingdom within the meaning of the Public Offers of
Securities Regulations 1995; (ii) it has complied and will comply with all
applicable provisions of the Financial Services Act 1986 and the Public Offers
of Securities Regulations 1995 with respect to anything done by it in relation
to the Securities in, from or otherwise involving the United Kingdom; and (iii)
it has only issued or passed on and will only issue or pass on in the United
Kingdom any document received by it in connection with the issue of the
Securities to a person who is of a kind

<PAGE>   15
                                      -15-

described in Article 11(3) of the Financial Services Act 1986 (Investment
Advertisements) (Exemptions) Order 1996 (as amended) or is a person to whom such
document may otherwise lawfully be issued or passed on.

          (e) Each Initial Purchaser, severally and not jointly, agrees that,
prior to or simultaneously with the confirmation of sale by such Initial
Purchaser to any purchaser of any of the Securities purchased by such Initial
Purchaser from the Company pursuant hereto, such Initial Purchaser shall furnish
to that purchaser a copy of the Offering Memorandum (and any amendment or
supplement thereto that the Company shall have furnished to such Initial
Purchaser prior to the date of such confirmation of sale where required by
applicable law). In addition to the foregoing, each Initial Purchaser
acknowledges and agrees that the Company and, for purposes of the opinions to be
delivered to the Initial Purchasers pursuant to Section 5(d), (e) and (g),
counsel for the Company and for the Initial Purchaser, respectively, may rely
upon the accuracy of the representations and warranties of the Initial
Purchasers and their compliance with their agreements contained in this Section
2, and each Initial Purchaser hereby consents to such reliance.

          (f) The Company acknowledges and agrees that the Initial Purchasers
may sell Securities to any affiliate of an Initial Purchaser and that any such
affiliate may sell Securities purchased by it to an Initial Purchaser.

          3.  Delivery of and Payment for the Securities. (a) Delivery of and
payment for the Securities shall be made at the offices of Cahill Gordon &
Reindel, New York, New York, or at such other place as shall be agreed upon by
the Initial Purchasers and the Company, at 10:00 A.M., New York City time, on
April 25, 2001, or at such other time or date, not later than seven full
business days thereafter, as shall be agreed upon by the Initial Purchasers and
the Company (such date and time of payment and delivery being referred to herein
as the "Closing Date").

          (b) On the Closing Date, payment of the purchase price for the
Securities shall be made to the Company by wire or book-entry transfer of
same-day funds to such account or accounts as the Company shall specify prior to
the Closing Date or by such other means as the parties hereto shall agree prior
to the Closing Date against delivery to the Initial Purchasers of the
certificates evidencing the Securities. Time shall be of the essence, and
delivery at the time and place specified pursuant to this Agreement is a further
condition of the obligations of the Initial Purchasers hereunder. Upon delivery,
the Securities shall be in global form, registered in such names and in such
denominations as JPMorgan on behalf of the Initial Purchasers shall have
requested in writing not less than two full business days prior to the Closing
Date. The Company agrees to make one or more global certificates evidencing the
Securities available for inspection by JPMorgan on behalf of the Initial
Purchasers in New York, New York at least 24 hours prior to the Closing Date.

<PAGE>   16
                                      -16-

          4.  Further Agreements of the Company and each of Guarantors. Each of
the Company and each of the Guarantors agrees with each of the several Initial
Purchasers:

          (a) during the period referred to in Section 4(d): (i) to advise the
     Initial Purchasers promptly and, if requested, confirm such advice in
     writing, of the happening of any event which makes any statement of a
     material fact made in the Offering Memorandum untrue or which requires the
     making of any additions to or changes in the Offering Memorandum (as
     amended or supplemented from time to time) in order to make the statements
     therein, in light of the circumstances under which they were made, not
     misleading; (ii) to advise the Initial Purchasers promptly of any order
     preventing or suspending the use of the Preliminary Offering Memorandum or
     the Offering Memorandum, of any suspension of the qualification of the
     Securities for offering or sale in any jurisdiction and of the initiation
     or threatening of any proceeding for any such purpose; and (iii) to use its
     reasonable best efforts to prevent the issuance of any such order
     preventing or suspending the use of the Preliminary Offering Memorandum or
     the Offering Memorandum or suspending any such qualification and, if any
     such suspension is issued, to obtain the lifting thereof at the earliest
     possible time;

          (b) to furnish promptly to each of the Initial Purchasers and counsel
     for the Initial Purchasers, without charge, as many copies of the
     Preliminary Offering Memorandum and the Offering Memorandum (and any
     amendments or supplements thereto) as may be reasonably requested;

          (c) prior to making any amendment or supplement to the Offering
     Memorandum, to furnish a copy thereof to each of the Initial Purchasers and
     counsel for the Initial Purchasers and not to effect any such amendment or
     supplement to which the Initial Purchasers shall reasonably object by
     notice to the Company after a reasonable period to review;

          (d) if, at any time prior to completion of the resale of the
     Securities by the Initial Purchasers, any event shall occur or condition
     exist as a result of which it is necessary, in the opinion of counsel for
     the Initial Purchasers or counsel for the Company, to amend or supplement
     the Offering Memorandum in order that the Offering Memorandum will not
     include an untrue statement of a material fact or omit to state a material
     fact necessary in order to make the statements therein, in light of the
     circumstances existing at the time it is delivered to a purchaser not
     misleading, or if it is necessary to amend or supplement the Offering
     Memorandum to comply with applicable law, to promptly prepare such
     amendment or supplement as may be necessary to correct such untrue
     statement or omission or so that the Offering Memorandum, as so amended or
     supplemented, will comply with applicable law;

<PAGE>   17
                                      -17-

          (e) for so long as the Securities are outstanding and are "restricted
     securities" within the meaning of Rule 144(a)(3) under the Securities Act,
     to furnish to holders of the Securities and prospective purchasers of the
     Securities 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, unless the Company is then
     subject to and in compliance with Section 13 or 15(d) of the Exchange Act
     (the foregoing agreement being for the benefit of the holders from time to
     time of the Securities and prospective purchasers of the Securities
     designated by such holders);

          (f) for so long as the Securities are outstanding, upon the request of
     an Initial Purchaser, to furnish to the Initial Purchasers copies of any
     annual reports, quarterly reports and current reports filed by the Company
     with the Commission on Forms 10-K, 10-Q and 8-K, or such other similar
     forms as may be designated by the Commission, and such other documents,
     reports and information as shall be furnished by the Company to the Trustee
     or to the holders of the Securities pursuant to the Indenture or the
     Exchange Act or any rule or regulation of the Commission thereunder;

          (g) to promptly take from time to time such actions as the Initial
     Purchasers may reasonably request to qualify the Securities for offering
     and sale under the securities or Blue Sky laws of such jurisdictions as the
     Initial Purchasers may designate and to continue such qualifications in
     effect for so long as required for the resale of the Securities; and to
     arrange for the determination of the eligibility for investment of the
     Securities under the laws of such jurisdiction as the Initial Purchasers
     may reasonably request; provided that the Company and its subsidiaries
     shall not be obligated to qualify as foreign corporations or limited
     liability companies in any jurisdiction in which they are not so qualified
     or to file a general consent to service of process in any jurisdiction;

          (h) to assist the Initial Purchasers in arranging for the Securities
     to be designated Private Offerings, Resales and Trading through Automated
     Linkages ("PORTAL") Market securities in accordance with the rules and
     regulations adopted by the National Association of Securities Dealers, Inc.
     ("NASD") relating to trading in the PORTAL Market and for the Securities to
     be eligible for clearance and settlement through The Depository Trust
     Company ("DTC");

          (i) not to, and to cause its affiliates not to, sell, offer for sale
     or solicit offers to buy or otherwise negotiate in respect of any security
     (as such term is defined in the Securities Act) which could be integrated
     with the sale of the Securities in a manner which would require
     registration of the Securities under the Securities Act;

          (j) except following the effectiveness of the Exchange Offer
     Registration, Statement or the Shelf Registration Statement, as the case
     may be, not to, and to cause

<PAGE>   18
                                      -18-

     its affiliates not to, and not to authorize or knowingly permit any person
     acting on their behalf to, solicit any offer to buy or offer to sell the
     Securities by means of any form of general solicitation or general
     advertising within the meaning of Regulation D or in any manner involving a
     public offering within the meaning of Section 4(2) of the Securities Act;
     and not to offer, sell, contract to sell or otherwise dispose of, directly
     or indirectly, any securities under circumstances where such offer, sale,
     contract or disposition would cause the exemption afforded by Section 4(2)
     of the Securities Act to cease to be applicable to the offering and sale of
     the Securities as contemplated by this Agreement and the Offering
     Memorandum;

          (k) except any notes issued under the new senior secured credit
     facility and any new industrial revenue bonds issued to refinance existing
     industrial revenue bonds, for a period of 90 days from the date of the
     Offering Memorandum, not to offer for sale, sell, contract to sell or
     otherwise dispose of, directly or indirectly, or file a registration
     statement for, or announce any offer, sale, contract for sale of or other
     disposition of any debt securities issued or guaranteed by the Company or
     any of its subsidiaries (other than the Securities) without the prior
     written consent of the Initial Purchasers;

          (l) during the period from the Closing Date until two years after the
     Closing Date, without the prior written consent of the Initial Purchasers,
     not to, and not permit any of its affiliates (as defined in Rule 144 under
     the Securities Act) to, resell any of the Securities that have been
     reacquired by them, except for Securities purchased by the Company or any
     of its affiliates and resold in a transaction registered under the
     Securities Act;

          (m) in connection with the offering of the Securities, until JPMorgan
     on behalf of the Initial Purchasers shall have notified the Company of the
     completion of the resale of the Securities, not to, and to cause its
     affiliated purchasers (as defined in Regulation M under the Exchange Act)
     not to, either alone or with one or more other persons, bid for or
     purchase, for any account in which it or any of its affiliated purchasers
     has a beneficial interest, any Securities, or attempt to induce any person
     to purchase any Securities; and not to, and to cause its affiliated
     purchasers not to, make bids or purchase for the purpose of creating
     actual, or apparent active trading in or of raising the price of the
     Securities;

          (n) in connection with the offering of the Securities, to make its
     officers, employees, independent accountants and legal counsel reasonably
     available upon request by the Initial Purchasers;

<PAGE>   19
                                      -19-

          (o) to furnish to each of the Initial Purchasers on the date hereof a
     copy of the independent accountants' report included in the Offering
     Memorandum signed by the accountants rendering such report;

          (p) to do and perform all things required to be done and performed by
     it under this Agreement that are within its reasonable control prior to or
     after the Closing Date, and to use its reasonable best efforts to satisfy
     all conditions precedent on its part to the delivery of the Securities;

          (q) to not take any action prior to the execution and delivery of the
     Indenture which, if taken after such execution and delivery, would have
     violated any of the covenants contained in the Indenture;

          (r) to not take any action prior to the Closing Date which would
     require the Offering Memorandum to be amended or supplemented pursuant to
     Section 4(d);

          (s) prior to the Closing Date, not to issue any press release or other
     communication directly or indirectly or hold any press conference with
     respect to the Company, its condition, financial or otherwise, or earnings,
     business affairs or business prospects (except for routine oral marketing
     communications in the ordinary course of business and consistent with the
     past practices of the Company and of which the Initial Purchasers are
     notified), without the prior written consent of the Initial Purchasers,
     unless in the judgment of the Company and its counsel, and after
     notification to the Initial Purchasers, such press release or communication
     is required by law; and

          (t) to apply the net proceeds from the sale of the Securities as set
     forth in the Offering Memorandum under the heading "Use of Proceeds."

          5.  Conditions to Initial Purchasers' Obligations. The respective
obligation of the several Initial Purchasers hereunder are subject to the
accuracy, on and as of the date hereof and the Closing Date, of the
representations and warranties of the Company and the Guarantors contained
herein, to the accuracy of the statements of the Company, the Guarantors and
each of their respective officers made in any certificates delivered pursuant
hereto, to the performance by the Company and the Guarantors of their
obligations hereunder required to be performed through the Closing Date, and to
each of the following additional terms and conditions:

          (a) The Offering Memorandum (and any amendments or supplements
     thereto) shall have been printed and copies distributed to the Initial
     Purchasers as promptly as practicable on or following the date of this
     Agreement or at such other date and time as to which the Initial Purchasers
     may agree; and no stop order

<PAGE>   20
                                      -20-

     suspending the sale of the Securities in any jurisdiction shall have been
     issued and no proceedings for the purpose shall have been commenced or
     shall be pending or threatened.

          (b) None of the Initial Purchasers shall have discovered and disclosed
     to the Company on or prior to the Closing Date that the Offering Memorandum
     or any amendment or supplement thereto contains an untrue statement of a
     fact which, in the opinion of counsel for the Initial Purchasers, is
     material or omits to state any fact which, in the opinion of such counsel,
     is material and is required to be stated therein or is necessary to make
     the statements therein not misleading.

          (c) All corporate or limited liability company proceedings and other
     legal matters incident to the authorization, form and validity of each of
     the Transaction Documents and the Offering Memorandum, and all other legal
     matters relating to the Transaction Documents and the transactions
     contemplated thereby, shall be satisfactory in all material respects to the
     Initial Purchasers, and the Company and each of the Guarantors shall have
     furnished to the Initial Purchasers all documents and information that the
     Initial Purchasers or their counsel may reasonably request to enable them
     to pass upon such matters.

          (d) Latham & Watkins shall have furnished to the Initial Purchasers a
     written opinion, as special counsel to the Company and the Guarantors,
     addressed to the Initial Purchasers and dated the Closing Date, in form and
     substance reasonably satisfactory to the Initial Purchasers, substantially
     in the form set forth in Annex B-1 hereto.

          (e) Douglas J. Babb, General Counsel of the Company, shall have
     furnished to the Initial Purchasers his written opinion, addressed to the
     Initial Purchasers and dated the Closing Date, in form and substance
     reasonably satisfactory to the Initial Purchasers, substantially in the
     form set forth in Annex B-2 hereto.

          (f) Proskauer Rose LLP, special regulatory counsel for the Company,
     shall have furnished to the Initial Purchasers their written opinion,
     addressed to the Initial Purchasers and dated the Closing Date, in form and
     substance reasonably satisfactory to the Initial Purchasers, substantially
     in the form set forth in Annex B-3 hereto.

          (g) The Initial Purchasers shall have received from Cahill Gordon &
     Reindel, counsel for the Initial Purchasers, such opinion or opinions,
     dated the Closing Date, with respect to such matters as the Initial
     Purchasers may reasonably require, and the Company shall have furnished to
     such counsel such documents and information as they request for the purpose
     of enabling them to pass upon such matters.

<PAGE>   21
                                      -21-

          (h) Epstein Becker & Green, P.C., special regulatory counsel for the
     Initial Purchasers, shall have furnished to the Initial Purchasers their
     written opinion, addressed to the Initial Purchasers and dated the Closing
     Date, in form and substance reasonably satisfactory to the Initial
     Purchasers.

          (i) Weil, Gotshal & Manges LLP, special counsel for the Company, shall
     have furnished to the Initial Purchasers their written opinion, addressed
     to the Initial Purchasers and dated the Closing Date, in form and substance
     reasonably satisfactory to the Initial Purchasers.

          (j) The Company shall have furnished to the Initial Purchasers a
     letter (the "Comfort Letter") of Ernst & Young LLP, addressed to the
     Initial Purchasers and dated the date hereof, in form and substance
     satisfactory to the Initial Purchasers.

          (k) The Company shall have furnished to the Initial Purchasers a
     letter (the "Bring-Down Comfort Letter") of Ernst & Young LLP, addressed to
     the Initial Purchasers and dated the Closing Date (A) confirming that they
     are independent public accountants with respect to the Company and its
     subsidiaries within the meaning of Rule 101 of the Code of Professional
     Conduct of the AICPA and its interpretations and rulings thereunder, (B)
     stating, as of the date of the Bring-Down Comfort Letter (or, with respect
     to matters involving changes or developments since the respective dates as
     of which specified financial information is given in the Offering
     Memorandum, as of a date not more than three business days prior to the
     date of the Bring-Down Comfort Letter), that the conclusions and findings
     of such accountants with respect to the financial information and other
     matters covered by the Comfort Letter are accurate and (C) confirming in
     all material respects the conclusions and findings set forth in the Comfort
     Letter.

          (l) The Company shall have furnished to the Initial Purchasers a
     certificate, dated the Closing Date, of its chief executive officer or its
     chief financial officer (including any interim chief financial officer)
     stating that (A) such officers have carefully examined the Offering
     Memorandum, (B) in their opinion, the Offering Memorandum, as of its date,
     did not include any untrue statement of a material fact and did not omit to
     state a material fact required to be stated therein or necessary in order
     to make the statements therein, in light of the circumstances under which
     they were made, not misleading, and since the date of the Offering
     Memorandum, no event has occurred which should have been set forth in a
     supplement or amendment to the Offering Memorandum so that the Offering
     Memorandum (as so amended or supplemented) would not include any untrue
     statement of a material fact and would not omit to state a material fact
     required to be stated therein or necessary in order to make the statements
     therein, in light of the circumstances under which they were made, not
     misleading and

<PAGE>   22
                                      -22-

     (C) as of the Closing Date, the representations and warranties of the
     Company and the each of the Guarantors, as applicable, in this Agreement
     are true and correct in all material respects, the Company and the each of
     the Guarantors, as applicable, have complied in all material respects with
     all agreements and satisfied all conditions on its part to be performed or
     satisfied hereunder on or prior to the Closing Date, and subsequent to the
     date of the most recent financial statements contained in the Offering
     Memorandum (exclusive of amendments or supplements after the date hereof),
     there has been no material adverse change in the financial position or
     results of operation of the Company or any of its subsidiaries, or any
     change, or any development including a prospective change, in or affecting
     the condition (financial or otherwise), results of operations, business or
     prospects of the Company and its subsidiaries taken as a whole that could
     reasonably be expected to have a Material Adverse Effect, except as set
     forth in the Offering Memorandum (exclusive of amendments or supplements
     after the date hereof).

          (m) The Initial Purchasers shall have received a counterpart of the
     Registration Rights Agreement that shall have been executed and delivered
     by a duly authorized officer or agent of the Company and of each of the
     Guarantors.

          (n) The Indenture shall have been duly executed and delivered by the
     Company, each of the Guarantors and the Trustee, and the Securities shall
     have been duly executed and delivered by the Company and duly authenticated
     by the Trustee.

          (o) The Securities shall have been approved by the NASD for trading in
     the PORTAL Market.

          (p) If any event shall have occurred that requires the Company under
     Section 4(d) to prepare an amendment or supplement to the Offering
     Memorandum, such amendment or supplement shall have been prepared, the
     Initial Purchasers shall have been given a reasonable opportunity to
     comment thereon, and copies thereof shall have been delivered to the
     Initial Purchasers reasonably in advance of the Closing Date.

          (q) There shall not have occurred any invalidation of Rule 144A under
     the Securities Act by any court or any withdrawal or proposed withdrawal of
     any rule or regulation under the Securities Act or the Exchange Act by the
     Commission or any amendment or proposed amendment thereof by the Commission
     which in the judgment of the Initial Purchasers would materially impair the
     ability of the Initial Purchasers to purchase, hold or effect resales of
     the Securities contemplated hereby.

          (r) Subsequent to the execution and delivery of this Agreement or, if
     earlier, the dates as of which information is given in the Offering
     Memorandum (exclusive of any amendment or supplement thereto), there shall
     not have been any change in

<PAGE>   23
                                      -23-

     the capital stock or long-term debt or any change, or any development
     involving a prospective change, in or affecting the condition (financial or
     otherwise), results of operations, business or prospects of the Company and
     its subsidiaries taken as a whole, the effect of which, in any such case
     described above, is, in the judgment of the Initial Purchasers, so material
     and adverse as to make it impracticable or inadvisable to proceed with the
     sale or delivery of the Securities on the terms and in the manner
     contemplated by this Agreement and the Offering Memorandum (exclusive of
     any amendment or supplement thereto).

          (s) No action shall have been taken and no statute, rule, regulation
     or order shall have been enacted, adopted or issued by any governmental
     agency or body which would, as of the Closing Date, prevent the issuance or
     sale of the Securities or the issuance of the Guarantees; and no
     injunction, restraining order or order of any other nature by any federal
     or state court of competent jurisdiction shall have been issued as of the
     Closing Date which would prevent the issuance or sale of the Securities or
     issuance of the Guarantees.

          (t) Subsequent to the execution and delivery of this Agreement no
     downgrading shall have occurred in the rating accorded the Securities or
     any of the Company's other debt securities by a "nationally recognized
     statistical rating organization", as such term is defined by the Commission
     for purposes of Rule 436(g)(2) of the rules and regulations of the
     Commission under the Securities Act and no such organization shall have
     publicly announced that it has under surveillance or review (other than an
     announcement with positive implications of a possible upgrading), its
     rating of the Securities or any of the Company's other debt securities.

          (u) Subsequent to the execution and delivery of this Agreement, there
     shall not have occurred any of the following: trading in securities
     generally on the New York Stock Exchange, the American Stock Exchange, or
     the over-the-counter market shall have been suspended or limited, or
     minimum prices shall have been established on any such exchange or market
     by the Commission, by any such exchange or by any other regulatory body or
     governmental authority having jurisdiction, or trading in any securities of
     the Company on any exchange or in the over-the-counter market shall have
     been suspended or any moratorium on commercial banking activities shall
     have been declared by federal or New York state authorities or an outbreak
     or escalation of hostilities or a declaration by the United States of a
     national emergency or war or a material adverse change in general economic,
     political or financial conditions (or the effect of international
     conditions on the financial markets in the United States shall be such),
     the effect of which, in the case of this clause (u), is, in the judgment of
     the Initial Purchasers, so material and adverse as to make it impracticable
     or inadvisable to proceed with the sale or the delivery of the Securities
     on the terms and in the manner

<PAGE>   24
                                      -24-

     contemplated by this Agreement and in the Offering Memorandum (exclusive of
     any amendment or supplement thereto).

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

          6.  Termination. The obligations of the Initial Purchasers hereunder
may be terminated by the Initial Purchasers, in their absolute discretion, by
notice given to and received by the Company prior to delivery of and payment for
the Securities if, prior to that time, any of the events described in Section
5(q), (r), (s), (t) or (u) shall have occurred and be continuing.

          7.  Defaulting Initial Purchasers. (a) If, on the Closing Date, any
Initial Purchaser defaults in the performance of its obligations under this
Agreement, the non-defaulting Initial Purchasers may make arrangements for the
purchase of the Securities which such defaulting Initial Purchaser agreed but
failed to purchase by other persons satisfactory to the Company and the
non-defaulting Initial Purchasers, but if no such arrangements are made within
36 hours after such default, this Agreement shall terminate without liability on
the part of the non-defaulting Initial Purchasers, the Company, or the
Guarantors, except that the Company and the Guarantors will continue to be
liable for the payment of expenses to the extent set forth in Sections 8 and 12
and except that the provisions of Sections 9 and 10 shall not terminate and
shall remain in effect. As used in this Agreement the term "Initial Purchasers"
includes, for all purposes of this Agreement unless the context otherwise
requires, any party not listed in Schedule 2 hereto that, pursuant to this
Section 7, purchases Securities which a defaulting Initial Purchaser agreed but
failed to purchase.

          (b) Nothing contained herein shall relieve a defaulting Initial
Purchaser of any liability it may have to the Company, the Guarantors or any
non-defaulting Initial Purchaser for damages caused by its default. If other
persons are obligated or agree to Purchase the Securities of a defaulting
Initial Purchaser, any of the non-defaulting Initial Purchasers or the Company
may postpone the Closing Date for up to seven full business days in order to
effect any changes that in the opinion of counsel for the Company or counsel for
the Initial Purchasers may be necessary in the Offering Memorandum or in any
other document or arrangement and the Company agrees to promptly prepare any
amendment or supplement to the Offering Memorandum that effects any such
changes.

          8.  Reimbursement of Initial Purchasers' Expenses. If (a) this
Agreement shall have been terminated due to the failure to comply with any
subsection of Section 5 (other than due to the events described in Section 5(q),
(s) or (u), in which case each party will be responsible for its own expenses)
or pursuant to Section 6, (b) the Company shall fail to tender the Securities
for delivery to the Initial Purchasers for any reason permitted under

<PAGE>   25
                                      -25-

this Agreement or (c) the Initial Purchasers shall decline to purchase the
Securities for any reason permitted under this Agreement, the Company and the
each of the Guarantors shall reimburse the Initial Purchasers for such
out-of-pocket expenses (including reasonable fees and disbursements of counsel)
as shall have been reasonably incurred by the Initial Purchasers in connection
with this Agreement and the proposed purchase and resale of the Securities. If
this Agreement is terminated pursuant to Section 7 by reason of the default of
one or more of the Initial Purchasers, neither the Company nor the Guarantors
shall be obligated to reimburse any defaulting Initial Purchaser on account of
such expenses.

          9.  Indemnification. (a) The Company and each of the Guarantors shall
jointly and severally indemnify and hold harmless each Initial Purchaser, its
affiliates, their respective officers, directors, employees, representatives and
agents, and each person, if any, who controls any Initial Purchaser within the
meaning of the Securities Act or the Exchange Act (collectively referred to for
purposes of this Section 9(a) and Section 10 as an Initial Purchaser), from and
against any loss, claim, damage or liability, joint or several, or any action in
respect thereof (including, without limitation, any loss, claim, damage,
liability or action relating to purchases and sales of the Securities), to which
that Initial Purchaser may become subject, whether commenced or threatened,
under the Securities Act, the Exchange Act, any other federal or state statutory
law or regulation at common law or otherwise, insofar as such loss, claim,
damage, liability or action arises out of, or is based upon, (i) any untrue
statement or alleged untrue statement of a material fact contained in the
Preliminary Offering Memorandum or the Offering Memorandum or in any amendment
or supplement thereto or in any information provided by the Company or any
Guarantor pursuant to Section 4(e), or (ii) the omission or alleged omission to
state therein a material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which
they were made not misleading and shall reimburse each Initial Purchaser
promptly upon demand for any legal or other expenses reasonably incurred by that
Initial Purchaser in connection with investigating or defending or preparing to
defend against or appearing as a third party witness in with any such loss,
claim, damage, liability or action as such expenses are incurred; provided,
however, that the Company and each of the Guarantors shall not be liable in any
such case to the extent that any such loss, claim, damage, liability or action
arises out of, or is based upon, an untrue statement or alleged untrue statement
in or omission or alleged omission from any of such documents in reliance upon
and in conformity with any Initial Purchasers' Information; and provided,
further, that with respect to any such untrue statement in or omission from the
Preliminary Offering Memorandum, the indemnity agreement contained in this
Section 9(a) shall not inure to the benefit of any such Initial Purchaser to the
extent that the sale to the person asserting any such loss, claim, damage,
liability or action was an initial resale by such Initial Purchaser and any such
loss, claim, damage, liability or action of or with respect to such Initial
Purchaser results from the fact that both (A) to the extent required by
applicable law, a copy of the Offering Memorandum was not sent or given to such
person at or prior to the written confirmation of the sale of such Securities to
such

<PAGE>   26
                                      -26-

person and (B) the untrue statement in or omission from the Preliminary Offering
Memorandum was corrected in the Offering Memorandum unless, in either case, such
failure to deliver the Offering Memorandum was a result of non-compliance by the
Company with Section 4(b).

          (b) Each Initial Purchaser, severally and not jointly, shall indemnify
and hold harmless the Company, each Guarantor and their respective affiliates,
their respective officers, directors, employees, representatives and agents, and
each person, if any, who controls the Company with the meaning of the Securities
Act or the Exchange Act (collectively referred to for purposes of this Section
9(b) and Section 10 as the Company), from and against any loss, claim, damage or
liability, joint or several, or any action in respect thereof, to which the
Company may become subject, whether commenced or threatened, under the
Securities Act, the Exchange Act, any other federal or state statutory law or
regulation, at common law or otherwise, insofar as such loss, claim, damage,
liability or action arises out of, or is based upon, (i) any untrue statement or
alleged untrue statement of a material fact contained in the Preliminary
Offering Memorandum or the Offering Memorandum or in any amendment or supplement
thereto or (ii) the omission or alleged omission to state therein a material
fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading, but in each case only to the extent that the untrue statement or
alleged untrue statement or omission or alleged omission was made in reliance
upon and in conformity with any Initial Purchasers' Information provided by such
Initial Purchaser, and shall reimburse the Company for any legal or other
expenses reasonably incurred by the Company in connection with investigating or
defending or preparing to defend against or appearing as a third party witness
in connection with any such loss, claim, damage, liability or action as such
expenses are incurred.

          (c) Promptly after receipt by an indemnified party under this Section
9 of notice of any claim or the commencement of any action, the indemnified
party shall, if a claim in respect thereof is to be made against the
indemnifying party pursuant to Section 9(a) or 9(b), notify the indemnifying
party in writing of the claim or the commencement of that action; provided,
however, that the failure to notify the indemnifying party shall not relieve it
from any liability which it may have under this Section 9 except to the extent
that it has been materially prejudiced (through the forfeiture of substantive
rights or defenses) by such failure; and, provided, further, that the failure to
notify the indemnifying party shall not relieve it from any liability which it
may have to an indemnified party otherwise than under this Section 9. If such
claim or action shall be brought against an indemnified party, and it shall
notify the indemnifying party thereof, the indemnifying party shall be entitled
to participate therein and to the extent that it wishes, jointly with any other
similarly notified indemnifying party, to assume the defense thereof with
counsel reasonably satisfactory to the indemnified party. After notice from the
indemnifying party to the indemnified party of its election to assume the
defense of such claim or action, the indemnifying party shall not be liable to
the indemnified

<PAGE>   27
                                      -27-

party under this Section 9 for any legal or other expenses subsequently incurred
by the indemnified party in connection with the defense thereof other than
reasonable costs of investigation; provided, however, that an indemnified party
shall have the right to employ its own counsel in any such action, but the fees,
expenses and other charges of such counsel for the indemnified party will be at
the expense of such indemnified party unless (1) the employment of counsel by
the indemnified party has been authorized in writing by the indemnifying party,
(2) the indemnified party has reasonably concluded (based upon advice of counsel
to the indemnified party) there may be legal defenses available to it or other
indemnified parties that are different from or in addition to those available to
the indemnifying party, (3) a conflict or potential conflict exists (based upon
advice of counsel to the indemnified party) between the indemnified party and
the indemnifying party (in which case the indemnifying party will not have the
right to direct the defense of such action on behalf of the indemnified party)
or (4) the indemnifying party has not in fact employed counsel reasonably
satisfactory to the indemnified party to assume the defense of such action
within a reasonable time after receiving notice of the commencement of the
action, in each of which cases the reasonable fees, disbursements and other
charges of counsel will be at the expense of the indemnifying party or parties.
It is understood, that the indemnifying party or parties shall not, in
connection with any proceeding or related proceedings in the same jurisdiction,
be liable for the reasonable fees, disbursements and other charges of more than
one separate firm of attorneys (in addition to any local counsel) at any one
time for all such indemnified party or parties. Each indemnified party, as a
condition of the indemnity agreements contained in Sections 9(a) and 9(b), shall
use all reasonable efforts to cooperate with the indemnifying party in the
defense of any such action or claim. No indemnifying party shall be liable for
any settlement of any such action effected without its written consent (which
consent shall not be unreasonably withheld), but if settled with its written
consent or if there be a final judgment for the plaintiff in any such action,
the indemnifying party agrees to indemnify and hold harmless any indemnified
party from and against any loss or liability by reason of such settlement or
judgment. No indemnifying party shall, without the prior written consent of the
indemnified party (which consent shall not be unreasonably withheld), effect any
settlement of any pending or threatened proceeding in respect of which any
indemnified party is or could have been a party and indemnity could have been
sought hereunder by such indemnified party unless such settlement includes an
unconditional release of such indemnified party from all liability on claims
that are the subject matter of such proceedings.

          The obligations of the Company, each of the Guarantors and the Initial
Purchasers in this Section 9 and in Section 10 are in addition to any other
liability that the Company, each of the Guarantors or the Initial Purchasers, as
the case may be, may otherwise have, including in respect of any breaches of
representations, warranties and agreements made herein by any such party.

<PAGE>   28
                                      -28-

          10. Contribution. If the indemnification provided for in Section 9 is
unavailable or insufficient to hold harmless an indemnified party under Section
9(a) or 9(b), then each indemnifying party shall, in lieu of indemnifying such
indemnified party, contribute to the amount paid or payable by such indemnified
party as a result of such loss, claim, damage or liability, or action in respect
thereof, (i) in such proportion as shall be appropriate to reflect the relative
benefits received by the Company and each of the Guarantors, on the one hand and
the Initial Purchasers on the other, from the offering of the Securities or (ii)
if the allocation provided by clause (i) above is not permitted by applicable
law, in such proportion as is appropriate to reflect not only the relative
benefits referred to in clause (i) above, but also the relative fault of the
Company and each of the Guarantors on the one hand and the Initial Purchasers on
the other, with respect to the statements or omissions that resulted in such
loss, claim, damage or liability, or action in respect thereof, as well as any
other relevant equitable considerations. The relative benefits received by the
Company and each of the Guarantors on the one hand and the Initial Purchasers on
the other, with respect to such offering shall be deemed to be in the same
proportion as the total net proceeds from the offering of the Securities
purchased under this Agreement (before deducting expenses) received by or on
behalf of the Company and each of the Guarantors, on the one hand, and the total
discounts and commissions received by the Initial Purchasers with respect to the
Securities purchased under this Agreement, on the other, bear to the total gross
proceeds from the sale of the Securities under this Agreement. The relative
fault 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 the Company and each of the
Guarantors or information supplied by the Company and each of the Guarantors on
the one hand or to any Initial Purchasers' Information on the other, the intent
of the parties and their relative knowledge, access to information and
opportunity to correct or prevent such untrue statement or omissions. The
Company, each of the Guarantors and the Initial Purchasers agree that it would
not be just and equitable if contributions pursuant to this Section 10 were to
be determined by pro rata allocation (even if the Initial Purchasers were
treated as one entity for such purpose) or by any other method of allocation
that does not take into account the equitable considerations referred to herein.
The amount paid or payable by an indemnified party as a result of the loss,
claim, damage or liability, or action in respect thereof, referred to above in
this Section 10 shall be deemed to include, for purposes of this Section 10, any
legal or other expenses reasonably incurred by such indemnified party in
connection with investigating or defending or preparing to defend any such
action or claim. Notwithstanding the provisions of this Section 10, no Initial
Purchaser shall be required to contribute any amount in excess of the amount by
which the total discounts and commissions received by such Initial Purchaser
with respect to the Securities purchased by it under this Agreement exceeds the
amount of any damages which such Initial Purchaser has otherwise paid or become
liable to pay by reason of any untrue or alleged untrue statement or omission or
alleged omission. No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from, any person who was not guilty of such

<PAGE>   29
                                      -29-

fraudulent misrepresentation. The Initial Purchasers' obligations to contribute
as provided in this Section 10 are several in proportion to their respective
purchase obligations and not joint.

          11. Persons Entitled to Benefit of Agreement. This Agreement shall
inure to the benefit of and be binding upon the Initial Purchasers, the Company,
each of the Guarantors and their respective successors. This Agreement and the
terms and provisions hereof are for the sole benefit of only those persons,
except as provided in Sections 9 and 10 with respect to affiliates, officers,
directors, employees, representatives, agents and controlling persons of the
Company, each of the Guarantors and the Initial Purchasers and in Section 4(e)
with respect to holders and prospective purchasers of the Securities. Nothing in
this Agreement is intended or shall be construed to give any person, other than
the persons referred to in this Section 11, any legal or equitable right, remedy
or claim under or in respect of this Agreement or any provision contained
herein.

          12. Expenses. The Company and each of the Guarantors agrees with the
Initial Purchasers to pay (a) the costs incident to the authorization, issuance,
sale, preparation and delivery of the Securities and any taxes payable in that
connection; (b) the costs incident to the preparation, printing and distribution
of the Preliminary Offering Memorandum, the Offering Memorandum and any
amendments or supplements thereto; (c) the costs of reproducing and distributing
each of the Transaction Documents; (d) the costs incident to the preparation,
printing and delivery of the certificates evidencing the Securities, including
stamp duties and transfer taxes, if any, payable upon issuance of the
Securities; (c) the fees and expenses of the Company's counsel and independent
accountants; (f) the fees and expenses of qualifying the Securities under the
securities laws of the several jurisdictions as provided in Section 4(g) and of
preparing, printing and distributing Blue Sky Memoranda (including related fees
and expenses of counsel for the Initial Purchasers); (g) any fee charged by
rating agencies for rating the Securities; (h) the fees and expenses of the
Trustee and any paying agent (including related fees and expenses of any counsel
to such parties); (i) all expenses and application fees incurred in connection
with the application for the inclusion of the Securities on the PORTAL Market
and the approval of the Securities for book-entry transfer by DTC; and (j) all
other costs and expenses incident to the performance of the obligations of the
Company and the Guarantors under this Agreement which are not otherwise
specifically provided for in this Section 12; provided, however, that except as
provided in this Section 12 and Section 8, the Initial Purchasers shall pay
their own costs and expenses, including the fees and disbursements of their
counsel and any advertising expenses (other than with respect to any roadshow
presentation) connected with any offers they may make.

          13. Survival. The respective indemnities, rights of contribution,
representations, warranties and agreements of the Company, each of the
Guarantors and the Initial Purchasers contained in this Agreement (and any other
agreement between or among the parties hereto relating to the subject matter
hereof) or made by or on behalf of the Company,

<PAGE>   30
                                      -30-

each of the Guarantors or the Initial Purchasers pursuant to this Agreement or
any certificate delivered pursuant hereto shall survive the delivery of and
payment for the Securities and shall remain in full force and effect, regardless
of any termination or cancellation of this Agreement or any investigation made
by or on behalf of any of them or any of their respective affiliates, officers,
directors, employees, representatives, agents or controlling persons.

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

          (a) if to the Initial Purchasers, shall be delivered or sent by mail
     or telecopy transmission to JPMorgan, a division of Chase Securities Inc.,
     270 Park Avenue, New York, New York 10017, Attention: Legal Department
     (telecopier no.: (212) 270-7487); or

          (b) if to the Company or the Guarantors, shall be delivered or sent by
     mail or telecopy transmission to the address of the Company set forth in
     the Offering Memorandum, Attention: Douglas J. Babb (telecopier no.: (501)
     201-4810).

Any such statements, requests, notices or agreements shall take effect at the
time of receipt thereof. The Company shall be entitled to act and rely upon any
request, consent, notice or agreement given or made on behalf of the Initial
Purchasers by JPMorgan.

          15. Definition of Terms. For purposes of this Agreement, (a) the term
"business day" means any day on which the Now York Stock Exchange, Inc. is open
for trading, (b) the term "subsidiary" has the meaning set forth in Rule 405
under the Securities Act and (c) except where otherwise expressly provided, the
term "affiliate" has the meaning set forth in Rule 405 under the Securities Act.

          16. Initial Purchasers' Information. The parties hereto acknowledge
and agree that, for all purposes of this Agreement, the Initial Purchasers'
Information consists solely of the following information in the Preliminary
Offering Memorandum and the Offering Memorandum; (i) the last paragraph on the
front cover page concerning the terms of the offering by the Initial Purchasers;
and (ii) the statements concerning the Initial Purchasers contained in the
third, fifth, tenth, the fourth sentence of the eleventh paragraph, twelfth and
thirteenth paragraphs under the heading "Plan of Distribution."

          17. GOVERNING LAW. 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 (which may include counterparts delivered by telecopier) and, if
executed in more

<PAGE>   31
                                      -31-

than one counterpart, the executed agreement, counterparts shall each be deemed
to be an original, but all such counterparts shall together constitute one and
the same instrument.

          19. Amendments. No amendment or waiver of any provision of this
Agreement, nor any consent or approval to any departure therefrom, shall in any
event be effective unless the same shall be in writing and signed by the parties
hereto.

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

          If the foregoing is in accordance with your understanding of our
agreement, kindly sign and return to us a counterpart hereof, whereupon this
instrument will become a binding agreement between the Company, the Guarantors
and the several Initial Purchasers in accordance with its terms.

                            [Signature Pages Follow]

<PAGE>   32

                                      S-1

                                     Very truly yours,

                                     BEVERLY ENTERPRISES, INC.

                                     By: /s/ Schuyler Hollingsworth, Jr.
                                         --------------------------------------
                                         Name:  Schuyler Hollingsworth, Jr.
                                         Title: Senior Vice President and
                                         Treasurer

                                     GUARANTORS listed on Schedule 1 attached
                                     hereto,

                                     By: /s/ John W. Mackenzie
                                         --------------------------------------
                                         Name:  John W. Mackenzie
                                         Title: Vice President and Secretary of
                                         each of the Guarantors

<PAGE>   33

                                      S-2

Accepted:

CHASE SECURITIES INC.,
as Representative of the Initial
Purchasers named on Schedule 2 attached hereto

By: /s/ Earl McClanahan
    -------------------------------
    Name:  Earl McClanahan
    Title: Managing Director

Address for notices pursuant to Section 9(c):

1 Chase Manhattan Plaza, 26th floor
New York, New York  10081
Attention:  Legal Department

<PAGE>   34
                                                                      SCHEDULE 1

                                   GUARANTORS

<TABLE>
<CAPTION>
                                                                         Employer             State of
Corporation                                                              ID Number            Incorporation
<S>                                                                      <C>                  <C>
AEGIS Therapies, Inc. (f/k/a Beverly Rehabilitation, Inc.)               71-0811574           Delaware

AGI-Camelot, Inc.                                                        43-1253376           Missouri

Arborland Management Company, Inc.                                       58-2340689           South Carolina

Associated Physical Therapy Practitioners, Inc.                          23-2638708           Pennsylvania

Beverly Assisted Living, Inc.                                            71-0777901           Delaware

Beverly - Bella Vista Holding, Inc.                                      71-0797481           Delaware

Beverly - Branson Holdings, Inc.                                         71-0817008           Delaware

Beverly-Indianapolis, LLC                                                71-0824184           Indiana

Beverly - Missouri Valley Holding, Inc.                                  71-0797485           Delaware

Beverly - Plant City Holdings, Inc.                                      71-0817010           Delaware

Beverly - Rapid City Holding, Inc.                                       71-0797483           Delaware

Beverly - Tamarac Holdings, Inc.                                         71-0817009           Delaware

Beverly - Tampa Holdings, Inc.                                           71-0817007           Delaware

Beverly Clinical, Inc.                                                   71-0796035           Delaware

Beverly Enterprises International Limited                                95-3982125           California

Beverly Enterprises - Alabama, Inc.                                      95-3742145           California

Beverly Enterprises - Arizona, Inc.                                      95-3750871           California
</TABLE>
<PAGE>   35
                                      -2-

<TABLE>
<CAPTION>
                                                                         Employer             State of
Corporation                                                              ID Number            Incorporation
<S>                                                                      <C>                  <C>
Beverly Enterprises - Arkansas, Inc.                                     95-3751272           California

Beverly Enterprises - California, Inc.                                   95-2499218           California

Beverly Enterprises - Colorado, Inc.                                     95-3750882           California

Beverly Enterprises - Connecticut, Inc.                                  95-3849642           California

Beverly Enterprises - Delaware, Inc.                                     95-3849628           California

Beverly Enterprises - Distribution Services, Inc.                        95-4081567           California

Beverly Enterprises - District of Columbia, Inc.                         95-3750889           California

Beverly Enterprises - Florida, Inc.                                      95-3742251           California

Beverly Enterprises - Garden Terrace, Inc.                               95-3849648           California

Beverly Enterprises - Georgia, Inc.                                      95-3750880           California

Beverly Enterprises - Hawaii, Inc.                                       95-3750890           California

Beverly Enterprises - Idaho, Inc.                                        95-3750886           California

Beverly Enterprises - Illinois, Inc.                                     95-3750883           California

Beverly Enterprises - Indiana, Inc.                                      95-3744258           California

Beverly Enterprises - Iowa, Inc.                                         95-3751271           California

Beverly Enterprises - Kansas, Inc.                                       95-3751269           California

Beverly Enterprises - Kentucky, Inc.                                     95-3750894           California

Beverly Enterprises - Louisiana, Inc.                                    95-3849633           California

Beverly Enterprises - Maine, Inc.                                        95-3849627           California

Beverly Enterprises - Maryland, Inc.                                     95-3750892           California
</TABLE>
<PAGE>   36
                                      -3-
<TABLE>
<CAPTION>
                                                                         Employer             State of
Corporation                                                              ID Number            Incorporation
<S>                                                                      <C>                  <C>
Beverly Enterprises - Massachusetts, Inc.                                95-3750893           California

Beverly Enterprises - Michigan, Inc.                                     95-3898661           California

Beverly Enterprises - Minnesota, Inc.                                    95-3742698           California

Beverly Enterprises - Mississippi, Inc.                                  95-3742144           California

Beverly Enterprises - Missouri, Inc.                                     95-3750895           California

Beverly Enterprises - Montana, Inc.                                      95-3849636           California

Beverly Enterprises - Nebraska, Inc.                                     95-3750873           California

Beverly Enterprises - Nevada, Inc.                                       95-3750896           California

Beverly Enterprises - New Hampshire, Inc.                                95-3849630           California

Beverly Enterprises - New Jersey, Inc.                                   95-3750884           California

Beverly Enterprises - New Mexico, Inc.                                   95-3750869           California

Beverly Enterprises - North Carolina, Inc.                               95-3742257           California

Beverly Enterprises - North Dakota, Inc.                                 95-3751270           California

Beverly Enterprises - Ohio, Inc.                                         95-3750867           California

Beverly Enterprises - Oklahoma, Inc.                                     95-3849624           California

Beverly Enterprises - Oregon, Inc.                                       95-3750881           California

Beverly Enterprises - Pennsylvania, Inc.                                 95-3750870           California

Beverly Enterprises - Rhode Island, Inc.                                 95-3849621           California

Beverly Enterprises - South Carolina, Inc.                               95-3750866           California

Beverly Enterprises - Tennessee, Inc.                                    95-3742261           California
</TABLE>
<PAGE>   37
                                      -4-

<TABLE>
<CAPTION>
                                                                         Employer             State of
Corporation                                                              ID Number            Incorporation
<S>                                                                      <C>                  <C>
Beverly Enterprises - Texas, Inc.                                        95-3744256           California

Beverly Enterprises - Utah, Inc.                                         95-3751089           California

Beverly Enterprises - Vermont, Inc.                                      95-3750885           California

Beverly Enterprises - Virginia, Inc.                                     95-3742694           California

Beverly Enterprises - Washington, Inc.                                   95-3750868           California

Beverly Enterprises - West Virginia, Inc.                                95-3750888           California

Beverly Enterprises - Wisconsin, Inc.                                    95-3742696           California

Beverly Enterprises - Wyoming, Inc.                                      95-3849638           California

Beverly Health and Rehabilitation Services, Inc.                         95-2301514           California

Beverly Healthcare, LLC                                                  71-0817438           Indiana

Beverly Healthcare Acquisition, Inc.                                     71-0812407           Delaware

Beverly Healthcare - California, Inc.                                    95-3750879           California

Beverly Holdings I, Inc.                                                 71-0768985           Delaware

Beverly Indemnity, Ltd.                                                  71-0712927           Vermont

Beverly Manor Inc. of Hawaii                                             99-0144750           California

Beverly Real Estate Holdings, Inc.                                       71-0768984           Delaware

Beverly Savana Cay Manor, Inc.                                           95-4217381           California

Carrollton Physical Therapy Clinic, Inc.                                 75-2102832           Texas

Commercial Management, Inc.                                              42-0891358           Iowa
</TABLE>
<PAGE>   38
                                      -5-

<TABLE>
<CAPTION>
                                                                         Employer             State of
Corporation                                                              ID Number            Incorporation
<S>                                                                      <C>                  <C>
Community Care, Inc.                                                     56-1487367           North Carolina

Compassion and Personal Care Services, Inc.                              56-1904822           North Carolina

Eastern Home Health Supply & Equipment Co., Inc.                         56-1581980           North Carolina

Greenville Rehabilitation Services, Inc.                                 75-2059145           Texas

Hallmark Convalescent Homes, Inc.                                        41-1413478           Michigan

HomeCare Preferred Choice, Inc.                                          62-1702864           Delaware

Home Health and Rehabilitation Services, Inc.                            75-2012280           Texas

Hospice of Eastern Carolina, Inc.                                        56-1951841           North Carolina

Hospice Preferred Choice, Inc.                                           71-0761314           Delaware

HTHC Holdings, Inc.                                                      71-0807323           Delaware

Las Colinas Physical Therapy Center, Inc.                                75-2402177           Texas

Liberty Nursing Homes, Incorporated                                      54-0784334           Virginia

MATRIX Occupational Health, Inc.                                         58-2380955           Delaware

MATRIX Rehabilitation, Inc.                                              71-0783147           Delaware

MATRIX Rehabilitation - Delaware, Inc.                                   71-0842504           Delaware

MATRIX Rehabilitation - Georgia, Inc.                                    58-2554073           Delaware

MATRIX Rehabilitation - Maryland, Inc.                                   71-0842503           Delaware

MATRIX Rehabilitation - Ohio, Inc.                                       71-0842505           Delaware

MATRIX Rehabilitation - South Carolina, Inc.                             73-1575603           Delaware

MATRIX Rehabilitation - Texas, Inc.                                      73-1589542           Delaware

MATRIX Rehabilitation - Washington, Inc.                                 58-2554074           Delaware
</TABLE>
<PAGE>   39
                                      -6-

<TABLE>
<CAPTION>
                                                                         Employer             State of
Corporation                                                              ID Number            Incorporation
<S>                                                                      <C>                  <C>
Medical Arts Health Facility of Lawrenceville, Inc.                      58-1329700           Georgia

Moderncare of Lumberton, Inc.                                            56-1217025           North Carolina

Nebraska City S-C-H, Inc.                                                41-1413481           Nebraska

Network for Physical Therapy, Inc.                                       74-2453469           Texas

North Dallas Physical Therapy Associates, Inc.                           75-2075331           Texas

Nursing Home Operators, Inc.                                             34-0949279           Ohio

Petersen Health Care, Inc.                                               59-2043392           Florida

PT NET, Inc.                                                             62-1575533           Tennessee

PT Net (Colorado), Inc.                                                  84-1277912           Colorado

Rehabilitation Associates of Lafayette, Inc.                             72-1118473           Louisiana

South Alabama Nursing Home, Inc.                                         95-3809397           Alabama

South Dakota - Beverly Enterprises, Inc.                                 95-3750887           California

Spectra Healthcare Alliance, Inc.                                        71-0759298           Delaware

Tar Heel Infusion Company, Inc.                                          56-1767308           North Carolina

The Parks Physical Therapy and Work Hardening Center, Inc.               75-2452926           Texas

Theraphysics Corp.                                                       13-3643705           Delaware

Theraphysics of New York IPA, Inc.                                       71-0817011           New York

Theraphysics Partners of Colorado, Inc.                                  51-0372115           Delaware

Theraphysics Partners of Texas, Inc.                                     62-1659976           Delaware
</TABLE>
<PAGE>   40
                                      -7-

<TABLE>
<CAPTION>
                                                                         Employer             State of
Corporation                                                              ID Number            Incorporation
<S>                                                                      <C>                  <C>
Theraphysics Partners of Western Pennsylvania, Inc.                      23-2901884           Delaware

TMD Disposition Company                                                  59-3151568           Florida

Vantage Healthcare Corporation                                           35-1572998           Delaware
</TABLE>

<PAGE>   41

                                                                      SCHEDULE 2

                               INITIAL PURCHASERS

                                                            Principal Amount
Initial Purchasers                                            of Securities
------------------                                          ----------------

JPMorgan                                                       $80,000,000

Banc of America Securities LLC                                 $80,000,000

BNY Capital Markets, Inc.                                      $20,000,000

BMO Nesbitt Burns Corp.                                        $20,000,000

         Total                                                 $200,000,000
                                                               ============

<PAGE>   42

                                                                      SCHEDULE 3

                                 PLEDGED SHARES

Beverly Enterprises - Alabama, Inc.               95-3742145        California

Beverly Enterprises - Arkansas, Inc.              95-3751272        California

Beverly Enterprises - Georgia, Inc.               95-3750880        California

Beverly Enterprises - Florida, Inc.               95-3742251        California

Beverly Enterprises - Massachusetts, Inc.         95-3750893        California

Beverly Enterprises - Minnesota, Inc.             95-3742698        California

Beverly Enterprises - Mississippi, Inc.           95-3742144        California

Beverly Enterprises - Missouri, Inc.              95-3750895        California

Beverly Enterprises - Nebraska, Inc.              95-3750873        California

Beverly Enterprises - North Carolina, Inc.        95-3742257        California

Beverly Enterprises - Ohio, Inc.                  95-3750867        California

Beverly Enterprises - Pennsylvania, Inc.          95-3750870        California

Beverly Enterprises - South Carolina, Inc.        95-3750866        California

Beverly Enterprises - Virginia, Inc.              95-3742694        California

Beverly Enterprises - Wisconsin, Inc.             95-3742696        California

South Dakota - Beverly Enterprises, Inc.          95-3750887        California

<PAGE>   43

                                                                         ANNEX A

                      FORM OF REGISTRATION RIGHTS AGREEMENT

<PAGE>   44

                                                                       ANNEX B-1

                      FORM OF OPINION OF LATHAM & WATKINS,
                             COUNSEL TO THE COMPANY

<PAGE>   45

                                                                       ANNEX B-2

                       FORM OF OPINION OF DOUGLAS J. BABB,
                         GENERAL COUNSEL OF THE COMPANY

<PAGE>   46

                                                                       ANNEX B-3

                     FORM OF OPINION OF PROSKAUER ROSE LLP,
                    SPECIAL REGULATORY COUNSEL TO THE COMPANY

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