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Exhibit 10.40

                      LOCKBOX AND BLOCKED ACCOUNT AGREEMENT

      THIS LOCKBOX AND BLOCKED ACCOUNT AGREEMENT ("Agreement") is made as of the
31st day of March, 2002 (this "Agreement"), by and among OCWEN FEDERAL BANK,
FSB, or any of its affiliates selected by Ocwen ("Bank"), OCWEN FINANCIAL
CORPORATION, a Florida corporation ("Ocwen"), BALANCED CARE REALTY (OFC), INC.,
a Delaware corporation ("Realty"), BALANCED CARE CORPORATION, a Delaware
corporation ("Balanced Care"), BALANCED CARE AT MEDINA, INC., a Delaware
corporation ("BCM"), BALANCED CARE AT CENTERVILLE, INC., a Delaware corporation
("BCC"), BALANCED CARE AT SHIPPENSBURG, INC., a Delaware corporation ("BCS"),
and SENIOR CARE OPERATORS OF SHIPPENSBURG, LLC, a Delaware limited liability
company ("SCS"). Hereinafter, Realty, Balanced Care, BCM, BCC, BCS, and SCS
shall be collectively referred to as the "Obligors," and individually, as an
"Obligor." Capitalized terms that are used in this Agreement, but that are not
defined herein, shall have the meanings ascribed to such terms in the Term Loan
Agreement (defined hereinafter), unless the context hereof clearly requires
otherwise.

                                   WITNESSETH:

      WHEREAS, Ocwen and the Obligors have entered into the Term Loan Agreement,
as of the date hereof ("Term Loan Agreement"), pursuant to which Ocwen has
agreed to loan Realty, and Realty has accepted from Ocwen, the principal sum of
Nine Million One Hundred Fifty-Three Thousand Three Hundred Fifty-Six Dollars
($9,153,356.00) plus interest thereon ("Loan"). Realty's obligations under the
Term Loan Agreement are evidenced by a promissory note of even date herewith
("Term Note").

      WHEREAS, as set forth and described in the Term Loan Agreement, Ocwen has
required that following an Event of Default under the Term Loan Agreement that
continues beyond any applicable cure periods, the Obligors will consent to and
participate in this Agreement with Ocwen and Bank with respect to all revenues
related to the Premises, including but not limited to the operation and conduct
of business on the three (3) Project Properties (as assisted-living facilities).
As used herein, "Premises" shall mean the real property and all improvements
located thereon described on Exhibit A, attached hereto and incorporated herein
by reference.

      NOW, THEREFORE, in consideration of the premises, mutual promises,
covenants, and agreements set forth herein, in order to induce Ocwen to enter
into the Term Loan Agreement, and for other good and valuable consideration, the
receipt and adequacy of which is hereby acknowledged, the Obligors, Bank, and
Ocwen, intending to be
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legally bound, hereby agree that the foregoing recitals are incorporated herein
by reference and as follows:

                                   AGREEMENT:

      1.    Lockbox and Blocked Account. The Obligors hereby confirm to Ocwen
that, upon an Event of Default under the Term Loan Agreement that continues
beyond any applicable cure periods, a post office box (the "Lockbox") will be
established by the Obligors and that only Bank will have access (and it shall be
unrestricted access) to the items deposited in the Lockbox. All of which items
deposited into the Lockbox that are remittances shall be deposited in a special
account or accounts at Bank to which only Bank will have access (the "Blocked
Account"), on which Blocked Account only payments to Ocwen's order may be drawn.
The Lockbox and Blocked Account are and shall each be in the names of one or
more of the Obligors for the benefit of Ocwen. Ocwen and the Obligors
understand, acknowledge and agree that there will be one Blocked Account
established for each of the three (3) Projects (as defined in the Term Loan
Agreement). All three Blocked Accounts are collectively referred to hereinafter
as "Blocked Account." All items of payment received through the Lockbox and all
funds deposited in the Blocked Account shall be and remain the sole and
exclusive property of Ocwen, and none of the Obligors or Bank shall have any
interest therein or (except as specifically authorized herein) control thereof.
All fees, costs and expenses charged by Bank for the Lockbox and Blocked Account
shall be in accordance with its customary practices, payable by Obligors,
jointly and severally. Except as expressly provided for hereinafter, Ocwen shall
bear no responsibility for said amounts. The Obligors shall direct all
residents, tenants, and others owing funds to the Obligors in connection with
the Project Properties to send checks, drafts, or other orders for the payment
of money to the Lockbox address. Obligors shall provide Ocwen and Bank written
notice of the Lockbox address.

      Pursuant to Section 15 hereof, Bank agrees to provide Ocwen and the
Obligors daily notice of deposits into the Blocked Account. In addition thereto,
Bank agrees to provide Obligors with written notice each day (which may be set
forth on the written notice provided pursuant to Section 15, as applicable), on
which payments are wired to Ocwen from Bank pursuant to the terms of Section 8
hereof, along with an indication of the total amount of such wire transfer. In
addition to the foregoing, monthly statements for the Blocked Account are to be
provided to Ocwen and Obligors, also as indicated in Section 15 hereof.

      Ocwen agrees that in the event that a refund of payments received in the
Lockbox and deposited into the Blocked Account is owed to a client, customer, or
resident of Obligors, or any other party


                                       -2-
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presenting a colorable claim to funds deposited into the Blocked Account, Ocwen
will consult with Obligors as to the reasonableness of the refund requested. In
the event that Obligors and Ocwen agree that a refund should be made (or Ocwen
alone makes such determination if Ocwen is threatened with litigation with
respect to such funds), then Ocwen shall refund monies to such claimant. Such
refunded amounts shall not be credited against the obligations of Obligors to
Ocwen under the Term Loan Agreement, the Term Note, the BCC Note (as defined in
the Term Loan Agreement), or the Deferred Purchase Price Note (as defined in the
Term Loan Agreement).

      2.    Fees and Charges; Returned Checks, Etc. Bank, Ocwen and Obligors
hereby agree that Bank will be entitled to exercise and/or claim a right of
setoff, deduction, or banker's lien, and/or otherwise make any other claim,
against the Lockbox, items of payment received therein, or any deposits made to
the Blocked Account including, without limitation, any right to charge the
Blocked Account for any returned checks or unpaid fees, costs and expenses.

      Remittance items returned to Bank due to insufficient or uncollected funds
will be automatically redeposited by Bank. If an item of remittance is returned
for "account closed" or "payment stopped" or if an item is unpaid a second time
for insufficient or uncollected funds, such items shall be sent to Bank and
Ocwen. In addition to normal account statements sent to Obligors, a copy of the
notice of any such returned item or charge as described as aforesaid will be
mailed by Bank to Ocwen and Obligors. With respect to each returned check, said
notice shall provide the maker, amount, date of deposit and reason for return.
Bank shall have the right to credit or debit the Blocked Account to correct
processing mistakes which are capable of correction. Copies of credit or debit
advices will be sent to Ocwen and Obligors.

      3.    Deficiency in Blocked Account. In the event that the available funds
in the Blocked Account shall be insufficient to cover any returned or unpaid
items or unpaid account service charges ("Service Charge"), Bank will promptly
notify the Obligors and Ocwen in writing with respect thereto. No later than
five (5) business days after receipt of such notice, Obligors, jointly and
severally, agree to remit to Bank the full amount of any such returned or unpaid
items or Service Charges. If the Obligors fail to reimburse Bank as provided
herein and the available funds in the Blocked Account of one or more of the
Obligors are insufficient for such reimbursement (Bank shall have a claim
against such funds held in the Blocked Account pursuant to Section 2 above),
Ocwen will indemnify and hold Bank harmless for the amount of any returned or
unpaid items, or Service Charges, to the extent Ocwen received payment in
respect thereof or Bank gave value therefore, by paying the amount of the
returned or unpaid items


                                       -3-
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or Service Charges to Bank. Provided, however, that Obligors shall remain
responsible for the payment of all such Service Charges, and the amount of all
such Service Charges not paid by Obligors shall be added to the indebtedness
owed to Ocwen pursuant to the Term Loan Agreement and Term Note. Notwithstanding
anything contained in this Agreement or any other Loan Document to the contrary,
the Obligors shall remain jointly and severally liable for the payment of all
such Service Charges.

      4.    Lockbox Sweep and Deposits into Blocked Account. As agent for Ocwen,
Bank will collect mail from the Lockbox at various times each day in accordance
with the Bank's regular collection schedule. The relationship of Ocwen to the
Bank as depositor will commence only when the remittances are credited to the
Blocked Account. Prior to such time, the Bank will be considered to be a bailee
as to the items in its possession. Checks and other items of payment received in
the Lockbox will be deposited by Bank into the Blocked Account on a daily basis.
The following corporate name or reasonable derivation thereof, as applicable to
the different facilities, will be acceptable as payee, and the Obligors agree
that they will direct all residents and others owing funds to any Obligor in
relation to or in connection with the Project Properties, to make all checks,
drafts, and other remittances payable to the following:

            Balanced Care at Centerville, Inc. or Outlook Pointe at Centerville
            or Outlook Pointe at Washington Township

            Balanced Care at Medina, Inc. or Outlook Pointe at Medina

            Balanced Care at Shippensburg, Inc. or Outlook Pointe at
            Shippensburg for the benefit of Senior Care Operators of
            Shippensburg, LLC; provided, however, that no later than 15 days
            after the date hereof, the following shall be deleted from the above
            "for the benefit of Senior Care Operators of Shippensburg, LLC."

All of the items that appear to be for deposit (i.e., which are written to the
order of the above-described payees) should be endorsed with the standard Ocwen
Federal Bank FSB endorsement (or that of its affiliate). Obligors, Ocwen, and
Bank agree that a payee endorsement shall not be required.

      5.    Additional Documents. Miscellaneous documents received in the
Lockbox without a remittance check will be sent by Bank to the respective
Obligor to which the document was directed, at such Obligor's expense. All
miscellaneous documents, tape listings of checks and remittance documents,
credit advises and photocopies, if


                                       -4-
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appropriate, will be forwarded to the respective Obligor by first class mail
unless otherwise agreed.

      6.    Post-Dating; Undated. Post-dated remittances will be processed in
accordance with the Bank's policy, which may require return to the respective
payee, unprocessed. Undated remittances may be processed in accordance with the
Bank's policy, which may require return to the respective payee, unprocessed.

      7.    Restrictive Endorsements; Irregularities; Interpretation. Checks
containing special or restrictive endorsements, including, but not limited to,
"Paid in Full" or words of similar import and such other items as Bank
designates as irregular, will not be processed by Bank but will be forwarded to
Ocwen (and copies of same will also be provided to Obligors) daily for
disposition. This will be done on a best efforts basis. Bank assumes no
liability for checks with restrictive endorsement inadvertently credited to the
Blocked Account. Incomplete items (missing signature, missing payee, altered
amounts, or items made payable to a payee other than those specified in Section
4) will not be processed by Bank, but will be forwarded to Ocwen (and copies of
same will also be provided to Obligors) for disposition. As with other
irregularities, this will be conducted by Bank on a best-efforts basis. An item
for remittance which appears to Bank to have been materially altered will not be
deposited into the Blocked Account. The Bank's current policy shall apply with
respect to whether the amount in words or amount in figures on any item of
remittance shall be accepted if the two amounts do not agree or if one or the
other is missing or not legible.

      8.    Delivery of Funds to Ocwen. Unless Ocwen directs Bank in writing to
the contrary, the Obligors and Bank hereby agree that as such funds are
collected, Bank will wire transfer to Ocwen or send through an automated
clearinghouse to Ocwen (pursuant to such wire and deposit instructions as Ocwen
shall provide Bank) all available funds deposited in the Blocked Account;
provided, however, that such wires shall not be required until at least $25,000
has accumulated in any of the Blocked Accounts. That is, upon the accumulation
of $25,000 into any one (or more) of the Blocked Accounts, such funds shall be
wired, the same day, to Ocwen.

      9.    No Waiver. This Agreement may be enforced from time to time by Ocwen
at its discretion, with or without order of any court and with or without
appointment of a receiver, as Ocwen shall determine. Ocwen may also at any time
cease to enforce this Agreement. Any failure on the part of Ocwen promptly to
exercise any option hereby given or reserved shall not prevent the exercise of
any such option at any time thereafter. The waiver by Ocwen of any breach of any
term, covenant, or condition contained in this Agreement or any default in the


                                       -5-
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performance of any obligations under this Agreement, shall not be deemed to be a
waiver of any other breach or default of the same or any other term, covenant,
condition or obligation, nor shall any waiver of any incident of breach or
default constitute a continuing waiver of same. Ocwen may pursue and enforce any
remedy or remedies accorded it hereunder independently or, in conjunction or
concurrently with, or subsequent to its pursuing enforcement of any remedy or
remedies that it may have under the other Loan Documents (as defined in the Term
Loan Agreement).

      10.   Miscellaneous. When the context so requires, the singular shall
include the plural and conversely, and use of any gender shall include all
genders.

      11.   Conformity with Term Loan Agreement. The provisions set forth in
Sections 8.1, 8.2, 8.3, 8.4, 8.5, 8.9, 8.10, 8.11, 8.12, 8.13, 8.15, 8.16, 8.19,
8.20, and 8.23 of the Term Loan Agreement shall be applicable to this Agreement
as though set forth herein in full.

      12.   Survivability. Notwithstanding anything set forth herein or in any
other Loan Document to the contrary, the following sections of this Agreement
shall survive the payment in full of the Term Note, or any other termination or
expiration of this Agreement or the Loan Documents: 11, 14, 16, and 18.

      13.   Assignment. This Agreement shall bind and shall inure to the benefit
of the successors and assigns of Ocwen. Ocwen does not consent to any assignment
of this Agreement by any Obligor. Subject to Section 8.16 of the Term Loan
Agreement, Ocwen may assign its rights and interests under this Agreement
freely. If an assignment is made, the Obligors shall render performance under
this Agreement to and with the assignee. The Obligors waive and will not assert
against any assignee any claims, defenses, or set-offs that the Obligors could
assert against Ocwen except defenses which cannot be waived.

      14.   JURY WAIVER. OCWEN AND THE OBLIGORS HEREBY VOLUNTARILY, IRREVOCABLY
AND UNCONDITIONALLY WAIVE ANY RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY
DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT, OR OTHERWISE, AMONG OR BETWEEN
OCWEN AND ANY OF THE OBLIGORS ARISING OUT OF, IN CONNECTION WITH, RELATED TO, OR
INCIDENTAL TO THE RELATIONSHIP ESTABLISHED BETWEEN OR AMONG THEM IN CONNECTION
WITH THIS AGREEMENT OR ANY OTHER AGREEMENT OR DOCUMENT EXECUTED OR DELIVERED IN
CONNECTION HEREWITH OR THE TRANSACTIONS RELATED HERETO. THIS PROVISION IS A
MATERIAL INDUCEMENT TO OCWEN TO ENTER INTO THE TERM LOAN AGREEMENT. IT SHALL NOT
IN ANY WAY AFFECT, WAIVE, LIMIT, AMEND OR MODIFY OCWEN'S ABILITY TO PURSUE ANY
REMEDY, EITHER IN LAW OR IN EQUITY, AVAILABLE TO IT.


                                       -6-
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      15.   Daily Notice. Bank agrees to advise Ocwen by facsimile at (561)
682-8091 and Obligors by facsimile at (717) 796-6294 each day by 3:00 p.m.,
Columbus, Ohio time, of the amount of checks and items of payment received in
the Lockbox that day and to mail to Ocwen and Obligors each day, a copy of the
deposit slip for each deposit made to the Blocked Account. In addition, Bank
agrees to mail to Ocwen and Obligors copies of all Blocked Account statements.
Notwithstanding the requirement for copies of notices to Ocwen and Obligors to
be sent to their respective legal counsel as provided in Section 8.13 of the
Term Loan Agreement (incorporated herein in Section 11 hereof), the items which
the Bank is required to deliver to Ocwen and Obligors pursuant to this Section
15 need only be delivered to Ocwen and Obligors (and not counsel).

      16.   No Inquiry by Bank; No Duty as to Other Matters; Standard of Care.
Bank shall be fully protected in acting only on orders or directions made by
Ocwen respecting the Lockbox (and Ocwen shall be entitled to make same without
input from Obligor) and the items received therein and the Blocked Account,
without making any inquiry whatsoever as to Ocwen's right or authority to give
such orders or directions or as to the application of any payment made pursuant
thereto. Bank shall have no duty to perform services not enumerated in this
Agreement. The Bank's responsibility in performing the services herein
contemplated by it to be performed shall be to refrain from acts or omissions of
gross negligence or willful misconduct. In the event Bank acts in substantial
compliance with the procedures set forth herein, it shall not be found or
determined to be acting in a grossly negligent manner or engaging in willful
misconduct. In addition, all parties agree that the occasional, unintentional
deviations by the Bank from the procedures set forth herein shall not be deemed
to be gross negligence or willful misconduct by Bank.

      In exercising its rights under and pursuant to this Agreement, Ocwen's
responsibility to the Obligors shall be to refrain from grossly negligent acts
and/or omissions and from engaging in willful misconduct. In the event Ocwen
acts in substantial compliance with the procedures set forth herein, it shall
not be found or determined to be acting in a grossly negligent manner or
engaging in willful misconduct. The parties agree that the occasional,
unintentional deviations by Ocwen from the procedures, or its duties,
responsibilities, or obligations set forth herein, shall not be deemed to be
gross negligence or willful misconduct by Ocwen.

      17.   Term of Agreement. This Agreement shall continue in full force and
effect until terminated by Bank or Ocwen upon not less than sixty (60) days
written notice to the other party (a copy of which will be given to Obligors).
The Obligors shall have no right to terminate this Agreement until the Term Note
and any other obligations


                                       -7-
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set forth in the Term Loan Agreement owing by any Obligor to Ocwen shall have
been paid in full. This Agreement shall automatically terminate at such time as
the Term Note has been paid in full and all other payments due Ocwen under the
Term Loan Agreement have been paid in full. Termination of this Agreement shall
in no event affect any obligation incurred hereunder prior to such termination,
specifically including the obligations set forth in Section 18 hereof. If Bank
shall desire to terminate this Agreement, but Ocwen desires to keep the Lockbox
and Blocked Account procedures set forth herein in place, then Ocwen shall
select a successor bank to perform the services to be performed by Bank
hereunder, and upon such successor's assumption of and agreement to be bound by
this Agreement, all rights, interests, privileges, as well as obligations,
duties, and responsibilities, of Bank hereunder shall apply to, inure to the
benefit of, and be binding upon such successor bank.

      18.   Protection of Bank and Ocwen. Notwithstanding any other provisions
of this Agreement to the contrary, unless Bank is grossly negligent or engages
in willful misconduct in performance or nonperformance in connection with this
Agreement, the Lockbox or the Blocked Account, Obligors, jointly and severally,
agree to hold Bank harmless from any claims, damages, losses or expenses
incurred by Bank or any other party in connection with this Agreement or the
rights, duties and obligations to be observed and/or performed as set forth
herein; in the event Bank breaches the standard of care described in Section 16
above, Obligors and Ocwen expressly agree that Bank's liability shall be limited
to damages directly caused by such breach and in no event shall Bank be liable
for any incidental, indirect, punitive or consequential damages whatsoever. The
Obligors agree that Bank may act on the instructions of Ocwen without making any
special inquiry into the authority of Ocwen, and Bank will not be held liable
for reasonable reliance on such instructions.

      Notwithstanding any other provisions of this Agreement to the contrary,
unless Ocwen is grossly negligent or engages in willful misconduct in
performance or nonperformance in connection with this Agreement, the Lockbox, or
the Blocked Account, Obligors, jointly and severally, agree to hold Ocwen
harmless from any claims, damages, losses or expenses incurred by Ocwen or any
other party in connection with this Agreement or the rights, duties and
obligations to be observed and/or performed as set forth herein; in the event
that Ocwen breaches the standard of care described in Section 16 above, Obligors
expressly agree that Ocwen's liability shall be limited to damages directly
caused by such breach and in no event shall Ocwen be liable for any incidental,
indirect, punitive, or consequential damages whatsoever.


                                       -8-
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      Notwithstanding any other provision of this Agreement to the contrary,
neither Bank nor Ocwen shall be liable for any failure, inability to perform, or
delay in performance hereunder, if such failure, inability or delay is due to
acts of God, war, civil commotion, governmental action, fire, explosion, terror
attack, strikes, other industrial disturbances, equipment malfunction, action,
non-action or delayed action on the part of Obligors, or any other entity or any
other causes that are beyond Bank's or Ocwen's reasonable control.


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      THE BANK MAKES NO REPRESENTATIONS OR WARRANTIES OF ANY KIND, EXPRESS OR
IMPLIED, INCLUDING BUT NOT LIMITED TO WARRANTIES OF MERCHANTABILITY OR FITNESS
FOR A PARTICULAR PURPOSE.

      IN WITNESS WHEREOF, the parties have caused this LOCKBOX AND BLOCKED
ACCOUNT AGREEMENT to be properly executed and delivered as of the date first
written above.

                                         Bank:

WITNESS:                                 OCWEN FEDERAL BANK FSB


/s/John W. Halvorson                     By:/s/William B. Shepro
Name: John W. Halvorson
                                         Name: William B. Shepro

                                         Title: Sr. Vice President

/s/Michael L. Roy
Name: Michael L. Roy

                                         Ocwen:

WITNESS:                                 OCWEN FINANCIAL CORPORATION


                                         By:/s/William B. Shepro
/s/John W. Halvorson
Name: John W. Halvorson                  Name: William B. Shepro

                                         Title: Sr. Vice President

/s/Michael L. Roy
Name: Michael L. Roy

                                         Obligors:

WITNESS:                                 BALANCED CARE REALTY (OFC), INC.


/s/Jaynelle D. Covert                    By:/s/Robin L. Barber
Name: Jaynelle D. Covert
                                         Name: Robin L. Barber

                                         Title: Vice President and
/s/Theresa M. Haddad                            Secretary
Name: Theresa M. Haddad


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<PAGE>
WITNESS:                                 BALANCED CARE CORPORATION


/s/Jaynelle D. Covert                    By:/s/Robin L. Barber
Name: Jaynelle D. Covert
                                         Name: Robin L. Barber

                                         Title: Senior Vice President,
/s/Theresa M. Haddad                            Legal Counsel and
Name: Theresa M. Haddad                         Assistant Secretary


WITNESS:                                 BALANCED CARE AT MEDINA, INC.


/s/Jaynelle D. Covert                    By:/s/Robin L. Barber
Name: Jaynelle D. Covert
                                         Name: Robin L. Barber

                                         Title: Vice President and
/s/Theresa M. Haddad                            Secretary
Name: Theresa M. Haddad


WITNESS:                                 BALANCED CARE AT CENTERVILLE, INC.


/s/Jaynelle D. Covert                    By:/s/Robin L. Barber
Name: Jaynelle D. Covert
                                         Name: Robin L. Barber

                                         Title: Vice President and
/s/Theresa M. Haddad                            Secretary
Name: Theresa M. Haddad


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<PAGE>
WITNESS:                                 BALANCED CARE AT SHIPPENSBURG, INC.



/s/Jaynelle D. Covert                    By:/s/Robin L. Barber
Name: Jaynelle D. Covert
                                         Name: Robin L. Barber

                                         Title: Vice President and
/s/Theresa M. Haddad                     Secretary
Name: Theresa M. Haddad

                                         SENIOR CARE OPERATORS OF
WITNESS:                                 SHIPPENSBURG, LLC

                                         By:  Balanced Care
/s/Jaynelle D. Covert                         at Shippensburg,
Name: Jaynelle D. Covert                      Inc., its Manager

                                         By:/s/Robin L. Barber
/s/Theresa M. Haddad
Name: Theresa M. Haddad                  Name: Robin L. Barber

                                         Title: Vice President and
                                                Secretary


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