<PAGE>
 EXHIBIT 10.8

                              EMPLOYMENT AGREEMENT

     This Employment Agreement (the "Agreement") is entered into effective July
23, 2001, by and between Senior Care Industries, Inc., a Nevada corporation (the
"Company"), and Gilbert Fuentes (the "Executive").

     WHEREAS the Company desires to employ the Executive effective as of July
23, 2001 (the "Effective Date"), and the Executive desires to accept employment
with the Company, on the terms and conditions set forth below.

     NOW, THEREFORE, in consideration of the foregoing recital and the
respective covenants and agreements of the parties contained in this document,
the Company and the Executive agree as follows:

     1. EMPLOYMENT AND DUTIES. The Executive will serve as Chief Financial
Officer. The duties and responsibilities of the Executive shall include the
duties and responsibilities as set forth in the Company's Bylaws from time to
time in effect and such other duties and responsibilities as the board of
directors of the Company (the "Board of Directors") may from time to time
reasonably assign the Executive, in all cases to be consistent with the
Executive's corporate offices and positions. The Executive shall also serve as
an officer and/or director of affiliates of the Company, without additional
compensation, if requested to do so by the Company. The Executive shall devote
his full time to the business of the Company and shall faithfully perform the
executive duties assigned to him to the best of his ability but may devote
reasonable time to other business affairs (not in conflict with the business of
the Company) as otherwise provided in paragraph 10 of this Agreement.

     2. EMPLOYMENT PERIOD.

     a. TERM. Executive's employment shall be for a period of three (3) years.

     b. INVOLUNTARY TERMINATION WITH CAUSE. The Company may terminate the
     Executive's employment for Cause by providing the Executive notice in
     writing. For all purposes under this Agreement, "Cause" shall mean (i)
     willful failure by the Executive to perform his duties hereunder, other
     than a failure resulting from the Executive's complete or partial
     incapacity due to physical or mental illness or impairment, (ii) gross
     negligence by the Executive in performing his duties hereunder, other than
     negligence resulting from the Executive's complete or partial incapacity
     due to physical or mental illness or impairment, (iii) a willful act by the
     Executive which constitutes gross misconduct and which is injurious to the
     Company, (iv) a willful violation of a federal or state law or regulation
     applicable to the business of the Company. No act or failure to act by the
     Executive shall be considered "willful" unless committed without good faith
     and without a reasonable belief that the act or omission was in the
     Company's best interest. The determination of Cause hereunder shall be made
     by a majority of the Company's disinterested Board of Directors. No
     Severance Pay as defined in paragraph 11(a)(i) will be paid to the
     Executive under this Agreement in the event of a termination for Cause.
     Executive's rights under any applicable benefit plans of the Company shall
     be determined under the provisions of those plans.

     c. DEATH. The Executive's employment will terminate in the event of his
     death.

     d. RESIGNATION WITHOUT CAUSE. The Executive may terminate his employment by
     providing the Company at least thirty (30) days advance written notice;
     provided that in such event, the Executive will cease performing any duties
     and responsibilities immediately or at any time during such thirty (30) day
     period, if so requested by the Company.

     3. PLACE OF EMPLOYMENT. The Executive's services shall be performed at the
Company's principal executive offices at Laguna Beach, California or such other
place as the Executive Committee of the Company and the Executive agree from
time to time, providing, however, that the Executive will at least be in the
Laguna Beach office two days per week unless specifically assigned to duties
elsewhere, as the case may be from time to time and the Executive understands
that he is expected to travel extensively in carrying out his duties with the
Company.


<PAGE>

     4. BASE SALARY. For all services to be rendered by the Executive pursuant
to this Agreement, the beginning salary shall be $1,442 per week in cash plus
additional benefits as follows:

     a. The Company shall issue 800,000 unregistered shares of Common stock in
     the name of the Executive to be held in trust for a period of one year,
     after which time, the shares shall be released to the Executive and shall
     be restricted under the terms of Section 144 of the Securities Act for an
     additional one year period; and

     b. After a period of one year, the Executive shall be entitled to
     participate in any Stock Option Plan which is otherwise available to
     executives and directors of the Company, and shall receive at least 200,000
     stock options under the terms of the 2001 Stock Option Plan, payable after
     one year of employment and to be registered at the Company expense upon
     exercise of the option on Form S-8 under the Securities Act.

     5. BONUS. For each fiscal year during Executive's employment with the
Company under this Agreement, the Executive will be eligible to receive an
annual bonus (the "Bonus") based upon an Executive Incentive Compensation Plan
(the "Plan") to be developed by executive management of the Company and approved
and adopted by the Board of Directors. This Plan will include the terms,
conditions and formula for computing bonuses for the Company's executive
officers for each fiscal year; it being understood that the Company's
expectation is to pay bonuses of at least twenty percent (20%) of an executive
officer's base salary annualized for the achievement of annual strategic and
operating plan goals and objectives. Executive shall be eligible to receive a
share of any stock options under the terms of any Stock Option Plan which the
Board of Directors or the shareholders may authorized during the course of the
employment of the Executive. In the event the Executive's employment is
terminated by the Company, as described in paragraph 11(a)(i), then the
Executive shall be entitled to receive a portion of the Bonus, as provided under
paragraph 11(b).

     6. EXPENSES. The Executive shall be entitled to reimbursement by the
Company for Executive's reasonable expenses for room, board and transportation
and for all reasonable, ordinary and necessary travel, entertainment and other
expenses incurred by the Executive during the term of this Agreement (in
accordance with the policies and procedures established by the Company for its
senior executive officers) in the performance of his duties and responsibilities
under this Agreement; provided, however, that the Executive shall properly
account for such expenses in accordance with the Company's policies and
procedures. Additionally, the Executive shall be entitled to an expense account
of $173 per week which shall be for general purposes and for which the Executive
need not render an accounting.

     7. BENEFITS. The Executive shall be entitled to participate in employee
benefit plans or programs of the Company, if any, to the extent that his
position, tenure, salary, age, health and other qualifications make him eligible
to participate, subject to the rules and regulations applicable thereto. In
addition, the Executive will be entitled to receive an annual physical
examination at Company's expense, or at the Company's request, will take a
physical examination annually and provide the results to the Board of Directors.

     8. VACATIONS AND HOLIDAYS. In accordance with the Company's policies in
effect from time to time, the Executive shall be entitled to paid vacation time
in the amount of four weeks per year, prorated for each complete month of
service, and Company holidays. Executive's right to carryover accrued unused
vacation shall be governed by the Company's policy then in effect.

     9. INDEMNIFICATION. The Company shall enter into an Indemnification
Agreement with the Executive that shall provide the Executive in substantially
the same form as that attached hereto as Exhibit A and incorporated herein by
this reference with the maximum amount of protection allowed under the laws of
Nevada to the extent that such protection is not inconsistent with the Company's
Certificate of Incorporation or Bylaws with respect to such subject matter.


<PAGE>

     10. OTHER ACTIVITIES. The Executive shall devote substantially all of his
working time and efforts during the Company's normal business hours to the
business and affairs of the Company and to the diligent and faithful performance
of the duties and responsibilities duly assigned to him pursuant to this
Agreement, except for vacations, holidays and sickness. The Executive may,
however, devote a reasonable amount of his time, in general after the regular
business hours of the Company, to civic, community or charitable activities and,
with the prior written approval of the Board of Directors, to serve as a
director of other corporations and other types of businesses or public
activities not expressly mentioned in this paragraph.

     11. TERMINATION BENEFITS. In the event the Executive's employment
terminates, then the Executive shall be entitled to receive Severance Pay, if
any, and other benefits as follows:

     a. SEVERANCE.

          (i) INVOLUNTARY TERMINATION WITHOUT CAUSE. If the Company terminates
     the Executive's employment other than for Cause, or Executive's death or
     disability, then Executive shall be entitled to payment of the total amount
     of $30,000 ("Severance Pay"), which Severance Pay shall be paid to
     Executive in periodic installments in accordance with the Company's regular
     payroll practices over a period of four (4) months; subject to Executive
     signing, delivering and abiding by a Separation Agreement and Release,
     substantially in the form attached hereto as Exhibit B and incorporated
     herein by this reference; and provided, however, that even if Executive
     satisfies the foregoing condition precedent to receipt of Severance Pay,
     the Company's obligations hereunder shall cease upon a breach by the
     Executive of his obligations under paragraphs 12, 14 and 16 hereof.

          (ii) OTHER TERMINATION. In the event the Executive's employment
     terminates for Cause or due to Executive's death or disability or
     Executive's voluntary resignation, then the Executive shall not be entitled
     to receive any Severance Pay or any other benefits, except as may be
     provided in the Company's severance and benefit plans and policies at the
     time of such termination, providing however, that the Executive shall be
     entitled to receive any and all compensation to which he is otherwise
     entitled and any stock options which may have vested prior to the
     termination date.

     b. BONUSES. In the event the Executive's employment is terminated by the
     Company as described in paragraph 11(a)(i) above, then the Executive shall
     be entitled to receive a portion of the Bonus, computed under the Company's
     Executive Incentive Compensation Plan referred to in paragraph 5, which
     Bonus will be determined, after the end of the fiscal year, by multiplying
     the amount of the Bonus which would have become payable to the Executive
     had he remained employed until the end of the fiscal year, by a fraction,
     the numerator of which will be the number of days the Executive was
     employed by the Company in such fiscal year, and the denominator of which
     shall be the number of days in the fiscal year. In the event the
     Executive's employment terminates for any other reason, then the Executive
     shall not be entitled to any Bonus which has not accrued as of such date.

     12. PROPRIETARY INFORMATION. The Executive shall not, without the prior
written consent of the Company, disclose or use for any purpose (except in the
course of his employment under this Agreement and in furtherance of the business
of the Company) any confidential information or proprietary data of the Company.
As an express condition of the Executive's employment with the Company, the
Executive agrees to execute confidentiality agreements as requested by the
Company, including but not limited to, the Company's standard form of employee
proprietary information agreement, a form of which is attached hereto as Exhibit
C and incorporated herein by this reference.

     13. ABSENCE OF CONFLICT. The Executive represents and warrants that his
employment by the Company as described herein shall not conflict with and will
not be constrained by any prior employment or consulting agreement or
relationship.


<PAGE>

     14. ARBITRATION. Except as provided in paragraph 16(b)(1) any dispute or
controversy of any kind arising under or in connection with this Agreement shall
be settled exclusively by binding arbitration in Portland, Oregon, in accordance
with the rules of the American Arbitration Association then in effect by an
arbitrator selected by both parties within ten (10) days after either party has
notified the other in writing that it desires a dispute between them to be
settled by arbitration. In the event the parties cannot agree on such arbitrator
within such ten (10) day period, each party shall select an arbitrator and
inform the other party in writing of such arbitrator's name and address within
five (5) days after the end of such ten (10) day period and the two arbitrators
so selected shall select a third arbitrator within fifteen (15) days thereafter;
provided, however, that in the event of a failure by either party to select an
arbitrator and notify the other party of such selection within the time period
provided above, the arbitrator selected by the other party shall be the sole
arbitrator of the dispute. Each party shall pay his or its own attorneys fee and
expenses associated with such arbitration, including the expense of any
arbitrator selected by such party and the Company will pay the expenses of the
jointly selected arbitrator. The decision of the arbitrator or a majority of the
panel of arbitrators shall be binding upon the parties and judgment in
accordance with that decision may be entered in any court having jurisdiction
there over. Punitive damages shall not be awarded.

BY AGREEING TO SUBMIT A DISPUTE OR CONTROVERSY TO ARBITRATION, THE PARTIES
UNDERSTAND THAT THEY WILL NOT ENJOY THE BENEFITS OF A JURY TRIAL. ACCORDINGLY,
THE PARTIES HERETO EXPRESSLY AGREE TO WAIVE THE RIGHT TO A JURY TRIAL.

     15. APPLICABLE LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of California as applied to agreements
between California residents entered and to be performed entirely within
California.

     16. CERTAIN COVENANTS OF THE EXECUTIVE.

     (a) COVENANTS AGAINST COMPETITION. The Executive acknowledges that (i) the
     principal business of the Company and its affiliates involves the operation
     of free-standing assisted living residences, primarily located in
     small-to-middle market rural and suburban communities, the provision of
     personal care and support services to meet the needs of its residents, and
     other related businesses which the Company and its affiliates currently
     operate and which the Company and its affiliates may become involved with
     during the Executive's employment under this Agreement (collectively, the
     "Company Business"); (ii) the Company Business is national in scope; (iii)
     the Executive's work for the Company will bring him into close contact with
     many confidential affairs not readily available to the public; and (iv) the
     Company would not enter into this Agreement but for the agreements and
     covenants of the Executive contained herein. In order to induce the Company
     to enter into this Employment Agreement, the Executive covenants and agrees
     that:

          (1) NON-COMPETE. During the time Executive is employed under this
     Agreement and for a period of six (6) months following the termination
     (whether for cause of otherwise) of the Executive's employment with the
     Company or any of its affiliates (the "Restricted Period"), the Executive
     shall not, in the United States of America or in any foreign country,
     directly or indirectly, (i) engage in the Company Business for his own
     account; (ii) enter the employ of, or render any services to, any persons
     engaged in such activities; or (iii) become interested in any person
     engaged in the Company Business, directly or indirectly, as an individual,
     partner, shareholder, officer, director, principal, agent, employee,
     trustee, consultant or in any other relationship or capacity; provided,
     however, that the Executive may own, directly or indirectly, solely as an
     investment, securities of any person which are traded on any national
     securities exchange or NASDAQ if the Executive (a) is not a controlling
     person of, or a member of a group which controls such person or (b) does
     not, directly or indirectly, own 1% or more of any class of securities of
     such person.

<PAGE>

          (2) CONFIDENTIAL INFORMATION. During and after the Restricted Period,
     the Executive shall keep secret and retain in strictest confidence, and
     shall not use for the benefit of himself or others except in connection
     with the business and affairs of the Company, all confidential matters of
     the Company and its affiliates. Such confidential matters include, without
     limitation, trade secrets, customer lists, subscription lists, details of
     consultant contracts, pricing policies, operational methods, marketing
     plans or strategies, product development techniques or plans, business
     acquisition plans, new personnel acquisition plans, designs and design
     projects, inventions and research projects of the Company and its
     affiliates, learned by the Executive heretofore or hereafter that are
     sufficiently secret to have the possibility, whether or not realized, of
     deriving economic value from not being generally known to other persons who
     can obtain economic value from their disclosure or use, and the Executive
     shall not disclose them to anyone outside of the Company and its
     affiliates, either during or after employment, by the Company or any of its
     affiliates, except as required in the course of performing duties hereunder
     or with the Company's express written consent. The Executive's obligations
     pursuant to this Employment Agreement shall not extend to matters which are
     within the public domain or hereafter enter the public domain through no
     fault or action or failure to act, whether directly or indirectly, on the
     part of the Executive.

          (3) PROPERTY OF THE COMPANY. All memoranda, notes, lists, records and
     other documents (and all copies thereof) made or compiled by the Executive
     or made available to the Executive concerning the business of the Company
     or any of its affiliates shall be the Company's property and shall be
     delivered to the Company promptly upon the termination of the Executive's
     employment with the Company or any of its affiliates or at any other time
     on request.

          (4) EMPLOYEES OF THE COMPANY. During the Restricted Period, the
     Executive shall not, directly or indirectly, hire, solicit or encourage to
     leave the employment of the Company or any of its affiliates, any employee
     of the Company or its affiliates or hire any such employee who has left the
     employment of the Company or any of its affiliates within six (6) months of
     the termination of such employee's employment with the Company or any of
     its affiliates.

          (5) CONSULTANTS AND INDEPENDENT CONTRACTORS OF THE COMPANY. During the
     Restricted Period, the Executive shall not, directly or indirectly, hire,
     solicit or encourage to cease to work with the Company or any of its
     affiliates, any consultant, sales representative or other person then under
     contract with the Company or any of its affiliates.

     (b) RIGHTS AND REMEDIES UPON BREACH. If the Executive breaches, or
     threatens to commit a breach of, any of the provisions of Section 16(a)
     (the "Restrictive Covenants"), the Company shall have the following rights
     and remedies, each of which rights and remedies shall be independent of the
     other and severally enforceable, and all of which rights and remedies shall
     be in addition to, and not in lieu of, any other rights and remedies
     available to the Company under law or in equity.

          (1) SPECIFIC PERFORMANCE. The right and remedy to have the Restrictive
     Covenants specifically enforced by any court having equity jurisdiction, it
     being acknowledged and agreed that any such breach or threatened breach
     will cause irreparable injury to the Company and its affiliates and that
     money damages will not provide an adequate remedy to the Company. The
     Parties further agree that the Company's claim for specific performance
     shall not be a claim which is covered by the parties' agreement to
     arbitrate as set forth in paragraph 15.

          (2) ACCOUNTING. The right and remedy to require the Executive to
     account for and pay over to the Company all compensation, profits, monies,
     accruals, increments or other benefits (collectively, "Benefits") derived
     or received by the Executive as a result of any transactions constituting a
     breach of any of the Restrictive Covenants, and the Executive shall account
     for and pay over such Benefits to the Company.

<PAGE>

     (c) SEVERABILITY OF COVENANTS. If any court determines that any of the
     Restrictive Covenants, or any parts thereof, are invalid or unenforceable,
     the remainder of the Restrictive Covenants shall not thereby be affected
     and shall be given full effect, without regard to the invalid portions.

     (d) "BLUE-PENCILING". If any court construes any of the Restrictive
     Covenants, or any part thereof, to be unenforceable because of the duration
     of such provision or the area covered thereby, such court shall have the
     power to reduce the duration or area of such provision and, in its reduced
     form, such provision shall then be enforceable and shall be enforced.

     (e) ENFORCEABILITY IN JURISDICTIONS. The parties intend to and hereby
     confer jurisdiction to enforce the Restrictive Covenants upon the courts of
     any jurisdiction within the geographical scope of such Restrictive
     Covenants. If the courts of any one or more of such jurisdictions hold the
     Restrictive Covenants wholly unenforceable by reason of the breadth of such
     scope or otherwise, it is the intention of the parties that such
     determination not bar or in any way affect the Company's right to the
     relief provided above in the courts of any other jurisdiction within the
     geographical scope of such Restrictive Covenants, as to breaches of such
     Restrictive Covenants in such other respective jurisdictions, such
     Restrictive Covenants as they relate to each jurisdiction being, for this
     purpose, severable into diverse and independent covenants.

     17. SUCCESSORS. The Company will require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company to expressly
assume and agree to perform this Agreement in the same manner and to the same
extent that the Company would be required to perform it if no such succession
had taken place. Failure of the Company to obtain such assumption agreement
prior to the effectiveness of any such succession shall entitle the Executive to
the Severance Pay described in paragraph 11(a)(i), subject to the terms and
conditions therein.

     18. ASSIGNMENT. This Agreement and all rights under this Agreement shall be
binding upon and inure to the benefit of and be enforceable by the parties
hereto and their respective personal or legal representatives, executors,
administrators, heirs, distributees, devisees, legatees, successors and assigns.
This Agreement is personal in nature, and, except as provided in paragraph 18
hereof, neither of the parties to this Agreement shall, without the written
consent of the other, assign or transfer this Agreement or any right or
obligation under this Agreement to any other person or entity. If the Executive
should die while any amounts are still payable to the Executive hereunder, all
such amounts, unless otherwise provided herein, shall be paid in accordance with
the terms of this Agreement to the Executive's devisee, legatee, or other
designee or, if there be no such designee, to the Executive's estate.

     19. NOTICES. For purposes of this Agreement, notices and other
communications provided for in this Agreement shall be in writing and shall be
delivered personally or sent by United States certified mail, return receipt
requested, postage prepaid, addressed as follows:


                If to the Executive:    Gilbert Fuentes
                                        410 Broadway, 2nd Floor
                                        Laguna Beach, CA 92651

                If to the Company:      Senior Care Industries, Inc.
                                        Attention: John Cruickshank
                                        Senior Vice President


or to such other address or the attention of such other person as the recipient
party has previously furnished to the other party in writing in accordance with
this paragraph. Such notices or other communications shall be effective upon
delivery or, if earlier, three (3) days after they have been mailed as provided
above.

     20. WAIVER. Failure or delay on the part of either party hereto to enforce
any right, power or privilege hereunder shall not be deemed to constitute a
waiver thereof. Additionally, a waiver by either party of a breach of any
promise hereof by the other party shall not operate as or be construed to
constitute a waiver of any subsequent breach by such other party.

<PAGE>

     21. SEVERABILITY. Whenever possible, each provision of this Agreement will
be interpreted in such manner as to be effective, valid and enforceable under
applicable law, but if any provision of this Agreement is held to be invalid,
illegal or unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability will not affect
any other provision or any other jurisdiction, but this Agreement will be
reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provision had never been contained herein.

     22. RIGHT TO ADVICE OF COUNSEL. The Executive acknowledges that he has
consulted with counsel and is fully aware of his rights and obligations under
this Agreement.

     23. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, none of which need contain the signature of more than one party
hereto, and each of which shall be deemed to be an original, and all of which
together shall constitute a single agreement,

     24. FACSIMILE TRANSMISSION AND SIGNATURES. Facsimile transmission of any
signed original document, and retransmission of any signed facsimile
transmission, shall be the same as delivery of an original document. At the
request of either party, the parties will confirm facsimile transmitted
signatures by signing an original documents.

     25. INTEGRATION. This Agreement represents the final and entire agreement
and understanding between the parties as to the subject matter hereof and
supersedes all prior or contemporaneous agreements whether written or oral. No
waiver, alteration or modification of any of the provisions of this Agreement
shall be binding unless in writing and signed by duly authorized representatives
of the parties hereto.


<PAGE>



     IN WITNESS WHEREOF, each of the parties has executed this Agreement, in the
case of the Company by its duly authorized officer, on the day set opposite its
name below.

 Senior Care Industries, Inc.



 By: /s/ Mervyn A. Phelan, Sr.
     -----------------------------
 Mervyn A. Phelan, Sr.
 Chief Executive Officer



 By: /s/ John W. Cruickshank
     -----------------------------
 John W. Cruickshank
 Senior Vice President




 Executive


 /s/ Gilbert Fuentes
 ---------------------------------
 Gilbert Fuentes




<PAGE>


                                    EXHIBIT A

                            INDEMNIFICATION AGREEMENT


     This INDEMNIFICATION AGREEMENT is made and entered into as of the ____ day
of __________, 2001 by and between _______________ ("Indemnitee") and Senior
Care Industries, Inc. a Nevada corporation and its affiliates (collectively, the
"Company").

                                    RECITALS

     A. The Company has recognized the difficulty that publicly held
corporations are having in attracting and retaining qualified directors,
officers and key employees as a result of the increasing risk of claims and
actions against them arising out of their association with the Company.

     B. Indemnitee is an officer, director and/or key employee of the Company.

     C. Indemnitee is willing to serve, to continue to serve and to take on
additional service for or on behalf of the Company.

     D. In view of the mutual desire of the parties that Indemnitee render
valuable services to the Company, the parties have agreed to enter into this
Indemnification Agreement.

     THEREFORE IT IS AGREED:

     1. Definitions. The following definitions shall apply to this Agreement:

          1.1 "Act" shall be the Nevada Corporation Act, NRS Sections
78.010-.795, and all amendments thereto hereinafter enacted.

          1.2 "Expenses" shall include, without limitation, expenses of
investigations, judicial or administrative proceedings or appeals and attorneys'
fees and disbursements and any expenses of establishing a right to
indemnification under this Agreement.

          1.3 "Liability" means the obligation to pay a judgment, settlement,
penalty, fine, including an excise tax assessed with respect to an employee
benefit plan, or reasonable Expenses incurred with respect to a Proceeding.

          1.4 "Party" includes an individual who was, is or is threatened to be
made a named defendant or respondent in a proceeding.

          1.5 "Proceeding" means any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative and
whether formal or informal.

     2. Indemnification. The Company shall indemnify Indemnitee against
Liability and Expenses actually and necessarily incurred by him or her in any
Proceeding in which he or she is made a Party by reason of being or having been
a director, officer or key employee of the Company, except in relation to
matters as to which indemnification is prohibited by the Act; but such
indemnification shall not be deemed exclusive of any other rights to which
Indemnitee may be entitled under any bylaw or agreement of the Company, general
or specific action of the Company's board of directors, vote of the Company's
shareholders or otherwise.

<PAGE>

     3. Procedure for Indemnification. After the final disposition of any
Proceeding in which Indemnitee may be entitled to indemnification pursuant to
this Agreement, Indemnitee may send to the Company a written request for
indemnification. The Company shall, in accordance with the provisions of the Act
regarding determination and authorization of indemnification, make a finding
whether the indemnification requested is permitted by the laws of the state of
Nevada no later than 60 days following receipt by the Company of such request.
The Company shall cause the indemnification requested to be authorized and paid
unless the Company finds that the indemnification requested is not so permitted.
Indemnitee shall be given an opportunity to be heard and to present evidence in
connection with the consideration of the party or parties determining
Indemnitee's right to indemnification under the Act. If the Company does not
authorize indemnification hereunder, Indemnitee shall have the right to seek
court-ordered indemnification in accordance with the provisions of the Act. In
any such action, neither the making of, nor the failure to make, any finding by
the Company that indemnification of the Indemnitee is proper or not proper in
the circumstances shall be a defense to such action or create a presumption that
the Indemnitee has not met the standard of conduct required by the Act. In
making its determination and in any court proceeding, the Company shall have the
burden of proving that Indemnitee has not met the standard of conduct required
by the Act to entitle Indemnitee to indemnification.

     4. Procedure for Advancement of Expenses. The Company shall pay for or
reimburse the reasonable Expenses incurred by Indemnitee as a result of being
Party to a Proceeding in advance of final disposition of the Proceeding promptly
upon receipt of a written request for payment of such Expenses that is in
accordance with the requirements of the Act for such written statements. Such
written statement shall also include or be accompanied by documentation of the
Expenses incurred certified true and correct by Indemnitee. When available, such
documentation of expenses shall include copies of bills or statements evidencing
the Expenses incurred. If the requirements of this Section 4 are met, the
Company shall pay the amount requested promptly notwithstanding the absence of a
final disposition of the Proceeding.

     5. Partial Indemnity. If Indemnitee is entitled under any provision of this
Agreement to indemnification by the Company for some or a portion of the
Expenses or Liability incurred by Indemnitee in the preparation, investigation,
defense, appeal or settlement of any Proceeding but not, however, for the total
amount thereof, the Company shall indemnify Indemnitee for the portion of such
Expenses or Liability to which Indemnitee is entitled in accordance with this
Agreement.

     6. Insurance. The Company may, but shall not be required to, purchase and
keep in force during the term of this Agreement a policy or policies of
liability insurance on behalf of Indemnitee against Liability and Expenses
incurred in any Proceeding. Nothing herein shall be construed to prohibit
Indemnitee from maintaining his or her own policy of liability insurance.

     7. Exclusions. The Company shall not be liable to make any payment
hereunder:

          7.1 If it shall be finally adjudicated that such payment is prohibited
by law;

          7.2 On account of any Proceeding brought under Section 16(b) of the
Securities Exchange Act of 1934, as such law is amended from time to time, or
under any similar law that replaces Section 16(b), in which judgment is rendered
against Indemnitee for an accounting for profits made from the purchase or sale
by Indemnitee of the securities of the Company;

          7.3 For Liability or Expenses in any Proceeding brought by Indemnitee
against the Company unless (i) the Proceeding is brought as a Proceeding for
indemnity under this Agreement, (ii) Indemnitee is successful in whole or in
part in a Proceeding or (iii) the indemnification is included in a settlement of
the Proceeding or is awarded by a court;

          7.4 To the extent payment is actually made to Indemnitee under a
valid, enforceable and collectible insurance policy, whether provided by the
Company or by Indemnitee (the "Insurance Policy"), by or out of a fund created
by the Company and under the control of a trustee or otherwise (the "Fund") or
from other sources provided by the Company ("Other Sources"); or

<PAGE>

          7.5 For amounts paid in settlement of a claim effected without the
Company's prior written consent, which consent shall not be unreasonably
withheld.

If Indemnitee shall become obligated or required to pay any amount that the
Company would be obligated to pay hereunder except for the exclusion in Section
7.4, the Company shall advance such amount to Indemnitee if payment is not
reasonably expected to be made under the Insurance Policy, by the Fund or from
Other Sources prior to the time that Indemnitee must make such payment,
provided, however, that Indemnitee shall immediately pay over to the Company,
from the funds Indemnitee later receives under the Insurance Policy, from the
Fund or from Other Sources, an amount equal to the amount advanced.

     8. Defense of Claim. If any Proceeding asserted or commenced against
Indemnitee is also asserted or commenced against the Company, the Company shall
be entitled to participate in the Proceeding at its own expense and, except as
otherwise provided herein below, to the extent that it may wish the Company
shall be entitled to assume the defense thereof. After notice from the Company
to Indemnitee of its election to assume the defense of any such Proceeding,
Indemnitee shall have the right to employ Indemnitee's own counsel in such
Proceeding, but the Expenses of such counsel incurred after notice from the
Company to Indemnitee of its assumption of the defense thereof shall be the
Expenses of Indemnitee, and the Company may not be obligated to Indemnitee under
this Agreement for any Expenses subsequently incurred by Indemnitee in
connection therewith other than the reasonable costs of investigation, travel
and lodging Expenses arising out of Indemnitee's participation in the defense of
such Proceeding unless (i) otherwise authorized by the Company, (ii)
Indemnitee's counsel shall have reasonably concluded, and so notified the
Company in writing, that there may be a conflict of interest between the Company
and Indemnitee in the conduct of the defense of such Proceeding or (iii) the
Company shall not in fact have employed counsel to assume the defense of such
Proceeding. If the Company may be obligated for some or all of the Expenses of
Indemnitee under this Section 8, the determination of Indemnitee's entitlement
to indemnification shall be made in accordance with Section 3.

     9. Change in Control.

          9.1 The Company agrees that, if there is a Change in Control (as
hereinafter defined) of the Company, then with respect to all matters thereafter
arising concerning the rights of Indemnitee to indemnification and Expense
advances under this Agreement, the Company shall seek legal advice only from
special, independent counsel selected by the Company with the consent of
Indemnitee, which consent shall not be unreasonably withheld, with respect to
matters arising out of this Agreement, including but not limited to the right of
Indemnitee to indemnification hereunder. Such counsel shall, among other things,
render its written opinion to the Company and Indemnitee as to whether and to
what extent Indemnitee would be permitted to be indemnified under the Act and as
to the amount of reasonable indemnification. Such written opinion shall be
binding upon the Company and Indemnitee. The Company shall agree to pay the
reasonable fees of such special counsel and to indemnify fully such counsel
against any and all expenses, including attorney fees, claims, liabilities and
damages arising out of or relating to this Agreement or its engagement pursuant
hereto.

          9.2 For the purpose of this Section 9, a "Change in Control" shall be
deemed to have occurred if:

               9.2.1 Any "person," as such term is used in Sections 13(d) and
14(d) of the Securities Exchange Act of 1934 (the "1934 Act"), other than a
trustee or other fiduciary holding securities under an employee benefit plan of
the Company or a corporation owned, directly or indirectly, by the stockholders
of the Company in substantially the same proportion as their ownership of the
Company, becomes the "Beneficial Owner," as defined in Rule 13d-3 under the 1934
Act, directly or indirectly, of securities of the Company representing
twenty-five percent (25%) or more of the combined voting power of the Company's
then outstanding voting securities ("Voting Stock");

<PAGE>

               9.2.2 During any period of twenty-four (24) consecutive months,
not including any period prior to the execution of this Agreement, individuals
who at the beginning of such period constitute the board of directors of the
Company and any new director, other than a director designated by a person who
has entered into an agreement with the Company to effect a transaction described
in Section 9.2.1 or 9.2.3, whose election was approved by a vote of at least
two-thirds (2/3rds) of the shares entitled to vote, cease for any reason to
constitute a majority of the board; or

               9.2.3 The stockholders of the Company (i) approve a merger or
consolidation of the Company with any other corporation, other than a merger or
consolidation that would result in the Voting Stock outstanding immediately
prior thereto continuing to represent, either by remaining outstanding or by
being converted into Voting Stock of the surviving entity, at least seventy
percent (70%) of the combined voting power of the Voting Stock of the Company or
such surviving entity outstanding immediately after such merger or
consolidation, (ii) approve a plan of complete liquidation of the Company
or(iii) approve an agreement for the sale or disposition by the Company of all
or substantially all of the Company's assets.

     10. Potential Change in Control.

          10.1 In the event of a Potential Change in Control (as hereinafter
defined), the Company shall, upon written request by Indemnitee, create a trust
(the "Trust") for the benefit of Indemnitee and from time to time upon written
request of Indemnitee shall fund the Trust in an amount sufficient to satisfy
any and all Expenses reasonably anticipated at the time of each such request to
be incurred in connection with investigating, preparing for and defending any
Proceeding for which Indemnitee may be entitled to indemnification under this
Agreement, and any and all Liability for which Indemnitee is entitled to
indemnification hereunder from time to time actually paid, reasonably
anticipated or proposed to be paid. The amount or amounts to be deposited in the
Trust pursuant to the foregoing funding obligations shall be determined in
accordance with the provisions of the Act with regard to determination and
authorization of indemnification.

          10.2 The terms of the Trust shall provide that upon a Change in
Control:

               10.2.1 The Trust shall not be revoked or the principal thereof
invaded without the prior written consent of Indemnitee;

               10.2.2 The trustee of the Trust (the "Trustee") shall advance,
within two (2) business days of a written request by Indemnitee in accordance
with the requirements of Section 4, any and all Expenses to Indemnitee, and
Indemnitee hereby agrees to reimburse the Trust under the circumstances under
which Indemnitee would be required to reimburse the Company pursuant to the Act
and Section 4;

               10.2.3 The Trust shall continue to be funded by the Company in
accordance with the funding obligation set forth above;

               10.2.4 The Trustee shall promptly pay to Indemnitee all amounts
for which Indemnitee shall be entitled to indemnification pursuant to this
Agreement or otherwise; and

               10.2.5 All unexpended funds in the Trust shall revert to the
Company upon a final determination by the special counsel established in
accordance with Section 9 or a court of competent jurisdiction, as the case may
be, that Indemnitee has been fully indemnified under the terms of this
Agreement.

          10.3 The Trustee shall be selected by Indemnitee with the consent of
the Company, which consent shall not be unreasonably withheld, and all
reasonable expenses, fees and other disbursements of the Trustee in connection
with the establishment and administration of the Trust shall be paid by the
Company.
<PAGE>

          10.4 Nothing in this Section 10 shall relieve the Company of any of
its obligations under this Agreement.

          10.5 A "Potential Change in Control" shall be deemed to have occurred
if: (i) the Company enters into an agreement, the consummation of which would
result in the occurrence of a Change in Control; (ii) any person, including the
Company, publicly announces an intention to take or to consider taking actions
that, if consummated, would constitute a Change in Control; (iii) any person,
other than a trustee or other fiduciary holding securities under an employee
benefit plan of the Company or a corporation owned, directly or indirectly, by
the stockholders of the Company in substantially the same proportions as their
ownership of stock of the Company, who is or becomes the beneficial owner,
directly or indirectly, of stock of the Company representing nine and one-half
percent (9.5%) or more of the combined voting power of the Company's then
outstanding Voting Stock, increases his or her beneficial ownership of such
stock by five (5) percentage points or more over the percentage so owned by such
person; or (iv) the board of directors adopts a resolution to the effect that,
for purposes of this Agreement, a Potential Change in Control has occurred.

     11. Nonexclusivity and Continuation of Rights. The indemnification provided
by this Agreement shall not be deemed exclusive of any other rights consistent
with the laws of the state of Nevada to which Indemnitee may be entitled under
the Company's articles of incorporation, bylaws or any other agreement, vote of
shareholders or otherwise, both as to action in Indemnitee's official capacity
and as to action in another capacity while holding office or while employed by
or acting as agent for the Company, and shall continue notwithstanding that
Indemnitee may have ceased to be connected with the Company.

     12. Heirs, Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the heirs, successors and assigns of the Company and
Indemnitee.

     13. Severability. Wherever possible, each provision in this Agreement shall
be interpreted in such manner as to be effective and valid under the laws of the
state of Nevada, but if any provision of this Agreement shall be invalidated by
any court of competent jurisdiction, such provision shall be ineffective only to
the extent of such prohibition or invalidity without invalidating the remainder
of such provision or the remaining provisions of this Agreement.

     14. Subrogation. In the event of payment under this Agreement, the Company
shall be subrogated to the extent of such payment to all of the rights of
recovery of Indemnitee, who shall execute all documents required and shall do
all acts necessary to secure such rights, including the execution of such
documents necessary to enable the Company effectively to bring suit to enforce
such rights.

     15. Modification and Amendment. No amendment, modification, termination or
claimed waiver of any of the provisions hereof shall be valid unless in writing
and signed by both of the parties hereto.

     16. Notices. All notices, requests, demands and other communications
hereunder shall be in writing and shall be deemed to have been duly given if
delivered by hand and receipted for by the party to whom said notice or other
communication shall have been directed or mailed by certified or registered mail
with postage prepaid, on the third business day after the date on which it is so
mailed:

 If to Indemnitee:                      If to the Company:
 Gilbert Fuentes                        Senior Care Industries, Inc.
 410 Broadway, 2nd floor                410 Broadway, 2nd Floor
 Laguna Beach, CA 92651                 Laguna Beach, CA 927

or to such other address as may have been furnished to the other party.

     17. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the state of Nevada.

     18. Counterparts. This Agreement may be executed in one or more separate
counterparts, each of which, once they are executed, shall be deemed to be an
original. Such counterparts shall be and constitute one and the same instrument.

     19. Facsimile Transmission and Signatures. Facsimile transmission of any
signed original document, and retransmission of any signed facsimile
transmission, shall be the same as delivery of an original document. At the
request of either party, the parties will confirm facsimile transmitted
signatures with an original document.
<PAGE>

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

 INDEMNITEE                                Senior Care Industries, Inc.
                                           a Nevada corporation


 /s/ Gilbert Fuentes                       By: /s/ John W. Cruickshank
 --------------------------                ---------------------------
 Gilbert Fuentes                           John W. Cruickshank
                                           Senior Vice President




<PAGE>

                                    EXHIBIT B

                     FORM OF SEPARATION AGREEMENT AND RELEASE


     This Separation Agreement and Release ("AGREEMENT") is made and entered
into as of this _____ day of ______________, ______, by and between Assisted
Living Concepts, Inc. and one or more of its Affiliates (collectively,
"COMPANY"), and ______________________ ("EMPLOYEE") in order to provide the
terms and conditions of Employee's termination of employment, to fully and
completely resolve any and all issues that Employee may have in connection with
Employee's employment with Company or the termination of that employment, and to
promote an amicable long-term relationship between Company and Employee.

     In consideration of the mutual promises and conditions contained herein,
the parties agree as follows:

     1. Separation. Employee has been [is currently] employed at Company as
Employee. Employee shall have no further job responsibilities at Company
_______________ and Employee's employment shall be terminated effective as of
such date.

     2. Payment to Employee. Pursuant to the Employment Agreement entered into
between the parties and subject to certain conditions precedent set forth
therein, Company agrees to provide a Severance Amount to Employee as set forth
in paragraph 11(a)(i) of the Employment Agreement; provided, however, that
Employee must execute and not revoke this Agreement.

     3. Release of Claims. In return for the benefits conferred under the
Employment Agreement and this Agreement (which Employee acknowledges Company has
no legal obligation to provide if Employee does not enter into this Agreement),
Employee, on behalf of Employee and Employee's heirs, executors, administrators,
successors and assigns, hereby releases and forever discharges Company and its
past, present and future affiliates, future parent companies, subsidiaries,
predecessors, successors and assigns, and each of their past, present and future
shareholders, officers, directors, employees, agents and insurers, from any and
all claims, actions, causes of action, disputes, liabilities or damages, of any
kind, which may now exist or hereafter may be discovered, specifically
including, but not limited to, any and all claims, disputes, actions, causes of
action, liabilities or damages, arising from or relating to Employee's
employment with Company, or the termination of such employment, except for any
claim for payment or performance pursuant to the terms of this Agreement. This
release includes, but is not limited to, any claims that Employee might have for
reemployment or reinstatement or for additional compensation or benefits and
applies to claims that Employee might have under either federal, state or local
law dealing with employment, contract, tort, wage and hour, or civil rights
matters, including, but not limited to, Title VII of the Civil Rights Act of
1964, the Age Discrimination in Employment Act, the Americans with Disabilities
Act, the Family and Medical Leave Act, similar state laws, and any regulations
under such laws. This release shall not affect any accrued rights Employee may
have under any medical insurance, workers compensation or retirement plan
because of Employee's prior employment with Company. EMPLOYEE ACKNOWLEDGES AND
AGREES THAT THROUGH THIS RELEASE EMPLOYEE IS GIVING UP ALL RIGHTS AND CLAIMS OF
EVERY KIND AND NATURE WHATSOEVER, KNOWN OR UNKNOWN, CONTINGENT OR LIQUIDATED,
THAT EMPLOYEE MAY HAVE AGAINST COMPANY AND THE OTHER PERSONS NAMED ABOVE, EXCEPT
FOR THE RIGHTS SPECIFICALLY EXCLUDED ABOVE.

     4. Confidentiality. Employee agrees to keep this Agreement and each of its
terms, including without limitation the Severance Amount, and the fact that
Employee has received such Amount, strictly confidential. Employee may only
disclose the terms of this Agreement only to Employee's attorney or accountant,
or as required by law. Employee understands that Company may be required to
publicly disclose the terms of this Agreement.

     5. No Disparagement. Employee shall not make any disparaging or derogatory
remarks of any nature whatsoever about Company, its officers, directors or
employees, or its services and/or products (if any), either publicly or
privately, unless required to do so by law.
<PAGE>

     6. No Admission of Liability. This Agreement shall not be construed as an
admission of liability or wrongdoing by Company because no admission is
intended. Employee understands and agrees that this Agreement shall not be
offered as evidence by Employee in any proceeding, whether administrative or
otherwise.

     7. Employment Agreement. Employee reaffirms Employee's acknowledgements and
obligations under paragraph 16 of the Employment Agreement executed by Employee
in conjunction with Employee's employment at Company. The terms of such
Employment Agreement are incorporated herein by this reference. Employee agrees
to strictly comply with the terms of the Employment Agreement.

     8. Return of Property. Employee agrees to and hereby represents that
Employee has returned to Company all of Company's property and all materials
containing confidential information of Company that were in Employee's
possession or under Employee's control.

     9. Miscellaneous.

          9.1 Final and Entire Agreement. This document constitutes the entire,
          final, and complete agreement and understanding of the partie with
          respect to the subject matter hereof and supersedes and replaces all
          written and oral agreements and understandings heretofore made or
          existing by and between the parties or their representatives with
          respect thereto, other than the Employment Agreement executed between
          the parties. There have been no representations or commitments by
          Company to make any payment or perform any act other than those
          expressly stated herein.

          9.2 Waiver. No waiver of any provision of this Agreement shall be
          deemed, or shall constitute a wavier of any other provision, whether
          or not similar, nor shall any waiver constitute a continuing waiver.
          No waiver shall be binding unless executed in writing by the parties
          making the waiver.

          9.3 Binding Effect. All rights, remedies, and liabilities herein given
          to or imposed upon the parties shall extend to, inure to the benefit
          of and bind, as the circumstances may require, the parties and their
          representative heirs, personal representatives, administrators,
          successors and assigns.

          9.4 Amendment. No supplement, modification or amendment of this
          Agreement shall be valid, unless the same is in writing and signed by
          both parties.

          9.5 Attorneys Fees. If it becomes necessary to enforce this
          Agreement, or any part hereof, the prevailing party shall be entitled
          to recover its reasonable attorney fees and costs incurred therein,
          including all attorneys fees and costs on appeal and otherwise.

          9.6 Governing Law. This Agreement and the rights of the parties
          hereunder shall be governed, construed and enforced in accordance with
          the laws of the State of California, without regard to its conflict of
          law principles. Any suit or action arising out of or in connection
          with this Agreement, or any breach hereof, shall be brought and
          maintained in the Superior Court of the State of California, county of
          Orange. The parties hereby irrevocably submit to the jurisdiction of
          such court for the purpose of such suit or action and hereby expressly
          and irrevocably waive, to the fullest extent permitted by law, any
          claim that any such suit or action has been brought in an inconvenient
          forum.

          9.7 Employee Given 21 Days to Consider Agreement. Employee
          acknowledges that Company advised Employee in writing to consult with
          an attorney before signing this Agreement and that Employee has had at
          least 21 days to consider whether to execute this Agreement.

          9.8 Revocation. Employee may revoke this Agreement by written
          notice delivered to the President or Chief Executive Officer of the
          Company within seven (7) days following the date Employee signed the
          Agreement. If not revoked under the preceding sentence, this Agreement
          becomes effective and enforceable after the seven-day period has
          expired.
<PAGE>

 EMPLOYEE ACKNOWLEDGES THAT EMPLOYEE HAS FREELY AND VOLUNTARILY EXECUTED THIS
 AGREEMENT, WITH A COMPLETE UNDERSTANDING OF ITS TERMS AND PRESENT AND FUTURE
 EFFECTS.

 "EMPLOYEE"                                  Senior Care Industries, INC.



 /s/ Gilbert Fuentes                         By: /s/ John Cruickshank
 --------------------------                  ---------------------------
 Gilbert Fuentes                             John Cruickshank
                                             Senior Vice President







<PAGE>

                                    EXHIBIT C

               EMPLOYEE NON-DISCLOSURE OF CONFIDENTIAL INFORMATION

During the term of Employee's employment and afterwards, unless authorized in
writing by Senior Care Industries, Inc. and its affiliates, herein known as
"Company," Employee shall not disclose any Confidential Information, defined
below, to any person nor shall Employee use Confidential Information for any
purpose at any time, except for the purpose of performing Employee's job duties
on behalf of or as directed by the Company.

All Confidential Information which comes into Employee's possession or is
generated by Employee during Employee's employment by the Company shall be and
remain the exclusive property of the Company, and Employee agrees to return all
such documents and tangible property of the Company on termination of Employee's
employment or at such earlier time as the Company may request.

Information received by Employee shall not be considered Confidential
Information to the extent that (i) the information, as shown by competent
evidence, was already known to Employee from sources outside of the Company at
the time Employee received it from the Company; or (ii) the information is or
becomes, through no fault of Employee, general knowledge in the public domain.

The term "Confidential Information" shall be deemed to include, but shall not be
limited to, the profiles and demographics of residents in the Companies
facilities, costs of care, employee matters, and compliance issues, as well as
the architectural plans and specifications, methods, techniques, financing,
formats, specifications, procedures, business and financial information, systems
and knowledge of and experience in the operation and/or franchising of assisted
living residences, all of which may hereafter be improved, further developed, or
otherwise modified by Company from time to time.

Employee acknowledges and agrees that any breach of the covenants and agreements
contained in this Agreement will cause irreparable injury to Company for which
there is and shall be no adequate remedy at law. Accordingly, Employee hereby
consents to the issuance by any court of competent jurisdiction of an injunction
in favor of Company enjoining any such breach or violation of the covenants or
agreements contained herein; provided, that no request for or receipt of any
such injunction by Company shall be considered an election of remedies or waiver
of any right to assert any other remedies Company may have against Employee,
either at law or in equity.


 _____________________, 2001              _____________________________________
 Date                                     Gilbert Fuentes