Document:

<PAGE>   1
                                                                    Exhibit 10.2

                 AMENDMENT AND JOINDER TO STOCK PLEDGE AGREEMENT

                  This Amendment and Joinder Agreement (the "Amendment") to that
certain the Stock Pledge Agreement (the "Stock Pledge Agreement") entered into
as of April 18, 2000 by and among Balanced Care Corporation, a Delaware
corporation ("BCC"), the other parties listed in Schedule "1" attached hereto,
all of which are Delaware corporations and are wholly-owned subsidiaries of BCC
(collectively referred to herein as "Subsidiaries", and together with BCC,
collectively the "Pledgor"), the parties listed on Schedule "2" attached hereto,
all of which are Delaware corporations (individually, a "Company" and
collectively, the "Companies"), FRR Investments Limited, a Cayman Islands
corporation ("FRR"), and IPC Advisors S.A.R.L., a Luxembourg corporation
("IPC"), is entered into as of this 6th day of November, 2000 by and among the
Pledgor, the Companies, FRR, IPC, HR Investments Limited, a Cayman Islands
corporation ("HR"), RH Investments Limited, a Cayman Islands corporation ("RH")
and VXM Investments Limited, a Cayman Islands corporation ("VXM") (FRR, IPC, HR,
RH and VXM are collectively referred to as the "Secured Party").

                  WITNESSETH:

                  WHEREAS BCC is issuing certain Promissory Notes (the
"Promissory Notes") dated November 6, 2000 in favour of HR, RH and VXM in the
original principal amounts of $2,166,666.67, $2,166,666.67 and $2,166,666.66
respectively, evidencing an aggregate loan (the "Loan") to BCC by HR, RH and VXM
of $6,500,000, the proceeds of which have been advanced to BCC;

                  AND WHEREAS Pledgor, being all of the shareholders of the
Companies, have received a direct benefit from the consummation of the
transactions evidenced by the Promissory Notes;

                  AND WHEREAS it is a condition precedent to the willingness of
the Secured Party to provide the Loan that Pledgor execute and deliver this
Amendment in favour of the Secured Party;

                  NOW THEREFORE, the parties hereby agree as follows:

1.       Incorporation of Recitals; Definitions.

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                                     - 2 -

                  The recitals set forth above are incorporated herein by
reference and are made a part hereof to the same extent as if such recitals were
set forth herein. Capitalized terms used but not defined herein shall have the
meanings ascribed to them in the Stock Pledge Agreement.

2.       Equity Pledge.

                  Section 1 of the Stock Pledge Agreement is hereby amended and
restated in its entirety as follows:

                  "Pledgor hereby pledges, grants a security interest in,
                  mortgages, assigns, transfers, delivers, sets over and
                  confirms unto Secured Party, its successors and assigns, all
                  of Pledgor's right, title and interest in and to all Equity
                  Interests owned by Pledgor (collectively, the "Pledged
                  Interests"), and delivers to FRR, as agent for itself, IPC, HR
                  Investments Limited ("HR"), RH Investments Limited ("RH") and
                  VXM Investments Limited ("VXM"), the certificates representing
                  or evidencing the Pledged Interests on the date hereof, which
                  certificates are listed on Schedule 3 attached hereto
                  (collectively, the "Certificates"), with equity powers
                  attached duly endorsed in blank by each Pledgor, receipt of
                  which is acknowledged by FRR, as agent for itself, IPC, HR, RH
                  and VXM, as security for: (a) Pledgor's complete payment and
                  performance of Pledgor's obligations under the promissory
                  notes dated November 6, 2000 in favour of HR, RH and VXM,
                  respectively, in the original principal amounts of
                  $2,166,666.67, $2,166,666.67 and $2,166,666.66 and the
                  Indemnification Agreement and, (b) all other past, present and
                  future obligations of Pledgor to any Secured Party which the
                  Secured Party makes subject to this Agreement in its sole
                  discretion (collectively, the "Secured Obligations"). Upon the
                  payment and satisfaction in full of the Secured Obligations,
                  this Agreement and the security interests granted hereby in
                  the Pledged Interests shall be released (with FRR, as agent
                  for itself, IPC, HR, RH and VXM returning all certificates
                  evidencing Pledged Interests and the Secured Party taking such
                  other action as Pledgor may reasonably request to release the
                  security interests granted hereby)."

3.       Joinder.

                  By executing and delivering this Amendment, each of HR, RH and
VXM hereby becomes a party to the Stock Pledge

<PAGE>   3
                                     - 3 -

Agreement, as amended hereby, and each party hereto acknowledges and agrees that
each of HR, RH and VXM shall be considered for all purposes of the Stock Pledge
Agreement to be a Secured Party and shall be entitled to the rights and
privileges of the Secured Party and that each of HR, RH and VXM is bound by all
of the provisions of the Stock Pledge Agreement, as amended, hereby applicable
to the Secured Party thereunder.

4.       Miscellaneous.

         (a)      Wherever it is stated in the Stock Pledge Agreement that FRR
                  acts as agent for itself and IPC, this phrase is amended to
                  read as follows: "FRR, as agent for itself, IPC, HR, RH and
                  VXM".

         (b)      Except as expressly amended or modified by this Amendment, the
                  terms and condition of the Stock Pledge Agreement shall remain
                  in full force and effect.

         (c)      This Amendment may be executed in one or more counterparts,
                  each of which shall constitute an original but all of which
                  shall constitute one and the same instrument.

         (d)      This Amendment may be amended only by a writing signed by all
                  of the parties hereto.

                  IN WITNESS WHEREOF, Pledgor, each Company and Secured Party
have caused this Amendment to be duly executed and delivered under hand and
seal, all as of the day and year first above written.

<PAGE>   4
                                     - 4 -

                                    PLEDGOR:

                                    BALANCED CARE CORPORATION

                                    By:      /s/Robin L. Barber
                                             Name:    Robin L. Barber
                                             Title:   Senior Vice President
                                                       and Legal Counsel

                                    BALANCED CARE REALTY I, INC.

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

                                    BALANCED CARE REALTY II, INC.

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

                                    BALANCED CARE REALTY III, INC.

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

                                    BALANCED CARE REALTY IV, INC.

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

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                                     - 5 -

                                    BALANCED CARE REALTY V, INC.

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

                                    BALANCED CARE REALTY VI, INC.

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

                                    BALANCED CARE REALTY VII, INC.

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

                                   BALANCED CARE REALTY VIII, INC.

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

                                    BALANCED CARE REALTY IX, INC.

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

<PAGE>   6
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                                    BALANCED CARE REALTY X, INC.

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

                                    BALANCED CARE REALTY XI, INC.

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

                                    BALANCED CARE REALTY XII, INC.

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

                                    BALANCED CARE REALTY XIII, INC.

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

                                    BALANCED CARE REALTY XIV, INC.

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

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                                    BALANCED CARE REALTY XV, INC.

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

                                    BALANCED CARE REALTY XVI, INC.

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

                                    BALANCED CARE REALTY XVII, INC.

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

                                    BALANCED CARE REALTY XVIII, INC.

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

                                    BALANCED CARE REALTY XIX, INC.

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

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                                    BALANCED CARE REALTY XX, INC.

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

                                    BALANCED CARE REALTY XXI, INC.

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

                                    BALANCED CARE REALTY XXII, INC.

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

                                    BALANCED CARE REALTY XXIII, INC.

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

                                    BALANCED CARE REALTY XXIV, INC.

                                    By:      /s/Robin L. Barber
                                             Name:    Robin L. Barber
                                             Title:   Vice President and
                                                          Secretary
<PAGE>   9
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                                    BALANCED CARE REALTY XXV, INC.

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

                                    BALANCED CARE REALTY XXVI, INC.

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

                                    BALANCED CARE REALTY XXVII, INC.

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

                                    BALANCED CARE REALTY XXVIII, INC.

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

                                    BALANCED CARE REALTY XXIX, INC.

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

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                                     - 10 -

                                    BALANCED CARE REALTY XXX, INC.

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

                                    BALANCED CARE REALTY XXXI, INC.

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

                                    BALANCED CARE REALTY XXXII, INC.

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

                                    BALANCED CARE REALTY XXXIII, INC.

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

                                    BALANCED CARE REALTY XXXIV, INC.

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

<PAGE>   11
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                                    BALANCED CARE REALTY XXXV, INC.

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

                                    BALANCED CARE REALTY XXXVI, INC.

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

                                    BALANCED CARE REALTY XXXVII, INC.

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

                                    BALANCED CARE REALTY XXXVIII, INC.

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

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                                     - 12 -

                                    BALANCED CARE REALTY XXXIX, INC.

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

                                    COMPANIES:

                                    BALANCED CARE REALTY AT ALTOONA, INC.

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

                                    BALANCED CARE REALTY AT BERWICK, INC.

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

                                    BALANCED CARE REALTY AT LEWISTOWN, INC.

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

<PAGE>   13
                                     - 13 -

                                    BALANCED CARE REALTY AT MANSFIELD, INC.

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

                                    BALANCED CARE REALTY AT MARTINSBURG, INC.

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

                                    BALANCED CARE REALTY AT MAUMELLE, INC.

                                    By:      /s/Robin L. Barber
                                             Name:
                                             Title:

                                    BALANCED CARE REALTY AT MOUNTAIN HOME, INC.

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

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                                     - 14 -

                                    BALANCED CARE REALTY AT PECKVILLE, INC.

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

                                    BALANCED CARE REALTY AT READING, INC.

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

                                    BALANCED CARE REALTY AT SCRANTON, INC.

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

                                    BALANCED CARE REALTY AT SHERWOOD, INC.

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

                                    BALANCED CARE REALTY AT STATE COLLEGE, INC.

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

<PAGE>   15
                                     - 15 -

                                    SECURED PARTY:

                                    FRR INVESTMENTS LIMITED

                                    By:      /s/J.B. Unsworth
                                             Name:    J.B. Unsworth
                                             Title:   Director

                                    IPC ADVISORS S.A.R.L.

                                    By:      /s/J.B. Unsworth
                                             Name:    J.B. Unsworth
                                             Title:   Manager

                                    HR INVESTMENTS LIMITED

                                    By:      /s/J.B. Unsworth
                                             Name:    J.B. Unsworth
                                             Title:   Director

                                    RH INVESTMENTS LIMITED

                                    By:      /s/J.B. Unsworth
                                             Name:    J.B. Unsworth
                                             Title:   Director

                                    VXM INVESTMENTS LIMITED

                                    By:      /s/J.B. Unsworth
                                             Name:    J.B. Unsworth
                                             Title:   Director

<PAGE>   16
                                     - 16 -

         The undersigned, Heller Healthcare Finance, Inc., hereby consents to
the foregoing Amendment.

                                    HELLER HEALTHCARE FINANCE, INC.

                                    By:       /s/David G. Moore
                                              Name:    David G. Moore
                                              Title:   SVP

<PAGE>   17

                                   SCHEDULE 1

                                  SUBSIDIARIES

1.       Balanced Care Realty I, Inc.

2.       Balanced Care Realty II, Inc.

3.       Balanced Care Realty III, Inc.

4.       Balanced Care Realty IV, Inc.

5.       Balanced Care Realty V, Inc.

6.       Balanced Care Realty VI, Inc.

7.       Balanced Care Realty VII, Inc.

8.       Balanced Care Realty VIII, Inc.

9.       Balanced Care Realty IX, Inc.

10.      Balanced Care Realty X, Inc.

11.      Balanced Care Realty XI, Inc.

12.      Balanced Care Realty XII, Inc.

13.      Balanced Care Realty XIII, Inc.

14.      Balanced Care Realty XIV, Inc.

15.      Balanced Care Realty XV, Inc.

16.      Balanced Care Realty XVI, Inc.

17.      Balanced Care Realty XVII, Inc.

18.      Balanced Care Realty XVIII, Inc.

19.      Balanced Care Realty XIX, Inc.

20.      Balanced Care Realty XX, Inc.

21.      Balanced Care Realty XXI, Inc.

22.      Balanced Care Realty XXII, Inc.

23.      Balanced Care Realty XXIII, Inc.

24.      Balanced Care Realty XXIV, Inc.

25.      Balanced Care Realty XXV, Inc.

26.      Balanced Care Realty XXVI, Inc.

27.      Balanced Care Realty XXVII, Inc.

28.      Balanced Care Realty XXVIII, Inc.

29.      Balanced Care Realty XXIX, Inc.

30.      Balanced Care Realty XXX, Inc.

<PAGE>   18
                                        2

31.      Balanced Care Realty XXXI, Inc.

32.      Balanced Care Realty XXXII, Inc.

33.      Balanced Care Realty XXXIII, Inc.

34.      Balanced Care Realty XXXIV, Inc.

35.      Balanced Care Realty XXXV, Inc.

36.      Balanced Care Realty XXXVI, Inc.

37.      Balanced Care Realty XXXVII, Inc.

38.      Balanced Care Realty XXXVIII, Inc.

39.      Balanced Care Realty XXXIX, Inc.

<PAGE>   19

                                   SCHEDULE 2

                                    COMPANIES

1.       Balanced Care Realty at Altoona, Inc.

2.       Balanced Care Realty at Berwick, Inc.

3.       Balanced Care Realty at Lewistown, Inc.

4.       Balanced Care Realty at Mansfield, Inc.

5.       Balanced Care Realty at Martinsburg, Inc.

6.       Balanced Care Realty at Maumelle, Inc.

7.       Balanced Care Realty at Mountain Home, Inc.

8.       Balanced Care Realty at Peckville, Inc.

9.       Balanced Care Realty at Reading, Inc.

10.      Balanced Care Realty at Scranton, Inc.

11.      Balanced Care Realty at Sherwood, Inc.

12.      Balanced Care Realty at State College, Inc.

<PAGE>   20

                                   SCHEDULE 3

                                  CERTIFICATES<PAGE>   1

                                                                    Exhibit 10.3

                                 PROMISSORY NOTE

$2,166,666.66                                                  November 6, 2000

1.       Promise to Pay.

                  FOR VALUE RECEIVED, BALANCED CARE CORPORATION, a Delaware
corporation ("Maker"), which has its address at 1215 Manor Drive, Mechanicsburg,
Pennsylvania 17055, Attention: Clint Fegan, Chief Financial Officer, promises to
pay to the order of VXM INVESTMENTS LIMITED, a Cayman Islands corporation, and
its successors and assigns ("Holder") the sum of Two Million One Hundred and
Sixty Six Thousand Six Hundred and Sixty Six Dollars and Sixty Six Cents
($2,166,666.66) ("this Note"), together with interest thereon as hereinafter set
forth, all payable in lawful money of the United States of America
(collectively, the "Loan"). Payments shall be made to Holder at Herengracht 483,
1017 BT, Amsterdam, Netherlands.

2.       Interest.

                  So long as no Event of Default (as hereinafter defined)
exists, interest shall accrue on the principal balance hereof from time to time
outstanding and Maker shall pay interest thereon at a rate equal to twelve
percent (12%) per annum (the "Interest Rate"). Interest shall be calculated
based on a 360 day year and charged for the actual number of days elapsed.

3.       Payment.

(a)      Provided that Holder has not advised Maker in writing that it wishes
         Maker to pay interest in cash on an Interest Payment Date (as defined
         below), accrued interest due under this Note shall be compounded on
         each Interest Payment Date and such compounded interest shall
         thereafter be added to and become part of, the principal amount due
         under this Note. For the purposes of this Note the "Interest Payment
         Date" shall mean the last day of each month commencing November 30,
         2000 and ending on the date all amounts payable under this Note are
         paid in full; and

(b)      This Note shall be due and payable on or before January 31, 2001, or
         any earlier date on which this Note shall be required to be paid in
         full, whether by acceleration or otherwise (the "Maturity Date").

<PAGE>   2

4.       Prepayment.

                  Maker may prepay this Note in full or in part at any time
Maker gives Holder at least five (5) days prior written notice thereof.

5.       Default.

         5.1.     Events of Default.

Any of the following constitute an "event of default" under this Note (each an
"Event of Default"): (a) the failure to pay any amounts owed pursuant to this
Note when due (other than the failure to pay interest when due, which will
become an Event of Default if not paid within ten (10) calendar days after such
payment is due); (b) the occurrence of an "Event of Default" as that term is
defined by that certain loan agreement dated as of December 30, 1999 by and
among Heller Healthcare Finance, Inc. ("Heller") and Maker, together with the
other parties identified therein, whether or not any such event of default has
been waived by Heller, and, for greater certainty, such definition of "Events of
Default" contained in such agreement is hereby incorporated by reference in and
made a part of this Note, regardless of whether such agreement is modified,
amended or terminated.

         5.2.     Remedies.

         So long as an Event of Default remains outstanding: (a) interest shall
accrue at a rate equal to the Interest Rate plus four percent (4%) per annum
(the "Default Rate"), compounded monthly on the last day of each month until all
amounts payable under this Note are paid in full; (b) Holder may, at its option
and without notice (such notice being expressly waived), declare this Note
immediately due and payable; and (c) Holder may pursue all rights and remedies
available under any security held by Holder, including, without limitation, the
stock pledge agreement dated April 18, 2000 as amended by agreement dated
November 6, 2000 (the "Stock Pledge"). Holder's rights, remedies and powers, as
provided in this Note and in the Stock Pledge are cumulative and concurrent, and
may be pursued singly, successively or together against Maker, any guarantor of
the Loan, the security described in the Stock Pledge and any other security
given at any time to secure the payment hereof, all at the sole discretion of

                                     - 2 -
<PAGE>   3

Holder. Additionally, Holder may resort to every other right or remedy available
at law or in equity without first exhausting the rights and remedies contained
herein, all in Holder's sole discretion. Failure of Holder, for any period of
time or on more than one occasion, to exercise its option to accelerate the
Maturity Date shall not constitute a waiver of the right to exercise the same at
any time during the continued existence of any Event of Default or any
subsequent Event of Default.

                  If any attorney is engaged: (i) to collect the Loan or any
sums due under the Stock Pledge or any other security, whether or not legal
proceedings are thereafter instituted by Holder; (ii) to represent Holder in any
bankruptcy, reorganization, receivership or other proceedings affecting
creditors' rights and involving a claim under this Note; (iii) to protect the
liens of the Stock Pledge or any other security; or (iv) in connection with
seeking an out-of-court workout or settlement of any of the foregoing, then
Maker shall pay to Holder all reasonable costs, attorneys' fees and expenses in
connection therewith, in addition to all other amounts due hereunder.

6.       Governing Law; Severability.

                  This Note shall be governed by and construed in accordance
with the internal laws of the State of Pennsylvania. The invalidity, illegality
or unenforceability of any provision of this Note shall not affect or impair the
validity, legality or enforceability of the remainder of this Note, and to this
end, the provisions of this Note are declared to be severable.

7.       Waiver.

                  Maker, for itself and all endorsers, guarantors and sureties
of this Note, and their respective heirs, legal representatives, successors and
assigns, hereby waives presentment for payment, demand, notice of nonpayment,
notice of dishonor, protest of any dishonor, notice of protest and protest of
this Note, and all other notices in connection with the delivery, acceptance,
performance, default or enforcement of the payment of this Note, and agrees that
their respective liability shall be unconditional and shall not be in any manner
affected by any indulgence, extension of time, renewal, waiver or modification
granted or consented to by Holder. Maker, for itself and all endorsers,
guarantors and sureties of this Note and their respective heirs, legal
representatives, successors and assigns, hereby consents to every extension of
time, renewal, waiver or modification that may be granted by Holder with respect
to the payment or other provisions of this Note, and to the release of

                                     - 3 -
<PAGE>   4

any makers, endorsers, guarantors or sureties, and their heirs, legal
representatives, successors and assigns, and of any collateral given to secure
the payment hereof, or any part hereof, with or without substitution, and agrees
that additional makers, endorsers, guarantors or sureties and their heirs, legal
representatives, successors and assigns, may become parties hereto without
notice to Maker or to any endorser, guarantor or surety and without affecting
the liability of any of them.

8.       Security, Application of Payments.

                  This Note is secured by the liens, encumbrances and
obligations created hereby and by the security interest created in the Stock
Pledge. As further security for its obligations under this Note, Maker agrees to
pledge all of the issued and outstanding shares in the capital of each of the
owners of properties owned directly or indirectly by Maker to the extent same
have not already been pledged pursuant to the Stock Pledge in a form
satisfactory to Holder. Payments will be applied, at Holder's option, first to
interest due on this Note, and second to the outstanding principal balance of
this Note provided, that all interest on and the entire principal amount of this
Note may be prepaid at any time subject to Section 4 of this Note.

9.       Miscellaneous.

         9.1.     Amendments.

         This Note may not be terminated or amended orally, but only by a
termination or amendment in writing signed by Holder and Maker.

         9.2.     Lawful Rate of Interest.

         In no event whatsoever shall the amount of interest paid or agreed to
be paid to Holder pursuant to this Note or any of the Loan Documents exceed the
highest lawful rate of interest permissible under applicable law. If, from any
circumstances whatsoever, fulfillment of any provision of this Note and the
other Loan Documents shall involve exceeding the lawful rate of interest which a
court of competent jurisdiction may deem applicable hereto ("Excess Interest"),
then ipso facto, the obligation to be fulfilled shall be reduced to the highest
lawful rate of interest permissible under such law and if, for any reason
whatsoever, Holder shall receive, as interest, an amount which would be deemed
unlawful under such applicable law, such interest shall be applied to the Loan
(whether or not due and payable), and not to the payment of interest, or
refunded to Maker if such Loan has been paid in full. Neither Maker nor any
guarantor, endorser

                                     - 4 -
<PAGE>   5

or surety nor their heirs, legal representatives, successors or assigns shall
have any action against Holder for any damages whatsoever arising out of the
payment or collection of any such Excess Interest.

         9.3.     Captions.

         The captions of the Paragraphs of this Note are for convenience of
reference only and shall not be deemed to modify, explain, enlarge or restrict
any of the provisions hereof.

         9.4.     Notices.

         Any notice, request, demand, statement or consent made hereunder shall
be in writing and shall be deemed duly given if personally delivered, sent by
certified mail, return receipt requested, sent by a nationally recognized
commercial overnight delivery service with provision for a receipt, postage or
delivery charges prepaid or by facsimile transmission and shall be deemed given
when postmarked or placed in the possession of such mail or delivery service the
day following or, if sent by facsimile transmission, upon receipt, and addressed
as follows:

         If to Holder              VXM Investments Limited
                                   c/o Unsworth & Associates
                                   Herengracht 483
                                   1017 BT
                                   Amsterdam, Netherlands
                                   Facsimile No.  011-31-20-623-2285

         with a copy to:           Goodman Phillips & Vineberg LLP
                                   250 Yonge Street, Suite 2400
                                   Toronto, Ontario
                                   M5B 2M6
                                   Facsimile No.  (416) 979-1234
                                   Attn: Stephen N. Pincus

         with a copy to:           Manfred J. Walt
                                   c/o Central Park Lodges Ltd.
                                   175 Bloor Street East
                                   South Tower
                                   Toronto, Ontario
                                   M4W 3R8
                                   Facsimile No.  (416) 323-3818

                                     - 5 -
<PAGE>   6

         If to Maker:              Balanced Care Corporation
                                   1215 Manor Drive
                                   Mechanicsburg, Pennsylvania 17055
                                   Attn:  Clint Fegan, Chief Financial Officer
                                   Facsimile No. (717) 796-6150

         with a copy to:            Balance Care Corporation
                                   1215 Manor Drive
                                   Mechanicsburg, Pennsylvania 17055
                                   Attn:  Robin L. Barber, Esq.
                                            Facsimile No.  (717) 796-6294

         with a copy to:           Kirkpatrick & Lockhart LLP
                                   1500 Oliver Building
                                   Pittsburg, Pennsylvania 15222
                                   Attn:  Steven J. Adelkoff, Esq.
                                   Facsimile No. (412) 355-6501

or addressed as such party may from time to time designate by written notice to
the other parties.

         Either party by notice to the other may designate additional or
different addresses for subsequent notices or communications.

         9.5.     Time of Essence.

         Time is of the essence for this Note and the performance of each of the
covenants and agreements contained herein.

10.      Sale of Loan.

         Holder, at any time and without the consent of Maker, may grant
participations in or sell, transfer, assign and convey all or any portion of its
right, title and interest in and to the Loan and this Note any guaranties given
in connection with the Loan and any collateral given to secure the Loan.

11.      Consent to Jurisdiction.

                  MAKER HEREBY CONSENTS TO THE JURISDICTION OF ANY STATE OR
FEDERAL COURT LOCATED WITHIN THE STATE OF PENNSYLVANIA AND IRREVOCABLY AGREES
THAT, SUBJECT TO HOLDER'S ELECTION, ALL ACTIONS OR PROCEEDINGS ARISING OUT OF OR
RELATING TO THIS NOTE OR THE OTHER LOAN DOCUMENTS SHALL BE LITIGATED IN SUCH
COURTS. MAKER EXPRESSLY SUBMITS AND CONSENTS TO THE JURISDICTION OF THE

                                     - 6 -
<PAGE>   7

AFORESAID COURTS AND WAIVES ANY DEFENSE OF FORUM NON CONVENIENS. MAKER HEREBY
WAIVES PERSONAL SERVICE OF ANY AND ALL PROCESS AND AGREES THAT ALL SUCH SERVICE
OF PROCESS MAY BE MADE UPON MAKER BY CERTIFIED OR REGISTERED MAIL, RETURN
RECEIPT REQUESTED, ADDRESSED TO MAKER, AT THE ADDRESS SET FORTH IN THIS NOTE AND
SERVICE SO MADE SHALL BE COMPLETE TEN (10) DAYS AFTER THE SAME HAS BEEN POSTED.

12.      Jury Trial Waiver.

                  MAKER, AND HOLDER BY ITS ACCEPTANCE OF THIS NOTE, HEREBY WAIVE
THEIR RESPECTIVE RIGHTS TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING BASED
UPON, OR RELATED TO, THE SUBJECT MATTER OF THIS NOTE AND THE BUSINESS
RELATIONSHIP THAT IS BEING ESTABLISHED. THIS WAIVER IS KNOWINGLY, INTENTIONALLY
AND VOLUNTARILY MADE BY MAKER AND BY HOLDER, AND MAKER ACKNOWLEDGES THAT NEITHER
HOLDER NOR ANY PERSON ACTING ON BEHALF OF HOLDER HAS MADE ANY REPRESENTATIONS OF
FACT TO INDUCE THIS WAIVER OF TRIAL BY JURY OR HAS TAKEN ANY ACTIONS WHICH IN
ANY WAY MODIFY OR NULLIFY ITS EFFECT. MAKER AND HOLDER ACKNOWLEDGE THAT THIS
WAIVER IS A MATERIAL INDUCEMENT TO ENTER INTO A BUSINESS RELATIONSHIP, THAT
MAKER AND HOLDER HAVE ALREADY RELIED ON THIS WAIVER IN ENTERING INTO THIS NOTE
AND THAT EACH OF THEM WILL CONTINUE TO RELY ON THIS WAIVER IN THEIR RELATED
FUTURE DEALINGS. MAKER AND HOLDER FURTHER ACKNOWLEDGE THAT THEY HAVE BEEN
REPRESENTED (OR HAVE HAD THE OPPORTUNITY TO BE REPRESENTED) IN THE SIGNING OF
THIS NOTE AND IN THE MAKING OF THIS WAIVER BY INDEPENDENT LEGAL COUNSEL.

                  IN WITNESS WHEREOF, Maker has executed this Note or has caused
the same to be executed by its duly authorized representatives as of the date
first set forth above.

                               MAKER:

                               BALANCED CARE CORPORATION.,
                               a Delaware corporation

                               By /s/Robin L. Barber
                               Printed Name Robin L. Barber
                               Its Senior Vice President and Legal
                               Counsel & Assistant Secretary

                                     - 7 -

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