Document:

<PAGE>   1
                                                                    Exhibit 10.9

                                    GUARANTY
                                      (BCC)

TO:      MEDITRUST MORTGAGE INVESTMENTS, INC.

         1. GUARANTY OF PAYMENT AND PERFORMANCE OF OBLIGATIONS. For value
received and hereby acknowledged and as an inducement to MEDITRUST MORTGAGE
INVESTMENTS, INC., a Delaware corporation, having its principal office at 197
First Avenue, Needham Heights, Massachusetts 02494 (hereinafter referred to as
the "Lender") to enter into that certain Omnibus Assignment and Assumption
Agreement, Amendment of Loan Documents, Amendment of Lease Documents,
Termination of Lease Documents, Consent to Assignment and Confirmation of
Guaranties, of even date herewith, by and among (i) Hawthorn Health Properties,
Inc., National Care Centers of Hermitage, Inc., National Care Centers, Inc.,
National Care Centers of Lebanon, Inc., Springfield Retirement Village, Inc.,
National Care Centers of Nixa, Inc., National Care Centers of Springfield, Inc.,
and Mt. Vernon Park Care Center West, Inc., (ii) BCC at Lebanon Care Center,
Inc., BCC at Lebanon Park Manor, Inc., BCC at Nixa Park Center, Inc., BCC at
Springfield Care Center, Inc., BCC at Mt. Vernon Park Care Center, Inc., BCC at
Mt. Vernon Park Care Center West, Inc., and BCC at Hermitage Park Care Center,
Inc., (iii) Balanced Care Corporation, and Dixon Management, Inc., (iv)
Meditrust Mortgage Investments, Inc., (v) Christian Health Care of Missouri,
Inc., (vi) Cornerstone Health Care, Inc., (vii) Cornerstone Properties
Investment II, LLC, (viii) Christian Health Care Personnel Services, Inc., (ix)
Christian Health Care, Inc., (x) Christian Health Care of Hermitage, Inc.,
Christian Health Care of Lebanon North, Inc., Christian Health Care of
Springfield West Park, Inc. Christian Health Care of Springfield West, Inc.,
Christian Health Care of Lebanon South, Inc., Christian Health Care of
Springfield East, Inc., and Christian Health Care of Nixa, Inc., and (xi)
Alington D. Kilgore (the "Omnibus Assignment and Consent"), the undersigned,
BALANCED CARE CORPORATION, a Delaware corporation, having its principal place of
business at 1215 Manor Drive, Mechanicsburg, PA 17055 (the "Guarantor"), being
the sole shareholder of each of the Balanced Care Lessees (as defined under the
Omnibus Assignment and Consent) and certain other subsidiaries, and, as such,
deriving a substantial benefit from the consummation of the BCC/CHC Lease
Assignments (as defined under the Omnibus Assignment and Consent) and the other
transactions described under the BCC/CHC Purchase Agreement (as defined under
the Omnibus Assignment and Consent), hereby unconditionally guarantees to the
Lender the full payment and performance of the "Loan Obligations", as such term
is defined under the Loan Agreement (as defined under the Omnibus Assignment and
Consent).
<PAGE>   2
         This Guaranty is an absolute, unconditional and continuing guaranty of
the full and punctual payment and performance of the Loan Obligations and not
merely of their collectibility, and is in no way conditioned upon any
requirement that the Lender first collect or attempt to collect the Loan
Obligations or any portion thereof from the Borrowers (as defined under the Loan
Agreement) or from any endorser, surety or other guarantor of any of the same or
resort to any security or other means of obtaining the payment and/or
performance of any of the Loan Obligations that the Lender now has or may
acquire after the date hereof, or upon any other contingency whatsoever. Upon
any Loan Default (as defined in the Loan Agreement), the Loan Obligations and
all liabilities and obligations of the Guarantor to the Lender, hereunder or
otherwise, shall, at the option of the Lender, become immediately due and
payable to the Lender without further demand or notice of any nature, all of
which are expressly waived by the Guarantor. Payments by the Guarantor hereunder
may be required by the Lender on any number of occasions. This Guaranty shall
continue in full force and effect until the complete payment and performance of
all of the Loan Obligations.

         All payments hereunder received by the Lender shall be applied by the
Lender, without any marshalling of assets, towards the payment and/or
performance of the Loan Obligations and any other indebtedness of the Guarantor
hereunder in such order as the Lender, in its sole and absolute discretion, may
determine.

         2. DEFINED TERMS. Capitalized terms used herein and not otherwise
specifically defined herein shall have the same meanings ascribed to such terms
in the Loan Agreement.

         3. THE GUARANTOR'S FURTHER AGREEMENTS TO PAY. The Guarantor further
agrees, as the principal obligor and not as a guarantor, to pay to the Lender
forthwith upon demand, in funds immediately available to the Lender, all costs
and expenses, including without limitation, court costs and attorneys' fees and
expenses and court costs, reasonably incurred or expended by the Lender in
connection with the collection or enforcement of the Obligations and the
enforcement of all of the other obligations hereunder. Any amounts owed to the
Lender under this Section 3 shall be a demand obligation and, if not paid within
ten (10) days after demand, shall thereafter, to the extent then permitted by
applicable law, bear interest at the Advances Rate until the date of payment.
The provisions of this Section 3 shall survive the foreclosure of any Deed of
Trust.

         4. LIABILITY OF THE GUARANTOR. This Guaranty is unlimited and the
Guarantor shall be jointly and severally liable with every endorser, surety or
other guarantor of any or all of the Loan Obligations and the continuation of
this Guaranty shall not be affected by the termination, discontinuance, release
or modification of any agreement from (a) any such endorser, surety or guarantor
and/or (b) any other endorser, surety or guarantor of any of the other
Obligations. Nothing contained herein or otherwise shall require the Lender to
make demand upon or join the Borrowers or any such endorser, surety or guarantor
or other party in any suit brought upon this Guaranty; and the Guarantor hereby
waives any right to require marshalling or

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exhaustion of any remedy against any collateral, other property, or any other
Person primarily or secondarily liable.

         5. THE LENDER FREEDOM TO DEAL WITH THE BORROWERS AND OTHER PARTIES.
Except as otherwise expressly provided herein, the Lender shall be at liberty,
without giving notice to or obtaining the assent of the Guarantor and without
relieving the Guarantor of any liability hereunder, to deal with the Borrowers
and with each other Person who now is or after the date hereof becomes liable in
any manner for any of the Obligations in such manner as the Lender, in its sole
and absolute discretion, deems fit. The Lender and the other Meditrust Entities
have full authority (in their sole and absolute discretion) to do any or all of
the following things, none of which shall discharge or affect the Guarantor's
liability hereunder:

         (a) extend credit, make loans and afford other financial accommodations
to any of the Borrowers and/or any of the Related Parties at such times, in such
amounts and on such terms as the Lender may approve; provided, however, that if
such credit, loans or other financial accommodations (i) increase, in any
material respect, the Obligations or (ii) are cross-defaulted with the Loan
Documents, the Lender shall not take any such action without first obtaining the
consent of the Guarantor (which consent shall not be unreasonably withheld,
delayed or conditioned).

         (b) after receipt of the prior written consent of the Guarantor (which
consent shall not be unreasonably withheld, conditioned or delayed), modify,
amend or vary, in any material respect, the terms of any of the Obligations or
any instrument relating to or securing the same, and without limitation, this
Guaranty shall survive the foreclosure of the Deeds of Trust;

         (c) grant extensions or renewals of any present or future indebtedness;

         (d) grant time, waivers and other indulgences in respect of any of the
Obligations;

         (e) vary, exchange, release or discharge, wholly or partially, or delay
or abstain from perfecting and enforcing any security or guaranty or other means
of obtaining payment of any of the Obligations which the Lender or any of the
other Meditrust Entities now has or acquires after the date hereof;

         (f) take or omit to take any of the actions referred to in any
instrument evidencing, securing or relating to any of the Obligations or any
actions under this Guaranty;

         (g) fail, omit or delay to enforce, assert or exercise any right, power
or remedy conferred on the Lender or any of the other Meditrust Entities in this
Guaranty or in any other instrument evidencing, securing or relating to any of
the Obligations or take or refrain from taking any other action;

                                      -3-
<PAGE>   4
         (h) accept partial payments from any of the Borrowers, any other member
of the Borrowing Group, any of the Related Parties or any other Person;

         (i) after receipt of the prior written consent of the Guarantor (which
consent shall not be unreasonably withheld, conditioned or delayed), release or
discharge, wholly or partially, any of the Borrowers, any other member of the
Borrowing Group, any of the Related Parties and/or any other Person now or
hereafter primarily or secondarily liable for the Obligations (or any portion
thereof);

         (j) accept additional collateral for the payment of any Obligations;

         (k) after receipt of the prior written consent of the Guarantor (which
consent shall not be unreasonably withheld, conditioned or delayed), compromise
or make any settlement or other arrangement with any of the Borrowers, any other
member of the Borrowing Group, any of the Related Parties or any other Person
referred to in clause (i) above; and

         (l) consent to and participate in the proceeds of any assignment, trust
or mortgage for the benefit of creditors.

         6. UNENFORCEABILITY OF OBLIGATIONS; INVALIDITY OF SECURITY OR OTHER
GUARANTIES. The obligations of the Guarantor hereunder shall not be affected by
any change in the beneficial ownership of any of the Borrowers, any other member
of the Borrowing Group or any of the Related Parties, by reason of any
disability of any of the Borrowers, any other member of the Borrowing Group or
any Related Party or by any other circumstance (other than the complete payment
and performance of the Loan Obligations) which might constitute a defense
available to, or a discharge of, any of the Borrowers, any other member of the
Borrowing Group or any of the Related Parties in respect of any of the
Obligations. If for any reason now or hereafter any of the Borrowers, any other
member of the Borrowing Group or any of the Related Parties has no legal
existence or is under no legal obligation to discharge any of the Obligations
undertaken or purported to be undertaken by it or on its behalf, or if any of
the moneys included in the Obligations have become irrecoverable from any of the
Borrowers, any other member of the Borrowing Group or any Related Party by
operation of law or for any other reason, this Guaranty shall nevertheless be
binding on the Guarantor and the Guarantor shall remain unconditionally liable
for the complete payment and performance of the Loan Obligations. This Guaranty
shall be in addition to any other guaranty or other security for the
Obligations, and it shall not be prejudiced or rendered unenforceable by the
invalidity of any such other guaranty or security. This Guaranty shall continue
to be effective or be reinstated, as the case may be, if, at any time, any
payment of any of the Obligations is rescinded or must otherwise be returned by
the Lender or any of the other Meditrust Entities, upon the insolvency,
bankruptcy or reorganization of any of the Borrowers or any of the Related
Parties or otherwise, all as though such payment had not been made.

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         It shall not be necessary for the Lender to inquire into the power of
the Borrowers or anyone acting or purporting to act on their behalf, and any
Loan Obligation made or created in reliance upon the professed exercise of such
powers shall be guaranteed hereunder. The Guarantor hereby indemnifies the
Lender and agrees to save it harmless against any damages or expenses suffered
by the Lender should any representation contained herein prove untrue in any
material respect. The aforesaid indemnification agreement shall include, without
limitation, attorneys' fees and expenses and court costs reasonably incurred by
the Lender in connection with the enforcement of said indemnification.

         The indemnity provisions of this Section 6 shall survive the complete
payment and performance of the Obligations and the foreclosure of the Deeds of
Trust.

         7. NO CONTEST WITH THE LENDER. No set-off, counterclaim, reduction or
diminution of any obligation, or any claim or defense of any kind or nature
which the Guarantor has or may have against any of the Borrowers, any other
member of the Borrowing Group, any of the Related Parties or the Lender shall be
available hereunder to the Guarantor. The Guarantor shall not assert and hereby
waives any right whatsoever that the Guarantor may have at law or in equity,
including, without limitation, any right of subrogation or to seek contribution,
indemnification or any other form of reimbursement from the Borrowers, any other
endorser, surety or guarantor of any of the Obligations or any other Person now
or hereafter primarily or secondarily liable for any of the Obligations;
provided, however, notwithstanding the foregoing or any other provision to the
contrary contained herein, in any other Loan Document, upon the payment in full
of the Loan Obligations and the expiration of ninety (90) days thereafter
without the filing of any proceedings under the Bankruptcy Code by or against
any Borrower or any member of the Borrowing Group, the Guarantor shall
nonetheless have the right of subrogation, and the right to seek contribution,
indemnification and reimbursement against Borrowers and any one or more of the
other members of the Borrowing Group and the Related Parties to the fullest
extent permitted under applicable laws in connection with amounts paid hereunder
or under any other guaranty or suretyship agreement provided to Lender by the
Guarantor or any Affiliate of the Guarantor. The Guarantor shall not, in any
proceedings under the Bankruptcy Code or insolvency proceedings of any nature,
prove in competition with the Lender in respect of any payment hereunder or be
entitled to have the benefit of any counterclaim or proof of claim or dividend
or payment by or on behalf of any of the Borrowers, any other member of the
Borrowing Group or any of the Related Parties or the benefit of any other
security for any Obligation which, now or hereafter, the Guarantor may hold in
competition with the Lender.

         8. SET-OFF. In addition to any rights now or hereafter granted under
any agreement or applicable law and not by way of limitation of any such rights,
upon the occurrence of any Loan Default, including, without limitation, any
default by the Guarantor hereunder, the Lender and the other Meditrust Entities
are hereby authorized at any time or from time to time, without presentment,
demand, protest or other notice of any kind to the Guarantor or to any other
Person, all of which are hereby expressly waived, to set off and to appropriate
and apply

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<PAGE>   6
any and all deposits and any other indebtedness at any time held by or owing to
the Lender (or any of the other Meditrust Entities) to or for the credit or the
account of the Guarantor against and on account of the obligations and
liabilities of the Guarantor to the Lender or any of the other Meditrust
Entities under this Guaranty or otherwise, irrespective of whether or not the
Lender or any of the other Meditrust Entities shall have made any demand
hereunder or under any Related Party Agreement and although said obligations,
liabilities or claims, or any of them, may then be contingent or unmatured and
without regard to the availability or adequacy of other collateral. The
Guarantor also grants to the Lender (and the other Meditrust Entities) a
security interest in all of the Guarantor's deposits, securities and other
property at any time and from time to time, in the possession of the Lender (or
any of the other Meditrust Entities) and, upon the occurrence of any Loan
Default, the Lender and the other Meditrust Entities may exercise all rights and
remedies of a secured party under the Massachusetts Uniform Commercial Code. The
Lender and the other Meditrust Entities shall have no duty to take steps to
preserve rights against prior parties as to such securities or other property.

         The Guarantor hereby agrees that all collateral now or hereafter
granted as security for any indebtedness of the Guarantor to the Lender and/or
the other Meditrust Entities shall be deemed to be additional collateral
securing the Obligations.

         9. GENERAL PROVISIONS; RULES OF CONSTRUCTION. The provisions set forth
in Section 6.10 and Section 12 of the Loan Agreement are hereby incorporated
herein by reference, mutatis, mutandis and shall be applicable to this Guaranty
as if set forth in full herein.

         10. ACKNOWLEDGMENT. Without limiting any of the other provisions set
forth herein, the Guarantor acknowledges and agrees that the execution and
delivery of this Guaranty shall not amend, abridge, limit, modify, release,
terminate or otherwise affect any of the provisions of any of the BCC Missouri
Lease Guaranties (as defined under the Omnibus Assignment and Consent).

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         IN WITNESS WHEREOF, the Guarantor has executed this Guaranty as an
instrument under seal as of the 12th day of January, 2000.

<TABLE>
<S>                            <C>
WITNESS:                       GUARANTOR:

                               BALANCED CARE CORPORATION,
                               a Delaware corporation

/s/Jaynelle D. Covert          By:/s/Robin L. Barber
Name:Jaynelle D. Covert            Name:Robin L. Barber
                                   Title:Senior Vice President and Legal Counsel
                                   & Assistant Secretary
</TABLE>

                                      -7-<PAGE>   1
                                                                   Exhibit 10.10

                              TERMINATION AGREEMENT

         THIS AGREEMENT is made as of the 12th day of January, 2000 by and among
(i) MEDITRUST MORTGAGE INVESTMENTS, INC., a Delaware corporation ("MMI") and NEW
MEDITRUST COMPANY LLC, a Delaware limited liability company, a Delaware limited
liability company ("New Meditrust" and together with MMI, the "Meditrust
Entities"), (ii) HAWTHORN HEALTH PROPERTIES, INC., a California corporation
("Hawthorn"), NATIONAL CARE CENTERS OF HERMITAGE, INC., a Missouri corporation
("Hermitage"), NATIONAL CARE CENTERS, INC., a Missouri corporation ("National
Care Centers"), NATIONAL CARE CENTERS OF LEBANON, INC., a Missouri corporation
("National Care Centers-Lebanon"), SPRINGFIELD RETIREMENT VILLAGE, INC., a
Missouri corporation ("Springfield"), NATIONAL CARE CENTERS OF NIXA, INC., a
Missouri corporation ("Nixa"), NATIONAL CARE CENTERS OF SPRINGFIELD, INC., a
Missouri corporation ("National Care Centers-Springfield") and MT. VERNON PARK
CARE CENTER WEST, INC., a Missouri corporation ("Mt. Vernon" and collectively
with Hawthorn, Hermitage, National Care Centers, National Care Centers-Lebanon,
Springfield, Nixa and National Care Centers-Springfield, the "Borrowers"), (III)
BALANCED CARE CORPORATION, a Delaware corporation ("BCC") and DIXON MANAGEMENT,
INC., a Missouri corporation ("Dixon" and collectively with BCC, the "Balanced
Care Guarantors") and (IV) BALANCED CARE AT STAFFORD, INC., a Delaware
corporation (the "Potomac Point Lessee").

                               W I T N E S S E T H

         WHEREAS, MMI is the holder of the lender's interest under the "Loan
Documents" as such term is defined under that certain Loan Agreement, dated as
of August 6, 1996, as amended, by and among MMI and the Borrowers (the "Hawthorn
Loan Agreement") and all capitalized terms used herein and not otherwise defined
herein shall have the same meanings ascribed to such terms under the Hawthorn
Loan Agreement;

         WHEREAS, at the request of BCC, MMI was requested to consent to certain
transactions contemplated by that certain Asset Purchase Agreement, dated as of
October 15, 1999, as amended, by and among BCC (on behalf of itself and certain
subsidiaries) and Christian Health Care of Missouri, Inc. (the "BCC/CHC Purchase
Agreement");

         WHEREAS, MMI was willing to consent to the transactions contemplated by
the BCC/CHC Purchase Agreement, subject to (i) the satisfaction of certain
conditions more particularly set forth in that certain Omnibus Assignment and
Assumption Agreement, Amendment of Loan Documents, Amendment of Lease Documents,
Termination of Lease Documents, Consent to Assignment and Confirmation of
Guaranties of even date herewith by and among the Borrowers, the wholly-ownned
Subsidiaries of BCC identified on Exhibit K of the Loan Agreement (the "Balanced
Care Lessee"), the Balanced Care Guarantors, MMI, Christian Health Care of
Missouri, Inc. (the "Purchaser"), Cornerstone Properties Investment II, LLC
("CPI"), Cornerstone Health Care, Inc. ("Cornerstone"), Christian Health Care
<PAGE>   2
Personnel Services, Inc. ("CHC-Personnel"), Christian Health Care, Inc. ("CHC"),
Christian Health Care of Hermitage, Inc., Christian Health Care of Lebanon
North, Inc., Christian Health Care of Springfield West Park, Inc., Christian
Heal Care of Springfield West, Inc., Christian Health Care of Lebanon South,
Inc., Christian Health Care of Springfield East, Inc., Christian Health Care of
Nixa, Inc. and Alington D. Kilgore (the "Consent"), including, without
limitation, the execution and delivery by BCC of a guaranty (the "BCC Loan
Guaranty") of the Loan Obligations and the execution and delivery of that
certain Cross-Default Agreement of even date herewith by and among the Meditrust
Entities, BCC and the Potomac Point Lessee (the "Cross-Default Agreement"); and

         WHEREAS, the Balanced Care Guarantors, the Potomac Point Lessee and the
Borrowers shall receive direct and indirect benefits from the consummation of
the transactions contemplated by the BCC/CHC Asset Purchase Agreement.

         NOW, THEREFORE, for One Dollar ($1.00) and other good and valuable
consideration, the receipt and sufficiency of which are acknowledged, and in
consideration of the mutual covenants set forth herein, the parties hereto
hereby agree as follows:

         1. Notwithstanding anything to the contrary set forth in the BCC Loan
Guaranty, MMI acknowledges and agrees that the BCC Loan Guaranty shall terminate
upon the Termination Date (as hereinafter defined) unless (i) a Loan Default or
a Lease Default (as defined under any of the BCC Missouri Leases) has occurred
as of the Termination Date (and has not been waived in writing by MMI) or (ii)
any event, condition and/or state of facts then exists which, with notice and/or
the passage of time, could constitute a Loan Default or Lease Default (and has
not been waived in writing by MMI). Notwithstanding anything to the contrary set
forth in the BCC Lease Guaranties (as such term is hereinafter defined) and
without limiting the terms and provisions of the Omnibus Assignment of
Contracts, the Assignments of Leases or any of the other Loan Documents, the
Borrowers and MMI acknowledge and agree that the BCC Lease Guaranties shall
terminate upon the earlier to occur of (a) the complete payment and performance
of the Loan Obligations or (b) Termination Date unless (x) a Loan Default or a
Lease Default has occurred as of the Termination Date (and has not been waived
in writing by MMI) or (y) any event, condition and/or state of facts then exists
which, with notice and/or the passage of time, could constitute a Loan Default
or Lease Default (and has not been waived in writing by MMI). Without limiting
the terms of the Cross Default Agreement, the Meditrust Entities, BCC and the
Potomac Point Lessee acknowledge and agree that the Cross Default Agreement
shall terminate upon the Termination Date unless (i) a Loan Default or a Lease
Default has occurred as of the Termination Date (and has not been waived in
writing by MMI) or (ii) any event, condition and/or state of facts then exists
which, with notice and/or the passage of time, could constitute a Loan Default
or Lease Default (and has not been waived in writing by MMI).

         As used herein, the term "Termination Date" shall mean the later to
occur of (a) December 31, 2000 or (b) the date upon which the Facilities have
achieved a combined Debt

                                      -2-
<PAGE>   3
Coverage Ratio (as hereinafter defined) for the prior fiscal quarter equal to or
greater than 1.1 to 1 (as evidenced by attested Consolidated Financials relating
to the CHC Lessees).

         As used herein, the term "Debt Coverage Ratio" shall mean the ratio of
(x) Cash Flow (as hereinafter defined) for each applicable period to (y) the
total of all BCC Rent (as defined under the BCC Missouri Leases) paid or payable
during such period or accrued for such period.

         As used herein, the term "Cash Flow" shall mean the Consolidated Net
Income (as defined under the BCC Missouri Leases) or Consolidated Net Loss (as
defined under the BCC Missouri Leases) before federal and state income taxes for
any period plus BCC Rent. Notwithstanding the foregoing, in calculating
Consolidated Net Income or Consolidated Net Loss for the CHC Lessees for any
fiscal quarter, the CHC Lessees shall include, as an expense, the greater of (1)
the aggregate amount of the management fees payable to Cornerstone under the
Management Agreements (as defined under the Consent) for such quarter or (2)
five percent (5%) of the aggregate Gross Revenues (as hereinafter defined)
generated at the Facilities during such fiscal quarter.

         As used herein, the term "Gross Revenues" shall collectively refer to
all revenues generated by reason of the operation of the Facilities, whether or
not directly or indirectly received or to be received by the CHC Lessees,
including, without limitation, all patient revenues received or receivable for
the use of, or otherwise by reason of, all rooms, beds and other facilities
provided, meals served, services performed, space or facilities subleased or
goods sold on or from any Facility and further including, without limitation,
except as otherwise specifically provided below, any consideration received
under any subletting, licensing, or other arrangements with any Person relating
to the possession or use of any Facility and all revenues from all ancillary
services provided at or relating to any Facility.

         To the extent that any Facility is subleased or occupied by an
Affiliate of any CHC Lessee, Gross Revenues shall include the Gross Revenues of
such sublessee with respect to the premises demised under the applicable
sublease (i.e., the Gross Revenues generated from the operations conducted on
such subleased portion of the applicable Facility) and the rent received or
receivable from such sublessee pursuant to such subleases shall be excluded from
Gross Revenues for all such purposes. As to any sublease between any CHC Lessee
and a non-Affiliate of such CHC Lessee, only the rental actually received by the
applicable CHC Lessee from such non-Affiliate shall be included in Gross
Revenues.

         As used herein, the term "BCC Lease Guaranties" shall refer
collectively to those certain guaranties executed and delivered by any Balanced
Care Guarantor for the benefit of the Hawthorn Subsidiaries guarantying the BCC
Missouri Lease Obligations.

         2. Notwithstanding anything to the contrary set forth in the BCC Lease
Guaranties or the BCC Loan Guaranty (collectively, the "Guaranties"), but
subject to the terms of the

                                      -3-
<PAGE>   4
paragraph below and without limiting the terms of the Omnibus Assignment of
Contracts and/or the Assignment of Leases, each of the Meditrust Entities and
the Hawthorn Subsidiaries agree that upon the occurrence of Loan Default or a
Lease Default (the date upon which MMI or any of the Hawthorn Subsidiaries, as
applicable, notifies any Balanced Care Guarantor, in writing, that any such
default has occurred is hereinafter referred to as a "Trigger Date"), prior to
any Meditrust Entity or any Hawthorn Subsidiary pursuing any of its respective
rights and/or remedies against any Balanced Care Guarantor and/or the Potomac
Point Lessee, MMI and, to the extent applicable, the Hawthorn Subsidiaries shall
use good faith and reasonable efforts to pursue their respective rights and/or
remedies against (i) the Borrowers (under the Loan Documents), (ii) the CHC
Lessees (under the BCC Missouri Lease Documents) and/or (iii) CHC, CPI and/or
Kilgore (under the Loan Documents and/or the BCC Missouri Lease Documents) for
three (3) months (such three month period commencing upon the Trigger Date is
hereinafter referred to as the "Limitation Period"). After the expiration of the
Limitation Period, subject to the terms of the Omnibus Assignment of Contracts
and the Assignment of Leases, the Meditrust Entities and, to the extent
applicable, the Hawthorn Subsidiaries may pursue their respective rights and/or
remedies against the Balanced Care Guarantors and/or the Potomac Point Lessee
concurrently and/or successively with, or instead of, pursuing any of their
rights and/or remedies against (a) the Borrowers under the Loan Documents and
(b) the CHC Lessees, CHC, CPI and/or Kilgore (collectively, the "CHC Group"), as
the case may be, under any of the Loan Documents and/or the BCC Missouri Lease
Documents, as the case may be. Notwithstanding the foregoing agreement by MMI
and, to the extent applicable, the Hawthorn Subsidiaries to pursue their rights
and remedies as set forth in the first sentence of this Section 2, the Balanced
Care Guarantors and the Potomac Point Lessee specifically acknowledge and agree
that (x) MMI and, to the extent applicable, the Hawthorn Subsidiaries are not
required to exhaust any or all of their respective rights and/or remedies
against (1) the Borrowers or any of the collateral securing the Loan during the
Limitation Period or (2) the CHC Group or any of the collateral securing the BCC
Missouri Leases during the Limitation Period, (y) MMI and, to the extent
applicable, the Hawthorn Subsidiaries may determine, in their sole and absolute
discretion, which rights and/or remedies they shall pursue against the Borrowers
and/or any member of the CHC Group during the Limitation Period and (z) good
faith settlement discussions and/or negotiations with the Borrowers and the CHC
Group during the Limitation Period shall fulfill the obligations of MMI and the
Hawthorn Subsidiaries to pursue their respective rights and remedies against the
Borrowers and/or the CHC Group during the Limitation Period.

         Notwithstanding the foregoing, but subject to the terms of the Omnibus
Assignment of Contracts and the Assignment of Leases, the Meditrust Entities and
the Hawthorn Subsidiaries may pursue their respective rights and/or remedies
against any Balanced Care Guarantor and/or the Potomac Point Lessee at any time,
including without limitation, during the Limitation Period, if (i) any Borrower
or any member of the CHC Group shall (a) voluntarily be adjudicated bankrupt or
insolvent, (b) seek or consent to the appointment of a receiver or trustee for
itself or for all or any portion of the Mortgaged Property (c) file a petition
seeking relief under the bankruptcy or other similar laws of the United States,
any state or any

                                      -4-
<PAGE>   5
jurisdiction, (d) make a general assignment for the benefit of creditors or (e)
be unable to pay its debts as such debts mature, (ii) any court shall enter an
order, judgment or decree appointing, without the applicable Borrower's consent
or the applicable member of the CHC Group's consent, as the case may be, a
receiver or trustee for such Borrower or for all or any portion of the Mortgaged
Property or for such member of the CHC Group (or any of its properties) or
approving a petition filed against any Borrower or any member of the CHC Group
which seeks relief under the bankruptcy or other similar laws of the United
States, any state or any jurisdiction, and such order, judgment or decree shall
remain in force, undischarged or unstayed, sixty (60) days after it is entered,
(iii) any Borrower or any member of the CHC Group (or any of their respective
Affiliates), or any Person claiming by or through any Borrower or any member of
the CHC Group ever commences or joins in any suit or other proceeding against
MMI and/or any of the Hawthorn Subsidiaries whether or not relating to the
Mortgaged Property and/or the execution, delivery and performance of any of the
Loan Documents and/or any of the BCC Missouri Lease Documents, (iv) any
proceeding is commenced by any creditor of any Borrower or any member of the CHC
Group which may involve or result in the taking of possession of any property
held by any Borrower or any member of the CHC Group or the foreclosure thereof.

         3. Notwithstanding anything to the contrary set forth herein or in any
of the Assignments of Leases or any of the other Loan Documents, the Borrowers,
the Balanced Care Guarantors and the Potomac Point Lessee acknowledge that MMI
is the successor in interest to Hawthorn Subsidiaries under the BCC Missouri
Lease Documents and is entitled to exercise all of the duties, covenants,
obligations, rights (including, without limitation, the exercise of any right of
approval or consent) and/or remedies of the Hawthorn Subsidiaries under the BCC
Missouri Lease Documents, other than the purchase options granted pursuant to
Section 18.4 of the BCC Missouri Leases.

         4. Except as expressly set forth herein, this Agreement shall not be
deemed to amend, abridge, limit, modify, release, terminate or otherwise affect
any of the provisions of the Loan Documents or the BCC Missouri Lease Documents.

         5. This Agreement shall be binding on and inure to the benefit of the
parties hereto and their respective successors and assigns.

         6. This Agreement shall remain in full force and effect until the
complete payment and performance of the Loan Obligations.

         7. This Agreement shall be construed, and the rights and obligations of
the parties hereto shall be determined, in accordance with the laws of the
Commonwealth of Massachusetts. The Borrowers, the Balanced Care Guarantors and
the Potomac Point Lessee hereby consent to personal jurisdiction in the courts
of the Commonwealth of Massachusetts and the United States District Court for
the District of Massachusetts as well as to the jurisdiction of all courts from
which an appeal may be taken from the aforesaid courts, for the

                                      -5-
<PAGE>   6
purpose of any suit, action or other proceeding arising out of or with respect
to this Agreement.

         8. This Agreement may be executed in one or more counterparts, each of
which taken together shall constitute an original and all of which shall
constitute one and the same instrument.

            [The remainder of this page is intentionally left blank]

                                      -6-
<PAGE>   7
         IN WITNESS WHEREOF, the parties have executed this Agreement under seal
as of the day and year first above written.

WITNESS:                               MEDITRUST ENTITIES:
--------                               -------------------

                                       MEDITRUST MORTGAGE INVESTMENTS, INC., a
                                       Delaware corporation

/s/ Annemarie Wasniewski               By: /s/Michael S. Benjamin
Name: Annemarie Wasniewski                 Name: Michael S. Benjamin
                                           Title: Senior Vice President

                                       NEW MEDITRUST COMPANY, LLC, a Delaware
                                       limited liability company

/s/ Annemarie Wasniewski               By: /s/Michael S. Benjamin
Name: Annemarie Wasniewski                 Name: Michael S. Benjamin
                                           Title: Senior Vice President

WITNESS:                               BORROWERS:
--------                               ----------

                                       HAWTHORN HEALTH PROPERTIES, INC.,  a
                                       California corporation

/s/ Gloriana M Calhoun                 By: J. Gray Beverley, Jr.
Name: Gloriana M. Calhoun                  Name: J. Gray Beverley, Jr.
                                           Title: President

                                      -7-
<PAGE>   8
WITNESS:                               NATIONAL CARE CENTERS OF HERMITAGE,
--------                               INC., a Missouri Corporation

/s/ Gloriana M Calhoun                 By: J. Gray Beverley, Jr.
Name: Gloriana M. Calhoun                  Name: J. Gray Beverley, Jr.
                                           Title: President

WITNESS:                               NATIONAL CARE CENTERS, INC., a Missouri
--------                               corporation

/s/ Gloriana M Calhoun                  By: J. Gray Beverley, Jr.
Name: Gloriana M. Calhoun                   Name: J. Gray Beverley, Jr.
                                            Title: President

WITNESS:                               NATIONAL CARE CENTERS OF LEBANON, INC.,
--------                               a Missouri corporation

/s/ Gloriana M Calhoun                 By: J. Gray Beverley, Jr.
Name: Gloriana M. Calhoun                  Name: J. Gray Beverley, Jr.
                                           Title: President

WITNESS:                               SPRINGFIELD RETIREMENT VILLAGE, INC., a
--------                               Missouri corporation

/s/ Gloriana M Calhoun                 By: J. Gray Beverley, Jr.
Name: Gloriana M. Calhoun                  Name: J. Gray Beverley, Jr.
                                           Title: President

                                      -8-
<PAGE>   9
WITNESS:                               NATIONAL CARE CENTERS OF NIXA, INC., a
--------                               Missouri corporation

/s/ Gloriana M Calhoun                  By: J. Gray Beverley, Jr.
Name: Gloriana M. Calhoun                   Name: J. Gray Beverley, Jr.
                                            Title: President

WITNESS:                               NATIONAL CARE CENTERS OF SPRINGFIELD,
--------                               INC., a Missouri corporation

/s/ Gloriana M Calhoun                  By: J. Gray Beverley, Jr.
Name: Gloriana M. Calhoun                   Name: J. Gray Beverley, Jr.
                                            Title: President

WITNESS:                               MT. VERNON PARK CARE CENTER WEST, INC.,
--------                               a Missouri corporation

/s/ Gloriana M Calhoun                  By: J. Gray Beverley, Jr.
Name: Gloriana M. Calhoun                   Name:J. Gray Beverley, Jr.
                                            Title: President

WITNESS:                               POTOMAC POINT LESSEE:
--------                               ---------------------

                                       BALANCED CARE AT STAFFORD, INC., a
                                       Delaware corporation

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

                                      -9--
<PAGE>   10
WITNESS:                               BALANCED CARE GUARANTORS:
--------                               -------------------------

                                       BALANCED CARE CORPORATION, a
                                       Delaware corporation

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

                                        DIXON MANAGEMENT, INC.,  a Delaware
                                        corporation

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

                                      -10-

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