EX-10 7 exhibit105.htm Exhibit 10.5

Exhibit 10.5

FIRST AMENDMENT TO LOAN AGREEMENT AND
FIRST AMENDMENT TO REGISTRATION RIGHTS AGREEMENT

        THIS FIRST AMENDMENT TO LOAN AGREEMENT AND FIRST AMENDMENT TO
REGISTRATION RIGHTS AGREEMENT (this " Amendment" ) made and entered into as of
the 1st day of March, 2002, between ALTERRA HEALTHCARE CORPORATION, a Delaware
corporation (the " Company" ), and RDVEPCO, L.L.C., a Michigan limited liability
company, HOLIDAY RETIREMENT 2000, LLC, a Washington limited liability company,
THE TORONTO-DOMINION BANK, a Canadian chartered bank and HBK MASTER FUND, L.P.,
a Cayman Islands limited partnership (each a " Lender" and, collectively, the "
Lenders" ).

W I T N E S S E T H:

        WHEREAS, the Company and the Lenders have entered into that certain Loan
Agreement dated as of March 5, 2001 (the " Loan Agreement" ; capitalized terms
used but not defined herein shall have the meaning ascribed to them therein),
pursuant to which the Lenders have made Loans to the Company in the original
aggregate principal amount of $7,500,000;

        WHEREAS, the Company and the Lenders desire to extend the maturity of
the Loans, to revise the interest rate applicable to the Loans, to substitute
promissory notes reflecting the current outstanding principal balance of the
Loans and the revised maturity date and interest rate in replacement of the
Notes issued and dated March 5, 2001, to amend the Loan Agreement, as more
particularly described below, to effect the foregoing and to revise certain
covenants, and to grant certain waivers with respect to the Company's
obligations under the Loan Agreement and the Notes;

        WHEREAS, pursuant to the Loan Agreement the Company has issued warrants
(collectively, the "Warrants") to the Lenders to purchase an aggregate of 60,000
shares of the Company's Series B-1 Non-Voting Participating Preferred Stock
having a stated value of $75.00 per share (the " Series B-1 Stock");

        WHEREAS, the Company and the Lenders have entered into that certain
Registration Rights Agreement dated as of March 5, 2001 (the "Registration
Rights Agreement" ), pursuant to which the Lenders have been granted certain
registration rights with respect to, among other securities of the Company,
shares of the Series B-1 Stock that may be issued to the Lenders;

        WHEREAS, in order to permit the Company to maintain a sufficient number
of authorized shares of the capital stock of the Company issuable upon exercise
of various conversion or exercise provisions of the Company's convertible
securities and warrants outstanding now or in the foreseeable future, including,
without limitation, capital stock issuable upon the exercise of the Warrants,
the conversion of the outstanding indebtedness pursuant to the Loan Agreement
("Loan Indebtedness"), the conversion of debentures issued pursuant to the
Indenture dated as of May 31, 2000 or the conversion of the Company's Series A
Preferred Stock, the Company has designated and established a new series of
Preferred Stock to replace the Series B-1 Stock as the security issuable upon
the exercise of the Warrants and upon the conversion of Loan Indebtedness;

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        WHEREAS, in order to permit and effect the substitution of such new
series of Preferred Stock for the Series B-1 Stock pursuant to the terms of the
Warrants and the Loan Agreement, the parties now desire to amend the Warrants
(as so amended, the "Amended Warrants'), pursuant to which the Lenders may
purchase an aggregate of 6,000 shares of the Company's Series B-1 Non-Voting
Participating Redeemable Preferred Stock having a stated value of $750.00 per
share (the "Series B-1 Replacement Stock") in lieu of 60,000 shares of Series
B-1 Stock; and

        WHEREAS, the parties further desire to modify and amend the Loan
Agreement and the Registration Rights Agreement in certain respects, as more
particularly described below, to reflect the substitution of the Series B-1
Replacement Stock for the Series B-1 Stock pursuant to the Amended Warrants and
the Loan Agreement and the Company's issuance of the Amended Warrants to the
Lenders.

        NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereby agree as
follows:

ARTICLE I

Loans

        Section 1.1.        Loan Indebtedness. The outstanding principal balance
of each Loan as of March 1, 2002 is as follows:

  RDVEPCO, L.L.C. $3,416,429.00   Holiday Retirement 2000, LLC $179,853.00   The
Toronto-Dominion Bank $1,193,570.00   HBK Master Fund, L.P. $1,049,532.00

        Section 1.2.        Notes. The Loans shall be evidenced by amended and
restated notes in the form of Exhibit A hereto in the respective amounts set
forth in Section 1.1 above, payable to the order of the respective Lenders and
dated as of March 1, 2002. Each Lender promptly shall return to the Company its
original Note dated March 5, 2001 in exchange for the amended and restated note
issued pursuant to this Amendment. Any reference to a "Note" or "Notes" in this
Amendment or in the Loan Agreement, as amended hereby, or in any security
document or other agreement given in connection therewith, shall mean the
amended and restated notes issued pursuant to this Amendment.

        Section 1.3        Payment of Accrued Interest and Principal. This
Amendment shall become effective upon execution by all parties and payment by
the Company to each Lender of the accrued and unpaid interest on its Loan
through February 28, 2002 in the respective amounts set forth below:

  RDVEPCO, L.L.C. $102,256.00   Holiday Retirement 2000, LLC $5,383.00   The
Toronto-Dominion Bank $35,724.00   HBK Master Fund, L.P. $31,413.00

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RDVEPCO, L.L.C. ("RDVEPCO") and the Company hereby agree that, promptly
following the execution by all parties of this Amendment, the Company and
RDVEPCO shall direct Hecht & Lentz, as "Escrow Agent" under that certain Escrow
Agreement ("Escrow Agreement") dated February 3, 2000, between the Company,
RDVEPCO and Hecht & Lentz, to pay to the Lenders the remaining funds held by
Escrow Agent pursuant to the Escrow Agreement ($64,818.54 as of March 31, 2002),
such payment to be made pro rata to the Lenders in accordance with their
respective outstanding Loan principal balance, and such payment to be applied
against principal of the Loans.

ARTICLE II

Amendments to Loan Agreement
        Section 2.1.        Definitions. The definition of the term " Warrants"
contained in Article I of the Loan Agreement is hereby deleted in its entirety
and the following definition substituted in lieu thereof:
"Warrants" shall mean the warrants to purchase up to an aggregate of 6,000
shares of the Company's Series B-1 Non-Voting Participating Redeemable Preferred
Stock (the "Series B-1 Stock") in the form attached hereto as Exhibit " C", the
terms and conditions of which are incorporated in and made a part of this
Agreement.

      Section 2.2.        Interest Rate; Payment; Usury. Section 3.1(a) of the
Loan Agreement is hereby deleted in its entirety and the following paragraph
substituted in lieu thereof:

(a)        Provided that no Event of Default has occurred and is continuing and
subject to the other provisions of this Agreement, commencing March 1, 2002 the
Loans shall bear interest at the rate of nine percent (9%) per annum. During any
period that an Event of Default shall have occurred and be continuing, interest
on the Loans shall accrue at a rate equal to the otherwise applicable interest
rate plus five hundred basis points (the "Default Interest Rate").
Notwithstanding anything contained herein to the contrary, in no event shall the
interest rate on the Loans, including the Default Interest Rate, exceed the
highest rate permitted by applicable law. Interest on the Loans, including
interest at the Default Interest Rate, shall be based on a 360 day year, and
interest shall accrue and be payable for the actual number of calendar days
elapsed. Interest shall be payable in arrears commencing on May 5, 2002 and on
the fifth day of each subsequent month until the principal and all accrued
interest have been paid in full.

      Section 2.3.        Maturity. Section 3.2 of the Loan Agreement is hereby
deleted in its entirety and the following paragraph substituted in lieu thereof:

      3.2        Maturity. Unless the same shall become due earlier as a result
of acceleration of the maturity, the Loans shall mature on January 5, 2003, at
which time the outstanding principle balance of the Loans and all accrued and
unpaid interest shall become due and payable.

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      Section 2.4.        Events of Default. Section 3.5(vii) of the Loan
Agreement is hereby deleted in its entirety and the following paragraph
substituted in lieu thereof:

           (vii)        [Intentionally Omitted]

      Section 2.5.        Series B-1 Debentures. Section 3.10(c) of the Loan
Agreement is hereby deleted in its entirety and the following paragraph
substituted in lieu thereof:

(c)        Terms of Series B-1 Debentures. The Series B-1 Debentures shall be
identical to, and rank pari passu with, the Series B Debentures except that (i)
the Series B-1 Debentures shall be convertible into Series B-1 Stock; and (ii)
the Conversion Price (as that term is used in the Indenture) of the Series B-1
Debentures shall be equal to the greater of (1) $750 per share of Series B-1
Stock and (2) (x) the lowest price per share (or the lowest conversion price of
any convertible security) of any shares of the Company's Series B Non-Voting
Participating Preferred Stock (the "Series B Stock") or Series B-1 Stock (or
other securities convertible into such Series B Stock or Series B-1 Stock) sold
by the Company during the first six (6) months following the Closing Date or (y)
1,000 times the lowest price per share of shares of the Company's common stock,
$.01 par value per share (the "Common Stock") (or the lowest conversion price of
any other securities convertible into Common Stock) sold by the Company during
the first six (6) months following the Closing Date; provided, however, that
clauses (x) and (y) above shall not apply to any sale of securities unless the
aggregate gross proceeds of such sale equals or exceeds $5,000,000.
      Section 2.6.        Representations and Warranties of the Company. Section
5.1(a) of the Loan Agreement is hereby deleted in its entirety and the following
paragraph substituted in lieu thereof:

(a)        Organization and Standing; Authorization of Series B-1 Stock. The
Company is duly incorporated and validly existing under the laws of the State of
Delaware, and has all requisite corporate power and authority to own or lease
its properties and assets and to conduct its business as it has been and is
proposed to be conducted. The Company is qualified to do business and in good
standing in each jurisdiction in which the failure to so qualify could have a
material adverse effect upon its assets, properties, liabilities, financial
condition, results of operations or business. The Company is duly authorized to
issue up to 300,000 shares of Series B-1 Stock in accordance with the form of
"Certificate of Designations, Rights and Preferences of the Series B-1
Non-Voting Participating Redeemable Preferred Stock" previously furnished to the
Lenders, which certificate has been duly adopted by the Company's board of
directors and duly filed by the Company pursuant Section 151 of the General
Corporation Law of the State of Delaware.

      Section 2.7.        Insurance. Section 6.1(c) of the Loan Agreement is
hereby deleted in its entirety and the following paragraph substituted in lieu
thereof:

(c)        Insurance. Maintain property insurance on its physical assets in such
amounts and of such types as are customarily carried by companies similar in
size and nature, and in the event of acquisition of additional property, real or
personal, increase such insurance coverage in such manner and to such extent as
prudent business judgment and present practice would dictate.

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      Section 2.8.        Exhibits. Exhibit "B" (form of Note) to the Loan
Agreement is hereby deleted in its entirety and the text of Exhibit A (form of
Note) hereto substituted in lieu thereof. Exhibit "C" (form of Warrant) to the
Loan Agreement is hereby deleted in its entirety and the text of Exhibit B (form
of Warrant) hereto substituted in lieu thereof.

ARTICLE III

Loan Agreement Waivers and Releases

      Section 3.1.        Waiver of Certain Events of Default; Release of
Claims. The Lenders jointly and severally waive any Event of Default under the
Loan Agreement based on (i) any failure by the Company prior to the date hereof
to make payments on the Loans when due, (ii) any failure by the Company to
maintain insurance other than property insurance and (iii) acceleration of the
maturity of Indebtedness of the Company. Each Lender waives and releases any
right or claim to payment of interest on its Loan calculated at the Default
Interest Rate for any period prior to March 1, 2002 and acknowledges that
payment of the amounts set forth in Section 1.3 above shall constitute payment
of all accrued and unpaid interest on its Loan as of February 28, 2002. Each
Lender further waives and releases any claim for damages arising from the
occurrence of any of the Events of Default which are waived pursuant to this
Section 3.1.

ARTICLE IV
Amendment to Registration Rights Agreement

        Section 4.1.        Recitals. Paragraph A. of the Recitals contained in
the Registration Rights Agreement is hereby deleted in its entirety and the
following paragraph substituted in lieu thereof:

A.        The Company has issued to the Investors Warrant Certificates dated as
of March 5, 2001 (the " Warrants" ) providing, among other things, for the
purchase by the Investors of the Company's Series B-1 Non-Voting Participating
Redeemable Preferred Stock, stated value of $750.00 per share (the " Series B-1
Stock" ). Capitalized terms defined in the Warrants and not otherwise defined
herein are used herein with the same meanings as defined in the Warrants.

ARTICLE V
Additional Covenants and Agreements

      Section 5.1.        Amendment of Warrants. In order to amend the Warrants
as contemplated hereby, each of the Lenders hereby transfers, conveys and
assigns to the Company all of such Lender's right, title and interest in and to
its respective Warrants and delivers to the Company such Warrants for
cancellation. Upon the receipt of such Warrants by the Company, the Company,
pursuant to Section 4.1(c) of the Loan Agreement, shall issue the Amended
Warrants to the Lenders pro rata according to the Lenders' respective Loan
Commitments (as defined in the Loan Agreement).

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      Section 5.2.        Filing of Certificates; Further Assurances. The
parties hereto hereby ratify and approve the filing with the Secretary of State
of Delaware pursuant to Section 151 of the General Corporation Law of the State
of Delaware of (i) the Certificate of Elimination of the Series B-1 Non-Voting
Participating Preferred Stock in the form of Exhibit C attached hereto and (ii)
the Certificate of Designations, Rights and Preferences of the Series B-1
Non-Voting Participating Redeemable Preferred Stock in the form of Exhibit D
attached hereto. In addition, the Company agrees to execute and deliver any and
all such further documents and take any and all such other actions as may be
necessary or appropriate to carry out the intent and purposes of this Amendment
and to consummate the transactions contemplated hereby.

ARTICLE VI
Miscellaneous

      Section 6.1.        Ratification of Agreements. The Loan Agreement and the
Registration Rights Agreement, each as hereby amended, are each hereby ratified
and confirmed in all respects.

      Section 6.2.        Governing Law. This Amendment shall be governed by and
construed in accordance with the laws of the State of Michigan and any
applicable laws of the United States of America in all respects, including
construction, validity and performance.

      Section 6.3.        Headings. The Section headings contained in this
Amendment are for reference purposes only and will not affect in any way the
meaning or interpretation of this Amendment.

      Section 6.4.        Severability. In case any provision of this Amendment
shall be invalid, illegal, or unenforceable, such provision shall be deemed to
have been modified to the extent necessary to make it valid, legal and
enforceable. The validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.

      Section 6.5.        Counterparts; Fax. This Amendment may be separately
executed in counterparts and by the different parties hereto in separate
counterparts, each of which when so executed shall be deemed to constitute one
and the same Amendment. This Amendment when executed may be validly delivered by
facsimile or other electronic transmission.

[Signatures follow on next page.]

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        IN WITNESS WHEREOF, the parties hereto have caused this First Amendment
to Loan Agreement and First Amendment to Registration Rights Agreement to be
executed by the undersigned thereunto duly authorized as of the date first
written above.

THE COMPANY:

ALTERRA HEALTHCARE CORPORATION

By:        /s/ Patrick F. Kenndy                        
        Its:        CEO and President                        

THE LENDERS:

RDVEPCO, L.L.C.

By: RDV Altco, L.L.C., a member
By: RDV Corporation, a member

By:        /s/ Robert H. Schierbeek                
        Its:        Treasurer                                

HOLIDAY RETIREMENT 2000, L.L.C.

By:        /s/ Norman L. Brenden                
Its:        Manager                                

THE TORONTO-DOMINION BANK

By:        Natalie Townsend                        
Its:                                                

HBK MASTER FUND, L.P.
By: HBK Investments, L.P., its investment manager

By:        /s/ Kevin O'Neal                        
Its:        Authorized Signatory                        

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EXHIBIT A

THIS NOTE HAS NOT BEEN REGISTERED PURSUANT TO THE SECURITIES ACT OF 1933 OR ANY
STATE SECURITIES LAW. NEITHER THIS NOTE NOR ANY PORTION HEREOF OR INTEREST
HEREIN MAY BE SOLD, ASSIGNED, TRANSFERRED, PLEDGED OR OTHERWISE DISPOSED OF
UNLESS THE SAME IS REGISTERED UNDER SAID ACT AND ANY APPLICABLE STATE SECURITIES
LAW, OR UNLESS AN EXEMPTION FROM SUCH REGISTRATION IS AVAILABLE AND THE COMPANY
SHALL HAVE RECEIVED, AT THE EXPENSE OF THE HOLDER HEREOF, EVIDENCE OF SUCH
EXEMPTION REASONABLY SATISFACTORY TO THE COMPANY (WHICH MAY INCLUDE, AMONG OTHER
THINGS, AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY).

AMENDED AND RESTATED PROMISSORY NOTE

$[_____________]        Milwaukee, Wisconsin
        March 1, 2002

     FOR VALUE RECEIVED, ALTERRA HEALTHCARE CORPORATION, a Delaware corporation
(the " Company" ), promises to pay to the order of
[_____________________________, a [____________________] (the " Holder" ), at
[___________________________], or such other place as designated in writing by
the Holder, the principal sum of [_________________________] Dollars and
[___]/100 ($[___________]) together with interest on the principal balance
outstanding from time to time in accordance with the provisions of this Note.
This Amended and Restated Promissory Note (the " Note" ) amends and restates
that certain $[________________] Promissory Note dated March 5, 2001 made by the
Company in favor of the Holder and is one of a series of notes, all of like
tenor except as to principal amount, executed and delivered by the Company
pursuant to that certain Loan Agreement among the Company and RDVEPCO, L.L.C., a
Michigan limited liability company, HOLIDAY RETIREMENT 2000, LLC, a Washington
limited liability company, THE TORONTO-DOMINION BANK, a Canadian chartered bank,
and HBK MASTER FUND, L.P., dated as of March 5, 2001, as amended by the First
Amendment to Loan Agreement and First Amendment to Registration Rights Agreement
dated as of the date hereof (as so amended, the " Loan Agreement" ), the terms
and conditions of which are incorporated herein by reference. Unless otherwise
indicated herein, capitalized terms used in this Note have the same meanings set
forth in the Loan Agreement.

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      1.        Interest Rate; Payment; Usury.

(a)        Provided that no Event of Default has occurred and is continuing and
subject to the other provisions of this Note, the outstanding principal of this
Note shall bear interest at the rate of nine percent (9%) per annum. During any
period that an Event of Default shall have occurred and be continuing, interest
on this Note shall accrue at a rate equal to the otherwise applicable interest
rate plus five hundred basis points (the " Default Interest Rate" ).
Notwithstanding anything contained herein to the contrary, in no event shall the
interest rate on this Note, including the Default Interest Rate, exceed the
highest rate permitted by applicable law. Interest on this Note, including
interest at the Default Interest Rate, shall be based on a 360 day year, and
interest shall accrue and be payable for the actual number of calendar days
elapsed. Interest shall be payable in arrears commencing on May 5, 2002 and on
the fifth day of each subsequent month until the principal and all accrued
interest have been paid in full.

(b)        It is the intention of the Company and the Holder to conform strictly
to applicable usury laws now or hereafter in force, and any interest payable
under this Note or the Loan Agreement shall be subject to reduction to an amount
not to exceed the maximum non-usurious amount for commercial loans allowed under
such applicable usury laws as now or hereafter construed by the courts having
jurisdiction over such matters. In the event such interest (whether designated
as interest, service charges, points, or otherwise) does exceed the maximum
legal rate, it shall be (i) canceled automatically to the extent that such
interest exceeds the maximum legal rate; (ii) if already paid, at the option of
the Holder, either be rebated to the Company or credited on the principal amount
of this Note; or (iii) if this Note has been prepaid in full, then such excess
shall be rebated to the Company. It is further agreed, without limitation of the
foregoing, that all calculations of the rate of interest contracted for,
charged, or received under the Loan Agreement and this Note that are made for
the purpose of determining whether such rate exceeds the maximum legal rate,
shall be made, to the extent permitted by applicable law, by amortizing,
prorating, allocating, and spreading throughout the full stated term of this
Note (and any extensions of the term thereof that may be hereafter granted) all
such interest at any time contracted for, charged, or received from the Company
or otherwise by the Holder so that the rate of interest on account of this Note,
as so calculated is uniform throughout the term hereof. If the Company is exempt
or hereafter becomes exempt from applicable usury statutes or for any other
reason the rate of interest to be charged on the this Note is not limited by
law, none of the provisions of this paragraph shall be construed so as to limit
or reduce the interest or other consideration payable under the Loan Agreement
or this Note or under the instrument securing payment thereof. The terms and
provisions of this paragraph shall control and supersede every other provision
of all agreements between the Company and the Holder.

      2.        Maturity. Unless the same shall become due earlier as a result
of acceleration of the maturity, this Note shall mature on January 5, 2003 at
which time the outstanding principal balance of this Note and all accrued
interest shall become due and payable.

      3.        Conditional Conversion Right. The Holder of this Note shall have
the Conditional Conversion Right as described and subject to the limitation set
forth in Section 3.10 of the Loan Agreement.
PAGE 9       4.        Prepayments. The Company may from time to time prepay
this Note, in whole or in part, at any time. Any partial prepayment shall be
applied first to interest which is accrued and unpaid and then to principal.

      5.        Manner of Payment. The Company shall make payments in respect of
this Note (including principal and interest) by wire transfer of immediately
available funds to the account specified by the Holder. Notwithstanding any
other provision in the Loan Agreement or the Notes, the Company covenants and
agrees and the Holders among themselves agree that all payments made by the
Company of interest and principal, including any prepayments, shall be made to
and for the benefit of the Holders pro rata according the outstanding principal
balance of their respective Notes.

         6.        Collection Expenses. In the event the Company fails to pay
any installment of interest or principal when due, the Company shall pay to the
Holder, in addition to the amounts due, all costs of collection, including
reasonable attorneys' fees.

         7.        Company Waivers. The Company, for itself and its successors
and assigns, hereby waives demand, presentment, protest, diligence, notice of
dishonor and any other formality in connection with this Note and expressly
agrees that this Note, or any payment hereunder, may be extended from time to
time and that the Holder may accept security for this Note or release security
for this Note, all without in any way affecting the liability of the Company
hereunder.

         8.        Governing Law. All questions concerning the construction,
validity and interpretation of this Note shall be governed by and construed in
accordance with the domestic laws of the State of Michigan, without giving
effect to any choice of law or conflict of law provision or rule (whether of the
State of Michigan or any other jurisdiction) that would cause the application of
the laws of any jurisdiction other than the State of Michigan.

         9.        Amendment and Waiver. The provisions of this Note may be
amended and waived only with the prior written consent of the Company and the
Holder of this Note.

         IN WITNESS WHEREOF, the Company has executed this Note as of the date
first written above.

ALTERRA HEALTHCARE CORPORATION

By:                                                          Title:
                                                        

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EXHIBIT A TO AMENDED AND RESTATED PROMISSORY NOTE

CONVERSION NOTICE
(To be Executed by the Registered Holder
in order to Convert the Note)

The undersigned hereby elects to convert the attached Note into Series B-1 9.75%
Convertible Pay-In-Kind Debentures due 2007 (the "Series B-1 Debentures") of the
Alterra Healthcare Corporation (the "Company") according to the conditions
hereof, as of the date written below. If the Series B-1 Debentures are to be
issued in the name of a person other than undersigned, the undersigned will pay
all transfer taxes payable with respect thereto and is delivering herewith such
certificates and opinions as reasonably requested by the Company in accordance
therewith. No fee will be charged to the holder for any conversion, except for
such transfer taxes, if any.

Conversion calculations:                                                        
        Effective Date of Conversion

                                                        
Principal Amount of the Note to be Converted

                                                        
Accrued and Unpaid Interest through
Effective Date of Conversion

                                                        
        Signature

                                                        
        Name
                                                        
        Address

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EXHIBIT B
WARRANT CERTIFICATE
THIS WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE HEREOF HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"),
OR UNDER ANY STATE SECURITIES LAWS AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE
DISPOSED OF UNLESS REGISTERED UNDER THE SECURITIES ACT AND UNDER APPLICABLE
STATE SECURITIES LAWS OR ALTERRA HEALTHCARE CORPORATION SHALL HAVE RECEIVED AN
OPINION OF ITS COUNSEL (OR OTHER COUNSEL REASONABLY SATISFACTORY TO IT) THAT
REGISTRATION OF SUCH SECURITIES UNDER THE SECURITIES ACT AND UNDER THE
PROVISIONS OF APPLICABLE STATE SECURITIES LAWS IS NOT REQUIRED.

AMENDED & RESTATED
WARRANT TO PURCHASE SHARES OF
SERIES B-1 NON-VOTING PARTICIPATING REDEEMABLE PREFERRED STOCK
OF
ALTERRA HEALTHCARE CORPORATION
Expires on the Expiration Date specified herein.
No.: W-__________        Number of Shares: [_____]
Original Issue Date: As of March 5, 2001

FOR VALUE RECEIVED, subject to the provisions hereinafter set forth, the
undersigned, Alterra Healthcare Corporation, a Delaware corporation (together
with its successors and assigns, the " Issuer" ), hereby certifies that
[___________________________], or its registered assigns is entitled to
subscribe for and purchase, during the period specified in this Warrant, up to
[________] shares (subject to adjustment as hereinafter provided) of the duly
authorized, validly issued, fully paid and non-assessable Series B-1 Preferred
Stock of the Issuer at the exercise prices specified in Section 2 hereof and
subject to the provisions and upon the terms and conditions hereinafter set
forth. Capitalized terms used in this Warrant and not otherwise defined herein
shall have the respective meanings specified in Section 8 hereof.

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      1.        Term. The right to subscribe for and purchase shares of Warrant
Stock represented hereby shall commence on the Original Issue Date of this
Warrant and shall expire on the Expiration Date (such period being referred to
herein as the " Term").
      2.        Warrant Price.Subject to the provisions of this Warrant, the
Holder has the right to purchase from the Issuer (and the Issuer will issue and
sell to such registered Holder) the Warrant Stock (as the same may be adjusted
pursuant to Section 5 hereof) at the exercise prices (as each such exercise
price relates to its corresponding tranche of Warrant Stock below and as the
same may be adjusted pursuant to Section 5 hereof, the " Warrant Price") equal
to the following:

         (a)        Tranche A. During the Term, the Holder may purchase
[_______] shares of Warrant Stock (the " Tranche A Warrant Stock" ) at an
exercise price per share of Warrant Stock equal to $750.00;

         (b)        Tranche B. During the Term, the Holder may purchase
[_______] shares of Warrant Stock (the " Tranche B Warrant Stock" ) at an
exercise price per share of Warrant Stock equal to $1,000.00; and

         (c)        Tranche C. During the Term, the Holder may purchase
[_______] shares of Warrant Stock (the " Tranche C Warrant Stock" ) at an
exercise price per share of Warrant Stock equal to $1,250.00.

      3.        Method of Exercise; Issuance of New Warrant; Transfer and
Exchange.

         (a)        Time of Exercise. The purchase rights represented by this
Warrant may be exercised in whole or in part at any time and from time to time
during the Term.

         (b)        Method of Exercise. The Holder hereof may exercise this
Warrant, in whole or in part, by the surrender of this Warrant (with the
exercise form attached hereto duly executed) at the principal office of the
Issuer, and by the payment to the Issuer of an amount of consideration therefor
equal to the Warrant Price in effect on the date of such exercise multiplied by
the number of shares of Warrant Stock with respect to which this Warrant is then
being exercised, payable at the Holder's election by certified or official bank
check or wire transfer of immediately available funds.

      (c)        Issuance of Stock Certificates. In the event of any exercise of
the rights represented by this Warrant in accordance with and subject to the
terms and conditions hereof, (i) certificates for the shares of Warrant Stock so
purchased shall be dated the date of such exercise and delivered to the Holder
within a reasonable time, not exceeding three (3) business days after such
exercise, and the Holder shall be deemed for all purposes to be the holder of
the shares of Warrant Stock so purchased as of the date of such exercise, and
(ii) unless this Warrant has expired, a new Warrant representing the number of
shares of Warrant Stock, if any, with respect to which this Warrant shall not
then have been exercised shall also be issued to the Holder hereof at the
Issuer's expense within such time.

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      (d)        Transferability of Warrant. Subject to Section 3(e) hereof,
this Warrant may be transferred by the Holder without the consent of the Issuer.
If transferred pursuant to this paragraph and subject to the provisions of
subsection (e) of this Section 3, this Warrant may be transferred on the books
of the Issuer by the Holder in person or by duly authorized attorney, upon
surrender of this Warrant at the principal office of the Issuer, properly
endorsed (by the Holder executing an assignment in the form attached hereto) and
upon payment of any necessary transfer tax or other governmental charge imposed
upon such transfer. This Warrant is exchangeable at the principal office of the
Issuer for Warrants for the purchase of the same aggregate number of shares of
Warrant Stock, each new Warrant to represent the right to purchase such number
of shares of Warrant Stock as the Holder shall designate at the time of such
exchange. All Warrants issued on transfers or exchanges shall be dated the
Original Issue Date and shall be identical with this Warrant except as to the
number of shares of Warrant Stock issuable pursuant hereto.

     (e)        Compliance with Securities Laws.

      (i)        The Holder, by acceptance hereof, acknowledges that this
Warrant and the shares of Warrant Stock to be issued upon exercise hereof are
being acquired solely for the Holder's own account and not as a nominee for any
other party, and for investment, and that the Holder will not offer, sell or
otherwise dispose of this Warrant or any shares of Warrant Stock to be issued
upon exercise hereof except pursuant to an effective registration statement, or
an exemption from registration, under the Securities Act and any applicable
state securities laws.

      (ii)        Except as provided in paragraph (iii) below, this Warrant and
all certificates representing shares of Warrant Stock issued upon exercise
hereof shall be stamped or imprinted with a legend in substantially the
following form:

      "THIS WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE HEREOF HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE " SECURITIES
ACT" ), OR UNDER ANY STATE SECURITIES LAWS AND MAY NOT BE SOLD, TRANSFERRED OR
OTHERWISE DISPOSED OF UNLESS REGISTERED UNDER THE SECURITIES ACT AND UNDER
APPLICABLE STATE SECURITIES LAWS OR ALTERRA HEALTHCARE CORPORATION SHALL HAVE
RECEIVED AN OPINION OF ITS COUNSEL (OR OTHER COUNSEL REASONABLY SATISFACTORY TO
IT) THAT REGISTRATION OF SUCH SECURITIES UNDER THE SECURITIES ACT AND UNDER THE
PROVISIONS OF APPLICABLE STATE SECURITIES LAWS IS NOT REQUIRED."

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      (iii)        The restrictions imposed by this subsection (e) upon the
transfer of this Warrant and the shares of Warrant Stock to be purchased upon
exercise hereof shall terminate (A) when such securities shall have been
effectively registered under the Securities Act, (B) upon the Issuer's receipt
of an opinion of counsel reasonably satisfactory to it, in form and substance
reasonably satisfactory to the Issuer, addressed to the Issuer to the effect
that such restrictions are no longer required to ensure compliance with the
Securities Act and state securities laws or (C) upon the Issuer's receipt of
other evidence reasonably satisfactory to the Issuer that such registration and
qualification under federal and state securities laws is not required. Whenever
such restrictions shall cease and terminate as to any such Securities, the
Holder shall be entitled to receive from the Issuer (or its transfer agent and
registrar), without expense (other than applicable transfer taxes, if any), new
Warrants (or, in the case of shares of Warrant Stock, new stock certificates) of
like tenor not bearing the applicable legend required by paragraph (ii) above
relating to the Securities Act and state securities laws.

      (f)        Continuing Rights of Holder. The Issuer will, at the time of or
at any time after each exercise of this Warrant, upon the request of the Holder,
acknowledge in writing the extent, if any, of its continuing obligation to
afford to the Holder all rights to which the Holder shall continue to be
entitled after such exercise in accordance with the terms of this Warrant,
provided that if the Holder shall fail to make any such request, the failure
shall not affect the continuing obligation of the Issuer to afford such rights
to the Holder.

      4.        Stock Fully Paid; Reservation and Listing of Shares; Covenants.

      (a)        Stock Fully Paid. The Issuer represents, warrants, covenants
and agrees that all shares of Warrant Stock which may be issued upon the
exercise of this Warrant or otherwise hereunder will, upon issuance, be duly
authorized, validly issued, fully paid and non-assessable and free from all
taxes, liens and charges created by or through the Issuer. The Issuer further
covenants and agrees that during the period within which this Warrant may be
exercised, the Issuer will at all times have authorized and reserved for the
purpose of the issue upon exercise of this Warrant a sufficient number of shares
of Series B-1 Preferred Stock to provide for the exercise of this Warrant.

      (b)        Reservation. The Issuer shall at all times have reserved for
issuance a sufficient number of shares of Series B-1 Preferred Stock to permit
the exercise in full of all Warrants and all other rights, options and warrants
contained in any Security relating to the issuance of Series B-1 Preferred
Stock. If any shares of Series B-1 Preferred Stock required to be reserved for
issuance upon exercise of the Warrants or as otherwise provided hereunder
require registration or qualification with any Governmental Authority under any
federal or state law before such shares may be so issued, the Issuer will in
good faith use its best efforts as expeditiously as possible and at its expense
to cause such shares to be duly registered or qualified. If the Issuer shall
list any shares of Series B-1 Preferred Stock on any securities exchange or
market it will, at its expense, list thereon, maintain and increase when
necessary such listing of, all shares of Warrant Stock from time to time issued
upon exercise of this Warrant or as otherwise provided hereunder, and, to the
extent permissible under the applicable securities exchange or market rules, all
unissued shares of Warrant Stock that are at any time issuable hereunder, so
long as any shares of Series B-1 Preferred Stock shall be so listed. The Issuer
will also so list on each securities exchange or market, and will maintain such
listing of, any other Securities which the Holder shall be entitled to receive
upon the exercise of this Warrant if at the time any Securities of the same
class shall be listed on such securities exchange or market by the Issuer.

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     (c)        Covenants. The Issuer shall not by any action, including,
without limitation, amending the Certificate of Incorporation or the Bylaws of
the Issuer, or through any reorganization, transfer of assets, consolidation,
merger, dissolution, issue or sale of securities or any other action, avoid or
seek to avoid the observance or performance of any of the terms of this Warrant,
but will at all times in good faith assist in the carrying out of all such terms
and in the taking of all such actions as may be necessary or appropriate to
protect the rights of the Holder against dilution (to the extent specifically
provided herein) or impairment. Without limiting the generality of the
foregoing, the Issuer will (i) not amend or modify any provision of the
Certificate of Incorporation or Bylaws of the Issuer in any manner that would
adversely affect in any way the powers, preferences or relative participating,
optional or other special rights of the Series B-1 Preferred Stock or which
would adversely affect the rights of the Holder, (ii) take all such action as
may be reasonably necessary in order that the Issuer may validly and legally
issue fully paid and nonassessable shares of Series B-1 Preferred Stock, free
and clear of any liens, claims, encumbrances and restrictions (other than as
provided herein) upon the exercise of this Warrant, and (iii) use its reasonable
best efforts to obtain all such authorizations, exemptions or consents from any
Governmental Authority or public regulatory body having jurisdiction thereof as
may be reasonably necessary to enable the Issuer to perform its obligations
under this Warrant.

      (d)        Loss, Theft, Destruction of Warrants. Upon receipt of evidence
satisfactory to the Issuer of the ownership and the loss, theft, destruction or
mutilation of this Warrant and, in the case of any such loss, theft or
destruction, upon receipt of indemnity or security satisfactory to the Issuer
or, in the case of any such mutilation, upon surrender and cancellation of this
Warrant, the Issuer will make and deliver, in lieu of such lost, stolen,
destroyed or mutilated Warrant, a new Warrant of like tenor and representing the
right to purchase the same number of shares of Series B-1 Preferred Stock.

      (e)        Rights and Obligations under the Registration Rights Agreement.
The shares of Warrant Stock are entitled to the benefits and subject to the
terms of the Registration Rights Agreement dated as of March 5, 2001 between the
Issuer and the Holders of the Warrants, as amended from time to time (the "
Registration Rights Agreement").

      5.        Adjustment of Warrant Price and Shares of Warrant Stock.The
Warrant Price shall be subject to adjustment from time to time upon the
happening of certain events as follows:

      (a)        Subdivisions or Combinations. If the Issuer, at any time while
this Warrant is outstanding, shall subdivide or combine any shares of Common
Stock or Series B-1 Preferred Stock, then, (i) in case of a subdivision of
shares, the Warrant Price shall be proportionately reduced (as at the effective
date of such subdivision or, if the Issuer shall take a record of the holders of
its Common Stock or Series B-1 Preferred Stock for the purpose of so
subdividing, as at the applicable record date, whichever is earlier) to reflect
the increase in the total number of shares of Common Stock (taking into account
that one share of Series B-1 Preferred Stock is convertible into 1,000 shares of
Common Stock) or Series B-1 Preferred Stock outstanding as a result of such
subdivision, or (ii) in the case of a combination of shares, the Warrant Price
shall be proportionately increased (as at the effective date of such combination
or, if the Issuer shall take a record of the holders of its Common Stock or
Series B-1 Preferred Stock for the purpose of so combining, as at the applicable
record date, whichever is earlier) to reflect the reduction in the total number
of shares of Common Stock (taking into account that one share of Series B-1
Preferred Stock is convertible into 1,000 shares of Common Stock) or Series B-1
Preferred Stock outstanding as a result of such combination.

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      (b)        Certain Dividends and Distributions. Except in a transaction of
the type otherwise described in this Section 5, if the Issuer, at any time while
this Warrant is outstanding, shall pay a dividend in, or make any other
distribution to the holders of one or more classes of its capital stock (without
consideration therefor) of, shares of:
      (i)        Common Stock, then (A) the Warrant Price shall be adjusted, at
the date the Issuer shall take a record of the holders of the Issuer's Capital
Stock for the purpose of receiving such dividend or other distribution (or if no
such record is taken, as at the date of such payment or other distribution), to
that price determined by multiplying the Warrant Price in effect immediately
prior to such record date (or if no such record is taken, then immediately prior
to such payment or other distribution), by the product obtained by multiplying
one thousand (1,000) times a fraction: (1) the numerator of which shall be the
total number of shares of Common Stock outstanding immediately prior to such
dividend or distribution, and (2) the denominator of which shall be the total
number of shares of Common Stock outstanding immediately after such dividend or
distribution (plus in the event that the Issuer paid cash for fractional shares,
the number of additional shares which would have been outstanding had the Issuer
issued fractional shares in connection with said dividends); and (B) the
aggregate number of shares of Warrant Stock on such date shall be adjusted by
multiplying such aggregate number by the product obtained by multiplying one
one-thousandth (.001) times a fraction: (1) the numerator of which shall be the
total number of shares of Common Stock outstanding immediately after such
dividend or distribution (plus in the event that the Issuer paid cash for
fractional shares, the number of additional shares which would have been
outstanding had the Issuer issued fractional shares in connection with said
dividends), and (2) the denominator of which shall be the total number of shares
of Common Stock outstanding immediately prior to such dividend or distribution;

      (ii)        Series B-1 Preferred Stock, then (i) the Warrant Price shall
be adjusted, at the date the Issuer shall take a record of the holders of the
Issuer's Capital Stock for the purpose of receiving such dividend or other
distribution (or if no such record is taken, as at the date of such payment or
other distribution), to that price determined by multiplying the Warrant Price
in effect immediately prior to such record date (or if no such record is taken,
then immediately prior to such payment or other distribution), by a fraction:
(A) the numerator of which shall be the total number of shares of Series B-1
Preferred Stock outstanding immediately prior to such dividend or distribution,
and (B) the denominator of which shall be the total number of shares of Series
B-1 Preferred Stock outstanding immediately after such dividend or distribution
(plus in the event that the Issuer paid cash for fractional shares, the number
of additional shares which would have been outstanding had the Issuer issued
fractional shares in connection with said dividends); and (ii) the aggregate
number of shares of Warrant Stock on such date shall be adjusted by multiplying
such aggregate number by a fraction: (A) the numerator of which shall be the
total number of shares of Series B-1 Preferred Stock outstanding immediately
after such dividend or distribution (plus in the event that the Issuer paid cash
for fractional shares, the number of additional shares which would have been
outstanding had the Issuer issued fractional shares in connection with said
dividends), and (B) the denominator of which shall be the total number of shares
of Series B-1 Preferred Stock outstanding immediately prior to such dividend or
distribution; or

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      (iii)        Capital Stock that ranks pari passu with the Common Stock
with respect to dividend rights and rights on liquidation, winding up or
dissolution or that entitles the holder thereof to share with the holders of
Common Stock in the distribution of dividends or any distributions in connection
with the liquidation, winding up or dissolution of the Issuer ("Parity Stock"),
then the adjustments contemplated by Section 5(b)(i) above shall be made as
nearly as possible in the manner provided in such Section, with such changes as
are necessary to account for the relative rights of such shares of Parity Stock
in relation to the Common Stock, so as to protect the Holder against the effect
of such diluting issuance.

      (c)        Adjustment of Warrant Stock and Warrant Price for Diluting
Issues. Except as otherwise provided in this Section 5(c), in the event the
Issuer sells or issues any Common Stock, Series B-1 Preferred Stock, Parity
Stock, or Stock Equivalents (other than in a transaction of the type described
in Section 5(d) hereof) at a Per Share Consideration (as defined below) less
than the Warrant Price then in effect for the Warrant Stock, then the Warrant
Price and the number of shares of Warrant Stock then in effect hereunder shall
be adjusted as provided in paragraphs (i), (ii), (iii) and (iv) of this Section
5(c). For purposes of this Section 5(c), the term " Per Share Consideration"
shall mean, with respect to the sale or issuance of (x) Common Stock, one
thousand (1,000) times the price per share received by the Issuer for the
issuance of such shares of Common Stock after the payment of any commissions,
discounts and other similar costs; (y) Series B-1 Preferred Stock, the price per
share received by the Issuer after the payment of any commissions, discounts and
other similar costs; (z) Parity Stock, the price per share (adjusted as
necessary to account for the relative rights of the such Parity Stock in
relation to the Common Stock) received by the Issuer for the issuance of such
shares of Parity Stock after the payment of any commissions, discounts and other
similar costs; (aa) Stock Equivalents that are convertible into or exchangeable
for Common Stock without further consideration, the number obtained by
multiplying one thousand (1,000) times the quotient obtained by dividing the
aggregate consideration received by the Issuer upon the sale or issuance of such
Stock Equivalents after the payment of any commissions, discounts and other
similar costs, by the maximum number of shares (as set forth in the instrument
relating thereto) of Common Stock issuable with respect to such Stock
Equivalents; (bb) Stock Equivalents that are convertible into or exchangeable
for Series B-1 Preferred Stock without further consideration, the number
obtained by dividing the aggregate consideration received by the Issuer upon the
sale or issuance of such Stock Equivalents after the payment of any commissions,
discounts and other similar costs, by the maximum number of shares (as set forth
in the instrument relating thereto) of Series B-1 Preferred Stock issuable with
respect to such Stock Equivalents;

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(cc) Stock Equivalents that are convertible into or exchangeable for Parity
Stock without further consideration, the number obtained by dividing the
aggregate consideration received by the Issuer upon the sale or issuance of such
Stock Equivalents (adjusted as necessary to account for the relative rights of
the such Parity Stock in relation to the Series B-1 Preferred Stock) after the
payment of any commissions, discounts and other similar costs, by the maximum
number of shares (as set forth in the instrument relating thereto) of Parity
Stock (expressed in terms of the equivalent number of shares of Series B-1
Preferred Stock represented thereby) issuable with respect to such Stock
Equivalents; (dd) other Stock Equivalents with respect to which Common Stock is
issuable, the number obtained by multiplying one thousand (1,000) times the
quotient obtained by dividing the total aggregate consideration received by the
Issuer upon the sale or issuance of such Stock Equivalents plus the total
consideration receivable by the Issuer upon the conversion or exercise of such
Stock Equivalents after the payment of any commissions, discounts and other
similar costs, by the maximum number of shares (as set forth in the instrument
relating thereto) of Common Stock issuable with respect to such Stock
Equivalents; (ee) other Stock Equivalents with respect to which Series B-1
Preferred Stock is issuable, the number obtained by dividing the total aggregate
consideration received by the Issuer upon the sale or issuance of such Stock
Equivalents plus the total consideration receivable by the Issuer upon the
conversion or exercise of such Stock Equivalents after the payment of any
commissions, discounts and other similar costs, by the maximum number of shares
(as set forth in the instrument relating thereto) of Series B-1 Preferred Stock
issuable with respect to such Stock Equivalents; (ff) other Stock Equivalents
with respect to which Parity Stock is issuable, the number obtained by dividing
the total aggregate consideration received by the Issuer upon the sale or
issuance of such Stock Equivalents (adjusted as necessary to account for the
relative rights of the such Parity Stock in relation to the Series B-1 Preferred
Stock) plus the total consideration receivable by the Issuer upon the conversion
or exercise of such Stock Equivalents after the payment of any commissions,
discounts and other similar costs, by the maximum number of shares (as set forth
in the instrument relating thereto) of Parity Stock (expressed in terms of the
equivalent number of shares of Series B-1 Preferred Stock represented thereby)
issuable with respect to such Stock Equivalents; (gg) Common Stock, Parity
Stock, Series B-1 Preferred Stock or Stock Equivalents for no consideration,
$.0001 for the Common Stock and $.000001 in all other cases; and (hh) Common
Stock, Series B-1 Preferred Stock, Parity Stock and/or Stock Equivalents for
non-cash consideration, an amount determined by the Board in good faith. In the
event of the issuance of any Stock Equivalents which contain provisions for
adjustment after the date of issuance in the number or price at which such Stock
Equivalents are, directly or indirectly, exercisable for, or exchangeable or
convertible into, shares of Common Stock, Series B-1 Preferred Stock or Parity
Stock, the calculations pursuant to this Section 5 upon the issuance of such
Stock Equivalents shall disregard such adjustment provisions, but upon the
occurrence of any event which results in such an adjustment pursuant to the
provisions of such Stock Equivalents, the Warrant Price and number of Warrant
Shares shall be further adjusted pursuant to the provisions of this Section 5 to
take into account such adjustment pursuant to such Stock Equivalents. If the
terms of any Stock Equivalents which are presently outstanding or may hereafter
by outstanding are renegotiated so as to affect the number of shares or price at
which such Stock Equivalents are, directly or indirectly, exercisable for, or
exchangeable or convertible into, shares of Common Stock, Series B-1 Preferred
Stock or Parity Stock, the provisions of this Section 5 shall be applied to take
into effect, as appropriate, such renegotiated terms.

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      (i)        Upon each issuance of:
      (A)        Common Stock for a Per Share Consideration less than the
Warrant Price in effect on the date of such issuance, (1) the Warrant Price in
effect on such date shall be adjusted by multiplying it by a fraction: (x) the
numerator of which shall be the number of shares of Common Stock outstanding
immediately prior to the issuance of such Additional Securities, plus the number
of shares of Common Stock that the aggregate net consideration received by the
Issuer for the total number of such Additional Securities so issued would
purchase at one one-thousandth (.001) of the Warrant Price then in effect; and
(y) the denominator of which shall be the number of shares of Common Stock
outstanding immediately prior to the issuance of such Additional Securities,
plus the number of such Additional Securities so issued; and (2) the aggregate
number of shares of Warrant Stock on such date shall be adjusted by multiplying
such aggregate number by a fraction: (x) the numerator of which shall be the
number of shares of Common Stock outstanding immediately prior to the issuance
of such Additional Securities, plus the number of such Additional Securities so
issued, and (y) the denominator of which shall be the number of shares of Common
Stock outstanding immediately prior to the issuance of such Additional
Securities, plus the number of shares of Common Stock that the aggregate net
consideration received by the Issuer for the total number of such Additional
Securities so issued would purchase at one one-thousandth (.001) of the Warrant
Price then in effect; or

      (B)        Series B-1 Preferred Stock for a Per Share Consideration less
than the Warrant Price in effect on the date of such issuance, (1) the Warrant
Price in effect on such date shall be adjusted by multiplying it by a fraction:
(x) the numerator of which shall be the number of shares of Series B-1 Preferred
Stock outstanding immediately prior to the issuance of such Additional
Securities, plus the number of shares of Series B-1 Preferred Stock that the
aggregate net consideration received by the Issuer for the total number of such
Additional Securities so issued would purchase at the Warrant Price then in
effect; and (y) the denominator of which shall be the number of shares of Series
B-1 Preferred Stock outstanding immediately prior to the issuance of such
Additional Securities, plus the number of such Additional Securities so issued;
and (2) the aggregate number of shares of Warrant Stock on such date shall be
adjusted by multiplying such aggregate number by a fraction: (x) the numerator
of which shall be the number of shares of Series B-1 Preferred Stock outstanding
immediately prior to the issuance of such Additional Securities, plus the number
of such Additional Securities so issued, and (y) the denominator of which shall
be the number of shares of Series B-1 Preferred Stock outstanding immediately
prior to the issuance of such Additional Securities, plus the number of shares
of Series B-1 Preferred Stock that the aggregate net consideration received by
the Issuer for the total number of such Additional Securities so issued would
purchase at the Warrant Price then in effect.

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      (C)Parity Stock, the adjustments contemplated by Section 5(c)(i)(A) above
shall be made as nearly as possible in the manner provided in such Section, with
such changes as are necessary to account for the relative rights of the such
Parity Stock in relation to the Common Stock, so as to protect the Holder
against the effect of such diluting issuance.

      (ii)        Upon each issuance of Stock Equivalents exercisable for, or
convertible or exchangeable into, without further consideration Common Stock,
Series B-1 Preferred Stock or Parity Stock for a Per Share Consideration less
than the Warrant Price in effect on the date of such issuance, the Warrant Price
and the number of shares of Warrant Stock in effect hereunder on such date shall
be adjusted as in paragraph (i) of this Section (5)(c) on the basis that the
Additional Securities underlying such Stock Equivalents are to be treated as
having been issued on the date of issuance of the Stock Equivalents and the
aggregate consideration received by the Issuer for such Stock Equivalents shall
be deemed to have been received for such underlying Additional Securities.

      (iii)        Upon each issuance of Stock Equivalents other than those
described in paragraph (ii) of this Section 5(c) for a Per Share Consideration
less than the Warrant Price in effect on the date of such issuance, the Warrant
Price and the number of shares of Warrant Stock in effect on such date shall be
adjusted as in paragraph (i) of this Section 5(c) on the basis that the
Additional Securities underlying such Stock Equivalents are to be treated as
having been issued on the date of issuance of such Stock Equivalents, and the
aggregate consideration received and receivable by the Issuer on conversion or
exercise of such Stock Equivalents shall be deemed to have been received for
such underlying Additional Securities.

      (iv)        Once any Additional Securities have been treated as having
been issued for the purpose of this Section 5(c), they shall be treated as
issued and outstanding shares of the Issuer whenever any subsequent calculations
must be made pursuant hereto; provided, however, that on the expiration of any
options, warrants or rights to purchase Additional Securities of the Issuer, the
termination of any rights to convert or exchange for Additional Securities of
the Issuer, or the expiration of any options or rights related to such
convertible or exchangeable Securities on account of which an adjustment in the
Warrant Price and Warrant Stock has been made previously pursuant to this
Section 5(c), the Warrant Price and the Warrant Stock shall forthwith be
readjusted to such Warrant Price and Warrant Stock as would have obtained had
the adjustment made upon the issuance of such options, warrants, rights,
securities or options or rights related to such Securities been made upon the
basis of the issuance of only the number of shares of Securities of the Issuer
actually issued upon the exercise of such options, warrants or rights, upon the
conversion or exchange of such Securities or upon the exercise of the options or
rights related thereto.

      (v)        The foregoing notwithstanding, no adjustment of the Warrant
Price or Warrant Stock under this Section 5(c) shall be made as a result of the
issuance of:

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      (A)        any Securities pursuant to which the Warrant Price and the
number of shares of Warrant Stock are adjusted under Section 5(a) or 5(b)
hereof; or

      (B)        any Securities issued pursuant to the exchange, conversion or
exercise of any Stock Equivalents that have previously been incorporated into
computations hereunder on the date when such Stock Equivalents were issued.

      (d)        Reorganization, Reclassification, Consolidation, Merger or Sale
of Assets. If any reorganization or reclassification of the Capital Stock of the
Issuer (other than by virtue of a change in par value, or from par value to no
par value, or from no par value to par value, where such change in par value
does not result in any change in the number of outstanding shares), or
consolidation or merger of the Issuer with another corporation, or the sale of
all or substantially all of its assets to another corporation, shall be effected
in such a way that holders of the Common Stock or Series B-1 Preferred Stock
shall be entitled to receive stock, securities or assets with respect to or in
exchange for the Common Stock or Series B-1 Preferred Stock, then, as a
condition of such reorganization, reclassification, consolidation, merger or
sale, the Holder shall have the right, and the Issuer shall enter into such
agreements as may be necessary to effectuate such right, thereafter and until
the expiration of the Term, to convert this Warrant into the same kind and
amount of stock, securities or assets as the stock, securities or assets
receivable upon such reorganization, reclassification, consolidation, merger or
sale by a holder of either (i) the same number of shares of the Series B-1
Preferred Stock as the number of shares of Warrant Stock then subject to this
Warrant, or (ii) one thousand (1,000) times the same number of shares of Common
Stock as the number of shares of Warrant Stock then subject to this Warrant, as
the case may be.

      (e)        De Minimis Adjustments. No adjustment in the Warrant Price or
the number of shares of Warrant Stock issuable hereunder shall be required
unless such adjustment would require an increase or decrease of at least
one-tenth of one percent (.1%) in the Warrant Price or the number of shares of
Warrant Stock issuable upon the exercise of this Warrant; provided, however,
that any adjustments which by reason of this Section 5(e) are not required to be
made shall be carried forward and taken into account in any subsequent
adjustment. All calculations shall be made to the nearest cent or one-thousandth
of a share.

        (f)        Form May Remain Unchanged. The form of this Warrant need not
be changed because of any adjustments in the Warrant Price or the number and
kind of Securities purchasable upon the exercise of this Warrant.

      6.        Notice of Adjustments. Whenever the Warrant Price shall be
adjusted pursuant to Section 5 hereof (for purposes of this Section 6, each an "
adjustment" ), the Issuer shall cause its Chief Financial Officer to prepare and
execute a certificate setting forth, in reasonable detail, the event requiring
the adjustment, the amount of the adjustment, the method by which such
adjustment was calculated (including a description of the basis on which the
Issuer's Board made any determination hereunder), and the Warrant Price and
number of shares of Warrant Stock after giving effect to such adjustment, and
shall cause a copy of such certificate to be delivered to the Holder promptly
after each adjustment. Any dispute between the Issuer and the Holder with
respect to the matters set forth in such certificate may at the option of the
Holder be submitted to one of the national accounting firms currently known as
the " big five" selected by the Holder, provided that the Issuer shall have
twenty (20) days after receipt of notice from such Holder of its selection of
such firm to object thereto, in which case the Holder shall select another such
firm and the Issuer shall have no such right of objection. The firm selected by
the Holder as provided in the preceding sentence shall be instructed to deliver
a written opinion as to such matters to the Issuer and the Holder within thirty
(30) days after submission to it of such dispute. Such opinion shall be final
and binding on the parties hereto. The fees and expenses of such accounting firm
shall be paid by the Issuer.

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7.        Fractional Shares. No fractional shares of Warrant Stock (other than
with respect to 1/1,000th of a share or even multiple thereof) will be issued in
connection with this issuance and exercise of this Warrant, but in lieu of any
fractional shares (other than with respect to 1/1,000th of a share or even
multiple thereof), the Issuer shall make a cash payment therefor equal in amount
to the product of the applicable fraction multiplied by the product obtained by
multiplying one thousand (1,000) by the Per Share Market Value then in effect.

      8.        Definitions. For the purposes of this Warrant, the following
terms have the following meanings:

     "Additional Securities" shall mean shares of Common Stock, Series B-1
Preferred Stock or Parity Stock issued subsequent to the Original Issue Date or,
with respect to the issuance of Stock Equivalents, the maximum number of shares
(as set forth in the instrument relating thereto) of Common Stock, Series B-1
Preferred Stock or Parity Stock issuable in exchange for or upon conversion or
exercise of, such Stock Equivalents.

"Board" shall mean the Board of Directors of the Issuer.

"Capital Stock" means and includes (i) any and all shares, interests,
participations or other equivalents of or interests in (however designated)
corporate stock, including, without limitation, shares of preferred or
preference stock, (ii) all partnership interests (whether general or limited) in
any Person which is a partnership, (iii) all membership interests or limited
liability company interests in any limited liability company, and (iv) all
equity or ownership interests in any Person of any other type.

"Certificate of Incorporation" means the Restated Certificate of Incorporation
of the Issuer, as amended, as in effect on the Original Issue Date, and as
hereafter from time to time amended, modified, supplemented or restated in
accordance with the terms hereof and thereof and pursuant to applicable law.

"Common Stock" means the Common Stock, $.01 par value per share, of the Issuer.

"Convertible Security" means any Security, directly or indirectly, convertible
into, exchangeable or exercisable for, or containing any right to receive shares
of Common Stock, Series B-1 Preferred Stock or Parity Stock.

"Expiration Date" means March 5, 2006.

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"Governmental Authority" means any governmental, regulatory or self-regulatory
entity, department, body, official, authority, commission, board, agency or
instrumentality, whether federal, state or local, and whether domestic or
foreign.
"Holder" means the Person or Persons who shall from time to time own this
Warrant.

"Independent Appraiser" means a nationally recognized or major regional
investment banking firm or firm of independent certified public accountants of
recognized standing (which may be the firm that regularly examines the financial
statements of the Issuer) that is regularly engaged in the business of
appraising the Capital Stock or assets of corporations or other entities as
going concerns, and which is not affiliated with either the Issuer or the
Holder.

"Issuer" means Alterra Healthcare Corporation, a Delaware corporation, and its
successors.

"Original Issue Date" means as of March 5, 2001.

"OTC Bulletin Board" means the over-the-counter electronic bulletin board.

"Parity Stock" has the meaning specified in Section 5(b)(iii).

"Person" means an individual, corporation, limited liability company,
partnership, joint stock company, trust, unincorporated organization, joint
venture, Governmental Authority or other entity of whatever nature.

"Per Share Consideration" has the meaning specified in Section 5(c) hereof.

"Per Share Market Value" means on any particular date (a) the last sales price
per share of the Common Stock on such date on the American Stock Exchange or
other registered national stock exchange on which the Common Stock is then
listed or if there is no such price on such date, then the closing bid price on
such exchange or quotation system on the date nearest preceding such date, or
(b) if the Common Stock is not listed then on the American Stock Exchange or any
registered national stock exchange, then the closing bid price for a share of
Common Stock in the over-the-counter market, as reported by the OTC Bulletin
Board or in the National Quotation Bureau Incorporated (or similar organization
or agency succeeding to its functions of reporting prices), at the close of
business on such date, or (c) if the Common Stock is not then reported by the
OTC Bulletin Board or the National Quotation Bureau Incorporated (or similar
organization or agency succeeding to its functions of reporting prices), then
the average of the "Pink Sheet" quotes for the relevant conversion period, as
determined in good faith by the Issuer or the Holder, as the context requires,
or (d) if the Common Stock is not then publicly traded, then the fair market
value of a share of Common Stock as determined by an Independent Appraiser
selected in good faith by the Issuer or the Holder, as the context requires;
provided, however, that after receiving the determination by such Independent
Appraiser, the party receiving such determination shall have the right to select
an additional Independent Appraiser, in which case, the fair market value shall
be equal to the average of the determinations by each such Independent
Appraiser; and provided further, however, that all determinations of the Per
Share Market Value shall be appropriately adjusted for any stock dividends,
stock splits or other similar transactions during such period. The fees and
expenses of such Independent Appraisers shall be paid by the Issuer. The
determination of fair market value by an Independent Appraiser shall be based
upon the fair market value of the Issuer determined as between a willing buyer
and a willing seller and taking into account all relevant factors determinative
of value, and shall be final and binding on all parties. In determining the fair
market value of any shares of Common Stock, no consideration shall be given to
any restrictions on transfer of the Common Stock imposed by agreement or by
federal or state securities laws, or to the existence or absence of, or any
limitations on, voting rights.

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"Registration Rights Agreement" has the meaning specified in Section 4(e)
hereof.
"Securities" means any debt or equity securities of the Issuer, whether now or
hereafter authorized, any instrument convertible into or exchangeable for
Securities or a Security, and any option, warrant or other right to purchase or
acquire any Security. "Security" means one of the Securities.

"Securities Act" means the Securities Act of 1933, as amended, or any similar
federal statute then in effect.

"Series B-1 Preferred Stock" means the Issuer's Series B-1 Non-Voting
Participating Redeemable Preferred Stock, with a stated value of $750.00 per
share, as adjusted, and any other Capital Stock into which such stock may
hereafter be changed.

"Stock Equivalent" means any Convertible Security or any warrant, option or
other right, directly or indirectly, to subscribe for or purchase or receive any
additional shares of Common Stock, Series B-1 Preferred Stock, Parity Stock or
any Convertible Security.

"Term" has the meaning specified in Section 1 hereof.

"Trading Day" means (a) a day on which the Common Stock is traded on the
American Stock Exchange as reported by Bloomberg L.P., or (b) if the Common
Stock is not listed on the American Stock Exchange, then a day on which the
Common Stock is traded on any other registered national stock exchange, or (c)
if the Common Stock is not quoted on the OTC Bulletin Board, then a day on which
the Common Stock is quoted in the over-the-counter market as reported by the
National Quotation Bureau Incorporated (or any similar organization or agency
succeeding its functions of reporting prices); provided, however, that in the
event that the Common Stock is not listed or quoted as set forth in (a), (b) and
(c) hereof, then Trading Day shall mean any day except Saturday, Sunday and any
day which shall be a legal holiday or a day on which banking institutions in the
State of New York are authorized or required by law or other government action
to close.

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"Warrant" means this Warrant (and any other warrant or warrants of like tenor
issued in substitution or exchange for this Warrant pursuant to the provisions
of Section 3(c), 3(d) or 3(e) hereof), and all other Warrants issued by the
Company on the Original Issue Date to purchase shares of Series B-1 Stock (and
any other warrant or warrants of like tenor issued in substitution or exchange
thereof pursuant to Section 3(c), 3(d) or 3(e) thereof).

"Warrant Price" has the meaning specified in Section 2 hereof.

"Warrant Stock" means collectively the Tranche A Warrant Stock, Tranche B
Warrant Stock and Tranche C Warrant Stock.

      9.        Other Notices. In case at any time:

      (a)        the Issuer shall make any distributions to the holders of the
Common Stock, the Series B-1 Preferred Stock or Parity Stock; or

      (b)        the Issuer shall authorize the granting to all holders of its
Common Stock, Series B-1 Preferred Stock or Parity Stock of rights to subscribe
for or purchase any shares of Capital Stock of any class or of any Stock
Equivalents or Convertible Securities or other rights; or

      (c)        there shall be any reclassification of the Capital Stock of the
Issuer; or

      (d)        there shall be any capital reorganization by the Issuer; or

      (e)        there shall be any (i) consolidation or merger involving the
Issuer or (ii) sale, transfer or other disposition of all or substantially all
of the Issuer's property, assets or business (except a merger or other
reorganization in which the Issuer shall be the surviving corporation and its
shares of Capital Stock shall continue to be outstanding and unchanged and
except a consolidation, merger, sale, transfer or other disposition involving a
wholly-owned subsidiary of the Issuer); or

      (f)        there shall be a voluntary or involuntary dissolution,
liquidation or winding-up of the Issuer or any partial liquidation of the Issuer
or distribution to holders of the Common Stock or the Series B-1 Preferred
Stock;

then, in each of such cases, the Issuer shall give written notice to the Holder
of the date on which (i) the books of the Issuer shall close or a record shall
be taken for such dividend, distribution or subscription rights or (ii) such
reorganization, reclassification, consolidation, merger, disposition,
dissolution, liquidation or winding-up, as the case may be, shall take place.
Such notice also shall specify the date as of which the holders of the Common
Stock, the Series B-1 Preferred Stock or Parity Stock of record shall
participate in such dividend, distribution or subscription rights, or shall be
entitled to exchange their certificates for Common Stock, Series B-1 Preferred
Stock, or Parity Stock for securities or other property deliverable upon such
reorganization, reclassification, consolidation, merger, disposition,
dissolution, liquidation or winding-up, as the case may be. Such notice shall be
given at least twenty (20) days prior to the action in question and not less
than twenty (20) days prior to the record date or the date on which the Issuer's
transfer books are closed in respect thereto. The Issuer shall give to the
Holder notice of all meetings and actions by written consent of its
stockholders, at the same time and in the same manner as notice of any meetings
of stockholders is required to be given to stockholders who do not waive such
notice (or, if such requires no notice, then two business days' written notice
thereof describing the matters upon which action is to be taken). The Holder
shall have the right to send two representatives selected by it to each meeting,
who shall be permitted to attend, but not vote at, such meeting and any
adjournments thereof. This Warrant entitles the Holder to receive copies of all
financial and other information distributed or required to be distributed to the
holders of the Common Stock, the Series B-1 Preferred Stock or Parity Stock.

      10.        Amendment and Waiver. Any term, covenant, agreement or
condition in this Warrant may be amended, or compliance therewith may be waived
(either generally or in a particular instance and either retroactively or
prospectively), by a written instrument or written instruments executed by the
Issuer and the Holder.

      11.        Governing Law. THIS WARRANT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, WITHOUT GIVING EFFECT TO
PRINCIPLES OF CONFLICTS OF LAW.

      12.        Notices. Any and all notices or other communications or
deliveries required or permitted to be provided hereunder shall be in writing
and shall be deemed given and effective on the earlier of (i) the date of
transmission, if such notice or communication is delivered via facsimile at the
facsimile telephone number specified for notice prior to 5:00 p.m., eastern
standard time, on a business day, (ii) the business day after the date of
transmission, if such notice or communication is delivered via facsimile at the
facsimile telephone number specified for notice later than 5:00 p.m., pacific
standard time, on any date and earlier than 11:59 p.m., eastern standard time,
on such date, (iii) the business day following the date of mailing, if sent by
nationally recognized overnight courier service or (iv) actual receipt by the
party to whom such notice is required to be given. The addresses for such
communications shall be with respect to the Holder of this Warrant or of Warrant
Stock issued pursuant hereto, addressed to such Holder at its last known address
or facsimile number appearing on the books of the Issuer maintained for such
purposes, or with respect to the Issuer, addressed to:

Alterra Healthcare Corporation
10000 Innovation Drive
Milwaukee, Wisconsin 53226
Attention: Chief Executive Officer
Facsimile: (414) 918-5055

or to such other address or addresses or facsimile number or numbers as any such
party may most recently have designated in writing to the other party hereto by
such notice. Copies of notices to the Issuer shall be sent to Rogers & Hardin
LLP, 2700 International Tower, Peachtree Street, N.E., Atlanta, Georgia 30303,
Attn: Alan C. Leet, Facsimile No.: (404) 525-2224.

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      13.        Warrant Agent. The Issuer may, by written notice to the Holder,
appoint an agent for the purpose of issuing shares of Warrant Stock on the
exercise of this Warrant pursuant to subsection (b) of Section 3 hereof,
exchanging this Warrant pursuant to subsection (d) of Section 3 hereof or
replacing this Warrant pursuant to subsection (d) of Section 4 hereof, or any of
the foregoing, and thereafter any such issuance, exchange or replacement, as the
case may be, shall be made at such office by such agent.

      14.        Remedies.The Issuer stipulates that the remedies at law of the
Holder in the event of any default or threatened default by the Issuer in the
performance of or compliance with any of the terms of this Warrant are not and
will not be adequate and that, to the fullest extent permitted by law, such
terms may be specifically enforced by a decree for the specific performance of
any agreement contained herein or by an injunction against a violation of any of
the terms hereof or otherwise.

      15.        Successors and Assigns. This Warrant and the rights evidenced
hereby shall inure to the benefit of and be binding upon the successors and
assigns of the Issuer and the Holder and shall be enforceable thereby.

      16.        Modification and Severability. If, in any action before any
court or agency legally empowered to enforce any provision contained herein, any
provision hereof is found to be unenforceable, then such provision shall be
deemed modified to the extent necessary to make it enforceable by such court or
agency. If any such provision is not enforceable as set forth in the preceding
sentence, the unenforceability of such provision shall not affect the other
provisions of this Warrant, but this Warrant shall be construed as if such
unenforceable provision had never been contained herein.

      17.        Headings. The headings of the Sections of this Warrant are for
convenience of reference only and shall not, for any purpose, be deemed a part
of this Warrant.

[SIGNATURE PAGE TO FOLLOW]

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IN WITNESS WHEREOF, the parties hereto have caused this Warrant to be executed,
delivered and acknowledged by their respective duly authorized officers as of
the day and year first above written.
ALTERRA HEALTHCARE CORPORATION

By:                                         Name:
Title:

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EXERCISE FORM

Alterra Healthcare Corporation (the "Corporation")

The undersigned holder of the within Warrant, pursuant to the provisions
thereof, hereby elects to purchase (i) _________ shares of Series B-1 Non-Voting
Participating Redeemable Preferred Stock of the Corporation covered by the
within Warrant pursuant to Section 2(a) thereof, (ii) ________ shares of Series
B-1 Non-Voting Participating Redeemable Preferred Stock of the Corporation
covered by the within Warrant pursuant to Section 2(b) thereof, and (iii)
_________ shares of Series B-1 Non-Voting Participating Redeemable Preferred
Stock of the Corporation covered by the within Warrant pursuant to Section 2(c)
thereof.

Dated:                Signature                                
                Address                                
                                                

ASSIGNMENT

FOR VALUE RECEIVED, the undersigned holder of the within Warrant hereby sells,
assigns and transfers unto ________________________________ the within Warrant
and all rights evidenced thereby and does irrevocably constitute and appoint
___________________________, attorney, to transfer the said Warrant on the books
of the Corporation.

Dated:                Signature                                
                Address                                
                                                
PARTIAL ASSIGNMENT

FOR VALUE RECEIVED, the undersigned holder of the within Warrant hereby sells,
assigns and transfers unto ___________________________________ the right to
purchase (i) _______ shares of Warrant Stock pursuant to Section 2(a) of the
within Warrant, (ii) _______ shares of Warrant Stock pursuant to Section 2(b) of
the within Warrant, and (iii) _______ shares of Warrant Stock pursuant to
Section 2(c) of the within Warrant, together with all rights therein, and does
irrevocably constitute and appoint ________________________, attorney, to
transfer that part of the said Warrant on the books of the Corporation.

Dated:                Signature                                
                Address                                
                                                

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FOR USE BY THE ISSUER ONLY:This Warrant No. W-_____ cancelled (or transferred or
exchanged) this _____ day of _________ __________________, 20____,
______________ shares of Series B-1 Non-Voting Participating Redeemable
Preferred Stock issued therefor in the name of _____________________________,
and Warrant No. W-____ issued for (i) _________ shares of Series B-1 Non-Voting
Participating Redeemable Preferred Stock pursuant to Section 2(a) thereof, (ii)
_________ shares of Series B-1 Non-Voting Participating Redeemable Preferred
Stock pursuant to Section 2(b) thereof, and (iii) _________ shares of Series B-1
Non-Voting Participating Redeemable Preferred Stock pursuant to Section 2(c)
thereof, in the name of __________________________.

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EXHIBIT C

CERTIFICATE OF ELIMINATION OF THE

SERIES B-1 NON-VOTING PARTICIPATING PREFERRED STOCK

of

ALTERRA HEALTHCARE CORPORATION

Pursuant to Section 151 of the General Corporation Law
of the State of Delaware

         Alterra Healthcare Corporation, a corporation organized and existing
under the General Corporation Law of the State of Delaware (the " Corporation"),
hereby certifies that the following recitals and resolutions were adopted by the
Board of Directors of the Corporation as authorized by Section 151(g) of the
General Corporation Law of the State of Delaware on December 11, 2001:

        " WHEREAS, no shares of the Corporation's Series B-1 Non-Voting
Participating Preferred Stock (the "March 2001 Series B-1 Stock") created and
authorized for issuance pursuant to that certain Certificate of Designations,
Rights and Preferences of the Series B-1 Non-Voting Participating Preferred
Stock filed with the Secretary of State of Delaware on March 2, 2001 (the
"Designation" ) have been issued or are outstanding;

        WHEREAS, the Board of Directors has determined that none of the shares
of March 2001 Series B-1 Stock authorized by the Designation will be issued and
outstanding at any time; and

        WHEREAS, the Board of Directors has determined that it is in the best
interest of the Corporation to eliminate from the Corporation's Restated
Certificate of Incorporation, as amended, all matters with respect to the March
2001 Series B-1 Stock;

        NOW, THEREFORE, BE IT RESOLVED, that the Board of Directors hereby
authorizes and directs the officers of the Corporation to file with the
Secretary of State of Delaware a Certificate of Elimination with respect to the
March 2001 Series B-1 Stock in order to eliminate from the Corporation's
Restated Certificate of Incorporation, as amended, all matters with respect to
such March 2001 Series B-1 Stock."

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        IN WITNESS WHEREOF, the Corporation has caused this Certificate of
Elimination to be executed and acknowledged by its duly authorized officer this
20th day of December, 2001.

Alterra Healthcare Corporation

                                                
Mark W. Ohlendorf, Chief Financial Officer,
Senior Vice President, Secretary and Treasurer

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EXHIBIT D

CERTIFICATE OF DESIGNATIONS,
RIGHTS AND PREFERENCES OF THE

SERIES B-1 NON-VOTING PARTICIPATING
REDEEMABLE PREFERRED STOCK

of

ALTERRA HEALTHCARE CORPORATION

Pursuant to Section 151 of the General Corporation Law
of the State of Delaware

        Alterra Healthcare Corporation, a corporation organized and existing
under the General Corporation Law of the State of Delaware (the "Corporation"),
hereby certifies that the following resolutions were adopted by the Board of
Directors of the Corporation as required by Section 151 of the General
Corporation Law of the State of Delaware on December 11, 2001:

        RESOLVED, that pursuant to the authority granted to and vested in the
Board of Directors of the Corporation in accordance with the provisions of the
Restated Certificate of Incorporation, as amended, the Board of Directors hereby
creates a series of Non-Voting Participating Redeemable Preferred Stock (the
"Series B-1 Preferred Stock" ) of the Corporation and hereby states the
designation and number of shares, and fixes the relative rights, preferences,
and limitations thereof as follows:

"Series B-1 Non-Voting Participating Redeemable Preferred Stock

           1.        Designation. The Preferred Stock of Alterra Healthcare
Corporation (the "Corporation"), created and authorized for issuance hereby
shall be designated as "Series B-1 Non-Voting Participating Redeemable Preferred
Stock" (hereinafter "Series B-1 Preferred Stock" ) which will consist of 300,000
shares of such Series B-1 Preferred Stock, each of which has a stated value of
$750 per share as adjusted, from time to time, in accordance with the provisions
of Section 8 hereof (the "Stated Value" ).

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           2.        Priority. The Series B-1 Preferred Stock shall, with
respect to dividend rights and rights on liquidation, winding up or dissolution,
whether voluntary or involuntary, whether now or hereafter issued, rank (i)
junior to the Corporation's Series A 9.75% Cumulative Convertible Pay-in-Kind
Preferred Stock (the "Series A Preferred Stock" ), the Corporation's Series B
Non-Voting Participating Preferred Stock (the " Series B Preferred Stock"), and
any other series of Preferred Stock established by the Corporation's Board of
Directors (the "Board of Directors"), the terms of which shall specifically
provide that such series shall rank senior to the Series B-1 Preferred Stock
with respect to dividend rights and rights on liquidation, winding up or
dissolution (all of such series of Preferred Stock to which the Series B-1
Preferred Stock ranks junior, are at times collectively referred to herein as
the " Senior Securities"), and (ii) senior to the Corporation's Common Stock
(the "Common Stock"), $.01 par value per share (except that with respect to
dividends the Series B-1 Preferred Stock shall rank pari passu with the Common
Stock), and the Corporation's Series A Junior Participating Preferred Stock (the
"Junior Preferred Stock") (except that with respect to dividends, the Series B-1
Preferred Stock shall rank junior to the Junior Preferred Stock), and, subject
to clause (i) of this Section 2, any other equity securities of the Corporation,
with respect to dividend rights and rights on liquidation, winding up or
dissolution (all of such equity securities of the Corporation to which the
Series B-1 Preferred Stock ranks senior, including the Common Stock, are at
times collectively referred to herein as the " Junior Securities").

           3.        Dividends.

                (a)        Each Holder of a share of Series B-1 Preferred Stock
shall be entitled to receive, when, as and if declared by the Board of Directors
out of funds legally available therefor under the General Corporation Law of the
State of Delaware (the "DGCL"), dividends for each share of Series B-1 Preferred
Stock in an amount equal the amount of all cash dividends, all non-cash
dividends and all other distributions (other than a dividend payable in shares
of Common Stock or a subdivision of the outstanding shares of Common Stock by
reclassification or otherwise, each of which are addressed in Section 8 hereof)
declared and paid on the Common Stock, as if the shares of Series B-1 Preferred
Stock had been converted immediately prior to the record date for payment of
such dividends or distributions at the conversion rate set forth in Section 5
hereof. Dividends on shares of Series B-1 Preferred Stock shall be payable in
cash or in such other property, securities or assets (other than shares of
Common Stock) as may be declared and paid by the Corporation as a dividend to
the holders of the Corporation's issued and outstanding shares of Common Stock.
Dividends shall be paid to the holders of record of shares of Series B-1
Preferred Stock at the close of business on the date specified by the Board of
Directors of the Corporation at the time such dividend is declared; provided,
however, that such record date shall not be more than 60 days nor less than 10
days prior to the respective dividend payment date.

           (b)        All dividends paid with respect to shares of Series B-1
Preferred Stock pursuant to Section 3(a) hereof shall be paid pro rata to the
holders entitled thereto.

           (c)        If at any time the Corporation shall have failed to pay
all dividends which have accrued on any outstanding shares of Senior Securities
at the times such dividends are payable, unless otherwise provided in the terms
of such Senior Securities, no cash or stock dividend (except in shares of Series
B-1 Preferred Stock) shall be declared by the Board of Directors or paid or set
apart for payment by the Corporation on shares of Series B-1 Preferred Stock
unless prior to or concurrently with such declaration, payment or setting apart
for payment, all accrued and unpaid dividends on all outstanding shares of such
Senior Securities shall have been declared, paid or set apart for payment,
without interest.

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      4.        Liquidation Preference.

           (a)        In the event of any voluntary or involuntary liquidation,
dissolution or winding up of the affairs of the Corporation, the holders of
shares of Series B-1 Preferred Stock then outstanding shall be entitled to be
paid out of the assets of the Corporation available for distribution to its
stockholders an amount in cash equal to the greater of (i) the Stated Value and
(ii) the Common Stock Liquidation Amount (as defined below) for each share of
Series B-1 Preferred Stock outstanding plus all declared but unpaid dividends
thereon to the date fixed for liquidation, before any payment shall be made or
any assets distributed to the holders of any of the Junior Securities (the "
Liquidation Preference"); provided, however, that the holders of outstanding
shares of Series B-1 Preferred Stock shall not be entitled to receive such
liquidation payment until the liquidation payments on all outstanding shares of
Senior Securities shall have been paid in full. If the assets of the Corporation
are not sufficient to pay in full the liquidation payments payable to the
holders of outstanding shares of Series B-1 Preferred Stock, then the holders of
all such shares shall share ratably in such distribution of assets in accordance
with the full respective preferential amounts that would be payable on such
shares of Series B-1 Preferred Stock if all amounts payable thereon were paid in
full.

           (b)        For the purposes of this Section 4, "Common Stock
Liquidation Amount" means the amount, if any, that each outstanding share of
Series B-1 Preferred Stock would be entitled to receive following the payment by
the Corporation of any liquidation preferences with respect to the Senior
Securities, out of assets legally available for distribution as contemplated by
the relevant provisions of the DGCL and applicable law, assuming that the
holders of shares of Series B-1 Preferred Stock were entitled to participate
with the holders of the Series B Preferred Stock and the Common Stock in all
other assets of the Corporation (with each share of Series B-1 Preferred Stock
entitled to participate on the same basis as one thousand (1,000) shares of
Common Stock).

           (c)        For the purposes of this Section 4, (i) the voluntary
sale, conveyance, exchange or transfer (for cash, shares of stock, securities or
other consideration) of all or substantially all of the property or assets of
the Corporation (unless and until such sale, conveyance, exchange or transfer is
followed by the dissolution of the Corporation pursuant to the DGCL) or (ii) the
consolidation or merger of the Corporation with one or more other companies or
entities shall not be deemed to be a liquidation, dissolution or winding up,
voluntary or involuntary.

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           5.        Conversion by the Corporation.

           (a)        The Corporation may, at its option, on or after May 31,
2003, convert all, but not less than all, of the shares of Series B-1 Preferred
Stock then outstanding, upon notice as set forth in Section 5(d) hereof, into
shares of Common Stock with each share of Series B-1 Preferred Stock being
converted into one thousand (1,000) shares of fully paid non-assessable shares
of Common Stock in accordance with and subject to the terms of this Section 5.

           (b)        Notice of any conversion shall be sent by or on behalf of
the Corporation not less than 30 days prior to the date specified for such
conversion in such notice (the "Conversion Date" ), by first-class mail, postage
prepaid, to all holders of record of Series B-1 Preferred Stock at their last
addresses as they shall appear on the books of the Corporation (the date such
notice is mailed by or on behalf of the Corporation is referred to herein as the
"Conversion Notice Date"); provided, however, that no failure to give such
notice or any defect therein or in the mailing thereof shall affect the validity
of the proceedings for the conversion of any shares of Series B-1 Preferred
Stock except as to the holder to whom the Corporation has failed to give notice
or except as to the holder to whom such notice was defective. In addition to any
information required by law, such notice shall state: (i) the place or places
where certificates for such shares are to be surrendered; and (ii) that
dividends on the shares to be converted will cease to be declared as of and
after the Conversion Date.

           (c)        If notice has been mailed in accordance with Section 5(b)
hereof and, provided that on or before the Conversion Date specified in such
notice, all shares of Common Stock necessary for such conversion shall have been
set aside by the Corporation for the pro rata benefit of the holders of the
Series B-1 Preferred Stock so called for conversion, so as to be, and to
continue to be available therefor, then, from and after the Conversion Date,
dividends on the shares of Series B-1 Preferred Stock so called for conversion
shall cease to be declared, and such shares shall no longer be deemed to be
outstanding and shall not have the status of shares of Series B-1 Preferred
Stock, and all rights of the holders thereof as stockholders of the Corporation
(except the right to receive from the Corporation shares of Common Stock in
connection with the conversion) shall cease.

           (d)        Upon surrender to the Corporation at the office of the
transfer agent or such other place or places, if any, as the Board of Directors
may determine and as specified in the Conversion Notice, of certificates duly
endorsed to the Corporation or in blank for shares of Series B-1 Preferred Stock
called for conversion together with appropriate evidence of the payment of any
transfer or similar tax, if required, the Corporation shall issue the number of
shares of Common Stock issuable upon conversion thereof as of the time of such
surrender and as promptly as practicable thereafter will deliver or cause to be
delivered certificates for such shares of Common Stock to the record holder of
the shares so surrendered.

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           (e)        No fractional shares of Common Stock shall be issued
pursuant to this Section 5 and the aggregate number of shares of Common Stock
issued to a holder of Series B-1 Preferred Stock shall be rounded down to the
nearest whole number of shares.

           (f)        The Corporation shall pay all documentary, stamp or
similar issue or transfer tax due upon conversion of Series B-1 Preferred Stock.

      6.        Redemption at the Request of the Holder.

           (a)        Any holder of Series B-1 Preferred Stock may, at its
option, on or after May 31, 2003, from time to time, cause the Corporation to
redeem all, but not less than all, of the Series B-1 Preferred Stock held by
such holder on such date, upon notice as set forth in Section 6(c) hereof at the
redemption price set forth in Section 6(b) hereof.

           (b)        The Redemption Price of each share of the Series B-1
Preferred Stock shall be an amount in cash equal to one thousand (1,000) times
the Common Share Value (hereinafter defined) on the Redemption Date (as defined
herein) and, at the election of the Corporation, may be paid in cash or may be
satisfied in full by issuing to the holder one thousand (1,000) shares of Common
Stock for each share of Series B-1 Preferred Stock that is subject to
redemption. The Corporation shall take all actions required or permitted under
the DGCL to permit such redemption of Series B-1 Preferred Stock.

           (c)        Notice of any requested redemption pursuant to Section
6(a) hereof shall be sent by or on behalf of the holder of shares of Series B-1
Preferred Stock by first-class mail, postage prepaid, to the Corporation at its
address set forth in Section 11 hereof (the date of such mailing being referred
to herein as the Redemption Date). Such notice shall state: (i) that such
redemption is being requested pursuant the redemption provisions hereof; and
(ii) the number of shares of Series B-1 Preferred Stock to be redeemed. Upon
receipt by the Corporation of any such notice of requested redemption, the
Corporation shall become obligated to redeem as soon as practicable thereafter
all shares as to which redemption has been requested.

           (d)        For purposes of this Certificate of Designations, Rights
and Preferences, the following terms have the following meanings:

           (i)        " Closing Price" on any Trading Day with respect to the
per share price of any shares of Common Stock means the last reported sale price
regular way or, in case no such reported sale takes place on such day, the
average of the reported closing bid and asked prices regular way, in either case
on the American Stock Exchange or, if shares of Common Stock are not listed or
admitted to trading on such exchange, on the principal national securities
exchange on which such shares are listed or admitted to trading or, if not
listed or admitted to trading on any national securities exchange, on the NASDAQ
or, if such shares are not listed or admitted to trading on any national
securities exchange or quoted on NASDAQ, the average of the closing bid and
asked prices in the over-the-counter market as furnished by any American Stock
Exchange member firm that is selected from time to time by the Corporation for
that purpose.

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      (ii)        " Common Share Value" means the average of the Closing Price
of the Common Stock for the five (5) consecutive Trading Days immediately
preceding the Redemption Date; provided, however, that in the event that the
Closing Price of Common Stock cannot be determined pursuant to subsection (d)(i)
hereof, the " Common Share Value" shall mean the fair market value of a share of
Common Stock on the Redemption Date as agreed to by the Corporation, on the one
hand, and the holders of a majority of the shares of Series B-1 Preferred Stock
that are subject to redemption (voting or consenting in writing as a separate
class), on the other hand; and provided further, however, that if the
Corporation and such holders are unable to so agree within 10 days after the
Redemption Date, then the fair market value of a share of Common Stock shall be
determined by an independent nationally-recognized investment banking firm
mutually acceptable to the Corporation, on the one hand, and the holders of a
majority of the shares of Series B-1 Preferred Stock that are subject to
redemption (voting or consenting in writing as a separate class), on the other
hand, or if the Corporation and such holders are unable to so agree within 5
days, by an independent nationally-recognized investment banking firm selected
by the American Arbitration Association.

      (iii)        " Trading Day," with respect to a securities exchange or
automated quotation system, means a day on which such exchange or system is open
for a full day of trading.

7.        Voting Rights. Except as otherwise provided herein or as otherwise
required by law, holders of the Series B-1 Preferred Stock shall have no voting
rights; provided, however, that, notwithstanding the foregoing, the holders of
the Series B-1 Preferred Stock, acting by vote of a majority of the then
outstanding Series B-1 Preferred Stock, shall be entitled to approve, voting
together as a single class: (i) any amendment or modification, direct or
indirect, of the rights or preferences of the Common Stock or the Series B-1
Preferred Stock, whether by amendment of the Certificate of Incorporation,
recapitalization, merger or otherwise (including, without limitation, the
authorization or the filing of any certificate of designations with respect to
any additional class or series of capital stock of the Corporation) and (ii) any
merger, amendment of the Certificate of Incorporation, share exchange or other
corporate action (including, without limitation, any offer by the Corporation to
repurchase shares of Common Stock or any amendment to the Rights Agreement
between the Corporation and American Stock Transfer & Trust Corporation dated as
of December 10, 1998, as amended or modified from time to time) involving the
conversion or exchange of Common Stock or the receipt of cash, securities
(whether of the Corporation or any other entity), options, warrants or rights to
acquire securities or other property by holders of Common Stock (except to the
extent such transaction is subject to the provisions of Section 8 hereof) unless
the holders of Series B-1 Preferred Stock are entitled to participate in such
transaction on the same terms as the holders of Common Stock (with each share of
Series B-1 Preferred Stock entitled to participate on the same basis as one
thousand (1,000) shares of Common Stock). Each share of Series B-1 Preferred
Stock shall entitle the holder thereof to cast one vote on any matter submitted
to a vote of the holders of the Series B-1 Preferred Stock in accordance with
the preceding sentence. Notwithstanding anything to the contrary contained
herein, any action required or permitted to be taken by the holders of Series
B-1 Preferred Stock at any meeting of the holders of Series B-1 Preferred Stock
may be taken without a meeting, without prior notice and without a vote, if a
consent in writing, setting forth the action so taken, shall be signed by the
holders of 100% of the issued and outstanding shares of Series B-1 Preferred
Stock.

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           8.        Anti-Dilution Adjustments.

      (a)        In case the Corporation shall (i) pay or make a dividend or
other distribution on the outstanding shares of Common Stock in shares of Common
Stock, (ii) subdivide or reclassify the outstanding shares of Common Stock into
a greater number of shares, or (iii) combine or reclassify the outstanding
shares of Common Stock into a smaller number of shares, the number of issued and
outstanding shares of Series B-1 Preferred Stock (the "Outstanding Number") at
the opening of business on the day following the date fixed for the
determination of stockholders entitled to receive such dividend or other
distribution or subject to such subdivision, combination or reclassification
(the "Record Date") shall be adjusted by multiplying such Outstanding Number by
a fraction of which the numerator shall be the sum of such number of shares of
Common Stock outstanding immediately after the event described in clauses (i),
(ii) or (iii) of this Section 8(a) and of which the denominator shall be the
number of shares of Common Stock outstanding at the close of business on the
Record Date, such adjustment to the Outstanding Number to become effective
immediately after the opening of business on the Record Date. No adjustment to
the Outstanding Number need be made for a change in the par value of the Common
Stock. Whenever the Outstanding Number is adjusted, the Stated Value of each
share of Series B-1 Preferred Stock shall be adjusted proportionately such that
the aggregate Stated Value of all issued and outstanding shares of Series B-1
Preferred Stock shall not change as the result of the adjustment of the
Outstanding Number.

      (b)        Whenever the Outstanding Number is adjusted, the Corporation
shall promptly mail to the holders of Series B-1 Preferred Stock (i) a notice of
adjustment briefly stating the facts requiring the adjustment, the manner of
computing such adjustment and any adjustment to the Stated Value; and (ii) a
certificate or certificates representing the number of shares of Series B-1
Preferred Stock to which such holder is entitled pursuant to Section 8(a) hereof
or, in the case of a reduction in the Outstanding Number, a new certificate or
certificates, in exchange for such holder's existing certificate or
certificates, representing the number of shares of Series B-1 Preferred Stock to
which such holder is entitled following the adjustment provided for in Section
8(a) hereof. No fractional shares of Series B-1 Preferred Stock shall be issued
by the Corporation pursuant to this Section 8(b) other than with respect to
1/1,000th of a share or even multiple thereof, so that the number of shares of
Series B-1 Preferred Stock to be issued pursuant to this Section 8 to a holder
of Series B-1 Preferred Stock shall be rounded down to the nearest 1/1,000th of
a share or even multiple thereof, and the Corporation shall make a cash payment
to a holder of shares of Series B-1 Preferred Stock receiving a fractional share
of Series B-1 Preferred Stock that has been rounded down pursuant to this
Section 8(b) in an amount equal to the greater of (i) the portion of the Stated
Value represented by such rounding adjustment or (ii) the portion of the Common
Stock Liquidation Amount represented by such rounding adjustment determined as
of the Record Date of the action necessitating the adjustment; provided,
however, that, at the option of the Corporation, the number of shares of Series
B-1 Preferred Stock to be issued to each holder of Series B-1 Preferred Stock
may be rounded up to the nearest 1/1,000th of a share or even multiple thereof
in lieu of making a cash payment with respect to any fractional amount.

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      (c)        In case of any consolidation or merger of the Corporation with
any other entity, or in case of any sale or transfer of all or substantially all
of the assets of the Corporation, or in the case of any share exchange pursuant
to which all of the outstanding shares of Common Stock are converted into other
securities or property, the Corporation shall make appropriate provision or
cause appropriate provision to be made so that the holder of each share of
Series B-1 Preferred Stock then outstanding shall have the right thereafter to
receive, in lieu of Common Stock, in exchange for holder's shares of Series B-1
Preferred Stock, the kind and amount of shares of stock and other securities and
property receivable upon such consolidation, merger, sale, transfer or share
exchange by a holder of one thousand (1,000) shares of Common Stock; provided,
however, that if a purchase, tender or exchange offer shall have been made to
and accepted by the holders of more than 50% of the outstanding shares of Common
Stock, and if a holder of shares of Series B-1 Preferred Stock so designates in
a notice given to the Corporation on or before the date immediately preceding
the date of the consummation of such transaction, the holder of such Series B-1
Preferred Stock shall be entitled to receive the highest amount of securities,
cash or other property to which a holder of a number of shares of Common Stock
equal to one thousand (1,000) times the number of shares of Series B-1 Preferred
Stock held by such holder of Series B-1 Preferred Stock would actually have been
entitled to receive upon the consummation of such purchase, tender or exchange
offer, subject to adjustments (from and after the consummation of such purchase,
tender or exchange offer) as nearly equivalent as possible to the adjustments
provided for in this Section 8. If in connection with any such consolidation,
merger, sale, transfer or share exchange, each holder of shares of Common Stock
is entitled to elect to receive either securities, cash or other assets upon
completion of such transaction, the Corporation shall provide or cause to be
provided to each holder of Series B-1 Preferred Stock the right to elect to
receive the securities, cash or other assets a holder of a number of shares of
Common Stock equal to one thousand (1,000) times the number of shares of Series
B-1 Preferred Stock held by such holder of Series B-1 Preferred Stock would have
been entitled to elect to receive on the same terms and subject to the same
conditions applicable to holders of the Common Stock (including, without
limitation, notice of the right to elect, the limitations on the period in which
such election shall be made and the effect of failing to exercise the election).
The Corporation shall not effect any such transaction unless the provisions of
this paragraph have been fulfilled. The above provisions shall similarly apply
to successive consolidations, mergers, sales, transfers or share exchanges.

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      (d)        Anything herein to the contrary notwithstanding, no adjustment
will be made pursuant to Section 8 hereof by reason of the issuance of Common
Stock upon the conversion of Series A Preferred Stock or the Corporation's
Series A 9.75% Convertible Pay-in-Kind Debentures due 2007 or the Corporation's
Series C 9.75% Convertible Pay-in-Kind Debentures due 2007 or by reason of the
issuance of shares of Series B Preferred Stock upon the conversion of the
Corporation's Series B 9.75% Convertible Pay-in-Kind Debentures due 2007.

           9.        Shares to Be Retired. Any share of Series B-1 Preferred
Stock redeemed, repurchased or otherwise acquired by the Corporation shall be
retired and cancelled and shall upon cancellation and the filing of an
appropriate certificate with the Delaware Secretary of State be restored to the
status of authorized but unissued shares of Preferred Stock, subject to
reissuance by the Board of Directors as Series B-1 Preferred Stock or shares of
preferred stock of one or more other series.

           10.        Record Holders. The Corporation and the Corporation's
transfer agent may deem and treat the record holder of any shares of Series B-1
Preferred Stock as the true and lawful owner thereof for all purposes, and
neither the Corporation nor the Corporation's transfer agent shall be affected
by any notice to the contrary.

           11.        Notice. Except as may otherwise be provided for herein,
all notices referred to herein shall be in writing, and all notices hereunder
shall be deemed to have been given upon, the earlier of receipt of such notice
or three Business Days after the mailing of such notice if sent by registered
mail (unless first-class mail shall be specifically permitted for such notice
under the terms of this Certificate of Designations) with postage prepaid,
addressed, if to the Corporation, to its offices at 10000 Innovation Drive,
Milwaukee, Wisconsin 53005, (Attention: Chief Financial Officer) or to an agent
of the Corporation designated as permitted by the Certificate of Incorporation
or, if to any holder of Series B-1 Preferred Stock, to such holder at the
address of such holder of Series B-1 Preferred Stock as listed in the stock
record books of the Corporation (which may include the records of the
Corporation's transfer agent); or to such other address as the Corporation or
holder, as the case may be, shall have designated by notice similarly given.

[Signature page to follow.]

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        IN WITNESS WHEREOF, the Corporation has caused this Certificate of
Designations to be executed and acknowledged by its duly authorized officer this
20th day of December, 2001.

Alterra Healthcare Corporation

By:                                                        
Mark W. Ohlendorf, Chief Financial Officer,
Senior Vice President, Secretary and Treasurer