Document:

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Exhibit 10.20

                  AMENDED, RESTATED AND CONSOLIDATED AFFILIATED

                          PARTY SUBORDINATION AGREEMENT

         THIS AGREEMENT is made as of the 14th day of March, 2002 by and among
(i) BALANCED CARE TENANT (MT), INC., a Delaware corporation, having its
principal place of business at 1215 Manor Drive, Mechanicsburg, Pennsylvania
17055 (the "Lessee"), (ii) BALANCED CARE CORPORATION, a Delaware corporation,
having its principal address at 1215 Manor Drive, Mechanicsburg, Pennsylvania
17055 (the "Guarantor"); (iii) BCC DEVELOPMENT AND MANAGEMENT CO., a Delaware
corporation, having its principal address at 1215 Manor Drive, Mechanicsburg,
Pennsylvania 17055 (the "Developer"); (iv) BALANCED CARE AT STAFFORD, INC., a
Delaware corporation, BALANCED CARE AT BLYTHEVILLE, INC., a Delaware
corporation, BALANCED CARE AT LEWISBURG, INC., a Delaware corporation, BCC AT
LIMA, INC., a Delaware corporation, BALANCED CARE AT DILLSBURG, INC., a Delaware
corporation, BALANCED CARE AT XENIA, INC., a Delaware corporation, BCC AT
CHIPPEWA, INC., a Delaware corporation, BALANCED CARE AT KINGSPORT, INC., a
Delaware corporation, BALANCED CARE AT CHESTERFIELD, INC., a Delaware
corporation, BALANCED CARE AT HENDERSONVILLE, INC., a Delaware corporation,
BALANCED CARE AT KNOXVILLE, INC., a Delaware corporation and BALANCED CARE AT
POCAHONTAS, INC., a Delaware corporation, each having a principal address at
1215 Manor Drive, Mechanicsburg, Pennsylvania 17055 (collectively, the
"Managers") and (v) all other Affiliates (as such term is defined in the "Lease"
as hereinafter defined) of the Lessee, the Guarantor and/or the Managers which
hereafter enter into Interaffiliate Agreements (as hereinafter defined) with the
Lessee (all of the parties referred to in the foregoing clauses (i), (ii),
(iii), (iv) and (v) are hereinafter collectively referred to as the "Affiliated
Parties"); and (vi) MEDITRUST ACQUISITION COMPANY II LLC, a Delaware limited
liability company, having a principal address at 197 First Avenue, Needham
Heights, Massachusetts 02494 (the "Lessor").

                               W I T N E S S E T H

         WHEREAS, the Lessor is the holder of the landlord's interest under
those certain twelve (12) Facility Lease Agreements more particularly described
in EXHIBIT A attached hereto (collectively, the "Existing Leases");
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         WHEREAS, the Lessee, the Guarantor, the Developer, the Managers, IPC
Advisors S.A.R.L, the Lessor and La Quinta TRS, Inc. are parties to that certain
Option, Settlement and Release Agreement dated February 6, 2002 (the "Option
Agreement"), pursuant to which, among other things, (i) the Lessee and the
Lessor agreed to amend, restate and consolidate the Existing Leases pursuant to
that certain Master Facility Lease Agreement of even date herewith to be
executed simultaneously herewith by and between the Lessor and the Lessee (the
"Lease") and (iii) the Lessee, the Guarantor, the Developer and the Managers
agreed to execute and deliver this Agreement as additional security for the
Obligations (as defined under the Lease);

         WHEREAS, all of the Third Party Lessees (as defined under the Option
Agreement) have been merged into the Lessee with the Lessee being the surviving
entity (collectively, the "Mergers");

         WHEREAS, pursuant to the Option Agreement, Balanced Care at Stafford,
Inc. (the "Potomac Point Lessee") has assigned its interest under the Potomac
Point Lease Documents (as defined in the Option Agreement) to the Lessee, and
the Lessee has assumed the Potomac Point Lessee's obligations under the Potomac
Point Lease Documents (the "Potomac Point Assignment");

         WHEREAS, as a consequence of the Mergers and the Potomac Point
Assignment, the Lessee is the holder of the tenant's interest under the Existing
Leases and is party to and bound by the agreements listed on EXHIBIT B attached
hereto (collectively, the "Existing Subordination Agreements"), which Existing
Subordination Agreements provide additional security for the obligations under
the Existing Leases; and

         WHEREAS, in connection with the amendment, restatement and
consolidation of the Existing Leases, the parties hereto have agreed that the
Existing Subordination Agreements be amended, restated and consolidated;

         NOW, THEREFORE, in consideration of the mutual covenants hereinafter
contained and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged by the parties hereto, which consideration
includes (a) the Lessor's agreement to enter into the Option Agreement and grant
the Option Right (as defined under the Option Agreement) to the Buyer, (b) the
Lessor's agreement to the "IPC/BCC Release" and the "BCC Release" (as such terms
are defined under the Option Agreement)

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and (c) the Lessor's agreement, notwithstanding the Existing Defaults (as
defined under the Option Agreement), to consent to the Stock Transfers (as
defined under the Option Agreement), the parties hereto agree to amend and
restate the Existing Subordination Agreements in their entirety and to that end
agree that this Amended, Restated and Consolidated Affiliated Party
Subordination Agreement shall be deemed effective as of the date hereof, shall
supersede the Existing Subordination Agreements in their entirety and shall be
referred to herein as the "Agreement". The parties hereto further agree as
follows:

                                  1. Background

         1.1 Capitalized Terms. All capitalized terms used herein and not
expressly defined herein shall have the same meanings ascribed to such terms in
the Lease.

         1.2 Interaffiliate Agreements. The Affiliated Parties have entered into
or may enter into agreements of any kind or nature, whether written or oral
(including, without limitation, management agreements, financing arrangements
and shareholder agreements) with the Lessee (such agreements are hereinafter
collectively referred to as the "Interaffiliate Agreements"), including, without
limitation, the Current Management Agreements.

         1.3 Affiliated Party Debt. All fees, indebtedness, interests,
liabilities, and obligations of the Lessee to any of the Affiliated Parties,
whether now existing or hereafter arising, under the Interaffiliate Agreements
are hereinafter referred to collectively as the "Affiliated Party Debt". Without
limiting the foregoing, the term "Affiliated Party Debt" shall be deemed to
include (i) all dividends, distributions and other payments of any kind or
nature hereafter made or paid by the Lessee to any of its partners or
shareholders, (ii) any payment hereafter made by the Lessee in connection with
any loan from or to any of the Affiliated Parties, (iii) any equity investment
hereafter made by the Lessee in any Affiliate or Subsidiary and (iv) the
indebtedness, liabilities and obligations of the Lessee to the Managers under
the Current Management Agreements.

                                2. Subordination

         2.1. Subordination of Affiliated Party Debt. The payment of any and all
of the Affiliated Party Debt is hereby expressly subordinated and made junior to
the payment and performance of

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all of the Obligations to the extent and in the manner set forth herein.

         2.2. Payments and Receipts. Until the Lease Obligations shall have been
completely paid and performed, the Lessee shall not make, and the Affiliated
Parties shall not receive, accept or retain any direct or indirect payment or
reduction (whether by way of loan, setoff, declaration of any dividend,
distribution of cash or property or otherwise) in respect to the principal of,
or premium or interest on, the Affiliated Party Debt, if, on the date such
payment would (but for the terms hereof) be payable to and received by any of
the Affiliated Parties pursuant to any of the Interaffiliate Agreements (each of
which such dates shall be hereinafter referred to as a "Affiliated Party Debt
Payment Date"):

                  (i) after giving effect to such payment, the Lessee shall be
unable to comply with any of the Lease Obligations;

                  (ii) a default or breach of condition continuing beyond all
applicable notice and/or grace periods under any of the Lease Documents
(hereinafter referred to as a "Lease Default") shall have occurred, shall be
continuing and shall not have been specifically waived in writing by the Lessor,
whether or not the Lessor has exercised any right or remedy under the Lease
Documents with respect thereto or if such a Lease Default shall not be
continuing on any Affiliated Party Debt Payment Date, but the Lessor (pursuant
to any of the Lease Documents) shall have commenced to exercise any right and
remedy under the Lease Documents with respect thereto and such exercise shall
not have been specifically rescinded in writing by the Lessor; or

                  (iii) an event which with the giving of notice or the passage
of time or both shall constitute a Lease Default shall have occurred, shall be
continuing and shall not have been specifically waived in writing by the Lessor.

         2.3 Bankruptcy and Insolvency. In the event of any voluntary or
involuntary insolvency, bankruptcy, receivership, custodianship, readjustment of
debt, arrangement, composition, assignment for the benefit of creditors or other
similar proceeding relative to the Lessee or any of the Lessee's property, then
and in any such event:

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<PAGE>
                  (i) all of the Obligations shall first be paid in full before
any payment or distribution of any character, whether in cash, securities,
obligations or other property, shall be made in respect to the Affiliated Party
Debt;

                  (ii) any payment or distribution of any character, which would
otherwise (but for the terms hereof) be payable or deliverable in respect of the
Affiliated Party Debt (including, without limitation, any payment or
distribution of any other indebtedness of the Lessee being subordinated to the
Affiliated Party Debt), shall be paid or delivered directly to the Lessor until
all of the Obligations shall have been paid in full, and the Affiliated Parties
or any other holders of the Affiliated Party Debt irrevocably authorize, empower
and direct all receivers, custodians, trustees, liquidators, conservators, and
others having authority with respect to the Leased Property (or any portion
thereof) to effect all such payments and deliveries;

                  (iii) upon the written request of the Lessor, the Affiliated
Parties shall prove, enforce and endeavor to obtain payment of the aggregate
outstanding amount of all unpaid Affiliated Party Debt payments due and payable,
or thereafter becoming due and payable from the Lessee to the Affiliated
Parties, and shall turn over to the Lessor in precisely the form received, any
payment of any kind or character on account of such Affiliated Party Debt for
application to the payment of the Obligations. In the event that the Affiliated
Parties shall fail to take any such action requested by the Lessor, the Lessor
as attorney-in-fact for the Affiliated Parties, with full power of substitution,
may take such action on behalf of the Affiliated Parties, but for the use and
benefit of the Lessor. This power of attorney, being coupled with an interest,
shall be irrevocable until all of the Lease Obligations are fully paid and
performed and shall not be affected by any disability or incapacity which any of
the Affiliated Parties may suffer and shall survive the same. The power of
attorney conferred on the Lessor by the foregoing provisions is provided solely
to protect the interests of the Lessor and shall not impose any duty on the
Lessor to exercise any such power, and neither the Lessor nor such
attorney-in-fact shall be liable for any act, omission, error in judgment or
mistake of law, except as the same may result from its gross negligence or
wilful misconduct; and

                  (iv) the Affiliated Parties or any other holder of the
Affiliated Party Debt shall execute and deliver to the Lessor all

                                      -5-
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such further instruments confirming the authorization referred to in the
foregoing clauses (ii) and (iii), and any powers of attorney specifically
confirming the rights of the Lessor arising hereunder, and all such proofs of
claim, assignments of claim and other instruments and shall take all such other
actions as may be requested by the Lessor in order to enable the Lessor to
enforce any and all claims upon or in respect of such Affiliated Party Debt and
to collect and give any and all payments or distributions which may be payable
or deliverable at any time upon or with respect to such Affiliated Party Debt.

         2.4. Application of Payments. If, notwithstanding the provisions of
this Agreement, any payment or distribution of any character (whether in cash,
securities or other property) or any security shall be received by any of the
Affiliated Parties in contravention of the terms of this Agreement, and before
all of the Obligations shall have been paid and performed in full, such payment,
distribution or security shall be held in trust for the benefit of and shall be
paid over or delivered and transferred to, the Lessor for application to the
payment of all of the Lease Obligations remaining unpaid, until all of the Lease
Obligations shall have been paid in full.

         2.5 Obligations of the Lessee to Affiliated Parties. Except to the
extent provided in this Agreement that the Affiliated Party Debt may not be
payable, be paid or be retained, nothing contained herein shall impair, as
between the Lessee and the Affiliated Parties, the obligations of the Lessee,
which are absolute and unconditional, to pay to the Affiliated Parties the
Affiliated Party Debt, as and when the same shall become due and payable in
accordance with the terms thereof (and retain the same), or prevent the
Affiliated Parties, upon default with respect to the Affiliated Party Debt, from
exercising all rights, powers, and remedies otherwise provided therein or by
applicable law, all subject to the rights of the Lessor hereunder.

                  3. Continued Effectiveness of this Agreement.

         3.1. Changes in Lease Documents, Etc. The terms and provisions of this
Agreement, the subordination effected hereby, the rights of the Lessor, and the
obligations of the Affiliated Parties arising hereunder shall not be affected,
modified or impaired in any manner or to any extent by:

                                      -6-
<PAGE>
                  (i) any renewal, replacement, amendment, extension,
substitution, revision, consolidation, modification or termination of any of the
Lease Documents and/or any of the Related Party Agreements;

                  (ii) the validity or enforceability of any such documents
referred to in clause (i) above;

                  (iii) the release, sale, exchange or surrender, in whole or in
part, of Collateral;

                  (iv) any exercise or nonexercise of any right, power or remedy
in respect of the Obligations; or

                  (v) any waiver, consent, release, indulgency, extension,
renewal, modification, delay or other action, inaction or omission in respect of
the Obligations, now existing or hereafter arising, all whether or not the
Affiliated Parties shall have had notice or knowledge of any of the foregoing
and whether or not they shall have consented thereto.

         3.2. Transferees. In the event of any sale, assignment, disposition or
other transfer of the Affiliated Party Debt, the Affiliated Parties shall cause
the transferee thereof to execute and deliver to the Lessor an agreement
(substantially identical with this Agreement) providing for the continued
subordination of the Affiliated Party Debt to the Obligations as provided herein
and for the continued effectiveness of all of the rights of the Lessor arising
under this Agreement; provided, however, that notwithstanding the delivery of
such an agreement, the Lessor shall not be deemed to have waived its right to
consent to any assignment, transfer, amendment or alteration of the
Interaffiliate Agreements pursuant to the terms of the Lease Documents.

                          4. Interaffiliate Agreements.

         4.1. Termination of Interaffiliate Agreements. Notwithstanding anything
to the contrary contained in the Interaffiliate Agreements, the Affiliated
Parties hereby agree that after the occurrence of any Lease Default, the Lessor
may terminate all or any one or more of the Interaffiliate Agreements, upon
written notice to the Affiliated Parties, in the event that:

                                      -7-
<PAGE>
                  (i) the Lessor elects to take possession (directly or through
a nominee) of all or any portion of the Leased Property by reason of the
exercise of the rights and remedies granted to the Lessor under any of the Lease
Documents; or

                  (ii) the Lessor elects to terminate the Lease pursuant to the
terms of any of the Lease Documents.

         In the event of a termination of any one or more of the Interaffiliate
Agreements pursuant to the provisions hereof, neither the Lessor nor any such
nominee shall have any liabilities or obligations whatsoever with respect to the
Affiliated Party Debt or any portion thereof (whether past due or which would
have become due and payable if such Interaffiliate Agreements had not been
terminated) or any other duties, covenants, agreements or obligations of the
Lessee under any of the Interaffiliate Agreements.

         4.2 Changes in Interaffiliate Agreements, Etc. Each of the Affiliated
Parties agrees that it shall not transfer or assign any Interaffiliate Agreement
or any interest therein, directly or indirectly, or consent to the transfer or
assignment of any Interaffiliate Agreement or any such interest by any party
thereto, without the prior written consent of the Lessor, in each instance,
which consent shall not be unreasonably withheld; provided, however, that the
Lessor's consent shall not be required for any transfer or assignment of any
Interaffiliate Agreement to another Affiliate of the Lessee as long as such
other Affiliate has executed this Agreement or executes and delivers to the
Lessor an agreement substantially identical to this Agreement.

                  5. Representations, Warranties and Covenants.

                                      -8-
<PAGE>
         The Lessee and the other Affiliated Parties each represent and warrant
to, and covenant and agree with the Lessor, that: (i) each Affiliate of the
Lessee that is a party to any Interaffiliate Agreement in effect as of the date
hereof is a party to this Agreement; (ii) a true and correct copy of each
written Interaffiliate Agreement entered into after the date hereof shall be
provided to the Lessor within ten (10) days after its execution and in the event
that any party to any Interaffiliate Agreement (whether written or oral) entered
into after the date hereof is not a party to this Agreement as of the date
hereof, the Affiliated Parties agree to cause such party to agree to be bound by
the terms of this Agreement, pursuant to an instrument in form and substance
acceptable to the Lessor, as fully and effectively as if such party constituted
one of the Affiliated Parties specifically named herein as of the date hereof;
and (iii) no written Interaffiliate Agreement shall be amended except by written
instrument and a true and correct copy of each instrument which is hereafter
entered into amending any Interaffiliate Agreement shall be provided to the
Lessor within ten (10) days after its execution.

                               6. Lease Documents.

         Each of the Affiliated Parties acknowledges that it has received copies
of the Lease Documents and hereby agrees to be bound by and to fully comply with
the terms and conditions contained therein, as the same may be applicable to the
Affiliated Parties (either directly or as a result of the Affiliated Parties'
duties, obligations, covenants and agreements under the Interaffiliate
Agreements).

                               7. Indemnification.

         The Affiliated Parties shall and hereby jointly and severally agree to
indemnify and hold the Lessor harmless from and against all obligations,
liabilities, losses, costs, claims, expenses, fines, penalties and damages
(including ,without limitation, attorneys' fees and expenses and court costs)
which the Lessor may reasonably incur (i) by reason of this Agreement and (ii)
in connection with the Interaffiliate Agreements (including, without limitation,
all claims and demands which may be asserted against the Lessor by reason of any
alleged obligation or undertaking on its part to perform or discharge any of the
terms, covenants or agreements contained in the Interaffiliate Agreements)
(collectively, the "Indemnified

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Losses"). Notwithstanding anything to the contrary contained herein, the
Indemnified Losses shall not include any obligations, liabilities, losses,
costs, claims, expenses, fines, penalties or damages arising solely as a result
of the Lessor's gross negligence or willful misconduct.

         The Affiliated Parties shall defend the Lessor against any claim or
litigation involving the Lessor for the same, with counsel approved by the
Lessor, and should the Lessor incur any such obligation, liability, loss, cost,
expense, fine, penalty or damage, then the Affiliated Parties shall reimburse
the Lessor for such amounts upon demand, and upon the failure of the Affiliated
Parties so to do, the Lessor, at its option, may declare the Lease Obligations
immediately due and payable. Notwithstanding anything to the contrary contained
herein, the Lessor shall have the option of conducting its own defense with
counsel of its own choice, but at the expense of the Affiliated Parties.

         The foregoing indemnification agreement shall also include all costs
reasonably incurred by the Lessor in connection with the enforcement of said
indemnification agreement. Any amounts owed to the Lessor under this Section
shall be a demand obligation and to the extent permitted under applicable law,
shall be added to the Lease Obligations and, if not paid within ten (10) days
after demand, shall thereafter, to the extent permitted by applicable law, bear
interest at the Overdue Rate until the date of payment.

         The provisions of this Section shall survive the complete payment and
performance of the Obligations and the expiration or earlier termination of the
Lease.

                                  8. Conflict.

         In the event of any conflict between any term, covenant or condition of
this Agreement and any term, covenant or condition of the Interaffiliate
Agreements, or any documents executed in connection therewith or the
indebtedness evidenced thereby, the provisions of this Agreement shall control
and govern.

                                   9. Notice.

         Any notice, request, demand, statement or consent made hereunder shall
be in writing and shall be deemed duly given if

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personally delivered, sent by certified mail, return receipt requested, or sent
by a nationally recognized commercial overnight delivery service with provisions
for a receipt, postage or delivery charges prepaid, and shall be deemed given
when postmarked or placed in the possession of such mail or delivery service and
addressed as follows:

If to the Affiliated                Balanced Care Corporation
Parties:                            1215 Manor Drive
                                    Mechanicsburg, Pennsylvania  17055
                                    Attn:  President

With copies to:                     Balanced Care Corporation
                                    1215 Manor Drive
                                    Mechanicsburg, Pennsylvania  17055
                                    Attn:  General Counsel

                                    Kirkpatrick & Lockhart
                                    Henry W. Oliver Building
                                    535 Smithfield Street
                                    Pittsburgh, Pennsylvania  15222-2312
                                    Attn:  Steven Adelkoff, Esq.

If to the Lessee:                   Balanced Care Tenant (MT), Inc.
                                    1215 Manor Drive
                                    Mechanicsburg, Pennsylvania  17055
                                    Attn:  President

With copies to:                     Balanced Care Corporation
                                    1215 Manor Drive
                                    Mechanicsburg, Pennsylvania  17055
                                    Attn:  General Counsel

                                    Kirkpatrick & Lockhart
                                    Henry W. Oliver Building
                                    535 Smithfield Street
                                    Pittsburgh, Pennsylvania  15222-2312
                                    Attn:  Steven Adelkoff, Esq.

If to the Lessor:                   Meditrust Acquisition Company II LLC
                                    197 First Avenue
                                    Needham Heights, Massachusetts  02494
                                    Attn:  President

With copies to:                     Meditrust Acquisition Company II LLC

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                                    197 First Avenue
                                    Needham Heights, Massachusetts  02494
                                    Attn:  General Counsel

                                    Nutter, McClennen & Fish, LLP
                                    One International Place
                                    Boston, Massachusetts  02110-2699
                                    Attn:  Marianne Ajemian, Esq.

or at such other place as any of the parties hereto may from time to time
hereafter designate to the others in writing. Any notice given to any of the
Affiliated Parties by the Lessor at any time shall not imply that such notice or
any further or similar notice was or is required.

                                  10. Priority.

         This Agreement is intended to establish relative rights and priorities
between the Lessor and the Affiliated Parties.

                               11. Governing Law.

         This Agreement shall in all respects be governed, construed, applied
and enforced in accordance with the laws of the Commonwealth of Massachusetts.

         To the maximum extent permitted by applicable law, the Affiliated
Parties hereby submit to the jurisdiction of 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 purpose of any suit, action or
other proceeding arising out of, or with respect to any of the Lease Documents,
the negotiation and/or consummation of the transactions evidenced by the Lease
Documents, the Lessor's relationship with any member of the Leasing Group in
connection with the transactions evidenced by the Lease Documents and/or the
performance of any obligation or the exercise of any remedy under any of the
Lease Documents and expressly waive any and all objections they may have as to
venue in any of such courts.

                                    12. Term.

         This Agreement shall remain in full force and effect so long as the
Lease Obligations remain undischarged or unsatisfied in

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any respect. The Affiliated Parties agree that an affidavit, certificate, letter
or statement of any officer, agent or attorney of the Lessor indicating that any
part of the Lease Obligations remains outstanding shall be deemed prima facie
evidence of the validity, effectiveness and continuing force of this Agreement
and any Person may and is hereby authorized to rely thereon. Upon the complete
payment and performance of the Lease Obligations, this Agreement shall be deemed
terminated without further action and shall thereupon be of no further force or
effect.

                             13. Further Assurances.

         At any time and from time to time, upon request by the Lessor, the
Affiliated Parties shall promptly make, execute and deliver, or cause to be
made, executed and delivered, to the Lessor and, where appropriate, cause to be
recorded and/or filed (and from time to time thereafter to be re-recorded and/or
refiled) at such time and in such offices and places as shall be deemed
desirable by the Lessor (in its reasonable discretion), any and all such other
and further amendments, assignments, instruments of further assurance,
certificates and other documents as the Lessor may, in its sole and absolute
discretion, deem desirable to (A) enable the Lessor to convey all or any portion
of the Leased Property, (B) assign the Lease and/or any of the other Lease
Documents or any portion of the Lessor's interest in any or all of the same, (C)
enable the Lessor to enter into participation agreements with respect to all or
any portion of the Obligations or (D) effectuate, complete or perfect, or to
continue and preserve the rights and remedies of the Lessor and/or the
obligations of any of the Affiliated Parties under this Agreement and/or any of
the other Lease Documents, including, without limitation, any document requested
in order to preserve the security interests created under the Lease Documents as
first priority security interests in the Collateral; provided, however, that no
such additional document or other instrument requested by the Lessor hereunder
shall increase the Obligations (except as to the costs and expenses reasonably
incurred by the Lessor in connection with the items referred to in the foregoing
clause (D)). Any failure by the Affiliated Parties to comply with any request
pursuant to this Section within twenty (20) days after such request is made by
the Lessor, shall be an Event of Default hereunder and upon such Event of
Default, the Lessor may make, execute, record, file, re-record and/or refile any
and all such amendments, assignments,

                                      -13-
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instruments, certificates, and documents for and in the name of the Affiliated
Parties and the Affiliated Parties each hereby appoint the Lessor as their
attorney-in-fact, with full power of substitution, to take such actions (on
their behalf and in their name) as the Lessor, in its sole and absolute
discretion, may deem necessary or desirable to effectuate the intent of this
Section. This power of attorney, being coupled with an interest, shall be
irrevocable until all of the Obligations are fully paid and performed and shall
not be affected by any disability or incapacity which any of the Affiliated
Parties may suffer and shall survive the same. The power of attorney conferred
on the Lessor pursuant to the provisions of this Section is provided solely to
protect the interests of the Lessor and shall not impose any duty on the Lessor
to exercise any such power, and neither the Lessor nor such attorney-in-fact
shall be liable for any act, omission, error in judgment or mistake of law,
except as the same may result from its gross negligence or willful misconduct.

            14. Successors and Assigns; Joint and Several Liability.

         The terms and provisions of this Agreement shall be (i) binding on the
Affiliated Parties and their respective heirs, executors, administrators, legal
representatives, successors and assigns and any Affiliates of the Lessee, now or
hereafter existing, and (ii) inure to the benefit of the Lessor, any other
Person who may now or hereafter hold any interest in the Lease or any of the
other Lease Documents and their respective successors, assigns and participants;
provided, however, that, without limiting any of the other provisions of any of
the other Lease Documents, in the event that more than fifty percent (50%) of
the legal or beneficial interest in an Affiliated Party shall have been sold to
a purchaser which is not an Affiliated Party or an Affiliate of an Affiliated
Party and such Affiliated Party shall no longer be controlled by an Affiliated
Party or an Affiliate of an Affiliated Party, then the obligation of the Lessee
and such Affiliate hereunder with respect to Affiliated Party Debt shall cease
with respect to Affiliated Party Debt first incurred by such Affiliated Party
following such sale. Notwithstanding the foregoing, except as specifically
permitted under this Agreement or Section 19.4 of the Lease, the Affiliated
Parties shall not, individually or together, assign or otherwise transfer this
Agreement or any of their respective rights or obligations hereunder without the
express written consent of the Lessor, in each instance, which consent may be
withheld in the Lessor's sole

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and absolute discretion. All of the obligations of the Affiliated Parties
hereunder shall be joint and several.

                 15. General Provisions; Rules of Construction.

         The provisions set forth in Article 23 and Sections 2.2, 16.8 through
16.10, 24.2 through 24.10 and 24.12 of the Lease are hereby incorporated by
reference, mutatis, mutandis, and shall be applicable to this Agreement as if
set forth in full herein.

                [REMAINDER OF THE PAGE INTENTIONALLY LEFT BLANK]

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

                                        AFFILIATED PARTIES:

WITNESSES:                              BALANCED CARE TENANT (MT), INC., a
                                        Delaware corporation

/s/Jaynelle D. Covert
Name: Jaynelle D. Covert

/s/Susan J. Dawson                      By:/s/Robin L. Barber      (SEAL)
Name: Susan J. Dawson                      Name: Robin L. Barber
                                           Title: Vice President and
                                                  Secretary

WITNESSES:                              BALANCED CARE CORPORATION, a
                                        Delaware corporation

/s/Jaynelle D. Covert
Name: Jaynelle D. Covert

/s/Susan J. Dawson                      By:/s/Robin L. Barber      (SEAL)
Name: Susan J. Dawson                      Name: Robin L. Barber
                                           Title: Senior Vice President,
                                                  Legal Counsel, and
                                                  Assistant Secretary

WITNESSES:                              BCC DEVELOPMENT AND MANAGEMENT CO.,
                                        a Delaware corporation
/s/Jaynelle D. Covert
Name: Jaynelle D. Covert

/s/Susan J. Dawson                      By:/s/Robin L. Barber      (SEAL)
Name: Susan J. Dawson                      Name: Robin L. Barber
                                           Title: Vice President and
                                                  Secretary

                                      -16-
<PAGE>
WITNESSES:                             BALANCED CARE AT STAFFORD, INC.,
                                       a Delaware corporation
/s/Jaynelle D. Covert
Name: Jaynelle D. Covert

/s/Susan J. Dawson                     By:/s/Robin L. Barber      (SEAL)
Name: Susan J. Dawson                     Name: Robin L. Barber
                                          Title: Vice President and
                                                 Secretary

WITNESSES:                             BALANCED CARE AT BLYTHEVILLE, INC.,
                                       a Delaware corporation
/s/Jaynelle D. Covert
Name: Jaynelle D. Covert

/s/Susan J. Dawson                     By:/s/Robin L. Barber      (SEAL)
Name: Susan J. Dawson                     Name: Robin L. Barber
                                          Title: Vice President and
                                                 Secretary

WITNESSES:                             BALANCED CARE AT LEWISBURG, INC.,
                                       a Delaware corporation
/s/Jaynelle D. Covert
Name: Jaynelle D. Covert

/s/Susan J. Dawson                     By:/s/Robin L. Barber      (SEAL)
Name: Susan J. Dawson                     Name: Robin L. Barber
                                          Title: Vice President and
                                                 Secretary

WITNESSES:                             BCC AT LIMA, INC., a Delaware corporation

/s/Jaynelle D. Covert
Name: Jaynelle D. Covert

/s/Susan J. Dawson                     By:/s/Robin L. Barber      (SEAL)
Name: Susan J. Dawson                     Name: Robin L. Barber
                                          Title: Vice President and
                                                 Secretary

                                      -17-
<PAGE>
WITNESSES:                         BALANCED CARE AT DILLSBURG, INC.,
                                   a Delaware corporation
/s/Jaynelle D. Covert
Name: Jaynelle D. Covert

/s/Susan J. Dawson                 By:/s/Robin L. Barber      (SEAL)
Name: Susan J. Dawson                 Name: Robin L. Barber
                                      Title: Vice President and
                                             Secretary

WITNESSES:                         BALANCED CARE AT XENIA, INC.,
                                   a Delaware corporation
/s/Jaynelle D. Covert
Name: Jaynelle D. Covert

/s/Susan J. Dawson                 By:/s/Robin L. Barber      (SEAL)
Name: Susan J. Dawson                 Name: Robin L. Barber
                                      Title: Vice President and
                                             Secretary

WITNESSES:                         BCC AT CHIPPEWA, INC., a Delaware corporation
/s/Jaynelle D. Covert
Name: Jaynelle D. Covert

/s/Susan J. Dawson                 By:/s/Robin L. Barber      (SEAL)
Name: Susan J. Dawson                 Name: Robin L. Barber
                                      Title: Vice President and
                                             Secretary

WITNESSES:                         BALANCED CARE AT KINGSPORT, INC.,
                                   a Delaware corporation
/s/Jaynelle D. Covert
Name: Jaynelle D. Covert

/s/Susan J. Dawson                 By:/s/Robin L. Barber      (SEAL)
Name: Susan J. Dawson                 Name: Robin L. Barber
                                      Title: Vice President and
                                             Secretary

                                      -18-
<PAGE>
WITNESSES:                             BALANCED CARE AT CHESTERFIELD, INC.,
                                       a Delaware corporation
/s/Jaynelle D. Covert
Name: Jaynelle D. Covert

/s/Susan J. Dawson                     By:/s/Robin L. Barber      (SEAL)
Name: Susan J. Dawson                     Name: Robin L. Barber
                                          Title: Vice President and
                                                 Secretary

WITNESSES:                             BALANCED CARE AT HENDERSONVILLE, INC.,
                                       a Delaware corporation
/s/Jaynelle D. Covert
Name: Jaynelle D. Covert

/s/Susan J. Dawson                     By:/s/Robin L. Barber      (SEAL)
Name: Susan J. Dawson                     Name: Robin L. Barber
                                          Title: Vice President and
                                                 Secretary

WITNESSES:                             BALANCED CARE AT KNOXVILLE, INC.,
                                       a Delaware corporation
/s/Jaynelle D. Covert
Name: Jaynelle D. Covert

/s/Susan J. Dawson                     By:/s/Robin L. Barber      (SEAL)
Name: Susan J. Dawson                     Name: Robin L. Barber
                                          Title: Vice President and
                                                 Secretary

WITNESSES:                             BALANCED CARE AT POCAHONTAS, INC.,
                                       a Delaware corporation
/s/Jaynelle D. Covert
Name: Jaynelle D. Covert

/s/Susan J. Dawson                     By:/s/Robin L. Barber      (SEAL)
Name: Susan J. Dawson                     Name: Robin L. Barber
                                          Title: Vice President and
                                                 Secretary

                                      -19-
<PAGE>
WITNESSES:                              LESSOR:

                                        MEDITRUST ACQUISITION COMPANY II LLC,
                                        a Delaware limited liability company

/s/Richard L. Pomroy
Name: Richard L. Pomroy

/s/Brian J. McGrath                     By:/s/Kathryn Arnone      (SEAL)
Name: Brian J. McGrath                     Name: Kathryn Arnone
                                           Title: Secretary

                                      -20-<PAGE>
Exhibit 10.21

                FORM OF AMENDED AND RESTATED MANAGEMENT AGREEMENT
                                  [          ]

         THIS AMENDED AND RESTATED MANAGEMENT AGREEMENT (the "Agreement") is
made as of the 14th day of March, 2002 between [          ], a Delaware
corporation (the "Management Firm") and BALANCED CARE TENANT (MT), INC., a
Delaware corporation (the "Operator").

                                   Witnesseth:

         WHEREAS, the Operator executed and delivered that certain Master
Facility Lease Agreement dated as of the date hereof (the "Lease") whereby the
Operator leased from MEDITRUST ACQUISITION COMPANY II LLC, a Delaware limited
liability company (the "Lessor") certain "Leased Property" (as defined in the
Lease); and

         WHEREAS, Operator is or will be the sole operator of [          ] with
[          ] licensed beds (located in [          ] units) located in [
], that is situated on a portion of the Leased Property (the "Facility"), and
has or will have a license from the State of [          ] to operate the
Facility; and

         WHEREAS, the Management Firm is experienced in operating such
facilities and is willing to be the manager of the Facility on behalf of the
Operator, as an independent contractor pursuant to the terms and conditions set
forth herein; and

         WHEREAS, Operator wishes to engage Management Firm as the operator and
manager of the Facility; and

         WHEREAS, during the term of this Agreement, the Management Firm shall
be the manager of the Facility on behalf of the Operator.

         NOW, THEREFORE, in consideration of the promises and covenants
contained herein, and intending to be legally bound hereby, the parties hereto
agree as follows:

1. Scope of Work. Operator hereby appoints Management Firm as the operator and
manager of the Facility during the term of this Agreement. The Management Firm
shall have responsibility and authority for the day-to-day operation and
management of the
<PAGE>
Facility and shall take all actions necessary or desirable to manage the
Facility and to fulfill its duties hereunder, including without limitation to:
(i) operate and maintain the Facility on behalf of the Operator as [          ]
facility providing residential care services; (ii) collect all room and board
revenue, as well as other revenue on behalf of the Operator, and timely pay all
debts and other obligations relating to the Facility, including operating
expenses, fixed expenses and taxes; (iii) ensure the Facility complies with
applicable Federal, state and local laws and regulations, and with the terms and
conditions of the Lease and the other Lease Documents (as defined in the Lease);
(iv) provide all necessary services to ensure that the Facility provides quality
care to its residents; (v) recruit, hire and train personnel as needed for the
operation of all departments and services of the Facility; (vi) maintain such
bank accounts as may be necessary or desirable for the operation of the Facility
(the "Operating Accounts"); (vii) establish salary levels, performance
standards, personnel policies and employee benefits; and (viii) take all other
actions necessary or desirable to operate and manage the Facility in accordance
with prudent practice and industry standards. In addition, without modifying,
limiting, releasing or otherwise affecting the Operator's obligations under the
Lease, the Management Firm and the Operator agree that all obligations and
duties of the Operator under the Lease Documents related to the operation of the
Facility (including, without limitation, obligations relating to maintenance of
insurance for the Facility and repairs and maintenance of the Facility) shall be
included in the scope of work to be performed hereunder and are hereby delegated
to the Management Firm to be performed by the Management Firm on behalf of the
Operator.

         Notwithstanding anything to the contrary contained herein or in any
Lease Document, the Operator shall retain and exercise ultimate authority for
the operation of the Facility. The Management Firm agrees to follow all
instructions and directives of the Operator relating to the management and
operation of the Facility.

         In performing its duties, the Management Firm (through its in-house
corporate staff or independent contractors) shall perform the following with
respect to the Facility, as well as any other matters reasonably related thereto
commencing upon the date of this Agreement:

                                       2
<PAGE>
         (a) Management Information Systems (MIS)

                  Support centralized Facility information systems that provide
         systems management for the following areas:

                         --    Accounts Receivable
                         --    Accounts Payable
                         --    Coordination of Payroll with Third Party Vendor
                         --    Financial Reporting
                         --    Marketing
                         --    General Ledger

         The Management Firm shall be responsible for billing and collection of
Accounts Receivable.

         (b) Legal Counsel

                  (i) Prepare or coordinate with outside legal counsel for
         preparation of documents for operation of the Facility, including
         resident agreements, supplier/vendor contracts, service contracts,
         equipment leases and other ancillary contracts; (ii) prepare or
         coordinate licensure and other regulatory applications; (iii)
         coordinate all litigation involving the Facility with local counsel or
         the insurance company; (iv) coordinate with local counsel on local law
         issues affecting the Facility; (v) process working capital requests and
         apply for, negotiate and obtain letters of credit; and (vi) provide
         legal counsel or coordinate with local counsel to provide counsel to
         the Facility's Human Resources Department.

         The parties acknowledge that all outside counsel expenses under the
foregoing paragraph shall be an expense of the Operator.

         (c) Accounting/Tax

                  (i) Provide an accountant to supervise all accounting
         activities; (ii) implement accounting policies and guidelines; (iii)
         provide a centralized cash management system; (iv) deposit in Operating
         Accounts all funds received from the operations of the Facility and
         satisfy obligations

                                       3
<PAGE>
         of the Facility from such Operating Accounts; (v) negotiate and
         administer working capital line of credit available to the Facility;
         (vi) supervise the Facility's internal control structure; (vii) provide
         payroll, income and real estate tax support as follows: prepare or
         supervise preparation of all tax returns, assist the Facility in the
         event of a tax audit, assist the Facility with technical issues
         relating to payroll, excise and other taxes, and monitor pending and
         final Federal, State and local tax law changes; (viii) maintain the
         Facility's accounting and tax records; (ix) provide operations
         expertise through site visits and strategies to maximize fiscal
         performance; and (x) develop and implement a budget for operations,
         capital outlay and cash requirements. All checks or other documents for
         withdrawal of funds shall be signed by the appropriate officer of the
         Management Firm or its designee. Deposits may be made by the
         appropriate officer of the Management Firm or its designee.

         (d) Human Resources

                  (i) Implement all personnel policies and guidelines; (ii)
         recruit management personnel of the Facility, including the community
         director of the Facility, which recruitment and the salaries related
         thereto shall be an expense of the Operator; (iii) provide on-going
         training for the Facility's Human Resources Director; (iv) negotiate
         and administer all employee benefit plans including health insurance,
         dental insurance, life insurance, long-term disability insurance, and
         retirement/401K; (v) negotiate and administer general and professional
         liability, workers' compensation, property, and vehicular insurance
         plans; (vi) monitor the Facility's compliance with Federal, State and
         local employment laws; (vii) respond to all government compliance
         agencies and legal proceedings as necessary; (viii) implement and
         monitor safety/loss control programs; (ix) develop and implement career
         planning and manpower development strategies; (x) recruit, employ and
         train personnel as needed

                                       4
<PAGE>
         for the operation of all departments and services of the Facility; and
         (xi) establish salary levels, performance standards, personnel policies
         and employee benefits for all employees within applicable budgetary and
         regulatory limits. All persons engaged to work at the Facility shall be
         the employees of the Management Firm, but each such employee's salary
         and benefits shall be considered an operating expense of the Facility.

         (e) Program Development

                  (i) Provide ongoing program development and management
         consultation; (ii) supply select program manuals for local modification
         and implementation; and (iii) provide program development/management
         training.

         (f) Quality Management

                  (i) Provide model quality management systems and implement
         such including risk management, resident/family satisfaction, licensing
         and accreditation, and program evaluation; and (ii) provide ongoing
         monitoring of the Facility resident outcomes, compare with regional and
         national norms, and make program modifications.

         (g) Marketing/Communication

                  (i) Hire, direct and supervise marketing department staff;
         (ii) train staff (program managers, rehabilitation liaisons, marketing
         representatives, etc.) in marketing skills; (iii) organize strong sales
         efforts within the target area, develop program mix strategies, and
         develop marketing plans for the Facility; (iv) establish an
         intake/admission system and continuously review the admission process;
         (v) develop image building advertising strategies for the Facility; and
         (vi) develop and produce Facility selected promotional literature.

         (h) Contracting

                                       5
<PAGE>
                  Negotiate and execute contracts and agreements related to the
         Facility with third parties and parties affiliated with the Management
         Firm; provided that all contracts and agreements with parties
         affiliated with the Management Firm shall be on terms no less favorable
         than terms for comparable contracts and agreements with unaffiliated
         parties.

         (i) Miscellaneous

                  (1)      Obtain and maintain in the name of Operator, the
                           license to operate the Facility, and any other
                           licenses and certifications required for operation of
                           the Facility and use reasonable efforts to procure
                           eligibility for Operator to participate in other
                           applicable referral or payor programs.

                  (2)      Purchase supplies, using procurement practices in
                           accordance with industry standards, and lease
                           equipment under national and regional agreements or
                           purchase contracts of the Management Firm or its
                           affiliated companies and provide to the Operator all
                           benefits resulting therefrom to the extent permitted
                           by their terms and by law. All such supplies so
                           purchased shall become property of the Operator. Once
                           leases are completed, equipment shall become property
                           of the Operator.

                  (3)      Review and analyze the performance of ancillary
                           services under contract and negotiate contractual
                           arrangements therefore.

                  (4)      Maintain books and records for the Facility at the
                           Management Firm's home office for the purpose of
                           providing services under this Agreement. The
                           Management Firm shall make available to the Operator
                           and the Lessor, and their respective agents,
                           accountants, and attorneys during normal business
                           hours all books and records pertaining to the
                           Facility, and the Management Firm shall

                                       6
<PAGE>
                           promptly respond to any questions of the Operator
                           with respect to such books and records and shall
                           confer with the Operator at all reasonable times,
                           upon request, concerning the operation of the
                           Facility.

                  (5)      Order, supervise and conduct a program of regular
                           maintenance and repair of the Facility at the
                           Operator's cost and expense.

                  (6)      Supervise and provide for the operation of food
                           service facilities for the Facility.

                  (7)      Make periodic evaluations of the performance of all
                           departments of the Facility and investigate and
                           report, upon request, any inconsistency between
                           expenditures and budget.

                  (8)      Implement all policies and procedures reasonably
                           necessary for the operation of the Facility
                           consistent with applicable regulations.

                  (9)      Foster a working relationship between Management Firm
                           and any authorized volunteer or auxiliary groups
                           interested in providing support to the Facility and
                           residents of the Facility.

2. Additional Services. It is the intention of the parties that the Management
Firm be responsible for providing all service necessary or desirable for the
efficient and orderly management and operations of the Facility; provided, the
cost and expense of operating the Facility is to be paid by Operator. The
Management Firm shall actively utilize staff specialists in its employ or that
of its affiliates in such areas as accounting, budgeting, marketing,
reimbursement, dietary, housekeeping, clinical, pharmaceutical, purchasing and
third party payments in the management of the Facility when considered desirable
by the Management Firm. The expense of such personnel shall be the
responsibility of Operator.

                                       7
<PAGE>
3. Financial Statement. The Management Firm shall prepare and deliver to the
Operator an unaudited balance sheet within forty-five (45) days after the close
of each fiscal quarter of the Operator. The Management Firm shall also cause an
un-audited annual statement to be made of the financial records of the Facility
and a copy of such report shall be provided to the Operator as soon as it is
available after the end of the fiscal year. The cost of the reports shall be an
expense of the Facility and shall be paid for by the Operator. The fiscal year
for the Facility shall coincide with the Operator's fiscal year. All financial
statements are to be prepared in accordance with GAAP. Without limiting any
other provision hereunder, the Management Firm shall prepare and deliver all
financial statements and reports relating to the Operator or the Facility
required by Lessor pursuant to the Lease.

4. Property Interests/Confidentiality. (a) The technical systems, methods,
policies, procedures and controls, copyrights, trade-names, trademarks,
service-marks, "know-how" and all other intellectual property rights related
thereto employed by the Management Firm (the "Intangible Rights") are to remain
the property of the Management Firm and are not, at any time, to be utilized,
distributed, copied or otherwise employed or acquired by the Operator except as
authorized in writing by the Management Firm or except as may be required by
law.

         (b) Operator understands and acknowledges that Management Firm has
devoted substantial time, energy and expense to developing a process and
procedure to manage and operate facilities such as the Facility, and that such
processes, procedures, Intangible Rights and the information and materials
compiled or prepared in connection therewith, including without limitation
marketing plans, business plans, pricing information, information on
competition, demographics, suppliers and providers of services and financing
arrangements (collectively "Confidential Information") are proprietary to
Management Firm and the confidential information of the Management Firm.
Operator shall not disclose to any party any Confidential Information, without
the prior written consent of Management Firm, except as may be required by law
or except as may be required by the Lessor.

         (c) The provisions of this Section shall survive the expiration or
sooner termination of this Agreement.

                                       8
<PAGE>
5. Term of Agreement. The term of this Agreement shall commence upon the date
hereof, and continue for a period of five (5) years thereafter. This Agreement
shall be automatically renewed for additional one (1) year terms unless either
party gives the other party notice of its intent not to renew, which notice must
be given at least ninety (90) days prior to the expiration of the then current
term.

6. Termination. (a) The Operator may terminate this Agreement upon written
notice if the Management Firm defaults in the performance of any material
covenant, agreement, term or provision of this Agreement to be performed by it
and such default continues for a period of forty-five (45) days after written
notice to the Management Firm from the Operator stating the specific default or,
if such default is not subject to cure within forty-five (45) days, such longer
period as may be required to effect a cure, provided Management Firm initiates
curative action within forty-five (45) days and thereafter is diligently and in
good faith pursuing such cure.

         (b) The Management Firm may, after the expiration or sooner termination
of the Lease, terminate this Agreement upon written notice in the event any one
or more of the following events shall occur:

         (1)      If the Operator shall fail to timely pay to the Management
                  Firm any Management Fee required to be paid in accordance with
                  Paragraph 9 hereof and such failure continues for ten (10)
                  days after written notice to the Operator; or

         (2)      If the Operator defaults in the performance of any other
                  material covenant, agreement, term or provision of this
                  Agreement to be performed by the Operator and such default
                  continues for a period of forty-five (45) days after written
                  notice to the Operator from the Management Firm stating the
                  specific default or, if such default is not subject to cure
                  within forty-five (45) days, such longer period as may be
                  required to effect a cure, provided the defaulting party
                  initiates curative action within forty-five

                                       9
<PAGE>
                  (45) days and thereafter is diligently and in good faith
                  pursuing such cure; or

         (3)      If the Facility or a material portion thereof is damaged or
                  destroyed by fire or other casualty and the Operator fails to
                  commence to repair, restore, rebuild or replace any such
                  damage or destruction within ninety (90) days of the
                  occurrence of such damage or destruction, and thereafter to
                  complete such work within a reasonable period of time.

         In the event of termination of this Agreement by either party pursuant
to Section 6(a) or 6(b) above, the Management Firm shall have the right to enter
the Facility and remove all of its personal property and Intangible Rights
material.

         (c) The Management Firm and Operator acknowledge and agree that this
Agreement shall automatically terminate upon the expiration or sooner
termination of the Lease, unless the Operator has acquired fee title to the
Facility.

7. Liability and Indemnification/Force Majuere. (a)By the Management Firm. The
Management Firm shall indemnify, defend, save and hold harmless the Operator,
its shareholders, officers, directors, employees, or agents from and against all
demands, claims, actions, losses, damages, deficiencies, liabilities, costs and
expenses (including, without limitation, attorney's fees, interest, penalties
and all amounts paid in investigation, defense or settlement of any of the
foregoing) asserted against or incurred by the Operator, its shareholders,
officers, directors, employees, or agents, in connection with, or arising out
of, or resulting from a breach of any covenant, agreement, representation or
warranty of the Management Firm. The provisions of this Section shall survive
the expiration or sooner termination of this Agreement.

         (b) By the Operator. The Operator shall indemnify, defend, save and
hold harmless the Management Firm, its shareholders, officers, directors,
employees, or agents from and against all demands, claims, actions, losses,
damages, deficiencies, liabilities, costs and expenses (including, without
limitation, attorney's fees, interest, penalties and all amounts paid in
investigation, defense or settlement of any of the

                                       10
<PAGE>
foregoing) asserted against or incurred by the Management Firm, its officers,
directors, employees, or agents, in connection with, or arising out of, or
resulting from a breach of any covenant, agreement, representation or warranty
of the Operator; provided, however, the Operator shall not be required to
provide indemnification hereunder in the event that the claim for which the
indemnification has arisen results from a breach of a duty or obligation of the
Operator under the Lease Documents that has been delegated to the Management
Firm hereunder. The provisions of this Section shall survive the expiration or
sooner termination of this Agreement.

         (c) No Bar to Claims. Nothing contained herein shall preclude either
party from asserting any claims or suits against the other party that may arise
out of the terms and provisions of this Agreement.

         (d) Force Majuere. The Management Firm shall not be deemed to be in
violation of this Agreement, and its performance shall be excused, if it is
prevented from performing any of its obligations hereunder for any reason beyond
its control, including without limitation, shortages in labor or supplies, war,
acts of God, failure of the Operator to advance funds, or changes in any statute
or regulation of Federal, State or local government, or any agency thereof.

8. Relationship Between Parties. The relationship of the Management Firm to the
Operator shall be that of independent contractor.

9. Management Fee. The Management Firm for the services rendered hereunder shall
be entitled to six percent (6%) of Gross Revenues (as defined in the Lease) of
the Facility as its sole compensation for management of the Facility (the
"Management Fee"). Payment of the Management Fee or any other amounts due to the
Management Firm from the Operator or the Facility shall be subordinated to
payment and other charges due to the Lessor under the Lease and the other Lease
Documents (as defined in the Lease). The Management Fee shall be paid monthly,
and shall be based on the financial operations of the Facility as of the end of
each calendar monthly. To the extent that the year-end audited financial
statements for the Facility disclose that the Management Fee actually received
during the year then ended was greater or less than what should have been
received, Operator shall (in case of underpayment) pay upon demand the shortfall
and

                                       11
<PAGE>
(in the case of overpayment) shall be credited against the Management Fee due in
the next succeeding quarter such overpayment.

10. Funding of Costs and Expenses by the Operator. The Operator shall at all
times provide sufficient working capital for operation of the Facility and shall
deposit such capital from time to time into the Operating Accounts of the
Facility in advance of the time required to be disbursed by the Management Firm.

11. No Approval by the Operator. The Management Firm shall, not less frequently
than annually, adopt a plan of operation for the Facility which shall set forth
proposed staffing, budgets, program and related matters; and such matters shall
be subject to approval of the Operator or its designee, and shall be subject to
the approval of the Lessor as provided in the Lease.

12. Other Facilities. Operator understands and acknowledges that Management Firm
is in the business of operating facilities such as the Facility, and that
Management Firm intends to continue to manage and operate such other facilities,
provided that such other facilities are not located within a 10-mile radius of
the Facility. Nothing contained herein shall be deemed to be construed as a
restriction on the Management Firm's right to so operate and manage such other
existing facilities or facilities that may be opened in the future. The
Management Firm acknowledges that it is included within the definition of
Leasing Group set forth under the Lease, and agrees to be bound by the
provisions of Section 11.5.4 of the Lease. The provisions of this Section 12
shall survive the expiration or sooner termination of the Lease and/or this
Agreement and may be enforced by the Lessor or any Purchaser (as defined in the
Lease) as a third party beneficiary.

13. Notices. All notices required or permitted hereunder shall be given in
writing by actual delivery or by Registered or Certified U.S. Mail, postage
prepaid. Notice shall be deemed given upon delivery, or if given by mail, upon
depositing with the U.S. Postal Service. Notice shall be delivered or mailed to
the parties at the following addresses or at such other places as a party shall
designate in writing.

                                       12
<PAGE>
       Management Firm:

                                  [          ]
                          c/o Balanced Care Corporation
                                1215 Manor Drive
                        Mechanicsburg, Pennsylvania 17055
                           Attention: Legal Department

       The Operator:

                         Balanced Care Tenant (MT), Inc.
                          c/o Balanced Care Corporation
                                1215 Manor Drive
                        Mechanicsburg, Pennsylvania 17055
                           Attention: Legal Department

14. [INTENTIONALLY DELETED].

15. Entire Agreement. This writing contains the entire agreement between the
parties and shall be binding upon and inure to the benefit of their successors
and assigns. Any modifications or changes in this Agreement shall be effective
only if in writing and signed by the parties hereto.

16. Counterparts. This Agreement may be signed in any number of counterparts,
each of which shall be an original, and all of which taken together shall be
deemed to constitute one and the same instrument.

17. Construction. This Agreement shall be constructed in accordance with the
laws of the Commonwealth of Pennsylvania, exclusive of its conflicts of laws.

18. Compliance with Federal Records Requirements. To the extent required under
applicable law, the Management Firm shall, (and if Management Firm carries out
any of the duties under this Agreement through a subcontract with a related
organization and such subcontract has a value or cost of $10,000 or more during
any 12-month period, such subcontract shall contain a clause to the effect that
the subcontractor shall), until the expiration of four (4) years after the
furnishing of services hereunder, make available upon written request by the
Secretary of Health and Human Service or the Comptroller General of the United
States or any of their duly authorized representatives, this Agreement and the
books, documents and records of the Management Firm (or such

                                       13
<PAGE>
subcontractor) that are necessary to verify the nature and extent of the costs
furnished under this Agreement.

19. Successors and Assigns. Except with respect to the collateral assignment of
its interest in this Agreement to the Lessor, Operator may not assign this
Agreement, expressly, by operation of law, or otherwise, without the prior
written consent of the Management Firm, which consent may be withheld in the
sole discretion of the Management Firm. Management Firm may not assign this
Agreement, expressly, by operation of law, or otherwise, without the prior
written consent of the Operator; provided, however, subject to the prior consent
of the Lessor (which consent shall not be unreasonably withheld, conditioned or
delayed) Management Firm may assign its rights and obligations hereunder without
consent to any company controlled by or under common control with the Management
Firm.

20. Lease Documents/Notices From Lessor. The Management Firm acknowledges that
it has received true, complete and correct copies of all Lease Documents, and
that the Management Firm shall operate the Facility in accordance with the terms
of the Lease Documents so provided. In the event of any inconsistency between
the terms of the Lease Documents and the terms of this Agreement, the terms of
the Lease Documents shall control. Operator shall immediately provide to
Management Firm all notices received from the Lessor.

                          Signatures on following page

                                       14
<PAGE>
       IN WITNESS WHEREOF, intending to be legally bound hereby, the parties
hereto have affixed their names by their proper officers or duly authorized
representatives as of the day and year first above written.

WITNESS/ATTEST:                     THE MANAGEMENT FIRM:

                                    [                            ]

/s/ Jaynelle D. Covert

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

WITNESS/ATTEST:                     THE OPERATOR:

                                    BALANCED CARE TENANT (MT), INC.
/s/ Jaynelle D. Covert

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

                                       15

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