Document:

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Exhibit 10.17
                                      NOTE

$1,000,000.00                                                   October 1, 2000
                                                    Mechanicsburg, Pennsylvania

         FOR VALUE RECEIVED, BALANCED CARE AT MERRILLVILLE, INC., a corporation
organized under the laws of the State of Delaware ("Borrower"), shall pay to the
order of HEALTH CARE REIT, INC., a corporation organized under the laws of the
State of Delaware ("Lender"), the principal sum of One Million and 00/100
Dollars ($1,000,000.00), or so much thereof as shall have been advanced to
Borrower, with interest on so much thereof as shall from time to time be
outstanding at the rate of interest set forth below, until fully paid. This note
is given pursuant to the Loan Agreement of even date between Borrower and
Lender, as amended from time to time (the "Loan Agreement") and is subject to
the provisions thereof. The definitions in the Loan Agreement shall be
applicable to any capitalized terms herein that are not otherwise defined. If
there is any conflict between the terms of the Loan Agreement and the terms of
this note, the provisions of the Loan Agreement shall control.

         1. Definitions.

                  "Amortization Date" means the fourth anniversary of the
Commencement Date.

                  "Business Day" means any day which is not a Saturday or Sunday
or a public holiday under the laws of the United States of America or the State
of Ohio.

                  "Closing Date" means the date of this note.

                  "Collateral Document" means any document providing security
for or guarantee of repayment of this note.

                  "Commencement Date" means [i] the Closing Date if the Closing
Date occurs on the first day of a month or [ii] the first day of the month after
the Closing Date if the Closing Date occurs on any day other than the first day
of the month.

                  "Default Rate" means 2.50% plus the then applicable interest
rate.

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                  "Event of Default" has the meaning set forth in Section 7.

                  "Facility" has the meaning set forth in the Lease.

                  "Initial Rate" has the meaning set forth in Section 2(a).

                  "Lease" means the Lease Agreement by which Lender leases the
Facility to Tenant.

                  "Loan" means the loan evidenced by this note.

                  "Loan Advance" means each advance of proceeds of the Loan.

                  "Maturity Date" means the earlier of [i] the date on which
Tenant acquires fee simple title to the Facility pursuant to the Option to
Purchase under the Lease; or [ii] the eighth anniversary of the Commencement
Date.

                  "State" means the Commonwealth of Pennsylvania.

         2. Interest Rate.

         (a) Initial Rate. Interest shall accrue on the principal amount
outstanding from and after the Closing Date until the Maturity Date at the rate
of 12% per annum ("Initial Rate").

         (b) Post-Maturity Rate. If the outstanding balance of this note has not
been paid in full by the Maturity Date, the interest rate on this note shall be
at the Default Rate.

         (c) Default Rate. After the occurrence and during the continuance of an
Event of Default, Borrower shall pay interest on this note, and on any judgment
on this note, at the Default Rate.

         (d) Computation Method. All interest rates shall be calculated based on
the actual number of days elapsed over a 360-day year (365/360 method).

         3. Payments. Borrower shall make payments in accordance with the
following:

         (a) On the Commencement Date, Borrower shall make a payment of interest
on the outstanding principal balance of this note at the Initial Rate for the
period commencing on the Closing Date and ending on the day before the
Commencement Date. If the

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Closing Date occurs on the first day of a month, this paragraph shall not
apply and no payment is due on the Commencement Date.

         (b) On the first day of the first month after the Commencement Date and
on the first day of each month thereafter to and including the Amortization
Date, Borrower shall pay accrued interest only on the outstanding principal
balance at the Initial Rate for the period commencing on the Commencement Date
and ending on the day before the Amortization Date.

         (c) Commencing on the first day of the first month after the
Amortization Date and on the first day of each month thereafter until the
Maturity Date, Borrower shall make monthly payments of principal and interest in
an amount sufficient to fully amortize the outstanding principal balance of this
note during the period commencing on the Amortization Date at the applicable
interest rate then in effect based upon a 4-year amortization period.

         (d) On the Maturity Date or upon prepayment of this note, Borrower
shall pay the outstanding principal balance of this note, all accrued and unpaid
interest, and all charges, expenses and other amounts payable by Borrower to
Lender.

         4. Method and Place of Payment. Borrower shall make all payments on
this note at One SeaGate, Suite 1500, P.O. Box 1475, Toledo, Ohio 43603, or at
such other place as the holder hereof may designate in writing. Borrower shall
make all payments in lawful money of the United States of America in immediately
available funds.

         5. Prepayment. Borrower may prepay all or any portion of the
outstanding principal balance of this note, all accrued and unpaid interest, and
all charges, expenses and other amounts payable by Borrower to Lender at any
time without payment of any prepayment fee.

         6. Application of Payments. Unless Lender elects otherwise, in its sole
discretion, all payments and other amounts received by Lender shall be credited
as follows: [i] first, to any charges, costs, expenses and fees payable by
Borrower under this note, or incurred by Lender for the protection of any
collateral securing the payment of this note, if not paid by Borrower by the due
date; [ii] second, to interest on the foregoing amounts at the Default Rate from
the due date or date of payment by Lender, as the case may be; [iii] third, to
accrued but unpaid interest on this note; [iv] fourth, to the principal amount
outstanding; and [v] the balance, if any, to Borrower.

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         7. Default. Any Event of Default under the Loan Agreement shall
constitute an "Event of Default" hereunder without advance notice to Borrower,
such notice being expressly waived by Borrower.

                  (a) Condition of Event of Default. Lender and Borrower
acknowledge that any monetary obligation of Borrower under the terms of this
note, which cannot be satisfied from revenues from operation of the Facility,
are subject to and conditioned upon Lender advancing funds pursuant to the
Working Capital Loan (subject to Borrower's obligation to advance working
capital under Section 2.1.2 of the Loan Agreement). Lender's failure to advance
such funds shall not entitle Lender to declare an Event of Default due to
Borrower's failure to comply with a monetary obligation that cannot be satisfied
from revenues from operation of the Facility, however, Lender shall not be
prohibited from declaring an Event of Default as a result of a non-monetary
caused Event of Default or a monetary Event of Default that occurs when Lender
does not have an obligation to advance pursuant to Section 2.1.2 of the Loan
Agreement.

         8. Acceleration. Upon the occurrence of any Event of Default, in
addition to all other remedies available to Lender, any security for or
guarantee of this note, and at law or in equity, at the option of Lender [i] the
outstanding principal balance of this note, all accrued and unpaid interest
thereon, and all other amounts payable by Borrower to Lender shall be
immediately due and payable, and [ii] all such amounts shall bear interest at
the Default Rate from the date of the Event of Default until paid. Lender may
exercise either or both options without notice or demand of any kind.

         9. Governing Law. This note shall be governed by and construed in
accordance with the internal laws of the State, without giving effect to the
conflict of laws rules thereof.

         10. Time is of the Essence. Time is of the essence in the payment of
this note. All grace periods in the Lease and any Collateral Document that apply
to a default shall run concurrently.

         11. Holidays. If any installment of this note becomes due on a day
which is not a Business Day, Borrower may pay the installment on the next
succeeding day on which banking institutions are open.

         12. Waivers. None of the following shall be a course of dealing,
estoppel, waiver or the like on which any party to

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this note or any Collateral Document may rely: [i] Lender's acceptance of one or
more late or partial payments; [ii] Lender's forbearance from exercising any
right or remedy under this note or any Collateral Document; or [iii] Lender's
forbearance from exercising any right or remedy under this note or any
Collateral Document on any one or more occasions. Lender's exercise of any
rights or remedies or a part of a right or remedy on one or more occasions shall
not preclude Lender from exercising the right or remedy at any other time.
Lender's rights and remedies under this note, the Collateral Documents, and the
law and equity are cumulative to, but independent of, each other.

         13. Representations. Each party to this note and each Collateral
Document: [i] acknowledges that Lender would not have extended the credit
evidenced by this note and will not continue to extend the credit but for the
obligations of each; [ii] warrants that each has executed this note or
Collateral Documents to induce Lender to extend and to continue to extend the
credit; [iii] warrants that each has received good and valuable consideration
for executing this note or any Collateral Document; and [iv] warrants that none
have executed this note or any Collateral Document in reliance upon the
existence of the security for or guaranty or promise of the payment of this
note.

         14. Indulgences. Without notice, Lender may do or refrain from doing
anything affecting this note or any Collateral Document, as many times as Lender
desires, including the following [i] granting or not granting any indulgences to
anyone liable for payment of this note or to anyone liable under any Collateral
Document; [ii] releasing any security or anyone or any property from liability
on this note or any Collateral Document; [iii] amending this note or any
Collateral Document, including extending the time for payment of this note, in
accordance the terms of such Collateral Documents.

         15. No Release of Liability. No obligations of any party to this note
shall be affected by [i] any default in this note or any Collateral Document
when accepted by Lender or arising any time thereafter; [ii] the
unenforceability of or defect in this note or in any Collateral Document or any
interest conveyed by any Collateral Document; [iii] any decline in the value of
any interest in any property conveyed by any Collateral Document; or, [iv] the
death, incompetence, insolvency, dissolution, liquidation or winding up of
affairs of any party to this note or any Collateral Document or the start of
insolvency proceedings by or against any such party. EACH PARTY TO ANY
COLLATERAL DOCUMENT WAIVES ALL SURETYSHIP DEFENSES. No party to this note or any
Collateral Document may enforce any right of subrogation or

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contribution unless and until this note is paid in full and waives all rights
of subrogation against any party that is subject to insolvency proceedings
unless and until this note is paid in full.

         16. Notices. All notices, demands, requests and consents (hereinafter
"notices") given pursuant to this note shall be in writing, and shall be served
by [i] personal delivery, [ii] United States Mail, postage prepaid; or [iii]
nationally recognized overnight courier to the following addresses:

                  To Borrower:      Balanced Care at Merrillville, Inc.
                                    1215 Manor Drive
                                    Mechanicsburg, Pennsylvania 17055

                  To Lender:        Health Care REIT, Inc.
                                    One SeaGate, Suite 1500
                                    P.O. Box 1475
                                    Toledo, Ohio  43603

All notices shall be deemed to be given upon the earlier of actual receipt or
three days after deposit in the United States mail or one business day after
deposit with the overnight courier. Lender and Borrower may change their notice
address at any time by giving the other party written notice of such change.

         17. Representation and Warranty Regarding Business Purpose. Borrower
represents and warrants that the loan evidenced by this note is for business
purposes only and not for personal, family, household, or agricultural purposes.

         18. Security. This note is secured by the Mortgage, a security interest
in certain property of Borrower granted pursuant to the provisions of Article 24
of the Lease and by a pledge of all of the issued and outstanding securities of
Borrower granted pursuant to the provisions of Section 25.19 of the Lease. This
note is guaranteed by the Unconditional and Continuing Guaranty of Balanced Care
Corporation.

         19. Protest. Each party to this note jointly and severally waives
protest, notice of protest, demand, dishonor or default, presentment for
payment, notice of intent to declare this note immediately due and payable,
notice of declaration that this note is immediately due and payable in full, all
other notices, and all demands.

         20. Savings Clause. The intention of Lender and Borrower is to comply
with the laws of the State concerning the rate of interest on this note.
Notwithstanding any other

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provision in this note or in any other document given in connection with this
note, Borrower shall not be required to pay interest in excess of the maximum
lawful rate. To the extent the amount of interest provided in this note ever
exceeds the maximum lawful rate (the "Excess Interest"), [i] the provisions of
this paragraph shall govern and control; [ii] Borrower shall not be obligated to
pay any Excess Interest; [iii] any Excess Interest that Lender may have received
shall be credited against the then outstanding balance due under this note and,
if the Excess Interest exceeds the outstanding balance, the excess amount shall
be refunded to Borrower; [iv] the rate of interest under this note shall be
automatically reduced to the maximum lawful rate and this note and any other
documents given in connection therewith shall be deemed reformed and modified to
reflect such reduction; and [v] subject to the foregoing provisions of this
paragraph, Borrower shall have no action or remedy against Lender for any
damages whatsoever or any defense to enforcement of the note or any other
documents given in connection therewith arising out of the payment or collection
of any Excess Interest. In determining whether interest paid or payable on this
note exceeds the maximum lawful rate, Borrower agrees to exclude voluntary
prepayment fees from the calculation of interest and to spread the total amount
of interest throughout the entire contemplated term of this note.

         21. Attorney's Fees and Expenses. Borrower shall pay to Lender all
reasonable costs and expenses incurred by Lender in enforcing or preserving
Lender's rights under this note, any Collateral Document, and in all matters of
collection, provided an Event of Default has actually occurred or has been
declared and thereafter cured, including but not limited to, [i] attorney's and
paralegal's fees and disbursements; [ii] the fees and expenses of any
litigation, administrative, bankruptcy, insolvency, receivership and any other
similar proceeding; [iii] court costs; [iv] the expenses of Lender, its
employees, agents, attorneys and witnesses in preparing for litigation,
administrative, bankruptcy, insolvency and other proceedings and for lodging,
travel, and attendance at meetings, hearings, depositions, and trials; and [v]
consulting and witness fees incurred by Lender in connection with any litigation
or other proceeding, but excluding Lender's internal bookkeeping and routine
loan servicing costs.

         22. Severability. If any clause, provision, section or article of this
note is ruled invalid by any court of competent jurisdiction, the invalidity of
such clause, provision, section, or article shall not affect any of the
remaining provisions hereof.

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         23. Assignment. Borrower shall not assign its rights nor delegate its
obligations under this note.

         24. Amendment. This note may not be amended except in writing signed by
Borrower and Lender. All references to this note, whether in this note or in any
other document or instrument, shall be deemed to incorporate all amendments,
modifications, and renewals of this note and all substitutions made therefor
after the date hereof.

         25. CONSENT TO JURISDICTION. BORROWER HEREBY IRREVOCABLY SUBMITS AND
CONSENTS TO THE NON-EXCLUSIVE JURISDICTION AND VENUE OF ANY STATE OR FEDERAL
COURT HAVING JURISDICTION OVER LUCAS COUNTY, OHIO OR CUMBERLAND COUNTY,
PENNSYLVANIA FOR ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY MATTER
ARISING FROM OR RELATED TO [I] THE TERM SHEET FOR THE LOAN EVIDENCED BY THIS
NOTE; [II] THIS NOTE; OR [III] ANY LOAN DOCUMENT EXECUTED IN CONNECTION WITH
THIS NOTE. BORROWER HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT BORROWER
MAY EFFECTIVELY DO SO, THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE
OF ANY SUCH ACTION OR PROCEEDING. BORROWER AGREES THAT A FINAL JUDGMENT IN ANY
SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN ANY OTHER
JURISDICTION BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW.

         BORROWER AND ANY GUARANTOR AGREE NOT TO INSTITUTE ANY LEGAL ACTION OR
PROCEEDING AGAINST LENDER OR ANY DIRECTOR, OFFICER, EMPLOYEE, AGENT OR PROPERTY
OF LENDER, CONCERNING ANY MATTER ARISING OUT OF OR RELATING TO THE TERM SHEET,
THIS NOTE OR ANY LOAN DOCUMENT IN ANY COURT OTHER THAN A STATE OR FEDERAL COURT
HAVING JURISDICTION OVER LUCAS COUNTY, OHIO.

         BORROWER HEREBY CONSENTS TO SERVICE OF PROCESS BY LENDER IN ANY MANNER
AND IN ANY JURISDICTION PERMITTED BY LAW. NOTHING HEREIN SHALL AFFECT OR IMPAIR
LENDER'S RIGHT TO SERVE LEGAL PROCESS IN ANY MANNER PERMITTED BY LAW, OR
LENDER'S RIGHT TO BRING ANY ACTION OR PROCEEDING AGAINST BORROWER OR THE
PROPERTY OF BORROWER OR ANY GUARANTOR IN THE COURTS OF ANY OTHER JURISDICTION.

         26. WAIVER OF JURY TRIAL. TO THE FULLEST EXTENT PERMITTED BY LAW,
BORROWER AND ANY GUARANTOR HEREBY KNOWINGLY AND VOLUNTARILY WAIVE THE RIGHT TO A
JURY TRIAL IN ANY ACTION, PROCEEDING OR COUNTERCLAIMS ARISING OUT OF OR RELATING
TO THIS NOTE.

            [THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]

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                  IN WITNESS WHEREOF, the undersigned has executed this note
effective as of the date first set forth above.

                              BALANCED CARE AT MERRILLVILLE,
                              INC.

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

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Exhibit 10.18

                             STOCK PLEDGE AGREEMENT

                  This Stock Pledge Agreement is made effective as of October 1,
2000 by and between BALANCED CARE CORPORATION, a corporation organized under the
laws of the State of Delaware ("Pledgor"), in favor of HEALTH CARE REIT, INC., a
corporation organized under the laws of the State of Delaware ("Landlord"),
having an address of One SeaGate, Suite 1950, Toledo, Ohio 43604.

                                R E C I T A L S:

                  A.       Landlord is on this date entering into a Master
Lease Agreement, as amended ("Lease") with Balanced Care at Merrillville, Inc.,
a corporation organized under the laws of the State of Delaware ("Tenant").

                  B. As a condition to entering into the Lease, Landlord has
required Pledgor to enter into an Unconditional and Continuing Lease Guaranty
("Guaranty"), which will be secured by a pledge of all of the issued and
outstanding stock of Tenant as listed on Schedule A (the "Pledged Securities").
Pledgor has determined that Pledgor will benefit from the Lease to Tenant and
has agreed to pledge the Pledged Securities.

                  NOW, THEREFORE, in consideration of the premises and to induce
Landlord to enter into the Lease, Pledgor grants to Landlord a security interest
in the Pledged Securities and Pledgor and Landlord agree to the following.

                   1. Grant of Security Interest. Pledgor grants to Landlord a
security interest in the Pledged Securities. All Pledged Securities shall be
delivered to Landlord and duly endorsed in blank or accompanied by stock powers
duly executed by Pledgor in blank. Upon the occurrence of an Event of Default
(as hereinafter defined), Landlord may cause the transfer into its name or into
the name of its nominee of any and all Pledged Securities.

                   2.      Secured  Obligations.  This pledge secures the
following obligations ("Secured Obligations"); [i] the payment and performance
of all obligations of Tenant's Obligations (as defined in the Lease) (the
"Obligations"); [ii] all obligations of Pledgor under this Agreement; and [iii]
all obligations under the Guaranty.

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                   3.      Rights to Distributions and Dividends.

                           (a)      After an Event of Default, as defined
herein, and until such Event of Default is cured, Landlord shall be entitled to
receive and hold under this pledge all amounts paid or distributed in cash or
other property on account of the Pledged Securities.

                           (b)      If, while this pledge is in effect, Pledgor
shall become entitled to receive or shall receive any stock certificate
(including without limitation, any certificate representing a stock dividend or
a distribution in connection with any reclassification, increase or reduction of
capital or issued in connection with any reorganization), option or rights,
whether as an addition to, in substitution of, or in exchange for any shares of
Pledged Securities or otherwise, Pledgor agrees to accept the same as Landlord's
agent to hold the same in trust for Landlord, and to deliver the same forthwith
to Landlord in the exact form received, with the appropriate endorsement of
Pledgor when necessary and/or appropriate updated stock powers duly executed in
blank, to be held by Landlord as additional collateral for any and all
liabilities of Pledgor to Landlord, subject to the terms hereof. Any sums paid
upon or in respect of the Pledged Securities upon the liquidation or dissolution
of the issuer thereof shall be paid over to Landlord to be held by it as
additional collateral security for the liabilities of Pledgor to Landlord,
subject to the terms hereof; and in case any distribution of capital shall be
made on or in respect of the Pledged Securities or any property shall be
distributed upon or with respect to the Pledged Securities pursuant to any
recapitalization or reclassification of the capital of Tenant or pursuant to any
reorganization of Tenant, the property so distributed shall be delivered to
Landlord to be held by it, as additional collateral for the liabilities of
Pledgor to Landlord, subject to the terms hereof. All sums of money and property
so paid or distributed in respect of the Pledged Securities that are received by
Pledgor shall, until paid or delivered to Landlord, be held by the Pledgor in
trust as additional collateral security for the liabilities of Pledgor to
Landlord.

                   4.      Events of Default.  The occurrence of any one or more
of the following events, which is not cured within any applicable grace, cure or
notice period, shall be an "Event of Default":

                             [i]    Any Event of Default occurs under the
Lease; or

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                            [ii]    Any default in the  performance or
observance of any agreement or condition in this Agreement or the Guaranty.

                   5.      Remedies.  Upon the occurrence of an Event of Default
and at any time thereafter, Landlord may do any one or more of the following:

                              [i]   Exercise its rights as a secured party.

                             [ii]   Commence and  prosecute an action to
foreclose Pledgor's equity of redemption in the Pledged Securities or any
portion thereof.

                            [iii]   Without notice,  apply the cash, if any,
then held by it as security hereunder to the payment of the Secured Obligations.

                              [v] Receive all ordinary cash dividends and apply
them to payment of the Secured Obligations.

                             [vi]   Exercise voting rights under the Pledged
Securities.

                            [vii]   Without waiving any prior or subsequent
default,  waive any default or, with or without waiving any default, remedy
any default.

                           [viii]   Take any action that Landlord is entitled
to take under any law or any document relating to the Lease.

                   6.      Powers of Landlord.  Landlord shall have the
following powers in exercising its rights under paragraph 5.

                              [i]   Any sale of the Pledged  Securities may be
public or private or at any broker's board or on any securities exchange, for
cash, upon credit, or for future delivery.

                             [ii]   Landlord may impose such restrictions on
the sale of any Pledged Securities that Landlord deems desirable to meet the
requirements of federal or state securities laws or any exemptions thereto.

                            [iii]   Ten (10) days' written notice of intention
to make any sale that states the time and place of sale, or, for a sale at
broker's board or on a securities exchange, the

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board or exchange at which the sale is to be made and the day on which the
Pledged Securities will first be offered for sale shall be conclusively deemed
commercially reasonable, but shall not preclude any other commercially
reasonable notice of sale.

                             [iv]   Any public sale shall be held at such time
or times within the ordinary business hours and at such place or places as
Landlord may fix in the notice of sale.

                              [v]   The Pledged Securities may be sold in one
lot or in separate parcels.

                             [vi]   Landlord  shall not be obligated to make
any sale pursuant to any notice of sale. Landlord may, without notice, adjourn
any public or private sale or cause the same to be adjourned from time to time
by announcement at the time and place fixed for the sale. Any sale adjourned may
be made at any time or place to which the same may have been adjourned.

                            [vii]   In any sale on credit or for future
delivery, Landlord may retain the Pledged Securities so sold until the sales
price has been paid by the purchaser, but Landlord shall not be liable for the
failure of any purchaser to pay for the Pledged Securities. If any purchaser of
the Pledged Securities fails to pay the purchase price in full, the Pledged
Securities may again be sold.

                           [viii]   After deducting all costs and expenses of
the sale and delivery, including attorneys' fees and other costs and expenses of
collection, Landlord shall apply the residue of the proceeds of the sale or
sales first to the payment of any costs Landlord may pay or incur in enforcing
its rights under the Lease, the Guaranty and this pledge and second to the
payment of any sums otherwise due on the Obligations and the excess, if any, to
Pledgor. No purchaser at any sale or sales, except Landlord, shall be
responsible for the application of the purchase money.

                   7.      [Intentionally Deleted]

                   8. Waivers. Pledgor agrees that Landlord assumes no
responsibility and shall not be held liable for loss or damage for failure to
collect or realize upon or to preserve any rights pertaining to any Pledged
Securities. Further, Pledgor waives presentment of any kind, notice of dishonor,
payment, and any other notice or demand of any kind whatsoever with respect to
the Lease and Guaranty and consents that the holder thereof may (a) extend the
time of payment or otherwise modify the terms of

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payment of the Lease or (b) release the whole or any part of any security given
to secure the Lease or consent to the substitution of any such security, without
in any manner altering or diminishing the liability or obligation hereunder of
Pledgor and the validity of the security interest granted hereunder. Pledgor
waives acceptance of this pledge.

                   9. Release of Pledged Securities. When the Lease is
terminated and all Obligations of Tenant are paid in full, Landlord shall
deliver to Pledgor all of the Pledged Securities, and shall execute and deliver
or cause to be executed and delivered to Pledgor such instruments as may be
necessary to cancel this pledge and revest the Pledged Securities in Pledgor
free and clear of the lien hereof.

                  10. Notices. All notices, demands, requests, and consents
(hereinafter "notices") given pursuant to the terms of this agreement shall be
in writing, shall be addressed to Landlord at the address set forth in the
introductory paragraph of this agreement and to a Pledgor at the address set
forth opposite such Pledgor's signature, and shall be served by [i] personal
delivery; [ii] United States mail, postage prepaid; or [iii] nationally
recognized overnight courier. All notices shall be deemed to be given upon the
earlier of actual receipt or three (3) days after mailing or one (1) day after
the deposit with the overnight courier. All notices meeting the requirements
hereof shall be effective, regardless of whether or not actually received.
Landlord and Pledgor may change their notice address at any time by giving the
other party notice of such change.

                  11.      Expenses.  Pledgor shall pay, indemnify, and hold
Landlord harmless against liability for the payment of all reasonable
out-of-pocket expenses arising in connection with the execution, delivery and
enforcement of this pledge, including but not limited to, attorneys' fees and
disbursements.

                  12. Applicable Law. This pledge, the Lease, the Guaranty and
all other instruments securing the Lease are being delivered and are to be
construed and enforced under the laws of the State of Ohio, and all rights and
remedies of Landlord as a secured party under the Uniform Commercial Code of the
State of Ohio shall be cumulative to all other rights and remedies of Landlord.

                  13.      Successors  and Assigns,  Etc. All of the covenants
and provisions in this pledge by or for the benefit of Landlord

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<PAGE>   6

and Pledgor shall bind and inure to the benefit of their respective successors
and assigns.

                  14. Security. This pledge shall not prejudice the rights of
Landlord to enforce collection of the obligations of Tenant under the Lease when
due and payable, by suit or in any lawful manner, or to resort to any other
security for the Lease. This pledge is concurrent security for the Lease. The
enumeration of certain rights, privileges and options in this pledge as vested
in Landlord, or its successors and assigns, shall not be construed as a waiver
of, nor an impairment in any way of other rights of Landlord or its successors
or assigns, either at law or in equity, independent of this instrument,
concerning this or any of the liabilities, obligations, indebtedness, or
collateral security involved in the Lease or other instrument securing the
Lease. Landlord, its successors and assigns, shall have the right to proceed
against the security granted hereunder or any other security granted for the
Lease and to proceed against all security at the same time or against
individually pledged or liened assets from time to time at the sole election of
Landlord. No action against any specific security granted for the Lease shall be
a bar to any subsequent action or actions against all or any other security
granted for the Lease.

                  15. Representation and Warranty of Pledgor. Pledgor represents
and warrants that [i] Pledgor owns all of the Pledged Securities free and clear
of all liens, claims, and other encumbrances; [ii] all certificates evidencing
the Pledged Securities are genuine; [iii] the Pledged Securities are fully paid
and non-assessable and constitute all of the issued and outstanding stock of
Tenant; [iv] Pledgor has full right and power to pledge the Pledged Securities
under this pledge; [v] Pledgor acknowledges that Landlord would not have made
the Loan but for this pledge; [vi] Pledgor has given this pledge to induce
Landlord to enter into the Lease; [vii] Pledgor has received good and valuable
consideration for this pledge; [viii] Pledgor has not given this pledge in
reliance upon the existence of any other security for, guaranty of, or liability
for payment of the Loan; and, [ix] the financial information given to Landlord
and upon which Landlord has relied in evaluating the Pledged Securities as
security for the Lease is true, complete and accurate.

                  16. Voting Rights. Unless and until the Pledged Securities are
transferred into Landlord's name pursuant to Section 5, Pledgor may exercise all
voting rights connected with the Pledged Securities. Upon transfer of the
Pledged Securities into Landlord's name after an Event of Default pursuant to
Section

                                      -6-

<PAGE>   7
5, Landlord may exercise all voting rights connected with the Pledged
Securities.

                  17. Severability. The parties intend this agreement to comply
with all laws, and this agreement shall be construed to be consistent with all
laws to the extent possible. If any provision of this agreement or the
application of any provision to any party or circumstance cannot be so
construed, and is adjudged invalid or unenforceable, the application of the
provision to other parties or circumstances and the application of the remainder
of this agreement shall not be affected. Each provision of this agreement shall
be valid and enforceable to the fullest extent permitted by Law.

            [THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]

                                      -7-
<PAGE>   8

                  IN WITNESS WHEREOF, Pledgor and Landlord have executed and
delivered this Stock Pledge Agreement as of the date first above written.

Address:                                    PLEDGOR:

1215 Manor Drive                            BALANCED CARE CORPORATION
Mechanicsburg, PA  17055
                                            By:/s/Robin L. Barber
                                                  Robin L. Barber
                                            Title:   Senior Vice President
                                                     and Legal Counsel &
                                                     Assistant Secretary

                                            LANDLORD:

                                            HEALTH CARE REIT, INC.

                                            By:/s/Erin C. Ibele
                                            Title: Vice President and
                                                   Corporate Secretary

                                      -8-
<PAGE>   9

                                 ACKNOWLEDGMENT

                  The undersigned Company hereby acknowledges the foregoing
Pledge Agreement and agrees to pay to Health Care REIT, Inc., after the
occurrence of an Event of Default, all amounts that become due and payable to
the above-named Pledgor whether attributable to the Pledged Securities or
otherwise.

                  IN WITNESS WHEREOF, Company has caused this Acknowledgment and
Consent to be executed and delivered effective as of the Effective Date.

                                            BALANCED CARE AT MERRILLVILLE, INC.

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

                                      -9-

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