Exhibit  10.9



FOURTH AMENDMENT TO LOAN AGREEMENT AND

FORBEARANCE AGREEMENT



Dated as of November 5, 2002





This FOURTH AMENDMENT TO LOAN AGREEMENT AND FORBEARANCE AGREEMENT (as the same may be modified, amended or supplemented from time to time, this "Fourth Amendment"), dated as of November 1, 2002, is by and among THE CAPITAL COMPANY OF AMERICA LLC, a Delaware limited liability company, (together with its successors and assigns, the "Lender"), ALS-VENTURE II, INC., a Delaware corporation (the "Borrower"), ALTERRA HEALTHCARE CORPORATION f/k/a ALTERNATIVE LIVING SERVICES, INC., a Delaware corporation (the "Parent"), and ALS-CLARE BRIDGE, INC., a Delaware corporation (the "Subsidiary").

RECITALS

WHEREAS, Nomura Asset Capital Corporation, a Delaware corporation ("Nomura"), and the Borrower entered into that certain Loan Agreement made as of May 26, 1998 (the "Original Loan Agreement");

WHEREAS, pursuant to (i) that certain Assignment and Assumption Agreement dated as of July 28, 1998, and (ii) that certain Allonge and the other documents related thereto, Nomura assigned to the Lender, and the Lender assumed from Nomura, all of Nomura's right, title, interest, duties and obligations in, to and under the Original Loan Agreement and the other Loan Documents;

WHEREAS, the Lender and the Borrower have amended the Original Loan Agreement pursuant to (i) that certain First Amendment to Loan Agreement and Reaffirmation Agreement dated as of July 31, 1998, (ii) that certain Second Amendment to Loan Agreement, First Amendment to Guaranty and Suretyship Agreement and Reaffirmation Agreement dated as of September __, 1998, and (iii) that certain Third Amendment to Loan Agreement and Reaffirmation Agreement dated as of November 30, 2000 (collectively with the Original Loan Agreement, the "Loan Agreement");

WHEREAS, the Borrower has acknowledged that certain Events of Default, as more fully described on Schedule I hereto, have occurred and are continuing under the Loan Documents  (the "Existing Events of Default");

WHEREAS, the Borrower has informed the Lender that during the Forbearance Period (as hereinafter defined) certain additional Events of Default, as more fully described on Schedule II hereto, will occur (the "Impending Events of Default" and collectively with the Existing Events of Default, the "Specified Events of Default"); and

WHEREAS, the Borrower has requested that the Lender forbear from exercising certain rights and remedies in respect of the Specified Events of Default, and the Lender has agreed to do so on the terms and subject to the conditions contained herein.

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NOW, THEREFORE, in consideration of the foregoing premises, the covenants set forth in this Fourth Amendment and for other valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:



ARTICLE I

DEFINED TERMS



ARTICLE II

ACKNOWLEDGMENT OF EVENTS OF
DEFAULT; FORBEARANCE



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ARTICLE III 
AMENDMENTS TO CREDIT AGREEMENT


"Alterra's Debt" shall mean all debt, guarantees and all convertible debt issued by Parent, including zero coupon instruments and non-cash paying securities (such as convertibles and PIKs), but excluding preferred equity securities that are not convertible to debt, all of the above on a consolidated basis with Parent's subsidiaries and other affiliates, determined in accordance with generally accepted accounting principles, consistently applied.

"Bankruptcy Code" means The Bankruptcy Reform Act of 1978, as heretofore and hereafter amended, and codified as 11 U.S.C. Section 101 et seq.

"Bankruptcy Court" means the United Sates Bankruptcy Court for the District of Delaware or any other court having jurisdiction over the Conforming Bankruptcy Proceeding from time to time.

"Cash Collateral Agreement" means that certain Cash Collateral Account Agreement dated as of August 22, 2001 among LaSalle Bank, N.A., the Borrower and the Lender.

"Cash Management Agreements" means, collectively, the Cash Collateral Agreement, the Collection Account Agreement and the Disbursement Agreement.

"Collection Account Agreement" means that certain Collection Account Agreement dated as of May 22, 1998 among the Borrower, the Lender and Firstar Bank, N.A.

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"Conforming Bankruptcy Proceeding" means a proceeding in the Bankruptcy Court (i) instituted pursuant to a voluntary petition for reorganization filed by the Parent under Chapter 11 of the Bankruptcy Code (or an involuntary petition filed by any Person that is converted by the Parent into a voluntary petition under Chapter 11 of the Bankruptcy Code within 30 days after the filing of such involuntary petition) and (ii) in which the Parent at all times during the pendency of such proceeding pursues the confirmation of a Conforming Plan.

"Conforming Plan" shall mean a plan of reorganization of the Parent that contains each of the following elements and will result upon confirmation in:

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ARTICLE VIII 
REPRESENTATIONS AND WARRANTIES




(d)     
Upon the Effective Date, this Fourth Amendment, the Guaranty, the Loan Agreement and each of the other Loan Documents to which each Loan Party is a party will constitute the legal, valid and binding obligation of such Loan Party, enforceable in accordance with its terms, in each case subject, as to enforceability, to the effects of bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium or other similar laws relating to or affecting creditors' rights generally and general equitable principles (whether considered in a proceeding at law or in equity) and an implied covenant of good faith.

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ARTICLE IX
ACKNOWLEDGEMENT, RELEASE AND INDEMNITY


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SECTION 10.1  
Cross-References.  Any reference in this Fourth Amendment to any Section is, unless otherwise specified, to such Section of this Fourth Amendment.

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[Signatures on Following Page]

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IN WITNESS WHEREOF, the parties hereto have caused this FOURTH AMENDMENT TO LOAN AGREEMENT AND FORBEARANCE AGREEMENT to be duly executed by their duly authorized representatives, all as of the day and year first above written.



BORROWER:

PARENT:

ALTERRA HEALTHCARE CORPORATION f/k/a 
ALTERNATIVE LIVING SERVICES, INC, a Delaware 
corporation

By:     /s/ Mark Ohlendorf
          Mark Ohlendorf
          Vice President

SUBSIDIARY:

ALS-CLARE BRIDGE, INC., a Delaware corporation

By:     /s/ Mark Ohlendorf 
          Mark Ohlendorf
          Vice President