<PAGE>
Exhibit 10.18

                       AMENDED, RESTATED AND CONSOLIDATED

                        ENVIRONMENTAL INDEMNITY AGREEMENT

         THIS AGREEMENT is made as of the 14th day of March, 2002 by and among
BALANCED CARE TENANT (MT), INC., a Delaware corporation, having its principal
place of business at 1215 Manor Drive, Mechanicsburg, Pennsylvania 17055 (the
"Lessee"); BALANCED CARE CORPORATION, a Delaware corporation, having its
principal place of business at 1215 Manor Drive, Mechanicsburg, Pennsylvania
17055 (the "Guarantor") and MEDITRUST ACQUISITION COMPANY II LLC, a Delaware
limited liability company having its principal address at 197 First Avenue,
Needham Heights, Massachusetts 02494 (the "Lessor").

                               W I T N E S S E T H

         WHEREAS, the Lessor is the holder of the landlord's interest under
those certain twelve (12) Facility Lease Agreements more particularly described
in EXHIBIT A attached hereto (collectively, the "Existing Leases");

         WHEREAS, the Lessee, the Guarantor, Affiliates of the Lessee and the
Guarantor, the Lessor and La Quinta TRS, Inc. are parties to that certain
Option, Settlement and Release Agreement dated February 6, 2002 (the "Option
Agreement"), pursuant to which, among other things, (i) the Lessee and the
Lessor agreed to amend, restate and consolidate the Existing Leases pursuant to
that certain Master Facility Lease Agreement of even date herewith to be
executed simultaneously herewith by and between the Lessor and the Lessee (the
"Lease"), (ii) the Guarantor agreed to execute and deliver the Guaranty (as
defined under the Lease), pursuant to which the Guarantor guaranties the
complete payment and performance of the Lease Obligations (as defined under the
Lease) and (iii) the Lessee and the Guarantor (collectively, the "Indemnitors")
agreed to execute and deliver this Agreement as additional security for the
Obligations (as defined under the Lease);

         WHEREAS, all of the Third Party Lessees (as defined under the Option
Agreement) have been merged into the Lessee with the Lessee being the surviving
entity (collectively, the "Mergers");

         WHEREAS, pursuant to the Option Agreement, Balanced Care at Stafford,
Inc. (the "Potomac Point Lessee") assigned all of its interest under the Potomac
Point Lease Documents (as defined in
<PAGE>
the Option Agreement) to the Lessee, and the Lessee assumed all of the Potomac
Point Lessee's obligations under the Potomac Point Lease Documents (the "Potomac
Point Assignment");

         WHEREAS, as a consequence of the Mergers and the Potomac Point
Assignment, the Lessee is the holder of the tenant's interest under the Existing
Leases and is party to and bound by the agreements listed on EXHIBIT B attached
hereto (collectively, the "Existing Environmental Indemnity Agreements"), which
Existing Environmental Indemnity Agreements provide additional security for the
obligations under the Existing Leases; and

         WHEREAS, in connection with the amendment, restatement and
consolidation of the Existing Leases, the Lessor and the Indemnitors have agreed
that the Existing Environmental Indemnity Agreements be amended, restated and
consolidated;

         NOW, THEREFORE, in consideration of the mutual covenants hereinafter
contained and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged by the parties hereto, which consideration
includes (a) the Lessor's agreement to enter into the Option Agreement and grant
the Option Right (as defined under the Option Agreement) to the Buyer, (b) the
Lessor's agreement to the "IPC/BCC Release" and the "BCC Release" (as such terms
are defined under the Option Agreement and (c) the Lessor's agreement,
notwithstanding the Existing Defaults (as defined under the Option Agreement),
to consent to the Stock Transfers (as defined under the Option Agreement), the
parties hereto agree to amend and restate the Existing Environmental Indemnity
Agreements in their entirety and to that end agree that this Amended, Restated
and Consolidated Environmental Indemnity Agreement shall be deemed effective as
of the date hereof, shall supersede the Existing Environmental Indemnity
Agreements in their entirety and shall be referred to herein as the "Agreement".
The parties hereto further agree as follows:

         1. DEFINITIONS: All capitalized terms used herein and not otherwise
expressly defined herein shall have the same meanings ascribed to such terms in
the Lease. For all purposes of this Agreement, except as otherwise expressly
provided or unless the context otherwise requires, the terms defined in this
Section have the meanings ascribed to them in this Section:

         Environmental Enforcement Actions: Collectively, all actions or orders
instituted, threatened, required or completed

                                      -2-
<PAGE>
by any Governmental Authority and all claims made or threatened by any Person
against any of the Indemnitors or all or any portion of the Leased Property (or
any other occupant, prior occupant or prior owner thereof), arising out of or in
connection with any of the Environmental Laws or the assessment, monitoring,
clean-up, containment, remediation or removal of, or damages caused or alleged
to be caused by, any Hazardous Substances (i) located on or under any portion of
the Leased Property, (ii) emanating from any portion of the Leased Property or
(iii) generated, stored, transported, utilized, disposed of, managed or released
by any of the Indemnitors (whether or not on, under or from any portion of the
Leased Property).

         Environmental Laws: Collectively, all Legal Requirements applicable to
(i) environmental conditions on, under or emanating from any portion of the
Leased Property including, without limitation, the Arkansas Code Annotated,
Title 8, Chapters 1 through 10, the Ohio Administrative Code ("OAC") Chapter
3745, Ohio Revised Code ("ORC") Chapter 6111, ORC Chapter 3734, OAC 3701-38, OAC
1501:15-1, ORC Chapter 6109.10, ORC Chapter 3710, ORC 3738.87 et. seq., OAC
1301:7-7-36, 1301:7-7-9 et. seq., ORC Chapter 4125, the Pennsylvania Suface
Mining Conservation and Reclamation Act, 52 P.S. Section 1396.1 through Section
1396.31, the Pennsylvania Clean Streams Law, 35 P.S. Section 691.1 through
Section 691.1001, the Pennsylvania Coal Refuse Disposal Contract Act, 52 P.S.
Section 30.51 through Section 30.206, the Pennsylvania Dam Safety and
Encroachments Act, 32 P.S. Section 693.1 through Section 693.27, the
Pennsylvania Solid Waste Management Act, 35 P.S. Section 6018.101 through
Section 6018.1003, the Pennsylvania Air Pollution Control Act, 35 P.S. Section
4001 through Section 4106, the Pennsylvania Hazardous Sites Cleanup Act, 35 P.S.
Section 6020.101 through Section 6020.1305, the Pennsylvania Storage Tank and
Spill Prevention Act, 35 P.S. Section 6021.101 through Section 6021.2105, the
Pennsylvania Safe Drinking Water Act, 35 P.S. Section 721.1 through Section
721.17, the Pennsylvania Infectious and Chemotherapeutic Waste Disposal Act, 35
P.S. Section 6019.1 through Section 6019.6, the Pennsylvania Radiation
Protection Act, 35 P.S. Section 7110.101 through Section 7110.703, the
Pennsylvania Low Level Radioactive Waste Disposal Act, 35 P.S. Section 7130.101
through Section 7130.906, the Pennsylvania Fish and Boat Code, 30 P.S. Section
2501 through Section 2506, the Pennsylvania Land Recycling and Environmental
Remediation Standards Act, 35 P.S. Section 6026.101 et seq., the Pennsylvania
Economic Development Agency, Fiduciary and Lender Environmental Liability Act,
35 P.S. Section 6027.1 et seq., Air Pollution Control Act, T.C.A. Section
68-201-101 through Section 68-201-203; Atomic Energy and Nuclear Materials Act,
T.C.A. Section 68-202-101 through Section 68-202-709; Environmental Protection
Fund, T.C.A. Section 68-


                                      -3-
<PAGE>
203-101 through Section 68-203-105; Solid Waste Management Act, T.C.A. Section
68-211-801 through Section 68-211-874; Hazardous Waste Management Act, T.C.A.
Section 68-212-101 through Section 68-212-407; Petroleum Underground Storage
Act, T.C.A. Section 68-215-101 through Section 68-215-204; Oil Spill Cleanup
Act, T.C.A. Section 68-216-101 through Section 68-216-103; Safe Drinking Water
Act, T.C.A. Section 68-221-701 through Section 68-221-720; the Virginia Coal
Surface Mining Control and Reclamation Act of 1979, " 45.1-226 et seq., Code of
Virginia (1950), the State Water Control law " 62.1-44.2 et seq., Code of
Virginia (1950), the Virginia Waste Management Act, " 10.1-1400 et seq., Code of
Virginia (1950), Air Pollution Control Board Act, " 10.1-1300 et seq., Code of
Virginia (1950), Chesapeake Bay Preservation Act, " 10.1-2100 et seq., Code of
Virginia (1950) and all local government ordinances adopted pursuant thereto,
the Virginia Dam Safety Act, " 10.1-604 et seq., Code of Virginia (1950), the
Soil and Water Conservation Act, " 10.1-500 et seq., Code of Virginia (1950),
the Fisheries and Habitat of Tidal Waters Act, " 28.2-100 et seq., Code of
Virginia (1950), the Submerged Lands Act, " 28.2-1200 et seq., Code of Virginia
(1950), the Wetlands Act, " 28.2-1300 et seq., Code of Virginia (1950), the Game
and Inland Fisheries Act, " 29.1-100 et seq., Code of Virginia (1950), the
Comprehensive Environmental Response, Compensation and Liability Act, the
Resource Conservation and Recovery Act, the Federal Water Pollution Control Act
and the Federal Clean Air Act, the Comprehensive Environmental Response,
Compensation and Liability Act, the Resource Conservation and Recovery Act, the
Federal Water Pollution Control Act and the Federal Clean Air Act and (ii) the
generation, storage, transportation, utilization, disposal, management or
release (whether or not on, under or from any portion of the Leased Property) of
Hazardous Substances by any of the Indemnitors.

         Environmental Reports: Collectively, the Environmental Site Assessment
Reports set forth on EXHIBIT C attached hereto and made a part hereof.

         Governmental Authorities: Collectively, all agencies, authorities,
bodies, boards, commissions, courts, instrumentalities, legislatures and offices
of any nature whatsoever for any government unit or political subdivision,
whether federal, state, county, district, municipal, city or otherwise, and
whether now or hereafter in existence.

         Hazardous Substances: Collectively, (i) any "hazardous material,"
"hazardous substance," "hazardous waste," "oil," "regulated substance," "toxic
substance," "restricted hazardous

                                      -4-
<PAGE>
waste", "special waste" or words of similar import as defined under any of the
Environmental Laws; (ii) asbestos in any form; (iii) urea formaldehyde foam
insulation; (iv) polychlorinated biphenyls; (v) radon gas; (vi) flammable
explosives; (vii) radioactive materials; (viii) any chemical, contaminant,
solvent, material, pollutant or substance that may be dangerous or detrimental
to any portion of the Leased Property, the environment, or the health and safety
of the residents and other occupants of any portion of the Leased Property or of
the owners or occupants of any other real property nearby any portion of the
Leased Property and (ix) any substance, the generation, storage, transportation,
utilization, disposal, management, release or location of which, on, under or
from any portion of the Leased Property is prohibited or otherwise regulated
pursuant to any of the Environmental Laws.

         Notwithstanding the foregoing, the term Hazardous Substances as defined
herein shall not include (a) pharmaceuticals and cleaning agents of the types
and in the quantities and concentrations normally stocked by health care and
senior housing providers similar to the Facilities, (b) oil in de minimis
amounts typically associated with the use of certain portions of the Leased
Property for driving and parking motor vehicles or (c) medical wastes generated
at any Facility; provided that the foregoing are used, stored, transported
and/or disposed of in accordance with all Legal Requirements.

         Surrounding Property: Any real property that is located within a
one-half (1/2) mile radius of any portion of the Leased Property.

         2. REPRESENTATIONS AND WARRANTIES: The Indemnitors each represent and
warrant to the Lessor, the same to be true as of the date hereof and throughout
the period that the Lease or any of the other Lease Documents shall remain in
force and effect, that:

         (i) to the actual knowledge of the Indemnitors, except as may be
disclosed in any of the Environmental Reports, no Hazardous Substance has been
or is currently generated, stored, transported, utilized, disposed of, managed,
released or located on, under or from any portion of the Leased Property
(whether or not in reportable quantities), except for de minimis releases
typically associated with the use of certain portions of the Leased Property for
driving and parking motor vehicles, or in any manner introduced onto any portion
of the Leased Property,

                                      -5-
<PAGE>
including, without limitation, the septic, sewage or other waste disposal
systems serving any portion of the Leased Property;

         (ii) except as may be disclosed in any of the Environmental Reports,
none of the Indemnitors has any knowledge of any threat of release of any
Hazardous Substance on, under or from any portion of the Leased Property;

         (iii) none of the Indemnitors has received any notice from any state or
local Governmental Authority in the state where any Facility is located, the
United States Environmental Protection Agency or any other Governmental
Authority claiming that (a) any portion of the Leased Property or any use
thereof violates any of the Environmental Laws or (b) any of the Indemnitors or
any of their respective employees or agents have violated any of the
Environmental Laws;

         (iv) none of the Indemnitors has incurred any liability to the
Commonwealths of Pennsylvania or Virginia, the States of Arkansas, Ohio or
Tennessee, the United States of America or any other Governmental Authority
under any of the Environmental Laws;

         (v) to the actual knowledge of the Indemnitors, no lien against all or
any portion of the Leased Property has arisen under or related to any of the
Environmental Laws;

         (vi) to the actual knowledge of the Indemnitors, except as may be
disclosed in any of the Environmental Reports, there is no Environmental
Enforcement Action pending, or to the best of the Indemnitors' information,
knowledge and belief, threatened;

         (vii) except as may be disclosed in any of the Environmental Reports,
none of the Indemnitors has any knowledge that any Hazardous Substance has been
or is currently generated, stored, transported, utilized, disposed of, managed,
released or located on, under or from any Surrounding Property in violation of,
or allegedly in violation of any of, the Environmental Laws;

         (viii) except as may be disclosed in any of the Environmental Reports,
none of the Indemnitors has any knowledge of any threat of release of any
Hazardous Substance on, under or from any Surrounding Property;

         (ix) none of the Indemnitors has any knowledge of any action or order
instituted or threatened against any Person by any Governmental Authority
arising out of or in connection with the

                                      -6-
<PAGE>
Environmental Laws involving the assessment, monitoring, clean-up, containment,
remediation or removal of or damages caused or alleged to be caused by (a) any
Hazardous Substances generated, stored, transported, utilized, disposed of,
managed, released or located on, under or from any Surrounding Property or (b)
the threat of release of any Hazardous Substance on, under or from any
Surrounding Property; and

         (x) to the actual knowledge of the Indemnitors, except as may be
disclosed in any of the Environmental Reports, there are no underground storage
tanks on or under any portion of the Leased Property.

         As used in this Agreement, the terms "generated," "stored,"
"transported," "utilized," "disposed," "managed," "released" and "threat of
release" (and all conjugates thereof) shall have the meanings and definitions
set forth in the Environmental Laws.

         3. MAINTENANCE OF LEASED PROPERTY: The Indemnitors each covenant that,
as long as the Lease or any of the other Lease Documents shall remain in force
and effect, none of the Indemnitors shall:

         (i) generate, store, transport, utilize, dispose of, manage, release or
locate, or permit the generation, storage, transportation, utilization,
disposal, management, release or threat of release, or location of any Hazardous
Substances on, under or from any portion of the Leased Property, except for de
minimis releases typically associated with the use of certain portions of the
Leased Property for driving and parking motor vehicles; or

         (ii) permit any lien arising under or related to any of the
Environmental Laws to attach to all or any portion of the Leased Property.

         In addition to all other covenants contained herein, the Indemnitors
agree that the Leased Property shall be maintained in compliance with the
Environmental Laws.

         4. NOTICE OF ENVIRONMENTAL CONDITIONS: The Indemnitors shall provide
the Lessor with immediate written notice upon: (i) any of the Indemnitors
becoming aware of (a) the presence of, any release or any threat of release of
any Hazardous Substances on, under or from any portion of the Leased Property
(whether or not caused by any of the Indemnitors), (b) any Environmental


                                      -7-
<PAGE>
Enforcement Action instituted or threatened, (c) any enforcement, assessment,
monitoring, clean-up, containment, removal, remediation, restoration or other
action or order instituted, threatened, required or completed by any
Governmental Authority pursuant to any of the Environmental Laws with respect to
any Surrounding Property and/or (d) any condition or occurrence on any
Surrounding Property that may constitute a violation of any of the Environmental
Laws and (ii) the receipt by any of the Indemnitors of any notice relating to
any portion of the Leased Property or any Hazardous Substance allegedly
originating on, under or from any portion of the Leased Property, from any
Governmental Authority pursuant to any of the Environmental Laws.

         At least six (6) months, but not more than nine (9) months, prior to
the expiration of the Term of the Lease, Lessee shall at its own cost and
expense obtain a professional environmental assessment of the Leased Property,
all in accordance with the scope of Section 6 below and with Lessor's then
standard requirements. Such assessment shall be set forth in a written report
addressed to and delivered to Lessor at least four (4) months before the end of
the Term of the Lease.

         5. INDEMNITORS' AGREEMENT TO TAKE REMEDIAL ACTIONS: Upon any of the
Indemnitors becoming aware of the presence of, any release, or any threat of
release of any Hazardous Substances on, under or from any portion of the Leased
Property or any Surrounding Property (whether or not caused by any of the
Indemnitors), the Indemnitors shall immediately take all such actions or cause
the responsible party to take all such actions to arrange for the assessment,
monitoring, clean-up, containment, removal, remediation or restoration of the
applicable portion of the Leased Property and the Surrounding Property, but only
to the extent that the presence of any Hazardous Substances on the Surrounding
Property originated on, under or from any portion of the Leased Property as (i)
are required pursuant to any of the Environmental Laws or by any Governmental
Authority and (ii) may otherwise be advisable and reasonably requested by the
Lessor.

         The Indemnitors shall provide the Lessor, or cause the responsible
party to provide the Lessor, within thirty (30) days after a demand by the
Lessor, with a bond, letter of credit or other similar financial assurance, in
form, amount and substance reasonably satisfactory to the Lessor evidencing to
the Lessor's reasonable satisfaction that the necessary financial resources are
available to pay all costs associated with the aforementioned actions, the
release of any lien against all or any portion of

                                      -8-
<PAGE>
the Leased Property, the release or other satisfaction of the liability, if any,
of any of the Indemnitors arising under or related to any of the Environmental
Laws and the satisfaction of each (if any) applicable Environmental Enforcement
Action.

         6. LESSOR'S RIGHTS TO INSPECT THE PROPERTY AND TAKE REMEDIAL ACTIONS:
As long as the Lease or any of the other Lease Documents shall remain in force
and effect, the Lessor shall have the right, but not the obligation, to enter
upon all or any portion of the Leased Property (at reasonable times and upon
reasonable notice to the Lessee, except in the event of an emergency), and may
expend funds to:

         (i) for good and reasonable cause, cause one or more environmental
assessments of all or any portion of the Leased Property to be undertaken. Such
environmental assessments may include, without limitation, (a) detailed visual
inspections of all or any portion of the Leased Property, including, without
limitation, all storage areas, storage tanks, drains, dry wells and leaching
areas, (b) the taking of soil and surface water samples, (c) the performances of
soil and ground water analyses and (d) the performance of such other
investigations or analyses as are necessary or appropriate and consistent with
sound professional environmental engineering practice in order for the Lessor to
obtain a complete assessment of the compliance of all or any portion of the
Leased Property and the use thereof with all Environmental Laws and to make a
determination as to whether there is any risk of contamination (x) to any
portion of the Leased Property resulting from Hazardous Substances originating
on, under or from any Surrounding Property or (y) to any Surrounding Property
resulting from Hazardous Substances originating on, under or from any portion of
the Leased Property;

         (ii) cure any breach of the representations, warranties, conditions and
covenants of this Agreement including, without limitation, any violation by any
of the Indemnitors or any portion of the Leased Property (or any other occupant,
prior occupant or prior owner thereof) of any of the Environmental Laws;

         (iii) take any actions as are necessary to (a) prevent the migration of
Hazardous Substances on, under or from any portion of the Leased Property to any
other property; (b) clean-up, contain, remediate or remove any Hazardous
Substances on, under or from any other property, which Hazardous Substances
originated on, under or from any portion of the Leased Property

                                      -9-
<PAGE>
or (c) prevent the migration of any Hazardous Substances on, under or from any
other property to any portion of the Leased Property; and

         (iv) comply with, settle or otherwise satisfy any Environmental
Enforcement Action (including, without limitation, the payment of any fines or
penalties imposed by any Governmental Authority); provided, however, that unless
a Lease Default has occurred, the Lessor shall not settle or otherwise satisfy
any Environmental Enforcement Action without the prior consent of the
Indemnitors, which consent shall not be unreasonably withheld.

         Any amounts paid or advanced by the Lessor and all costs and expenses
reasonably incurred in connection with any action taken pursuant to the terms of
this Section 6 (including, without limitation, environmental consultants' and
experts' fees and expenses, attorneys' fees and expenses, court costs and all
costs of assessment, monitoring, clean-up, containment, remediation, removal and
restoration) shall be a demand obligation of the Indemnitors to the Lessor, and,
to the extent permitted by applicable law, shall be added to the Lease
Obligations and, if not paid within ten (10) days after demand, shall
thereafter, to the extent permitted by applicable law, bear interest at the
Overdue Rate until the date of payment.

         Subject to the provisions of applicable law, the exercise by the Lessor
of any of the rights and remedies set forth in this Section 6 shall not operate
or be deemed (a) to place upon the Lessor any responsibility for the operation,
control, care, service, management, maintenance or repair of all or any portion
of the Leased Property or (b) to make the Lessor the "operator" of all or any
portion of the Leased Property or a "responsible party" within the meaning of
any of the Environmental Laws. Furthermore, the Lessor, by making any such
payment or incurring any such costs, shall be subrogated (but only until the
complete payment and performance of the Obligations) to all rights of each of
the Indemnitors or any other occupant of any portion of the Leased Property to
seek reimbursement from any Person, including, without limitation, any
predecessor to the Lessor's fee title to any portion of the Leased Property, who
may be a "responsible party" under any of the Environmental Laws, in connection
with the presence of Hazardous Substances on, under or from any portion of the
Leased Property.

         Without limiting the generality of the provisions incorporated by
reference pursuant to Section 11 hereof, any

                                      -10-
<PAGE>
partial exercise by the Lessor of any of the rights and remedies set forth in
this Section 6, including, without limitation, any partial undertaking on the
part of the Lessor to cure any failure by any of the Indemnitors or all or any
portion of the Leased Property (or any other occupant, prior occupant or prior
owner thereof) to comply with any of the Environmental Laws, shall not obligate
the Lessor to complete such actions taken or require the Lessor to expend
further sums to cure such non-compliance.

         7. INDEMNIFICATION: Each of the Indemnitors shall and hereby agrees to
indemnify, defend (with counsel reasonably acceptable to the Lessor) and hold
the Lessor harmless from and against any claim, liability, loss, cost, damage or
expense (including, without limitation, environmental consultants' and experts'
fees and expenses, attorneys' fees and expenses, court costs and all costs of
assessment, monitoring, clean-up, containment, removal, remediation and
restoration reasonably incurred by the Lessor) arising out of or in connection
with (i) any breach of any of the representations, warranties, conditions and
covenants of this Agreement or any of the other Lease Documents (whether any
such matters arise before or after any action is commenced to terminate the
Lease or to evict the Lessee), (ii) the Lessor's exercise of any of its rights
and remedies hereunder or (iii) the enforcement of the aforesaid indemnification
agreement; excluding, however, any claim, liability, loss, cost, damage or
expense resulting from the Lessor's gross negligence or willful misconduct.
Notwithstanding the foregoing, the Lessor shall have the option of conducting
its defense with counsel of the Lessor's choice, but at the expense of the
Indemnitors as aforesaid.

         The matters covered by the foregoing indemnity with respect to any
property other than the Leased Property shall not include any costs incurred as
a result of the clean-up, containment, remediation or removal of Hazardous
Substances on, under or from such other property or the restoration thereof if
such Hazardous Substances did not originate on, under or from any portion of the
Leased Property, unless the clean-up, containment, remediation or removal
thereof or the restoration of such other property is either required in
connection with any Environmental Enforcement Action or is necessary to prevent
the migration of Hazardous Substances from such other property to any portion of
the Leased Property. The Indemnitors each acknowledge and agree that their
obligations pursuant to the provisions hereof are in addition to any and all
other legal liabilities and responsibilities (at law or in equity) that any of
the Indemnitors may otherwise have as

                                      -11-
<PAGE>
an "operator" of the Leased Property or a "responsible party" within the meaning
of any of the Environmental Laws, as the case may be.

         The indemnity provisions of this Section 7 shall survive the payment
and performance of the Obligations and/or the expiration or termination of the
Lease.

         8. JOINT AND SEVERAL LIABILITY: All obligations of the Indemnitors
under this Agreement shall be joint and several.

         9. NOTICES: Any notice, request, demand, statement or consent made
hereunder shall be in writing and shall be deemed duly given if personally
delivered, sent by certified mail, return receipt requested, or sent by a
nationally recognized commercial overnight delivery service with provisions for
a receipt, postage or delivery charges prepaid, and shall be deemed given when
postmarked or placed in the possession of such mail or delivery service and
addressed as follows:

If to the Guarantor:                Balanced Care Corporation
                                    1215 Manor Drive
                                    Mechanicsburg, Pennsylvania  17055
                                    Attn:  President

With copies to:                     Balanced Care Corporation
                                    1215 Manor Drive
                                    Suite 200
                                    Mechanicsburg, Pennsylvania  17055
                                    Attn:  General Counsel

                                    Kirkpatrick & Lockhart
                                    Henry W. Oliver Building
                                    535 Smithfield Street
                                    Pittsburg, PA  15222-2312
                                    Attn:  Steven Adelkoff, Esq.

If to the Lessee:                   Balanced Care at Stafford, Inc.
                                    1215 Manor Drive
                                    Mechanicsburg, Pennsylvania  17055
                                    Attn:  President

With copies to:                     Balanced Care Corporation
                                    1215 Manor Drive
                                    Mechanicsburg, Pennsylvania  17055
                                    Attn:  General Counsel

                                      -12-
<PAGE>

                                    Kirkpatrick & Lockhart
                                    Henry W. Oliver Building
                                    535 Smithfield Street
                                    Pittsburg, PA  15222-2312
                                    Attn:  Steven Adelkoff, Esq.

If to the Lessor:                   Meditrust Acquisition Company II LLC
                                    197 First Avenue
                                    Needham Heights, Massachusetts  02494
                                    Attn:  President

With copies to:                     Meditrust Acquisition Company II LLC
                                    197 First Avenue
                                    Needham Heights, Massachusetts  02494
                                    Attn: General Counsel

                                    Nutter, McClennen & Fish, LLP
                                    One International Place
                                    Boston, MA  02110-2699
                                    Attn:  Marianne Ajemian, Esq.

or at such other place as any of the parties hereto may from time to time
hereafter designate to the others in writing. Any notice given to any of the
Indemnitors by the Lessor at any time shall not imply that such notice or any
further or similar notice was or is required.

         10. GOVERNING LAW: This Agreement shall be construed, and the rights
and obligations of each of the Indemnitors and the Lessor shall be determined,
in accordance with the laws of the Commonwealth of Massachusetts, except as to
matters under which the laws of a State in which any Facility is located, or
under applicable conflicts of laws rules, require the application of laws of
such other State, in which case the laws or conflicts of laws rules, as the case
may be, of such State shall govern to the extent required.

         The Indemnitors hereby consent to personal jurisdiction in the state
and federal courts of the Commonwealth of Massachusetts and each State where any
portion of the Leased Property is situated as well as to the jurisdiction of all
courts from which an appeal may be taken from the aforesaid courts, for the
purpose of any suit, action or other proceeding arising out of or with respect
any of the Lease Documents, the negotiation and/or consummation of the
transactions evidenced by the Lease

                                      -13-
<PAGE>
Documents, the Lessor's relationship of any member of the Leasing Group in
connection with the transactions evidenced by the Lease Documents and/or the
performance of any obligation or the exercise of any remedy under any of the
Lease Documents and expressly waive any and all objections the Indemnitors may
have as to venue in any of such courts.

       11. GENERAL PROVISIONS; RULES OF CONSTRUCTION: The provisions set forth
in Article 23 and Sections 2.2, 16.8 through 16.10, 24.2 through 24.10 and 24.12
of the Lease are hereby incorporated herein by reference, mutatis, mutandis and
shall be applicable to this Agreement as if set forth in full herein.

                [REMAINDER OF THE PAGE INTENTIONALLY LEFT BLANK]


                                      -14-
<PAGE>
         IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed as a sealed instrument on the date first above-mentioned.

WITNESSES:                              LESSEE:

                                        BALANCED CARE TENANT (MT), INC., a
                                        Delaware corporation

/s/Jaynelle D. Covert
Name: Jaynelle D. Covert

/s/Susan J. Dawson                      By:/s/Robin L. Barber      (SEAL)
Name: Susan J. Dawson                      Name: Robin L. Barber
                                           Title: Vice President and
                                                  Secretary

WITNESSES:                              GUARANTOR:

                                        BALANCED CARE CORPORATION, a
                                        Delaware corporation

/s/Jaynelle D. Covert
Name: Jaynelle D. Covert

/s/Susan J. Dawson                      By:/s/Robin L. Barber      (SEAL)
Name: Susan J. Dawson                      Name: Robin L. Barber
                                           Title: Senior Vice President,
                                                  Legal Counsel and
                                                  Assistant Secretary

WITNESSES:                              LESSOR:

                                        MEDITRUST ACQUISITION COMPANY II
                                        LLC, a Delaware limited liability
                                        company

/s/Richard L. Pomroy
Name: Richard L. Pomroy

/s/Brian J. McGrath                     By:/s/Kathryn Arnone      (SEAL)
Name: Brian J. McGrath                       Name: Kathryn Arnone
                                             Its: Secretary



                                      -15-