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                                                                  EXHIBIT 10.1



                      AMENDMENT TO EMPLOYMENT AGREEMENT


      THIS AMENDMENT TO EMPLOYMENT AGREEMENT (the "Amendment") is made and
entered into and is effective as of April 23, 1997, by and between ARV ASSISTED
LIVING, INC., a California corporation (the "Company"), and GARY L. DAVIDSON, an
individual (the "Employee"), the parties to the certain Employment Agreement
dated and effective as of October 1, 1995 (the "Employment Agreement").

RECITAL

      Whereas, the parties to the Employment Agreement desire to amend the
Employment Agreement as set forth below.

      NOW, THEREFORE, the parties hereto agree as follows:

      1.    Paragraph 7.3 of the Employment Agreement shall be amended and
restated as follows:

            7.3 CHANGE IN CONTROL. Notwithstanding anything to the contrary
      contained in Section 7.2 hereof, following a change in the ownership, or
      effective control of the Company or in the ownership of a substantial
      portion of the Company's assets (any one of which shall be referred to
      herein as "Change in Control"), in the event Employee's employment is
      terminated either voluntarily or involuntarily within three (3) months of
      the Change in Control, the Company shall immediately pay to Employee the
      Base Salary, that portion of Employee's Minimum Bonus which shall have
      been earned but unpaid as of the Change in Control (assuming that the
      Minimum Bonus shall have been earned on a daily basis and, but for a
      Change in Control, payable only on a quarterly basis), Employee's accrued
      vacation and reimbursable expenses through the date of Change in Control,
      and an amount equal to three (3) times the total compensation received by
      Employee during the immediately preceding calendar year (the "Change in
      Control Bonus"); provided, however, that, if applicable, the amount of the
      Change in Control Bonus shall be reduced so that no portion of the Change
      in Control Bonus shall be deemed to be an "excess parachute payment" under
      Section 280G of the Internal Revenue Code of 1986, as amended, or any
      replacement statute. The determination of the existence of an "excess
      parachute payment" shall be made by the Company's independent accountants
      who prepare and file the federal income tax returns for the Company. In
      addition, any options to purchase the common stock of the Company
      previously granted to Employee and not otherwise vested shall be fully
      vested as of the date of the Change in Control. The Company shall pay the
      expenses incurred by such 




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      accountants pursuant to this Section. Generally, for the purposes of this
      Section: (i) "change in the ownership of the Company" shall mean the date
      that any person or persons acting as a group, acquires ownership of the
      capital stock of the Company and the acquired capital stock together with
      capital stock held by such person or group, gives the acquiring person or
      group possession of more than fifty percent (50%) of the total fair market
      value or the total voting power of the capital stock of the Company; (ii)
      "change in effective control of the Company" shall mean that either: (A)
      any one person, or more than one person acting as a group, would acquire
      (or had acquired during the twelve (12) - month period ending on the date
      of the most recent acquisition by such person or persons) ownership of the
      capital stock of the Company possessing fifty percent (50%) or more of the
      total voting power of the capital stock of the Company; or (B) a majority
      of the members of the Board was replaced during any twelve (12) - month
      period by directors whose appointment or election was not endorsed by a
      majority of the members of the Board prior to the date of such appointment
      or election; and (iii) "change in ownership of a substantial portion of
      the Company's assets" shall mean the date on which one person, or more
      than one person acting as a group, would acquire (or had acquired during
      the twelve (12) month period ending on the date of the most recent
      acquisition by such person or persons) assets from the Company that have a
      total fair market value equal to, or more than, thirty three and one-third
      percent (33-1/3%) of the total fair market value of all of the assets of
      the Company immediately prior to such acquisitions. All determinations of
      the applicability of this Section shall be made consistent with the
      Proposed Regulations Section 1.280G-1 promulgated by the Internal Revenue
      Service, or any successor regulations.


      2. Paragraph 8 of the Employment Agreement shall be deleted and the
following will be added in its place:

            TERM. This Agreement shall commence upon the date hereof and shall
      terminate three (3) years thereafter (the "Termination Date"), unless
      sooner terminated as provided herein; provided, however, that if the
      Company has not given Employee written notice of the Company's intent to
      terminate this Agreement at least two (2) years prior to the Termination
      Date, the Termination Date shall automatically be extended for a period of
      one year, upon all the same terms and conditions. The Termination Date
      shall continue to be extended annually unless and until the Company timely
      delivers such written notice of termination at least two (2) years prior
      to the then effective Termination Date (the "Term").

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      3. Paragraph 9 of the Employment Agreement shall be amended by adding the
following clause:

            This Section 9 shall not apply in the event of a Change in Control
      under Section 7.3. Further, this Section 9 shall not apply in the event of
      termination of employment as described in Section 7.2.1 or Section 7.2.2;
      provided, however, that Employee shall first waive in writing all rights
      to receive severance pay other than amounts due by law.

      The remaining provisions of the Employment Contract shall remain
unmodified and in full force and effect.

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



THE COMPANY

ARV Assisted Living, Inc., a
California Corporation



By:   /s/ Sheila M. Muldoon
     -------------------------------
      Sheila M. Muldoon
Its:  Vice President and Secretary


EMPLOYEE




       /s/ Gary L. Davidson
    --------------------------------
      Gary L. Davidson