Amendment #1 To Master Construction Line of Credit

AMENDMENT NO. 1 TO
MASTER CONSTRUCTION LINE OF CREDIT AGREEMENT


THIS AMENDMENT NO. 1 TO MASTER CONSTRUCTION LINE OF CREDIT AGREEMENT, dated as of March 1, 2000 ("THIS AMENDMENT"), among the following:


(I) THIRD PARTY INVESTORS I, LLC, a Delaware limited liability
company (herein, together with its successors and assigns, the
"BORROWER");


(II) the lending institutions listed on the signature pages
hereof (the "LENDERS");


(IV) FLEET NATIONAL BANK, a national banking association, and
THE HUNTINGTON NATIONAL BANK, a national banking association, as
Co-Agents; and


(V) KEY CORPORATE CAPITAL INC., a Michigan corporation, as
administrative agent (the "ADMINISTRATIVE AGENT").


PRELIMINARY STATEMENTS:


(1) The parties hereto entered into the Master Construction Line of Credit Agreement, dated as of August 31, 1999 (the "CREDIT AGREEMENT"; with the terms defined therein, or the definitions of which are incorporated therein, being used herein as so defined).


(2) In connection with the execution and delivery of the Credit Agreement, Alterra Healthcare Corporation, a Delaware corporation (herein, together with its successors and assigns, the "COMPANY") and the Administrative Agent entered into the Guaranty, dated as of August 31, 1999, as amended by Amendment No. 1 thereto, dated as of the date hereof in the form attached hereto as Exhibit A (as so amended, the "GUARANTY").


(3) The parties hereto desire to change certain of the terms and provisions of the Credit Agreement, all as more fully set forth below.


NOW, THEREFORE, the parties hereby agree as follows:


SECTION 1. AMENDMENTS, ETC.


1.1. INTEREST. Effective on the Effective Date of this Amendment provided for in section 4 hereof, sections 2.9 (a) and (b) of the Credit Agreement are amended to read in their entirety as follows:


(A) INTEREST ON PRIME RATE LOANS. During any period in which a
Loan is a Prime Rate Loan, the unpaid principal amount of such Loan
shall bear interest at a fluctuating rate per annum which shall at all
times be equal to the Prime Rate in effect from time to time, PROVIDED
that during the Construction Period for such Project an interest rate
margin of 25 basis points shall be added to such Prime Rate, PROVIDED
FURTHER that if (A) the New Capital Commitment Requirement is satisfied
by April 20, 2000, (B) the New Capital Funding Requirement is


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satisfied by June 30, 2000, and (C) the Administrative Agent notifies
the parties hereto that such conditions have been satisfied (which the
Administrative Agent shall issue promptly upon satisfaction of such
conditions), then on the effective date of such notice from the
Administrative Agent, but not earlier than July 1, 2000, the interest
rate margin specified in the foregoing clause shall change from 25
basis points to zero basis points.


(B) INTEREST ON LIBOR LOANS. During any Interest Period for a
LIBOR Loan for a Project, the unpaid principal amount of such Loan
shall bear interest at a rate per annum which shall at all times be the
relevant Adjusted LIBOR Rate for such Loan PLUS (i) during the
Construction Period for such Project, the LIBOR Construction Period
Margin; or (ii) during the Mini-Perm Period for such Project, the LIBOR
Lease-Up Period Margin prior to the time Stabilization of such Project
is achieved, or the LIBOR Stabilized Period Margin after Stabilization
of such Project has been achieved. Notwithstanding the foregoing, no
reduction in the interest rate margin pursuant to the preceding
sentence shall be effective for any Loans for a Project until at least
two Business Days after the Administrative Agent shall have received
written notice from the Borrower of the occurrence of the event or
circumstance giving rise to such reduction and referring specifically
to the interest rate margin provisions of this section 2.9(b).


1.2. EFFECTIVENESS OF PRICING CHANGES. The pricing changes effected pursuant to section 1.1 of this Amendment shall be applicable as of and from and after January 1, 2000, for all Loans outstanding on such date or thereafter.


1.3. INTEREST PERIODS. Effective on the Effective Date of this Amendment provided for in section 4 hereof, section 2.10(a) of the Credit Agreement is amended to read in its entirety as follows:


2.10 INTEREST PERIODS. (a) During the Construction Period for
a Project, subject to the conditions set forth herein, the Borrower
shall have the right, upon not less than three Business Days' written
notice to the Administrative Agent, to elect whether the Loans shall be
Prime Rate Loans or LIBOR Rate Loans. Each Interest Period for any
LIBOR Loan for such Project shall be the calendar month, and the
Adjusted LIBOR Rate applicable to all LIBOR Loans for such Project
which are outstanding during such Interest Period (whether previously
incurred or incurred during such Interest Period) shall be determined
prior to the commencement of such Interest Period in accordance with
the definition of the term Adjusted LIBOR Rate. The initial Interest
Period of the Construction Period for a Project for any LIBOR Rate
Loans shall commence on the date such Construction Period commences or
on such later date permitted hereunder if the Borrower initially elects
Prime Rate Loans in accordance with the provisions set forth herein. In
the event that the Borrower fails to elect a Type for the Loans in
accordance with the provisions set forth herein, the Borrower shall be
deemed to have selected LIBOR Rate Loans; provided, however, in no
event shall LIBOR Rate Loans be permitted if the Interest Period would
end after the expiration of the Construction Period for such Project.


1.4. MONTHLY PROJECT FINANCIAL STATEMENTS. Effective on the Effective Date of this Amendment provided for in section 4 hereof, section 8.1(d) of the Credit Agreement is amended by deleting the text "within 45 days after the close of each of the monthly accounting periods" and inserting in its place "within 60 days after the close of each of the monthly accounting periods".


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1.5. EVENTS OF DEFAULT. Effective on the Effective Date of this Amendment provided for in section 4 hereof, sections 10.1(c), (e) and (j) of the Credit Agreement respectively are amended to read in their entirety as follows:


(C) CERTAIN NEGATIVE COVENANTS: the Borrower shall default in
the due performance or observance by it of any term, covenant or
agreement contained in sections 9.1 through 9.8, inclusive, of this
Agreement; or the Borrower shall default in the due performance or
observance by it of any term, covenant or agreement contained in
section 5, 10, 16(a)(i) or 16(c) of any Mortgage; or the Guarantor
shall default in the due performance of any term, covenant or agreement
contained in section 13(a), 13(b), 13(c), 13(d), 13(e), 13(h), 13(i),
13(j) or 13(k) of the Alterra Guaranty; or


(E) CROSS DEFAULT: the Borrower, or the Guarantor or any of
its Subsidiaries, shall (i) in the case of the Borrower, default in any
payment with respect to any Indebtedness, other than the Obligations
and any amounts owed by the Borrower to the Guarantor, and such default
shall continue after the applicable grace period, if any, specified in
the agreement or instrument relating to such Indebtedness, or (ii) in
the case of the Guarantor or any of its Subsidiaries, default in any
payment with respect to any Indebtedness owed to any Lender, or any
other Indebtedness of $10,000,000 or greater, individually or in the
aggregate, in each case other than the Obligations, and such default
shall continue after the applicable grace period, if any, specified in
the agreement or instrument relating to such Indebtedness and such
default shall not have been cured or remedied prior to the acceleration
of any of the Loans or other Obligations pursuant to section 10.2
hereof, or (iii) default in the observance or performance of any
agreement or condition relating to any such Indebtedness described in
clause (i) or (ii) above or contained in any instrument or agreement
evidencing, securing or relating thereto (and all grace periods
applicable to such observance, performance or condition shall have
expired and the existence thereof otherwise shall not have been
eliminated by written amendment or waiver by the holder or holders of
such Indebtedness (or a trustee or agent on behalf of such holder or
holders) prior to the acceleration of any of the Loans or other
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