<PAGE>

                                                                EXHIBIT: 10.43.2

                        FIRST AMENDMENT TO MASTER LEASE,
                           AFFIRMATION OF GUARANTY AND
                               CONSENT TO TRANSFER

            THIS FIRST AMENDMENT TO MASTER LEASE, AFFIRMATION OF GUARANTY AND
CONSENT TO TRANSFER (the "FIRST AMENDMENT") is made as of September 12, 2003 by
and among ALS LEASING, INC., a Delaware corporation, and ASSISTED LIVING
PROPERTIES, INC., a Kansas corporation (collectively, "TENANT") and JER/NHP
SENIOR LIVING ACQUISITION, LLC, a Delaware limited liability company, JER/NHP
SENIOR LIVING TEXAS, L.P., a Texas limited partnership, JER/NHP SENIOR LIVING
WISCONSIN, LLC, a Delaware limited liability company, and JER/NHP SENIOR LIVING
KANSAS, INC., a Kansas corporation (collectively, "LANDLORD") and ALTERRA
HEALTHCARE CORPORATION, a Delaware corporation ("GUARANTOR").

                                R E C I T A L S:

            A. Landlord and Tenant have entered into that certain Master Lease
dated as of April 9, 2002 (the "MASTER LEASE"), pursuant to which Landlord
leases to Tenant the Premises described therein. Initially capitalized terms
used but not otherwise defined in this First Amendment shall have the meanings
given to them in the Master Lease.

            B. Pursuant to the Master Lease and that certain Letter of Credit
Agreement dated as of April 9, 2002 (the "LC AGREEMENT") by and between Landlord
and Tenant, Tenant has posted one or more letters of credit with Landlord as
partial collateral for the performance of Tenant's obligations under the Master
Lease.

            C. Pursuant to that certain Guaranty of Master Lease and Letter of
Credit Agreement dated as of April 9, 2002 (the "GUARANTY") executed by
Guarantor, as guarantor, in favor of Landlord, as beneficiary, Guarantor has
guarantied the obligations of Tenant under the Master Lease. Pursuant to that
certain Stock Pledge Agreement dated as of April 9, 2002 (the "PLEDGE
AGREEMENT") by and between Guarantor, as pledgor, and Landlord, as secured
party, Guarantor has pledged to Landlord the capital stock of each entity
comprising Tenant as security for the performance by Tenant under the Master
Lease and the performance by Guarantor under the Guaranty.

            D. Pursuant that certain Memorandum of Understanding dated as of
April 9, 2002 (the "MOU" (the Master Lease, the LC Agreement, the MOU and all
other documents executed by Tenant in connection therewith or incorporated or
referenced therein are collectively referred to herein as the "LEASE DOCUMENTS",
and the Guaranty, the Pledge Agreement and the MOU and all other documents
executed by Guarantor in connection therewith or incorporated or referenced
therein are collectively referred to herein as the "GUARANTY DOCUMENTS"))
executed by Guarantor, Tenant and Landlord, the parties hereto and thereto
established certain understandings with respect to the Master Lease and the
Guaranty.

            E. As of the date hereof, Guarantor is a debtor in possession in a
case (Case No. 03-10254 (MFW)) (including any later bankruptcy proceeding of
Tenant procedurally

                                       -1-
<PAGE>

consolidated therewith, the "BANKRUPTCY PROCEEDING") commenced under chapter 11
of Title 11 of the United States Code (the "BANKRUPTCY CODE"), which case is
presently pending before the United States Bankruptcy Court for the District of
Delaware (the "BANKRUPTCY COURT"). It is currently contemplated that FEBC-ALT
Acquisition, Inc., a Delaware corporation (the "PURCHASER"), shall be merged
with and into Guarantor (the "TRANSFER") pursuant to the terms of the Agreement
and Plan of Merger dated July 18, 2003 by and among FEBC-ALT Investors, Inc.,
FEBC-ALT Acquisition Inc. and the Guarantor Guarantor's First Amended Plan of
Reorganization of Alterra Healthcare Corporation dated July 28, 2003 (as such
plan may later be amended, supplemented or otherwise modified, the "PLAN"). Each
entity comprising Tenant is prior to the Transfer a wholly owned subsidiary and
an Affiliate of Guarantor, and shall remain immediately following the
effectiveness of the Transfer a wholly owned subsidiary and an Affiliate of
Guarantor as the surviving entity under the Transfer (the "SURVIVING ENTITY").

            F. Landlord, Tenant and Guarantor desire, among other things, to
amend the Lease Documents and to make certain other representations, warranties
and covenants, all as more particularly set forth in this First Amendment.

                               A G R E E M E N T

          NOW, THEREFORE, taking into account the foregoing Recitals, and 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 hereto agree as follows:

            1. AMENDMENTS TO LEASE DOCUMENTS.

               (a) MINIMUM OCCUPANCY. Clause (i) of Section 7.1(b) of the Master
      Lease is hereby amended and restated in its entirety as follows:

                   "(i) commencing as of June 30, 2004, to be less than forty
            percent (40%) of the applicable number of beds or living units, as
            applicable, shown on Schedule 2, for more than four (4) individual
            Facilities at any time that the Coverage Ratio for the immediately
            preceding calendar quarter was less than 1.0:1.0; provided that (x)
            the Disposition Facilities (as defined below) shall not be
            considered, and (y) the Coverage Ratio for purposes of this clause
            (i) shall be calculated as if (i) the Disposition Facilities were
            not a part of the Premises in calculating Portfolio EBITDARM, and
            (ii) Portfolio Rent Expense were reduced by an amount equal to the
            reduction of Minimum Rent that would result from subtracting the
            Target Purchase Price for each of the Excluded Facilities from
            Landlord's Investment and recalculating Minimum Rent in accordance
            with Section 2.2(b), or"

                                       -2-
<PAGE>

               (b) NONCOMPLIANCE. Section 7.1(c) of the Master Lease is hereby
      amended and restated in its entirety as follows:

                   "(c) Intentionally Omitted."

               (c) COVERAGE RATIO. Section 7.4 of the Master Lease is hereby
      amended and restated in its entirety as follows:

                   "7.4 DEFINITION OF COVERAGE RATIO. As used in Section 7 and
            elsewhere in this Master Lease, "COVERAGE RATIO" shall mean the
            ratio of (i) Portfolio EBITDARM to (ii) Portfolio Rent Expense."

               (d) CERTAIN EVENTS OF DEFAULT. Clauses (i) and (ii) of Section
      12(b) of the Master Lease are each hereby amended and restated in their
      entirety as follows:

                   "(b) (i) the failure to perform or comply with the provisions
            of, or a breach or default under, Section 7.2 (together with the
            events described in Section 12(c), each a "LOSS OF LICENSURE"); (ii)
            the closure of any material portion of the Business;"

               (e) CERTAIN CROSS DEFAULTS.

                   (i)  Clause (ii) of Section 12(d) of the Master Lease is
                        hereby amended and restated in its entirety as follows:
                        "(ii) any other lease, agreement or obligation between
                        it and Landlord or any of its Affiliates (excluding
                        Nationwide Health Properties, Inc. ("NHP")) which is not
                        cured within any applicable cure period specified
                        therein,".

                   (ii) Clause (iii) of Section 12(d) of the Master Lease is
                        hereby amended and restated in its entirety as follows:
                        "(iii) [intentionally omitted]".

               (f) SALE OF CERTAIN FACILITIES; REDUCTION IN RENT. The following
      is hereby added to and made a part of the Master Lease as Section 27
      thereof:

                   "27. SALE OF CERTAIN FACILITIES; REDUCTION IN RENT. Pursuant
            to this Section 27, at the request of Tenant, Landlord agrees to use
            commercially reasonable efforts as described herein, provided that
            Tenant use its commercially reasonable efforts to assist and
            cooperate with Landlord in such regard (but Landlord shall control
            such process and any actions by Tenant in connection therewith shall
            be subject to Landlord's prior reasonable approval to ensure
            coordination), to sell the four (4) Disposition Facilities
            identified in accordance with the procedure set forth in Section
            27.1, and Landlord and Tenant agree that, concurrently with the
            closing of any such sale, this Master Lease shall be terminated as
            to the applicable Disposition Facility. Landlord's obligation to
            market or sell any Disposition Facility under this Section 27 shall
            terminate and be of no force or effect during the continuance of any
            material Event of Default.

                                       -3-
<PAGE>

                   27.1 DISPOSITION FACILITIES. As used herein, "DISPOSITION
            FACILITY" shall refer to four (4) of the Facilities described below,
            which shall be the Facility located at Lower Makefield, PA ("LOWER
            MAKEFIELD"), which shall be sold pursuant to the letter of intent
            dated August 4, 2003, and three (3) of the remaining of the
            Facilities listed below, to be identified by Tenant by written
            notice (the "DISPOSITION FACILITY ID NOTICE") thereof to Landlord
            delivered not later than March 30, 2004 (and the failure of Tenant
            to timely deliver a Disposition Facility ID Notice in compliance
            with this Section 27.1 shall terminate the rights of Tenant under
            this Section 27 except with respect to Lower Makefield). As used
            herein, (i) the "LENDER RELEASE PRICE" with respect to each
            potential Disposition Facility shall be the price indicated as the
            Lender Release Price set forth below next to such Facility, (ii) the
            "TARGET PURCHASE PRICE" with respect to each potential Disposition
            Facility shall be the price indicated as the Target Purchase Price
            set forth below next to such Facility plus, in each case, the net
            book value of the Tenant Personal Property allocable to such
            Disposition Facility, and (iii) the "MINIMUM PURCHASE PRICE" shall
            be the greater of (x) the Lender Release Price and (y) the price at
            which the Coverage Ratio as calculated based on such price
            immediately following such sale on a pro forma basis, for the prior
            three (3) month period, would be one hundred one percent (101%) of
            the Coverage Ratio as calculated immediately prior to such sale.
            Landlord shall not be required to sell any Disposition Facility for
            less than the applicable Minimum Purchase Price unless it so agrees
            in its sole and absolute discretion.

<TABLE>
<CAPTION>
Disposition Facility    Target Purchase Price        Lender Release Price
--------------------    ---------------------        --------------------
<S>                     <C>                          <C>
Ft. Myers, FL                $4,425,000                   $3,330,000

Ocala, FL                    $2,437,000                   $1,210,000

Tampa, FL                    $2,700,000                   $  370,000

Farmington Hills, MI         $4,000,000                   $2,500,000

Lower Makefield, PA          $2,000,000                   $        0

Lancaster, TX                $1,900,000                   $1,240,000

Bethany, OK                  $1,324,000                   $  600,000
</TABLE>

                   27.2 MARKETING PERIOD. Commencing on the later to occur of
            (i) Landlord's timely receipt of the Disposition Facility ID Notice,
            and (ii) the Effective Date (as defined below) and continuing until

                                       -4-
<PAGE>

            September 30, 2004 (the "MARKETING PERIOD"), Landlord and Tenant
            shall use their respective reasonable commercial efforts to market
            and sell each of the potential Disposition Facilities in accordance
            with this Section 27. In the event that during the Marketing Period,
            through the efforts of Tenant or otherwise, Landlord is presented
            with an offer to sell a Disposition Facility for an amount equal to
            or in excess of the applicable Minimum Purchase Price and otherwise
            in accordance with this Section 27 prior to expiration of the
            Marketing Period, in the form of a fully executed non-binding letter
            of intent, term sheet or similar instrument for the purchase and
            sale of the applicable Disposition Facility in form acceptable to
            Landlord in its reasonable discretion (a "BONA FIDE OFFER"),
            Landlord shall take commercially reasonable efforts to enter into a
            purchase and sale agreement for such sale, in form and substance
            reasonably acceptable to Landlord and Tenant, prior to the
            expiration of the Marketing Period, and consummate such sale in
            accordance with such purchase and sale agreement prior to the date
            that is sixty (60) days after the expiration of the Marketing
            Period. However, in no event shall Landlord be obligated to market
            any Disposition Facility or otherwise take any action to sell any
            Disposition Facility after the expiration of the Marketing Period,
            except for the consummation of any sale within a reasonable period
            of time after Marketing Period, not to exceed, sixty (60) days that
            is subject as of the expiration of the Marketing Period to a fully
            executed purchase and sale agreement with a deposit not less than
            five percent (5%) of the applicable actual purchase price, which
            deposit shall become nonrefundable no later than thirty (30) days
            after the execution of the purchase and sale agreement. Such
            purchase and sale agreement shall, upon expiration of the Marketing
            Period, not be subject to any unexpired study or feasibility period
            or due diligence-type termination right, nor any financing or other
            open-ended closing condition that expires beyond thirty (30) days
            after the execution of the purchase and sale agreement, but may be
            subject to reasonable and customary closing conditions such as
            insurable title, no material casualty, licensing and no material
            condemnation in form and substance reasonably acceptable to
            Landlord.

                   27.3 TERMS OF SALE. In no event shall Landlord be obligated
            to sell any Disposition Facility at any time (a) if, as a condition
            to such sale, Landlord would be required to make any
            representations, warranties, indemnifications, obligations or
            agreements to the buyer or any other third party concerning any
            aspect of the real or personal property comprising such Disposition
            Facility or the business of the Tenant conducted thereon (and Tenant
            shall make any commercially reasonable representations warranties,
            indemnifications, obligations or agreements to the buyer or other
            appropriate third party with respect

                                       -5-
<PAGE>

            thereto) or any other representations or warranties other than
            customary and reasonable representations (which shall not survive
            more than one year from the date of closing) regarding Landlord's
            existence, good standing and authority to enter into the sale
            transaction or (b) otherwise on terms, conditions and provisions
            that are not reasonably acceptable to Landlord. In the event that
            Landlord receives multiple offers for any Disposition Facility,
            Landlord shall be free, in its commercially reasonable discretion,
            to select the final Bona Fide Offer from among such multiple offers.

                   27.4 CLOSING COSTS; APPLICATION OF PROCEEDS. Tenant shall pay
            or reimburse Landlord for all reasonable transaction and closing
            costs incurred by Landlord in selling any Disposition Facility in
            accordance with the terms of this Section 27, provided that Tenant
            shall have approved, in the exercise of its commercially reasonable
            discretion, the amount of any commission in connection with such
            sale to be paid to any broker or agent engaged by Landlord. All of
            the proceeds from the sale of any Disposition Facility shall be paid
            to and retained by Landlord, provided that the portion of such
            proceeds allocable to any Tenant Personal Property shall be paid to
            and retained by Tenant.

                   27.5 RETENTION OPTION. Landlord has the right (the "RETENTION
            OPTION"), but not the obligation, exercisable in its sole and
            absolute discretion, at any time there is no Bona Fide Offer in
            effect, to elect by express written notice to Tenant (the "RETENTION
            NOTICE"), to terminate its obligation to use commercially reasonable
            efforts to sell one or more of the Disposition Facilities pursuant
            to this Section 27 and to retain ownership of such Disposition
            Facility. This Master Lease shall terminate as to such Disposition
            Facility on the date chosen by Landlord, which shall be the sixtieth
            (60th) day after such Retention Notice (or such earlier date as
            Landlord may designate and which shall be subject to change from
            time to time upon notice by Landlord provided that termination of
            the Master Lease occurs on or before such sixtieth (60th) day). Upon
            such termination date, (a) the Landlord's Investment shall be
            reduced by an amount equal to the Target Purchase Price, and (b)
            Minimum Rent shall be recalculated and reset in accordance with
            Section 2.2(b) based upon the reduction of the Landlord's Investment
            in accordance with the immediately preceding clause (a). The
            Retention Option is not intended to require termination of the
            Master Lease in the event Landlord does not receive any offer to
            sell the Disposition Facility for an amount equal to a greater than
            its applicable Minimum Purchase Price by a Bona Fide Offer prior to
            the expiration of the Marketing Period, in which event Landlord may
            retain such Disposition Facility and the Master Lease shall remain
            in

                                       -6-
<PAGE>
            full force and effect with respect to such Disposition Faculty
            without modification of the Landlord's Investment or the Minimum
            Rent. At the request of Landlord, Tenant shall operate the
            applicable Disposition Facility after the termination of this Master
            Lease following the exercise of the Retention Option for a
            management fee equal to five percent (5%) of the gross revenues from
            such Disposition Facility and otherwise in accordance with a
            management agreement on market terms reasonably acceptable to both
            Landlord and Tenant. The term of such management agreement shall be
            one (1) year, and shall automatically renew for successive one (1)
            year periods unless either party provides written notice of
            termination at least thirty (30) days prior to the expiration of the
            then current term. Landlord may terminate any such management
            agreement upon ten (10) days prior notice to Tenant in connection
            with the sale or lease of such Disposition Facility, or entering
            into management agreement with a third party with respect to such
            Disposition Facility.

                   27.6 ADJUSTMENT TO LANDLORD'S INVESTMENT; MODIFICATION OF
            MASTER LEASE. Concurrently with the closing of any sale of any
            Disposition Facility pursuant to this Section 27 or the termination
            of this Master Lease with respect to any Disposition Facility
            pursuant to Section 27, (a) Landlord's Investment shall be reduced
            by an amount equal to the lesser of (i) the applicable Target
            Purchase Price (regardless of any higher price or net proceeds that
            may be actually received by Landlord) and (ii) the actual net
            proceeds received by Landlord, if less than the Target Purchase
            Price (provided that Landlord shall not consummate any sale if the
            actual net proceeds received by Landlord is less than the applicable
            Minimum Purchase Price unless both Landlord and Tenant, each in
            their sole and absolute discretion, elect to enter into such sale
            transaction), (b) Minimum Rent shall be recalculated and reset in
            accordance with Section 2.2(b) based upon the reduction of the
            Landlord's Investment in accordance with the immediately preceding
            clause (a), and (c) such Disposition Facility shall be removed from,
            and shall no longer be a part of, the Premises, with the Master
            Lease being deemed amended mutatis mutandis to reflect such
            removal."

               (g) NOTICE ADDRESSES.

                   (1) The notice address for Tenant set forth in Section 21 of
               the Master Lease is hereby amended and restated in its entirety
               as follows:

                   c/o Alterra Healthcare Corporation
                   _________________________________
                   _________________________________
                   _________________________________

                                       -7-
<PAGE>

                   Attention:_______________________
                   Fax No.__________________________

                   With a copy to:
                   _________________________________
                   _________________________________
                   _________________________________
                   Attention:_______________________
                   Fax No.__________________________

                   (2) The notice address for the first-listed counsel to
               Landlord set forth in Section 21 of the Master Lease is hereby
               amended and restated in its entirety as follows:

                   Sherry Meyerhoff Hanson & Crance LLP
                   610 Newport Center Drive, Suite 1200
                   Newport Beach, California 92660
                   Attention: Frank M. Crance
                   Fax No. (949) 719-1212

               (h) EFFECT OF AMENDMENT. Except as specifically amended pursuant
      to the terms of this First Amendment, the terms and conditions of the
      Lease Documents shall remain unmodified and in full force and effect. In
      the event of any inconsistencies between the terms of this First Amendment
      and any terms of the Lease Documents, the terms of this First Amendment
      shall govern and prevail.

            2. AFFIRMATION OF LEASE DOCUMENTS AND GUARANTY DOCUMENTS.

                  (a) Each entity comprising Tenant hereby acknowledges and
      affirms its obligations under the Lease Documents (as modified hereby),
      and further represents and warrants that the Lease Documents are the valid
      and binding obligations of Tenant and are in full force and effect and are
      fully enforceable by Landlord against Tenant in accordance with their
      respective terms. Each entity comprising Tenant specifically acknowledges
      and affirms that, except as expressly modified by this First Amendment,
      its obligations under the Lease Documents shall not be diminished or
      otherwise affected by this First Amendment and shall not be released,
      discharged, terminated or otherwise diminished in whole or in part as a
      result of the Bankruptcy Proceeding, and further agrees that it shall take
      no actions and shall oppose any actions by third parties in the Bankruptcy
      Proceeding that would result in the release, discharge, termination or
      other diminution of any obligation of the Tenant thereunder.

                  (b) Guarantor hereby acknowledges and affirms its obligations
      under the Guaranty Documents, and further represents and warrants that the
      Guaranty Documents are the valid and binding obligations of Guarantor and
      are in full force and effect and are fully enforceable by Landlord against
      Guarantor in accordance with their respective

                                       -8-
<PAGE>

      terms. Guarantor specifically acknowledges and affirms that, except as
      expressly modified by this First Amendment, its obligations under the
      Guaranty Documents shall not be diminished or otherwise affected by this
      First Amendment and shall not be released, discharged, terminated or
      otherwise diminished in whole or in part as a result of the Bankruptcy
      Proceeding, and further agrees that it shall take no actions and shall
      oppose any actions by third parties in the Bankruptcy Proceeding that
      would result in the release, discharge, termination or other diminution of
      any obligation of the Guarantor thereunder, in each case whether such
      result is achieved under the Plan or under an successor or replacement
      chapter 11 plan. Guarantor hereby further represents and warrants that,
      upon entry of the Approval Order (as defined in the Stipulation referred
      to below), the Guaranty Documents will be the valid and binding
      obligations of the Surviving Entity and shall be in full force and effect
      and fully enforceable by Landlord against the Surviving Entity in
      accordance with their respective terms. Guarantor further agrees that any
      reference made in the Guaranty Documents to the Lease Documents or any
      terms or conditions contained therein, shall mean such Lease Documents or
      such terms or conditions as modified by this First Amendment.

            3. ACKNOWLEDGMENT OF DEFAULT; WAIVER OF SETOFF, COUNTERCLAIM.

                  (a) The Events of Default and other defaults described in this
      paragraph are collectively referred to in this First Amendment as the
      "AUGUST 2003 EVENTS OF DEFAULT." The August 2003 Events of Default include
      any Events of Default or other defaults arising from (i) the failure to
      maintain the Coverage Ratio required under Section 7.4 of the Master Lease
      for the quarter ended June 30, 2003, (ii) any mechanic's or materialman's
      lien being recorded against the Premises that has, on or before the date
      hereof, been released and terminated, (iii) the default arising under the
      MOU as a result of the defaults described in the foregoing clauses (i) and
      (ii), (iv) any default under the MOU for failure to file and continuously
      pursue a Conforming Plan (as defined in the MOU), and (v) a cross default
      occurring under the Master Lease dated October 7, 2002 between ALS
      Leasing, Inc. and JER/NHP Senior Living Acquisition, LLC or the Master
      Lease dated April 9, 2002 between Guarantor and NHP and certain Affiliates
      of NHP as a result of the defaults described in the foregoing clauses
      (i)-(iv).

                  (b) Each entity comprising Tenant and Guarantor hereby
      acknowledges and agrees that (i) the August 2003 Events of Default have
      occurred and are continuing, and (ii) until satisfaction of the conditions
      set forth in Section 3(d) of this First Amendment, Landlord's agreement in
      Section 3(c) to forbear is not intended as and shall not be construed as a
      waiver of the August 2003 Events of Default or any other defaults or
      Events of Default, whether now existing or hereafter arising and, except
      as specifically provided herein, Landlord's agreement to forbear in no way
      impairs Landlord's right to enforce its remedies for the August 2003
      Events of Default and any subsequent defaults or Events of Default.
      Landlord reserves all such rights and remedies. Each entity comprising
      Tenant and Guarantor hereby waives any right of setoff or counterclaim
      against Landlord with respect to any rights, claims or defenses it has or
      may have with respect to the Lease Documents or Guaranty Documents.

                                       -9-
<PAGE>

                  (c) Subject to the provisions of this Section 3 and other
      provisions of this First Amendment, Landlord shall forbear from exercising
      its rights and remedies with respect to the August 2003 Events of Default
      for a period (the "FORBEARANCE PERIOD") commencing effective as of the
      date of the Stipulation (as defined below) and terminating upon the
      earlier to occur of the following dates (the "TERMINATION DATE"): (i) the
      entry of an order denying the Approval Order (as defined in the
      Stipulation); (ii) the date on which occurs any Event of Default or other
      default under any of the Lease Documents (including without limitation any
      default arising as a cross-default with any of the Guaranty Documents)
      other than the August 2003 Events of Default; (iii) the date on which
      Tenant or Guarantor breaches any covenant, representation or warranty of
      this First Amendment; and (iv) December 31, 2003, if by such date the
      Bankruptcy Court has not entered a final order that is no longer subject
      to appeal confirming the Amended Plan and the Transfer has not been
      consummated and become effective.

                  (d) Upon satisfaction of the conditions precedent to the
      effectiveness of this First Amendment as set forth in Section 5 hereof,
      Landlord shall be deemed to have and shall waive the August 2003 Events of
      Default and any rights or remedies it may have in connection therewith.

            4. CONSENT TO TRANSFER. Upon satisfaction of the conditions
precedent to the effectiveness of this First Amendment as set forth in Section 5
hereof, Landlord shall be deemed to have consented to the Transfer in accordance
with Section 16 of the Master Lease.

            5. EFFECTIVENESS OF FIRST AMENDMENT. This First Amendment shall be
deemed effective on the first date (the "EFFECTIVE DATE") upon which each of the
following conditions has occurred, each of which shall be deemed a condition
precedent to the Landlord's obligations and covenants hereunder:

                  (a) Landlord has obtained all consents and approvals from its
      mortgage lender in connection with this First Amendment that Landlord
      deems necessary to comply with the terms and conditions of the mortgage
      loan secured by the Premises, provided that Landlord shall either (i)
      elect in its sole and absolute discretion to waive this condition, or (ii)
      obtain all such consents and approvals, in either case on or before
      September 24, 2003;

                  (b) All conditions precedent to the effectiveness of this
      First Amendment as set forth in that certain Stipulation between the
      parties dated as of September __, 2003 (the "STIPULATION") shall have been
      satisfied in accordance with the Stipulation, and Guarantor and Tenant
      shall have performed all covenants, conditions and undertakings and
      satisfied all other requirements binding on them under the Stipulation in
      accordance with the Stipulation;

                  (c) No Events of Default or other defaults or breaches of the
      Lease Documents or the Guaranty Documents, other than the August 2003
      Events of Defaults (as defined in the Stipulation) shall have occurred and
      be continuing; and

                                      -10-

<PAGE>

                  (d) (i) the Transfer shall have been consummated and closed in
      accordance with the Plan, (ii) the Lease Documents and the Guaranty
      Documents shall continue to be and shall be the valid and binding
      obligations of Tenant and the Surviving Entity, respectively, and shall
      continue to be and shall be in full force and effect, enforceable in
      accordance with their respective terms by Landlord against Tenant and the
      Surviving Entity, respectively, and (iii) the claims of Landlord shall
      have been treated as impaired, with the consent of and in accordance with
      the consent given by Landlord and with the Plan.

            6. FURTHER INSTRUMENTS. Each of the undersigned will, whenever and
as often as it shall be reasonably requested so to do by another party, take all
actions reasonably required and shall cause to be executed, acknowledged or
delivered, any and all such further instruments and documents as may be
necessary or proper, in the reasonable opinion of the requesting party, in order
to carry out the intent and purpose of this First Amendment, including without
limitation modifying or amending the Plan to ensure that the undersigned receive
the full benefit of their respective bargains set forth herein.

            7. INCORPORATION OF RECITALS. The Recitals to this First Amendment
are incorporated hereby by reference.

            8. ATTORNEYS' FEES. In the event of any dispute or litigation
concerning the enforcement, validity or interpretation of this First Amendment,
or any part thereof, the losing party shall pay all costs, charges, fees and
expenses (including reasonable attorneys' fees) paid or incurred by the
prevailing party, regardless of whether any action or proceeding is initiated
relative to such dispute and regardless of whether any such litigation is
prosecuted to judgment.

            9. MISCELLANEOUS. This First Amendment contains the entire agreement
between the parties relating to the subject matters contained herein. Any prior
representations or statements concerning the subject matters herein shall be of
no force or effect. This First Amendment shall be construed as a whole and in
accordance with its fair meaning. Headings are for convenience only and shall
not be used in construing meaning. This First Amendment shall be governed by and
construed in accordance with the internal laws of the State of California
without regard to rules concerning the choice of law. This First Amendment may
be executed in multiple counterparts and in original or by facsimile, each of
which constitute an original, but all of which taken together shall constitute
but one in the same document.

                            [SIGNATURES ON NEXT PAGE]

                                      -11-
<PAGE>

            IN WITNESS WHEREOF, the parties have executed this First Amendment
as of the date first above written.

"TENANT"

ALS LEASING, INC.,
a Delaware corporation

By: /s/ Mark W. Ohlendorf
    ----------------------------
Name: Mark W. Ohlendorf
    ----------------------------
Title: VP
    ----------------------------

Witness: /s/ Illegible                      Witness: /s/ Illegible
         -----------------------                     -------------------------

ASSISTED LIVING PROPERTIES, INC.,
a Kansas corporation

By: /s/ Mark W. Ohlendorf
    ----------------------------
Name: Mark W. Ohlendorf
    ----------------------------
Title: VP
    ----------------------------

Witness: /s/ Illegible                      Witness: /s/ Illegible
         -----------------------                     -------------------------


                                      S-1
<PAGE>

"GUARANTOR"

ALTERRA HEALTHCARE CORPORATION,
a Delaware corporation

By: /s/ Mark W. Ohlendorf
    ----------------------------
Name: Mark W. Ohlendorf
    ----------------------------
Title: President
    ----------------------------

Witness: /s/ Illegible                      Witness: /s/ Illegible
         -----------------------                     ----------------------

                                      S-2
<PAGE>

"LANDLORD"

JER/NHP SENIOR LIVING ACQUISITION, LLC,
a Delaware limited liability company

By: JER/NHP SENIOR HOUSING, LLC,
    a Delaware limited liability company,
    its sole member

    By: NATIONWIDE HEALTH PROPERTIES, INC.,
        a Maryland corporation,
        its managing member

        By: /s/ Donald D. Bradley
           ------------------------
        Name:  Donald D. Bradley
        Title: Senior Vice President & General Counsel

Witness: /s/ Illegible                      Witness: /s/ Illegible
         --------------------------                  -------------------------

JER/NHP SENIOR LIVING TEXAS, L.P.,
a Texas limited partnership

By: JER/NHP MANAGEMENT TEXAS, LLC,
    a Texas limited liability company
    its general partner

    By: /s/ Donald D. Bradley
       ---------------------------
    Name:  Donald D. Bradley
    Title: Manager

Witness: /s/ Illegible                      Witness: /s/ Illegible
         --------------------------                  -------------------------

                                      S-3
<PAGE>

JER/NHP SENIOR LIVING WISCONSIN, LLC,
a Delaware limited liability company

By: JER/NHP SENIOR HOUSING, LLC,
    a Delaware limited liability company,
    its sole member

    By: NATIONWIDE HEALTH PROPERTIES, INC.,
        a Maryland corporation,
        its managing member

        By: /s/ Donald D. Bradley
           --------------------------------
        Name:  Donald D. Bradley
        Title: Senior Vice President & General Counsel

Witness: /s/ Illegible                      Witness: /s/ Illegible
         --------------------------                  -------------------------

JER/NHP SENIOR LIVING KANSAS, INC.,
a Kansas corporation

By:/s/ Donald D. Bradley
   ------------------------------
Name:  Donald D. Bradley
Title: Secretary and Treasurer

Witness: /s/ Illegible                      Witness: /s/ Illegible
         --------------------------                  -------------------------

                                      S-4