Document:

<PAGE>
Exhibit 10.46
                            COLLATERAL ASSIGNMENT OF

                              MANAGEMENT AGREEMENTS

         THIS COLLATERAL ASSIGNMENT OF MANAGEMENT AGREEMENTS ("Assignment"), is
made and entered into as of March 31, 2002, by and among OCWEN FINANCIAL
CORPORATION, a Florida corporation ("Ocwen"), and BALANCED CARE REALTY (OFC),
INC., a Delaware corporation ("Realty"), BALANCED CARE AT MEDINA, INC., a
Delaware corporation ("BCM"), BALANCED CARE AT CENTERVILLE, INC., a Delaware
corporation ("BCC"), BALANCED CARE AT SHIPPENSBURG, INC., a Delaware corporation
("BCS"), and SENIOR CARE OPERATORS OF SHIPPENSBURG, LLC, a Delaware limited
liability company ("SCS"), execute this Assignment for the purpose of evidencing
their consent to assignments and other terms and conditions set forth herein.

                                   WITNESSETH:

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

         WHEREAS, Ocwen is willing to enter into the Term Loan Agreement upon
the condition that Realty enter into this Assignment in favor of Ocwen.

                                   AGREEMENT:

         NOW, THEREFORE, in consideration of the premises, mutual promises,
covenants, and agreements set forth herein, in order to induce Ocwen to enter
into the Term Loan Agreement, and for other good and valuable consideration, the
receipt and adequacy of which is hereby acknowledged, Realty does hereby
covenant, agree, warrant, represent, assign, set over and transfer to Ocwen all
of its right, title, privilege, and interest in the agreements described below.

         1. Management Agreements. The contracts and agreements that shall be
the subject of this Assignment, are as follows:

                  (a) the Management Agreement by and between Realty and BCM,
dated of even date herewith, pursuant to which BCM has agreed

<PAGE>
to provide certain management services to Realty in connection with the long
term care facility owned by Realty and located at 1046 North Jefferson Street,
Medina, Ohio 44256, a current copy of which is attached hereto as Exhibit A.

                  (b) the Management Agreement by and between Realty and BCC,
dated of even date herewith, pursuant to which BCC has agreed to provide certain
management services to Realty in connection with the long term care facility
owned by Realty and located at 8630 Washington Church Road, Centerville, Ohio
45342, a current copy of which is attached hereto as Exhibit B.

                  (c) the Management Agreement by and among Realty, BCS and SCS,
dated of even date herewith, pursuant to which BCS and SCS have agreed to
provide certain management services to Realty in connection with the long term
care facility owned by Realty and located at 129 Walnut Bottom Road,
Shippensburg, Pennsylvania 17257, a current copy of which is attached hereto as
Exhibit C.

         All of the foregoing shall be collectively referred to hereinafter as
the "Management Agreements."

         2. Assignment. Realty hereby assigns, transfers and sets over unto
Ocwen all of its right, title, privilege, claims, remedies, payments, and any
and all other interests in and to the Management Agreements and all of the
rights and benefits therefrom as security for the full, timely and faithful
repayment by Realty of all and any amounts due and owing under the Term Loan
Agreement and Term Note, and the performance by Realty of all of its obligations
under the Term Loan Agreement, Security Documents, Management Agreements, and
Ancillary Documents (collectively, the Term Loan Agreement, the Term Note, the
Security Documents, the Management Agreements, and the Ancillary Documents shall
be referred to hereinafter as the "Loan Documents"). For the purposes and
subject to the terms set forth herein, the above assignment of the Management
Agreements is absolute, unconditional, and is a presently effective assignment
from Realty to Ocwen.

         3. Security Interest. Realty hereby grants to Ocwen a security interest
in all of Realty's respective rights, privileges, title and interests in and to
the Management Agreements and all of the rights and benefits therefrom, and
Realty agrees that it shall execute appropriate UCC Financing Statements
relating thereto, and Ocwen shall have the right to file the same in order to
secure its interests therein.

                                      -2-
<PAGE>
         4. Occurrence of Event of Default. Until the occurrence of an Event of
Default, as defined in any of the Loan Documents, which is continuing and which
shall not have been cured by any applicable cure period, Realty may retain, use
and enjoy the benefits of the Management Agreements. After the occurrence of an
Event of Default as aforesaid, Ocwen may, at its option, enforce this Assignment
by notifying Realty by registered or certified mail or by personal delivery sent
or delivered to the address hereinafter prescribed for sending notices. The
affidavit or written statement of an officer, agent or attorney of Ocwen stating
that there has been an Event of Default as aforesaid shall constitute conclusive
evidence thereof, and any of BCM, BCS, BCC, and SCS, or any other Person, is
authorized and directed to rely thereon.

         5. Performance; Amendments. Realty agrees to faithfully observe and
perform all of the material obligations and agreements imposed upon Realty under
the Management Agreements, and agrees that the Management Agreements shall not
be encumbered, terminated, cancelled, or materially amended or modified without
the prior written consent of Ocwen, which consent shall not be unreasonably
withheld. For purposes hereof, "material" amendments or modifications of the
Management Agreements shall include, without limitation, amendments or
modifications which adversely affect Ocwen's security as determined by Ocwen in
its reasonable discretion.

         6. No Assumption. Until the exercise by Ocwen of its rights hereunder
as a consequence of an Event of Default, as described above, which is continuing
beyond any applicable cure period, Ocwen will not be deemed in any manner to
have assumed any of the Management Agreements, be obligated to perform any
obligation of Realty under the Management Agreements, or be liable to BCM, BCC,
BCS, SCS, or any other Person, by reason of a default or breach by any party
under the Management Agreements. Realty agrees to indemnify, defend, and to hold
Ocwen harmless of and from any and all liability, loss or damage that it may or
might incur by reason of any claims or demands against it based on or arising
out of (i) an alleged assumption of Realty's duties and obligations to perform
and discharge the terms, covenants and agreements in the Management Agreements,
or (ii) this Assignment; such indemnification of Ocwen by Realty shall not be
required to the extent any claim or demand results from Ocwen's gross negligence
or willful misconduct.

         7. Remedies. After the occurrence of an Event of Default, as described
above, which is continuing beyond any applicable cure periods, Ocwen shall have
all rights under applicable law, and as

                                      -3-
<PAGE>

a secured party under the Uniform Commercial Code, to enforce this Assignment,
and in addition, shall have the right, at its option, to (i) enforce its rights,
remedies, powers and privileges to and under the Management Agreements, as
described in this Assignment, without interference from Realty, and/or (ii) to
the extent permitted by law, either itself or an agent or nominee of Ocwen, in
lieu of Realty, may, with or without entry upon the Property (as defined below)
and/or the Project Properties, take over and enjoy the benefits of, and perform
all acts contemplated by the Management Agreements, in the same manner and to
the same extent as Realty may do. In the event Ocwen elects to do either or both
of the foregoing, Realty shall cooperate in causing BCM, BCC, BCS, and SCS to
materially comply with all the terms and conditions of the Management
Agreements. As used herein, "Property" shall mean the real property owned by
Realty, located at the following addresses, on which the Project Properties are
located: (i) 1046 North Jefferson Street, Medina, OH 44256, (ii) 8630 Washington
Church Road, Centerville, OH 45342, and (iii) 129 Walnut Bottom Road,
Shippensburg, PA 17257.

         Upon an Event of Default, which is continuing beyond any applicable
cure periods, and during the continuance thereof, Realty hereby irrevocably
constitutes and appoints Ocwen as its attorney-in-fact, coupled with an
interest, to demand, receive and enforce Realty's rights with respect to the
items covered hereby, to give appropriate receipts, releases and satisfactions
for and on behalf of Realty and to do any and all acts in the name of Ocwen with
the same force and effect as Realty could do if this Assignment had not been
made, including, at Ocwen's option, to enforce and enjoy the benefits of the
Management Agreements and to require performance thereunder by the other
contracting party. Upon an Event of Default, which is continuing beyond any
applicable cure periods, in connection with any and all of the foregoing powers,
and without limiting the same, Ocwen may effect new Management Agreements,
cancel or surrender existing Management Agreements, alter and/or amend the terms
of and renew existing Management Agreements, and make concessions to BCM, BCC,
BCS, and/or SCS, if Ocwen deems such appropriate. Except for the gross
negligence or willful misconduct of Ocwen, Realty hereby releases any and all
claims that it has or might have against Ocwen arising out of such performance
by Ocwen.

         8. Advances. All of the foregoing powers herein granted Ocwen shall be
liberally construed. Ocwen need not expend its own funds in the exercise of such
power. However, Ocwen may, after the occurrence of an Event of Default, which is
continuing beyond any applicable cure periods, after giving notice to Realty as
provided in Section 4 above, at its option, and without releasing

                                      -4-
<PAGE>
Realty from any obligation hereunder, discharge any obligation which Realty
fails to discharge under or with respect to said Management Agreements,
including without limitation, defending any legal action. All such amounts
expended by Ocwen shall be deemed reasonable and considered as advances secured
by this Assignment and also evidenced and secured by the other Loan Documents,
and Realty agrees to pay promptly upon demand all sums expended by Ocwen in
connection herewith, including attorneys' fees, together with interest thereon
at the Default Rate of interest set forth in the Term Loan Agreement.

         9. Copies. Realty shall, upon the written request of Ocwen, furnish it
with current, executed copies of all of the Management Agreements, if such
Management Agreements have been amended from the versions attached hereto.

         10. No Waiver. This Assignment may be enforced from time to time by
Ocwen at its discretion, with or without order of any court and with or without
appointment of a receiver, as Ocwen shall determine. Ocwen may also at any time
cease to enforce this Assignment. Any failure on the part of Ocwen promptly to
exercise any option hereby given or reserved shall not prevent the exercise of
any such option at any time thereafter. The waiver by Ocwen of any breach of any
term, covenant, or condition contained in this Assignment or any default in the
performance of any obligations under this Assignment, shall not be deemed to be
a waiver of any other breach or default of the same or any other term, covenant,
condition or obligation, nor shall any waiver of any incident of breach or
default constitute a continuing waiver of same. Ocwen may pursue and enforce any
remedy or remedies accorded it hereunder independently or, in conjunction or
concurrently with, or subsequent to its pursuing enforcement of any remedy or
remedies that it may have under the other Loan Documents.

         11. Capitalized Terms. Capitalized terms that are used in this
Assignment but that are not defined herein shall have the meanings ascribed to
such terms in the Term Loan Agreement, unless the context hereof clearly
requires otherwise.

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

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

                                      -5-
<PAGE>

         14. Survivability. Upon the payment in full of the Term Note, and the
payment in full of any other sums or monies due Ocwen pursuant to the terms of
the Term Loan Agreement (except for any Additional Payments due pursuant to
Section 1.6 of the Term Loan Agreement), this Assignment shall terminate and be
of no further force and effect, and in such event, Ocwen will, at the expense of
Realty, redeliver and reassign the Management Agreements to Realty and take all
action necessary to terminate the security interest of Ocwen in the Management
Agreements. Notwithstanding anything set forth herein or in any other Loan
Document to the contrary, the following sections of this Assignment shall
survive the payment in full of the Term Note, or any other termination or
expiration of this Assignment or the Loan Documents until the expiration of any
and all applicable statutes of limitation relating to claims that may arise
under and pursuant to or as a result of the terms of the following sections: 6,
13, 17 and 18.

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

          16. Consent of Management Companies. Each of BCM, BCC, BCS, and SCS
hereby fully consent and agree to the assignments set forth herein and to the
other terms and provisions of this Assignment. Each of BCM, BCC, BCS, and SCS
shall take whatever further actions, execute any instruments or agreements
reasonably requested by, and otherwise offer their assistance and cooperation to
Ocwen in order to effectuate the assignment of the Management Agreements
contemplated herein and otherwise to allow for Ocwen's full and complete
enjoyment of its rights and benefits set forth herein.

         17. Representations and Warranties. Realty hereby warrants and
represents to Ocwen as follows:

             (i) It has made no prior assignments of or granted any security
interest in any of its rights under the Management Agreements, except those in
favor of Ocwen;

                                      -6-
<PAGE>

             (ii) That, to the best of its knowledge, all of the Management
Agreements are in full force and effect on the date hereof, subject to no
defenses, set-offs, or counterclaims whatsoever;

             (iii) That to the best of its knowledge, there exists no event,
condition, or occurrence that constitutes or which with notice and/or passage of
time would constitute, a breach of or default under any term or condition of any
of the Management Agreements. Realty also hereby covenants and agrees not to do
any act that would destroy or impair the security to Ocwen of this Assignment;
and,

                  (iv) Realty will not waive or give any consent with respect to
any material default or material variation in the performance under the
Management Agreements, will at all times take proper steps to enforce all of the
material provisions and conditions thereof, and will forthwith notify Ocwen of
any material default or event of default thereunder.

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

                                      -7-
<PAGE>

         IN WITNESS WHEREOF, Realty and Ocwen have caused this COLLATERAL
ASSIGNMENT OF MANAGEMENT AGREEMENTS to be duly executed on the date first above
written.

<TABLE>
<CAPTION>
<S>                                                 <C>
Signed and acknowledged                              REALTY:
in the presence of:
                                                     BALANCED CARE REALTY (OFC), INC.
/s/Theresa M. Haddad
Witness
Printed Name: Theresa M. Haddad                      By:/s/Robin L. Barber
                                                     Print Name: Robin L. Barber
/s/Diane M. Borger                                   Title: Vice President and Secretary
Witness
Printed Name: Diane M. Borger

                                                     BALANCED CARE AT MEDINA, INC.
/s/Theresa M. Haddad
Witness
Printed Name: Theresa M. Haddad                      By:/s/Robin L. Barber
                                                     Print Name: Robin L. Barber
/s/Diane M. Borger                                   Title: Vice President and Secretary
Witness
Printed Name: Diane M. Borger

                                                     BALANCED CARE AT CENTERVILLE, INC.
/s/Theresa M. Haddad
Witness
Printed Name: Theresa M. Haddad                      By:/s/Robin L. Barber
                                                     Print Name: Robin L. Barber
/s/Diane M. Borger                                   Title: Vice President and Secretary
Witness
Printed Name: Diane M. Borger

                                                     BALANCED CARE AT SHIPPENSBURG,
/s/Theresa M. Haddad
Witness
Printed Name: Theresa M. Haddad                      By:/s/Robin L. Barber
                                                     Print Name: Robin L. Barber
/s/Diane M. Borger                                   Title: Vice President and Secretary
Witness
Printed Name: Diane M. Borger
</TABLE>
                                      -8-
<PAGE>

<TABLE>
<CAPTION>
<S>                                                  <C>
s/Theresa M. Haddad                                  SENIOR CARE OPERATORS OF
Witness                                              SHIPPENSBURG, LLC
Printed Name: Theresa M. Haddad                      By: BALANCED CARE AT SHIPPENSBURG, INC.,
                                                         its Manager

/s/Diane M. Borger                                   By:/s/Robin L. Barber
Witness                                              Print Name: Robin L. Barber
Printed Name: Diane M. Borger                        Title: Vice President and Secretary

                                                     OCWEN:

/s/John W. Halvorson                                 OCWEN FINANCIAL CORPORATION
Witness

Printed Name: John W. Halvorson

                                                     By:/s/William B. Shepro

/s/Michael L. Roy                                    Print Name: William B. Shepro
Witness                                              Title: Sr. Vice President
Printed Name: Michael L. Roy
</TABLE>

COMMONWEALTH OF PENNSYLVANIA        )
                                    )  SS
COUNTY OF CUMBERLAND                )

         Before me, the subscriber, a Notary Public in and for said State and
County, personally appeared Robin L. Barber, the Vice President and Secretary of
Balanced Care Realty (OFC), Inc., a Delaware corporation, who acknowledged the
signing of the foregoing instrument on behalf of Balanced Care Realty (OFC),
Inc., to be his/her free act and deed.

         IN TESTIMONY WHEREOF, I have hereunto set my hand and affixed my
official seal this 9th day of April, 2002.

                                                           /s/Barbara E. Davis
                                                           Notary Public

                                      -9-
<PAGE>
COMMONWEALTH OF PENNSYLVANIA        )
                                    )  SS
COUNTY OF CUMBERLAND                )

         Before me, the subscriber, a Notary Public in and for said State and
County, personally appeared Robin L. Barber, the Vice President and Secretary of
Balanced Care at Medina, Inc., a Delaware corporation, who acknowledged the
signing of the foregoing instrument on behalf of Balanced Care at Medina, Inc.,
to be his/her free act and deed.

         IN TESTIMONY WHEREOF, I have hereunto set my hand and affixed my
official seal this 9th day of April, 2002.

                                                             /s/Barbara E. Davis
                                                                Notary Public

COMMONWEALTH OF PENNSYLVANIA        )
                                    )  SS
COUNTY OF CUMBERLAND                )

         Before me, the subscriber, a Notary Public in and for said State and
County, personally appeared Robin L. Barber, the Vice President and Secretary of
Balanced Care at Centerville, Inc., a Delaware corporation, who acknowledged the
signing of the foregoing instrument on behalf of Balanced Care at Centerville,
Inc., to be his/her free act and deed.

         IN TESTIMONY WHEREOF, I have hereunto set my hand and affixed my
official seal this 9th day of April, 2002.

                                                             /s/Barbara E. Davis
                                                                   Notary Public

                                      -10-
<PAGE>
COMMONWEALTH OF PENNSYLVANIA        )
                                    )  SS
COUNTY OF CUMBERLAND                )

         Before me, the subscriber, a Notary Public in and for said State and
County, personally appeared Robin L. Barber, the Vice President and Secretary of
Balanced Care at Shippensburg, Inc., a Delaware corporation, who acknowledged
the signing of the foregoing instrument on behalf of Balanced Care at
Shippensburg, Inc., to be his/her free act and deed.

         IN TESTIMONY WHEREOF, I have hereunto set my hand and affixed my
official seal this 9th day of April, 2002.

                                                             /s/Barbara E. Davis
                                                                   Notary Public

COMMONWEALTH OF PENNSYLVANIA        )
                                    )  SS
COUNTY OF CUMBERLAND                )

         Before me, the subscriber, a Notary Public in and for said State and
County, personally appeared Robin L. Barber, the Vice President and Secretary of
Balanced Care at Shippensburg, Inc., the acting manager of Senior Care Operators
of Shippensburg, LLC, a Delaware limited liability company, who acknowledged the
signing of the foregoing instrument on behalf of Senior Care Operators of
Shippensburg, LLC, by and through its manager, Balanced Care at Shippensburg,
Inc., to be his/her free act and deed.

         IN TESTIMONY WHEREOF, I have hereunto set my hand and affixed my
official seal this 9th day of April, 2002.

                                                             /s/Barbara E. Davis
                                                                   Notary Public

                                      -11-
<PAGE>

STATE OF FLORIDA           )
                           )  SS
COUNTY OF PALM BEACH       )

         Before me, the subscriber, a Notary Public in and for said State and
County, personally appeared William B. Shepro, as Senior Vice President of Ocwen
Financial Corporation, a Florida corporation, who acknowledged the signing of
the foregoing instrument on behalf of Ocwen Financial Corporation, to be his/her
free act and deed.

         IN TESTIMONY WHEREOF, I have hereunto set my hand and affixed my
official seal this 4th day of April, 2002.

                                                          /s/Jerry Daniel Payton
                                                                   Notary Public

This instrument was prepared by: Squire, Sanders & Dempsey L.L.P., 1300
Huntington Center, 41 South High Street, Columbus, Ohio 43215.

                                      -12-<PAGE>
Exhibit 10.47

                          FORM OF MANAGEMENT AGREEMENT

               THIS AGREEMENT ("Agreement") is made effective as of the 31st day
of March, 2002, between [         ], a Delaware corporation (the "Management
Firm") and Balanced Care Realty (OFC), Inc., a Delaware corporation (the
"Owner").

                               W I T N E S S E T H

               WHEREAS, the Owner is or will be the owner of a residential care
facility with [         ] licensed beds located in [         ], having an
address of [ ] (the "Facility"); and

               WHEREAS, Owner is or will be the sole operator of the Facility
located on the Property; and

               WHEREAS, the Management Firm is experienced in operating such
facilities and is willing to be the exclusive manager and operator of the
Facility on behalf of the Owner, as an independent contractor pursuant to the
terms and conditions set forth herein; and

               WHEREAS, Management Firm has or will have a license from the
State of Ohio to operate the Facility; and

               WHEREAS, Owner, wishes to engage Management Firm as the sole and
exclusive operator and manager of the Facility; and

                  WHEREAS, during the term of this Agreement, the Management
Firm shall be the exclusive manager and operator of the Facility on behalf of
and in the name of the Owner.

               NOW, THEREFORE, for valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, and intending to be legally bound
hereby, the parties hereto hereby agree as follows:

1. Scope of Work. Owner hereby appoints Management Firm as the exclusive
operator and manager of the Facility during the term of this Agreement. The
Management Firm shall have full responsibility and authority in the name and on
behalf of Owner to operate and manage the Facility and hereby covenants and
agrees to take all actions necessary or desirable to operate and manage the
Facility and to fulfill its duties hereunder,

<PAGE>
including to: (i) operate and maintain the Facility on behalf of the Owner as a
comprehensive residential care facility providing personal care services; (ii)
collect all room and board revenue, as well as other revenue, and timely pay all
debts and other obligations relating to the Facility, including operating
expenses, fixed expenses and taxes; (iii) ensure the Facility complies with
applicable Federal, state and local laws and regulations; (iv) provide all
necessary services to ensure that the Facility provides quality care to its
residents; (v) recruit, hire and train personnel as needed for the operation of
all departments and services of the Facility; (vi) maintain such bank accounts
as may be necessary or desirable for the operation of the Facility (the
"Operating Accounts"); (vii) establish salary levels, performance standards,
personnel policies and employee benefits for the Owner's employees; (viii) apply
for, obtain and maintain a license from the Ohio Department of Health to operate
the Facility as a residential care facility and take all reasonable actions to
ensure that no license , permit, right, franchise or privilege in connection
with the Facility is allowed to lapse or to be revoked so long as the same shall
be necessary for the operation of the Facility; (ix) comply with all terms of
the Loan Documents (as defined in that certain Term Loan Agreement dated as of
March 31, 2002, executed among Balanced Care Corporation, Owner, Management Firm
and the other parties named therein, the "Loan Agreement")), and (x) to take all
other actions necessary or desirable to operate and manage the Facility in
accordance with prudent practice and industry standards.

               Without limiting the generality of the foregoing, Management Firm
shall, as part of its management duties hereunder and on behalf of (and at the
sole cost of) Owner, perform each and every obligation of Owner under the Loan
Agreement and the other Loan Documents through out the term hereof, including
all representations and warranties of Owner contained therein, to the extent
applicable. Additionally, the Management Firm shall collect all revenues of any
kind or nature from the Facility, and so long as any amounts are owing to Ocwen
(as defined in the Loan Agreement) under the Loan Agreement and the other Loan
Documents, make payments of principal and interest and other sums due and owing
to Ocwen under the Loan Agreement from revenues of Facility or as otherwise
provided in the Loan Documents.

             In performing its duties, the Management Firm (through its in-house
corporate staff or independent contractors) shall perform the following with
respect to the Facility, as well as

                                       2
<PAGE>
any other matters reasonably related thereto commencing upon the date of this
Agreement:

             (a)   Management Information Systems (MIS)

                   Support centralized Facility information systems that provide
management for the following areas:

                         --    Accounts Receivable
                         --    Accounts Payable
                         --    Coordination of Payroll with Third Party Vendor
                         --    Financial Reporting
                         --    Marketing
                         --    General Ledger

             The Management Firm shall be responsible for billing and collection
of accounts receivable generated in connection with the Facility.

             (b)   Legal Counsel

                   (i) Prepare or coordinate with outside legal counsel for
             preparation of documents for operation of the Facility, including
             resident agreements, supplier/vendor contracts, service contracts,
             equipment leases and other ancillary contracts; (ii) prepare or
             coordinate licensure and other regulatory applications; (iii)
             coordinate all litigation involving the Facility with local counsel
             or the insurance companies; (iv) coordinate with local counsel on
             local law issues affecting the Facility; (v) process working
             capital requests, and apply for, negotiate and obtain letters of
             credit or other credit enhancements from lending institutions; and
             (vi) provide legal counsel or coordinate with local counsel to
             provide counsel to the Facility's Human Resources Department.

             Without limiting the generality of Section 2 and Section 10 below,
the parties acknowledge that all outside counsel expenses under the foregoing
paragraph shall be an expense of the Owner.

             (c)   Accounting/Tax

                                       3
<PAGE>

                   (i) Provide an accountant to supervise all accounting
             activities; (ii) implement accounting policies and guidelines;
             (iii) provide a centralized cash management system; (iv) subject to
             the terms and conditions of the Loan Agreement and other Loan
             Documents, deposit in Operating Accounts all funds received from
             the operations of the Facility and satisfy obligations of the
             Facility from such Operating Accounts; (v) subject to the terms and
             conditions of the Loan Agreement and other Loan Documents,
             negotiate and administer working capital lines of credit available
             to the Facility; (vi) supervise the Facility's internal control
             structure; (vii) provide payroll, income and real estate tax
             support as follows: prepare or supervise preparation of all tax
             returns, assist the Facility in the event of a tax audit, assist
             the Facility with technical issues relating to payroll, excise and
             other taxes, and monitor pending and final Federal, State and local
             tax law changes; (viii) maintain the Facility's accounting and tax
             records; (ix) provide operations expertise through site visits and
             strategies to maximize fiscal performance; and (x) develop and
             implement a budget for operations, capital outlay and cash
             requirements. All checks or other documents for withdrawal of funds
             shall be signed by the appropriate officer of the Management Firm
             or its designee. Deposits may be made by the appropriate officer of
             the Management Firm or its designee.

             (d)   Human Resources

                   (i) Implement all personnel policies and guidelines; (ii)
             recruit management personnel of the Facility, including the
             community director of the Facility, which recruitment and the
             salaries related thereto shall be an expense of the Owner; (iii)
             provide on-going training for the Facility's Human Resources
             Director; (iv) negotiate and administer all employee benefit plans
             including, without limitation, health insurance, dental insurance,
             life insurance, long-term disability

                                       4
<PAGE>
             insurance, and retirement/401K; (v) negotiate and administer
             general and professional liability, workers' compensation,
             property, and vehicular insurance plans; (vi) monitor the
             Facility's compliance with Federal, State and local employment
             laws; (vii) respond to all government compliance agencies and legal
             proceedings as necessary; (viii) implement and monitor safety/loss
             control programs; (ix) develop and implement career planning and
             manpower development strategies; (x) recruit, employ and train
             personnel as needed for the operation of all departments and
             services of the Facility; and (xi) establish and enforce salary
             levels, performance standards, personnel policies and employee
             benefits for all employees within applicable budgetary and
             regulatory limits. Owner acknowledges and agrees that all personnel
             employed at the Facility, including without limitation the
             community director and the marketing director, shall be deemed the
             employees of the Management Firm, but shall be paid salaries and
             wages (including employment taxes and the like) by Owner as part of
             the expenses of the Facility.

             (e)   Program Development

                   (i) Provide ongoing program development and management
             consultation; (ii) supply select program manuals for local
             modification and implementation; and (iii) provide program
             development/management training.

             (f)   Quality Management

                   (i) Provide model quality management systems and implement
             such including risk management, resident/family satisfaction,
             licensing and accreditation, and program evaluation; and (ii)
             provide ongoing monitoring of the Facility resident outcomes,
             compare with regional and national norms, and make program
             modifications.

             (g)   Marketing/Communication

                   (i) Hire, direct and supervise marketing

                                       5
<PAGE>
             department staff; (ii) train staff (program managers,
             rehabilitation liaisons, marketing representatives, etc.) in
             marketing skills; (iii) organize strong sales efforts within the
             target area, develop program mix strategies, and develop marketing
             plans for the Facility; (iv) establish an intake/admission system
             and continuously review the admission process; (v) develop image
             building advertising strategies for the Facility; and (vi) develop
             and produce Facility selected promotional literature.

             (h)   Contracting

                   Negotiate and execute contracts and agreements related to the
             Facility with third parties and parties affiliated with the
             Management Firm; provided that all contracts and agreements with
             parties affiliated with the Management Firm shall be on terms no
             less favorable than terms for comparable contracts and agreements
             with unaffiliated parties.

             (i)   Miscellaneous

                   (1)   Obtain and maintain in accordance with all applicable
                         Ohio laws and regulations all licenses, approvals and
                         certifications required for operation of the Facility
                         and use reasonable efforts to procure eligibility for
                         participation in other applicable referral or payor
                         programs. Comply with all notification and reporting
                         requirements imposed under Ohio laws and regulations in
                         connection with the operation of the Facility.

                   (2)   Purchase supplies, using procurement practices in
                         accordance with industry standards, and lease equipment
                         under national and regional agreements or purchase
                         contracts of the Management Firm or its affiliated
                         companies and provide to the Owner all benefits
                         resulting therefrom to the extent permitted by their
                         terms and by law. All such supplies so purchased shall

                                       6
<PAGE>
                         become property of the Owner. Once leases are
                         completed, equipment shall become property of the
                         Owner.

                   (3)   Review and analyze the performance of ancillary
                         services under contract and negotiate contractual
                         arrangements therefore.

                   (4)   Maintain books and records for the Facility at the
                         Management Firm's address herein for the purpose of
                         providing services under this Agreement. The Management
                         Firm shall make available to the Owner and any lender
                         of the Facility, and their respective agents,
                         accountants, and attorneys during normal business hours
                         all books and records pertaining to the Facility, and
                         the Management Firm shall promptly respond to any
                         questions of the Owner or any such lender with respect
                         to such books and records and shall confer with the
                         Owner and any such lender at all reasonable times, upon
                         request, concerning the operation of the Facility.

                   (5)   Order, supervise and conduct a program of regular
                         maintenance and repair of the Facility at the Owner's
                         cost and expense. So long as the Loan Agreement is in
                         full force and effect, such maintenance and repair
                         program shall comply with the requirements of the Loan
                         Agreement related thereto.

                   (6)   Supervise and provide for the operation of food service
                         facilities for the Facility.

                   (7)   Make periodic evaluations of the performance of all
                         departments of the Facility and investigate and report,
                         upon request, any inconsistency between expenditures
                         and budget.

                   (8)   Implement all policies and procedures
                                       7
<PAGE>

                         reasonably necessary for the operation of the Facility
                         consistent with applicable regulations.

                   (9)   Foster a working relationship between Management Firm
                         and any authorized volunteer or auxiliary groups
                         interested in providing support to the Facility and
                         residents of the Facility.

2. Additional Services. It is the intention of the parties that the Management
Firm be responsible for providing all service necessary or desirable for the
efficient and orderly management and operations of the Facility; provided, the
cost and expense of operating the Facility is to be paid by Owner. The
Management Firm shall actively utilize staff specialists in its employ or that
of its affiliates in such areas as accounting, budgeting, marketing,
reimbursement, dietary, housekeeping, clinical, pharmaceutical, purchasing and
third party payments in the management of the Facility when considered desirable
by the Management Firm. The expense of such personnel shall be the
responsibility of Owner.

3. Financial Statement. The Management Firm shall prepare and deliver to the
Owner an un-audited balance sheet within forty-five (45) days after the close of
each fiscal quarter of the Owner. The Management Firm shall also cause an
un-audited annual statement to be made of the financial records of the Facility
and a copy of such report shall be provided to the Owner as soon as it is
available after the end of the fiscal year. The cost of the reports shall be an
expense of the Facility and shall be paid for by the Owner. The fiscal year for
the Facility shall coincide with the Owner's fiscal year. All financial
statements are to be prepared in accordance with GAAP. Notwithstanding anything
to the contrary contained herein, the Management Firm shall provide financial
reporting to Ocwen at such times and in such form as may be required from time
to time by Ocwen under the Loan Agreement.

4. Property Interests/Confidentiality. (a) The technical systems, methods,
policies, procedures and controls, copyrights, "know-how" and all other
intellectual property rights related thereto employed by the Management Firm
(the "Intangible Rights") are to remain the property of the Management Firm and
are not, at any time, to be utilized, distributed, copied or otherwise

                                       8
<PAGE>
employed or acquired by the Owner except as authorized herein, in writing by the
Management Firm, or except as may be required by law or court order.

             (b) Owner understands and acknowledges that Management Firm has
devoted substantial time, energy and expense to developing a process and
procedure to manage and operate facilities such as the Facility, and that such
processes, procedures, Intangible Rights and the information and materials
compiled or prepared in connection therewith, including without limitation
marketing plans, business plans, pricing information, information on
competition, demographics, suppliers and providers of services and financing
arrangements (collectively "Confidential Information") are proprietary to
Management Firm and the confidential information of the Management Firm. Owner
shall not disclose to any party any Confidential Information, without the prior
written consent of Management Firm, except as may be required by law or court
order.

             (c) Notwithstanding the foregoing, Intangible Rights and
Confidential Information shall in no event include materials, lists, books,
records, pamphlets, rental agreements, supplier lists, prescription lists and
schedules, employee information, dietary instructions for residents and other
similar items that are integral to the operation of the Facility.

             (d) The provisions of this Section shall survive the expiration or
sooner termination of this Agreement.

5. Term of Agreement. The term of this Agreement shall commence upon the date
hereof, and continue for a period of five (5) years thereafter. This Agreement
shall be automatically renewed for additional consecutive one (1) year terms
unless either party gives the other party notice of its intent not to renew,
which notice must be given at least ninety (90) days prior to the expiration of
the then current term.

6. Termination. (a) Subject to the provisions of the Loan Documents, the Owner
may terminate this Agreement (i) in the case of fraud of the Management Firm,
immediately and (ii) in all other cases, upon written notice if the Management
Firm defaults in the performance of any material covenant, agreement, term or
provision of this Agreement to be performed by it and such default continues for
a period of forty-five (45) days after written notice to the Management Firm
from the Owner stating the

                                       9
<PAGE>
specific default or, if such default is not subject to cure within forty-five
(45) days, such longer period as may be required to effect a cure, provided
Management Firm initiates curative action within forty-five (45) days and
thereafter is diligently and in good faith pursuing such cure.

             (b) Subject to the provisions of the Loan Documents, the Management
Firm may terminate this Agreement upon written notice in the event any one or
more of the following events shall occur:

                   (1)   If the Owner shall fail to timely pay to the Management
                         Firm any Management Fee required to be paid in
                         accordance with Paragraph 9 hereof and such failure
                         continues for ten (10) days after Owner's receipt of
                         written notice from Management Firm of such nonpayment;
                         or

                   (2)   If the Owner defaults in the performance of any other
                         material covenant, agreement, term or provision of this
                         Agreement to be performed by the Owner and such default
                         continues for a period of forty-five (45) days after
                         written notice to the Owner from the Management Firm
                         stating the specific default or, if such default is not
                         subject to cure within forty-five (45) days, such
                         longer period as may be required to effect a cure,
                         provided the defaulting party initiates curative action
                         within forty-five (45) days and thereafter is
                         diligently and in good faith pursuing such cure; or

                   (3)   If the Facility or a material portion thereof is
                         damaged or destroyed by fire or other casualty and the
                         Owner fails to commence to repair, restore, rebuild or
                         replace any such damage or destruction within ninety
                         (90) days of the occurrence of such damage or
                         destruction, and thereafter to complete such work
                         within a reasonable period of time.

             In the event of termination of this Agreement by either party
pursuant to Section 6(a) or 6(b) above, the Management Firm

                                       10
<PAGE>
shall have the right to enter the Facility and remove all of its personal
property and Intangible Rights material.

             (c) Upon termination of this Agreement for any reason, Management
Firm shall as soon as practical, but in any event within 60 days after such
termination, deliver to Owner (or, if directed in writing by Ocwen, to Ocwen and
Owner) all records, books, accounts, contracts, leases, receipts for deposits,
unpaid bills and other papers or documents pertaining to the Facility not
constituting Intangible Rights or Confidential Information. In addition,
Management Firm shall deliver (i) to Owner and Ocwen, a final accounting,
reflecting the balance of income and expenses on the Facility as of the date of
termination, (b) to Ocwen, any balance or moneys of Owner or resident security
deposits, or both, held by the Management Firm with respect to the Facility, to
be delivered immediately, less amounts properly due Management Firm and (iii) to
Ocwen (with a copy to Owner) all records, contracts, leases, receipts for
deposits, unpaid bills and other papers and documents which pertain to the
Facility. Further, the Management Firm shall cooperate in all reasonable ways
with Ocwen in the event of a termination of this Agreement during the Loan
Agreement term so as to facilitate a smooth and efficient transfer of control of
the Facility.

7. Liability and Indemnification/Force Majuere. (a)By the Management Firm. The
Management Firm shall indemnify, defend, save and hold harmless the Owner and
any lender of the Facility, and their respective shareholders, officers,
directors, employees, or agents from and against all demands, claims, actions,
losses, damages, deficiencies, liabilities, costs and expenses (including,
without limitation, attorney's fees, interest, penalties and all amounts paid in
investigation, defense or settlement of any of the foregoing) asserted against
or incurred by the Owner or any such lender, their respective shareholders,
officers, directors, employees, or agents, in connection with, or arising out
of, or resulting from (i) a breach of any covenant, agreement, representation or
warranty of the Management Firm or (ii) the negligent or willful acts or
omissions of Management Firm, its employees or agents. The provisions of this
Section shall survive the expiration or sooner termination of this Agreement.

             (b) By the Owner. The Owner shall indemnify, defend, save and hold
harmless the Management Firm, its shareholders, officers, directors, employees,
or agents from and against all

                                       11
<PAGE>
demands, claims, actions, losses, damages, deficiencies, liabilities, costs and
expenses (including, without limitation, attorney's fees, interest, penalties
and all amounts paid in investigation, defense or settlement of any of the
foregoing) asserted against or incurred by the Management Firm, its officers,
directors, employees, or agents, in connection with, or arising out of, or
resulting from (i) a breach of any covenant, agreement, representation or
warranty of the Owner or (ii) the negligent or willful acts or omissions of
Owner, its employees or agents. The provisions of this Section shall survive the
expiration or sooner termination of this Agreement.

             Nothing contained herein shall preclude either party from asserting
any claims or suits against the other party that may arise out of the terms and
provisions of this Agreement.

             (c) The Management Firm shall not be deemed to be in violation of
this Agreement, and its performance shall be excused, if it is prevented from
performing any of its obligations hereunder for any reason beyond its reasonable
control, including shortages in labor or supplies, war, acts of God, failure of
the Owner to advance funds, or changes in any law of Federal, State or local
government, or any agency thereof.

8. Relationship Between Parties. The relationship of the Management Firm to the
Owner shall be that of independent contractor.

9. Management Fee. The Management Firm for the services rendered hereunder shall
be entitled to six percent (6%) of gross revenues of the Facility as its sole
compensation for management of the Facility (the "Management Fee"). The
Management Fee shall be paid monthly, and shall be based on the financial
operations of the Facility as of the end of each calendar monthly. To the extent
that the year-end audited financial statements for the Facility disclose that
the Management Fee actually received during the year than ended was greater or
less than what should have been received, Owner shall (in case of underpayment)
pay upon demand the shortfall and (in the case of overpayment) shall be credited
against the Management Fee due in the next succeeding quarter such overpayment.
Further, notwithstanding anything to the contrary contained herein, the payment
of the Management Fee and all other compensation to the Management Firm shall be
subject in all events to the Loan Documents.

                                       12
<PAGE>

10. Funding of Costs and Expenses by the Owner. The Owner, and not the
Management Firm, shall be responsible for the costs and expenses of all
operations of the Facility. The Owner shall at all times provide sufficient
working capital for operation of the Facility and shall deposit such capital
from time to time into the Operating Accounts of the Facility in advance of the
time required to be disbursed by the Management Firm.

11. No Approval by the Owner. The Management Firm shall operate the Facility and
the Owner act as a passive investor with respect thereto. The Management Firm
shall, not less frequently than annually, adopt a plan of operation for the
Facility which shall set forth proposed staffing, budgets, program and related
matters; such shall not, however, be subject to approval of the Owner or its
designee. The Owner shall not participate in the day-to-day operation of the
Facility.

12. Other Facilities. Owner understands and acknowledges that Management Firm is
in the business of operating facilities such as the Facility, and that
Management Firm intends to continue to manage and operate such other facilities,
which may or may not be in competition with the Facility. Nothing contained
herein shall be deemed to be construed as a restriction on the Management Firm's
right to so operate and manage such other existing facilities or facilities that
may be opened in the future, even if such facilities are in competition with the
Facility.

13. Notices. All notices and other communications hereunder shall be in writing
and shall be deemed to have been duly given if delivered in person, Federal
Express or other recognized overnight courier or sent by registered or certified
U.S. mail, return receipt requested or sent by facsimile or telecopy
transmission (in which event such facsimile or telecopy shall be confirmed and
followed within one business day with delivery by one of the alternate methods
set forth herein) and addressed:

                           (i)      If to the Management Firm, at:

                                    [                            ]
                                    1215 Manor Drive
                                    Mechanicsburg, Pennsylvania 17055
                                    Attention: Legal Department

                           (ii)     If to the Owner, at:

                                       13
<PAGE>

                                    BALANCED CARE REALTY (OFC), INC.
                                    1215 Manor Drive
                                    Mechanicsburg, Pennsylvania 17055
                                    Attention: Legal Department

or to such other address or facsimile number as a party may designate by notice
to the other parties hereto.

14.    [Intentionally Deleted].

15. Compliance with Federal Records Requirements. To the extent required under
applicable Law, the Management Firm shall, (and if Management Firm carries out
any of the duties under this Agreement through a subcontract with a related
organization and such subcontract has a value or cost of $10,000 or more during
any 12-month period, Management Firm shall cause such subcontract to contain a
clause to the effect that the subcontractor shall), until the expiration of four
(4) years after the furnishing of services hereunder, make available upon
written request by the Secretary of Health and Human Service or the Comptroller
General of the United States or any of their duly authorized representatives,
this Agreement and the books, documents and records of the Management Firm (or
such subcontractor) that are necessary to verify the nature and extent of the
costs furnished under this Agreement.

16. Successors and Assigns. Except as otherwise expressly provided in the Loan
Documents, Owner may not assign this Agreement, expressly, by operation of law,
or otherwise, without the prior written consent of the Management Firm, which
consent may be withheld in the sole discretion of the Management Firm.
Management Firm may not assign this Agreement, expressly, by operation of law,
or otherwise, without the prior written consent of the Owner; provided, however,
(subject to the Loan Documents) Management Firm may assign its rights and
obligations hereunder without consent to (i) any affiliate and (ii) to Ocwen.

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

                                       14
<PAGE>

             IN WITNESS WHEREOF, intending to be legally bound hereby, the
parties hereto have affixed their names by their proper officers or duly
authorized representatives the day and year first above written.

MANAGEMENT FIRM:                    [                            ]

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

OWNER:                                      BALANCED CARE REALTY (OFC), INC.

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

                                       15

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