Document:

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                                                                   Exhibit 10.14

APPENDIX (FOR EDGAR TRANSMISSION ONLY)

                              ESCALON MEDICAL CORP.

                              AMENDED AND RESTATED
                           1999 EQUITY INCENTIVE PLAN

         1. PURPOSE. The purpose of the Escalon Medical Corp. 1999 Equity
Incentive Plan is to enhance the ability of Escalon Medical Corp. (the
"Company") and any subsidiaries to attract and retain the best available
personnel for positions of substantial responsibility, to provide additional
incentives to such personnel and to promote the success of the Company. To
accomplish these purposes, this Plan provides a means whereby employees,
directors and consultants may receive stock options ("Options") to purchase the
Company's Common Stock, no par value, (the "Common Stock").

         2. ADMINISTRATION.

         (a) COMPOSITION OF THE COMMITTEE. This Plan shall be administered by a
committee (the "Committee"), which shall be appointed by and serve at the
pleasure of the Company's Board of Directors (the "Board"). The Committee shall
be comprised of two or more members of the Board. Each member of the Committee
shall be (i) a "non-employee director" within the meaning of Rule 16b-3 under
the Securities Exchange Act of 1934 (the "Exchange Act") and (ii) an "outside
director" within the meaning of Section 162(m) of the Internal Revenue Code of
1986, as amended (the "Code"). Subject to the foregoing, from time to time the
Board may increase or decrease the size of the Committee, appoint additional
members thereof, remove members (with or without cause), appoint new members in
substitution therefor, fill vacancies or remove all members of the Committee and
thereafter directly administer this Plan.

         (b) AUTHORITY OF THE COMMITTEE. The Committee shall have full and final
authority, in its sole discretion, to interpret the provisions of this Plan and
to decide all questions of fact arising in its application; to determine the
employees, directors and consultants to whom awards shall be made and the type,
amount, size and terms of each such award; to determine the time when awards
shall be granted; and to make all other determinations necessary or advisable
for the administration of this Plan. The Committee shall have the authority to
adopt, amend and rescind such rules, regulations and procedures as, in its
opinion, may be advisable in the administration of this Plan, including, without
limitation, rules, regulations and procedures that: (i) deal with satisfaction
of an optionee's tax withholding obligations pursuant to Section 13 hereof, (ii)
include arrangements to facilitate an optionee's ability to borrow funds for the
payment of the exercise price of an Option, if applicable, from securities'
brokers and dealers, and (iii) include arrangements that provide for the payment
of some or all of an Option's exercise price by delivery of previously owned
shares of Common Stock or other property and/or by withholding some of the
shares of Common Stock being acquired upon exercise of an Option. All decisions,
determinations and interpretations of the Committee shall be final and binding
on all optionees and all other holders of Options granted under this Plan.

         (c) AUTHORITY OF THE BOARD. Notwithstanding anything to the contrary
set forth in this Plan, all authority granted hereunder to the Committee may be
exercised at any time and
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from time to time by the Board. All decisions, determinations and
interpretations of the Board shall be final and binding on all optionees and all
other holders of Options granted under this Plan.

         3. STOCK SUBJECT TO THIS PLAN. Subject to Section 16 hereof, the shares
that may be issued under this Plan shall not exceed in the aggregate 635,000
shares of Common Stock. Such shares may be authorized and unissued shares or
shares issued and subsequently reacquired by the Company. Except as otherwise
provided herein, any shares subject to an Option that for any reason expires or
is terminated unexercised as to such shares shall again be available under this
Plan.

         4. ELIGIBILITY TO RECEIVE OPTIONS. Persons eligible to receive Options
under this Plan shall be limited to those consultants, directors, officers and
other employees of the Company and any subsidiary (as defined in Section 424 of
the Code or any amendment or substitute thereto), who are in positions in which
their decisions, actions and counsel significantly impact upon the profitability
and success of the Company and any subsidiary. Directors of the Company who are
not also employees of the Company or any subsidiary and consultants shall not be
eligible to be awarded Incentive Stock Options (as defined in Section 5 hereof).
Notwithstanding anything to the contrary set forth in this Plan, the maximum
number of shares of Common Stock for which Options may be granted to any
employee in any calendar year shall be 100,000 shares.

         5. TYPES OF OPTIONS. Grants may be made at any time and from time to
time by the Committee in the form of Options to purchase shares of Common Stock.
Options granted hereunder may be Options that are intended to qualify as
incentive stock options within the meaning of Section 422 of the Code or any
amendment or substitute thereto ("Incentive Stock Options") or Options that are
not intended to so qualify ("Nonqualified Stock Options").

         6. OPTION AGREEMENTS. Options for the purchase of Common Stock shall be
evidenced by written agreements in such form not inconsistent with this Plan as
the Committee shall approve from time to time. The Options granted hereunder may
be evidenced by a single agreement or by multiple agreements, as determined by
the Committee in its sole discretion. Each Option agreement shall contain in
substance the following terms and conditions:

         (a) TYPE OF OPTION. Each Option agreement shall identify the Options
represented thereby as Incentive Stock Options or Nonqualified Stock Options, as
the case may be.

         (b) OPTION PRICE. Each Option agreement shall set forth the purchase
price of the Common Stock purchasable upon the exercise of the Option evidenced
thereby. Subject to the limitation set forth in Section 6(d)(ii) hereof, the
purchase price of the Common Stock subject to an Incentive Stock Option shall be
not less than 100% of the fair market value of such stock on the date the Option
is granted, as determined by the Committee, but in no event less than the par
value of such stock. The purchase price of the Common Stock subject to a
Nonqualified Stock Option shall be not less than 85% of the fair market value of
such stock on the date the Option is granted, as determined by the Committee.
For this purpose, fair market value on any date shall mean the closing price of
the Common Stock, as reported in The Wall Street Journal or if not so

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reported, as otherwise reported by the National Association of Securities
Dealers Automated Quotation ("Nasdaq") System, or if the Common Stock is not
reported by Nasdaq, the fair market value shall be as determined by the
Committee pursuant to Section 422 of the Code.

         (c) EXERCISE TERM. Each Option agreement shall state the period or
periods of time within which the Option may be exercised, in whole or in part,
which shall be such a period or periods of time as may be determined by the
Committee, provided that no Option shall be exercisable after ten years from the
date of grant thereof. The Committee shall have the power to permit an
acceleration of previously established exercise terms, subject to the
requirements set forth herein, upon such circumstances and subject to such terms
and conditions as the Committee deems appropriate.

         (d) INCENTIVE STOCK OPTIONS. In the case of an Incentive Stock Option,
each Option agreement shall contain such other terms, conditions and provisions
as the Committee determines necessary or desirable in order to qualify such
Option as a tax-favored Option (within the meaning of Section 422 of the Code or
any amendment or substitute thereto or regulation thereunder) including without
limitation, each of the following, except that any of these provisions may be
omitted or modified if it is no longer required in order to have an Option
qualify as a tax-favored Option within the meaning of Section 422 of the Code or
any substitute therefor:

                  (i) The aggregate fair market value (determined as of the date
the Option is granted) of the Common Stock with respect to which Incentive Stock
Options are first exercisable by any employee during any calendar year (under
all plans of the Company) shall not exceed $100,000.

                  (ii) No Incentive Stock Options shall be granted to any
employee if, at the time the Option is granted, the employee owns stock
possessing more than 10% of the total combined voting power of all classes of
stock of the Company or its parent or its subsidiaries unless, at the time such
Option is granted, the Option price is at least 110% of the fair market value of
the stock subject to the Option and, by its terms, the Option is not exercisable
after the expiration of five years from the date of grant.

                  (iii) No Incentive Stock Options shall be exercisable more
than three months (or one year, in the case of an employee who dies or becomes
disabled within the meaning of Section 72(m)(7) of the Code or any substitute
therefor) after termination of employment.

         (e) SUBSTITUTION OF OPTIONS. Options may be granted under this Plan
from time to time in substitution for stock options held by directors,
consultants and employees of other corporations who are about to become, and who
do concurrently with the grant of such options become, directors, consultants or
employees of the Company or a subsidiary as a result of a merger or
consolidation of the employing corporation with the Company or a subsidiary, or
the acquisition by the Company or a subsidiary of the assets or capital stock of
the employing corporation or a subsidiary of the employing corporation. The
terms and conditions of the substitute options so granted may vary from the
terms and conditions set forth in this Section 6 to

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such extent as the Committee at the time of grant may deem appropriate to
conform, in whole or in part, to the provisions of the stock options in
substitution for which they are granted.

         7. DATE OF GRANT. The date on which an Option shall be deemed to have
been granted under this Plan shall be the date of the Committee's authorization
of the Option or such later date as may be determined by the Committee at the
time the Option is authorized. Notice of the determination shall be given to
each individual to whom an Option is so granted within a reasonable time after
the date of such grant.

         8. EXERCISE AND PAYMENT FOR SHARES. Options may be exercised in whole
or in part, from time to time, by giving written notice of exercise to the
Secretary of the Company, specifying the number of shares to be purchased,
except that no Option may be exercised in whole or in part during the first six
months after the Option is granted unless expressly permitted by the Committee.
The purchase price of the shares with respect to which an Option is exercised
shall be payable in full at the time notice is given in cash, Common Stock at
fair market value, or a combination thereof, as the Committee may determine from
time to time and subject to such terms and conditions as may be prescribed by
the Committee for such purpose. The Committee may also, in its discretion and
subject to prior notification to the Company by an optionee, permit an optionee
to enter into an agreement with the Company's transfer agent or a brokerage firm
of national standing whereby the optionee will simultaneously exercise the
Option and sell the shares acquired thereby through the Company's transfer agent
or such a brokerage firm and either the Company's transfer agent or the
brokerage firm executing the sale will remit the Company from the proceeds of
sale the exercise price of the shares as to which the Option has been exercised.

         9. RIGHTS UPON TERMINATION OF SERVICE. In the event that an optionee
ceases to be a consultant, director, officer or employee of the Company or any
subsidiary, for any reason other than death, retirement, as hereinafter defined,
or disability (within the meaning of Section 72(m)(7) of the Code or any
substitute therefor), the optionee shall have the right to exercise the Option
during its term within a period of three months after such termination to the
extent that the Option was exercisable at the time of termination, or within
such other period, and subject to such terms and conditions as may be specified
by the Committee. In the event that an optionee dies, becomes disabled or, in
the case of any employee, retires prior to the expiration of his Option and
without having fully exercised his Option, the optionee or his successor shall
have the right to exercise the Option during its term within a period of one
year after termination of service due to death, disability (within the meaning
of Section 72(m)(7) of the Code) or, in the case of an employee, retirement, in
each case only to the extent that the Option was exercisable at the time of
termination, or within such other period, and subject to such terms and
conditions as may be specified by the Committee. As used in this Section 9,
"retirement" means a termination of employment by reason of an optionee's
retirement at or after his earliest permissible retirement date pursuant to and
in accordance with his employer's regular retirement plan or personnel
practices. Notwithstanding the provisions of Section 6(d)(iii) hereof, an
Incentive Stock Option may be exercised more than three months after termination
of employment due to retirement, as provided in this Section 9, but in that
event, the Option shall lose its status as an Incentive Stock Option and shall
be treated as a Nonqualified Stock Option.

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         10. GENERAL RESTRICTIONS. Each Option granted under this Plan shall be
subject to the requirement that if at any time the Committee shall determine
that (i) the listing, registration or qualification of the shares of Common
Stock subject or related thereto upon any securities exchange or under any state
or federal law, or (ii) the consent or approval of any government regulatory
body, or (iii) an agreement by the recipient of an Option with respect to the
disposition of shares of Common Stock is necessary or desirable as a condition
of or in connection with the granting of such Option or the issuance or purchase
of shares of Common Stock thereunder, such Option shall not be consummated in
whole or in part unless such listing, registration, qualification, consent,
approval or agreement shall have been effected or obtained free of any
conditions not acceptable to the Committee.

         11. RIGHTS OF A SHAREHOLDER. The recipient of any Option under this
Plan, unless otherwise provided by this Plan, shall have no rights as a
shareholder unless and until certificates for shares of Common Stock are issued
and delivered to him.

         12. RIGHT TO TERMINATE EMPLOYMENT. Nothing contained in this Plan or in
any agreement entered into pursuant to this Plan shall confer upon any optionee
the right to continue in the employment of the Company or any subsidiary or
affect any right that the Company or any subsidiary may have to terminate the
employment of such optionee or consulting relationship with such optionee.

         13. WITHHOLDING. Whenever the Company proposes or is required to issue
or transfer shares of Common Stock under this Plan, the Company shall have the
right to require the recipient to remit to the Company an amount sufficient to
satisfy any federal, state or local withholding tax requirements prior to the
delivery of any certificate or certificates for such shares. If and to the
extent authorized by the Committee, in its sole discretion, an optionee may make
an election, by means of a form of election to be prescribed by the Committee,
to have shares of Common Stock that are acquired upon exercise of an Option
withheld by the Company or to tender other shares of Common Stock or other
securities of the Company owned by the optionee to the Company at the time of
exercise of an Option to pay the amount of tax that would otherwise be required
by law to be withheld by the Company as a result of any exercise of an Option.
Any such election shall be irrevocable and shall be subject to the disapproval
of the Committee at any time. Any securities so withheld or tendered will be
valued by the Committee as of the date of exercise.

         14. NON-ASSIGNABILITY. No Option under this Plan shall be assignable or
transferable by the recipient thereof except by will or by the laws of descent
and distribution or by such other means as the Committee may approve. During the
life of the recipient such Option shall be exercisable only by such person or by
such person's guardian or legal representative.

         15. NON-UNIFORM DETERMINATIONS. The Committee's determinations under
this Plan (including without limitation determinations of the persons to receive
Options, the form, amount and timing of such grants, the terms and provisions of
Options, and the agreements evidencing same) need not be uniform and may be made
selectively among persons who receive, or are eligible to receive, grants of
Options under this Plan whether or not such persons are similarly situated.

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         16. ADJUSTMENTS.

         (a) CHANGES IN CAPITALIZATION. Subject to any required action by the
shareholders of the Company, the number of shares of Common Stock covered by
each outstanding Option and the number of shares of Common Stock that have been
authorized for issuance under this Plan but as to which no Options have yet been
granted or which have been returned to this Plan upon cancellation or expiration
of an Option, as well as the price per share of Common Stock covered by each
such outstanding Option, shall be proportionately adjusted for any increase or
decrease in the number of issued shares of Common Stock resulting from a stock
split, reverse stock split, stock dividend, combination or reclassification of
the Common Stock, or any other increase or decrease in the number of issued
shares of Common Stock effected without receipt of consideration by the Company;
provided, however, that conversion of any convertible securities of the Company
shall not be deemed to have been "effected without receipt of consideration."
Such adjustment shall be made by the Committee, whose determination in that
respect shall be final, binding and conclusive. Except as expressly provided
herein, no issuance by the Company of shares of stock of any class, or
securities convertible into shares of stock of any class, shall affect, and no
adjustment by reason thereof shall be made with respect to, the number or price
of shares of Common Stock subject to an Option.

         (b) DISSOLUTION OR LIQUIDATION. In the event of the proposed
dissolution or liquidation of the Company, all outstanding Options will
terminate immediately prior to the consummation of such proposed action, unless
otherwise provided by the Committee. The Committee may, in the exercise of its
discretion in such instances, declare that any Option shall terminate as of a
date fixed by the Committee and give each Option holder the right to exercise
his Option as to all or any part of the shares of Common Stock covered by the
Option, including shares as to which the Option would not otherwise be
exercisable.

         (c) SALE OR MERGER. In the event of a proposed sale of all or
substantially all of the assets of the Company, or the merger of the Company
with or into another corporation, the Committee, in the exercise of its sole
discretion, may take such action as it deems desirable, including, but not
limited to: (i) causing an Option to be assumed or an equivalent option to be
substituted by the successor corporation or a parent or subsidiary of such
successor corporation, (ii) providing that an Option holder shall have the right
to exercise his Option as to all of the shares of Common Stock covered by the
Option, including shares as to which the Option would not otherwise be
exercisable, or (iii) declaring that an Option shall terminate at a date fixed
by the Committee provided that the Option holder is given notice and opportunity
to exercise the then exercisable portion of his Option prior to such date.

         17. AMENDMENT. The Board may terminate or amend this Plan at any time
with respect to shares as to which Options have not been granted, subject to any
required shareholder approval or any shareholder approval that the Board may
deem to be advisable for any reason, such as for the purpose of obtaining or
retaining any statutory or regulatory benefits under tax, securities or other
laws or satisfying any applicable stock exchange listing requirements. The Board
may not, without the consent of the holder of an Option, alter or impair any
Option previously granted under this Plan, except as specifically authorized
herein.

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         18.      CONDITIONS UPON ISSUANCE OF SHARES.

         (a) COMPLIANCE WITH SECURITIES LAWS. Shares of the Company's Common
Stock shall not be issued pursuant to the exercise of an Option unless the
exercise of such Option and the issuance and delivery of such shares pursuant
thereto shall comply with all relevant provisions of law, including, without
limitation, the Securities Act of 1933, as amended, the Exchange Act, the rules
and regulations promulgated thereunder, and the requirements of any stock
exchange upon which the Common Stock of the Company may then be listed, and
shall be further subject to the approval of counsel for the Company with respect
to such compliance.

         (b) INVESTMENT REPRESENTATIONS. As a condition to the exercise of an
Option, the Company may require the person exercising such Option to represent
and warrant at the time of any such exercise that the shares of Common Stock are
being purchased only for investment and without any present intention to sell or
distribute such shares if, in the opinion of counsel for the Company, such
representation is required by any of the aforementioned relevant provisions of
law.

         19. RESERVATION OF SHARES. The Company, during the term of this Plan,
will at all times reserve and keep available such number of shares as shall be
sufficient to satisfy the requirements of this Plan. Inability of the Company to
obtain authority from any regulatory body having jurisdiction, which authority
is deemed by the Company's counsel to be necessary to the lawful issuance and
sale of any shares hereunder, shall relieve the Company of any liability in
respect of the failure to issue or sell such shares as to which such requisite
authority shall not have been obtained.

         20. EFFECT ON OTHER PLANS. Participation in this Plan shall not affect
an employee's eligibility to participate in any other benefit or incentive plan
of the Company or any subsidiary. Any Options granted pursuant to this Plan
shall not be used in determining the benefits provided under any other plan of
the Company or any subsidiary unless specifically provided.

         21. DURATION OF THIS PLAN. This Plan shall remain in effect until all
Options granted under this Plan have been satisfied by the issuance of shares,
but no Option shall be granted more than ten years after the earlier of the date
this Plan is adopted by the Company or is approved by the Company's
shareholders.

         22. FORFEITURE FOR DISHONESTY. Notwithstanding anything to the contrary
in this Plan, if the Committee finds, by a majority vote, after full
consideration of the facts presented on behalf of both the Company and any
optionee, that the optionee has been engaged in fraud, embezzlement, theft,
commission of a felony or dishonest conduct in the course of his employment or
retention by the Company or any subsidiary that damaged the Company or any
subsidiary or that the optionee has disclosed trade secrets of the Company or
any subsidiary, the optionee shall forfeit all unexercised Options and all
exercised Options under which the Company has not yet delivered the
certificates. The decision of the Committee in interpreting and applying the
provisions of this Section 22 shall be final. No decision of the Committee,

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however, shall affect the finality of the discharge or termination of such
optionee by the Company or any subsidiary in any manner.

         23. NO PROHIBITION ON CORPORATE ACTION. No provision of this Plan shall
be construed to prevent the Company or any officer or director thereof from
taking any corporate action deemed by the Company or such officer or director to
be appropriate or in the Company's best interest, whether or not such action
could have an adverse effect on this Plan or any Options granted hereunder, and
no optionee or optionee's estate, personal representative or beneficiary shall
have any claim against the Company or any officer or director thereof as a
result of the taking of such action.

         24. INDEMNIFICATION. With respect to the administration of this Plan,
the Company shall indemnify each present and future member of the Committee and
the Board against, and each member of the Committee and the Board shall be
entitled without further action on his part to indemnity from the Company for
all expenses (including the amount of judgments and the amount of approved
settlements made with a view to the curtailment of costs of litigation, other
than amounts paid to the Company itself) reasonably incurred by him in
connection with or arising out of, any action, suit or proceeding in which he
may be involved by reason of his being or having been a member of the Committee
and the Board, whether or not he continues to be such member at the time of
incurring such expenses; provided, however, that such indemnity shall not
include any expenses incurred by any such member of the Committee or the Board
(i) in respect of matters as to which he shall be finally adjudged in any such
action, suit or proceeding to have been guilty of gross negligence or willful
misconduct in the performance of his duty as such member of the Committee or the
Board; or (ii) in respect of any matter in which any settlement is effected for
an amount in excess of the amount approved by the Company on the advice of its
legal counsel; and provided further that no right of indemnification under the
provisions set forth herein shall be available to or enforceable by any such
member of the Committee and the Board unless, within 60 days after institution
of any such action, suit or proceeding, he shall have offered the Company in
writing the opportunity to handle and defend same at its own expense. The
foregoing right of indemnification shall inure to the benefit of the heirs,
executors or administrators of each such member of the Committee and the Board
and shall be in addition to all other rights to which such member may be
entitled as a matter of law, contract or otherwise.

         25. MISCELLANEOUS PROVISIONS.

         (a) COMPLIANCE WITH PLAN PROVISIONS. No optionee or other person shall
have any right with respect to this Plan, the Common Stock reserved for issuance
under this Plan or in any Option until a written option agreement shall have
been executed by the Company and the optionee and all the terms, conditions and
provisions of this Plan and the Option applicable to such optionee (and each
person claiming under or through him) have been met.

         (b) APPROVAL OF COUNSEL. In the discretion of the Committee, no shares
of Common Stock, other securities or property of the Company, or other forms of
payment shall be issued hereunder with respect to any Option unless counsel for
the Company shall be satisfied that such

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issuance will be in compliance with applicable federal, state, local and foreign
legal, securities exchange and other applicable requirements.

         (c) COMPLIANCE WITH RULE 16B-3. To the extent that Rule 16b-3 under the
Exchange Act applies to this Plan or to Options granted under this Plan, it is
the intention of the Company that this Plan comply in all respects with the
requirements of Rule 16b-3, that any ambiguities or inconsistencies in
construction of this Plan be interpreted to give effect to such intention and
that, if this Plan shall not so comply, whether on the date of adoption or by
reason of any later amendment to or interpretation of Rule 16b-3, the provisions
of this Plan shall be deemed to be automatically amended so as to bring them
into full compliance with such rule.

         (d) UNFUNDED PLAN. This Plan shall be unfunded. The Company shall not
be required to establish any special or separate fund or to make any other
segregation of assets under this Plan.

         (e) EFFECTS OF ACCEPTANCE OF OPTION. By accepting any Option or other
benefit under this Plan, each optionee and each person claiming under or through
him shall be conclusively deemed to have indicated his acceptance and
ratification of, and consent to, any action taken under this Plan by the
Company, the Board and/or the Committee or its delegates.

         (f) CONSTRUCTION. The masculine pronoun shall include the feminine and
neuter, and the singular shall include the plural, where the context so
indicates.

         26. SHAREHOLDER APPROVAL. The Company shall submit this Plan to the
shareholders entitled to vote hereon for approval within twelve months after the
date of adoption by the Board in order to meet the requirements of Section 422
of the Code and the regulations thereunder, Section 162(m) of the Code and
regulations thereunder, and the National Association of Securities Dealers, Inc.
for the quotation of the Common Stock on the Nasdaq System. The exercise of any
Option granted under this Plan shall be subject to the approval of this Plan by
the shareholders.

         As Amended by the Board of Directors through August 14, 2001.

                                       -9-<PAGE>
Exhibit 10.1

                                  AGREEMENT FOR
                        TERMINATION OF LEASE, GUARANTIES
                             AND ANCILLARY DOCUMENTS

                  THIS AGREEMENT FOR TERMINATION OF LEASE, GUARANTIES AND
ANCILLARY DOCUMENTS (this "Agreement") is made and entered into as of October
31, 2001, by and among HEALTH CARE PROPERTY INVESTORS, INC., a Maryland
corporation ("Landlord"), ASSISTED CARE OPERATORS OF JACKSON, LLC, a Delaware
limited liability company ("Tenant"), ASSISTED CARE OPERATORS, L.L.C., a
Delaware limited liability company ("ACO"), OAKHAVEN SENIOR LIVING, INC., a
California corporation ("Oakhaven Senior"), OAKHAVEN ASSISTED LIVING, INC., a
California corporation ("Oakhaven Assisted"), BALANCED CARE CORPORATION, a
Delaware corporation ("BCC"), BCC DEVELOPMENT AND MANAGEMENT CO., a Delaware
corporation (a/k/a "BCC Management and Development Co." and referred to herein
as "BCC Development"), and BALANCED CARE AT JACKSON, INC., a Delaware
corporation ("BCC Jackson"), with respect to the following:

                                    RECITALS

                  A. Landlord, as successor in interest to AHP of Tennessee,
Inc., a Tennessee corporation ("AHP"), and Tenant are parties to that certain
Lease and Security Agreement dated as of January 30, 1998, as amended by a First
Amendment to Lease and Security Agreement dated as of July 8, 1999 (as the same
may have been further amended or modified from time to time in accordance with
the terms thereof, collectively, the "Lease"), covering certain real and
personal property (collectively, the "Leased Property") located in the City of
Jackson, State of Tennessee, as more particularly described in the Lease. Tenant
presently operates a residential care facility (the "Facility") on the Leased
Property.

                  B. Landlord, as successor in interest to AHP, and Tenant are
also parties to that certain Assignment of Leases, Rents and Receivables dated
as of January 30, 1998 (as the same may have been amended or modified in
accordance with the terms thereof, the "Assignment of Rents"), entered into in
connection with the Lease and recorded in the Office of the Recorder in which
the Leased Property is located.

                  C. Landlord, as successor in interest to AHP, and Tenant are
also parties to that certain Security Agreement dated as of January 30, 1998 (as
the same may have been amended or
<PAGE>
modified in accordance with the terms thereof, the "Security Agreement"),
entered into in connection with the Lease.

                  D. ACO, Oakhaven Senior, and Oakhaven Assisted are
collectively the "Guarantor" pursuant to (i) that certain Guaranty of Payment
and Performance dated as of January 30, 1998 (as the same may have been amended
or reaffirmed from time to time in accordance with the terms thereof, the "Lease
Guaranty"), made in favor of Landlord, as successor in interest to AHP, in
connection with the Lease, and (ii) that certain Assignment Agreement dated as
of March 16, 1998 (the "Oakhaven Assignment"), by and between Oakhaven Senior,
as assignor, and Oakhaven Assisted, as assignee. Oakhaven Senior was not
released of its obligations under the Lease Guaranty in connection with the
Oakhaven Assignment. Pursuant to that certain Agreement for Assumption of
Guaranty Obligations dated as of October 31, 2001, BCC is assuming and shall be
jointly and severally liable with ACO, Oakhaven Senior, and Oakhaven Assisted
under the Lease Guaranty.

                  E. Tenant and BCC Jackson are parties to that certain
Management Agreement dated as of January 30, 1998 (as the same may have been
amended or modified from time to time in accordance with the terms thereof, the
"Management Agreement"), entered into in connection with the Lease. The
Management Agreement will be terminated concurrently herewith pursuant to that
certain Management and Subordination and Standstill Termination Agreement dated
as of October 31, 2001.

                  F. BCC is also the "Guarantor" pursuant to that certain
Management Agreement Guaranty dated as of January 30, 1998 (as the same may have
been amended or reaffirmed from time to time in accordance with the terms
thereof, the "Management Agreement Guaranty"), made in favor of Landlord, as
successor in interest to AHP, in connection with the Lease.

                  G. Landlord, as successor in interest to AHP, and BCC are also
parties to that certain Right of First Refusal Offer Agreement dated as of
January 30, 1998 (as the same may have been amended or modified from time to
time in accordance with the terms thereof, the "Right of First Offer"), entered
into in connection with the Lease.

                  H. Landlord, as successor in interest to AHP, Tenant, BCC
Development, and BCC are also parties to that certain Assignment of Rights dated
as of January 30, 1998 (as the same may have been amended or modified from time
to time in

                                       2
<PAGE>
accordance with the terms thereof, the "Assignment of Rights"), entered into in
connection with the Lease.

                  I. Landlord, as successor in interest to AHP, Tenant, BCC
Development, BCC Jackson, Oakhaven Assisted, as successor in interest to
Oakhaven Senior pursuant to the Oakhaven Assignment, ACO, and BCC are also
parties to that certain Non-Competition Agreement dated as of January 30, 1988
[sic] (as the same may have been amended or modified from time to time in
accordance with the terms thereof, the "Non-Competition Agreement"), entered
into in connection with the Lease. As described in the Oakhaven Assignment,
Oakhaven Senior continues to be bound by the terms of the Non-Competition
Agreement.

                  J. Tenant and Cheyenne Trace, LLC, a Delaware limited
liability company ("New Operator"), have entered or will enter into an
operations transfer agreement (the "Operations Transfer Agreement"), pursuant to
which Tenant and New Operator have provided for the orderly transfer of the
Facility from Tenant to New Operator as of the termination of the Lease, and
have clarified each party's responsibilities and obligations with regard to the
transfer of the operation of and ownership interests in the Facility.

                  K. The Lease, the Assignment of Rents and the Security
Agreement are collectively referred to herein as the "Lease Documents". The
Management Agreement Guaranty and the Right of First Offer are collectively
referred to herein as the "BCC Documents." The Assignment of Rights and the
Non-Competition Agreement are collectively referred to herein as the "Ancillary
Documents".

                  L. Landlord and BCC have also entered into that certain Option
to Purchase Agreement dated March 13, 2001, as amended by letter agreements
dated March 30, 2001, April 16, 2001, July 3, 2001, and October 29, 2001
(collectively, the "Put/Call Agreement") pursuant to which Landlord and BCC have
agreed to enter into a series of transactions involving the Facility and certain
other facilities owned by Landlord and leased to Affiliates of BCC. The
"Acceptance Period" under the Put/Call Agreement will expire on January 31,
2002, and unless BCC shall deliver a written termination notice to Landlord on
or before the expiration of the "Acceptance Period," the parties shall
thereafter be obligated to consummate the transactions described therein,
including BCC's purchase of those facilities located in Allison Park,
Pennsylvania, and Evansville, Indiana (collectively, the "Purchased
Facilities"). Notwithstanding

                                       3
<PAGE>
that the Acceptance Period had not expired, Landlord (in order to mitigate its
damages), BCC and certain other parties previously executed definitive documents
relating to a termination of the lease for the facility in Anderson, Indiana, as
contemplated by the Put/Call Agreement. Pursuant and subject to the terms and
conditions of the Put/Call Agreement, pending the expiration of the Acceptance
Period Landlord has also agreed, among other things, to a standstill with
respect to its rights and remedies under the Lease, Lease Guaranty and Ancillary
Documents as a result of the "Tenant's" failure to timely perform its
obligations under the Lease.

                  M. Notwithstanding that the Acceptance Period under the
Put/Call Agreement has not expired as of the date hereof, in order to permit
Landlord to mitigate its damages under the Lease and to transition operations of
the Facility to New Operator, Lease Guaranty and Ancillary Documents, Landlord,
Tenant, ACO, Oakhaven Senior, Oakhaven Assisted, BCC, BCC Development, and BCC
Jackson desire to mutually cancel and terminate the Lease Documents, the Lease
Guaranty, the Management Agreement Guaranty and the Ancillary Documents to which
each is a party on the terms and conditions contained herein.

                                    AGREEMENT

                  IN CONSIDERATION OF the foregoing recitals, the mutual
promises contained herein, and other good and valuable consideration, the
receipt and adequacy of which are hereby acknowledged, the parties hereto hereby
agree as follows:

         1. Termination of Lease Documents. Subject to all of the terms and
conditions of this Agreement, including, without limitation, Paragraph 2 below,
each of the Lease Documents and the respective obligations of Landlord and
Tenant thereunder, including, but not limited to, (i) Tenant's obligations with
respect to present or future Base Rent, Additional Rent and those items of
Additional Charges that directly relate to the payment of Base Rent and/or
Additional Rent (e.g., late payments charges and interest) (collectively, the
"Terminated Rent Obligations"), and (ii) any right of Tenant to purchase all or
any portion of the Leased Property pursuant to Article 15, 16 or 25 of the Lease
or otherwise shall be terminated at 11:59 p.m. (Eastern time) on the date (the
"Termination Date") that is the later of (a) the date upon which Tenant actually
vacates the Leased Property and surrenders possession thereof to Landlord or New
Operator in accordance with Section 3 below and the Operations Transfer
Agreement or (b) the "Effective Date" of the Operations Transfer Agreement.
Unless Landlord delivers written

                                       4
<PAGE>
notice to Tenant specifying a reason that Tenant's surrender of the Leased
Property is not in compliance with Section 3 below, the Termination Date shall
be deemed to be the "Effective Date" of the Operations Transfer Agreement.
Except as set forth in this Agreement, neither Landlord nor Tenant shall have
any further obligations to the other pursuant to the Lease Documents subsequent
to the Termination Date.

         2. Termination Payment; Cessation of Obligations Under Lease Documents;
and Reservations. Notwithstanding the occurrence of the Termination Date, the
following obligations of Tenant shall be reserved and continue subsequent to the
Termination Date:

                  (a) In consideration for Landlord's execution and delivery of
this Agreement, concurrently with Tenant's execution and delivery hereof, Tenant
shall pay or cause BCC to pay to Landlord the sum of $30,000.00, as a one-time
termination payment (the "Termination Fee"), which amount shall be applied by
Landlord towards certain operating costs of the Facility following the
Termination Date. If the provisions of Section 2(f) below apply, such
Termination Fee shall be applied against any other damages and remedies to which
Landlord is entitled to receive pursuant to such Section 2(f).

                  (b) Tenant agrees to defend, indemnify and hold harmless
Landlord from and against any and all liens, claims, costs, losses, expenses,
damages, actions and causes of action for which Tenant is responsible under the
Lease Documents and which accrue or accrued on or before the Termination Date
(other than in connection with the Terminated Rent Obligations).

                  (c) Tenant shall remain liable for (i) the cost of any and all
Impositions, insurance premiums, utilities charges and other expenses incurred
in connection with the operation, maintenance and use of the Leased Property
through and including the Termination Date until full payment thereof (other
than in connection with the Terminated Rent Obligations). Tenant shall obtain,
or cause to be obtained, directly from the companies providing any such services
closing statements for all services rendered through the Termination Date and
shall promptly pay the same.

                  (d) Tenant shall remain responsible for and shall pay any
personal property taxes assessed against the Leased Property or any personal
property abandoned by Tenant therein with a lien date prior to the Termination
Date, irrespective of the date of the billing therefor, and shall indemnify,
defend and hold

                                       5
<PAGE>
Landlord harmless with respect to any claims for such taxes or resulting from
non-payment thereof.

                  (e) Without limiting the generality of Section 2(b) above,
Tenant shall remain responsible for and shall pay all 2000 assessments for real
estate and personal property taxes due and payable in 2001, and for all prior
years (the "2000 Assessments"). Tenant shall also be responsible for and shall
pay its proportionate share of all real estate and personal property taxes which
are assessed in 2001, and which are due and payable in 2002, based upon the
number of days between January 1, 2001, and the Termination Date.

                  (f) Notwithstanding anything to the contrary in this
Agreement, Tenant acknowledges that Landlord would not enter into this Agreement
and effect the transactions contemplated hereby (including, but not limited to,
a termination of the Lease and Lease Guaranty effective as of the Termination
Date) but for BCC's agreement to purchase the Purchased Facilities in accordance
with the terms of the Put/Call Agreement. Nevertheless, as of the Termination
Date, BCC will continue to hold the right to terminate the Put/Call Agreement by
written notice to Landlord on or before the expiration of the Acceptance Period
in accordance with the terms thereof. Accordingly, the parties hereto agree as
follows:

                           (i) As of the date hereof, an Event of Default under
the Lease (and under the related documents including the Lease Guaranty and
Ancillary Documents) has occurred and is continuing, without the requirement for
delivery of any further notice of any kind.

                           (ii) If, at any time after the Termination Date,
either (i) BCC shall terminate the Put/Call Agreement in accordance with the
terms thereof or (ii) within thirty (30) days following the expiration of the
Acceptance Period, BCC and Landlord (through no fault of Landlord) shall fail to
execute and deliver definitive legal documentation with respect to the purchase
and sale of the Purchased Facilities in accordance with the terms of the
Put/Call Agreement, then, notwithstanding the occurrence of the Termination Date
or anything in this Agreement to the contrary, Landlord shall be entitled to
seek and recover from Tenant (and BCC, ACO, Oakhaven and Oakhaven Assisted as
"Guarantors" under the Lease Guaranty and any other responsible parties) all
damages to which Landlord is entitled under the Lease and Lease Guaranty by
reason of an Event of Default, including, without limitation, the right to seek
and recover the

                                       6
<PAGE>
damages set forth in clauses (i) through (iv) of Section 17.3 of the Lease.

                           (iii) Each party hereto (other than Landlord) hereby
irrevocably waives and relinquishes any defenses or counterclaims which it may
have to prevent the enforcement of or the right of Landlord to seek and recover
any such damages under the Lease by reason of such Event of Default, including
those damages set forth in clauses (i) through (iv) of Section 17.3 of the
Lease.

The provisions of this Section 2(f) shall automatically terminate and be of no
further force or effect upon execution and delivery of definitive legal
documentation with respect to the purchase and sale of the Purchased Facilities
in accordance with the terms of the Put/Call Agreement.

         3. Delivery of the Leased Property. On or before the Termination Date,
Tenant shall deliver to Landlord or, at Landlord's direction to New Operator,
possession of the Leased Property, including the Land, Improvements, Equipment
and Fixtures. Delivery shall be accomplished by surrender of physical possession
of the Leased Property to Landlord. Upon surrender to Landlord, the Leased
Property shall be broom-clean (i.e., free of debris and rubbish), in a safe
condition and free from any Hazardous Substances.

         4. Transfer of Tenant's Personal Property. As additional consideration
for Landlord's execution of this Agreement, including the termination of
Tenant's Terminated Rent Obligations as described in this Agreement, on or
before the Termination Date, Tenant shall convey and deliver to Landlord all of
Tenant's Personal Property other than the property described on Schedule 4A
attached hereto free and clear of any liens, claims or encumbrances, except for
(i) any Permitted Encumbrances (as defined in the Lease), and (ii) the purchase
money security interests set forth on Schedule 4B attached hereto (the "PMSIs").
Tenant shall execute in favor of Landlord a bill of sale in form and substance
acceptable to Landlord evidencing such conveyance.

         5. Termination of Lease Guaranty. Subject to all of the terms and
conditions of this Agreement, the Lease Guaranty and the respective obligations
of BCC, ACO, Oakhaven Senior and Oakhaven Assisted thereunder, including, but
not limited to, any obligations relating to the Terminated Rent Obligations,
shall be terminated at 11:59 p.m. (Eastern time) on the Termination Date;
provided, however, that nothing contained herein shall be

                                       7
<PAGE>
deemed to relieve BCC, ACO, Oakhaven Senior and Oakhaven Assisted of any of its
respective obligations or liabilities under the Lease Guaranty which accrue or
have accrued on or prior to the Termination Date or any obligations or
liabilities of Tenant under this Agreement, which obligations and liabilities
shall continue to be guaranteed obligations under the Lease Guaranty to and
until full and complete performance of the same, including, without limitation,
those obligations of Tenant set forth in Sections 2, 3 and 4 above.

         6. Termination of BCC Documents. Subject to all of the terms and
conditions of this Agreement, the BCC Documents and the respective obligations
of Landlord and BCC thereunder, including, but not limited to, any obligations
relating to the Terminated Rent Obligations, shall be terminated at 11:59 p.m.
(Eastern time) on the Termination Date; provided, however, that nothing
contained herein shall be deemed to relieve BCC of any of its obligations or
liabilities under the BCC Documents which accrue or have accrued on or prior to
the Termination Date, including, without limitation, any obligations of BCC to
indemnify, defend and hold harmless Landlord from and against any and all
claims, liabilities, losses, costs, actions, damages, expenses or fees,
including but not limited to attorneys' fees and costs of defense, for which BCC
is responsible under the BCC Documents and which accrue or have accrued on or
before the Termination Date.

         7. Termination of Ancillary Documents. Subject to all of the terms and
conditions of this Agreement, each of the Ancillary Documents and the respective
obligations of Landlord, Tenant, BCC, BCC Development, BCC Jackson, ACO,
Oakhaven Senior and Oakhaven Assisted thereunder, including, but not limited to,
any obligations relating to the Terminated Rent Obligations thereunder, shall be
terminated at 11:59 p.m. (Eastern time) on the Termination Date; provided,
however, that nothing contained herein shall be deemed to relieve Tenant, BCC,
BCC Development, BCC Jackson, ACO, Oakhaven Senior and Oakhaven Assisted of any
of their respective obligations or liabilities under the Ancillary Documents to
which such entity is a party which accrue or have accrued on or prior to the
Termination Date, including, without limitation, any obligations of Tenant, BCC,
BCC Development, BCC Jackson, ACO, Oakhaven Senior and Oakhaven Assisted to
indemnify, defend and hold harmless Landlord from and against any and all
claims, liabilities, losses, costs, actions, damages, expenses or fees,
including but not limited to attorneys' fees and costs of defense, for which
Tenant, BCC, BCC Development, BCC Jackson, ACO, Oakhaven Senior and Oakhaven

                                       8
<PAGE>
Assisted are responsible under the Ancillary Document to which Landlord, BCC,
BCC Development, BCC Jackson, ACO, Oakhaven Senior and Oakhaven Assisted is a
party and which accrue or have accrued on or before the Termination Date.

         8. Representations and Covenants. Tenant represents, warrants and
covenants as follows:

                  (a) Except for the Terminated Rent Obligations, Tenant will
pay or make provision for the payment of all trade accounts, wage claims and
other obligations of the business conducted in the Leased Property and shall
neither take any action nor fail to take any action the result of which will be
the imposition of any liens upon the Leased Property or the Improvements,
Fixtures or Equipment thereon or therein or the creation of any claims against
Landlord. It is hereby mutually agreed that this provision is not intended to
bestow any benefit upon any person who is not a party to this Agreement.

                  (b) The Leased Property, all Improvements, Fixtures and
Equipment therein, and Tenant's Personal Property are free and clear of any
liens, claims or encumbrances created or suffered by, through or under Tenant,
or its Affiliates, sublessees or other third parties for whom Tenant or its
Affiliates are responsible, and that none of the foregoing is subject to a
conditional sales agreement, lease or other title retention device.

                  (c) That there are no subtenants, franchisees, concessionaires
or other persons claiming an interest in the Leased Property or Tenant's
Personal Property or a right to occupy the Leased Property or any portion
thereof under or through Tenant other than the residents of the Facility.

         9. Indemnity for Breach of Representations and Warranties. As
additional consideration for Landlord entering into this Agreement, Tenant and
BCC each agree to indemnify, defend and hold harmless Landlord from and against
any and all claims, liabilities, losses, costs, actions, damages, expenses or
fees, including but not limited to attorneys' fees and costs of defense relating
to the breach of any representation or warranty set forth in Section 8 above.
The obligations of Tenant and BCC under this Section 9 shall be joint and
several.

         10. Mutual Termination of Lease. Within ten (10) days after the
Termination Date, Landlord and Tenant shall execute in recordable form a Mutual
Termination of Lease relating to the Lease in substantially the form of Exhibit
A attached hereto,

                                       9
<PAGE>
and shall cause same to be recorded in the office of the county recorder in the
appropriate county where the Facility is located (the "County"). Landlord and
Tenant each hereby agree promptly to execute and deliver such other documents as
the other party may reasonably request in order to confirm the termination of
the Lease in accordance with the terms of this Agreement.

         11. Further Assurances. The parties hereto agree to execute and deliver
to the other parties hereto any agreement, document or instrument deemed
reasonably necessary or desirable to give effect to the transactions described
in this Agreement. Without limiting the generality of the foregoing, within ten
(10) days after the Termination Date, (i) Tenant and BCC agree to execute in
recordable form and cause to be recorded in the office of the county recorder in
the County, any and all instruments deemed reasonably necessary by Landlord to
remove the effect on title to the Leased Property of that certain Revolving
Credit/Future Advances Leasehold Mortgage dated as of January 30, 1998, by and
between Tenant, as mortgagor, and BCC, as mortgagee, and (ii) Landlord agrees to
execute and cause to be recorded or filed, as applicable, in the office of the
county recorder in the county in which the Leased Property is located and/or in
the office of the Secretary of State, termination statements relating to any
Financing Statements or Fixture Filings relating to the Leased Property in favor
of Landlord.

         12. Miscellaneous.

                  (a) This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which shall
constitute one and the same instrument.

                  (b) This Agreement shall be governed by and construed in
accordance with the local law of the state in which the Leased Property is
located.

                  (c) There are no agreements, understandings, commitments,
representations or warranties with respect to the subject matter hereof except
as expressly set forth in this Agreement. This Agreement supersedes all prior
oral or written negotiations, understandings and agreements with respect to the
subject matter hereof; provided, however, that except with respect to the
specific matters addressed herein relating to the Lease, the Lease guaranty and
the Ancillary Documents, nothing contained herein shall be deemed to modify in
any way the Put/Call Agreement, which Put/Call Agreement shall remain in full
force and effect in accordance with the terms thereof.

                                       10
<PAGE>
                  (d) Neither anything contained herein nor the transaction
provided for herein shall be deemed or construed to constitute a "bulk sale" or
an assumption by Landlord of any obligations of Tenant. The transaction provided
for herein is and shall be construed solely as the termination of the Lease, the
Lease Guaranty, the Management Guaranty and the Ancillary Documents.

                  (e) Each of the parties hereto acknowledges that it has
negotiated for the specific considerations to be received by it hereunder and
that damages would be an inadequate remedy for the breach of this Agreement by
another party hereto. Each of the parties hereto shall be entitled to enforce
the terms of this Agreement by an action either for specific performance or for
injunctive relief, or both, to prevent the breach or continued breach of this
Agreement. The prevailing party in any proceeding pursuant to or based upon this
Agreement or in which this Agreement is asserted as a defense shall be entitled
to recover attorneys' fees and costs incurred in such proceeding in such amount
as the court shall determine to be reasonable.

                  (f) All capitalized terms not defined in this Agreement but
defined in the Lease shall have the meaning given to such terms under the Lease.

                  (g) All indemnification covenants are intended to apply to
losses, damages, injuries, claims, etc. incurred directly by the indemnified
parties and their property, as well as by the indemnifying party or third party,
and their property.

                  (h) Landlord hereby acknowledges that following the
Termination Date, BCC or an Affiliate of BCC intends to acquire all of the
issued and outstanding securities of Tenant, ACO, Oakhaven Senior and Oakhaven
Assisted.

                            [SIGNATURE PAGE FOLLOWS]

                                       11
<PAGE>
                  IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the day and year first above written.

"Landlord"                              HEALTH CARE PROPERTY INVESTORS,
                                        a Maryland corporation

                                        By:/s/Edward J. Henning
                                           -------------------------------------
                                              Edward J. Henning
                                              Senior Vice President, General
                                              Counsel and Corporate Secretary

"Tenant"                                ASSISTED CARE OPERATORS OF JACKSON, LLC,
                                        a Delaware limited liability company

                                        By:      Assisted Care Operators,
                                                 L.L.C., a Delaware limited
                                                 liability company,
                                                 its manager and authorized
                                                 representative

                                                 By:   Retirement Operators
                                                       Funding, L.L.C., a
                                                       Delaware limited
                                                       liability company, its
                                                       manager and authorized
                                                       representative

                                                       By:   Retirement
                                                             Operators
                                                             Management,
                                                             Inc., a California
                                                             corporation, its
                                                             manager and
                                                             authorized
                                                             representative

                                                       By:/s/F. David Carr
                                                          ----------------------
                                                             F. David Carr,
                                                             President

                                       12
<PAGE>
"ACO"                                   ASSISTED CARE OPERATORS, L.L.C.,
                                        a Delaware limited liability company

                                        By:     Retirement Operators Funding,
                                                L.L.C., a Delaware limited
                                                liability company, its manager
                                                and authorized representative

                                                By:    Retirement Operators
                                                       Management, Inc., a
                                                       California corporation,
                                                       its manager and
                                                       authorized representative

                                                        By:/s/F. David Carr
                                                          ----------------------
                                                              F. David Carr,
                                                              President

"Oakhaven Senior"                       OAKHAVEN SENIOR LIVING, INC.,
                                        a California corporation

                                        By:
                                        Name:
                                        Title:

"Oakhaven Assisted"                     OAKHAVEN ASSISTED LIVING, INC.,
                                        a California corporation

                                        By:
                                        Name:
                                        Title:

                                       13
<PAGE>
"BCC"                                   BALANCED CARE CORPORATION,
                                        a Delaware corporation

                                        By:/s/Robin L. Barber
                                           -------------------------------------
                                              Robin L. Barber
                                              Senior Vice President,
                                              Legal Counsel
                                              & Assistant Secretary

"BCC Development"                       BCC DEVELOPMENT AND MANAGEMENT CO.,
                                        a California corporation

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

"BCC Jackson"                           BALANCED CARE AT JACKSON, INC., a
                                        Delaware corporation

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

                                       14
<PAGE>
                                    EXHIBIT A

                       Form of Mutual Termination of Lease

RECORDING REQUESTED BY

AND WHEN RECORDED MAIL TO:

Latham & Watkins
650 Town Center Drive
Twentieth Floor
Costa Mesa, California 92626
Attn:  David C. Meckler, Esq.

                                     (Space Above Line For Recorder's Use Only)

                           MUTUAL TERMINATION OF LEASE

                  THIS MUTUAL TERMINATION OF LEASE is made and entered into as
of October 31, 2001, by and between HEALTH CARE PROPERTY INVESTORS, a Maryland
corporation ("Landlord"), and ASSISTED CARE OPERATORS OF TENNESSEE, LLC, a
Delaware limited liability company (the "Tenant"), with respect to the
following:

A.       Landlord, as successor in interest to AHP of Tennessee, Inc., a
         Tennessee corporation, is the landlord and Tenant is the tenant
         pursuant to that certain Lease and Security Agreement dated as of
         January 30, 1998 (as the same may have been modified or amended, the
         "Lease"). The Lease describes and covers certain real property located
         in _____________ County, Tennessee, and more particularly described on
         Exhibit A attached hereto and incorporated herein by this reference
         (the "Property"). The Lease is evidenced of record by that certain
         Memorandum of Lease dated as of January 30, 1998, recorded in the
         Office of the Recorder of _______ County, Tennessee on ___________,
         1998, as Instrument No. ___________.

B.       Landlord and Tenant mutually desire to cancel and terminate the Lease
         effective as of ______________, 2001 (the "Termination Date"),
         irrespective of the date of the execution and recordation of this
         instrument.

                                      A-1
<PAGE>
C.       All terms used in this instrument with initial capital letters and not
         defined herein shall have the meanings given to such terms by the
         Lease.

                  NOW, THEREFORE, for and in consideration of the foregoing
recitals and for good and valuable consideration, the receipt and adequacy of
which are hereby acknowledged, Landlord and Tenant do hereby mutually cancel and
terminate the Lease, and the leasehold estate created thereby, effective on the
Termination Date; provided, however, that nothing contained herein shall be
deemed to relieve Tenant of any of its obligations or liabilities under the
Lease which accrue or have accrued on or prior to the Termination Date,
including, without limitation, all obligations of Tenant, to indemnify, defend
and hold harmless Landlord from and against any and all claims, liabilities,
losses, costs, actions, damages, expenses or fees, including but not limited to
attorneys' fees and costs of defense, for which Tenant is responsible under the
Lease and which accrue or have accrued on or before the Termination Date.
Furthermore, this Mutual Termination of Lease shall in no way affect the
obligations of any party under that certain Agreement for Termination of Lease,
Guaranty and Ancillary Documents dated as of October 31, 2001 by and among
Landlord, Tenant, Assisted Care Operators of Tennessee, L.L.C., Assisted Care
Operators, L.L.C., Oakhaven Senior Living, Inc., Oakhaven Assisted Living, Inc.,
Balanced Care Corporation, BCC Development and Management Co., and Balanced Care
at Jackson, Inc.

                  This instrument may be signed in multiple counterparts which,
when duly delivered and taken together, shall constitute a binding agreement
between all parties.

                  IN WITNESS WHEREOF, the parties hereto have executed and
entered into this Mutual Termination of Lease as of the day and year first above
written.

                            [SIGNATURES PAGE FOLLOWS]

                                      A-2
<PAGE>
                  IN WITNESS WHEREOF, the undersigned have caused this Mutual
Termination of Lease to be executed as of the date first above written.
<TABLE>
<CAPTION>
                       "Tenant"                                               "Owner"
<S>                                                     <C>
ASSISTED CARE OPERATORS OF TENNESSEE, LLC, a Delaware   HEALTH CARE PROPERTY INVESTORS, INC., a Maryland
limited liability company                               corporation

By:      Balanced Care at Jackson, Inc.,
         a Delaware corporation                         By:
                                                                Edward J. Henning
                                                                Senior Vice President, General Counsel and
         By:                                                    Corporate Secretary
                  Robin L. Barber
                  Vice President    and
                  Secretary
</TABLE>

                                      A-3
<PAGE>
STATE OF ___________________________
COUNTY OF _________________________

                 On _______________________, 2001 before me, _________________,
Notary Public, personally appeared, __________________ personally known to me
(or proved to me on the basis of satisfactory evidence) to be the person(s)
whose name(s) is/are subscribed to the within instrument and acknowledged to me
that he/she/they executed the same in his/her/their authorized capacity(ies),
and that by his/her/their signature(s) on the instrument the person(s), or the
entity upon behalf of which the person(s) acted, executed the instrument.

                  IN WITNESS WHEREOF, I have hereunto set my hand and seal on
this ______ day of _________________, 2001.

                                            ____________________________________
                                            Notary Public

MY COMMISSION EXPIRES:
_________________________

STATE OF ___________________________
COUNTY OF _________________________

                  On _______________________, 2001 before me, _________________,
Notary Public, personally appeared __________________, personally known to me
(or proved to me on the basis of satisfactory evidence) to be the person(s)
whose name(s) is/are subscribed to the within instrument and acknowledged to me
that he/she/they executed the same in his/her/their authorized capacity(ies),
and that by his/her/their signature(s) on the instrument the person(s), or the
entity upon behalf of which the person(s) acted, executed the instrument.

                                            ____________________________________
                                            Notary Public

MY COMMISSION EXPIRES:
_________________________

                                      A-4
<PAGE>
                                    EXHIBIT A
                                       TO
                           MUTUAL TERMINATION OF LEASE

                        Legal Description of the Property

                    Exhibit A to Mutual Termination of Lease
<PAGE>
                                   SCHEDULE 4A

                           Excluded Personal Property

                                   Schedule 4A
<PAGE>
                                   SCHEDULE 4B

                        Purchase Money Security Interests

                                   Schedule 4B

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00031-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00031-of-00352.parquet"}]]