Document:

<PAGE>
                                                                 EXHIBIT (10)(b)

INDEPENDENT AUDITORS' CONSENT

We consent to the use in this Post-Effective Amendment No. 16 to Registration
Statement No. 33-45380 of ML of New York Variable Annuity Separate Account B on
Form N-4 of our reports on (i) ML Life Insurance Company of New York dated
February 27, 2001 and (ii) ML of New York Variable Annuity Separate Account B
dated February 16, 2001, appearing in the Statement of Additional Information,
which is a part of such Registration Statement, and to the reference to us under
the heading "Experts" in the Prospectus, which is a part of such Registration
Statement.

/s/ DELOITTE & TOUCHE LLP

New York, New York
April 25, 2001<PAGE>
                                                                 EXHIBIT (10)(c)

                       CONSENT OF BARRY G. SKOLNICK, ESQ.

    I hereby consent to the reference to my name under the caption "Legal
Matters" in the prospectus included in Post-Effective Amendment No. 17 to the
Registration Statement on Form N-4 for certain variable annuity insurance
contracts issued through ML of New York Variable Annuity Separate Account A and
included in the prospectus included in Post-Effective Amendment No. 16 to the
Registration Statement on Form N-4 for certain variable annuity insurance
contracts issued through ML of New York Variable Annuity Separate Account B of
Merrill Lynch Life Insurance Company, File Nos. 33-43654 and 33-45380.

                                               /s/ BARRY G. SKOLNICK
                                     -----------------------------------------
                                                 Barry G. Skolnick
                                           PRESIDENT AND GENERAL COUNSEL

April 27, 2001<PAGE>

Exhibit 10.1
Severance Letter Agreement

                                                     June 30, 2000

Ms. Debora A. Pfaff
534 Everett Street
Westwood, MA 02090

RE:  Severance Agreement dated as of January 1, 1999 between Meditrust
     Corporation (the "Company" or "Employer") and Debora A. Pfaff (the
     "Employee"), as amended by First Amendment to Severance Agreement dated
     January, 2000 (the "Severance Agreement")
     ------------------------------------------------------------------------

Dear Debora:

         This will confirm that the Company has requested that you remain
employed with the Company at its Needham office (or an alternative office in the
Boston metropolitan area) until December 31, 2002 (the "Anticipated Termination
Date") and that, until the Anticipated Termination Date, you continue to
implement the Company's strategic plan to sell a significant portion of the
healthcare portfolio. You have agreed to the foregoing, subject to the following
conditions, all of which shall be deemed to supplement and amend the Severance
Agreement. Capitalized terms used herein and not otherwise defined shall have
the meaning as defined in the Severance Agreement.

          1.   Payment with respect to your Performance Units shall be made in
               cash on the earlier to occur of (i) the Anticipated Termination
               Date or (ii) a Termination Other Than for Cause or Termination
               for Good Reason;

          2.   The Employee's Base Salary shall be increased effective on July
               1, 2000 to $220,000;

          3.   Termination of your employment with the Company on the
               Anticipated Termination Date shall be considered a Termination
               Other Than for Cause (or a Termination Upon a Change in Control
               in the event a Change in Control has occurred prior to, or occurs
               within nine (9) months following, such date);

          4.   The Employer has requested that the Employee continue to work for
               the Employer through the Anticipated Termination Date and as an
               additional inducement to Employee to continue his/her employment
               through such date, in addition to the Severance Compensation
               provided in the Severance Agreement, which shall also be payable
               in connection with a termination on the Anticipated Termination
               Date, the Employee shall be eligible to be paid a bonus equal to
               100% of his/her Base Salary (the "Maximum Bonus Payment") on
               December 31, 2000, December 31, 2001 and December 31, 2002,
               provided, however, that with

<PAGE>

Ms. Debora A. Pfaff
June 30, 2000
Page 2 of 3

               respect to each such bonus payment, 80% of each such bonus
               payment shall be based on achievement of the asset sale criteria
               described on Schedule A attached hereto and incorporated herein
               and 20% of each such bonus payment shall be discretionary.
               Although nothing herein shall be deemed to be a guaranty of
               employment through the Anticipated Termination Date; if Employee
               is terminated in a Termination Other Than for Cause or in a
               Termination for Good Reason prior to the Anticipated Termination
               Date, in addition to and simultaneously with the Severance
               Compensation, Employee shall be paid the Maximum Bonus
               Payment(s) that would have been paid on December 31st of each
               year after such termination, through and including the
               Anticipated Termination Date;

          5.   In accordance with the change to the Company's vacation policy,
               upon any termination you shall be paid for all accrued and unused
               vacation time;

          6.   Outplacement services shall be made available to you for a
               reasonable period of time after any termination; such services
               shall be provided on a basis and for a duration comparable to
               outplacement services offered by the Company to terminated
               employees in November 1998;

          7.   It is hereby agreed that neither the relocation of the Company's
               principal offices from Needham, Massachusetts to Dallas, Texas,
               nor the fact that your duties and responsibilities will
               hereinafter change, including a primary focus towards selling a
               significant portion of the Company's healthcare portfolio, will
               be considered to be a Termination for Good Reason under the
               Severance Agreement;

          8.   For purposes of determining whether a Change in Control has
               occurred pursuant to Paragraph 1.8(d) of the Severance Agreement,
               the initial measurement date shall be January 1, 1999 and the
               calculation shall be based upon the net book value of such assets
               as reported on the Company's financial statements as of that
               date; and

          9.   Except as amended hereby, the Severance Agreement shall remain in
               full force and effect.

<PAGE>

Ms. Debora A. Pfaff
June 30, 2000
Page 3 of 3

         Thank you for your ongoing participation in effectuating the Company's
strategic plan. Please acknowledge your agreement to the foregoing by signing
this letter where indicated below and returning it to the undersigned.

                                                 Very truly yours,

                                                 MEDITRUST CORPORATION

                                                 By:  /s/ Francis W. Cash
                                                    -----------------------
                                                      Francis W. Cash
Acknowledged and Agreed

/s/ Debora A. Pfaff
---------------------
Debora A. Pfaff<PAGE>

Exhibit 10.2
Pfaff Severance Agreement

                               SEVERANCE AGREEMENT

     SEVERANCE AGREEMENT (the "Agreement") made and entered into as of the 1st
day of January, 1999 by and between Meditrust Corporation, a Delaware
corporation (the "Employer"), and Debora Pfaff (the "Employee").

     WHEREAS, the Employee is currently employed by the Employer as its Vice
President of Operations; and

     WHEREAS, the Employer desires to provide severance compensation to key
management personnel upon the occurrence of certain events;

     NOW, THEREFORE, in consideration of the mutual promises hereinafter
contained, the parties hereto hereby agree as follows:

     1. DEFINITIONS.

     For purposes of this Agreement, the following terms shall have the
following meanings:

         1.1 "Termination For Cause" shall mean termination by the Employer of
the Employee's employment by reason of (i) the Employee's fraud upon, deliberate
injury or attempted injury to, or dishonesty towards the Employer that causes
material and demonstrable injury to the Employer, (ii) the Employee's
intentional and material breach of the provisions of Section 4 of this
Agreement, (iii) the Employee's intentional and material breach of, or material
failure to perform under, this Agreement (other than the provisions of Section 5
hereof) that is not cured by the Employee within 30 days after written notice
from the President specifying the breach and requesting a cure, or (iv) the
conviction of any felony involving a crime of moral turpitude.

         1.2 "Termination Other Than For Cause" shall mean termination by the
Employer of the Employee's employment other than a Termination For Cause, a
Termination Upon Death or Disability, or a Termination Upon a Change in Control.

         1.3 "Termination for Good Reason" shall mean termination of employment
by the Employee after (i) a material reduction by the Employer, without the
Employee's consent, in the Employee's major duties and major responsibilities,
(ii) the reduction by the Employer of the Employee's Base Salary (except for
across-the-board salary reductions similarly affecting all management
personnel), (iii) the relocation of the Employer's offices at which the Employee
is principally employed to a location which is more than 35 miles from the
current location of the

                                       1

<PAGE>

Employer's office or the requirement that the Employee be based (1) anywhere
other than the Employer's principal offices, as the same may be relocated within
35 miles as provided above, or (2) more than 35 miles from the Employer's
current offices, except for required travel on the Employer's business to an
extent substantially consistent with the Employee's present business travel
obligations, (iv) a material breach of this Agreement by the Employer that is
not rectified within 30 days of notification to the President of the Employer by
the Employee of such breach, or (v) the failure of the Employer to obtain an
agreement from any successor or assign of the Employer, to assume and agree to
perform this Agreement, as contemplated by Section 6.14. Notwithstanding the
foregoing, in connection with a Permitted Spin-Off, if the Employee continues to
be Vice President of Operations of the Spin-Off Entity, such change in title and
position shall not be deemed to be a material reduction in the Employee's duties
and responsibilities for purposes of clause (i) above.

         1.4 "Termination Upon a Change in Control" shall mean termination of
the Employee's employment with the Employer within two (2) years following a
Change in Control either by the Employer as a Termination Other Than For Cause
or by the Employee as a Termination for Good Reason.

         1.5 "Termination Upon Death or Disability" shall mean termination by
the Employer by reason of the Employee's death or disability. For purposes
hereof, "disability" shall mean any termination of employment by the Employer,
if the Employee, in the reasonable judgment of the President, has failed to
perform her duties because of illness or physical or mental incapacity, and such
illness or incapacity continues for a period of more than four (4) consecutive
months.

         1.6 "Permitted Spin-Off" shall mean a corporate restructuring of The
Meditrust Companies pursuant to which all of the stock of any existing or
newly-created subsidiary of The Meditrust Companies (or either of them) which
owns (or acquires by purchase, dividend, investment or otherwise) all of the
healthcare assets and investments of The Meditrust Companies (or the stock of
subsidiaries which own such assets and investments) existing immediately prior
thereto is "spun-off" ratably to the shareholders of The Meditrust Companies at
the time of such spin-off.

         1.7 "Spin-Off Entity" shall mean any Person resulting from a Permitted
Spin-Off.

         1.8 "Change in Control" shall mean (a) an acquisition by any
individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2)
of the Securities Exchange Act of 1934, as amended (the "Exchange Act")) (a
"Person") of beneficial ownership (within the meaning of Rule 13d-3 promulgated
under the Exchange Act) of 20% or more of the combined voting power of the then
outstanding voting securities of the Employer entitled to vote generally in the
election of directors of the Employer (the "Outstanding Voting Securities") or
20% or

                                       2

<PAGE>

more of the combined market value of the equity securities of the Employer (the
"Equity Value"); provided, however, that any acquisition directly from or by the
Employer or any acquisition by any employee benefit plan (or related trust)
sponsored or maintained by the Employer or an affiliated company or any
acquisition by a company pursuant to a transaction which complies with clauses
(i), (ii) and (iii) of (c) below shall be excluded from this clause (a); or (b)
individuals who, as of the date hereof, constitute the Board of Directors (the
"Incumbent Board") of the Employer, cease for any reason to constitute at least
60% of the Board of Directors of the Employer; provided, however, that any
individual becoming a director whose election, or nomination for election by the
Employer's stockholders, was approved by a vote of at least 60% of the directors
then comprising the Incumbent Board shall be considered as though such
individual was a member of the Incumbent Board, but excluding, for this purpose,
any such individual whose initial assumption of office occurs as a result of an
actual or threatened election contest with respect to the election or removal of
directors or other actual or threatened solicitation of proxies or consents by
or on behalf of a Person other than the Board of Directors of the Employer; or
(c) consummation of a reorganization, merger or consolidation of the Employer (a
"Business Combination"), unless, in each case, following such Business
Combination, (i) all or substantially all the individuals and entities who were
the beneficial owners, respectively, of the outstanding Equity Value and
Outstanding Voting Securities immediately prior to such Business Combination
beneficially own, directly or indirectly, more than 60% of the combined market
value of the equity securities and more than 60% of the combined voting power of
the then outstanding voting securities entitled to vote generally in the
election of directors of the corporation resulting from such Business
Combination (including, without limitation, a corporation which as a result of
such transaction owns the Employer or all or substantially all of the Employer's
assets either directly or through one or more subsidiaries) in substantially the
same proportions as their ownership, immediately prior to such Business
Combination of the Equity Value and Outstanding Voting Securities, (ii) no
Person (excluding any corporation resulting from such Business Combination or
any employee benefit plan (or related trust) of the Employer or such corporation
resulting from such Business Combination) beneficially owns, directly or
indirectly, 20% or more of the combined voting power of the then outstanding
voting securities or 20% or more of the combined market value of the equity
securities of the corporation resulting from such business combination except to
the extent that such ownership existed prior to the Business Combination and
(iii) at least 60% of the members of the board of directors of the corporation
resulting from such Business Combination were members of the Incumbent Board at
the time of the execution of the initial agreement, or the action of the Board,
providing for such Business Combination, (d) the sale or other disposition of
more than 50% of the healthcare assets of the Employer, or (e) a complete
liquidation or dissolution of the Employer or approval thereof by the
stockholders of the Employer. For purposes of this definition, "Employer" shall
mean either (x) Meditrust Corporation or Meditrust Operating Company
("Meditrust" and together with the Employer, "The Meditrust Companies") or (y)
any subsidiary of Meditrust Corporation, the assets of which are substantially
all of the healthcare assets and investments of Meditrust Corporation (or the
stock of subsidiaries, the assets of which are substantially all of the
healthcare assets and investments of Meditrust Corporation). Notwithstanding the
foregoing, any corporate restructuring directly related to a Permitted Spin-Off,
including any related change to the Board of Directors shall not be deemed to be
a Change in Control; provided, however, that this exclusion shall not apply to
any

                                       3

<PAGE>

simultaneous or subsequent sale of, or Business Combination, or other events
described in clauses (a) through (e) of this Section 1.8 involving such Spin-Off
Entity.

     2. PERFORMANCE SHARES AND PERFORMANCE UNITS

         2.1 PERFORMANCE SHARES. The Employer has previously awarded the
Employee 10,000 performance shares in accordance with the terms described in
Exhibit A hereto and the Employer's 1995 Share Award Plan (the "Performance
Shares").

         2.2 PERFORMANCE UNITS. The Employer has previously issued to the
Employee 10,000 performance units ("Performance Units") in the Employer's Long
Term Bonus Program. Such Performance Units shall become payable only to pursuant
to the provisions of Section 4.1 or 4.3.

     3. PAYMENTS UPON TERMINATION. Upon any termination of the Employee's
employment by the Employer hereunder, the Employer shall promptly pay to the
Employee, or in the case of her death, to her estate or such beneficiaries as
the Employee may from time to time designate, all accrued salary, any benefits
under any plans of the Employer in which the Employee is a participant to the
full extent of the Employee's rights under such plans, accrued vacation pay and
any appropriate business expense incurred by the Employee in connection with her
duties hereunder, all to the date of termination. The Employee, or her estate or
beneficiaries in the case of her death, shall not be entitled to any other
compensation or reimbursement of any kind, including, without limitation,
severance compensation, except as provided in Section 4 hereof. Unless otherwise
provided in writing or as provided in Section 4 hereof, upon termination of
employment, all options held by the Employee that are not then currently
exercisable and all Performance Units shall immediately lapse and have no force
or effect, all then unvested Performance Shares held by the Employee shall be
forfeited and returned to the Employer, and the Employer shall have no further
obligation to continue to issue to the Employee previously authorized stock
grants.

     4. SEVERANCE COMPENSATION.  The Employee shall be paid severance
compensation in accordance with and subject to the terms and conditions of this
Section 4.

         4.1 SEVERANCE COMPENSATION IN THE EVENT OF A TERMINATION OTHER THAN FOR
CAUSE OR TERMINATION FOR GOOD Reason. In the event the Employee's employment is
terminated in a Termination Other Than For Cause or in a Termination for Good
Reason, subject to the signing by the Employee of a general release of
employment-related claims (other than continuing rights under this Agreement) in
a form and manner reasonably satisfactory to the Employer, (i) all unvested
Performance Shares held by the Employee shall become immediately vested in full,
(ii) all Performance Units issued to the Employee shall become immediately
vested in full with the value of each unit deemed to be $25; provided that
payment with respect to the Performance Units shall be made in cash no earlier
than January 1, 2002, (iii) any unvested

                                       4

<PAGE>

options to purchase paired shares of The Meditrust Companies held by the
Employee shall become immediately vested and exercisable in full in accordance
with the Employer's 1995 Share Award Plan, (iv) all previously authorized but
unissued stock grants shall immediately be issued by the Employer to the
Employee, and (v) the Employee shall be paid a lump sum within 30 days of such
termination equal to the sum of her base salary and the average of the bonuses
received by the Employee for the three (3) immediately preceding fiscal years
(or such shorter period that the Employee was eligible for a bonus). The
Employee shall continue to enjoy the benefits under the medical and dental
insurance plans for one (1) year. Notwithstanding the foregoing, in the event a
Change in Control occurs within nine (9) months after a termination under this
Section 4.1, the Employee's employment shall be deemed to have been terminated
in a Termination Upon a Change in Control and the benefits inuring to the
Employee shall be recalculated and paid or delivered to the Employee as though
Section 4.3 applied at the time of such termination.

         4.2 SEVERANCE COMPENSATION UPON DEATH OR DISABILITY. In the event the
Employee's employment is terminated in a Termination Upon Death or Disability,
and in the case of Termination Upon Disability, subject to the signing by the
Employee (in the case of Disability) of a general release of employment-related
claims (other than continuing rights under this Agreement) in a form and manner
reasonably satisfactory to the Employer, (i) any unvested options to purchase
shares of The Meditrust Companies held by the Employee shall become immediately
vested and exercisable in full in accordance with the Plan and (ii) the Employee
or her estate shall be paid a lump sum within 30 days of such termination equal
to the sum of her Base Salary and the average of the bonuses received by the
Employee for the three (3) immediately preceding fiscal years (or for such
shorter period that the Employee was eligible for a bonus). The Employee (or
dependents, in the case of the Employee's death) shall continue to enjoy the
benefits under the medical and dental insurance plans for one (1) year.

         4.3 SEVERANCE COMPENSATION IN THE EVENT OF A TERMINATION UPON A CHANGE
IN CONTROL.

             (a) Upon a Change in Control, (i) all unvested Performance Shares
held by the Employee shall become immediately vested in full, (ii) all
Performance Units issued to the Employee shall become immediately vested in full
with the value of each unit deemed to be $50, (iii) any unvested options to
purchase paired shares of The Meditrust Companies held by the Employee shall
become immediately vested and exercisable in full in accordance with the
Employer's 1995 Share Award Plan, and (iv) all previously authorized but
unissued stock grants shall immediately be issued by the Employer to the
Employee. In the event the Employee's employment is terminated in a Termination
Upon a Change in Control, subject to the signing by the Employee of a general
release of employment-related claims (other than continuing rights under this
Agreement) in a form and manner reasonably satisfactory to the Employer, the
Employee shall be paid a lump sum in cash within 30 days of such termination in
an amount equal to the full value of her Performance Units and an amount equal
to the sum of (A) her base salary and (B) her maximum bonus opportunity (but not
less than 50% of base salary) for the

                                       5

<PAGE>

year of termination. The Employee shall continue to enjoy the benefits under the
medical and dental insurance plan for one (1) year.

             (b) Notwithstanding the foregoing, in the event of the
determination (as hereinafter provided) that any required payment by the
Employer to or for the benefit of the Employee (whether paid or payable pursuant
to the terms of the Agreement or otherwise pursuant to, or by reason of any
other agreement, policy, plan, program or arrangement, including without
limitation any stock option, stock appreciation right, or similar right, or the
lapse or termination of any restriction on the vesting or exercisability of any
of the foregoing including without limitation the acceleration of the vesting or
lapse of deferral periods under any equity or incentive compensation program
(individually and collectively, "Severance Payments")) would be subject to
excise tax imposed by Section 4999 of the Internal Revenue Code of 1986, as
amended (the "Code") or any successor provision thereto (the "Excise Tax"), the
following provisions shall apply:

                 (i) If the Severance Payments, reduced by the sum of (1) the
Excise Tax and (2) the total of the Federal, state, and local income and
employment taxes payable by the Employee on the amount of the Severance Payments
which are in excess of the Threshold Amount (as defined below), are greater than
or equal to the Threshold Amount, the Employee shall be entitled to the full
benefits payable under this Agreement.

                 (ii) If the Threshold Amount is less than (a) the Severance
Payments, but greater than (b) the Severance Payments reduced by the sum of (1)
the Excise Tax and (2) the total of the Federal, state, and local income and
employment taxes on the amount of the Severance Payments which are in excess of
the Threshold Amount, then the benefits payable under this Agreement shall be
reduced (but not below zero (0)) to the extent necessary so that the maximum
Severance Payments shall equal the Threshold Amount. To the extent that there is
more than one method of reducing the payments to bring them within the Threshold
Amount, the Employee shall determine which method shall be followed; provided
that if the Employee fails to make such determination within 15 days after the
Employer has sent the Employee written notice of the need for such reduction,
the Employer may determine the amount of such reduction in its sole discretion.

     For the purposes of this section, "Threshold Amount" shall mean three
(3) times the Employee's "base amount" within the meaning of Section 280G(b)(3)
of the Code and the regulations promulgated thereunder less one dollar ($1.00).

The determination as to which provisions of this Section 4.3(b) shall apply to
the Employee shall be made by PriceWaterhouseCoopers or such other nationally
recognized accounting firm retained by the Employer and reasonably acceptable to
the Employee (the "Accounting Firm"). The Employer shall direct the Accounting
Firm to submit its determination and detailed supporting calculations both to
the Employer and the Employee within 30 days after the Change in Control, or at
such earlier time as is reasonably requested by the Employer or the Employee.
For purposes of this Section 4.3(b), the Employee shall be deemed to pay Federal
income taxes

                                       6

<PAGE>

at the highest marginal rate of Federal income taxation applicable to
individuals for the calendar year in which the determination is to be made, and
state and local income taxes at the highest marginal rates of individual
taxation in the state and locality of the Employee's residence on the Change in
Control, net of the maximum reduction in Federal income taxes which could be
obtained from deduction of such state and local taxes. Any determination by the
Accounting Firm shall be binding upon the Employer and the Employee.

             (c) Each of the Employee and the Employer shall provide the
Accounting Firm access to and copies of any books, records and documents in the
Employee's or its possession, as the case may be, reasonably requested by the
Accounting Firm, and shall otherwise cooperate with the Accounting Firm in
connection with the preparation and issuance of the determination and
calculations required or contemplated hereunder.

             (d) The Employer shall bear the fees and expenses of the Accounting
Firm for services hereunder. If, for any reason, the Employee initially pays
such fees and expenses, the Employer shall reimburse the Employee the full
amount of the same within ten (10) business days following receipt from the
Employee of a statement and reasonable evidence of the Employee's payment
thereof.

     5. NON-COMPETITION AND NON-DISCLOSURE.

         5.1 NON-COMPETITION. During the Employee's employment with the
Employer, without approval by the Board, the Employee will not, directly or
indirectly, (i) engage or become interested, directly or indirectly, as owner,
employee, director, partner, consultant, through stock ownership (except
ownership of not more than one percent (1%) of any class of securities of a
corporation which is publicly traded), investment of capital, lending of money
or property, rendering of services, or otherwise, either alone or in association
with others, in any business which competes directly or indirectly with the
business of the Employer, (ii) induce or attempt to induce any customer of the
Employer to reduce such customer's business with the Employer, or (iii) solicit
any of the Employer's employees to leave the employ of the Employer or employ
any of such Employees.

     As used in Sections 5.1, 5.2, 6.2 and 6.3, the term "Employer" shall
mean Meditrust Corporation or its subsidiaries and affiliates.

         5.2 NON-DISCLOSURE. The Employee agrees that all confidential and
proprietary information relating to the business of the Employer shall be kept
and treated as confidential at all times, both during the Employee's employment
with the Employer and after its termination, except as may be permitted in
writing by the Employer's Board of Directors or if such information is within
the public domain or comes within the public domain without any breach of this
Agreement.

                                       7

<PAGE>

     6. MISCELLANEOUS.

         6.1 ARBITRATION; DISPUTE RESOLUTION.

             (a) ARBITRATION PROCEDURE. Any disagreement, dispute, controversy
or claim arising out of or relating to this Agreement or the interpretation of
this Agreement or any arrangements relating to this Agreement or contemplated in
this Agreement or the breach, termination or invalidity thereof shall be settled
by final and binding arbitration in Boston, Massachusetts in accordance with the
Employment Dispute Resolution Rules (the "Arbitration Rules") of the American
Arbitration Association (the "AAA"); PROVIDED, that nothing contained herein
shall be deemed to prohibit either party to apply to a court of competent
jurisdiction for temporary or preliminary equitable relief. The arbitral
tribunal shall consist of one arbitrator. In making any decision, the arbitrator
shall apply and follow the substantive law of Massachusetts without reference to
the conflicts of law provisions thereof. The parties to the arbitration jointly
shall directly appoint such arbitrator within 30 days of the initiation of
arbitration. If the parties shall fail to appoint such arbitrator as provided
above, such arbitrator shall be appointed by the AAA as provided in the
Arbitration Rules. The Employee and the Employer agree that the decision of the
arbitrator shall be final, the arbitral award may be enforced against the
parties to the arbitration proceeding or their assets wherever they may be found
and that a judgment upon the arbitral award may be entered in any court having
jurisdiction thereof. The Employer shall pay all fees and expenses of the
Arbitrator regardless of the result and shall provide all witnesses and evidence
reasonably required by the Employee to present her case. The Employer shall pay
to the Employee all reasonable arbitration expenses and legal fees incurred by
the Employee as a result of a termination of the Employee's employment in
seeking to obtain or enforce any right or benefit provided by this Agreement
(whether or not the Employee is successful in obtaining or enforcing such right
or benefit). Such payments shall be made within five (5) days after the
Employee's request for payment accompanied with such evidence of fees and
expenses incurred as the Employer reasonably may require.

             (b) COMPENSATION DURING DISPUTE.  The Employee's compensation
during any disagreement, dispute, controversy or claim arising out of or
relating to this Agreement or the interpretation of this Agreement shall be as
follows:

         If there is a termination by the Employer followed by a dispute as to
whether the Employee is entitled to the payments and other benefits provided
under this Agreement, then, during the period of that dispute the Employer shall
pay the Employee 50% of the amount specified in Section 4.1 hereof and the
Employer shall provide the Employee with the benefits provided in Section 4.1
hereof, if, but only if, the Employee agrees in writing that if the dispute is
resolved against the Employee, the Employee shall promptly refund to the
Employer all payments received under Section 4.1 of this Agreement plus interest
at the rate provided in Section 1274(d) of the Code, compounded quarterly. If
the dispute is resolved in the Employee's favor, promptly after resolution of
the dispute, the Employer shall pay to the Employee the sum

                                       8

<PAGE>

that was withheld during the period of the dispute plus interest at the rate
provided in Section 1274(d) of the Code, compounded quarterly.

         6.2 LITIGATION AND REGULATORY COOPERATION. During and after the
Employee's employment, the Employee shall reasonably cooperate with the Employer
in the defense or prosecution of any claims or actions now in existence or which
may be brought in the future against or on behalf of the Employer which relate
to events or occurrences that transpired while the Employee was employed by the
Employer; provided, however, that such cooperation shall not materially and
adversely affect the Employee or expose the Employee to an increased probability
of civil or criminal litigation. The Employee's cooperation in connection with
such claims or actions shall include, but not be limited to, being available to
meet with counsel to prepare for discovery or trial and to act as a witness on
behalf of the Employer at mutually convenient times. During and after the
Employee's employment, the Employee also shall cooperate fully with the Employer
in connection with any investigation or review of any federal, state or local
regulatory authority as any such investigation or review relates to events or
occurrences that transpired while the Employee was employed by the Employer. The
Employer shall also provide the Employee with compensation on an hourly basis
calculated at her final base compensation rate for requested litigation and
regulatory cooperation that occurs after her termination of employment, and
reimburse the Employee for all costs and expenses incurred in connection with
her performance under this Section 6.2, including, but not limited to,
reasonable attorneys' fees and costs.

         6.3 NONDISPARAGEMENT. During and after the Employee's employment, the
Employee agrees that she shall not take any action or make any statement,
written or oral, which disparages or criticizes the Employer or The Meditrust
Companies, or their respective officers, directors, agents, or management and
business practices, or which disrupts or impairs the normal operations of the
Employer or The Meditrust Companies. During and after the Employee's employment,
the Employer agrees that it shall not take any action or make any statement,
written or oral, which disparages or criticizes Employee or Employee's
management and business practices and that it shall instruct its officers,
directors and agents not to take any action or make any statement, written or
oral, which disparages or criticizes the Employee or the Employee's management
and business practices.

         6.4 NO MITIGATION. The Employee is not required to seek other
employment or to attempt in any way to reduce any amounts payable to the
Employee by the Employer under this Agreement. Further, the amount of any
payment provided for in this Agreement shall not be reduced by any compensation
earned by the Employee as the result of employment by another employer, by
retirement benefits, by offset against any amount claimed to be owed by the
Employee to the Employer, or otherwise.

         6.5 AUTHORITY; NO RESTRICTIONS. Each party represents and warrants that
it has full power and authority to execute and deliver this Agreement and to
consummate the transactions contemplated hereby and this Agreement is the legal,
valid and binding obligation of

                                       9

<PAGE>

the party, enforceable against the party in accordance with its terms. No
consent, approval or agreement of any person, party, court, government or entity
is required to be obtained by either party in connection with the execution and
delivery of this Agreement. Each party is not subject to any agreement,
restriction, lien, encumbrance or right, title or interest in anyone limiting in
any way the scope of this Agreement or in any way inconsistent herewith, and
each party will not hereafter grant anyone the same.

         6.6 EQUITABLE RELIEF. The obligations of the Employee under Section 5
hereunder are special, unique and extraordinary, and any breach by the Employee
thereof shall be deemed material and to cause irreparable injury not properly
compensated by damages in an action at law. Notwithstanding Section 6.1, the
Employer's rights and remedies hereunder shall therefore be enforceable both at
law and in equity, by injunction and otherwise; and the rights and remedies of
the Employer hereunder with respect thereto shall be cumulative and not
alternative and shall not be exhausted by any one or more uses thereof.

         6.7 CONSENT TO JURISDICTION. To the extent that any court action is
permitted consistent with or to enforce Section 5, 6.1, 6.2 or 6.6 of this
Agreement, the parties hereby consent to the jurisdiction of the Courts of the
Commonwealth of Massachusetts and the United States District Court for the
District of Massachusetts. Accordingly, with respect to any such court action,
the Employee (a) submits to the personal jurisdiction and venue of such courts;
(b) consents to service of process; and (c) waives any other requirement
(whether imposed by statute, rule of court or otherwise) with respect to
personal jurisdiction, venue or service of process.

         6.8 WAIVER. The waiver of the breach of any provision of this Agreement
shall not operate or be construed as a waiver of any subsequent breach of the
same or other provision hereof.

         6.9 ENTIRE AGREEMENT; MODIFICATIONS. Except as otherwise provided
herein, this Agreement represents the entire understanding among the parties
with respect to the subject matter hereof, and this Agreement supersedes any and
all prior understandings, agreements, plans and negotiations, whether written or
oral, with respect to the subject matter hereof. All modifications to the
Agreement must be in writing and signed by the party against whom enforcement of
such modification is sought.

         6.10 NOTICES. All notices and other communications under this Agreement
shall be in writing and shall be deemed duly given (a) when delivered, or (b)
two (2) days after being mailed by first class mail, certified or registered
with return receipt requested, or (c) one (1) day after being mailed through an
overnight delivery service, or (d) upon confirmation of transmission via
facsimile, to the following addresses:

                                       10

<PAGE>

         If to the Employer:        Meditrust Corporation
                                    197 First Avenue
                                    Needham, MA  02494
                                    Attention:  General Counsel

         If to the Employee:        Debora Pfaff
                                    534 Everett Street
                                    Westwood, MA  02090

Any party may change such party's address for notices by notice duly given
pursuant to this Section 6.10.

         6.11 HEADINGS. The Section headings herein are intended for reference
and shall not by themselves determine the construction or interpretation of this
Agreement.

         6.12 GOVERNING LAW. This Agreement shall be governed by and construed
in accordance with the laws of the Commonwealth of Massachusetts, applied
without regard to conflict of law principles.

         6.13 SEVERABILITY. Should a court or other body of competent
jurisdiction determine that any provision of this Agreement is excessive in
scope or otherwise invalid or unenforceable, such provision shall be adjusted
rather than voided, if possible, and all other provisions of this Agreement
shall be deemed valid and enforceable to the extent possible.

         6.14 SUCCESSORS AND ASSIGNS. This Agreement may not be assigned by the
Employee without the prior written consent of the Employer, and may be assigned
by the Employer and shall be binding upon, and inure to the benefit of, the
Employer's successors and assigns. The Employer will require any successor
(whether direct or indirect, by purchase, merger, consolidation or otherwise) to
all or substantially all of the business and/or assets of the Employer to assume
expressly and agree to perform this Agreement in the same manner and to the
extent that the Employer would be required to perform it if no such succession
had taken place. As used in this Agreement, "Employer" shall mean the Employer
as herein before defined and any successor to its business and/or assets as
aforesaid which assumes and agrees to perform this Agreement by operation of
law, or otherwise.

         6.15 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, all of which taken together shall constitute one and the same
Agreement.

         6.16 WITHHOLDINGS. All compensation and benefits to the Employee
hereunder shall be reduced by all federal, state, local and other withholdings
and similar taxes and payments required by applicable law. The Employee agrees
to pay all federal, state and local taxes owed by her in connection with this
Agreement.

                                       11

<PAGE>

         6.17 SUBSTITUTION OF EMPLOYER. Upon a Permitted Spin-Off, the Spin-Off
Entity shall be deemed to be the Employer for all purposes of this Agreement.

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

                               MEDITRUST CORPORATION
SEAL

                               By:    /s/ David F. Benson
                                      ----------------------------------------
                                      Name:      David F. Benson
                                      Title:     President and Chief Executive
                                                 Officer

                                      /s/ Debora A. Pfaff
                                      ----------------------------------------
                                      Debora A. Pfaff

                                       12

<PAGE>

                                    Exhibit A

THE PERFORMANCE SHARES

100% of the Performance Shares described in Section 2.1 shall be deemed issued
as of February 27, 1998 upon payment by the Employee of the par value thereof to
The Meditrust Companies. Subject to the terms of the Agreement, the Performance
Shares shall vest on the earliest of (a) eight (8) years after the date of
issuance, (b) on March 31 of the year following the first fiscal year after
issuance in which the Performance Goal is achieved or (c) as the Board of
Directors may determine. The Performance Goal for all outstanding grants of
Performance Shares shall be deemed achieved in any fiscal year commencing with
the year 2000 that meets both criteria specified below:

<TABLE>
<CAPTION>
         Fiscal                   FFO                 Cumulative FFO per Share
          Year                 Per Share                Since January 1, 1998
          ----                 ---------                ---------------------
          <S>                   <C>                            <C>
          2000                  $2.92                          $ 8.28
          2001                   3.10                           11.38
          2002                   3.28                           14.66
          2003                   3.48                           18.14
          2004                   3.69                           21.83
</TABLE>

For purposes of the foregoing calculation, "FFO" shall mean funds from
operations as reported by The Meditrust Companies. The above Performance Goals
may be adjusted by the Board of Directors of the Employer to reflect changes in
accounting rules or changes in corporate structure.

Subject to the terms of the Agreement, upon termination of the Employee's
employment by The Meditrust Companies for any reason, all right, title and
interest in any unvested Performance Shares shall be transferred to The
Meditrust Companies in exchange for the par value of such Performance Shares,
and the Employee shall not receive any unissued Performance Shares.

The Employee shall receive all voting rights and dividends paid with respect to
unvested Performance Shares from the date of issuance so long as the Employee is
an employee of The Meditrust Companies or any subsidiary thereof.

                                       13

<PAGE>

                                    Exhibit A

Management has prepared a three year forecast for the years 2000 - 2002 based on
actual Ql 2000 results and other expectations. This forecast was provided to the
banks in negotiating the extension and to the Boards of Directors at the June 8,
2000 Board Meeting.

o    Asset sales and mortgage repayments were estimated as follows:

                           Q2 - Q4
                           2000             2001              2002
                           ---------------------------------------
Expected cash proceeds     $106             $398              $325

Year 2000 asset sales and mortgage repayments include:

o    Repayment of two MOB Mortgages with a face value of $55M, which
     generated proceeds of $48M and closed on April 7, 2000.
o    An expected mortgage repayment in Q3 of $8M.
o    Unidentified mortgage repayments with a face value of $70M generating
     proceeds of approximately $50M in Q4.

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