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Exhibit 10.132

          GUARANTY OF MASTER LEASE AND SECURITY AGREEMENT (CUMBERLAND)
                   AND LETTER OF CREDIT AGREEMENT (CUMBERLAND)


         THIS GUARANTY OF MASTER LEASE AND SECURITY AGREEMENT (CUMBERLAND) AND
LETTER OF CREDIT AGREEMENT (CUMBERLAND) (this "Guaranty") is executed as of July
1, 2000 by BALANCED CARE CORPORATION, a Delaware corporation, and those entities
listed as Guarantors on Schedule 1 hereto, which by this reference is
incorporated herein (collectively, "Guarantor"), in favor of NATIONWIDE HEALTH
PROPERTIES, INC., a Maryland corporation ("Landlord").

                                 R E C I T A L S

         A. Landlord and those entities listed as Tenants on Schedule 1
(collectively, "Tenant"), have entered into that certain Master Lease and
Security Agreement (Cumberland) of even date herewith (the "Lease") whereby
Landlord has agreed to lease to Tenant the Premises, as more specifically set
forth in the Lease. All capitalized terms used herein and not otherwise defined
herein shall have the meaning ascribed to such terms in the Lease.

         B. Landlord and Tenant have entered into, or shortly after the date
hereof will enter into, that certain Letter of Credit Agreement (Cumberland)
(the "Letter of Credit Agreement"), whereby Tenant shall post and maintain with
Landlord a letter of credit as partial security for Tenant's obligations under
the Lease, as more particularly set forth therein.

         C. It is a condition to Landlord's obligations under the Lease that the
Guarantor execute and deliver to Landlord this Guaranty.

                               A G R E E M E N T S

         NOW, THEREFORE, in consideration of Landlord entering into the Lease
with Tenant, and other good and valuable consideration the receipt and
sufficiency of which are hereby acknowledged, Guarantor agrees as follows:

         1. Guaranty.
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         Guarantor hereby absolutely and unconditionally guarantees to Landlord
the following (collectively, the "Guaranteed Obligations"):

                  (a) payment in full by Tenant of all rent (including, without
         limitation, Minimum Rent and Additional Rent) and other amounts due
         under the Lease in the manner and at the time prescribed in the Lease;

                  (b) the full, complete and timely performance by Tenant of all
         covenants, indemnities and other obligations under the Lease including,
         without limitation, any indemnity or other obligations of Tenant which
         survives the expiration or earlier termination of the Lease;

                  (c) the full, complete and timely performance by Tenant of all
         covenants, agreements and other obligations under the Letter of Credit
         Agreement;

                  (d) the accuracy and truthfulness in all material respects of
         all of the representations and warranties made by Tenant under the
         Lease and under the Letter of Credit Agreement; and

                  (e) all costs of collection or enforcement incurred by
         Landlord in exercising any remedies provided for in the Lease or the
         Letter of Credit Agreement at law or in equity with respect to the
         matters set forth in clauses (a) through (d) inclusive, above,
         including, without limitation, legal fees.

         2. Performance by Guarantor.

         If any Minimum Rent, Additional Rent or other amount due under the
Lease shall not be paid, or any obligation not performed as required by the
Lease or the Letter of Credit Agreement, then upon demand by Landlord, Guarantor
shall pay within ten (10) days of demand by Landlord such sums and perform such
obligations as required by the Lease or the Letter of Credit Agreement, as
applicable, without regard to:

                  (a) any defense, set-off, or counterclaim which Guarantor or
         Tenant (whether under the Lease or Letter of Credit Agreement) may have
         or assert;

                  (b) whether or not Landlord shall have instituted any suit,
         action or proceeding or exhausted its remedies or taken any steps to
         enforce any rights against


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         Tenant (whether under the Lease or Letter of Credit Agreement) or any
         other person to collect all or any part of such sums, either pursuant
         to the provisions of the Lease, the Letter of Credit Agreement or at
         law or in equity (it being understood that this is a guaranty of
         payment and not collection, and Guarantor's liability for such payment
         shall be primary); or

                  (c) any other condition or contingency.

         Guarantor waives any right of exoneration and any right to require
Landlord to make an election of remedies. Guarantor covenants and agrees that it
shall not cause any default under the Lease or the Letter of Credit Agreement.

         3. Guarantor's Representations and Warranties.

         Guarantor hereby represents and warrants unto Landlord that:

                  (a) This Guaranty constitutes a legal, valid, and binding
         obligation of Guarantor and is fully enforceable against Guarantor in
         accordance with its terms;

                  (b) One hundred percent (100%) of the equity interests of
         Tenant are owned beneficially and of record by Manager, and all of the
         issued and outstanding capital stock of Manager is owned beneficially
         and of record by BCC;

                  (c) Each entity comprising Guarantor is a corporation duly
         organized, validly existing and in good standing under the laws of the
         State of Delaware and is duly authorized and qualified to do all things
         required of it under this Guaranty; and

                  (d) This Guaranty is duly authorized, executed and delivered
         by and binding upon each entity comprising Guarantor.

         Any material breach by Guarantor of the representations and warranties
set forth herein shall be a default under this Guaranty.

         4. Waiver.

         Guarantor hereby knowingly, voluntarily and unequivocally waives:

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                  (a) all notice of acceptance hereof, protest, demand and
         dishonor, presentment and demands of any kind now or hereafter provided
         for by any statute or rule of law;

                  (b) any and all requirements that Landlord institute any
         action or proceeding, or exhaust any or all of Landlord's rights,
         remedies or recourses, against Tenant (whether under the Lease or
         Letter of Credit Agreement) or anyone else or any collateral as a
         condition precedent to bringing an action against Guarantor under this
         Guaranty, it being expressly agreed that the liability of Guarantor
         hereunder shall be primary and not secondary;

                  (c) any defense arising by reason of any disability,
         insolvency, bankruptcy, lack of authority or power, death, insanity,
         minority, dissolution or any other defense of Tenant, its successors
         and assigns, Guarantor or, if applicable, any other guarantor of the
         Guaranteed Obligations (even though rendering same void, unenforceable
         or otherwise uncollectible), it being agreed that Guarantor shall
         remain liable hereon regardless of whether Tenant or any other such
         person be found not liable thereon for any reason;

                  (d) the benefits of:

                           (1) all statutes of limitations as a defense to any
                  action or proceeding brought against Guarantor by Landlord, to
                  the fullest extent permitted by law;

                           (2) any defense based on any claim that Guarantor's
                  obligations exceed or are more burdensome than those of Tenant
                  (whether under the Lease or Letter of Credit Agreement);

                           (3) any defense based on or arising out of any
                  defense that Tenant may have (whether under the Lease or
                  Letter of Credit Agreement) to the payment or performance of
                  the Guaranteed Obligations or any part of them; and

                           (4) the benefits of any and all express or implied
                  waivers that may otherwise be available to or claimed by
                  Guarantor under the laws of the State of California or any
                  Situs State;

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                  (e) any claim Guarantor might otherwise have against Landlord
         by virtue of Landlord's invocation of any right, remedy or recourse
         permitted it hereunder, under the Letter of Credit Agreement or under
         the Lease or otherwise available at law or equity;

                  (f) any failure, omission, delay or lack on the part of
         Landlord or Tenant (whether under the Lease or Letter of Credit
         Agreement) to enforce, assert or exercise any right, power or remedy
         conferred on Landlord or Tenant in the Lease, the Letter of Credit
         Agreement or this Guaranty or any action on the part of Landlord
         granting a waiver, indulgence or extension to Tenant or any Guarantor;

                  (g) the voluntary or involuntary liquidation, dissolution,
         sale or other disposition of all or substantially all the assets of
         Tenant or any Affiliate, marshalling of assets or liabilities,
         receiverships, insolvency, bankruptcy, assignment for the benefit of
         creditors, reorganization, arrangement, composition or readjustment of,
         or other similar proceeding affecting Tenant or any Affiliate or any of
         their respective assets, or the disaffirmance of all or any part of the
         Lease or the Letter of Credit Agreement in any such proceeding;

                  (h) any release or other reduction of the Guaranteed
         Obligations arising as a result of the expansion, release, substitution
         or replacement (whether or not in accordance with terms of the Lease)
         of the Premises or any portion thereof;

                  (i) any release or other reduction of the Guaranteed
         Obligations arising as a result of the release, substitution or
         replacement (whether or not in accordance with the terms of the Letter
         of Credit Agreement) of any letter of credit issued and outstanding
         pursuant to the Letter of Credit Agreement.

         This Guaranty shall apply notwithstanding any extension or renewal of
the Lease, or any holdover following the expiration or termination of the Term
or any renewal or extension of the Term.

         5. Financial Statements and Legal Proceedings.

         The financial statements heretofore given to Landlord by or on behalf
of Guarantor (pursuant to this Guaranty, the Lease or otherwise):

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                  (a) have been prepared in accordance with generally accepted
         accounting principles consistently applied throughout the periods
         covered thereby;

                  (b) are true and correct in all material respects;

                  (c) present fairly the results of operations of the parties
         described therein for the respective periods covered thereby; and

                  (d) reflect accurately, in all material respects, the books
         and records of account of the parties described therein as of such
         dates and for such periods.

         Subject to the foregoing, Guarantor hereby warrants and represents unto
Landlord that any and all balance sheets and other financial statements and data
which have heretofore been given to Landlord with respect to Guarantor fairly
and accurately present the financial condition of Guarantor.

         6. Subsequent Acts.

         Without notice to, consideration to, or the consent of, Guarantor:

                  (a) the Lease, and Tenant's rights thereunder, may be
         modified, amended, renewed, assigned or sublet;

                  (b) the Letter of Credit Agreement, and Tenant's rights and
         obligations thereunder, may be modified, amended, renewed or assigned;

                  (c) any additional parties who are or may become liable for
         the Guaranteed Obligations may hereafter be released from their
         liability hereunder and thereon; and/or

                  (d) Landlord may take, or delay in taking or refuse to take,
         any and all action with reference to the Lease or the Letter of Credit
         Agreement (regardless of whether same might vary the risk or alter the
         rights, remedies or recourses of any Guarantor), including specifically
         the settlement or compromise of any amount allegedly due thereunder.

         No such acts shall in any way release, diminish, or affect the absolute
nature of Guarantor's obligations and liabilities hereunder. Guarantor's
obligations and liabilities


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under this Agreement are primary, absolute and unconditional under any and all
circumstances and until the Guaranteed Obligations are fully and finally
satisfied, such obligations and liabilities shall not be discharged or released,
in whole or in part, by any act or occurrence which might, but for this Section
6, be deemed a legal or equitable discharge or release of a Guarantor.

         7. Successors and Assigns.

         This Guaranty may be enforced as to any one or more breaches either
separately or cumulatively, shall inure to the benefit of Landlord (and its
successors and assigns) and shall be binding upon Guarantor (and its successors
and assigns). All references herein to "Landlord" shall mean the above-named
Landlord and any subsequent owner of Landlord's interest in the Lease or
assignee of Landlord's rights under the Letter of Credit Agreement. No transfer
by any Guarantor of its obligations hereunder shall operate to release any
Guarantor from such obligations.

         8. Remedies Cumulative.

         All rights, remedies and recourses afforded to Landlord by reason of
this Guaranty, or otherwise, are separate and cumulative and may be pursued
separately, successively or concurrently, as occasion therefor shall arise and
are non-exclusive and shall in no way limit or prejudice any other legal or
equitable right, remedy or recourse which Landlord may have.

         9. Subordination; Limitation on Rights of Subrogation.

         If for any reason whatsoever Tenant now or hereafter becomes indebted
to Guarantor or any Affiliate of Guarantor (including, without limitation, under
the Management Agreement), such indebtedness and all interest thereon shall at
all times be subordinate in all respects to the Guaranteed Obligations. Until
the Guaranteed Obligations shall have been paid in full, each Guarantor shall
withhold exercise of (a) any claim, right or remedy, direct or indirect, that
such Guarantor now has or may hereafter have against Tenant or any of its assets
in connection with this Guaranty or the performance by such Guarantor of its
obligations hereunder, in each case whether such claim, right or remedy arises
in equity, under contract, by statute, under common law or otherwise and
including without limitation any right of subrogation, reimbursement or
indemnification that such Guarantor now has or may hereafter


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have against Tenant, and (b) any right of contribution such Guarantor may have
against any other guarantor (including any other Guarantor) of any of the
Guaranteed Obligations (including without limitation any such right of
contribution under Section 15(b)). Each Guarantor further agrees that, to the
extent the agreement to withhold the exercise of its rights of subrogation,
reimbursement, indemnification and contribution as set forth in this Section 9
is found by a court of competent jurisdiction to be void or voidable for any
reason, any rights of subrogation, reimbursement or indemnification such
Guarantor may have against Tenant, and any rights of contribution such Guarantor
may have against any such other guarantor, shall be junior and subordinate to
any rights Landlord may have against Tenant and to any right Landlord may have
against such other guarantor. If any amount shall be paid to any Guarantor on
account of any such subrogation, reimbursement or indemnification rights at any
time when all Guaranteed Obligations shall not have been paid in full, such
amount shall be held in trust for Landlord and shall forthwith be paid over to
Landlord to be credited and applied against the Guaranteed Obligations.

         10. Governing Law.

         This Guaranty and all rights and duties of Guarantor and Landlord
arising from this Guaranty shall be governed by, construed and enforced in
accordance with the laws of the State of California, without regard to the
conflict of law rules of such State, except to the extent as may be provided
expressly to the contrary in the Lease.

         11. Severability.

         If any provision of this Guaranty or the application thereof to any
person or circumstance shall, for any reason and to any extent, be invalid or
unenforceable, neither the remainder of this Guaranty nor the application of
such provision to any other persons or circumstances shall be affected thereby,
but rather the same shall be enforced to the greatest extent permitted by law.

         12. Attorneys' Fees.

         If Landlord or Guarantor brings any action to interpret or enforce this
Guaranty, or for damages for any alleged breach thereof, the prevailing party in
any such action shall be entitled to reasonable attorneys' fees and costs as
awarded by the court in addition to all other recovery, damages and costs.

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         13. Confirmation.

         At any time, and at the request of Landlord, Guarantor shall execute
and deliver to Landlord a certificate ratifying and confirming all of
Guarantor's obligations and liabilities under this Guaranty.

         14. Benefit to Guarantor.

         Guarantor acknowledges that it will derive substantial benefit and
value from the execution and continued existence of the Lease, and Guarantor
further acknowledges that Landlord will be relying upon Guarantor's guarantee,
representations, warranties and covenants contained herein.

         15. Limitation on Amount Guaranteed; Contribution by Guarantors.

         (a) Anything contained in this Guaranty to the contrary
notwithstanding, if any Fraudulent Transfer Law (as hereinafter defined) is
determined by a court of competent jurisdiction to be applicable to the
obligations of any Guarantor under this Guaranty, such obligations of such
Guarantor hereunder shall be limited to a maximum aggregate amount equal to the
largest amount that would not render its obligations hereunder subject to
avoidance as a fraudulent transfer or conveyance under Section 548 of Title 11
of the United States Code or any applicable provisions of comparable state law
(collectively, the "Fraudulent Transfer Laws"), in each case after giving effect
to all other liabilities of such Guarantor, contingent or otherwise, that are
relevant under the Fraudulent Transfer Laws (specifically excluding, however,
any liabilities of such Guarantor (x) in respect of intercompany indebtedness to
Tenant or any Affiliates to the extent that such indebtedness would be
discharged in an amount equal to the amount paid by such Guarantor hereunder and
(y) under any guaranty of other indebtedness or obligations which guaranty
contains a limitation as to maximum amount similar to that set forth in this
Section 15(a), pursuant to which the liability of such Guarantor hereunder is
included in the liabilities taken into account in determining such maximum
amount) and after giving effect as assets to the value (as determined under the
applicable provisions of the Fraudulent Transfer Laws) of any rights to
subrogation, reimbursement, indemnification or contribution of such Guarantor
pursuant to applicable law or pursuant to the terms of any agreement (including
any such right of contribution under Section 15(b)).

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         (b) Guarantors under this Guaranty together desire to allocate among
themselves (collectively, the "Contributing Guarantors"), in a fair and
equitable manner, their obligations arising under this Guaranty. Accordingly, in
the event any payment or distribution is made on any date by any Guarantor under
this Guaranty (a "Funding Guarantor") that exceeds its Fair Share (as defined
below) as of such date, that Funding Guarantor shall be entitled to a
contribution from each of the other Contributing Guarantors in the amount of
such other Contributing Guarantor's Fair Share Shortfall (as defined below) as
of such date, with the result that all such contributions will cause each
Contributing Guarantor's Aggregate Payments (as defined below) to equal its Fair
Share as of such date. "Fair Share" means, with respect to a Contributing
Guarantor as of any date of determination, an amount equal to (i) the ratio of
(x) the Adjusted Maximum Amount (as defined below) with respect to such
Contributing Guarantor to (y) the aggregate of the Adjusted Maximum Amounts with
respect to all Contributing Guarantors multiplied by (ii) the aggregate amount
paid or distributed on or before such date by all Funding Guarantors under this
Guaranty in respect of the obligations guaranteed. "Fair Share Shortfall" means,
with respect to a Contributing Guarantor as of any date of determination, the
excess, if any, of the Fair Share of such Contributing Guarantor over the
Aggregate Payments of such Contributing Guarantor. "Adjusted Maximum Amount"
means, with respect to a Contributing Guarantor as of any date of determination,
the maximum aggregate amount of the obligations of such Contributing Guarantor
under this Guaranty determined as of such date, in the case of any Guarantor, in
accordance with Section 15(a); provided that, solely for purposes of calculating
the Adjusted Maximum Amount with respect to any Contributing Guarantor for
purposes of this Section 15(b), any assets or liabilities of such Contributing
Guarantor arising by virtue of any rights to subrogation, reimbursement or
indemnification or any rights to or obligations of contribution hereunder shall
not be considered as assets or liabilities of such Contributing Guarantor.
"Aggregate Payments" means, with respect to a Contributing Guarantor as of any
date of determination, an amount equal to (i) the aggregate amount of all
payments and distributions made on or before such date by such Contributing
Guarantor in respect of this Guaranty (including in respect of this Section
15(b)) minus (ii) the aggregate amount of all payments received on or before
such date by such Contributing Guarantor from the other Contributing Guarantors
as contributions under this Section 15(b). The amounts payable as contributions
hereunder shall be determined as of the date on which the related payment or
distribution is made by the


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applicable Funding Guarantor. The allocation among Contributing Guarantors of
their obligations as set forth in this Section 15(b) shall not be construed in
any way to limit the liability of any Contributing Guarantor hereunder.

         16. Counterparts.

         This Guaranty may be executed in multiple counterparts, each of which
shall be an original, but all of which shall constitute but one instrument. The
signature page of any counterpart may be detached therefrom and reattached to
any other counterpart to physically form a single document.

         17. Notices.

         All notices, requests and demands to be made hereunder to the parties
hereto shall be made in writing to the addresses set forth below and shall be
given by any of the following means: (a) personal service; (b) electronic
communication, whether by telex, telegram or telecopying; (c) certified or
registered mail, postage prepaid, return receipt requested; or (d) nationally
recognized courier or delivery service. Such addresses may be changed by notice
to the other parties given in the same manner as provided above. Any notice,
demand or request sent pursuant to either subsection (a), (b) or (d) hereof
shall be deemed received upon the actual delivery thereof, and, if sent pursuant
to subsection (c) shall be deemed received five (5) days following deposit in
the mail. Refusal to accept delivery of any notice, request or demand shall be
deemed to be delivery thereof. If Guarantor is not an individual, notice may be
made on any officer, general partner or principal thereof. Notice to any one
co-Guarantor shall be deemed notice to all co-Guarantors. In the event Landlord
notifies Guarantor of the name and address of Landlord's lender, Guarantor shall
cause a copy of all notices delivered to Landlord by Guarantor to be
concurrently therewith delivered to such lender.

If to Guarantor:           c/o Balanced Care Corporation
                           1215 Manor Drive
                           Mechanicsburg, Pennsylvania 17055
                           Attention: Robin Barber, General Counsel
                           Facsimile No.: (717) 796-6294

with a copy to:            Kirkpatrick & Lockhart, LLP
                           Henry W. Oliver Building
                           535 Smithfield Street


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                           Pittsburgh, Pennsylvania 15222
                           Attention: Steven Adelkoff
                           Facsimile:  (412) 355-6501

If to Landlord:            Nationwide Health Properties, Inc.
                           610 Newport Center Drive, Suite 1150
                           Newport Beach, California  92660
                           Attention:  Gary E. Stark, General Counsel
                           Facsimile No.: (949) 759-6876

with a copy to:            O'Melveny & Myers LLP
                           610 Newport Center Drive, Suite 1700
                           Newport Beach, California  92660
                           Attention: Steven L. Edwards
                           Facsimile No.: (949) 823-6994

         18. Incorporation of Recitals. The Recitals set forth above are hereby
incorporated by this reference and made a part of this Guaranty. Guarantor
hereby represents and warrants that the Recitals are true and correct.

         19. Preservation of Gross Revenues.

                  (a) Guarantor acknowledges that a fair return to Landlord on
         its investment in the Premises is dependent, in part, on the
         concentration on the Premises during the Term of the ALF business of
         Tenant and its Affiliates in the geographical areas in which the
         Facilities located. Guarantor further acknowledges that the diversion
         of patient care activities from the Facilities to other facilities
         owned or operated by Guarantor or Tenant or their respective Affiliates
         at or near the end of the Term will have a material adverse impact on
         the value and utility of the Premises. Therefore, Guarantor agrees that
         during the Term, and for a period of one (1) year thereafter, neither
         Tenant nor Guarantor nor any Affiliate of Tenant or Guarantor shall,
         without the prior written consent of Landlord, operate, own,
         participate in or otherwise receive revenues from any other facility or
         institution providing services or similar goods to those provided on or
         in connection with the Premises and the permitted use thereof as
         contemplated under the Lease, within a five (5) mile radius of each of
         the Facilities; provided, however, that the provisions of this Section
         19(a) shall not apply to the operation or ownership of any licensed
         skilled nursing facility or licensed acute care hospital facility.

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                  (b) In addition, Guarantor hereby covenants and agrees that
         for a period of one (1) year following the expiration or earlier
         termination of the Lease, neither Tenant nor Guarantor nor any
         Affiliate of Tenant or Guarantor shall, without prior written consent
         of Landlord, hire, engage or otherwise employ any management or
         supervisory personnel working on or in connection with any of the
         Facilities and not also working at any other facility owned or operated
         by Tenant or Guarantor or any Affiliate of Tenant or Guarantor.

                  (c) Except as required for medically appropriate reasons,
         prior to and for a period of one (1) year after Lease termination,
         neither Tenant nor Guarantor will recommend or solicit the removal or
         transfer of any patient from any Facility to any other nursing or
         healthcare facility, or to any senior housing or retirement housing
         facility; provided, however, that the provisions of this Section 19(c)
         shall not apply to the operation or ownership of any licensed skilled
         nursing facility or licensed acute care hospital facility.

                  (d) The terms of this Section 19 shall survive the termination
         or expiration of the Lease.

                  (e) Guarantor hereby specifically acknowledges and agrees that
         the temporal, geographical and other restrictions contained in this
         Section 19 are reasonable and necessary to protect the business and
         prospects of Landlord, and that the enforcement of the provisions of
         this Section 19 will not work an undue hardship on Guarantor or Tenant.
         Guarantor further agrees that in the event either the length of time,
         geographical or any other restrictions, or portion thereof, set forth
         in this Section 19 is overly restrictive and unenforceable in any court
         proceeding, the court may reduce or modify such restrictions, but only
         to the extent necessary, to those which it deems reasonable and
         enforceable under the circumstances, and the parties agree that the
         restrictions of this Section 19 will remain in full force and effect as
         reduced or modified. Guarantor further agrees and acknowledges that
         Landlord does not have an adequate remedy at law for the breach or
         threatened breach by Guarantor or Tenant of the covenants contained in
         this Section 19, and Guarantor therefore specifically agrees that
         Landlord may, in addition to other remedies which may be available to
         Landlord hereunder, file a suit in equity to enjoin Guarantor or Tenant
         from such breach or threatened breach,

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         without the necessity of posting any bond. Guarantor further agrees, in
         the event that any provisions of this Section 19 is held to be invalid
         or against public policy, the remaining provisions of this Section 19
         and the remainder of this Guaranty and the Lease shall not be affected
         thereby.

         20. License. Guarantor acknowledges and agrees that:

                  (a) the ALF licenses and all other licenses and certifications
         on or affecting the Facilities must be in the name of Tenant or
         Guarantor, one of their respective Affiliates, or another operator (the
         "Operator") approved in writing by Landlord whose consent may not be
         unreasonably withheld;

                  (b) neither Tenant, or Guarantor nor any other Operator may
         sell, transfer, assign, encumber, sublet, permit to lapse, expire,
         become suspended, or terminate any such licenses or certifications,
         operating rights associated with the Facilities and certification
         without the prior written consent of Landlord which may be not
         unreasonably withheld, except for transfers between Tenant, or
         Guarantor or their respective Affiliates (of which Landlord must
         receive written notice prior to such transfer);

                  (c) all such licenses are an integral part of each Facility
         and must remain at the applicable Facility unless approved in writing
         by Landlord, which approval may be unreasonably withheld (and agrees to
         so direct any other Operator);

                  (d) Tenant, Guarantor, or such Operator must provide
         photocopies of all such certifications and licenses, and any and all
         notices and reports requested by Landlord, within five days of receipt
         of such request.

         21. Attempted Assignment of License. If (i) Tenant commits a default
under the Lease which remains uncured, (ii) Tenant, Guarantor or other Operator
attempt to transfer the Facility license or certification during the term of the
Lease without the prior written consent of Landlord (except for transfers
between Tenant or Guarantor, or their respective Affiliates, of which Landlord
has received written notice) (iii) at the end of the term of the Lease or any
lease termination, Tenant does not renew this Lease and the Premises are not
acquired by Guarantor or an Affiliate of Guarantor


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pursuant to the option to purchase the Premises set forth in Section 44 of the
Lease, or (iv) any governmental agency or department terminates or fails to
renew any ALF or other license and certification, then, in any such event,
Guarantor irrevocably appoints Landlord as its true and lawful ATTORNEY-IN-FACT
for the sole purpose of transferring such licenses and certifications to
Landlord. Guarantor hereby authorizes Landlord to execute on its behalf all
documents necessary for the outright transfer of such licenses and
certifications hereunder to Landlord and such documents may be process by
Landlord with the appropriate department of the applicable State government
without hindrance or delay on the part of Tenant, Manager, or Guarantor. This
power of attorney shall be irrevocable and uncontestable by Guarantor and
implement the intention of the Parties, protect against transfers of Tenant
Personal Property, licenses, certifications, and Intangible Property by and
between Guarantor and Tenant, and for the purpose of securing and guaranteeing
the payment and performance of Tenant's obligations under the Lease, Guarantor,
as debtor, hereby grants to Landlord, as secured party, a secured interest in
and an express contractual lien upon, all of Guarantor's right, title and
interest in and to the Tenant Personal Property and in and to the Intangible
Property and any and all products and proceeds thereof (including all licenses,
certifications, and permits, to the extent legally transferable), in which
Guarantor now owns or hereafter acquires an interest or right, including any
leased Tenant Personal Property, all as otherwise provided under the Lease with
respect to the Tenant and to the same extent as if Guarantor had signed the
Lease as Tenant. This Guaranty constitutes a security agreement covering all
such Tenant Personal Property, certifications, licenses, permits, and Intangible
Property.

         22. Management Agreement. BCC acknowledges that BCC is the sole
shareholder of Manager. As the sole shareholder of Manager, BCC agrees and shall
cause the Manager to agree, that in the case of an Event of Default under the
Lease (after applicable cure periods): (i) Landlord shall have the right to
terminate the Management Agreement and the Manager's rights to manage the
Facility, (ii) Landlord shall have the right to require Manager to cooperate and
assist in all reasonable ways during any transition of management of the
Facility after such termination, (iii) during any such interim management,
Landlord shall have the right to approve or veto all operational budgets and
(iv) during such period, Manager shall otherwise take such actions or refrain
from taking such actions as Landlord may reasonably request.

                                       15
<PAGE>   16
         23. Joint and Several Obligations. Except to the extent expressly
provided to the contrary herein, the liability and obligations of each entity
comprising Guarantor under this Guaranty shall be joint and several including,
without limitation, the provisions of Section 19.

                         [Signatures Begin on Next Page]

                                       16
<PAGE>   17
                 EXECUTED as of the date first set forth above.


                                   "GUARANTOR"

                                   BALANCED CARE CORPORATION,
                                   a Delaware corporation


                                   By:
                                   Name:    Robin L. Barber
                                   Title:   Senior Vice President, Legal Counsel
                                            and Assistant Secretary

                                   BALANCED CARE AT HAGERSTOWN, INC.,
                                   a Delaware corporation


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

                                   BALANCED CARE AT JOHNSON CITY, INC.,
                                   a Delaware corporation


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

                                   BALANCED CARE AT BRISTOL, INC.,
                                   a Delaware corporation


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

                                      S-1
<PAGE>   18
                                   BALANCED CARE AT MURFREESBORO,
                                   INC., a Delaware corporation


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

                                   BALANCED CARE AT TEAY'S VALLEY, INC.,
                                   a Delaware corporation


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

                                      S-2
<PAGE>   19
                                   SCHEDULE 1

                       Guarantors and Tenants (Cumberland)

Guarantors:

1.       Balanced Care Corporation, a Delaware corporation

2.       Balanced Care at Hagerstown, Inc., a Delaware corporation

3.       Balanced Care at Bristol, Inc., a Delaware corporation

4.       Balanced Care at Johnson City, Inc., a Delaware corporation

5.       Balanced Care at Murfreesboro, Inc., a Delaware corporation

6.       Balanced Care at Teay's Valley, Inc., a Delaware corporation



Tenants:

1.       C&G Healthcare at Hagerstown, L.L.C., a Delaware limited liability
company

2.       Elder Care Operators of Bristol, LLC, a Delaware limited liability
company

3.       C&G Healthcare at Johnson City, L.L.C., a Delaware limited liability
company

4.       Elder Care Operators of Murfreesboro, LLC, a Delaware limited liability
company

5.       C&G Healthcare at Teay's Valley, L.L.C., a Delaware limited liability
company

                                   Schedule 1