Exhibit 10.3



MASTER LEASE(Alterra Pool 2)

This "Master Lease" is entered into effective as of October 7, 2002 (the "Effective Date") among the JER/NHP Senior Living Acquisition, LLC, a Delaware limited liability company ("Landlord"), and ALS Leasing, Inc., a Delaware corporation ("Tenant"), for the real properties and improvements thereon (collectively, the "Facilities") as set forth on Schedule 1 and as legally described on Exhibit A and the "Landlord Personal Property" associated therewith as described in Exhibit B or as may be acquired after the Effective Date (collectively, the "Premises"), each used as a licensed healthcare facility of the type described on Schedule 1 (individually as so utilized, and collectively, the "Business").  Landlord and Tenant have also concurrently entered into a Letter of Credit Agreement (the "LC Agreement") pursuant to which Tenant shall provide certain collateral to Landlord for the performance of its obligations under this Master Lease.  Pursuant to its concurrent Guaranty of Lease and Letter of Credit Agreement (the "Guaranty"), Alterra Healthcare Corporation, a Delaware corporation ("Guarantor"), has guaranteed, inter alia, Tenant's obligations hereunder.  In consideration of the mutual covenants, conditions and agreements set forth herein, Landlord hereby leases the Premises to Tenant for the Term upon the terms and conditions provided below.  Certain capitalized terms used in this Master Lease are defined on Exhibit E.

RECOGNITION OF INDIVISIBLE MASTER LEASE;
IRREVOCABLE WAIVER OF CERTAIN RIGHTS

Tenant and Guarantor each acknowledge and agree that this Master Lease constitutes a single, indivisible lease of the entire Premises, and the Premises constitutes a single economic unit.  The Minimum Rent, other Rent payable hereunder and all other provisions contained herein have been negotiated and agreed upon based on the intent to lease the entirety of the Premises as a single and inseparable transaction, and such Minimum Rent, other Rent and other provisions would have been materially different had the parties intended to enter into separate leases or a divisible lease.  Any Event of Default under this Master Lease shall constitute an Event of Default as to the entire Premises.

Tenant and Guarantor each further acknowledge and agree that Landlord is entering into this Master Lease as an accommodation to Tenant and Guarantor.  Each of the entities comprising Tenant and Guarantor, in order to induce Landlord to enter into this Master Lease, to the extent permitted by law:

A.     Agrees, acknowledges and is forever estopped from asserting to the contrary that the statements set forth in the preceding paragraphs of this Section are true, correct and complete;

B.     Agrees, acknowledges and is forever estopped from asserting to the contrary that this Master Lease is a new and de novo lease, separate and distinct from any other lease between any of the entities comprising Tenant and any of the entities comprising Landlord that may have existed prior to the date hereof;

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C.     Agrees, acknowledges and is forever estopped from asserting to the contrary that this Master Lease is a single lease pursuant to which the collective Premises are demised as a whole to Tenant;

D.     Agrees, acknowledges and is forever estopped from asserting to the contrary that if, notwithstanding the provisions of this Section, this Master Lease were to be determined or found to be in any proceeding, action or arbitration under state or federal bankruptcy, insolvency, debtor-relief or other applicable laws to constitute multiple leases demising multiple properties, such multiple leases could not, by the debtor, trustee, or any other party, be selectively or individually assumed, rejected or assigned;

E.     Forever knowingly waives and relinquishes any and all rights under or benefits of the provisions of the Federal Bankruptcy Code Section 365 (11 U.S.C.§ 365), or any successor or replacement thereof or any analogous state law, to selectively or individually assume, reject or assign the multiple leases comprising this Master Lease following a determination or finding in the nature of that described in the foregoing Section D.

2.     
Rent.  During the Term, Tenant shall pay Landlord "Rent" consisting of "Minimum Rent" determined as provided in this Section 2 and such other sums as may be described in this Master Lease as Rent.  The monthly Minimum Rent for any month that begins or ends on other than the first or last day of a calendar month, and the annual Minimum Rent for any Lease Year that begins on other than the first day of a Lease Year, shall be prorated based on actual days elapsed.

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2.2     
Landlord's Investment; Rent Adjustments.


          
(a)     "Landlord's Investment" in the Premises, shall mean Twenty Eight Million Eight Hundred Twenty-Six Thousand Two Hundred Forty-Six Dollars and 61/100 Dollars ($28,826,246.61), which includes the amount of Seven Hundred Fifty Thousand Dollars ($750,000) representing the Initial Security Deposit and Collateral Funding (as defined in Section 4.1), plus any amount for Alterations advanced by Landlord pursuant to Section 8.4, plus any amount elected to be added by Landlord pursuant to Section 13.4, plus any other amount that, in accordance with any other term of provision of this Master Lease, is to be added to Landlord's Investment, and minus the amount of the Initial Security Deposit and Collateral Funding upon the full and complete payment thereof by Tenant pursuant to Section 4.1, minus any net award paid to Landlord for a Partial Taking pursuant to Section 18, minus any other net capital proceeds received by Landlord for any portion of the Premises sold or conveyed, including any portion of the Premises as to which Tenant acquires title pursuant to the operation of the Put set forth in Section 13.2 or otherwise, as to any portion of the Premises for which this Master Lease is terminated during the Term in accordance with its terms, and minus any other amount that, in accordance with any other term of provision of this Master Lease, is to be subtracted from Landlord's Investment.  

          
(b)     
Concurrently with any increase or decrease in Landlord's Investment during the Term as described in Section 2.2(a), the Minimum Rent then due and payable for the balance of the applicable Lease Year and Term shall be recalculated and reset based on the adjusted Landlord's Investment.

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(a)     
Notwithstanding any of the other terms of this Master Lease, in no event shall the Minimum Rent in the first (1st) Lease Year of any Renewal Term exceed one hundred twenty-five percent (125%) of the Minimum Rent due for the last Lease Year of the Initial Term or preceding Renewal Term, as applicable.

          
(b)     
Notwithstanding any of the other terms of this Master Lease, in no event shall the Minimum Rent in the first (1st) Lease Year of any Renewal Term be less than one hundred percent (100%) of the Minimum Rent due for the last Lease Year of the Initial Term or preceding Renewal Term, as applicable.

          
2.5     
Payment Terms.  All Rent and other payments to Landlord shall be paid by wire transfer only.  Minimum Rent and all amounts to be paid concurrently therewith shall be paid in advance in equal monthly installments on or before the first (1st) business dayof each calendar month (or, with respect to the first such payment due hereunder, on the Effective Date).

          
2.6     
Absolute Net Lease.  All Rent payments shall be absolutely net to Landlord, free of any and all Taxes, Other Charges, and operating or other expenses of any kind whatsoever, all of which shall be paid by Tenant.  Tenant shall continue to perform its obligations under this Master Lease even if Tenant claims that it has been damaged by Landlord.  Thus, Tenant shall at all times remain obligated under this Master Lease without any right of set-off, counterclaim, abatement, deduction, reduction or defense of any kind; provided, however, that the foregoing shall not preclude Tenant from bringing a separate action against Landlord for breach of its obligations under Section 24.  Tenant's sole right to recover damages against Landlord under this Master Lease shall be to prove such damages in a separate action.


     
3.     Late Charges.  The late payment of Rent or other amounts due will cause Landlord to lose the use of such money and incur administrative and other expenses not contemplated under this Master Lease.  While the exact amount of the foregoing is extremely difficult to ascertain, the parties agree that as a reasonable estimate of fair compensation to Landlord, if any Rent or other amount is not paid (a)on the due date for such payment (without consideration of any grace period that may be applicable in connection therewith), then Tenant shall thereafter pay to Landlord on demand a late charge equal to five percent (5%)of such delinquent amounts, and (b)within ten (10) days after the due date for such payment, such unpaid amount shall accrue interest from such date at the "Agreed Rate" of five percent (5%) plus the prime rateof interest then charged by Wells Fargo Bank, N.A., San Francisco, CA.

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Professional Liability Coverage with respect to each Facility for damages for injury, death, loss of service or otherwise on account of professional services rendered or which should have been rendered, in a minimum amount of Five Million Dollars ($5,000,000)per claim and Ten Million Dollars  ($10,000,000)in the aggregate;

     
Worker's Compensation Coveragewith respect to each Facility for injuries sustained by Tenant's employees in the course of their employment and otherwise consistent with all applicable legal requirements;


     
Boiler and Pressure Vessel Coverage with respect to each Facility on any fixtures or equipment which are capable of bursting or exploding, in an amount not less than Five Million Dollars ($5,000,000) for resulting damage to property, bodily injury or death and with an endorsement for boiler business interruption insurance;


     
Business Interruption and Extra Expense Coveragewith respect to each Facility for loss of rental value for a period not less than one (1) year, provided that, so long as Tenant continues to pay all Rent and other amounts due hereunder and no other Event of Default exists, Tenant shall be entitled to receive all proceeds of such business interruption insurance; and

     
Deductibles/Self-Insured Retentionsfor the above policies shall not be greater than Fifty Thousand Dollars ($50,000), and Landlord shall have the right at any time to require a lower such amount or set higher policy limits, to the extent commercially available and reasonable and customary for similar properties.  At such times and only so long as policies of insurance with deductibles or self-insured retentions not greater than Fifty Thousand Dollars ($50,000) are generally not available to operators of assisted living facilities owned by institutional landlords and similar to the Facilities at commercially reasonable rates, as jointly determined by Landlord and Tenant in their respective reasonable judgment, the deductibles or self-insured retentions on the policies of insurance required hereunder may be in such greater amount, as jointly determined by Landlord and Tenant in their respective reasonable judgment, that would result in the applicable policies being available at commercially reasonable rates, not to exceed Two Hundred Fifty Thousand Dollars ($250,000).

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If to Tenant:

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With a copy to:

If to Landlord:

And:

With a copy to:

And:

A party may designate a different address by notice as provided above.  Any notice or other instrument so delivered (whether accepted or refused) shall be deemed to have been given and received on the date of delivery established by U.S. Post Office return receipt or the carrier's proof of delivery or, if not so delivered, on the day received (provided that such notice or instrument shall be deemed received on the next succeeding business day if received after 5:00 p.m. (local time)).  Delivery to any officer, general partner or principal of a party shall be deemed delivery to such party.

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IN WITNESS WHEREOF, this Master Lease has been executed by Landlord and Tenant as of the Effective Date.

"TENANT"

ALS LEASING, INC.,
a Delaware corporation

By:/s/ Kristin A. Ferge
Name:     Kristin A. Ferge
Title:     Vice President

Witness:/s/ JC Hansen          Witness:/s/ Marilyn Janz



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"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/ Mark L. Desmond          Witness:Denise Munoz