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Exhibit 10.18


                              EMPLOYMENT AGREEMENT



     THIS AGREEMENT dated as of January 31, 2001 (together with the exhibits
attached hereto and made a part hereof, the "Agreement") is made by and between
BALANCED CARE CORPORATION, a Delaware corporation with a principal office at
1215 Manor Drive, Mechanicsburg, PA 17055, on behalf of it and each of its
subsidiaries (the "Company") and BRAD E. HOLLINGER, an individual residing at
2850 Ford Farm Road, Mechanicsburg, PA 17055 (the "Employee").


                              W I T N E S S E T H :

     WHEREAS, the Company desires to retain the services of Employee as Chairman
of its Board of Directors and its Chief Executive Officer for the benefit of
itself and each of its Subsidiaries (as hereafter defined) throughout the term
of this Agreement, and Employee is willing to be employed by the Company in the
foregoing capacities for such period, upon the terms and conditions herein set
forth.

     WHEREAS, the Company and Employee are parties to an employment agreement
dated as of August 1, 1996 (the "Original Employment Agreement"), as amended by
a first amendment to employment agreement dated as of December 4, 1999 (the
"First Amendment"), as further amended a second amendment to employment
agreement dated as of December 4, 2000 (the "Second Amendment" and, together
with the First Amendment and the Original Employment Agreement, the "Employment
Agreement"), which Employment Agreement is superseded in its entirety by this
Agreement.

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

1.   Employment and Signing Bonus. The Company hereby employs Employee and
     Employee hereby accepts employment by the Company subject to all the terms
     and conditions hereafter set forth. Employee, in addition to the
     compensation and
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     other benefits set forth in this Agreement, shall, upon execution of this
     Agreement and as further consideration for this Agreement, be entitled to a
     cash payment of $500,000, which payment shall be due and payable
     immediately upon execution of this Agreement.

2.   Capacity. Employee shall serve as Chairman of the Board and Chief Executive
     Officer and President of each subsidiary (each a "Subsidiary") of the
     Company, whether in existence at the time this Agreement is executed or
     formed thereafter.

3.   Duties. During the Term of this Agreement, Employee shall devote his
     business attention and best efforts to the performance of duties
     customarily performed by the Chairman of the Board and Chief Executive
     Officer of the Company, and, with respect to each Subsidiary, by the Chief
     Executive Officer and President of each such Subsidiary, together with such
     other duties, not inconsistent with duties typically and customarily
     performed by the chairman of the board of directors and chief executive
     officer of comparable companies, as Employee may be requested to perform by
     the Board of Directors, in its sole discretion.

4.   Term of Employment. Unless earlier terminated as hereafter provided, this
     Agreement shall commence on January 31, 2001 and shall expire on January
     30, 2004, provided that upon expiration of such term, this Agreement shall
     be extended until January 30, 2005 (the "First Renewal Term") without
     further action on the part of the parties hereto, unless either party gives
     written notice of termination to the other party at least ninety (90) days
     prior to the expiration of the current term. Upon expiration of the First
     Renewal Term, this agreement shall be extended until January 30, 2006 (the
     "Second Renewal Term") without further action on the part of the parties
     hereto, unless either party gives written notice of termination to the
     other party at least ninety (90) days prior to the expiration of the First
     Renewal Term.

5.   Termination.

     (a)  Death. The employment of Employee under this Agreement shall
          immediately terminate upon the death of Employee and the Company shall
          have no further obligations or liabilities to Employee, except to the
          extent of any


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          employee benefit plans or practices of the Company required by law.

     (b)  Disability. In the event Employee becomes Disabled (as hereafter
          defined), the Company may elect to terminate the employment of
          Employee and make claim on his behalf with respect to an insurance
          policy purchased as provided below in Subsection 6(e). For the
          purposes of this Agreement, Employee shall be "Disabled" if Employee
          is absent from his duties for medical reasons for a period of three
          (3) months.

     (c)  Termination Without Cause. If the Company terminates Employee without
          cause on or before July 30, 2002, Employee shall be entitled to a cash
          payment of $500,000, due and payable within 10 business days of such
          termination. If the employment of the Employee is terminated without
          cause after July 30, 2002 but before January 30, 2004, Employee shall
          be entitled to a cash payment (due and payable within 10 business days
          following his termination of employment) in an amount equal to the
          product determined by multiplying by three (3) the annual cash
          compensation of the Employee at the rate then in effect under
          Subsection 6(a) hereof. If the term of this Agreement is renewed
          pursuant to Section 4 hereof and the employment of Employee is
          terminated without cause after January 30, 2004 but before the
          expiration of either the First Renewal Term or the Second Renewal
          Term, Employee shall be entitled to a cash payment (due and payable
          within 10 business days following his termination of employment) in an
          amount equal to the annual cash compensation of the Employee at the
          rate stipulated in Subsection 6(a)(iii) hereof. Upon the payment to
          Employee of any amount under this Subsection 5(c), the Company shall
          have no further obligations or liabilities to Employee under this
          Agreement. Without limiting the foregoing, in the event of such
          termination and payment, the Company shall have no obligations under
          Section 6 of this Agreement.

     (d)  Voluntary Resignation or Retirement. If Employee voluntarily resigns
          from employment or chooses to retire from active service with the
          Company, the employment of Employee shall terminate on the effective
          date of his resignation or retirement and the Company
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          shall have no further obligations or liabilities to Employee except to
          the extent required by law.

6.   Compensation.

     (a)  Cash Compensation. During the term of this Agreement, as compensation
          for services to the Company, the Company shall pay to Employee a base
          salary, in semi-monthly cash instalments, in the respective amounts as
          follows:

          (i)  for the period beginning January 31, 2001 and ending January 30,
               2002, an annual base salary of $250,000;

          (ii) for the period beginning January 31, 2002 and ending January 30,
               2003, an annual base salary of $275,000; and

          (iii) for the period beginning January 31, 2003 and ending January 30,
               2004, and for the First and Second Renewal Terms, an annual base
               salary of $300,000.

     (b)  Annual Bonus. For each fiscal year of the Company during the term of
          this Agreement, Employee shall be entitled, in the sole discretion of
          the Board of Directors, to receive an annual bonus in an amount not to
          exceed 75% of Employee's base salary, at the rate then in effect. The
          Board of Directors shall also have the discretion to direct the
          Company to grant Employee the right to purchase shares in the common
          stock of the Company, the price and number of which shall be
          determined by the Board of Directors in its sole discretion at the
          time such direction is made.

     (c)  Additional Incentive Bonus. Employee shall be entitled to a cash
          payment in the amount of $500,000 upon the achievement (evidenced by
          duly executed documentation) by Employee of a Successful Restructuring
          on or before September 30, 2001. For the purposes of this Agreement,
          "Successful Restructuring" means: (i) the achievement by Employee of
          discounts or reductions negotiated with the lenders and landlords of
          the Company: and/or, (ii) the raising by Employee of equity capital in
          the Company; provided such discounts,
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          reductions and/or equity capital are sufficient, in the aggregate, to
          enable the Company to meet all of its obligations and liabilities
          throughout the twenty four (24) month period commencing from the date
          of this Agreement. For greater certainty, the parties agree that the
          Company shall have no obligations to make any payment under this
          Section 6(c) if a Successful Restructuring is not achieved by Employee
          on or before September 30, 2001.

     (d)  Vacation and Benefits. Employee shall receive six (6) weeks per year,
          such vacation to be taken when and as desired by Employee. Any time
          spent by Employee at professional meetings, instructional classes and
          other similar meetings so as to better enable Employee to perform
          professional services in the employ of the Company shall not be
          considered vacation time. Employee shall participate in any and all
          employment benefit and fringe plans of the Company to the extent under
          the same terms and conditions applicable to employees of the Company
          generally.

     (e)  Disability Payments. Company shall purchase and pay for a disability
          insurance policy paying disability benefits, in a monetary amount not
          less than 80% of his base pay at the rate then in effect, to the
          Employee commencing on the date he becomes Disabled (as defined in
          Subsection 5(b)) and continuing until the earliest of his attaining
          age 65, his becoming able to return to gainful employment in any
          occupation reasonably consistent with his education, training and
          experience or his death. Such policy may exclude disablement resulting
          from automobile racing or similar activities.

7.   Assignment. This Agreement shall not be assignable by Employee; and shall
     be assignable by the Company only to a person, firm, corporation or other
     entity which may become a successor in interest (by purchase, merger or
     otherwise) to the Company, with respect to the business or portion of the
     business presently operated by it. The Company shall require any such
     successor to assume an expressly agree to perform this Agreement in the
     same manner and to the same extent that the Company would be required to
     perform if no such succession had taken place.

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8.   Entire Agreement. This writing represents the entire agreement and
     understanding of the parties with respect to the subject matter hereof, and
     it may not be altered or amended except by agreement in writing.

9.   Binding Effect/Severability. Subject to Section 7, this Agreement shall be
     binding upon and inure to the benefit of the parties hereto and their
     respective successors, assigns, heirs, executors and administrators. This
     Agreement is personal in nature and neither of the parties hereto shall,
     without the consent of the other, assign or transfer this Agreement or any
     rights or obligations hereunder, except as provided in Section 7. Without
     limiting the foregoing, Employee's right to receive payments hereunder
     shall not be assignable or transferable, whether by pledge, creation of a
     security interest or otherwise, other than transfer by his will or by the
     laws of descent or distribution, and in the event of any attempted
     assignment or transfer contrary to this Section 9, the Company shall have
     no liability to pay any amount so attempted to be assigned or transferred.
     If any provision of this Agreement shall be or become illegal or
     unenforceable in whole or in part for any reason whatsoever, the remaining
     provisions shall nevertheless be deemed valid, binding and enforceable to
     the fullest extent permitted by law.

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

11.  Counterparts. This Amendment may be executed by the parties in two or more
     counterparts, each of which shall be deemed to be an original, but all such
     counterparts shall constitute one and same instrument.

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

                                        EMPLOYEE:
                                              /s/Brad E. Hollinger
                                              Brad Hollinger

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                                        BALANCED CARE CORPORATION
                                        By:   /s/David Goldsmith
                                              David Goldsmith
                                              Board of Directors Member,
                                              Compensation Committee