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Exhibit 10.1



                         AGREEMENT OF PURCHASE AND SALE



                                  by and among


                                Medina ALF, Inc.,
                             Centerville ALF, Inc.,
                             Shippensburg ALF, Inc.,
                                   as Sellers,
                          Ocwen Financial Corporation,


                                       and

                        Balanced Care Realty (OFC), Inc.,
                                    as Buyer,
                           Balanced Care Corporation,
   And, the following parties join for the limited purposes set forth herein:
                         Balanced Care at Medina, Inc.,
                       Balanced Care at Centerville, Inc.,
                    Balanced Care at Shippensburg, Inc., and
                   Senior Care Operators of Shippensburg, LLC




                                    Property:
                       Medina, OH Assisted Living Facility
                    Centerville, OH Assisted Living Facility
                    Shippensburg, PA Assisted Living Facility
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                         AGREEMENT OF PURCHASE AND SALE


      THIS AGREEMENT OF PURCHASE AND SALE ("Agreement") is made as of the
Effective Date by and among Medina ALF, Inc., a Florida corporation ("Medina"),
Centerville ALF, Inc., a Florida corporation ("Centerville"), and Shippensburg
ALF, Inc., a Florida corporation ("Shippensburg") (Medina, Centerville, and
Shippensburg are collectively referred to hereinafter as "Seller"), Ocwen
Financial Corporation, a Florida corporation ("Ocwen"), Balanced Care Realty
(OFC), Inc., a Delaware corporation ("Buyer"), and Balanced Care Corporation, a
Delaware corporation ("Balanced Care"). The following parties join only for the
specific purposes specified opposite their signatures at the end of this
Agreement: 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") (BCM, BCC, and BCS
are collectively referred to hereinafter as "Management Companies"), and Senior
Care Operators of Shippensburg, LLC, a Delaware limited liability company
("Licensee").

                                   WITNESSETH:

      WHEREAS, Seller is the owner of the Property (as defined in Section 2).

      Whereas, Buyer desires to purchase the Property from Seller, and Seller is
willing to sell the Property on the terms and conditions set forth in this
Agreement.

      WHEREAS, in order to finance the purchase of the Property from Seller,
Buyer will obtain a loan from an affiliate of Seller, Ocwen.

      WHEREAS, the terms and conditions of the aforementioned loan from Ocwen to
Buyer ("Loan") are set forth in the Term Loan Agreement by and among Balanced
Care, Buyer, the Management Companies, and Licensee, dated of even date herewith
("Term Loan Agreement").

      WHEREAS, the Management Companies, Licensee, and Buyer are subsidiaries of
Balanced Care. BCM manages the operations of the assisted living facility
located on the portion of the Property located in Medina, Ohio, and BCC manages
the operations of the assisted living facility located on the portion of the
Property located in Centerville, Ohio. BCS and Licensee (and Licensee for a
period not to extend longer than 60 days after the Effective Date), co-manage
the operations of the assisted
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living facility located on the portion of the Property located in Shippensburg,
Pennsylvania.

      WHEREAS, prior to Effective Date, Licensee (as to the Shippensburg
facility) and two other tenants of the Ohio assisted living facilities, Senior
Care Operations of Ohio, LLC, and Senior Care Operators of Centerville, LLC
(collectively referred to hereinafter as "Tenants"), leased the Property from
Seller and contracted with the Management Companies for the management of the
three (3) assisted living facilities located on the Property. Balanced Care was
required to support the Licensee and the Tenants and was ultimately responsible
for the lease payments of the Licensee and the Tenants to Seller. Licensee and
the Tenants failed to pay certain of the lease payments due Seller, and Seller
commenced a lawsuit against Balanced Care ("Lawsuit"). In order to settle the
Lawsuit, Balanced Care, Buyer, Ocwen and Seller have agreed upon the sale and
purchase, contemplated by this Agreement, as well as the Loan, as further
described in the Loan Documents (as defined in the Term Loan Agreement).

      NOW THEREFORE, in consideration for the mutual promises, covenants and
agreements set forth herein and in the Loan Documents, as well as certain other
valuable consideration, the receipt and adequacy of which is hereby
acknowledged, the parties, intending to be legally bound, hereby agree as
follows:

                                   AGREEMENT:

      1. Certain Definitions. For purposes of this Agreement, the following
terms shall have the following definitions:

            1.1 "Buyer's Address" means:

                          1215 Manor Drive
                          Mechanicsburg, PA  17055
                          Attention:  Robin L. Barber
                          Telecopy No.:  (717) 796-6294
                          Telephone No.:  (717) 796-6135

            1.2 "Closing" means the effective date of execution and delivery of
this Agreement, all documents, instruments and agreements in connection
herewith, the Term Loan Agreement, the other Loan Documents, and additional
documents required in connection with the settlement of the Lawsuit. As used
herein, "Closing" shall occur on the "Closing Date," which shall be as of March
31, 2002.


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            1.3 "Costs and Expenses" shall include, but are not limited to, the
following: reasonable out-of-pocket expenses or other expenses, including but
not limited to reasonable counsel fees and disbursements, travel expenses in
connection with due diligence and the closing of the Loan and the Purchase
Transaction (hereinafter defined), all other reasonable costs and expenses of
due diligence and the making of the Loan and the Purchase Transaction, such as
title examination and title insurance premiums, appraisals, recording fees,
transfer taxes, inspections, commissions, fees of all engineers (including
Ocwen's engineers and consultants), environmental survey expenses, real property
surveyor fees, lien searches and the like, all fees and costs (including Ocwen's
reasonable attorney's fees) associated with the Compromise and Settlement (as
defined in the Loan Agreement), and all other costs and fees incurred,
attributable to, allocated to, to be paid, or paid by Ocwen (of any nature or
type) in connection with (i) the due diligence, the negotiation, development,
preparation, execution and performance of this Agreement, the Loan Documents,
and transactions related thereto; (ii) the Closing of the Loan transaction and
Purchase Transaction and any related transactions; (iii) any requested
amendments, waivers or consents pursuant to the provisions hereof and thereof;
(iv) the enforcement of this Agreement, the Loan Documents, the Management
Agreements, other documents executed in connection with the Purchase
Transaction, the BCC Note (defined in the Term Loan Agreement), the Deferred
Purchase Price Note (defined hereinafter), and the Subordinate Mortgage (defined
hereinafter), including such expenses as may be incurred by Ocwen in collection
of the Term Note (defined in the Loan Agreement), the BCC Note, and the Deferred
Purchase Price Note, and all obligations of the Obligated Group (defined in the
Term Loan Agreement) under the Loan Documents, this Agreement, the Management
Agreements, the BCC Note, the Deferred Purchase Price Note, the Subordinate
Mortgage, and any other documents executed in connection with the Purchase
Transaction; and (v) the Lawsuit and Compromise and Settlement (defined in the
Term Loan Agreement).

Buyer, Balanced Care, Ocwen and Seller hereby all acknowledge, understand and
agree that the transfer taxes paid in order to record the Deeds may be audited
after the Closing. In no event shall Seller or Ocwen be responsible for any
transfer taxes assessed by any taxing authority, whether in Pennsylvania or
Ohio, whether before or after the recording of the Deeds. In the event that
additional transfer taxes are due after the Closing, Buyer and Balanced Care,
jointly and severally, shall be responsible for the payment of same, and Ocwen
and Seller shall be indemnified, defended, and held harmless by Buyer and
Balanced Care for same as set forth in Section 8.8 of the Term Loan Agreement.


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            1.4 "Deferred Purchase Price" means that portion of the total
Purchase Price due Seller that Seller has agreed may be deferred and payable by
Buyer after the Closing. The amount of the Deferred Purchase Price is Three
Million Four Hundred Forty-Nine Thousand Four Hundred One Dollar and 47/100
($3,449,401.47), payable to Seller in accordance with the terms of the Deferred
Purchase Price Note. The Deferred Purchase Price is allocable among the Property
(hereinafter defined) as reflected on Schedule 1.4. The Deferred Purchase Price
is a contingent payment, payable only as provided in the Deferred Purchase Price
Note.

            1.5 "Deferred Purchase Price Note" the promissory note given by
Buyer to Seller as of the Effective Date in the principal amount of the Deferred
Purchase Price, payable to Seller as set forth in the Deferred Purchase Price
Note. The form of Deferred Purchase Price Note is attached hereto as Exhibit B.

            1.6 "Effective Date" means March 31, 2002.

            1.7 "Excluded Items" means all proprietary, privileged or
confidential information of Seller relating to the Property, including but not
limited to, Seller's internal financial analyses, Seller's credit analyses and
collection plans, materials relating to Seller's cost to acquire the Property
and any documents or communications subject to the attorney/client privilege.

            1.8 "Purchase Price" means the sum of Fourteen Million One Hundred
Eighty Three Thousand Eight Hundred Twelve Dollars and 45/100 ($14,183,812.45)
plus the Deferred Purchase Price. The Purchase Price is allocable among the
Property as reflected on Schedule 1.8.

            1.9 Reserved.

            1.10 "Seller's Address" means:

                 Ocwen Federal Bank FSB
                 Ocwen Financial Corporation
                 1675 Palm Beach Lakes Boulevard
                 West Palm Beach, FL  33401
                 Attention:  Secretary
                 Fax No.: (561) 682-8163


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                 Ocwen Financial Corporation
                 1675 Palm Beach Lakes Blvd.
                 West Palm Beach, FL  33401
                 Attn:  John Halvorson
                 Fax:  (561) 682-8091

            1.11 "Title Company" means First American Title Insurance Company, 2
Penn Center Plaza, Suite 1910, Philadelphia, PA 19102, Attn: Joan Beste.

      2. Sale of Property: Purchase Price.

            2.1 Sale of Property. Subject to the terms, covenants and conditions
of this Agreement, Seller shall sell to Buyer, and Buyer shall purchase from
Seller:

                  (a) the land located in the Township of Shippensburg, County
of Cumberland, Commonwealth of Pennsylvania, which is more particularly
described in Exhibit A-1, the land located in the Township of Washington, County
of Montgomery, State of Ohio, which is more particularly described on Exhibit
A-2, and the land located in the City of Medina, County of Medina, State of
Ohio, which is more particularly described in Exhibit A-3, and all of Seller's
right, title and interest in and to any and all appurtenances and other rights
of Seller relating thereto, including all subsurface rights, if any ("Land");

                  (b) all buildings and other improvements located on the Land
("Improvements"); and,

                  (c) all right, title and interest of Seller, if any, in and to
any equipment, machinery or other property which is affixed to the Improvements
so as to constitute fixtures under Pennsylvania law (as to the Land located in
Pennsylvania) and under Ohio law (as to the Land located in Ohio) on the date of
Closing ("Fixtures").

                  (d) all right, title and interest of Seller in and to any
furniture, furnishings, decorations, equipment and/or other tangible personal
property now existing and located upon the Property to the extent of Seller's
ownership interest therein ("Personalty"). (the Land, the Improvements, the
Fixtures and the Personalty are collectively referred to herein as the
"Property").


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            2.2 Purchase Price. The Purchase Price shall be payable as follows:

                  2.2.1 Expense Deposit. Buyer has paid Seller One Hundred
Twenty-Five Thousand Dollars ($125,000.00) as a good faith deposit ("Expense
Deposit") and for Costs and Expenses incurred by Seller, Ocwen, or a third party
on the behalf of either of the foregoing, in connection with the Lawsuit, Loan,
and the transactions contemplated by this Agreement ("Purchase Transaction"). At
the Closing, in the event that the Costs and Expenses (including a reasonable
estimate of any and all Costs and Expenses expected to be incurred following the
Closing Date) exceed $125,000, then Buyer and/or Balanced Care, both of which
shall have joint and several liability and obligation with respect thereto,
shall pay the amount of the excess of the Costs and Expenses over the Expense
Deposit to Ocwen. At the Closing, in the event that the Costs and Expenses
(including a reasonable estimate of any and all Costs and Expenses expected to
be incurred following the Closing Date), are less than $125,000, then the amount
of excess of $125,000 over such Costs and Expenses shall be credited to Buyer as
part of the Down Payment.

                  2.2.2 Down Payment. Buyer shall pay to Seller, as a down
payment, Five Million Thirty Thousand Four Hundred Fifty-Six Dollars and 45/100
($5,030,456.45) by wire transfer in immediately-available federal funds of U.S.
currency, subject to any credit for Costs and Expenses pursuant to the terms of
Subsection 2.2.1 hereof, on or prior to the Effective Date.

                  2.2.3 Loan Amount. The Buyer shall execute the Term Note in
favor of Ocwen and shall deliver the same to Ocwen on or prior to the Effective
Date, which Term Note shall be is the principal amount of Nine Million One
Hundred Fifty-Three Thousand Three Hundred Fifty-Six Dollars ($9,153,356.00).
The form of Term Note is attached as an exhibit to the Term Loan Agreement. The
Loan will be secured by Mortgages (as defined in the Term Loan Agreement)
provided by Buyer to Ocwen on the Property as well as additional security more
fully described in the Term Loan Agreement.

                  2.2.4 Deferred Purchase Price. Buyer shall execute and deliver
the Deferred Purchase Price Note to Seller on or prior to the Effective Date.
The terms and conditions relating the payment of the Deferred Purchase Price are
set forth in the Deferred Purchase Price Note. The Deferred Purchase Price shall
be secured by a second mortgage on the Property in favor of Seller ("Subordinate
Mortgage").


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      3. Waivers; Closing Conditions.

            3.1 Waiver of Due Diligence Period and Seller's representations.
Buyer acknowledges that it has had the opportunity to undertake any studies,
inspections or investigations of the Property as Buyer deemed necessary to
evaluate the physical, environmental condition, or any other condition of the
Property. To the extent that Buyer has waived or otherwise declined the
opportunity to undertake such inspections and investigations as a condition to
the completion of the Closing under the terms of this Agreement, Buyer has
knowingly and voluntarily done so. Buyer understands and acknowledges that the
Property may be subject to earthquake, fire, floods, erosion, high water table,
dangerous underground soil conditions, hazardous materials, environmental
conditions, and similar occurrences that may alter its condition or affect its
suitability for any proposed use. Seller shall have no responsibility or
liability with respect to any such occurrence. It is understood by the parties
that Seller does not make any representation or warranty, express or implied, as
to the accuracy or completeness of any information contained in Seller's files
or in the documents produced by Seller or its agents, including, without
limitation, any environmental audit or report. Buyer acknowledges that Seller
and Seller's affiliates shall have no responsibility for the contents and
accuracy of such disclosures, and Buyer agrees that the obligations of Seller in
connection with the purchase of the Property shall be governed by this Agreement
irrespective of the contents of any such disclosures or the timing or delivery
thereof. Buyer further acknowledges and agrees that its affiliates have been and
are currently in possession of and/or manage the Property, and Seller has had
very little, if any, involvement with the Property since the three assisted
living facilities were built on the Property. As such, Buyer, as opposed to
Seller, is in a better position to know the condition (physical, environmental,
or otherwise) of the Property than Seller, and Buyer is not relying on Seller
for any information at all, including any representations or warranties, express
or implied, from Seller as to the condition of the Property.

            3.2 Seller's Conditions to Closing. The obligations of Seller to
consummate the transactions provided for herein are subject to and contingent
upon the satisfaction of the following conditions or the waiver of same by
Seller in writing:

                  3.2.1 Representations and Warranties. All representations and
warranties of Buyer and the other members of the Obligated Group contained in
this Agreement, if any, the


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Loan Documents, the Management Agreements, the Deferred Purchase Price Note, the
BCC Note, the Subordinate Mortgage, the Compromise and Settlement (as defined in
the Term Loan Agreement), Agreed Entry (as defined in the Term Loan Agreement),
and any other documents or instruments executed in connection with the Purchase
Transaction (all of the foregoing shall be collectively referred to hereinafter
as the "Transaction Documents"), shall be true and correct in all material
respects as of the Closing Date, and, at the Closing, Buyer and the other
members of the Obligated Group shall provide Seller and Ocwen with a certificate
of their respective authorized officers so indicating.

                  3.2.2 Preconditions, Covenants. Buyer and the other members of
the Obligated Group shall have performed and satisfied in all material respects
all conditions precedent, agreements, covenants, and obligations required to be
performed by Buyer or such other member of the Obligated Group prior to or at
the Closing under and pursuant to the terms and conditions of the Transaction
Documents.

                  3.2.3 Execution of Documents. Receipt by Seller and/or Ocwen
of a counterpart original of all of the Transaction Documents.

                  3.2.4 Board Approval. The receipt by Seller and/or Ocwen of a
certificate of the Secretary, Assistant Secretary or other officer of each
member of the Obligated Group certifying the following: the accuracy and
completeness of copies of the resolutions or action by unanimous written consent
of the board of directors (or other authorized governing body) of each member of
the Obligated Group, authorizing or ratifying the execution, delivery and
performance of the Transaction Documents, as applicable to such member of the
Obligated Group.

                  3.2.5 Incumbency. The receipt by Seller and/or Ocwen of a
certificate of the Secretary, Assistant Secretary or other officer of each
member of the Obligated Group certifying the names and true signatures of the
officers or other representatives of the respective member of the Obligated
Group authorized to sign the Transaction Documents.

                  3.2.6 Legal Opinions and Other Deliverables. Seller and/or
Ocwen shall have received each and all of the legal opinions, certificates, and
other documents and instruments set forth on the Closing Checklist for the
Purchase Transaction and the transactions contemplated by the Term Loan
Agreement ("Loan Transaction"), attached hereto as Exhibit C,


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including but not limited to all due diligence materials and information listed
thereon. All of the foregoing shall be found to be satisfactory by Ocwen and
Seller, in their reasonable discretion.

                  3.2.7 LMR Net Worth. The Net Worth (as defined in the Term
Loan Agreement) of LMR Holdings Limited, an exempted company incorporated in the
Cayman Islands and a Guarantor (as defined in the Term Loan Agreement) ("LMR"),
as of the Closing Date, must be at least Twenty Million Dollars
($20,000,000.00).

                  3.2.8 Certified Articles and Bylaws. Receipt by Ocwen and/or
Seller of Articles of Incorporation or Organization or a Certificate of
Existence (as applicable) certified by the Secretary of the State of
incorporation or organization or the Registrar of Companies of the Cayman
Islands for each member of the Obligated Group, indicating that such member is
in existence and good standing as of the date of certification. Receipt by Ocwen
and/or Seller of Bylaws (or an Operating Agreement, as applicable) of each
member of the Obligated Group certified by the Secretary, Assistant Secretary or
other officer of each member of the Obligated Group providing the current
version of the Bylaws (or Memorandum of Articles of Association or an Operating
Agreement, as applicable) and certifying as to the accuracy and completeness of
same as of the Closing Date.

                  3.2.9 Additional Conditions. Receipt by Ocwen and Seller of
any other items, documents, instruments, opinions, or certificates reasonably
requested by Ocwen or Seller relating to any member of the Obligated Group, the
Purchase Transaction, the Loan Transaction, or the Transaction Documents.

      4. Title.

            Deed. Seller shall convey title to the portion of the Property
located in Ohio to Buyer by limited warranty deeds in the form of Exhibit D, and
Seller shall convey title to the portion of the Property located in Pennsylvania
by special warranty deed in the form of Exhibit E (collectively referred to
hereinafter as the "Deeds"). Seller agrees to execute and deliver to the Title
Company any and all documents, instruments or agreements reasonably required by
the Title Company in order to effect the transfer of the Property or to record
the Deeds; provided, however, that any costs incurred in connection with the
foregoing shall be considered "Costs and Expenses" payable


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by Buyer and Balanced Care. In addition, Ocwen shall provide to the title
company indemnifications or other assurances in connection with state bulk sales
liens under 72 P.S. Section 1403 and similar statutes.

      Seller hereby agrees to provide the Buyer with good and marketable title
(pursuant to the Deeds) to the Property (and such as may be insurable at regular
rates), free and clear of all liens and encumbrances, except for liens and other
encumbrances: (i) for taxes not yet due and payable; (ii) created by, or
relating to Balanced Care, Buyer, Management Companies, Licensees, Tenants, or
any other Affiliate (as defined in the Term Loan Agreement), subsidiary, or
parent of Balanced Care; (iii) created by, or relating to, any tenants, lessees,
sublessees, residents, occupants, or other parties in possession of the
Property; (iv) recorded in the land records for the Property and relating to
utilities benefiting the Property; and (v) recorded in the land records for the
Property and acceptable to Buyer, in its reasonable discretion.

      5. Prorations and Adjustments.

            5.1 Real Property Taxes. Buyer shall be responsible for the payment
of any and all real estate taxes and assessments related to the Property whether
accrued, owing, due or payable prior to or after the Closing. Any and all
amounts due and owing as of the Closing Date shall be paid by Buyer at the
Closing, and otherwise, Buyer shall deliver sufficient funds to Ocwen to meet
Buyer's obligations to escrow funds for real property taxes and assessments
pursuant to Section 4.7 of the Term Loan Agreement.

            5.2 Rent. All of the leases by and between Seller and the Licensee
and Tenants shall be terminated effective as of the Closing Date in accordance
with that certain Agreement for Termination of Lease Documents and Mutual
Releases of even date herewith. The one remaining lease in effect relating to
the Property, other than the occupancy or resident contracts, whether written or
oral, entered into by the inhabitants of the three (3) assisted living
facilities (as used hereinafter, "Resident Contracts"), is a sublease of space
in the Centerville assisted living facility by and between Senior Care Operators
of Centerville, LLC, and Heartland Rehab Services, an Ohio corporation
("Sublease"). The Sublease shall be assigned from Senior Care Operators of
Centerville, LLC, as lessor, to Buyer at the Closing in accordance with that
certain Assignment of Therapy Sublease Agreement dated of even date herewith. No


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proration by and between Seller and Buyer shall be necessary for this Sublease.

            5.3 Security Deposits; Seller Responsibilities. Effective on and as
of the Closing Date, all obligations and performances of Seller with respect to
the Property shall cease and terminate, and Buyer shall assume and undertake all
of the terms, covenants and conditions that may have been or were binding on
Seller under the Resident Contracts, and all other obligations, performances and
liabilities arising out of or in connection with the ownership, occupancy, or
use of the Property.

            Seller has not received any security deposits ("Security Deposit")
(i) from any party to any Resident Contract, (ii) in connection with the
Sublease, or (iii) otherwise. To the extent that such Security Deposits have
been delivered to the Licensee, Tenants, the Management Companies, Buyer,
Balanced Care, or any other affiliate of Balanced Care rendering services at the
Property, Buyer will assume liability for those Security Deposits. This
assumption and undertaking by Buyer shall survive the Closing and the delivery,
acceptance and recordation of the Deeds and shall not be merged therein.

            5.4 Utilities and Other Expenses. Buyer shall notify all water, gas,
electric and other utility companies servicing the Property (collectively,
"Utility Companies") of the sale of the Property to Buyer and shall request that
all Utility Companies send all utility bills for the period commencing on and
extending after the Closing Date to Buyer or the Management Companies, at
Buyer's option. Buyer shall be responsible for the payment of any and all
utility bills whether relating to utility services provided prior to or after
the Closing Date. As such, no proration of utilities or any other expenses
relating to the Property is required.

      6. Delivery and Possession. Seller shall deliver possession of the
Property to Buyer on the Closing Date.

      7. Broker Fees, Commissions. Buyer and all members of the Obligated Group
(as defined in the Term Loan Agreement) hereby affirm that none of them has
retained or dealt with a broker in connection with this Agreement, the Purchase
Transaction, or the transactions contemplated by any of the Transaction
Documents. Neither Ocwen nor Seller shall be responsible for any fees,
commission, costs or expenses due any broker or any third parties or brokers
claiming an interest by, through, or under any member of the Obligated Group in
connection with this Agreement, the


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Purchase Transaction, or the transactions contemplated by any of the Transaction
Documents. Buyer and all other members of the Obligated Group shall indemnify,
defend, and hold Seller, Ocwen, their affiliates, successors, assigns,
employees, agents, officers, directors, and shareholders harmless from and
against any and all liabilities, claims, demands, damages, costs and expenses,
including, without limitation, reasonable attorneys' fees and court costs, in
connection with claims for any such commissions, finders' fees, brokerage fees,
or other costs or expenses arising out of any member of the Obligated Group's
conduct in relation to the subject matter of this Section 7 or the inaccuracy of
the foregoing representation and/or warranty of Buyer and the Obligated Group.

      Seller and Ocwen hereby affirm that none of them has retained or dealt
with a broker in connection with this Agreement, the Purchase Transaction, or
the transactions contemplated by any of the Transaction Documents. No member of
the Obligated Group shall be responsible for any fees, commission, costs or
expenses due any broker or any third parties or brokers claiming an interest by,
through, or under any Seller or Ocwen in connection with this Agreement, the
Purchase Transaction, or the transactions contemplated by any of the Transaction
Documents. Ocwen shall indemnify, defend, and hold the members of the Obligated
Group, their affiliates, successors, assigns, employees, agents, officers,
directors, and shareholders harmless from and against any and all liabilities,
claims, demands, damages, costs and expenses, including, without limitation,
reasonable attorneys' fees and court costs, in connection with claims for any
such commissions, finders' fees, brokerage fees, or other costs or expenses
arising out of Ocwen's conduct in relation to the subject matter of this Section
7 or the inaccuracy of the foregoing representation and/or warranty of Ocwen.

      8. Damage or Destruction; Condemnation.

            8.1 "Material Part". A taking by eminent domain of a portion of the
Property shall be deemed to affect a "material part" of the Property if the
estimated value of the portion of the Property taken exceeds twenty percent
(20%) of the Purchase Price, and (b) the destruction of a "material part" of the
Property shall be deemed to mean an insured or uninsured casualty to the
Property prior to the Closing Date having an estimated cost of repair which
equals or exceeds twenty percent (20%) of the Purchase Price.

            8.2 "Estimated Value". The phrase "estimated value" shall mean an
estimate obtained from a M.A.I. appraiser, who has


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at least five (5) years experience evaluating property located in the respective
County where the portion of the Property at issue is located, similar in nature
and function to that of the Property, selected by Seller and approved by Buyer,
and the phrase "estimated cost of repair shall" mean an estimate obtained from
an independent contractor selected by Seller and approved by Buyer. Buyer shall
not unreasonably withhold, condition or delay Buyer's approval under this
Section.

            8.3 Notice; Credit to Buyer. Buyer shall have the right to terminate
this Agreement if all or a material part of the Property is destroyed without
fault of Buyer, Balanced Care, the Management Companies, Licensee, any other
affiliate of Buyer or Balanced Care, or a material part of the Property becomes
the subject of a condemnation proceeding by a public or quasi-public authority
having the power of eminent domain. Buyer shall give written notice of Buyer's
election to terminate this Agreement within five (5) business days after Buyer
first learns of any damage to or taking of the Property that entitles Buyer to
terminate this Agreement. If Buyer does not give such notice, then this
Agreement shall remain in full force and effect, and there shall be no reduction
in the Purchase Price, but Seller shall, at Closing, assign to Buyer (a) any
insurance proceeds payable with respect to such damage; or (b) the entire award
payable with respect to such condemnation proceeding, whichever is applicable.

      9. DISCLAIMER OF REPRESENTATIONS AND WARRANTIES. BUYER HEREBY ACKNOWLEDGES
THAT NEITHER SELLER NOR OCWEN, WHETHER HEREIN OR IN ANY OTHER DOCUMENT,
INSTRUMENT OR AGREEMENT DELIVERED PRIOR TO OR CONTEMPORANEOUSLY WITH THE
DELIVERY HEREOF, HAS MADE OR MAKES ANY REPRESENTATION OR WARRANTY OF ANY KIND
WHATSOEVER, EITHER EXPRESS OR IMPLIED, WITH RESPECT TO THE PROPERTY, OR ANY
OTHER MATTERS, AND THAT THE PROPERTY IS SOLD TO BUYER IN AN "AS IS," "WHERE IS,"
AND "WITH ALL FAULTS" CONDITION. In particular, Seller makes no representations
or warranties with respect to (i) the use, environmental condition, or physical
condition of the Property, (ii) compliance with applicable statutes, laws,
codes, ordinances, regulations, or requirements relating to leasing, zoning,
subdivision, planning, building, fire, safety, health or environmental matters,
(iii) compliance with covenants, conditions and restrictions (whether or not of
record) pertaining to the title to the Property, and (iv) compliance with any
other local, municipal, regional, state, or federal requirements, or any other
statutes, laws, codes, ordinances, regulations, or requirements. Notwithstanding
anything to the contrary set forth in this Section 9, Seller has agreed to
convey the Property to Buyer,


                                     - 13 -
<PAGE>
subject to the provisions of Section 4, pursuant to the Deeds (special warranty
and limited warranty) in the form attached hereto as Exhibits D and E.

      10. Buyer's Representations and Warranties. Buyer, as a member of the
Obligated Group, has made representations and warranties to Ocwen and Seller in
Article III of the Term Loan Agreement. Such representations and warranties are
incorporated into this Purchase Agreement by reference.

      11. RESERVED.

      12. Waiver of Trial by Jury. EACH MEMBER OF THE OBLIGATED GROUP, SELLER
AND OCWEN (BY THEIR ACCEPTANCE HEREOF) HEREBY VOLUNTARILY, KNOWINGLY,
IRREVOCABLY AND UNCONDITIONALLY WAIVE ANY RIGHT TO HAVE A JURY PARTICIPATE IN
RESOLVING ANY DISPUTE (WHETHER BASED ON CONTRACT, TORT, OR OTHERWISE) BETWEEN OR
AMONG THEM ARISING OUT OF OR IN ANY WAY RELATED TO, IN CONNECTION WITH, OR
INCIDENTAL TO THE RELATIONSHIP ESTABLISHED AMONG ANY OF THEM IN CONNECTION WITH
THIS AGREEMENT OR THE OTHER TRANSACTION DOCUMENTS. THIS PROVISION IS A MATERIAL
INDUCEMENT TO SELLER TO ENTER INTO THIS AGREEMENT AND FOR OCWEN TO PROVIDE THE
FINANCING EVIDENCED BY THE TERM LOAN AGREEMENT. THIS PROVISION SHALL NOT IN ANY
WAY AFFECT, WAIVE, LIMIT, AMEND OR MODIFY OCWEN'S OR SELLER'S ABILITY TO PURSUE
ITS REMEDIES INCLUDING, BUT NOT LIMITED TO, ANY CONFESSION OF JUDGMENT OR
COGNOVIT PROVISION CONTAINED IN THIS AGREEMENT OR IN ANY OTHER TRANSACTION
DOCUMENT.

      13. Attorneys' Fees. If any action or proceeding is commenced by any party
to enforce their rights under this Agreement, or any document, instrument, or
certificate executed in connection herewith, or to collect damages as a result
of the breach of any of the provisions of this Agreement, or such other
documents, instruments, or certificates, the prevailing party in such action or
proceeding, including any bankruptcy, insolvency or appellate proceeding, shall
be entitled to recover all reasonable costs and expenses, including, without
limitation, reasonable attorneys' fees and court costs, in addition to any other
relief awarded by the court.

      14. Notices. (i) All notices required to be sent to any party under and
pursuant to this Agreement or any document, instrument, or certificate executed
in connection herewith shall be sent to the following address, as applicable, by
hand delivery, delivery charges prepaid, overnight courier service, delivery
charges prepaid, facsimile delivery, via email delivery, or by the United States
mail, sent for certified delivery, return receipt requested, postage prepaid:


                                     - 14 -
<PAGE>
Seller/Ocwen:                         With a Copy To:

Ocwen Federal Bank FSB                Squire, Sanders & Dempsey L.L.P.
Ocwen Financial Corporation           41 S. High Street, Suite 1300
1675 Palm Beach Lakes Blvd.           Columbus, Ohio  43215
West Palm Beach, FL  33401
Attn:  Secretary                      Attn:  David W. Grauer, Esq.
Fax:   (561) 862-8163                 Fax:   (614) 365-2499

AND

Ocwen Financial Corporation

1675 Palm Beach Lakes Blvd.
West Palm Beach, FL  33401
Attn:  John Halvorson
Fax:   (561) 682-8091

Buyer:                                With a Copy To:

Balanced Care Realty (OFC),           Kirkpatrick & Lockhart LLP
Inc.                                  Henry W. Oliver Building
1215 Manor Drive                      535 Smithfield Street
Mechanicsburg, PA  17055              Pittsburgh, PA  15222
Attn: Robin L. Barber                 Attn: Steven J. Adelkoff
Fax:  (717) 796-6294                  Fax:  (412) 355-6501

Balanced Care, the
Licenses or any
Management Company                    With a Copy To:

Balanced Care Realty (OFC),           Kirkpatrick & Lockhart LLP
Inc.                                  Henry W. Oliver Building
1215 Manor Drive                      535 Smithfield Street
Mechanicsburg, PA  17055              Pittsburgh, PA  15222
Attn: Robin L. Barber                 Attn: Steven J. Adelkoff
Fax: (717) 796-6294                   Fax:  (412) 355-6501

            Such notices shall be deemed received by a party on the day of hand
delivery, the day after deposited with a reputable overnight delivery services
for next-day delivery, the day that receipt is confirmed by the sender's
facsimile machine if the notice is sent by facsimile; the day on which the
notice is received by email transmission evidenced by a reply of the recipient
indicating receipt; or three days after the notice is deposited with the U.S.
Postal Service for delivery as aforesaid.


                                     - 15 -
<PAGE>
            (ii) Any party listed above may change the address for service of
notice upon it by a notice in writing to the other parties hereto as provided in
this Section 14.

      15. Amendment; Complete Agreement; No Construction Against Drafter. All
amendments and supplements to this Agreement must be in writing and executed by
all parties hereto. The Transaction Documents reflect the entire understanding
of the parties with respect to the subject matter of such documents and
supersede all prior and/or contemporaneous agreements or understandings with
respect thereto in their entirety, including but not limited to the Letter of
Intent (as defined in the Term Loan Agreement); provided, however, that the
provisions of the Letter of Intent that indicate specifically that they shall
survive the Closing of the Purchase Transaction shall continue in full force and
effect and shall be incorporated into this Agreement by reference.
Notwithstanding the foregoing, in the event that there is a conflict between any
such terms in the Letter of Intent that survive, and the terms of this
Agreement, the terms of this Agreement shall control. This Agreement has been
drafted through a joint effort of the parties and their counsel and, therefore,
shall not be construed in favor of or against either of the parties.

      16. Governing Law. The Transaction Documents shall be deemed to be
contracts made under and shall be construed in accordance with and governed by
the laws of the State of Ohio, without regard to its conflict of law principles.
In the event of any dispute, claim or controversy arising out of the terms or
conditions of any of the Transaction Documents, each member of the Obligated
Group hereby agrees that such dispute, claim, or controversy shall be brought
and heard only in the United States District Court for the Southern district of
Ohio, Western Division, in such other federal court as Ocwen shall select, in
state court in the State of Ohio, County of Montgomery, or in such other state
court in such other county and state as Ocwen may select, and all applicable
appellate courts thereof, and each member of the Obligated Group hereby waives
any objection to jurisdiction, venue, or forum non convenes that such party may
have otherwise had if this provision were not included herein. At the request of
Ocwen, made at any time, any party shall designate a statutory agent in any
State requested by Ocwen such that the forum selection clause of this Section 16
may be effectuated.

      17. Severability. The parties hereto intend and believe that each
provision in this Agreement, and the other documents, instruments, and
certificates executed in connection with the Purchase Transaction ("Other
Purchase Documents") comport with all


                                     - 16 -
<PAGE>
applicable local, state and federal laws and judicial decisions. However, if any
provision or provisions, or if any portion of any provision or provisions, in
this Agreement, or in any Other Purchase Documents, are found by a court of law
to be in violation of any applicable local, state or federal ordinance, statute,
law, administrative or judicial decision, or public policy, and if such court
should declare such portion, provision or provisions of this Agreement, or any
Other Purchase Document, to be illegal, invalid, unlawful, void or unenforceable
as written, then it is the intent of the parties hereto that such portion,
provision or provisions shall be given force and effect to the fullest possible
extent, that the remainder of this Agreement, and the Other Purchase Documents,
shall be construed as if such provision or provisions were not contained herein
and therein and that the rights, obligations and interests of the parties under
the remainder of this Agreement and the Other Purchase Documents shall continue
in full force and effect.

      18. Counterparts, Headings. This Agreement may be executed in
counterparts, each of which shall be an original, but all of which together
shall constitute one agreement. The headings to sections of this Agreement are
for convenient reference only and shall not be used in interpreting this
Agreement.

      19. Time of the Essence. Time is of the essence with respect to the dates,
terms, and conditions set forth herein, and in the performance of all of the
obligations of the Buyer and the other members of the Obligated Group under this
Agreement and the other Transaction Documents.

      20. Waiver. No waiver by any party of any of the terms or conditions of
this Agreement or any of their respective rights under this Agreement shall be
effective unless such waiver is in writing and signed by the party charged with
the waiver. Neither any failure nor delay on the part of a party in exercising
any right, power or privilege hereunder or under the other Transaction Documents
shall operate as a waiver thereof, nor shall a single or partial exercise
thereof preclude any other or further exercise of the same or the exercise of
any other rights, power or privilege. No waiver or consent shall be a continuing
waiver, and no waiver shall extend to any subsequent event of default, breach,
or condition, or impair any right consequent thereon. No notice or demand on
Buyer in any case shall entitle Buyer to any other or further notice or demand
in similar or other circumstances.


                                     - 17 -
<PAGE>
      21. Third Parties. This Agreement is entered into for the sole benefit of
the parties hereto and their respective permitted successors and assigns. No
Person (as defined in the Term Loan Agreement) other than the parties hereto,
and such permitted successors and assigns, shall have any right of action under
or rights or remedies by reason of this Agreement.

      22. Indemnification. Buyer, Balanced Care, and the other members of the
Obligated Group have agreed to indemnify, defend and hold harmless Ocwen and
Seller pursuant to the terms of Section 8.8 of the Term Loan Agreement. Such
terms and provisions are hereby incorporated herein by reference.

      23. Certificates, Etc. All certificates, reports and other writings
submitted by the Buyer and other members of the Obligated Group to Ocwen or
Seller hereunder, in connection with the Other Purchase Documents, shall
constitute the representations and warranties of the Buyer or the other
respective members of the Obligated Group to Ocwen and Seller as to the truth
and accuracy of all facts, calculations and other information set forth therein,
as though fully set forth and repeated in this Agreement or any Other Purchase
Document.

      24. Further Assurances. Buyer and Seller agree to do such further acts and
things and to execute and deliver to each other and/or Ocwen such additional
assignments, agreements, powers and instruments as such party or Ocwen may
reasonably require or deem advisable to carry into effect the purposes of this
Agreement and/or the Other Purchase Documents, or to better assure and confirm
unto Buyer, Seller, and/or Ocwen their rights, powers and remedies hereunder and
thereunder.

      25. Exhibits and Schedules. Any exhibits and schedules attached to this
Agreement are an integral part hereof and are hereby incorporated herein and
included in the term "this Agreement."

      26. Independent Counsel. Each party hereto hereby acknowledges that: (i)
they have been represented by independent counsel in connection with this
Agreement and the Other Purchase Documents; (ii) they have executed this
Agreement and the Other Purchase Documents with the advice of such counsel; and
(iii) this Agreement and the Other Purchase Documents are the result of
negotiations between the parties hereto and the advice and assistance of their
respective counsel. The fact that this Agreement and the Other Purchase
Documents were prepared by Seller's counsel as a matter of convenience shall
have no import or significance. Any


                                     - 18 -
<PAGE>
uncertainty or ambiguity in this Agreement or the Other Purchase Documents shall
not be construed against Seller because Seller's counsel prepared this Agreement
and the Other Purchase Documents in their final form.

      27. Successors and Assigns. Whenever in this Agreement and the Other
Purchase Documents any of the parties hereto is referred to, such reference
shall be deemed to include the successors and permitted assigns of such parties;
and all terms and provisions of this Agreement and the Other Purchase Documents
shall be binding upon and shall inure to the benefit of the parties hereto and
their respective successors and permitted assigns, whether so expressed or not.
As described in Section 36 hereof, except as otherwise provided in the Term Loan
Agreement with respect to Balanced Care, neither Buyer nor any other member of
the Obligated Group may assign or transfer their rights or duties under this
Agreement or the Other Purchase Documents to any Person. Also as described in
Section 36 hereof, Ocwen and/or Seller may assign or transfer their rights and
duties under this Agreement and the Other Purchase Documents to any Person
without the prior written consent of the Buyer or any other member of the
Obligated Group.

      28. Construction of Provisions. Each covenant by Buyer and the other
members of the Obligated Group contained in this Agreement and the Other
Purchase Documents shall be construed without reference to any other such
covenant, and any determination of whether any Buyer or any members of the
Obligated Group is in compliance with any such covenant shall be made without
reference to whether the Buyer or such other member of the Obligated Group is in
compliance with any other such covenant.

      29. Survivability. Notwithstanding anything set forth herein to the
contrary, the following sections of this Agreement shall survive the Closing of
the Purchase Transaction contemplated hereunder and shall not terminate and/or
otherwise merge with the Deeds: 1.3, 3.1, 5.3, 5.4, 7, 9, 10, 12, 13 through 31,
inclusive, 33, and 36.

      30. Condition of Property. Except as provided in Section 4, Buyer
represents and warrants that Buyer is acting, and will act only, upon
information obtained by Buyer directly from Buyer's own inspection of the
Property. Notwithstanding anything to the contrary contained in this Agreement,
the suitability or lack of suitability of the Property for any proposed or
intended use, or availability or lack of availability of (a) permits or
approvals of governmental or regulatory authorities, or (b) easements, licenses
or other


                                     - 19 -
<PAGE>
rights with respect to any such proposed or intended use of the Property shall
not affect the rights or obligations of the Buyer hereunder.

      31. Property "AS IS".

            31.1 Buyer's Possession. Buyer hereby acknowledges that, as
described above, affiliates of Buyer have been in possession of the Property
exclusively during almost the entire period of Seller's ownership of the
Property. As such, Buyer and its affiliates are in a better position and have
more knowledge to evaluate the condition of the Property than Seller.

            31.2 No Side Agreements or Representations. No Person (as defined in
the Term Loan Agreement) acting on behalf of Seller or Ocwen is authorized to
make, and by execution hereof, Buyer acknowledges that no Person has made any
representation, agreement, statement, warranty, guarantee or promise regarding
the Property or the transaction contemplated herein or the zoning, construction,
physical condition or other status of the Property except as may be expressly
set forth in this Agreement. No representation, warranty, agreement, statement,
guarantee or promise, if any, made by any person acting on behalf of Seller or
Ocwen which is not contained in this Agreement will be valid or binding on
Seller or Ocwen.

            31.3 AS IS CONDITION. IN ADDITION TO AND NOT IN LIEU OF OTHER
SIMILAR STATEMENTS MADE BY SELLER AND/OR OCWEN SET FORTH HEREIN, BUYER
ACKNOWLEDGES AND AGREES THAT NEITHER SELLER NOR OCWEN HAS MADE, DOES NOT MAKE
AND SPECIFICALLY NEGATES AND DISCLAIMS ANY REPRESENTATIONS, WARRANTIES,
PROMISES, COVENANTS, AGREEMENTS OR GUARANTIES OF ANY KIND OR CHARACTER
WHATSOEVER, WHETHER EXPRESS OR IMPLIED, ORAL OR WRITTEN, PAST, PRESENT OR
FUTURE, OF, AS TO, CONCERNING OR WITH RESPECT TO (I) VALUE; (II) THE INCOME TO
BE DERIVED FROM THE PROPERTY; (III) THE SUITABILITY OF THE PROPERTY FOR ANY AND
ALL ACTIVITIES AND USES WHICH BUYER MAY CONDUCT THEREON, INCLUDING THE
POSSIBILITIES FOR FUTURE DEVELOPMENT OF THE PROPERTY; (IV) THE HABITABILITY,
MERCHANTABILITY, MARKETABILITY, PROFITABILITY OR FITNESS FOR A PARTICULAR
PURPOSE OF THE PROPERTY; (V) THE MANNER, QUALITY, STATE OF REPAIR OR LACK OF
REPAIR OF THE PROPERTY; (VI) THE NATURE, QUALITY OR CONDITION OF THE PROPERTY,
INCLUDING, WITHOUT LIMITATION, THE WATER, SOIL, GEOLOGY OR OTHER ENVIRONMENTAL
OR PUBLIC HEALTH AND SAFETY CONDITION OF THE PROPERTY; (VII) THE COMPLIANCE OF
OR BY THE PROPERTY OR ITS OPERATION WITH ANY LAWS, RULES, ORDINANCES OR
REGULATIONS OF ANY APPLICABLE GOVERNMENTAL AUTHORITY OR BODY; (VIII) THE MANNER
OR QUALITY OF THE CONSTRUCTION OR MATERIALS, IF ANY, INCORPORATED INTO THE


                                     - 20 -
<PAGE>
PROPERTY; (IX) COMPLIANCE WITH ANY ENVIRONMENTAL PROTECTION, POLLUTION, PUBLIC
HEALTH AND SAFETY OR LAND USE LAWS, RULES, REGULATIONS, ORDERS OR REQUIREMENTS,
INCLUDING BUT NOT LIMITED TO, TITLE III OF THE AMERICANS WITH DISABILITIES ACT
OF 1990, THE RESOURCE CONSERVATION AND RECOVERY ACT, THE CLEAN AIR ACT, THE U.S.
ENVIRONMENTAL PROTECTION AGENCY REGULATIONS AT 40 C.F.R., PART 261, THE
COMPREHENSIVE ENVIRONMENTAL RESPONSE, COMPENSATION AND LIABILITY ACT OF 1980, AS
AMENDED, THE CLEAN WATER ACT, THE SAFE DRINKING WATER ACT, THE HAZARDOUS
MATERIALS TRANSPORTATION ACT, THE OCCUPATIONAL SAFETY AND HEALTH ACT, AND THE
TOXIC SUBSTANCE CONTROL ACT, AND REGULATIONS PROMULGATED UNDER ANY OF THE
FOREGOING AND SIMILAR STATE AND LOCAL LAWS, RULES AND REGULATIONS; (X) THE
PRESENCE OR ABSENCE OF HAZARDOUS MATERIALS AT, ON, UNDER, OR ADJACENT TO THE
PROPERTY; (XI) THE CONTENT, COMPLETENESS OR ACCURACY OF THE DUE DILIGENCE
MATERIALS OR PRELIMINARY REPORT REGARDING TITLE; (XII) THE CONFORMITY OF THE
IMPROVEMENTS TO ANY PLANS OR SPECIFICATIONS FOR THE PROPERTY, INCLUDING ANY
PLANS AND SPECIFICATIONS THAT MAY HAVE BEEN OR MAY BE PROVIDED TO BUYER; (XIII)
THE CONFORMITY OF THE PROPERTY TO PAST, CURRENT OR FUTURE APPLICABLE ZONING OR
BUILDING REQUIREMENTS; (XIV) DEFICIENCY OF ANY UNDERSHORING; (XV) DEFICIENCY OF
ANY DRAINAGE; (XVI) THE FACT THAT ALL OR A PORTION OF THE PROPERTY MAY BE
LOCATED ON OR NEAR AN EARTHQUAKE FAULT LINE; (XVII) THE EXISTENCE OF VESTED LAND
USE, ZONING OR BUILDING ENTITLEMENTS AFFECTING THE PROPERTY; OR (XVIII) WITH
RESPECT TO ANY OTHER MATTER. BUYER FURTHER ACKNOWLEDGES AND AGREES THAT HAVING
BEEN GIVEN THE OPPORTUNITY TO INSPECT THE PROPERTY AND REVIEW INFORMATION AND
DOCUMENTATION AFFECTING THE PROPERTY, BUYER IS RELYING SOLELY ON ITS OWN
INVESTIGATION OF THE PROPERTY AND REVIEW OF SUCH INFORMATION AND DOCUMENTATION,
AND NOT ON ANY INFORMATION PROVIDED OR TO BE PROVIDED BY SELLER OR OCWEN. BUYER
FURTHER ACKNOWLEDGES AND AGREES THAT ANY INFORMATION MADE AVAILABLE TO BUYER OR
PROVIDED OR TO BE PROVIDED BY OR ON BEHALF OF SELLER OR OCWEN WITH RESPECT TO
THE PROPERTY WAS OBTAINED FROM A VARIETY OF SOURCES AND THAT NEITHER SELLER NOR
OCWEN HAS MADE ANY INDEPENDENT INVESTIGATION OR VERIFICATION OF SUCH INFORMATION
AND MAKES NO REPRESENTATIONS AS TO THE ACCURACY OR COMPLETENESS OF SUCH
INFORMATION. BUYER AGREES TO FULLY AND IRREVOCABLY RELEASE ALL SUCH SOURCES OF
INFORMATION AND PREPARERS OF INFORMATION AND DOCUMENTATION AFFECTING THE
PROPERTY WHICH WERE RETAINED BY SELLER OR OCWEN FROM ANY AND ALL CLAIMS THAT
THEY MAY NOW HAVE OR HEREAFTER ACQUIRE AGAINST SUCH SOURCES AND PREPARERS OF
INFORMATION FOR ANY COSTS, LOSS, LIABILITY, DAMAGE, EXPENSE, DEMAND, ACTION OR
CAUSE OF ACTION ARISING FROM SUCH INFORMATION OR DOCUMENTATION. NEITHER SELLER
NOR OCWEN IS LIABLE OR BOUND IN ANY MANNER BY ANY ORAL OR WRITTEN STATEMENTS,
REPRESENTATIONS OR INFORMATION PERTAINING TO THE PROPERTY, OR THE OPERATION
THEREOF, FURNISHED


                                     - 21 -
<PAGE>
BY ANY REAL ESTATE BROKER, AGENT, EMPLOYEE, SERVANT OR OTHER PERSON. BUYER
FURTHER ACKNOWLEDGES AND AGREES THAT TO THE MAXIMUM EXTENT PERMITTED BY LAW, THE
SALE OF THE PROPERTY AS PROVIDED FOR HEREIN IS MADE ON AN "AS IS," "WHERE IS"
CONDITION AND BASIS WITH ALL FAULTS, AND THAT NEITHER SELLER NOR OCWEN HAS ANY
OBLIGATION TO MAKE REPAIRS, REPLACEMENTS OR IMPROVEMENTS TO THE PROPERTY. BUYER
REPRESENTS, WARRANTS AND COVENANTS TO SELLER AND OCWEN THAT BUYER IS RELYING
SOLELY UPON BUYER'S OWN INVESTIGATION OF THE PROPERTY IN CONNECTION WITH ITS
PURCHASE OF THE PROPERTY.

/s/WBS   /s/WBS                       /s/RLB
SELLER'S/OCWEN'S INITIALS             BUYER'S INITIALS

NOTWITHSTANDING ANYTHING TO THE CONTRARY SET FORTH IN THIS SUBSECTION 31.3,
SELLER HAS AGREED TO CONVEY THE PROPERTY TO BUYER IN ACCORDANCE WITH THE
PROVISIONS OF SECTION 4 AND PURSUANT TO THE DEEDS (SPECIAL WARRANTY AND LIMITED
WARRANTY) IN THE FORM ATTACHED HERETO AS EXHIBITS D AND E.

            31.4 Environmental Indemnity. In connection with obtaining the Loan
from Ocwen, Buyer, Balanced Care, the Management Companies and the Licensee have
made certain representations and warranties, and provided indemnification of
Ocwen and Seller, in connection with the past, present and future environmental
condition of the Property in the Environmental Condition and Indemnity
Agreement, dated of even date herewith ("Environmental Indemnity Agreement").
The terms of such Environmental Indemnity Agreement are incorporated herein by
reference and shall inure to the benefit of, be binding upon, and enforceable
against the parties hereto to the same extent if the provisions of the
Environmental Indemnity Agreement were reproduced in full in this Agreement.

      32. Governmental Approvals. Nothing contained in this Agreement or in any
Other Purchase Document shall be construed as authorizing Buyer to apply for a
zone change, variance, subdivision map, lot line adjustment, or other
discretionary governmental act, approval or permit with respect to the Property
prior to the Closing, and Buyer agrees not to do so without Seller's prior
written approval, which approval may be withheld in Seller's reasonable
discretion. Buyer agrees not to submit any reports, studies or other documents,
including, without limitation, plans and specifications, impact statements for
water, sewage, drainage or traffic, environmental review forms, or energy
conservation checklists to any governmental agency, or any amendment or
modification to any such instruments or documents prior to the Closing unless
first approved by


                                     - 22 -
<PAGE>
Seller, which approval Seller may withhold in Seller's sole discretion. Buyer's
obligation to purchase the Property shall not be subject to or conditioned upon
Buyer's obtaining any variances, zoning amendments, subdivision map, lot line
adjustment or other discretionary governmental act, approval or permit.

      33. Release. Buyer shall rely solely upon Buyer's own knowledge of the
Property based on its investigation of the Property and its own inspection of
the Property in determining the Property's physical condition. Buyer, and anyone
claiming by, through, or under Buyer hereby waives its right to recover from and
fully and irrevocably releases Seller and Ocwen, and their employees, officers,
directors, shareholders, representatives, consultants, agents, servants,
attorneys, affiliates, parents, subsidiaries, successors and assigns, and all
Persons (as defined in the Term Loan Agreement) on their behalf ("Released
Parties") from any and all claims that it may now have or hereafter may acquire
against any of the Released Parties for any costs, loss, liability, damage,
expenses, demand, action or cause of action arising from or related to any
construction defects, errors, omissions or other conditions, latent or
otherwise, including environmental matters, affecting the Property, or any
portion thereof. This release includes claims of which Buyer is presently
unaware or which Buyer does not presently suspect to exist which, if known by
Buyer, would materially affect Buyer's release to the Released Parties.

      In this connection and to the extent permitted by law, Buyer hereby
agrees, represents and warrants that Buyer realizes and acknowledges that
factual matters now unknown to it may have given or may hereafter give rise to
causes of action, claims, demands, debts, controversies, damages, costs, losses
and expenses which are presently unknown, unanticipated and unsuspected, and
Buyer further agrees, represents and warrants that the waivers and releases
herein have been negotiated and agreed upon in light of that realization and
that Buyer nevertheless hereby intends to release, discharge and acquit the
Release Parties from any such unknown causes of action, claims, demands, debts,
controversies, damages, costs, losses and expenses which might in any way be
included as a material portion of the consideration given to Seller by Buyer in
exchange for Seller's performance hereunder.

      Seller has given Buyer material concessions regarding this Purchase
Transaction in exchange for Buyer agreeing to the provisions of this Section 33.
Seller and Buyer have each


                                     - 23 -
<PAGE>
initialed this Section 33 to further indicate their awareness and acceptance of
each and every provision hereof.

/s/WBS                                /s/RLB
SELLER'S INITIALS                     BUYER'S INITIALS

NOTWITHSTANDING ANYTHING TO THE CONTRARY SET FORTH IN THIS SECTION 33, SELLER
HAS AGREED TO CONVEY THE PROPERTY TO BUYER IN ACCORDANCE WITH THE PROVISIONS OF
SECTION 4 AND PURSUANT TO THE DEEDS (SPECIAL WARRANTY AND LIMITED WARRANTY) IN
THE FORM ATTACHED HERETO AS EXHIBITS D AND E.

      34. Reserved.

      35. No Reservation of Property. The preparation and/or delivery of
unsigned drafts of this Agreement shall not create any legally binding rights in
the Property and/or obligations of the parties, and Buyer and Seller acknowledge
that this Agreement shall be of no effect until it is duly executed by both
Buyer and Seller (and all other parties hereto).

      36. Confidentiality; Assignment. Each party hereto agrees that the terms
of this Agreement and the Other Purchase Documents are confidential and shall
not be disclosed to any other person or entity without the written consent of
all of the parties hereto (unless ordered to do so by a court of competent
jurisdiction or otherwise required by applicable law). Provided, however, that a
party may disclose the terms of this Agreement and the Other Purchase Documents
to members of its and its affiliates' board of directors, management, employees,
shareholders, officers, advisors, and others within their organizations with a
need to know, subject to the conditions that the receiving party (a) notify such
board members, management employees, shareholder, advisors, officers, and others
within their organization with a need to know that the terms of this Agreement
and the Other Purchase Documents are subject to a confidentiality agreement, and
(b) obtain such person's agreement to maintain the confidentiality of the terms
of this Agreement or the Other Purchase Documents. And, provided, further, that
Ocwen may disclose the terms of this Agreement and the Other Purchase Documents
to any party interested in taking assignment of this Agreement and the Other
Purchase Documents, but Ocwen shall first obtain confidentiality agreements
substantially in the form of the agreement attached hereto as Exhibit F or in
another form reasonably acceptable to Balanced Care from such interested third
parties.

      Buyer and each member of the Obligated Group hereby acknowledge,
understand and agree that Ocwen and/or Seller may


                                     - 24 -
<PAGE>
assign, in whole or in part, their respective right, title and interest, and/or
obligations or responsibilities in, under and to this Agreement and the Other
Purchase Documents, without the prior consent of Buyer or any other member of
the Obligated Group being required. However, neither Buyer, nor any other member
of the Obligated Group, may assign or otherwise transfer or delegate, in whole
or in part, their right, title or interest or obligations or responsibilities
under and pursuant to this Agreement or the Other Purchase Documents without the
prior written consent of Ocwen, which may be withheld for any reason or no
reason. In no event shall any assignment consented to by Ocwen relieve Buyer
from its obligations under this Agreement or any of the Other Purchase
Documents. Any other purported or attempted assignment or delegation without
obtaining Ocwen's prior written consent shall be void ab initio and of no
effect.

      37. Escrow. The Title Company shall act as escrow agent, pursuant to joint
instructions provided by Seller and Buyer. In this capacity, the Title Company
shall receive the Purchase Price from Buyer, shall receive all of the
Transaction Documents that must be recorded, and shall distribute the proceeds
and record all such documents, pursuant to the instructions presented to the
Title Company by Seller and Buyer.

      IN WITNESS WHEREOF, Buyer, Balanced Care, Seller, Ocwen, and the following
for the specific purposes set forth below only, Balanced Care at Medina, Inc.,
Balanced Care at Centerville, Inc., Balanced Care at Shippensburg, Inc., and
Senior Care Operators of Shippensburg, LLC, do hereby execute this AGREEMENT OF
PURCHASE AND SALE to be effective as of the Effective Date.

SELLER:
CENTERVILLE ALF, INC.


By: /s/ William B. Shepro
Name:   William B. Shepro
Title:  Sr. Vice President


MEDINA ALF, INC.


By: /s/ William B. Shepro
Name:   William B. Shepro
Title:  Sr. Vice President


                                     - 25 -
<PAGE>
SHIPPENSBURG, ALF, INC.


By: /s/ William B. Shepro
Name:   William B. Shepro
Title:  Sr. Vice President


OCWEN:
OCWEN FINANCIAL CORPORATION


By: /s/ William B. Sherpro
Name:   William B. Shepro
Title:  Sr. Vice President


BUYER:
BALANCED CARE REALTY (OFC), INC.


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


BALANCED CARE:
BALANCED CARE CORPORATION


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

The following entities execute this AGREEMENT OF PURCHASE AND SALE for the
purpose of agreeing to be bound by Sections 7, 11-16, 19, 23, 26-29, and 36
only:


LICENSEE:
SENIOR CARE OPERATORS OF SHIPPENSBURG, LLC

By:  Balanced Care at Shippensburg, Inc., its Manager

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


                                     - 26 -
<PAGE>
MANAGEMENT COMPANIES:
BALANCED CARE AT MEDINA, INC.


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


BALANCED CARE AT CENTERVILLE, INC.


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


                                     - 27 -