<PAGE>   1

                                                                   Exhibit 10.19

                    SECOND SERIES MASTER INVESTMENT AGREEMENT
                    -----------------------------------------


         THIS SECOND SERIES MASTER INVESTMENT AGREEMENT (this "AGREEMENT") is
made by and between BALANCED CARE CORPORATION ("BCC"), BCC DEVELOPMENT AND
MANAGEMENT CO. ("DEVELOPER"), a Delaware corporation, C&G HEALTHCARE AT
PENSACOLA, L.L.C., C&G HEALTHCARE AT TALLAHASSEE, L.L.C., C&G HEALTHCARE AT
HAGERSTOWN, L.L.C., C&G HEALTHCARE AT JOHNSON CITY, L.L.C., and C&G HEALTHCARE
AT TEAY'S VALLEY, L.L.C. (such Delaware limited liability companies being
hereinafter individually referred to as a "Tenant" and collectively as
"TENANTS"), and NATIONWIDE HEALTH PROPERTIES, INC., a Maryland corporation
("NHP").

                                    RECITALS:

         A. NHP, Tenants, Developer, and BCC have agreed to enter into a series
of five (5) transactions, as specifically set forth in EXHIBIT "A" attached
hereto and included herein for all purposes as though fully set forth
(hereinafter individually referred to as a "TRANSACTION" and collectively
referred to as the "TRANSACTIONS"), each of which will include the purchase,
lease, and development of certain tracts or parcels of real property, together
with all improvements thereon, all personal property to be leased therewith, and
all appurtenances thereto (hereinafter individually referred to as a "PROPERTY"
and collectively referred to as the "PROPERTIES"), with the sum of the aggregate
purchase prices and aggregate development fees and costs for the Properties
("NHP'S MAXIMUM INVESTMENT") to be limited to Twenty-Five Million Nine Hundred
Thousand and No/100 Dollars ($25,900,000.00).

         B. The Transactions are generally expected to take the following form:
(a) each of the Properties are to be located, identified, and chosen by BCC or
its Affiliates (defined below), which will enter into option or purchase
agreements (hereinafter individually referred to as a "PURCHASE CONTRACT" and
collectively referred to as the "PURCHASE CONTRACTS") by and between various
third parties, as seller, and BCC, as buyer; (b) following the exercise of an
option or the firm decision by BCC to proceed with a purchase pursuant to a
Purchase Contract, BCC will assign all its rights, duties, and obligations under
such Purchase Contract to NHP, pursuant to an assignment of purchase contract
agreement (the "PURCHASE CONTRACT ASSIGNMENTS"); (c) NHP will purchase the
respective Properties upon the terms and conditions set forth in the applicable
Purchase Contracts, and any amendments thereto required by NHP; (d)
simultaneously with the closing of each Purchase Contract, one of the Tenants
will lease from NHP the applicable Property, pursuant to the terms and
conditions set forth in a lease and security agreement (hereinafter individually
referred to as a "LEASE" and collectively referred to as the "LEASES"), which
Leases will typically provide for an initial term of eleven (11) years and for
three (3) separate renewal terms of six (6) years each; (e) as additional
security for the obligations of Tenants under each respective Lease, BCC will
enter into working capital assurance agreements with NHP (the "CAPITAL
AGREEMENTS"), whereby BCC agrees to make working capital loans to the applicable
Tenant, and as further security, NHP will be a party to deposit pledge
agreements (the "DEPOSIT AGREEMENTS") whereby each applicable Tenant pledges a
minimum amount of capital as a working capital reserve for its operations; (f)
each


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<PAGE>   2

property will be developed, used, and licensed (by the State in which such
Property is located) as an assisted living facility, personal care home,
independent living facility, or similar adult care facility (hereinafter
individually referred to as a "FACILITY" and collectively referred to as the
"FACILITIES"), including (at BCC's option) such ancillary services for
independent living, skilled nursing, rehabilitation, or Alzheimer's or dementia
care as are permitted by law and may be necessary or incidental thereto; (g)
Developer will act as developer of each of the Properties, pursuant to the terms
and conditions of development agreements (hereinafter individually referred to
as a "DEVELOPMENT AGREEMENT" and collectively referred to as the "DEVELOPMENT
AGREEMENTS") to be entered into by and between Developer and NHP, with the
aggregate development fees paid to Developer under the Development Agreements
being funded out of NHP's Maximum Investment and limited to an amount equal to
six and one-half percent (6.5%) of NHP's Maximum Investment; (h) BCC will
guarantee the obligations of Developer under each respective Development
Agreement and the completion of all improvements contemplated in such
Development Agreements, pursuant to a guaranty agreement with NHP (the
"DEVELOPMENT GUARANTIES"), (i) each of the Tenants will enter into a management
agreement with a newly formed subsidiary of BCC, whereby such BCC subsidiary
agrees to manage the respective Facility on behalf of the respective Tenant
(such BCC subsidiaries being hereinafter collectively referred to as the
"MANAGERS"), (j) BCC will indemnify NHP with respect to possible environmental
hazards on each applicable Property by means of environmental indemnification
agreements (the "ENVIRONMENTAL INDEMNIFICATIONS"), and (k) NHP will grant rights
of first refusal to BCC with respect to any proposed sales of the Properties, by
means of right of first refusal agreements ("REFUSAL AGREEMENTS").

         C. BCC, each of the Tenants, and Developer each acknowledges and agrees
that this Agreement is given as an inducement to NHP to consummate the
Transactions and to enter into the Purchase Contract Assignments, Purchase
Contracts, Leases, Capital Agreements, Deposit Agreements, Development
Agreements, Development Guaranties, Environmental Indemnifications, and Refusal
Agreements, that NHP would not enter into the Purchase Contract Assignments,
Purchase Contracts, Leases, Capital Agreements, Deposit Agreements, Development
Agreements, Development Guaranties, Environmental Indemnifications, and Refusal
Agreements without the execution and delivery by Tenants' Owner, BCC and
Developer of this Agreement, that such execution and delivery is a condition
precedent to NHP's obligations under the Purchase Contract Assignments, Purchase
Contracts, Leases, Capital Agreements, Deposit Agreements, Development
Agreements, Development Guaranties, Environmental Indemnifications, and Refusal
Agreements, and that the Transactions are each subject to final approval by NHP.

         NOW, THEREFORE, taking the foregoing paragraphs A through C (the
"RECITALS") into account, and in consideration of the mutual covenants,
agreements, and conditions set forth herein and in the Purchase Contract
Assignments, Purchase Contracts, Leases, Capital Agreements, Deposit Agreements,
Development Agreements, Development Guaranties, Environmental Indemnifications,
and Refusal Agreements, and for other good and valuable consideration the
receipt and sufficiency of which is hereby acknowledged, the parties hereto,
intending to be legally bound, hereby agree as follows:

         1. DEFINITION OF AFFILIATE. For purposes of any of the Transactions,
this





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<PAGE>   3

agreement, the Purchase Contracts, Purchase Contract Assignments, Leases,
Capital Agreements, Deposit Agreements, Development Agreements, Development
Guaranties, Environmental Indemnifications, and Refusal Agreements, and any
other documents executed by any of the parties hereto, any Tenants or their
respective Affiliates (as defined herein) with respect to the Transactions:(a)
the term "AFFILIATE" is defined to mean with respect to any person or entity,
any other person or entity which controls, is controlled by or is under common
control with the first person or entity, and the term "AFFILIATES" is defined to
mean any group of such persons or entities; (b) the term "CONTROL" is expressly
deemed to include any actual discretion or power to direct the affairs of the
controlled person or entity, either directly or through a chain of ownership or
control (regardless of actual ownership); (c) a general partner, manager, or
managing member of a partnership or limited liability company, and any owner of
thirty percent (30%) or more of such general partner or managing member, is
expressly deemed to control such partnership or limited liability company; (d) a
person or entity owning thirty percent (30%) or more of the common stock of a
corporation or thirty percent (30%) or more of the voting interest in any other
type of entity, is expressly deemed to control such corporation or other entity;
(e) a trustee of a trust is expressly deemed to control such trust; (f) Tenants
and any entity which is an Affiliate of any of the Tenants, are all expressly
deemed to be Affiliates of each other, and (g) BCC, Developer, Managers and any
entity which is an Affiliate of any of the aforementioned entities in this
clause (g) are all expressly deemed to be Affiliates of each other.
Notwithstanding the foregoing, the term "Affiliate" shall not include any person
or entity that is an equity owner or parent entity of any of the Tenants;
provided, however, this exclusion provision shall not exclude BCC, Developer,
Manager, or any Tenant as an Affiliate.

         2. CROSS DEFAULT PROVISIONS. BCC, each of the Tenants, and Developer
each hereby acknowledges and agrees that a material default by BCC, Developer,
any Tenant, or their respective Affiliates under any obligation owed by BCC,
Developer, any Tenant, or their respective Affiliates to NHP or any Affiliate of
NHP arising under or in connection with the Transactions, including, without
limitation, a material default under the Purchase Contract Assignments, Leases,
Lease Guaranties, Capital Agreements, Deposit Agreements, Development
Agreements, Development Guaranties, Environmental Indemnifications, and Refusal
Agreements and any related financing statements, collateral assignments, or
security agreements (hereinafter individually referred to as an "OBLIGATION" and
collectively referred to in this Agreement as the "OBLIGATIONS"), which default
is not cured within any applicable cure period provided in the documentation for
such Obligation, shall, in NHP's sole, absolute, and uncontrolled discretion,
constitute an event of default for purposes of and under (A) such Obligation,
and (B) any or all of the other Obligations under the Transactions.

         3. CROSS RENEWAL PROVISIONS. The Lease or Leases (in the case of Leases
with identical effective dates) with the earliest effective date for any of the
Transactions entered into by and between NHP, their respective Affiliates and a
Tenant are hereinafter sometimes individually referred to as an "INITIAL LEASE"
and sometimes collectively referred to as the "INITIAL LEASES". All other Leases
(excluding the Initial Leases) and all subleases of such other Leases (not
including subleases to residents of Facilities) for any of the Transactions are
hereinafter sometimes individually referred to as an "OTHER LEASE" and
collectively referred to as the "OTHER LEASES". Any renewal or extension options
at any time made a part


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<PAGE>   4

of any of the Leases for any of the Transactions are hereinafter sometimes
individually referred to as a "RENEWAL OPTION" and collectively referred to as
the "RENEWAL OPTIONS". BCC, each of the Tenants, and Developer each hereby
agrees that: (A) if any Renewal Option under any Initial Lease or any sublease
of an Initial Lease is exercised by any person having the legal authority to
exercise such Renewal Option (hereinafter referred to as the "EXERCISED RENEWAL
OPTION"), then all Specified Renewal Options (defined below) in the other
Initial Leases and Other Leases (whether or not previously exercised) for any of
the Transactions shall be deemed to have been automatically exercised, without
any additional actions being required to be taken by BCC, Developer, any
Tenants, NHP, or their respective Affiliates; and (B) if any Renewal Option
under any Initial Lease or any sublease of an Initial Lease is not timely
exercised by a person having the legal authority to exercise such Renewal Option
or has not been automatically deemed exercised pursuant to Section 3(a) hereof
(hereinafter referred to as an "UNEXERCISED RENEWAL OPTION"), then all Specified
Renewal Options in the other Initial Leases and Other Leases (whether or not
previously exercised) and all subsequent Renewal Options contained in any of the
Leases for any of the Transactions shall be deemed to have automatically
terminated and shall thereupon be null and void. For purposes of this Agreement,
and with regard to the Transactions, "SPECIFIED RENEWAL OPTIONS" means all
Renewal Options in the other Initial Leases and Other Leases which by their
terms may be exercised within three (3) years prior to or following the
beginning date of the renewal term of the Initial Lease to which the Exercised
Renewal Option or an Unexercised Renewal Option, as applicable, relates. Upon
the occurrence of an Exercised Renewal Option, BCC, Developer, each of the
Tenants and any of their Affiliates each hereby irrevocably appoints NHP as
their true and lawful attorney-in-fact for the sole purpose of executing any
documents necessary, advisable or convenient, in NHP's sole discretion, to
evidence the exercise of any and all Specified Renewal Options under this
Agreement, and, more specifically, they each hereby (AA) authorize NHP to
execute on their behalf all documents necessary to exercise any or all of the
Specified Renewal Options, (BB) agree this power of attorney shall be
irrevocable and uncontestable by the BCC, Developer, any of the Tenants, or
their respective Affiliates, successors, or assigns, and (CC) acknowledge and
agree this power of attorney is given as security and coupled with an interest.

         4. RENEWAL OPTION CURE PROVISIONS. Notwithstanding anything else in
this Agreement to the contrary, in the event of an Unexercised Renewal Option,
the Specified Renewal Options in the other Initial Leases and the Other Leases
(whether or not previously exercised) for any of the Transactions shall not be
deemed to have automatically terminated and shall not thereupon be null and
void, until and unless: (A) NHP gives written notice (in the manner required
under Section 8 hereof) to BCC and the Tenants of the occurrence of an
Unexercised Renewal Option, and (B) NHP does not receive, within ten (10)
calendar days from the deemed receipt date of the notice required under Section
4(a) hereof, a written and signed notice (in the manner required under Section 8
hereof) (hereinafter referred to as a "LATE RENEWAL NOTICE") from BCC or the
Tenant under the applicable Initial Lease which states that the Tenant under the
applicable Initial Lease desires to exercise the Renewal Option to which such
Unexercised Renewal Option relates. Nothing in this Section 3 shall be construed
as extending the time period set forth in any Initial Lease or Other Lease for
exercising a Renewal Option. In the event NHP receives a Late Renewal Notice,
then (AA) NHP (as applicable) shall have the option, at its sole discretion, to
either renew or not renew 


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<PAGE>   5

any or all Expired Leases, and (BB) all Specified Renewal Options shall be
deemed to have been automatically exercised (as otherwise provided in Section 2
hereof). For purposes of this Agreement and with regard to the Transactions, the
term "EXPIRED LEASES" means the Initial Lease and all Other Leases for which the
otherwise applicable Renewal Option has expired, whether or not the Term (as
defined in each Initial Lease or Other Lease) has expired.

         5. BCC PURCHASE OPTION. Provided that (i) all the Leases are still in
effect, and (ii) no Event of Default (as defined in the respective Leases and
subject to Section 2 hereof) under any of the Leases remains uncured as of (A)
BCC's exercise of its option to purchase the Properties pursuant to this Section
5, and (B) the closing date established to consummate the purchase of the
Properties pursuant to BCC's exercise of such option, BCC shall have the option
to purchase (or cause a BCC Affiliate to purchase) all but not less than all of
the Properties upon the following terms and conditions:

                  (a) Not more than thirty (30) days before or after the date
         which is twelve (12) months prior to the end of the then current Term
         (as defined in the Initial Leases) of the Initial Leases, BCC may, but
         is not obligated to, exercise an option to purchase all but not less
         than all of the Properties by giving NHP written notice thereof;

                  (b) The purchase price for the Properties shall be payable in
         cash by BCC and shall be equal to the greater of (i) the aggregate fair
         market value of the Properties on the date of BCC's exercise of its
         option pursuant to this Section 5 (the "OPTION DATE"), or (ii) the
         aggregate Landlord's Investment (as defined in each Lease) for all the
         Leases on the Option Date. If within ten (10) days of the date of BCC's
         exercise of its option under this Section 5 BCC and NHP are unable to
         agree on the fair market value of the Properties, such fair market
         value shall be established by the appraisal process prescribed in each
         of the Leases with respect to the setting of fair market value for
         purposes of determining Minimum Rent (as defined in each Lease) for any
         Renewal Term (as defined in each Lease). Such fair market value must be
         finally determined no later than ninety (90) calendar days after BCC's
         exercise of its option under this Section 5 or BCC shall lose its right
         to purchase the Properties unless the failure to determine value was
         caused by the willful acts or omissions of NHP;

                  (c) Once the purchase price is established pursuant to the
         above, NHP, as seller (hereinafter sometimes collectively referred to
         as "SELLERS"), and BCC and/or its designated Affiliates, as buyer
         (hereinafter sometimes collectively referred to as "BUYERS"), shall
         immediately open an escrow to consummate such purchase at a national
         title company selected by NHP on the following terms: (i) the form of
         such instructions to be then signed by Sellers and Buyers shall be such
         title company's standard sale escrow instructions without any
         representations or warranties and without due diligence or other
         contingencies in favor of Buyers, (ii) the purchase price shall be
         payable in cash by Buyers upon the expiration of the then current Term
         of the Initial Leases (as defined therein), (iii) Buyers shall pay all
         transaction costs, (iv) at close, Sellers shall deliver title to the
         Properties subject only to those title exceptions agreed to by NHP and
         free and clear of any liens created by Sellers (other than liens,
         Leases, subleases, and related instruments entered into, caused, or
         created in whole or in part 


                                      -5-
<PAGE>   6

         by BCC, Developer, Manager, Buyers, the Tenants, or their respective
         Affiliates), (v) the sale escrow instructions shall provide for a
         deposit equal to five percent (5%) of the purchase price and shall
         provide that the deposit may be retained by Sellers as liquidated
         damages in the event of any breach by Buyers of the terms of the escrow
         instructions (provided, however, such liquidated damages shall relate
         only to Sellers' damages by reason of a breach of the escrow
         instructions and shall in no way liquidate or limit Sellers' damages by
         reason of a breach of this Lease), (vi) the escrow shall close on the
         last day of the then current Term or the Initial Lease, and (vii) the
         escrow instructions shall otherwise be in form and substance reasonably
         satisfactory to NHP;

                  (d) If BCC fails to close the escrow for any reason other than
         a breach by NHP, then NHP shall have the right to extend the then
         current Term (as defined in each Lease) of each of the Leases for the
         Transactions for an additional year. The Additional Rent (as defined in
         each Lease) and Minimum Rent (as defined in each Lease) during such
         year extension period shall be calculated as if on the Option Date BCC
         had instead exercised its right under each Lease to extend the Term for
         a Renewal Term; and

                  (e) On such terms as may be mutually agreed to by and between
         NHP and BCC, and subject to the requirement that ALL of the Properties
         in connection with the Transaction be purchased in the event BCC
         exercises its option under this Section 5, NHP agrees to permit BCC to
         designate (i) pools of Properties ("POOLS") to be purchased, and (ii)
         joint venture partners to invest with BCC in such Pools. Each of such
         Pools shall be subject to the requirements otherwise set forth in this
         Section 5. Anything in this Agreement to the contrary notwithstanding,
         the provisions of this Section 5 and the rights and obligations
         contained herein shall automatically expire on June 30, 2027.

         6. DEVELOPMENT FEES AND BUDGETS.

                  (a) Notwithstanding any provisions of the Development
         Agreements to the contrary, BCC and Developer hereby acknowledge and
         agree that the aggregate development fees (the "DEVELOPMENT FEES") paid
         to Developer by NHP with respect to the development of the Properties
         in connection with the Transaction pursuant to the Development
         Agreements, shall be a part of NHP's Maximum Investment and shall be
         limited to six and one-half percent (6.5%) of NHP's Maximum Investment.
         In the event the aggregate Development Fees paid by NHP and its
         Affiliates ever exceeds six and one-half percent (6.5%) of NHP's
         Maximum Investment, Developer hereby agrees to refund the amount of
         such excess to NHP within ten (10) calendar days of Developer's deemed
         receipt of written notice from NHP of the fact and amount of such
         excess (the "REFUND AMOUNT"); provided, further, in the event Developer
         fails to refund the Refund Amount to NHP within the Refund Period, BCC
         hereby agrees to reimburse to NHP the Refund Amount, within ten (10)
         days of BCC's receipt of written notice from NHP of the facts of
         Developer's failure to refund the Refund Amount, which payment shall
         directly offset the Refund Amount due from Developer.



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<PAGE>   7

                  (b) Notwithstanding any provisions of this Agreement or the
         Development Agreements for any of the Transactions to the contrary, if
         the Development Advance amount defined in a Development Agreement is
         greater than the aggregate amounts paid by NHP with respect to all
         Applications for Payment made by Developer pursuant to such Development
         Agreement (the "TOTAL FACILITY FUNDINGS"), then any such excess (the
         "UNDER BUDGET AMOUNT") may be applied, to the extent of such Under
         Budget Amount, in payment of any Over Budget Application for Payment
         submitted to NHP or its Affiliate with respect to another Development
         Agreement. For purposes of this Agreement, the term "OVER BUDGET
         APPLICATION FOR PAYMENT" shall mean any Application for Payment (as
         defined in the applicable Development Agreement) which, if paid, would
         cause the Total Facility Fundings paid pursuant to a Development
         Agreement to exceed the Development Advance amount defined in such
         Development Agreement. To determine whether there is an available Under
         Budget Amount, the Total Facility Fundings may only be calculated
         following the later of (i) the date on which the Improvements are
         deemed substantially complete (as determined under the applicable
         Development Agreement), (ii) the deemed receipt date by NHP or its
         Affiliate of the Final Application for Payment. For purposes of this
         Agreement, the term "FINAL APPLICATION FOR PAYMENT" shall mean an
         Application for Payment identified by the Developer as the final
         Application for Payment to be submitted by Developer with respect to
         the applicable Development Agreement. Nothing in this Paragraph 6 shall
         be construed so as to require NHP and its Affiliates to pay any amount
         which would cause the aggregate payments made by them (pursuant to this
         Agreement and the Development Agreements) to exceed NHP's Maximum
         Investment.

         7. ESTOPPEL CERTIFICATES. All the Properties in connection with the
Transactions shall be subject to this Master Agreement. Prior to entering into
any Lease or sublease of a Lease (except with respect to any resident
agreements), the proposed Tenant under such Lease or sublease must execute an
estoppel certificate in the form attached hereto as EXHIBIT "B", acknowledging
and agreeing that Tenant's leasehold interest under the applicable Lease is
subject to the terms and conditions of this Agreement, and the proposed Manager
of any Facility located on the Property which is the subject of such Lease or
sublease must execute an estoppel certificate in the form attached hereto as
EXHIBIT "C", acknowledging and agreeing that Manager shall comply with and not
take any actions which violate the terms and conditions of this Agreement or the
applicable Lease.

         8. NOTICE. All notices and demands, certificates, requests, consents,
approvals, and other similar instruments under this Agreement shall be in
writing and shall be deemed to have been properly given upon actual receipt
thereof or within three (3) business days of being placed in the United States
certified or registered mail, return receipt requested, postage prepaid (a) if
to BCC, a Tenant or the Tenants, or the Developer, addressed to: Balanced Care
Corporation, 5021 Louise Drive, Suite 200, Mechanicsburg, PA 17055, Attn:
President, Facsimile No. (717) 796-6150; with a copy to Balanced Care
Corporation, 5021 Louise Drive, Suite 200, Mechanicsburg, PA 17055, Attn: Legal
Department; with a copy to C&G Healthcare, c/o Cordray & Goodrich, 3306 Sul
Ross, Houston, Attn: President and General Counsel, Facsimile No. (713)
630-0017; and with a copy to Kirkpatrick & Lockhart, LLP, 1500 Oliver Building,
Pittsburgh, PA 15222, Attn: Steven J. Adelkoff, Facsimile No. (412) 355-6501; or
at such other address as BCC, any Tenant, or Developer from time to time may


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<PAGE>   8

have designated by written notice to NHP, and (b) if to NHP, addressed to
Nationwide Health Properties, Inc., 610 Newport Center Drive, Suite 1150,
Newport Beach, CA 92660, Attention: President, Fax No. (714) 759-6876 with a
copy to Cordray & Goodrich, 3306 Sul Ross, Houston, Texas 77098, Attention:
Howard F. Cordray, Jr., Fax No. (713) 630-0017, or at such address as NHP may
from time to time have designated by written notice to Developer. Refusal to
accept delivery shall be deemed delivery. If the addressee is not an individual,
notice may be made to any officer, general partner or principal of such
addressee.

         9. REPRESENTATIONS AND WARRANTIES. BCC, each of the Tenants, and
Developer each understands and acknowledges that NHP is relying upon the
respective representations of such parties set forth in this Agreement, and that
NHP may rely on such party's representations for all purposes, including without
limitation all the Transactions, all the Development Agreements, and all the
Leases. The Recitals set forth above are hereby incorporated by this reference
and made a part of this Agreement. BCC, each of the Tenants, and Developer each
hereby acknowledges, represents and warrants that the Recitals are true and
correct.

         10. MISCELLANEOUS. This Agreement may be executed in multiple
counterparts, each of which shall be deemed an original, but all of which shall
constitute one and the same document. This Agreement shall be binding upon the
successors and permitted assigns of the parties hereto (and the Affiliates of
such parties, successors, and permitted assigns). For purposes of the
Transactions and this Agreement, the term "NHP" shall include NHP or its
Affiliates and any subsequent owner of NHP's or its Affiliate's interest in any
of the Leases or Properties, or any assignee of NHP's or its Affiliate's rights
under any instruments or agreements memorializing or evidencing the Obligations
in connection with the Transactions. This Agreement shall be construed and
enforced in accordance with the internal laws of the State of Texas, without
regard to the rules governing choice of law. The parties hereto agree that venue
for any and all lawsuits related to this Agreement shall be in Harris County,
Texas.

         11. NO JOINT VENTURE. The parties to this Agreement do not intend by
this Agreement to in any way or for any purpose become partners of each other or
in the conduct of any business, joint venturers of each other, or members of a
joint enterprise with each other, it being understood and agreed between the
parties that each party is and shall be, for all purposes of this Agreement,
acting independently of each other and/or as independent contractors.

         12. INCREASES IN NHP'S MAXIMUM INVESTMENT. The parties may in the
future mutually agree in writing, by amendment of this Agreement, to (i)
increase the number of Properties or Facilities governed by this Agreement (ii)
apply any Under Budget Amount to the development of improvements on such
additional Properties or Facilities, and/or (iii) increase NHP's Maximum
Investment; provided, however, if and when BCC or its Affiliates have received
assignment of and/or assumed the rights, duties, and obligations of the Tenants
under all the Leases for all the Transactions, then (A) BCC and its Affiliates
hereby agree that all similar transactions and/or leases by and between NHP and
its Affiliates and BCC and its Affiliates, shall be defined as Transactions
and/or Other Leases for purposes of this Agreement and be subject to this
Agreement for all purposes, including, without


                                      -8-
<PAGE>   9

limitation, the cross default and cross renewal provisions set forth herein, and
(B) for purposes of this sentence, Tenants' Owner and such Tenants shall cease
to be parties to this Agreement. NHP's Maximum Investment shall not be increased
for any reason without the express written consent of NHP, which consent shall
be at the sole discretion of NHP, and no application of an Under Budget Amount
as contemplated in Paragraph 6(b) above shall constitute a consent to increase
NHP's Maximum Investment.

         IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed in their names under seal by duly authorized officers, managers or
representatives effective as of __________________________, 1998.

<TABLE>
<S>                                                  <C>
                                                     "NHP"

                                                     NATIONWIDE HEATH PROPERTIES, INC., 
                                                     a Maryland corporation


                                                     By: /s/ JOHN J. SHEEHAN, JR. (SEAL)
                                                        --------------------------------
                                                     Name:   John J. Sheehan, Jr.
                                                     Title:  Vice President

                                                     "BCC"

                                                     BALANCED CARE CORPORATION,
                                                     a Delaware corporation

                                                     By: /s/ BRIAN L. BARTH (SEAL)
                                                        --------------------------------
                                                     Name:   Brian L. Barth
                                                     Title:  Chief Development Officer

                                                     "DEVELOPER"

                                                     BCC DEVELOPMENT AND MANAGEMENT CO., 
                                                     a Delaware corporation


                                                     By: /s/ BRIAN L. BARTH (SEAL)
                                                        --------------------------------
                                                     Name:  Brian L. Barth
                                                     Title: Vice President

                                                     "TENANTS"

                                                     C&G HEALTHCARE AT PENSACOLA, L.L.C., 
                                                     a Delaware corporation
</TABLE>


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<PAGE>   10

<TABLE>
<S>                                                  <C>
                                                     By: /s/ KEVIN L. SHERRY (SEAL)
                                                        -------------------------------------
                                                     Name:   Kevin L. Sherry
                                                     Title:  Sole Member and Manager

                                                     C&G HEALTHCARE AT TALLAHASSEE, L.L.C., 
                                                     a Delaware corporation


                                                     By: /s/ KEVIN L. SHERRY (SEAL)
                                                        -------------------------------------
                                                     Name:   Kevin L. Sherry
                                                     Title:  Sole Member and Manager

                                                     C&G HEALTHCARE AT HAGERSTOWN, L.L.C.,
                                                     a Delaware corporation


                                                     By: /s/ KEVIN L. SHERRY (SEAL)
                                                        -------------------------------------
                                                     Name:   Kevin L. Sherry
                                                     Title:  Sole Member and Manager

                                                     C&G HEALTHCARE AT JOHNSON CITY, L.L.C., 
                                                     a Delaware corporation


                                                     By: /s/ KEVIN L. SHERRY (SEAL)
                                                        -------------------------------------
                                                     Name:  Kevin L. Sherry
                                                     Title: Sole Member and Manager

                                                     C&G HEALTHCARE AT TEAY'S VALLEY, L.L.C., 
                                                     a Delaware corporation


                                                     By: /s/ KEVIN L. SHERRY (SEAL)
                                                        -------------------------------------
                                                     Name:  Kevin L. Sherry
                                                     Title: Sole Member and Manager
</TABLE>


                                      -10-
<PAGE>   11

                                   EXHIBIT "A"
                              SCHEDULE OF PROJECTS


<TABLE>
<CAPTION>
                                                                                  Maximum NHP
     Name of Facility                          Location                           Investment
------------------------------      -------------------------------------       --------------

<S>                                 <C>                                         <C>              
Outlook Pointe at Johnson City      Mountain View Road, Johnson                 $    4,458,000.00
                                    City, 10th Civil District of
                                    Washington County, Tennessee

Balanced Care, Hagerstown           Professional Court, Hagerstown,             $    4,117,000.00
                                    Washington County, Maryland

Outlook Pointe at Teay's Valley     Outlook Drive, Hurricane,                   $    4,898,000.00
                                    Putnam County, West Virginia

Outlook Pointe at Tallahassee       Fleischman Road, Tallahassee,               $    7,825,000.00
                                    Leon County, Florida

Outlook Pointe at Pensacola         2310 Abbie Lane, Pensacola,                 $    4,602,000.00
                                    Escambia County, Florida                   ------------------
                                    


TOTAL:                                                                          $   25,900,000.00
                                                                                =================
</TABLE>




                                      A-1
<PAGE>   12

                                OMITTED EXHIBITS


     Exhibit B        Tenant Estoppel Certificate

     Exhibit C        Manager Estoppel Certificate