<PAGE>
Exhibit 10.3

                      UNCONDITIONAL AND CONTINUING GUARANTY

         THIS GUARANTY is made effective as of January 1, 2002 (the "Effective
Date") by BALANCED CARE CORPORATION ("Company"), and BALANCED CARE AT LEBANON,
INC., FINANCIAL CARE INVESTORS OF LEBANON, LLC, BALANCED CARE AT LOYALSOCK,
INC., FINANCIAL CARE INVESTORS OF LOYALSOCK, LLC, BALANCED CARE AT SAGAMORE
HILLS, INC., FINANCIAL CARE INVESTORS OF SAGAMORE HILLS, LLC, BALANCED CARE AT
SAXONBURG, INC., and BALANCED CARE AT BLOOMSBURG II, INC.(collectively called
"Manager"), in favor of PENNSYLVANIA BCC PROPERTIES, INC., a corporation
organized under the laws of Commonwealth of Pennsylvania ("HCRI-PA/BCC"), and
HCN BCC HOLDINGS, INC., a corporation organized under the laws of the State of
Delaware ("HCRI-HCN/BCC"). Company and Manager may be collectively called
"Guarantor". HCRI, HCRI-PA/BCC, and HCRI-HCN/BCC may be collectively called
"Landlord".

                                 R E C I T A L S

         A. Landlord is granting to Balanced Care Tenant (HCN), Inc., a
corporation organized under the laws of the State of Delaware ("Tenant"), a
lease of certain real property ("Property") pursuant to a Master Lease Agreement
between Landlord and Tenant of even date ("Lease"). Tenant is entering into
management agreements with each Manager to operate the facilities located on the
Property.

         B. In order to extend the Lease, Landlord requires that this guaranty
be provided by Guarantor. Guarantor has determined that Guarantor will benefit
from the Lease and has agreed to provide this guaranty to Landlord.

         C. As used herein, "Lease Documents" means the Lease and all other
documents and agreements made in connection with the Lease, as amended,
modified, renewed or extended from time to time. "Credit" means all rent, late
charges, taxes, utility charges, insurance premiums and all other charges,
expenses and amounts payable by Tenant to Landlord pursuant to the Lease
Documents. "Security" includes all guaranties of any Credit, all interests in
real or personal property securing the payment of any Credit or any guaranties
of any Credit, and all other agreements, rights, or interests insuring or
guaranteeing payment of any Credit. "Lease Obligations" means all of the
covenants, obligations and liabilities of Tenant under the Lease Documents,
including the payment of the Credit when due.

         NOW, THEREFORE, in consideration of the premises and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Landlord and Guarantor intending to be legally bound hereby, agree
as follows:

         1. Guaranty. Guarantor unconditionally guarantees the prompt payment
when due of the Credit and the performance of the
<PAGE>
Lease Obligations and shall indemnify Landlord and hold Landlord harmless from
any costs and expenses in any way arising out of Tenant's failure to repay the
Credit or perform the Lease Obligations according to their terms.

         2. Warranties.

                  (a) Capacity. Balanced Care at Lebanon, Inc., Balanced Care at
Loyalsock, Inc., Balanced Care at Sagamore Hills, Inc., Balanced Care at
Saxonburg, Inc., and Balanced Care at Bloomsburg II, Inc. are corporations duly
organized, validly existing and in good standing under the laws of the State of
Delaware. Financial Care Investors of Lebanon, LLC, Financial Care Investors of
Loyalsock, LLC, and Financial Care Investors of Sagamore Hills, LLC are limited
liability companies duly organized, validly existing, and in good standing under
the laws of the State of Delaware. Guarantor warrants that Guarantor has taken
all necessary corporate or limited liability company action to incur the
obligations of this guaranty and to execute, deliver and perform this guaranty.

                  (b) Contracts. Guarantor warrants that there is no provision
of the Articles of Incorporation or Bylaws or Articles of Organization or
Operating Agreement of Guarantor, or any existing indenture, contract, or
agreement to which Guarantor is a party or of any law, administrative
regulation, court order, or consent decree that would be contravened by the
execution, delivery, or performance of this guaranty.

                  (c) Inducement to Landlord; Waivers. Guarantor [1]
acknowledges that Landlord would not have extended the Credit to Tenant and will
not continue to extend Credit to Tenant but for this guaranty; [2] warrants that
Guarantor has given this guaranty to induce Landlord to extend and to continue
to extend Credit to Tenant; [3] agrees that Landlord may rely on this guaranty
in extending future Credit to Tenant without notice to Guarantor, but only in
connection with the Leased Property; [4] warrants that Guarantor has received
good and valuable consideration for this guaranty; [5] waives acceptance of this
guaranty; [6] warrants that Guarantor has not given this guaranty in reliance
upon the existence of any Security; [7] acknowledges receipt of notice of all
Credit extended before this date; [8] waives notice of any Credit extended after
this date except as specifically provided in the Lease; [9] waives protest and
any other notice of failure to pay the Credit or to perform any agreement
relating to any Credit or Security except as specifically provided in the Lease;
[10] acknowledges that Guarantor has read this guaranty, the Lease, and all
other Lease Documents; and [11] acknowledges that Guarantor understands and
agrees to Guarantor's obligations under this guaranty.

                  (d) No Reliance on Information from Landlord. Guarantor [1]
warrants that Guarantor has not relied on any information about the Tenant, the
Security, or any guarantor of


                                      -2-
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the Credit provided directly or indirectly by Landlord; [2] warrants that
Guarantor is familiar with Tenant, Tenant's affairs, and the Security; [3]
warrants that Guarantor has had ample opportunity to investigate Tenant,
Tenant's affairs, the Security, and the effect that the Credit will have; [4]
warrants that Guarantor has been provided all information concerning Tenant,
Tenant's affairs, and the Security that Guarantor has requested; [5] warrants
that Guarantor has had adequate opportunity to seek and evaluate professional
advice concerning Tenant, the Security, and this guaranty from advisors of
Guarantor's choosing, including financial and legal advice; and [6] agrees that
Guarantor shall not rely on any information provided by Landlord about Tenant or
the Security, including any other guarantor. Guarantor shall continue to
investigate and evaluate Tenant and the Security independently throughout the
term of this guaranty, and Landlord has no obligation to provide Guarantor any
information about the Tenant or the Security.

         3. Waivers. Subject to the provisions of the Lease Documents, without
notice to or consent of Guarantor, Landlord may do or refrain from doing
anything affecting any Credit or any Security including the following: [a]
granting or not granting any indulgences to anyone liable for payment of the
Credit or any Security; [b] failing to get or to perfect any Security; [c]
failing to get an enforceable agreement to repay the Credit; [d] releasing any
Security or anyone or any property from liability for payment of the Credit; [e]
exercising any right or remedy including, without limitation, eviction of Tenant
or termination of the Lease; [f] applying any funds received from Tenant,
Guarantor or any other party and any funds realized from any Security to the
Credit in such manner and in such order or priority as Landlord elects in its
sole discretion; and [g] delaying in enforcing or failing to enforce any rights
to payment of the Credit or rights against any Security. In the event that
Landlord forecloses or otherwise realizes on any Security for repayment of the
Credit, Guarantor agrees that the purchase price at any judicial or other sale
of the Security paid by Landlord or any other party shall be conclusive evidence
of the value of the Security and Landlord shall have an absolute right, subject
to applicable law, to obtain a deficiency judgment of all amounts due in excess
of such purchase price, to the extent permitted by applicable law. To the
fullest extent permitted by law, Guarantor waives the right to contest the value
of the Security through appraisals or otherwise, and waives any defense to a
deficiency judgment that Guarantor may have pursuant to any statute or other
applicable law.

         4. Defects in Security, Etc. Guarantor's liability under this guaranty
shall not be affected by [a] any default in any document concerning any Credit
or Security when accepted by Landlord or arising any time thereafter; [b] the
unenforceability of or defect in any Security or document relating to any
Credit; [c] any decline in the value of any Security; [d] Landlord's failure to
obtain any Security or to perfect Landlord's security


                                      -3-
<PAGE>
interest therein; [e] the death, incompetence, insolvency, dissolution,
liquidation, or winding up of affairs of Tenant, Guarantor, or anyone liable for
any Security or the start of insolvency proceedings by or against any such
person or entity; [f] any termination of the leasehold estate created by the
Lease to the extent Tenant remained liable under the Lease; [g] the release or
discharge of Tenant in any creditor's, receivership, bankruptcy, other
insolvency proceedings, or other proceedings; [h] impairment, limitation or
modification of the liability of Tenant or the estate of Tenant in bankruptcy or
of any remedy for the enforcement of Tenant's liability under the Lease,
resulting from the operation of any present or future provisions of the federal
Bankruptcy Code or other statutes or from the decision of any court; [i] the
rejection or disaffirmance of the Lease in any such proceedings; [j] the
assignment or transfer of the Lease by the Tenant; [k] any disability or other
defense of Tenant; [l] the cessation from any cause whatsoever of the liability
of Tenant under the Lease; or [m] any reorganization, merger, consolidation,
combination, or sale of substantially all the assets of Tenant.

         5. Waiver of Surety's Defenses. GUARANTOR WAIVES ALL SURETYSHIP AND
OTHER SIMILAR DEFENSES.

         6. Unconditional Obligation. If Tenant fails to pay all or any part of
any Credit when due after expiration of any applicable grace, notice or cure
period, Guarantor shall immediately pay to Landlord all amounts then due and
payable in connection with any Credit, regardless of whether or not Landlord
first pursues Tenant or exhausts any of its rights or remedies against Tenant,
any other Guarantor, others, or other Security. Guarantor shall not have any
right of subrogation to the rights of Landlord against any of the assets of
Tenant or any other guarantor of the Lease until after indefeasible payment in
full of the Credit.

         7. Continuing Obligation. This guaranty shall extend and be applicable
to all renewals, amendments, extensions, consolidations, modifications,
increases and reductions of the Lease Documents and the Credit. Guarantor's
liability under this guaranty shall not be reduced or cancelled by any such
action and shall be deemed modified in accordance with the terms of such action,
whether or not Guarantor has notice of such action.

         8. Subordination. Except as otherwise specified in the Lease, the
provisions of this paragraph shall be effective only [i] after the occurrence of
an Event of Default (as defined in the Lease) and until such Event of Default is
cured, or [ii] after the commencement of any bankruptcy or insolvency proceeding
by or against Tenant and until such proceeding is dismissed. Guarantor
subordinates to and postpones in favor of the Credit and Security [a] any
present and future debts and obligations of Tenant to Guarantor (the
"Indebtedness") including but not limited to [i] salary, bonuses, and other
payments pursuant to any employment arrangement; [ii] fees, reimbursement


                                      -4-
<PAGE>
of expenses and other payments pursuant to any independent contractor
arrangement; [iii] principal and interest pursuant to any Indebtedness; [iv]
distributions payable to any shareholders or general or limited partners of
Tenant; and [v] lease payments pursuant to any leasing arrangement; and [b] any
liens or security interests securing payment of the Indebtedness. Guarantor
shall not ask for, sue for, demand, take or receive any payment, by setoff or in
any other manner, including the receipt of a negotiable instrument, for all or
any part of the Indebtedness owed by Tenant, or any successor or assign of
Tenant, including without limitation a receiver, trustee or debtor in possession
(the term "Tenant" shall include any such successor or assign of Tenant) until
the Credit has been paid in full; however, if Guarantor receives such a payment,
Guarantor shall immediately deliver the payment to Landlord for credit against
the then outstanding balance of the Credit, whether matured or unmatured.
Notwithstanding any right of Guarantor to ask, demand, sue for, take or receive
any payment with respect to the Indebtedness, all rights, liens and security
interests of the Guarantor, whether now or hereafter arising, in any assets of
the Tenant or in any Security shall be and hereby are subordinated to the rights
of Landlord in such assets and Guarantor shall have no right to possession of
any such assets or to foreclose upon any such asset, whether by judicial action
or otherwise, unless and until the Credit has been paid in full. Guarantor
agrees that Landlord shall be subrogated to the Guarantor with respect to the
Guarantor's claims against Tenant and the Guarantor's rights, liens and security
interest, if any, in any of the Tenant's assets and proceeds thereof until all
of the Credit has been paid in full.

         Guarantor warrants and represents that Guarantor has not previously
assigned any interest in the Indebtedness to any party other than Landlord, that
no other party owns an interest in the Indebtedness other than Guarantor,
(whether as joint holders of the Indebtedness, participants or otherwise) and
that, except as provided below, the entire Indebtedness is and shall continue to
be owing only to the Guarantor. Guarantor shall not assign or transfer to others
any claim Guarantor has or may have against the Tenant, unless such assignment
or transfer is made expressly subject to this guaranty.

         Any claim which Guarantor may make against Tenant or Tenant's estate in
any bankruptcy or insolvency proceedings shall be expressly subject to the terms
of this Section 8.

         In the event of any distribution of the assets or readjustment of the
obligations and indebtedness of the Tenant, whether by reason of liquidation,
bankruptcy, arrangement, receivership, assignment for the benefit of creditors
or any other action or proceeding involving the readjustment of all or any of
the Indebtedness hereby subordinated, or the application of the assets of the
Tenant to the payment or liquidation thereof, Landlord shall be entitled to
receive payment in full of any and


                                      -5-
<PAGE>
all of the Credit, due or not due, prior to the payment of all or any part of
the Indebtedness hereby subordinated, and in order to enable Landlord to enforce
its rights hereunder in any such action or proceeding, Landlord is hereby
authorized and empowered in its discretion to make and present for and on behalf
of Guarantor such proofs of claims against the Tenant, if the Guarantor shall
have failed to file any such proof of claim within thirty (30) days after
Landlord has requested Guarantor to file such proofs of claim on account of the
Indebtedness hereby subordinated, as Landlord may deem expedient or proper and
to vote such proofs of claims in any such proceeding and to receive and collect
any and all dividends or other payments or disbursements made thereon in
whatever form the same may be paid or issued and to apply the same on account of
any of the Credit.

         In the event of any distribution, division or application, partial or
complete, voluntary or involuntary, by operation of law or otherwise, of all or
any part of the assets of the Tenant or the proceeds thereof, to the creditors
of the Tenant's business, or upon the sale of all or substantially all of the
Tenant's assets, then, and in any such event, any payment or distribution of any
kind or character, either in cash, securities or other property, which shall be
payable or deliverable upon or with respect to any or all of the Indebtedness
shall be paid or delivered directly to Landlord for application on any of the
Credit, due or not due, until such Credit shall have first been fully paid and
satisfied. After the occurrence and during the continuance of any Event of
Default, in the event that Guarantor shall fail or refuse to take any action
that Landlord requests in writing that the Guarantor take with respect to the
Indebtedness within thirty (30) days of the Guarantor's receipt of such request,
Guarantor authorizes and empowers Landlord to demand, sue for, collect and
receive every such payment or distribution and give acquittance therefor and to
file claims and take such other proceedings, in Landlord's own name or in the
name of Guarantor or otherwise, as Landlord may deem necessary or advisable for
the enforcement of this guaranty; and Guarantor will execute and deliver to
Landlord such powers of attorney, assignments or other instruments or documents,
as may be requested by Landlord in order to enable Landlord to enforce any and
all claims upon or with respect to any or all of the Indebtedness and to collect
and receive any and all payments of distributions which may be payable or
deliverable at any time upon or with respect to the Indebtedness, all for
Landlord's own benefit.

         Should any payment, distribution, security, instrument or proceeds
which are subject to the subordination contained in the first paragraph of this
Section 8 be received by Guarantor upon, or with respect to, the Indebtedness
while such subordination provision is effective and prior to the satisfaction of
all of the Credit and termination of all financing arrangements between the
Tenant and Landlord, Guarantor shall receive and hold the same in trust as
trustee, for the benefit of Landlord and shall forthwith deliver the same to
Landlord in precisely the form received


                                      -6-
<PAGE>
(except for the endorsement or assignment of the Guarantor where necessary), for
application on any of the Credit, due or not due, and until so delivered, the
same shall be held in trust by the Guarantor as the property of Landlord. In the
event of the failure of Guarantor to make any such endorsement or assignment to
Landlord, Landlord, or any of its officers or employees, is hereby irrevocably
authorized to make the same.

         Any instrument evidencing any of the Indebtedness, or any portion
thereof, will, on the date hereof or promptly hereafter, be inscribed with a
legend conspicuously indicating that payment thereof is subordinated to the
claims of Landlord, pursuant to the terms of this guaranty, and will be
delivered to Landlord upon request therefor after the declaration of an Event of
Default, if such original is necessary in order to enable Landlord to take any
action permitted hereunder, including, without limitation, the filing of proofs
of claim on behalf of Guarantor.

         This subordination shall continue and shall be irrevocable until all
the terms, covenants and conditions of the Credit have been fully and completely
performed by Tenant or otherwise discharged and released by Landlord, and the
Guarantor shall not be released from any duty, obligation or liability hereunder
so long as there is any claim of Landlord against Tenant arising out of the
Credit which has not been performed, settled or discharged in full.

         9. Financial Statements.

                  (a) Financial Statements. Not later than 90 days after the end
of each fiscal year, Company shall deliver to Landlord audited consolidated
financial statements of Company for the preceding year and each Manager shall
deliver to Landlord unaudited financial statements of each Manager for the
preceding year. In addition, not later than 45 days after the end of each
quarter, Company shall deliver to Landlord unaudited consolidated financial
statements of Company for the preceding quarter. If Company is or becomes
subject to any reporting requirements of the Securities and Exchange Commission
("SEC"), Company shall, in lieu of providing the financial statements described
above concurrently deliver to Landlord such financial statements as are
delivered to the SEC pursuant to applicable securities laws.

                  (b) Certificate. With each delivery of financial statements,
Company shall also provide to Landlord a Certificate in the form of Exhibit A.

                  (c) Tax Returns. Company shall deliver to Landlord the federal
tax return of Company for each year within 15 days after the filing of the
return. If the filing date for any tax return has been extended, Company shall
also deliver to Landlord a copy of the extension application within 15 days
after the date of filing.


                                      -7-
<PAGE>
                  (d) Other Information. Guarantor shall promptly furnish to
Landlord such other information and statements concerning the business affairs
and financial condition of the Guarantor as Landlord may reasonably request.
Guarantor shall give Landlord access to all books, records, and financial data
of Guarantor by or through any of Landlord's officers, agents, attorneys or
accountants, at all reasonable times and from time to time. Landlord may
examine, inspect, and make extracts from Guarantor's books and other records at
all reasonable times and from time to time, subject, however, to any agreements
made by Landlord regarding confidentiality of such information.

                  (e) Covenants. Guarantor covenants that all financial
statements of Guarantor furnished Landlord will present fairly in all material
respects the financial condition of Guarantor as of the dates of the statements
and will be prepared in accordance with generally accepted accounting principles
applied on a basis consistently maintained throughout the period involved.

         10. [Intentionally Deleted].

         11. No Conveyance. Except as permitted in the Lease, Guarantor shall
not sell, convey, pledge, encumber or otherwise transfer any ownership interest
in Tenant now owned or hereafter acquired, if any, without the prior written
consent of Landlord, which consent shall not be unreasonably withheld. Except as
permitted in the Lease, Guarantor shall not sell, give, convey or otherwise
transfer, directly or indirectly, all or substantially all of the assets of
Guarantor to any person ("Transferee"). Any transfer of assets that is
prohibited by this section shall constitute an Event of Default under the Lease
and shall be deemed to be a fraudulent conveyance against Landlord. In the event
of any such prohibited transfer, Landlord shall be entitled to enforce this
guaranty against the Transferee and to seize all such transferred assets and
apply the proceeds from such assets to payment of the Credit, whether matured or
unmatured.

         12. Lease Covenants. Throughout the term of the Lease, Guarantor shall
comply with all requirements and covenants of the Lease expressly applicable to
Guarantor, including, without limitation,Sections 14.5 and 14.9.

         13. Subsequent Guaranties. No subsequent guaranty to Landlord by
Guarantor shall supersede or terminate this guaranty, but shall be an additional
guaranty unless otherwise stated therein and, if Guarantor has given a previous
guaranty to Landlord, this guaranty shall be in addition to the previous
guaranty.

         14. Successors, Etc. This guaranty shall be binding upon not only
Guarantor but also Guarantor's successors and assigns and shall inure to the
benefit of Landlord and its successors and assigns.


                                      -8-
<PAGE>
         15. Termination; Revocation. Subject to reinstatement pursuant
to Section 16, this guaranty shall automatically terminate on the date on which
all of the Credit is paid in full. No revocation of this guaranty or any
substitute guaranty by Guarantor shall be effective until all of the Credit has
been paid in full.

         16. Survival. The obligations of the Guarantor under this guaranty will
continue to be effective or shall be reinstated, as the case might be, if at any
time any payment from the Tenant of any sum due to the Landlord is rescinded or
must otherwise be restored or returned by the Landlord on the insolvency,
bankruptcy, dissolution, liquidation or reorganization of the Tenant or as a
result of the appointment of a custodian, conservator, receiver, trustee or
other officer with similar powers with respect to the Tenant or any part of the
Tenant's property or otherwise.

         17. Governing Law. This guaranty shall be governed by and construed in
accordance with the internal laws of the State of Ohio without giving effect to
the conflict of laws rules thereof.

         18. Number; Gender. Where appropriate, the number of any word in this
guaranty shall include both singular and plural, the gender of any word shall be
masculine, feminine, or neuter.

         19. Enforceability. If any provision of this guaranty or the
application thereof to anyone or any circumstance shall be adjudged invalid or
unenforceable to any extent, the application of the remainder of the provision
to the party or circumstance, the application of the provision to other parties
or circumstances, and the application of the remainder of this guaranty shall
not be affected thereby. Each provision of this guaranty shall be valid and
enforceable to the fullest extent permitted by law.

         20. No Waivers by Landlord. No forbearance by Landlord in exercising
any right under this guaranty, any Credit, or any Security shall operate as a
waiver thereof; no forbearance in exercising any right under this guaranty, any
Credit, or any Security on any one or more occasions shall operate as a waiver
of such right on any other occasion; and no single or partial exercise of any
right under this guaranty, any Credit, or any Security shall preclude any other
or further exercise thereof or the exercise of any other right, power, or
privilege. Landlord's rights under this guaranty are cumulative and not
exclusive of any rights or remedies that Landlord may otherwise have.

         21. Fees and Expenses. Guarantor shall pay to Landlord all costs and
expenses incurred by Landlord in administering the Lease and the Security,
enforcing or protecting Landlord's rights in connection with any Credit,
Security or this guaranty and in collecting payment on any Credit or this
guaranty, whether or not an Event of Default (as defined in the Lease) has
actually


                                      -9-
<PAGE>
occurred or has been declared and thereafter cured, including, but not limited
to, [a] attorney's fees and paralegal fees; [b] the fees and expenses of any
litigation, administrative, bankruptcy, insolvency, receivership or any other
similar proceeding; [c] court costs; [d] the expenses of Landlord, its
employees, agents, and witnesses in preparing for litigation and for lodging,
travel, and attendance at pretrial hearings, depositions, and trials; and [e]
consulting fees and expenses incurred by Landlord in connection with any
litigation.

         22. Notices. Any notices required or desired to be given under this
guaranty shall be in writing and shall be delivered in the manner set forth in
the Lease, and if to Landlord, delivered to Landlord at One SeaGate, Suite 1500,
P.O. Box 1475, Toledo, Ohio 43603, and if to a Guarantor, to the address set
forth opposite such Guarantor's signature, or to such other address as Landlord
or any Guarantor may hereafter give written notice thereof. All notices shall be
effective upon the earlier of actual receipt or three days after deposit in the
U.S. mail or one business day after deposit with the overnight courier.

         23. Amendment. This guaranty may not be amended except in a writing
signed by Guarantor and Landlord. All references to this guaranty, whether in
this guaranty or any other document or instrument, shall be deemed to
incorporate all amendments, modifications, renewals and extensions of this
guaranty and all substitutions therefor made after the date hereof.

         24. [Intentionally Deleted].

         25. Counterparts. This guaranty may be executed in multiple
counterparts, each of which shall constitute an original and all of which
together shall constitute one and the same instrument.

         26. JURISDICTION AND VENUE. GUARANTOR IRREVOCABLY SUBMITS AND CONSENTS
TO THE NONEXCLUSIVE JURISDICTION AND VENUE OF ANY STATE OR FEDERAL COURT HAVING
JURISDICTION OVER LUCAS COUNTY, OHIO OR ANY COUNTY IN WHICH A FACILITY IS
LOCATED FOR ADJUDICATION OF ALL MATTERS IN CONTROVERSY UNDER THIS GUARANTY, AND
WAIVES ANY OBJECTIONS TO SUCH JURISDICTION AND VENUE AND CONSENTS TO FULL FAITH
AND CREDIT BEING GIVEN TO ANY DECISION OF SUCH COURTS BY ANY OTHER STATE OR
FEDERAL COURT OF THE UNITED STATES OF AMERICA. GUARANTOR SHALL NOT ATTEMPT TO
LITIGATE ANY MATTERS IN CONTROVERSY UNDER THIS GUARANTY BEFORE ANY COURT OR
TRIBUNAL OTHER THAN BEFORE A STATE OR FEDERAL COURT HAVING JURISDICTION OVER
LUCAS COUNTY, OHIO. GUARANTOR WAIVES PERSONAL SERVICE OF ANY AND ALL PROCESS
UPON GUARANTOR AND CONSENTS THAT ALL SUCH SERVICE OF PROCESS UPON THE GUARANTOR
BE MADE BY REGISTERED OR CERTIFIED MAIL DIRECTED TO GUARANTOR AT THE ADDRESS SET
FORTH BELOW AND SHALL BE DEEMED TO BE COMPLETED FIVE (5) DAYS AFTER POSTED.

         27. WAIVER OF JURY TRIAL. TO THE FULLEST EXTENT PERMITTED BY LAW,
GUARANTOR HEREBY WAIVES KNOWINGLY AND


                                      -10-
<PAGE>
VOLUNTARILY THE RIGHT TO A JURY TRIAL IN ANY ACTION, PROCEEDING OR COUNTERCLAIM
ARISING OUT OF OR RELATING TO THIS GUARANTY.

            [THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]


                                      -11-
<PAGE>
                  IN WITNESS WHEREOF, Guarantor executes and delivers to
Landlord this Unconditional and Continuing Guaranty effective as of the
Effective Date.


Address:                              BALANCED CARE CORPORATION
1215 Manor Drive
Mechanicsburg, Pennsylvania  17055

                                      By:/s/Robin L. Barber

                                          Title: Sr. Vice President and

                                          Assistant Secretary

                                           Tax ID No.:


                                      BALANCED CARE AT LEBANON, INC.

                                      By:/s/Robin L. Barber

                                          Title:Vice President and

                                          Secretary

                                           Tax ID No.:


                                      FINANCIAL CARE INVESTORS OF LEBANON, LLC

                                      By:/s/Robin L. Barber

                                          Title:Vice President and

                                          Secretary

                                           Tax ID No.:


                                      BALANCED CARE AT LOYALSOCK, INC.

                                      By:/s/Robin L. Barber

                                          Title:Vice President and

                                          Secretary

                                           Tax ID No.:


                                      FINANCIAL CARE INVESTORS OF LOYALSOCK, LLC

                                      By:/s/Robin L. Barber

                                          Title:Vice President and

                                          Secretary

                                           Tax ID No.:
<PAGE>
                                      BALANCED CARE AT SAGAMORE HILLS, INC.

                                      By:/s/Robin L. Barber

                                          Title:Vice President and

                                          Secretary

                                           Tax ID No.:


                                      FINANCIAL CARE INVESTORS OF
                                         SAGAMORE HILLS, LLC

                                      By:/s/Robin L. Barber

                                          Title:Vice President and

                                          Secretary

                                           Tax ID No.:


                                      BALANCED CARE AT SAXONBURG, INC.

                                      By:/s/Robin L. Barber

                                          Title:Vice President and

                                          Secretary

                                           Tax ID No.:


                                      BALANCED CARE AT BLOOMSBURG II, INC.

                                      By:/s/Robin L. Barber

                                          Title:Vice President and

                                          Secretary

                                           Tax ID No.: