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                                                                    Exhibit 10.6



                            FORM OF OPTION AGREEMENT


                  THIS OPTION AGREEMENT (THE "AGREEMENT") is made and entered
into as of the 30th day of June, 1998 by and between TC Realty Holding Company,
a Delaware Corporation ("OPTIONOR") and Balanced Care Corporation, a Delaware
corporation, or its successors and assigns ("BCC").

                                   WITNESSETH:

                  WHEREAS, Optionor is the owner of 100 shares (THE "EQUITY
INTERESTS") of _______________________________, a Delaware corporation (THE
"COMPANY"), which Equity Interests are evidenced by stock certificate number 1
of the Company, and represent 100% of the equity ownership in the Company; and

                  WHEREAS, the Company is the Lessee under that certain Facility
Lease Agreement dated as of the date hereof (THE "LEASE") between MEDITRUST
COMPANY LLC, a Delaware limited liability company (THE "LESSOR") and the Company
for property located in _____________________________, as more fully described
in the Lease (THE "PROPERTY"); and

                  WHEREAS, the Company has entered into that certain Management
Agreement dated as of the date hereof (THE "MANAGEMENT AGREEMENT") with ________
__________________________, a Delaware Corporation (THE "MANAGER") whereby the
Manager shall operate for the benefit of the Company an adult care residence on
the Property (THE "PROJECT"); and

                  WHEREAS, the Optionor, the Lessor and the Company have entered
into that certain Stock Pledge Agreement dated as of the date hereof (the "STOCK
PLEDGE AGREEMENT"), whereby Optionor has pledged to the Lessor a first lien
security interest in the Equity Interests; and, if and when the Equity Interests
are purchased from Optionor pursuant to this Agreement, such purchaser shall
expressly assume all obligations of Optionor under the Stock Pledge Agreement;
and

                  WHEREAS, the Company, the Lessor, the Optionor and BCC have
entered into that certain Working Capital Assurance Agreement dated as of the
date hereof (THE "WORKING CAPITAL AGREEMENT") whereby, among other matters, BCC
has agreed to fund certain Shortfalls (as defined in the Working Capital
Agreement) by making loans to the Company, as more fully described in the
Working Capital Agreement; and

                  WHEREAS, BCC and the Company have entered into a Shortfall
Funding Agreement dated as of the date hereof (THE "SHORTFALL AGREEMENT")
whereby, among other matters, BCC has agreed to fund certain Shortfalls by
making loans to the Company, as more fully provided in the Shortfall Agreement;
and

                  WHEREAS, BCC, the Lessor and the Company have entered into
that certain Subordination and Standstill Agreement dated as of the date hereof
(the "SUBORDINATION AGREEMENT") whereby BCC has agreed, on the terms and
conditions provided in the Subordination Agreement, to subordinate certain
interests of BCC to the interests of the Lessor; and

                  WHEREAS, pursuant to the Management Agreement, Notes (as
defined in the Shortfall Agreement) and Shortfall Agreement, in no event shall
the directors or officers of the 


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Lessee or the shareholders, directors or officers of the Parent ever be
personally liable to BCC or any affiliate of BCC or any third party for the
payment and/or performance of any obligations or liabilities thereunder.

                  WHEREAS, BCC is willing to enter into the Shortfall Agreement,
and all other Transaction Documents (as defined in the Shortfall Agreement) of
which BCC is a party, only if Optionor executes and delivers an option agreement
whereby BCC or its successors and assigns may acquire all of the Equity
Interests of the Optionor, on the terms and conditions provided herein.

                  NOW, THEREFORE, for valuable consideration, the receipt of
which is hereby acknowledged, and intending to be legally bound, the parties
hereto do hereby agree as follows:

                  1. DEFINED TERMS/INTERPRETATIONS. As used herein, unless the
context otherwise requires: (a) the terms defined herein shall have the meaning
set forth herein for all purposes; (b) references to "Section" are to a section
hereof; (c) "include", "includes" and "including" are deemed to be followed by
"without limitation" whether or not they are in fact followed by such word or
words of like import; (d) "writing", "written" and comparable terms refer to
printing, typing, lithography and other means of reproducing words in a visible
form; (e) "hereof", "herein", "hereunder" and comparable terms refer to the
entirety of this Agreement and not to any particular section hereof; (f)
references to any gender include references to all genders; (g) references to an
agreement or other instrument or statute or regulation are referred to as
amended and supplemented from time to time and, in the case of a statute or
regulation, any successor provisions thereof; (h) the headings of the various
Sections hereof are for convenience of reference only and shall not modify,
define or limit any of the terms or provisions hereof; and (i) initially
capitalized terms not otherwise defined herein shall have the meanings ascribed
to such terms in the Shortfall Agreement.

                  2 GRANT OF OPTION/CONSIDERATION. (a) Subject to the terms of
the Stock Pledge Agreement and Section 19.4 of the Lease, Optionor hereby grants
to BCC an option (the "OPTION") to purchase all of Optionor's right, title and
interest in and to the Equity Interests on the terms and conditions provided
herein. The Purchase Price (as defined below) for the Equity Interests shall be
paid to Optionor on the Closing Date (as hereinafter defined) in immediately
available funds. The Option shall be exercisable by providing written notice to
Optionor on or before the tenth anniversary after the date of this Agreement
(the "OPTION TERM"); provided, however, in no event shall BCC be entitled to
exercise its Option so long as any amounts are outstanding under that certain
Demand Promissory Note of even date herewith in the original principal amount of
________ made by Bruce A Rendina to the order of Lessor.

                  (b) In consideration of the grant of the Option, BCC shall pay
to Optionor the following sums (the "OPTION PAYMENTS"), as follows: (i) on or
before December 1, 1998, BCC shall pay the sum of $75,000 to Optionor, (ii) on
or before June 1, 1999, BCC shall pay the sum of $25,000 to Optionor and (iii)
on or before June 1, 2000 and on or before June 1 of each successive year
thereafter until the expiration of the Option Term, BCC shall pay to Optionor
the sum of $50,000 per annum. Option Payments shall be made to Optionor without
demand or notice.

                  (c) Until BCC provides written notice of its exercise of the
Option, BCC shall be under no obligation whatsoever to purchase the Equity
Interests or exercise the Option, and shall not otherwise have any liability
whatsoever hereunder in connection with the purchase of the Equity Interests.



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                  (d) The "Purchase Price" as used herein shall mean an amount
equal to (A) the total amount funded into the Working Capital Reserve as
Borrowings (as defined in Section 3(b) below), plus (B) an amount which, when
combined with all Option Payments made under Section 2(b) above, equals
$250,000, plus (C) the outstanding principal balance, together with all accrued
but unpaid interest, with respect to Advances made under the Shortfall
Agreement, together with all other sums then due and owing to BCC or an
affiliate of BCC under the Shortfall Agreement and the other Transaction
Documents (such amounts stated in Subsection (C) being referred to herein as the
"BCC PAY-OFF AMOUNT"). It is the intent of the parties hereto that the Purchase
Price shall include all amounts referred to in (B) of this Section 2(d), all
amounts owing to BCC in connection with the BCC Pay-Off Amount and all amounts
owing in connection with Borrowings.

                  3. CLOSING. (a) Subject to the satisfaction of the conditions
set forth in Section 19.4 of the Lease, the closing of the purchase of the
Equity Interests (the "Closing") shall take place at such time and location in
Pennsylvania as shall be designated by BCC upon three (3) days prior written
notice to Optionor (the "Closing Date"). At the Closing (i) BCC shall deliver
(A) the Purchase Price and (B) an agreement in form and substance reasonably
satisfactory to Optionor and Lessor whereby the purchaser of the Equity
Interests expressly assumes all obligations of Optionor under the Stock Pledge
Agreement and (ii) Optionor shall deliver to BCC (A) the certificate
representing the original Equity Interests, together with such powers and other
instruments as BCC may request, (B) such pay-off letters or other evidence of
the outstanding amounts due the Lessor in connection with Borrowings and (C) the
certificate of an appropriate officer of the Company stating that the transfer
of the Equity Interests to BCC has been recorded on the books and records of the
Company, and affirming to BCC such additional matters as BCC may reasonably
request. Additionally, both BCC and Optionor shall take such further actions and
execute and deliver such further documents and instruments as either party may
reasonably request. At the Closing, BCC and Optionor shall deliver a mutual
release agreement in form and substance acceptable to Optionor and BCC pursuant
to which Optionor and BCC shall release each other from claims under the
Transaction Documents (the "MUTUAL RELEASE"). Provided, however, that such
Mutual Release shall not encompass those claims of BCC relating to (i) liens,
encumbrances and restrictions (except Permitted Liens and the security interest
granted to the Lessor pursuant to the Stock Pledge Agreement) as of the Closing
Date on the Equity Interests and (ii) liabilities, indebtedness or other
encumbrances upon the assets of the Company resulting from the acts or omissions
of Optionor or the Company except as otherwise expressly contemplated in the
Transaction Documents and except as resulting from the acts or omissions of BCC
or a BCC affiliate including, without limitation, the Manager.

                  (b) Notwithstanding anything to the contrary contained herein
or in the other Transaction Documents, if and to the extent that the Working
Capital Reserve is borrowed by the Optionor (such borrowings, together with all
interest, penalties and other costs and fees assessed or incurred in connection
therewith, are referred to herein as the "BORROWINGS"), the Borrowings shall be
repaid in full from the Purchase Price at the Closing. Except as otherwise
provided in Section 4(d), Optionor shall give BCC prior written notice before
making any Borrowings, detailing the amount thereof. BCC shall have the right at
the Closing to pay from the Purchase Price the total amount outstanding with
respect to the Borrowings. Such Borrowings shall be contributed by Optionor to
Lessee as an equity contribution of Optionor to Lessee and in no event shall the
Borrowings be deemed in any manner indebtedness of Lessee to Optionor. Without
limiting the generality of the foregoing, in connection with the exercise of the
Option, BCC and Optionor agree that, at the time the Stock Transfer (as defined
in the Lease) is consummated, any amounts then due under the Note (as defined in
the Lease) shall be paid in accordance with the 


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terms thereof from the Purchase Price.

                  (c) Notwithstanding anything to the contrary contained herein,
in the other Transaction Documents or in the Lease Documents, in addition to the
repayment of Borrowings from the Purchase Price as provided in Section 3(b)
above, the BCC Pay-off Amount shall be paid in full by Optionor to BCC at the
Closing from the Purchase Price.

                  4. COVENANTS OF OPTIONOR/LEGEND. (a) Optionor shall not (i)
sell, assign, convey, pledge, encumber or otherwise transfer (by operation of
law or otherwise) any of Optionor's rights, title or interest under, in or to
the Equity Interests, other than as set forth herein or as expressly provided in
the Transaction Documents, the Lease or the Stock Pledge Agreement in favor of
Lessor, (ii) cause or permit the Company to merge, consolidate, dissolve,
liquidate, change its capital structure, issue new or substitute equity
interests (including the issuance of warrants) or sell all or any portion of the
Company's assets, (iii) cause or permit the Company to otherwise take any action
that with the passage of time and/or the giving of notice would constitute a
default under or a breach of any covenant or provision of the Shortfall
Agreement, the Lease Documents or the other Transaction Documents, or (iv)
challenge or disaffirm the validity or perfection of the lien held by BCC in the
Equity Interests.

                  (b) Optionor shall cause the Company to place the following
legend on all certificates representing Equity Interests:

                  THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO AN
                  OPTION TO PURCHASE IN FAVOR OF BALANCED CARE CORPORATION AND
                  ITS SUCCESSORS AND ASSIGNS, AS MORE FULLY SET FORTH IN THAT
                  CERTAIN OPTION AGREEMENT DATED AS OF JUNE 30, 1998.

                  (c) To secure the obligations of the Optionor hereunder,
Optionor hereby grants and pledges to BCC a security interest in the Equity
Interests, subject to the lien of the Lessor as provided in the Stock Pledge
Agreement. Notwithstanding the foregoing, BCC acknowledges and agrees that BCC
may not exercise any rights or remedies with respect to such lien in the Equity
Interests without the prior written consent of the Lessor, which consent maybe
withheld in the Lessor's sole and absolute discretion. The Lessor may enforce
the provisions of the foregoing sentence as a third party beneficiary.

                  (d) Optionor shall permit the Manager to request Loan Proceeds
from the Lender (as such terms are defined in the Note) in accordance with the
Note to fund operating deficits with respect to the Facility (as defined in the
Lease). Notwithstanding the provisions of Section 3(b), Optionor shall not be
required to provide BCC prior written notice with respect to any requests for
Loan Proceeds made by Manager in accordance with the provisions of this Section
4(d).

                  5.  REPRESENTATIONS AND WARRANTIES. Optionor represents and
warrants to BCC that (i) Optionor is the sole and exclusive owner of the Equity
Interests free and clear of all liens, encumbrances and restrictions (except
Permitted Liens and the security interest granted to the Lessor pursuant to the
Stock Pledge Agreement), and Optionor's ownership interest in the Equity
Interests is appropriately noted and documented on the books and records of the
Company, (ii) all shareholders of the Optionor are accredited investors as that
term is defined in Regulation D promulgated under the 1933 Act, (iii) no other
person or entity holds any equity 


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interests in the Company, (iv) the Equity Interests have been duly issued to
Optionor, are fully paid and nonassessable, (vi) Optionor has the full right and
power to transfer and convey the Equity Interests, enter into this Option
Agreement and sell the Equity Interests to BCC without the need to obtain the
consent or joinder of any party (other than the Lessor), (vi) each shareholder
of Optionor has had the opportunity to ask all questions of BCC, the Company and
any other person or entity necessary or desirable concerning Optionor's
investment in the Equity Interests, (vii) each shareholder of Optionor has the
requisite knowledge and sophistication to make an informed decision regarding
the risks and merits of an investment in the Optionor and the Company, and has
not relied on any oral or written statements of BCC or any party affiliated with
BCC in connection with Optionor's investment in the Company, (viii) each
shareholder of Optionor understands that the Equity Interests will be deemed
restricted securities within the meaning of the 1933 Act (and state securities
laws), the Equity Interests are non-transferable and each shareholder of
Optionor must be able to bear the economic risks of ownership of the Equity
Interests for an indefinite period of time and (ix) the representations and
warranties contained in Article III of the Shortfall Agreement are true and
correct to the best knowledge of Optionor in every material respect. The
provisions of this Section shall survive the Closing and purchase of the Equity
Interests.

                  6.  NO WAIVER. No failure or delay on the part of BCC in
exercising any right, remedy, power or privilege hereunder shall operate as a
waiver thereof or of any other right, remedy, power or privilege of BCC
hereunder or under any other Transaction Document; nor shall any single or
partial exercise of any such right, remedy, power or privilege preclude any
other or further exercise thereof or the exercise of any other right, remedy,
power or privilege.

                  7.  GOVERNING LAW/BINDING EFFECT. This Agreement shall be
deemed to be a contract under the laws of the Commonwealth of Pennsylvania and
for all purposes shall be governed by and construed in accordance with the laws
of said Commonwealth, excepting its rules and laws relating to conflicts of law.
The rights and obligations of the parties hereunder shall be binding upon and
inure to the benefit of the parties hereto and their heirs, personal
representatives, successors and assigns.

                  8.  ASSIGNMENT. Except for the pledge of the Equity Interests
to the Lessor pursuant to the Stock Pledge Agreement, Optionor may not assign,
pledge, hypothecate or otherwise transfer its rights, obligations and duties
hereunder without the prior written consent of BCC. Subject to the terms of the
Working Capital Agreement and the Subordination Agreement, BCC shall have the
right to transfer and assign its rights, obligations and duties hereunder to any
affiliate or third party without the consent of the Optionor.

                  9.  DEFAULT. (a) In the case of default by Optionor hereunder,
BCC shall be entitled, after ten (10) days prior written notice to Optionor, to
(a) seek an action in specific performance and/or (b) seek such other relief,
including without limitation an action at law for damages, as may be available.
Optionor shall pay all reasonable counsel fees of BCC in connection with
enforcing any rights or benefits of BCC hereunder or under the other Transaction
Documents. The rights and remedies of BCC under this Option Agreement are
cumulative and not exclusive of any rights or remedies which it may otherwise
have.

                  (b) In the case of default by BCC hereunder, Optionor shall be
entitled, after ten (10) days prior written notice to BCC, to seek such relief,
including without limitation an action at law for damages, as may be available
to Optionor. Without limiting the foregoing, in the event that BCC fails to pay
any Option Payment to the Optionor within ten (10) days after the date that such
Option Payment is due, BCC agrees, upon behalf of itself and its subsidiaries,
that 



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the Optionor shall have the right, at any time thereafter, to exercise any or
all of the following remedies upon written notice to BCC: (i) to cause the
Company to terminate the Management Agreement and (ii) terminate this Agreement;
all without recourse to the Optionor or the Company. In addition, in the event
of any such termination of this Agreement, to the extent any Advances have been
made under the Shortfall Agreement or any other sums are then due and owing to
BCC or an affiliate of BCC under the Shortfall Agreement and/or any of the other
Transaction Documents, the then outstanding BCC Pay-Off Amount shall be
forgiven. BCC shall pay all reasonable counsel fees of Optionor in connection
with enforcing any rights or benefits of Optionor hereunder. The rights and
remedies of Optionor under this Option Agreement are cumulative and not
exclusive of any rights or remedies which it may otherwise have.

                  10.      MISCELLANEOUS.

                           (a) Notices. All notices and other communications
hereunder shall be in writing and shall be deemed to have been duly given if
delivered in person, Federal Express or other recognized overnight courier or
sent by registered or certified U.S. mail, return receipt requested or sent by
facsimile or telecopy transmission and addressed:

                               (i)     If to the Optionor,  at:

                                       3801 PGA Boulevard, Suite 1000
                                       Palm Beach Gardens, FL 33410
                                       Attn. Bruce A. Rendina


                               (ii)    If to BCC, at

                                       c/o BCC Development and Management Co.
                                       5021 Louise Drive
                                       Suite 200
                                       Mechanicsburg, PA 17055

or to such other address or facsimile number as a party may designate by notice
to the other parties hereto.

                  A notice or other communication shall be deemed to be duly
received:

                               (a)     if sent by hand or telegram or express
                                       service, when left at the address of the
                                       recipient;

                               (b)     if sent by registered or certified
                                       U.S. mail, return receipt requested,
                                       the second day after mailing; and

                               (c)     if sent by facsimile, upon receipt
                                       by the sender of an acknowledgment
                                       or transmission report generated by
                                       the machine from which the facsimile
                                       was sent indicating that the
                                       facsimile was sent in its entirety
                                       to the recipient's facsimile number;

                  PROVIDED THAT if a notice or other communication is served by
hand or by telegram, or is received by telex or facsimile on a day which is not
a business day, or after 5:00 P.M. on 



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any business day at the addressee's location, such notice or communication shall
be deemed to be duly received by the recipient at 9:00 A.M. on the first
business day thereafter.

                           (b)      Entire Agreement. This Agreement, together
with all other Transaction Documents and Lease Documents, contains the entire
understanding among the parties hereto with respect to its subject matter and
supersedes any prior understandings or agreements between the parties with
respect to such subject matter.

                           (c)      Amendments. Subject to the terms of the
Lease Documents, this Agreement may be modified or amended only by a written
instrument executed by the Company, BCC and Optionor.

                           (d)      Severability. If any term or other provision
of this Agreement is invalid, illegal or incapable of being enforced by any rule
of law, or public policy, all other conditions and provisions of this Agreement
shall nevertheless remain in full force and effect so long as the substance of
the transactions contemplated hereby is not affected in any manner adverse to
any party. Upon such determination that any term or other provision is invalid,
illegal or incapable of being enforced, the parties hereto shall negotiate in
good faith to modify this Agreement so as to effect the original intent of the
parties as closely as possible in an acceptable manner to the end that
transactions contemplated hereby are fulfilled to the extent possible.

                           (e)      Counterparts. This Agreement may be executed
in two or more counterparts, each of which shall constitute an original, but all
of which together shall constitute but a single instrument.





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