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                                                                   EXHIBIT 10.38

                       SECOND AMENDMENT TO LOAN AGREEMENT
                           AND REAFFIRMATION AGREEMENT


         SECOND AMENDMENT TO LOAN AGREEMENT AND REAFFIRMATION AGREEMENT dated as
of April 7, 2000 (this "AMENDMENT") by and among ALS-VENTURE I, INC., a Delaware
corporation having an address c/o Alterra Healthcare Corporation, 10000
Innovation Drive, Milwaukee, Wisconsin 53226 (together with its permitted
successors and assigns, "BORROWER"); ALTERRA HEALTHCARE CORPORATION, a Delaware
corporation having an address at 10000 Innovation Drive, Milwaukee, Wisconsin
53226 (together with its permitted successors and assigns, the "GUARANTOR" and
"PARENT PLEDGOR", as applicable); ALS-CLARE BRIDGE, INC., a Delaware corporation
having an address at 10000 Innovation Drive, Milwaukee, Wisconsin 53226
(together with its permitted successors and assigns, "SUBSIDIARY PLEDGOR"); and
CAPMARK SERVICES, L.P., a Texas limited partnership having an address at 245
Peachtree Center Avenue, NE, Suite 1800, Atlanta, Georgia 30303-1231 (together
with its permitted successors and assigns, "Lender").

                                    RECITALS

                  A.       Borrower and Nomura Asset Capital Corporation
("NACC") entered into that certain Loan Agreement dated as of March 31, 1998, as
amended by that certain First Amendment to Loan Agreement and Reaffirmation
Agreement dated as of August 28, 1998 (as so amended, the "EXISTING LOAN
AGREEMENT") pursuant to which a secured mortgage loan in the original principal
amount of $50,140,000 (the "ORIGINAL LOAN") was advanced to Borrower. The
Original Loan is evidenced by that certain First Amended and Restated Promissory
Note with an effective date of March 31, 1998 in the original principal amount
of $50,140,000 made by Borrower and payable to NACC, (the "ORIGINAL NOTE").

                  B.       Prior to the execution hereof, the Existing Loan
Agreement, the Original Loan and the Original Note were assigned (i) by NACC to
Wilmington Trust Company, in its capacity as Owner Trustee (the "OWNER TRUSTEE")
of CDC Mirror Trust ST-I 3/11/00 (formerly known as Nomura Mirror Trust ST-I
3/11/00), (ii) by Owner Trustee to LaSalle Bank N.A., as Trustee (the "TRUSTEE")
for CDC Depositor Trust ST I (formerly known as Nomura Depositor Trust ST I),
Commercial Mortgage Pass-Through Certificates, Series 1998-ST I and (iii) by
Trustee to Lender, each pursuant to a general assignment.

                  C.       Borrower and Lender desire to amend the terms and
conditions of the Existing Loan Agreement in accordance with the terms hereof.

                  NOW THEREFORE, in consideration of the premises and other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Existing Loan Agreement is hereby amended as follows:


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I.       Modification of Existing Loan Agreement.

         1.       Section 1.1 of the Existing Loan Agreement is hereby amended
as follows:

                  A.       The following definitions are hereby deleted in their
         entirety: "Accrued Interest"; "Actual Prepayment Amount"; "Advance";
         "Advisor"; "Amortizable Amount"; "Annual Operating Budget"; "Class B
         Amount"; "Class B Equity Interests"; "Class C Amount"; "Class C Equity
         Interests"; "Cut-Off Date"; "Defeasance Debt Service Coverage Ratio";
         "Defeasance Deposit"; "Defeasance Release Date"; "Difference";
         "Earn-Out Advance"; "Extra Funds"; "Final Locked Rate"; "Guaranty";
         "Initial Interest Rate"; "Initial Securitization Expense Amount";
         "NACC"; "Optional Prepayment Date"; "Preferred Cash Collateral
         Account"; "Preferred Cash Collateral Bank"; "Preferred Cash Management
         Agreement"; "Preferred Equity Holder"; "Recalculated Loan Amount";
         "Request For Advance"; "Required Base Debt Service Payment"; "Revised
         Interest Rate"; "Securitization Expense Sub-Account"; "Stabilization
         Date"; "Stabilization Date Loan Amount"; "Stabilization Date Payment
         Date"; "Stabilization Interest Rate"; "Stabilization Optimum Debt
         Service Coverage Ratio"; "Ten Year Treasury Rate"; "Treasury Rate";
         "Unpaid Excess Loan Amount"; "U.S. Obligations"; "Warrant"; and "Yield
         Maintenance Premium". All references in the Existing Loan Agreement to
         the aforementioned defined terms are hereby deleted.

                  B.       The following definitions are hereby deleted in their
         entirety and replaced with the following respective definitions:

                           (a)  "Agreement" means the Loan Agreement dated as of
                           March 31, 1998 between Borrower and Nomura Asset
                           Capital Corporation, as amended by that certain First
                           Amendment to Loan Agreement and Reaffirmation
                           Agreement dated as of August 28, 1998, as further
                           amended by that certain Second Amendment to Loan
                           Agreement and Reaffirmation Agreement dated as of the
                           Effective Date between Borrower and Lender as the
                           same may be amended, restated, replaced,
                           supplemented, consolidated or otherwise modified from
                           time to time.

                           (b)  "Base Payment" has the meaning provided in
                           Section 2.5(a).

                           (c)  "Interest Rate" means for any Interest Accrual
                           Period, the Spread plus the greater of LIBOR for such
                           Interest Accrual Period and 4.95% (or, when
                           applicable pursuant to the Note or any other Loan
                           Document, the Default Rate).

                           (d)  "Lender" means CapMark Services, L.P., together
                           with its successors and assigns.

                           (e)  "Maturity Date" means December 11, 2001, as the
                           same may be extended to the Extended Maturity Date
                           pursuant to Section 2.16 hereof.

                           (f)  "Maximum Facility Amount" means $50,140,000.



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                           (g)  "Note" means that certain Second Amended and
                           Restated Renewal Promissory Note dated as of the
                           Effective Date in the stated principal amount of
                           $50,140,000, made by Borrower in favor of Lender, as
                           the same may be amended, restated, replaced,
                           supplemented, consolidated or otherwise modified from
                           time to time.

                           (h)  "Parent" means Alterra Healthcare Corporation
                           (formerly known as Alternative Living Services,
                           Inc.).

                           (i)  "Spread" means 2.50%.

                  C.       The following definitions are hereby amended as
        follows:

                           (a)  The definition of "Allocated Loan Amount" is
                           hereby amended by (i) deleting the words "(i) prior
                           to the Stabilization Date," on the first line
                           thereof, (ii) deleting the words "and (ii) on and
                           after the Stabilization Date, the portion of the Loan
                           allocated to each Facility by Lender as determined by
                           Lender in its sole discretion, in each case," on the
                           third and fourth lines thereof and (iii) deleting the
                           words "(i) a regular monthly payment of principal
                           pursuant to Section 2.5(c)," on the sixth and seventh
                           lines thereof.

                           (b)  The definition of "Cash Management Event" is
                           hereby amended by deleting therefrom clauses (v) and
                           (vii).

                           (c)  The definition of "Manager" is hereby amended by
                           deleting therefrom the words "Alternative Living
                           Services, Inc." and replacing such words with the
                           words "Alterra Healthcare Corporation (formerly known
                           as Alternative Living Services, Inc.)". All
                           references in the Existing Loan Agreement to
                           Alternative Living Services, Inc. are hereby
                           similarly so amended.

                           (d)  Clause (ii) of the definition of "Mortgage -
                           Borrower" is hereby amended by (i) inserting the
                           words "subsequent to Borrower acquiring a fee
                           interest in the Joint Venture Facility" after the
                           words "with respect to the Joint Venture Facility"
                           and (ii) deleting the words "(on the Stabilization
                           Date Payment Date)".

                           (e)  The definition of "Permitted Transfers" is
                           hereby amended by replacing all references therein to
                           the "Stabilization Date" with the defined term
                           "Effective Date" (as defined below).

                  D.       The following definitions are hereby added:


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                           (a)  "Debt" means the unpaid Principal Indebtedness,
                           all interest accrued and unpaid thereon and all other
                           sums due to Lender in respect of the Loan, or under
                           any Loan Document.

                           (b)  "Effective Date" means April 7, 2000.

                           (c)  "Extended Maturity Date" shall have the meaning
                           given in Section 2.16.

                           (d)  "LIBOR" means with respect to any Interest
                           Accrual Period, the rate per annum which is equal to
                           the 30 day U.S. Dollar London Interbank Offered Rate
                           reported from time to time by Telerate News Service
                           (page 3750), at approximately 11:00 a.m., London
                           time, on the related Determination Date. If such
                           interest rate shall cease to be available from
                           Telerate News Service, LIBOR shall be determined from
                           such financial reporting service as Lender shall
                           reasonably determine and use with respect to its
                           other loan facilities on which interest is determined
                           based on LIBOR. If two or more such rates appear on
                           Telerate page 3750 or associated pages, the rate in
                           respect of such Interest Accrual Period will be the
                           arithmetic mean of such offered rates, absent
                           manifest error. For purposes hereof, (i)
                           "DETERMINATION DATE" shall mean, with respect to any
                           Interest Accrual Period, the date which is two
                           Eurodollar Business Days prior to the 15th day of the
                           calendar month occurring during such Interest Accrual
                           Period; and (ii) "EURODOLLAR BUSINESS DAY" shall mean
                           any day other than a Saturday, Sunday or other day on
                           which banks in the City of London, England are closed
                           for interbank or foreign exchange transactions.

                           (e)  "Original Interest Rate" shall mean a rate of
                           interest equal to 7.63% per annum.

         2.       The following Sections are hereby deleted in their entirety
from the Existing Loan Agreement: Sections 2.4(b); 2.6(f); 2.11(f)(iv);
2.11(f)(v); 2.11(f)(vi); 2.11(f)(vii); 2.11(g)(iv); 2.11(h); 3.2; 3.3; 8.32(a) -
(g); and 8.35.

         3.       Section 2.1 of the Existing Loan Agreement is hereby deleted
in its entirety and replaced with the following:

                           Section 2.1 The Loan. Borrower represents to Lender
                           that (i) as of the date hereof the outstanding
                           principal balance of the Original Loan is $50,140,000
                           (the "Loan"), (ii) there exists no claims by Borrower
                           against Lender or any holder of the Loan and (iii)
                           there are no offsets or defenses by Borrower to the
                           payment of any amounts required under the Loan
                           Documents or otherwise to enforcement by the holder
                           of the Loan. Lender shall have no further obligations
                           to provide any additional


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                           financing to Borrower and any amounts of the Loan
                           repaid may not be reborrowed.

         4.       Section 2.3 of the Existing Loan Agreement is hereby amended
by deleting the word "Guaranties" and replacing such word with the words
"Environmental Guaranty".

         5.       Sections 2.5(a) - (i) of the Existing Loan Agreement are
hereby deleted in their entirety and replaced with the following:

                           Section 2.5      Interest; Monthly Payments.

                           (a)  Generally. From and after the date hereof,
                           interest on the unpaid Principal Indebtedness shall
                           accrue and be payable as hereinafter provided. On the
                           first Payment Date after the Effective Date (i.e.,
                           April 11, 2000), Borrower shall make a payment of
                           $329,433.73, representing interest calculated at the
                           Original Interest Rate on the outstanding Principal
                           Indebtedness which has accrued through the last day
                           of the Interest Accrual Period immediately preceding
                           such Payment Date. Commencing on the second Payment
                           Date after the Effective Date (i.e., May 11, 2000)
                           and each Payment Date thereafter through and
                           including the Maturity Date, Borrower shall pay
                           interest, calculated at the Interest Rate, on the
                           unpaid Principal Indebtedness which has accrued
                           through the last day of the Interest Accrual Period
                           immediately preceding such Payment Date (the "BASE
                           PAYMENT"). All accrued and unpaid interest shall be
                           due and payable on the Maturity Date.

                           (b)  Default Rate. After the occurrence and during
                           the continuance of an Event of Default, the entire
                           unpaid Debt shall bear interest at the Default Rate,
                           and shall be payable upon demand from time to time,
                           to the extent permitted by applicable law. Payment or
                           acceptance of interest at the Default Rate is not a
                           permitted alternative to timely payment and shall not
                           constitute a waiver of any Default or Event of
                           Default or an amendment to this Agreement or any
                           other Loan Document and shall not otherwise prejudice
                           or limit any rights or remedies of Lender.

                           (c)  Taxes. Any and all payments by Borrower
                           hereunder and under the other Loan Documents shall be
                           made free and clear of and without deduction for any
                           and all present or future taxes, levies, imposts,
                           deductions, charges or withholdings, and all
                           liabilities with respect thereto, excluding taxes
                           imposed on Lender's income, and franchise taxes
                           imposed on Lender by the law or regulation of any
                           Governmental Authority (all such non-excluded taxes,
                           levies, imposts, deductions, charges, withholdings
                           and liabilities being hereinafter referred to in this
                           Section 2.5(c) as "APPLICABLE TAXES"). If Borrower
                           shall be required by law to deduct any Applicable
                           Taxes from or in respect of any sum payable


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                           hereunder to Lender, the following shall apply: (i)
                           the sum payable shall be increased as may be
                           necessary so that after making all required
                           deductions (including deductions applicable to
                           additional sums payable under this Section 2.5(c)),
                           Lender receives an amount equal to the sum it would
                           have received had no such deductions been made, (ii)
                           Borrower shall make such deductions and (iii)
                           Borrower shall pay the full amount deducted to the
                           relevant taxation authority or other authority in
                           accordance with applicable law. Payments pursuant to
                           this Section 2.5(c) shall be made within ten days
                           after the date Lender makes written demand therefor.

                           (d)  Breakage Indemnity. Borrower shall indemnify
                           Lender against any loss or expense which Lender may
                           actually sustain or incur in liquidating or
                           redeploying deposits from third parties acquired to
                           effect or maintain the Loan or any part thereof as a
                           consequence of (i) any payment or prepayment of the
                           Loan or any portion thereof made on a date other than
                           a Payment Date and (ii) any default in payment or
                           prepayment of the Principal Indebtedness or any part
                           thereof or interest accrued thereon, as and when due
                           and payable (at the date thereof or otherwise, and
                           whether by acceleration or otherwise). Lender shall
                           deliver to Borrower a statement for any such sums
                           which it is entitled to receive pursuant to this
                           Section 2.5(d), which statement shall be binding and
                           conclusive absent manifest error.

                           (e)  Computations. Interest payable hereunder or
                           under the Note shall be computed on the basis of the
                           actual number of days elapsed over a 360-day year.

                           (f)  Late Payment Charge. If any Principal
                           Indebtedness, interest or other sum due under any
                           Loan Document is not paid by Borrower on the date on
                           which it is due, and the same remains unpaid after
                           the expiration of any applicable cure period, if any,
                           Borrower shall pay to Lender upon demand an amount
                           equal to the lesser of 5% of such unpaid sum or the
                           maximum amount permitted by applicable law, in order
                           to defray the expense incurred by Lender in handling
                           and processing such delinquent payment and to
                           compensate Lender for the loss of the use of such
                           delinquent payment. Such amount shall be secured by
                           the Loan Documents.

                           (g)  Maturity Date. Borrower shall repay the entire
                           outstanding principal balance of the Note in full on
                           the Maturity Date, together with interest thereon to
                           (but excluding) the date of repayment and any other
                           amounts due and owing under the Loan Documents.

         6.       Section 2.6(a) of the Existing Loan Agreement is hereby
amended by (i) deleting the words "On or after the earlier to occur of (i) the
Optional Prepayment Date or (ii)" and (ii)


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deleting the words "(but not Accrued Interest or interest thereon) to pay
Accrued Interest and interest thereon".

         7.       Section 2.6(c) of the Existing Loan Agreement is hereby
deleted in its entirety and replaced with the following:

                           (c)  Borrower shall have the right to prepay all or
                           any portion of the Principal Indebtedness on any
                           Payment Date provided that Borrower gives Lender at
                           least 15 days prior written notice thereof. If any
                           such prepayment is not made on a Payment Date,
                           Borrower shall also pay interest that would have
                           accrued on such prepaid Principal Indebtedness to but
                           not including the next Payment Date.

         8.       Section 2.7 of the Existing Loan Agreement is hereby amended
by (i) deleting the words "at the Initial Interest Rate" on the sixth line
thereof and replacing such words with the words "at the Interest Rate" and (ii)
deleting the words "to Accrued Interest and interest thereon; and fifth," on the
seventh and eighth lines thereof.

         9.       Section 2.10 of the Existing Loan Agreement is hereby deleted
in its entirety and replaced with the following:

                           Section 2.10 Release of Properties. Lender shall,
                           upon the written request and at the expense of
                           Borrower, upon payment in full of the Debt in
                           accordance herewith, release or, if requested by
                           Borrower, assign to Borrower's designee (without any
                           representation or warranty by and without any
                           recourse against Lender whatsoever), the Liens of the
                           Loan Documents if not theretofore released.

         10.      Section 2.11(a) of the Existing Loan Agreement is hereby
amended by replacing all references therein to the "Stabilization Date" with the
defined term "Effective Date".

         11.      Section 2.11(g)(v) of the Existing Loan Agreement is hereby
amended by deleting the words "during each of the following periods: (i) any
period in which the Preferred Equity Holder is an equity holder in Borrower and
(ii) on and after the Optional Prepayment Date, or".

         12.      Section 2.11(g)(vi) of the Existing Loan Agreement is hereby
amended by (i) deleting the reference to clause (iv) from the sixth line and the
nineteenth line thereof, (ii) deleting the words "to the Preferred Cash
Collateral Account (if the Preferred Equity Holder is an equity holder in
Borrower) or if the Preferred Equity Holder is not an equity holder in the
Borrower," beginning on the twelfth line thereof and (iii) deleting the words
"on or after the Optional Prepayment Date" on the seventeenth line thereof.

         13.      Section 2.12(b) of the Existing Loan Agreement is hereby
amended by replacing all references therein to the "Stabilization Date" with the
defined term "Effective Date".


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         14.      Section 2.15 of the Existing Loan Agreement is hereby amended
by replacing all references therein to the "Stabilization Date" with the defined
term "Effective Date".

         15.      Section 5.1(p) of the Existing Loan Agreement is hereby
amended by (i) replacing all references therein to the "Stabilization Date" with
the defined term "Effective Date", (ii) deleting clause (v) therefrom and (iii)
deleting the words "defeases" on the twenty third line thereof and replacing
such word with the word "prepays".

         16.      Section 5.1(q)(x) of the Existing Loan Agreement is hereby
amended by deleting the parenthetical language from the third through sixth
lines thereof.

         17.      Section 8.6 of the Existing Loan Agreement is hereby amended
(i) to provide that notices to Lender should be sent to CapMark Services, L.P.,
245 Peachtree Center Avenue N.E., Suite 1800, Atlanta, Georgia 30303-1231,
Attention Katherine M. Saathoff, Vice President, Telecopier (404) 654-2726, with
copies to: CDC Mortgage Capital Inc., 9 West 57th Street, 36th Floor, New York,
New York 10019; Attention: Real Estate Administration (Gary DiGiuseppe),
Telecopier (212) 891-6851 and with copies to: Kaye, Scholer, Fierman, Hays &
Handler, LLP, 425 Park Avenue, New York, New York 10022, Attention: Stephen
Gliatta, Telecopier: (212) 836-8689, (ii) by deleting the words "Alternative
Living Services, Inc., 1201 Pacific Avenue, Suite 1800" and replacing such words
with the words "Alterra Healthcare Corporation, 1142 Broadway Plaza, Suite 300"
and (iii) by deleting the words "Alternative Living Services, Inc., 450 North
Sunnyslope Road, Suite 300, Brookfield, Wisconsin 53005, Telefax Number
(414)789-6182" and replacing such words with the words "Alterra Healthcare
Corporation, 10000 Innovation Drive, Milwaukee, Wisconsin 53226, Telefax Number
(414) 918-5055".

         18.      Section 8.14 of the Existing Loan Agreement is hereby amended
by deleting the last sentence thereof.

         19.      Section 8.32(h) of the Existing Loan Agreement is hereby
amended by deleting the words "On the Stabilization Date Payment Date" and
replacing such words with the words "Within thirty (30) days after written
request by Lender".

         20.      Section 8.34(a) of the Existing Loan Agreement is hereby
deleted in its entirety and replaced with the following:

                           (a)  Transfers of Equity Interests in Operators and
                           Joint Venture. The parties hereto acknowledge that
                           the Parent currently owns interests in the Operators
                           and Joint Venture and that the Subsidiary has
                           acquired the remaining interests in the Operators
                           (except the Operators of the residences located in
                           Marion, Indiana and Alliance, Ohio) and the Joint
                           Venture, such that the Parent and the Subsidiary own
                           100% of the Operators (except the Operators of the
                           residences located in Marion, Indiana and Alliance,
                           Ohio) and the Joint Venture. The Parent and
                           Subsidiary each covenant (A) to cause the Subsidiary
                           to acquire all of the



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                           interests not owned by the Parent in the Operators of
                           the residences located in Marion, Indiana and
                           Alliance, Ohio no later than December 31, 2000 and
                           (B) provide Lender with five (5) days written notice
                           before the consummation of the acquisition of any
                           such interests.

         21.      The following Section 2.16 is hereby added at the end of
Article 2 of the Existing Loan Agreement.

                  2.16     Extension Option. Borrower shall have the right, at
                  is option, to extend the term of the Loan until December 11,
                  2002 (the "EXTENDED MATURITY DATE") by giving notice of such
                  extension to Lender at least 15 days prior to the originally
                  scheduled Maturity Date. Upon receipt of such request to
                  extend the term of the Loan until the Extended Maturity Date,
                  Lender will promptly confirm to Borrower in writing that the
                  Maturity Date will be so extended, upon the satisfaction of
                  the following conditions:

                           (a)  no Event of Default exists at the time such
                           request is made and on the originally scheduled
                           Maturity Date;

                           (b)  Borrower delivers to Lender an Officer's
                           Certificate confirming the accuracy of the
                           information contained in clause (a) above;

                           (c)  on or prior to the originally scheduled Maturity
                           Date, Borrower either (i) extends the term of the
                           Interest Rate Protection Agreement (as defined in
                           Section 2.17) to a date not earlier than the Extended
                           Maturity Date, or (ii) enters into a new interest
                           rate protection agreement on the same terms set forth
                           in Section 2.17 which expires no earlier than the
                           Extended Maturity Date and which has the effect of
                           capping LIBOR at 8.83% per annum;

                           (d) the Debt Service Coverage Ratio shall be at
                           least equal to the Debt Service Coverage Ratio on the
                           Effective Date; and

                           (e)  Borrower shall pay to Lender on or before the
                           Extended Maturity Date, an extension fee in an amount
                           equal to 1.00% of the then outstanding Principal
                           Indebtedness.

                           If Borrower is unable to satisfy all of the foregoing
                           conditions within the applicable time frames for
                           each, Lender shall have no obligation to extend the
                           Stated Maturity Date hereunder.

         22.      The following Section 2.17 is hereby added at the end of
Article 2 of the Existing Loan Agreement.


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                  2.17     Interest Rate Protection Agreements. As of the date
                  hereof, Borrower has entered into, made all payments required
                  under, and satisfied all conditions precedent to the
                  effectiveness of, an interest rate protection agreement that
                  satisfies all of the following conditions. (such interest rate
                  protection agreement together with (i) any extension or
                  modification thereof (including pursuant to Section 2.16(c))
                  or (ii) any other interest rate protection agreement entered
                  into pursuant to Section 2.16(c) being referred to herein as
                  the "INTEREST RATE PROTECTION AGREEMENT"):

                           (a)  the Interest Rate Protection Agreement is with a
                           financial institution having a long term, unsecured
                           and unsubordinated debt rating of at least "AA" by
                           S&P and "Aa2" by Moody's; has a term ending no
                           earlier than the Maturity Date; is an interest rate
                           cap in respect of a notional amount not less than the
                           maximum principal amount of the Loan that shall have
                           the effect of capping LIBOR at 8.83% per annum; and
                           provides that the only obligation of Borrower
                           thereunder is the making of a single payment upon the
                           execution and delivery thereof.

                           (b)  Borrower's interest in such Interest Rate
                           Protection Agreement has been assigned to Lender
                           pursuant to documentation satisfactory to Lender in
                           form and substance, and the counterparty to such
                           Interest Rate Protection Agreement has executed and
                           delivered to Lender an acknowledgment of such
                           assignment, which acknowledgment includes such
                           counterparty's agreement to pay directly to Lender
                           all sums payable by such counterparty pursuant to the
                           Interest Rate Protection Agreement and shall
                           otherwise be satisfactory to Lender in form and
                           substance.

                           (c)  Notwithstanding anything in this Section 2.17 to
                           the contrary, prior to purchasing an Interest Rate
                           Protection Agreement, Borrower shall notify CDC
                           Mortgage Capital Inc. of its intention to purchase
                           such Interest Rate Protection Agreement, which notice
                           may be telephonic and shall contain the name of the
                           proposed financial institution and the price and
                           other applicable terms relating to the proposed
                           Interest Rate Protection Agreement. Upon receipt of
                           such notice, CDC Mortgage Capital Inc. or its
                           Affiliate shall have the right to provide an Interest
                           Rate Protection Agreement to Borrower at the same (or
                           lower) price and upon substantially the same terms
                           and conditions applicable to the proposed Interest
                           Rate Protection Agreement with such other financial
                           institution and Borrower hereby agrees to promptly
                           enter into same with CDC Mortgage Capital Inc. or its
                           Affiliate. If CDC Mortgage Capital Inc. or its
                           Affiliate does not elect to provide such Interest
                           Rate Protection Agreement to Borrower as provided in
                           the preceding sentence, Borrower may purchase the
                           Interest Rate Protection Agreement from any financial
                           institution having a rating of at least that
                           specified in Section 2.17(a) above at the same (or
                           lower) price and upon substantially the same terms


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                           and conditions applicable to the proposed Interest
                           Rate Protection Agreement first offered to CDC
                           Mortgage Capital Inc.

                           (d)  Borrower agrees that Lender shall not have any
                           obligation, duty or responsibility to Borrower or any
                           other Person by reason of, or in connection with, any
                           Interest Rate Protection Agreement (including any
                           duty to provide or arrange any Interest Rate
                           Protection Agreement, to consent to any mortgage or
                           pledge of the Properties or any portion thereof as
                           security for Borrower's performance of its
                           obligations under any Interest Rate Protection
                           Agreement, or to provide any credit or financial
                           support for the obligations of Borrower or any other
                           Person thereunder or with respect thereto). No
                           Interest Rate Protection Agreement shall alter,
                           impair, restrict, limit or modify in any respect the
                           obligation of Borrower to pay interest on the Loan as
                           and when the same becomes due and payable in
                           accordance with the provisions of the Loan Documents.

                           (e)  All amounts received by Lender from payments
                           made by the counterparty to the Interest Rate
                           Protection Agreement shall be deposited into the
                           Collection Account and applied in the same manner as
                           repayments hereunder.


II.      Representations. Borrower hereby represents and warrants to Lender as
         of the date hereof as follows:

         1.       Authorization and Power. Borrower has the power and requisite
authority to execute, deliver and perform its obligations under this Amendment
and any other document executed in connection herewith and is duly authorized
to, and has taken all action necessary to authorize it to, execute, deliver and
perform its obligations under this Amendment.

         2.       Valid and Binding Obligations. This Amendment constitutes
legal, valid and binding obligations of Borrower enforceable in accordance with
its terms.

         3.       Consents, Etc. No consent, approval, authorization or order of
any court or Governmental Authority or any third party is required in connection
with the execution and delivery by Borrower of this Amendment or to consummate
the transactions contemplated hereby, which consent has not been obtained.

         4.       No Offsets; Defenses. There are no existing claims by Borrower
against Lender and there are no offsets or defenses by Borrower to the payment
of any amounts required under the Loan Documents or otherwise to the enforcement
by Lender of the Loan Documents.

III.     Reaffirmation. Each of Borrower, Guarantor, Parent Pledgor and
         Subsidiary Pledgor hereby ratifies and reaffirms the obligations,
         waivers, indemnities and covenants made


                                       11
<PAGE>   12

         under the Loan Documents to which each is bound (except with respect to
         the Guaranty, which is being terminated as of the date hereof).

IV.      Successors and Assigns. This Amendment shall be binding upon and shall
         inure to the benefit of each of the parties hereto and their respective
         successors and assigns.

V.       Ratification. Each of the Existing Loan Agreement (as amended hereby),
         the Environmental Indemnity Agreement and the Equity Pledge Agreements
         are hereby ratified and confirmed and shall continue in full force and
         effect.

VI.      Counterparts. This Amendment may be executed in multiple counterparts,
         each of which shall constitute an original, but all of which shall
         constitute one original.



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                                       12
<PAGE>   13

         IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed by their duly authorized representatives, all as of the day and
year first above written.

                              BORROWER:

                              ALS-VENTURE I, INC.

                              By:  /s/ David Boitano
                                 ---------------------------------
                                   Name:  David Boitano
                                   Title:  Vice President

                              GUARANTOR/PARENT PLEDGOR:

                              ALTERRA HEALTHCARE CORPORATION

                              By:  /s/ David Boitano
                                 ---------------------------------
                                   Name:  David Boitano
                                   Title:  Senior Vice President

                              SUBSIDIARY PLEDGOR:

                              By:  /s/ David Boitano
                                 ---------------------------------
                                   Name:  David Boitano
                                   Title:  Vice President

                              LENDER:

                              CAPMARK SERVICES, L.P.

                              By:  Pearl Mortgage, Inc., a Delaware corporation,
                                   general partner

                                   By:  /s/ Katherine M. Saathoff
                                      -----------------------------
                                        Name: Katherine M. Saathoff
                                        Title: Vice President



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<PAGE>   14

                                ACKNOWLEDGEMENT

The undersigned Owner Trustee hereby acknowledges to the terms of the foregoing.

Wilmington Trust Company, in its capacity as Owner Trustee of CDC Mirror Trust
ST-I 3/11/00 (formerly known as Nomura Mirror Trust ST-I 3/11/00)


By:  /s/ David A. Vanaskey, Jr.
   ----------------------------
     David A. Vanaskey, Jr.
     Assistant Vice President




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