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Exhibit 10.20





July 18, 2000

VIA FEDERAL EXPRESS

Centerville ALF, Inc.
Medina ALF, Inc.
Shippensburg ALF, Inc.
c/o Ocwen Financial
1675 Palm Beach Lakes Boulevard, Suite 900
West Palm Beach, FL  33401
Attn: Secretary and Vice President of Multifamily Finance

         Re:      Balanced Care Corporation ("BCC")
                  BCC Development and Management Co ("Developer")

Dear Sir or Madam:

         Reference is made to those certain Development Agreements identified on
Schedule 1 attached hereto and any documents executed thereunder or in
connection therewith, including without limitation the Leases (together with any
amendments thereto, collectively, the "Transaction Documents"), under which the
Facilities at the locations described on Schedule 1 are leased in favor of the
Owners, as landlords. The Facilities are leased by either wholly owned
subsidiaries of BCC or entities in which BCC or its designee has the option to
acquire all of the assets and/or equity of such entities (the "Tenants") and are
managed by wholly owned subsidiaries of BCC (the "Managers"). Any terms used but
not defined herein shall have the meanings ascribed to such terms in the
Development Agreements.

         Notwithstanding anything to the contrary contained in any of the
Transaction Documents, the Owners hereby acknowledge and agree that the
following shall not constitute an Event of Default or Default under any of the
Transaction Documents:

                  1.       The acquisition at any time, or from time to time
         (whether prior to the date of the Transaction Documents or after), by
         one or more of:
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                  (a)      Paul Reichmann or any member of his family or any
                           entity controlled by him or any of them, or any
                           entity sponsored or managed by any of the foregoing,
                           or

                  (b)      any trust for the benefit of Paul Reichmann or any
                           one or more members of his family or any entity
                           controlled by such a trust, including without
                           limitation RH Investments Limited, a Cayman Islands
                           corporation ("RH"), VXM Investments Limited, a Cayman
                           Islands corporation ("VXM"), LXB Investments Limited,
                           a Cayman Islands corporation ("LXB"), IPC Advisors
                           S.a.r.l., a Luxembourg corporation ("IPC"), and/or
                           any Affiliate of VXM, RH, LXB or IPC, or any entity
                           sponsored or managed by any of the foregoing.

                  (all such persons and entities referenced specifically or
                  generically in subsections (a) and (b) of this Section 1 being
                  referred to herein collectively as "Reichmann Entities"),
                  acting separately or in concert, of securities of BCC that
                  entitle the holder(s) of the beneficial interest(s) in
                  sufficient Voting Stock (as defined below) of BCC to permit
                  one or more Reichmann Entities (acting separately or in
                  concert) to vote for a majority of the board of directors of
                  BCC (hereinafter, each a "Consented Transaction"); provided,
                  however, that a Consented Transaction shall in no event
                  include the sale or other transfer by one or more Reichmann
                  Entities of Voting Stock in BCC or ownership interests in any
                  Reichmann Entities to one or more persons not otherwise
                  constituting Reichmann Entities that would otherwise
                  constitute an Event of Default or Default with respect to BCC
                  under the Transaction Documents.

                  As used in Section 1 above, (A) the term "Voting Stock" shall
                  collectively mean (i) any and all classes of capital stock of
                  a corporation to which any voting rights are ascribed to the
                  holders thereof, at law or by contact, together with (ii) any
                  contracts for the purchase of such stock already issued by
                  that corporation, (iii)
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                  subscriptions for the purchase of such stock to be issued by
                  that corporation, (iv) options to purchase such stock, (v)
                  warrants for such stock, (vi) securities convertible into such
                  stock, (vii) voting trusts, proxies, or other agreements or
                  understandings with respect to the voting of such stock, or
                  (viii) purchase rights, exchange rights, or other contracts or
                  commitments that could require that corporation to sell,
                  transfer, or otherwise dispose of any such stock or that could
                  require that corporation to issue, sell or otherwise cause to
                  become outstanding any of such stock; and (B) the term
                  "entity" shall include (without limitation) any corporation,
                  partnership, limited partnership, joint venture, syndicate,
                  trust or other entity.

         BCC hereby agrees to provide notice to you of the exercise of any of
the rights described above or the transfer or acquisition of the Voting Stock or
equitable or beneficial interests of any of the Balanced Care Entities (as
hereinafter defined).

         In consideration of the agreements set forth herein, the undersigned
BCC, Developer, Balanced Care at Shippensburg, Inc., Balanced Care at Medina,
Inc., and Balanced Care at Centerville, Inc. (collectively, the "Balanced Care
Entities") hereby agree, jointly and severally that:

         1.       None of them has any claim, counterclaim, or cause of action
against any of the addresses of this letter or Ocwen Federal Bank, F.S.B. or
Ocwen Financial Corporation, or any officer, director or shareholder thereof,
and

         2.       The Transaction Documents are in full force and effect and
there exists no claim by any of the foregoing Balanced Care Entities as to the
validity or enforceability with respect to any of the Transaction Documents.

         3.       We understand that you acknowledge that certain of the
undersigned have outstanding draw requests under certain Transaction Documents
and that the provisions of 1 and 2 above shall not terminate these requests. The
undersigned acknowledged and agree, however, that the
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funding of the draw requests shall be governed by the terms and conditions of
the Transaction Documents.

         The undersigned Balanced Care Entities hereby covenant and agree with
you that during the Option Period (as hereinafter defined) that the following
restrictions shall be applicable and the breach thereof shall constitute an
Event of Default under the Transaction Documents:

         1.       neither the Balanced Care Entities, any other direct or
indirect subsidiary of Balanced Care (the "BCC-Subs") nor the Reichmanns
Entities shall acquire, contract to acquire, make any investment in or otherwise
acquire any interest whatsoever in any of the real property or operations
managed, leased or under option by BCC, the Balanced Care Entities or any of the
BCC-Subs ("Acquired Interest") and

         2.       the Balanced Care Entities and the BCC-Subs shall not acquire,
contract to acquire, make any investment in or otherwise acquire any interest
whatsoever in any other person or entity;

                  in each case in 1 and 2 without first closing the acquisition
of one or more of the assets affected by the Transaction Documents ("Existing
Assets").

         The number of assets to be acquired by the undersigned shall correspond
to the number of assets affected by the Acquired Interest. For example, if the
undersigned or any of them or any combination of them or their affiliates
acquires an interest in one entity then such acquiring entities shall acquire
one of the Existing Assets.

         All acquisitions shall be governed by the option agreements contained
in the Transaction Documents. The Existing Assets shall be acquired in the
following order to the extent such applicable option period has not already
expired:

         1.       Medina
         2.       Shippensburg; and
         3.       Centerville.

         The term "Option Period" shall mean the period from May 1, 2003 through
and including April 30, 2004.
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         The undersigned agree that the obligations under this letter agreement
are binding and enforceable against the Balanced Care Entities; such obligations
are joint and several among them and that time is of the essence of such
obligations. This letter agreement shall be governed by the laws of the State of
Florida. The Balanced Care Entities acknowledge and agree that they are in
common enterprise of the ownership and operation of senior and assisted living
facilities, and accordingly, each of them has received good and adequate
consideration in connection with the execution and delivery of this letter
agreement.

         Should you have any questions or comments regarding the foregoing,
please contact me at 717-796-6135. BCC would like to thank the Owners in advance
for their consideration of this matter.

                                   BALANCED CARE CORPORATION

                                   By: /s/ Robin L. Barber
                                      Name: Robin L. Barber
                                      Title: Senior Vice President and
                                             Legal Counsel & Assistant Secretary

                                   BCC DEVELOPMENT AND MANAGEMENT CO.

                                   By: /s/ Robin L. Barber
                                      Name: Robin L. Barber
                                      Title: Vice President and Secretary

                                   BALANCED CARE AT SHIPPENSBURG, INC.

                                   By: /s/ Robin L. Barber
                                      Name: Robin L. Barber
                                      Title: Vice President and Secretary

                                   BALANCED CARE AT MEDINA, INC.

                                   By: /s/ Robin L. Barber
                                      Name: Robin L. Barber
                                      Title: Vice President and Secretary
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                                   BALANCED CARE AT CENTERVILLE, INC.

                                   By: /s/ Robin L. Barber
                                      Name: Robin L. Barber
                                      Title: Vice President and Secretary

ACKNOWLEDGED AND AGREED TO THIS 18th day of July, 2000.

                                        CENTERVILLE ALF, INC.

                                        By: /s/ C. Peter Woodman
                                           Title: Vice President
                                           Name: C. Peter Woodman

                                        MEDINA ALF, INC.

                                        By: /s/ C. Peter Woodman
                                           Title: Vice President
                                           Name: C. Peter Woodman

                                        SHIPPENSBURG ALF, INC.

                                        By: /s/ C. Peter Woodman
                                           Title: Vice President
                                           Name: C. Peter Woodman

                                        BALANCED CARE/REICHMANN ENTITIES
                                        Acquisition Letter of July 2000

                                        READ AND APPROVED:

                                        MANUFACTURERS AND TRADERS TRUST
                                        COMPANY

                                        By: /s/ E.S.
                                           Title: Vice President
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                                   SCHEDULE I

              FACILITY LOCATIONS, OWNERS AND DEVELOPMENT AGREEMENTS

<TABLE>
<CAPTION>
Location             Owner                      Development Agreement

<S>                  <C>                        <C>
Centerville, OH      Centerville ALF, Inc.      Development Agreement
                                                dated as of March 31, 1998

Medina, OH           Medina ALF, Inc.           Development Agreement
                                                dated as of December 31, 1997

Shippensburg, PA     Shippensburg ALF, Inc.     Development Agreement
                                                dated as of March 31, 1998
</TABLE>