EXHIBIT 10.1



LETTER OF CREDIT AGREEMENT     This "
Agreement"
 is
entered into as of April 9, 2002 between the Entities Listed on Schedule
1 (collectively, "
Beneficiary"
), and ALS Leasing, Inc., a
Delaware corporation ("
ALS Leasing"
), and Assisted Living Properties,
Inc., a Kansas corporation ("
ALP"
 and, collectively with ALS Leasing,
"
Tenant"
), as an inducement to Beneficiary to enter into that certain
Master Lease with Tenant dated the date hereof (the "
Lease"
). All
initially capitalized terms used but not otherwise defined herein have the
meanings given them in the Lease. Thus, for valuable consideration, the receipt
and sufficiency of which are acknowledged, the parties agree as follows:







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|If to Tenant: | c/o Alterra Healthcare Corporation10000
      Innovation DriveMilwaukee, Wisconsin 53226Attention: Mark W.
      OhlendorfFacsimile: (414) 918-5055
|------------- | ---------------------------------------------------------------------------------------------------------------------------------------------------



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|With a copy to: | Rogers & Hardin LLP2700 International
      Tower229 Peachtree Street, N.E.Atlanta, Georgia
      30303-1601Attention: Miriam J. DentFacsimile: (404)
  525-2224
|--------------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------



|If to Landlord: | Nationwide Health Properties, Inc.610
      Newport Center Drive, Suite 1150Newport Beach, California
      92660-6429Attention: President and General CounselFacsimile: (949)
      759-6876
|--------------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|And: | JER Partners1650 Tysons Boulevard, Suite
      1600McLean, Virginia 22101Attention: Paul A. FroningFacsimile:
      (703) 714-8060 andAttention: Daniel T. Ward, Esq.Facsimile: (703)
      714-8102
|---- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|With a copy to: | O'Melveny & Myers LLP610 Newport Center
      Drive, Suite 1700Newport Beach, California 92660-6429Attention:
      Steven L. EdwardsFacsimile: (949) 823-6994
|--------------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------



|And: | Pircher, Nichols & Meeks1925 Century
      Park East, Suite 1700Los Angeles, California 90067Attention:
      Stevens A. Carey, Esq.Facsimile: (310)
201-8922
|---- | -------------------------------------------------------------------------------------------------------------------------------------------------------------





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IN WITNESS WHEREOF, this Agreement has
been executed by Tenant and Beneficiary as of the date first above written.



"
TENANT"



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

|Witness: | /s/ Sarah Wits |  |  |  | Witness: | /s/ Kristin Ferge
|-------- | -------------- |  |  |  | -------- | -----------------

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

|Witness: | /s/ Sarah Wits |  |  |  | Witness: | /s/ Kristin Ferge
|-------- | -------------- |  |  |  | -------- | -----------------

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



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

















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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



















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SCHEDULE 1LANDLORD ENTITIES



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

JER/NHP Senior Living Kansas, Inc., a Kansas corporation (f/k/a
Meditrust of Kansas, Inc., a Kansas corporation)

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SCHEDULE 2



1. Irrevocable Standby Letter of Credit No. MLWS121365, issued by Firstar
  Bank, N.A. on May 19, 1999, as amended, modified or revised;
2. Irrevocable Standby Letter of Credit No. MLWS121344, issued by Firstar
  Bank, N.A. on March 28, 2000, as amended, modified or revised;
3. Irrevocable Standby Letter of Credit No. MLWS121364, issued by Firstar MW
  Bank of Milwaukee, N.A. on July 1, 1999, as amended, modified or revised;
  and
4. Irrevocable Standby Letter of Credit No. MLWS121366, issued by Firstar MW
  Bank of Milwaukee, N.A. on May 19, 1999, as amended, modified or
  revised.

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EXHIBIT A

[NAME] BANK


IRREVOCABLE LETTER OF CREDIT NO. _________DATE:
________________________EXPIRATION DATE: ____________________

[Landlord Entities]c/o Nationwide Health Properties, Inc.610 Newport
Center Drive, Suite 1150Newport Beach, CA 92660Ladies and
Gentlemen:     We hereby establish our
Irrevocable Letter of Credit in your favor for the account of ALS Leasing,
Inc., a Delaware corporation ("
ALS Leasing"
), and Assisted Living
Properties, Inc., a Kansas corporation ("
ALP"
 and, collectively with ALS
Leasing, "
Customer"
) available by your draft(s) on us payable at sight in
an amount not to exceed a total of ________________________ Dollars
($____________) when accompanied by the following documents:

1.        A
certificate which on its face appears to have been executed by an officer,
managing member or general partner, as applicable, of any of the following
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, JER/NHP
Senior Living Kansas, Inc., a Kansas corporation (f/k/a Meditrust of Kansas,
Inc., a Kansas corporation) (individually and collectively, "
Landlord"
),
or any member of JER/NHP Senior Housing, LLC, a Delaware limited liability
company (together with Landlord, "
Beneficiary"
), stating the amount which
Beneficiary is drawing and that one or more of the following events has
occurred: (i) an Event of Default has occurred under the Master
Lease dated as of April __, 2002 between Landlord, as landlord, and Customer, as
tenant, as amended from time to time (as amended, the "
Lease"
);
(ii) a default has occurred under that certain Letter of Credit
Agreement dated April , 2002 between Landlord and Customer, as amended; or
(iii)at least one of Alterra Healthcare Corporation, a Delaware
corporation, or either of the entities comprising Customer (a)has
ceased to generally pay its debts as they become due, has admitted in writing
its inability to pay its debts generally, or has made an assignment of all or
substantially all of its property for the benefit of creditors,
(b)has had a receiver, trustee or liquidator appointed for it or
any of its property, or (c)has filed a voluntary petition, or has
had filed against it any other petition, under any federal bankruptcy or state
law to be adjudicated as bankrupt or for any arrangement or other debtor's
relief.



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This Letter of Credit may be transferred or assigned by Beneficiary to any
successor or assign of its interests under the Lease or to any lender obtaining
a lien or security interest in the property covered by the Lease. Each draft
hereunder by any assignee or successor shall be accompanied by a copy of the
fully executed documents or judicial orders evidencing such encumbrance,
assignment or transfer. Any draft drawn hereunder shall be in the form attached
hereto as Schedule 1. Partial drawings are permitted with the amount
of the Letter of Credit being reduced, without amendment, by the amount(s) drawn
hereunder. This Letter of Credit shall expire at 2:00 p.m., Los Angeles time, on
the expiration date set forth above. Notwithstanding the foregoing, this Letter
of Credit shall be automatically extended for additional periods of one (1)
year from the present or each future expiration date unless we have notified
you in writing, not less than ninety (90) days before any such expiration
date, that we elect not to renew this Letter of Credit. Our notice of any such
election shall be sent by express, registered or certified mail to the address
shown above.

Except so far as otherwise expressly stated,
this Letter of Credit is subject to the "
Uniform Customs and Practice for
Documentary Credits (1/1/94 Revision), International Chamber of Commerce
Publication No. 500."
 We hereby agree with you and all persons negotiating such
drafts that all drafts drawn and negotiated in compliance with the terms of this
Letter of Credit will be duly honored upon presentment and delivery of the
documents specified above by certified or registered mail to
_____________________________________________, if negotiated on or before the
expiration date shown above.

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SCHEDULE 1 TO EXHIBIT ASIGHT DRAFT



PAY TO THE ORDER OF:

Nationwide Health Properties, Inc., a Maryland corporation, c/o Wells
Fargo Bank420 Montgomery StreetSan Francisco, CaliforniaABA No.
121000248 for the benefit of Nationwide Health Properties, Inc. Account
No. 4692089329THE SUM OF:_________________________________ Dollars
($_________)DRAWN ON:Irrevocable Letter of Credit No.
____________dated ____________, 20__ issued by_______________________
Bank[SIGNATURE BLOCK]

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