Document:

<PAGE>   1
                                                                  EXHIBIT 10.120

                                 LOAN AGREEMENT

         THIS LOAN AGREEMENT (this "Agreement") made and entered into as of this
13th day of December, 1999 between ALTERRA HEALTHCARE CORPORATION, a Delaware
corporation, (the "Company"), and RDVEPCO, L.L.C., a Michigan limited liability
company ("Lender").

                                    Recitals:

         Company desires to borrow from Lender and Lender agrees to lend to
Company on the terms and conditions set forth herein the sum of Fourteen Million
Dollars ($14,000,000.00).

         NOW, THEREFORE, the parties promise and agree as follows:

                                    ARTICLE I
                                   Definitions

         In addition to terms defined elsewhere in this Agreement, the following
definitions shall apply for purposes of this Agreement:

                  "Bankruptcy Law" means Title 11, U.S. Code or any similar
         federal or state law for the relief of debtors.

                  "Business Day" means a day other than a Saturday, a Sunday or
         a day on which banking institutions in the City of Grand Rapids,
         Michigan are authorized by law, regulation or executive order to remain
         closed. If a payment date is not a Business Day, payment may be made on
         the next succeeding day that is a Business Day.

                  "Collateral Real Estate" means the parcels of unimproved real
         estate owned by the Company identified on Exhibit A hereto.

                  "Contract" means any contract, agreement, undertaking or
         commitment (written or oral, formal or informal, firm or contingent) to
         which the Company or any of its Subsidiaries is a party or by which the
         Company, any of its Subsidiaries, or any of their respective assets are
         bound, and which has current operative or executory effect.

                  "Default" means any event that is or with the passage of time
         or the giving of notice or both would be an Event of Default.

                  "GAAP" means generally accepted accounting principles set
         forth from time to time in the opinions and pronouncements of the
         Accounting Principles Board and the American Institute of Certified
         Public Accountants and statements and pronouncements

<PAGE>   2

         of the Financial Accounting Standards Board (or agencies with similar
         functions of comparable stature and authority within the U.S.
         accounting profession), which are applicable to the circumstances as
         of the date of determination.

                  "Governmental Authority" means the United States, any state or
         municipality, the government of any foreign country, any subdivision of
         any of the foregoing, or any authority, department, commission, board,
         bureau, agency, court, or instrumentality of any of the foregoing.

                  "Hedging Obligations" means, with respect to any Person, the
         obligations of such Person under (i) currency exchange or interest rate
         swap agreements, currency exchange or interest rate cap agreements and
         currency exchange or interest rate collar agreements and (ii) other
         agreements or arrangements designed to protect such Person against
         fluctuations in currency exchange or interest rates.

                  "Holder" means the Lender and any subsequent holder of the
         Note.

                  "Holding" means AHC Purchaser Holding, Inc., a Delaware
         corporation.

                  "Indebtedness" means, with respect to any Person, any
         indebtedness of such Person, whether or not contingent, in respect of
         borrowed money or evidenced by bonds, notes, debentures or similar
         instruments or letters of credit (or reimbursement agreements in
         respect thereof) or banker's acceptances or representing obligations in
         respect of a lease that would at such time be required to be
         capitalized on a balance sheet in accordance with GAAP or the balance
         deferred and unpaid of the purchase price of any property (other than
         contingent or "earnout" payment obligations) or representing any
         Hedging Obligations, except any such balance that constitutes an
         accrued expense or trade payable, if and to the extent any of the
         foregoing indebtedness (other than letters of credit and Hedging
         Obligations) would appear as a liability upon a balance sheet of such
         Person prepared in accordance with GAAP, as well as all indebtedness of
         others secured by a Lien on any asset of such Person (whether or not
         such indebtedness is assumed by such Person) and, to the extent not
         otherwise included, the guarantee, whether or not conditional, by such
         Person of any indebtedness of any other Person.

                  "Lien" means, with respect to any asset, any mortgage, lien,
         pledge, charge, security interest or encumbrance of any kind in respect
         of such asset, whether or not filed, recorded or otherwise perfected
         under applicable law (including any conditional sale or other title
         retention agreement, any lease in the nature thereof, any option or
         other agreement to sell or give a security interest in and any filing
         of or agreement to give any financing statement under the Uniform
         Commercial Code (or equivalent statutes) of any jurisdiction).

                  "Obligations" means any principal, interest, penalties, fees,
         indemnifications, reimbursements, damages and other liabilities payable
         under the documentation governing any Indebtedness.

<PAGE>   3

                   "Permitted Liens" means (i) Liens for taxes and assessments
         or governmental charges or levies not at the time due, and (ii)
         easements that do not impair or restrict the Company's or Subsidiary's
         use and enjoyment of the property affected thereby.

                  "Person" means any individual, corporation, partnership,
         limited liability company, joint venture, association, joint-stock
         company, trust, unincorporated organization, government or any agency
         or political subdivision thereof or any other entity.

                  "Purchaser" means AHC Purchaser, Inc., a Delaware corporation.

                  "Subsidiary" means any corporation, partnership, limited
         partnership, limited liability company, association or other business
         entity of which securities or other ownership interests representing
         more than fifty percent (50%) of the ordinary voting power are, at the
         time as of which any determination is being made, owned or controlled
         by the Company or one or more Subsidiaries of the Company.

                  "SEC" means the Securities and Exchange Commission.

                  "Subscription and Organizational Agreement" means the
         Subscription and Organizational Agreement between Company, Lender and
         Holding dated as of the date of this Agreement pursuant to which, among
         other things, Lender has agreed to purchase from Holding and Holding
         has agreed to issue and sell to Lender an aggregate of 1,000 shares of
         the Convertible Preferred Stock of Holding.

                  "1934 Act" means the Securities Exchange Act of 1934, as
         amended.

                  "1933 Act" means the Securities Act of 1933, as amended.

                                   ARTICLE II
              Loan; Note; Closing; Closing Date; and Commitment Fee

         2.1. Tranche A Loan; Note. On the terms and conditions set forth in
this Agreement, Lender agrees to lend to Company on the Closing Date the sum of
Fourteen Million Dollars ($14,000,000.00) in principal amount (the "Tranche A
Loan Commitment"). The Fourteen Million Dollars ($14,000,000.00) borrowed by
Company pursuant to the Tranche A Loan Commitment (the "Tranche A Loan") shall
be evidenced by a note in the form of Exhibit B hereto payable to the order of
Lender and dated the Closing Date (the "Tranche A Note"), the terms and
conditions of which, are incorporated in and made a part of this Agreement.

         2.2. Tranche B Loan Commitment. Lender agrees to make a loan to
Purchaser on or before December 30, 1999 (the "Tranche B Loan") substantially on
the terms and conditions set forth in Exhibit C, hereto, subject to (i) the
Closing of the Tranche A Loan occurring, (ii) no

<PAGE>   4

Default or Event of Default having occurred with respect to the Tranche A Loan,
(iii) GMAC shall be diligently pursuing completion of the Proposed GMAC
Financing, to the reasonable satisfaction of Lender and (iv) documentation of
the Tranche B Loan in form and substance reasonably satisfactory to Lender and
its counsel.

         2.3. Closing; Closing Date. The closing of the Tranche A Loan (the
"Closing") shall occur at 10:00 a.m. at the offices of Company on or before
December 15, 1999 or such other time and place as the parties may agree in
writing (the "Closing Date") upon satisfaction of the terms and conditions to
Lender's obligations as set forth in Article IV, below.

         2.4. Fees. On or before the Closing, the Company agrees to pay to the
Lender the following fees; (i) a Seventy Thousand Dollar ($70,000.00) loan fee
with respect to the Tranche A Loan, and (ii) on behalf of Purchaser One Hundred
and Fifty Thousand Dollar ($150,000.00) commitment fee with respect to the
Tranche B Loan. Neither of such fees shall be prorated in the event of
prepayment of the related loan and the commitment fee with respect to the
Tranche B Loan shall be deemed fully earned when paid and shall not be
non-refundable under any circumstances. If not paid prior to the Closing,
Company agrees that Lender may deduct such fees from the proceeds of the Tranche
A Loan and remit to Company the amount of the Tranche A Loan net of such fees.

                                   ARTICLE III
                        Terms of Tranche A Loan and Note

         3.1.     Interest Rate; Payment; Usury.

                  (a) Provided that no Event of Default has occurred and is
         continuing and subject to the other provisions of this Agreement (i)
         during the period from and including the Closing Date to, but not
         including, the third month anniversary of the Closing Date, the Tranche
         A Loan shall bear interest at the rate of eight percent (8%) per annum;
         (ii) from and including the third month anniversary of the Closing Date
         through the sixth month anniversary of the Closing Date, the Tranche A
         Loan shall bear interest at the rate of nine percent (9%) per annum;
         and (iii) during each monthly period (or portion thereof) from and
         after sixth month anniversary of the Closing Date until the principal
         and all accrued interest on the Tranche A Loan have been paid, the
         Tranche A Loan shall bear interest at a rate that is fifty basis points
         (.5 of 1%) higher than the rate in effect immediately prior to the
         commencement of such monthly period. During any period that an Event of
         Default shall have occurred and be continuing, interest on the Tranche
         A Loan shall accrue at a rate equal to the otherwise applicable
         interest rate plus five hundred basis points (the "Default Interest
         Rate"). Notwithstanding anything contained herein to the contrary, in
         no event shall the interest rate on the Tranche A Loan, including the
         Default Interest Rate, exceed the highest rate permitted by applicable
         law. Interest on the Tranche A Loan, including interest at the Default
         Rate, shall be based on a 360 day year and interest shall accrue and be
         payable for the actual number of calendar days elapsed. Interest shall
         be payable on the third month anniversary of the Closing Date and on
         the

<PAGE>   5

         same day of each subsequent month until the principal and all accrued
         interest have been paid in full.

                  (b) It is the intention of the Company and Lender to conform
         strictly to applicable usury laws now or hereafter in force, and any
         interest payable under this Agreement or the Note shall be subject to
         reduction to an amount not to exceed the maximum non-usurious amount
         for commercial loans allowed under such applicable usury laws as now or
         hereafter construed by the courts having jurisdiction over such
         matters. In the event such interest (whether designated as interest,
         service charges, points, or otherwise) does exceed the maximum legal
         rate, it shall be (i) canceled automatically to the extent that such
         interest exceeds the maximum legal rate; (ii) if already paid, at the
         option of the Holder, either be rebated to the Company or credited on
         the principal amount of the Tranche A Loan; or (iii) if the Tranche A
         Loan has been prepaid in full, then such excess shall be rebated to the
         Company. It is further agreed, without limitation of the foregoing,
         that all calculations of the rate of interest contracted for, charged,
         or received under this Agreement and the Note that are made for the
         purpose of determining whether such rate exceeds the maximum legal
         rate, shall be made, to the extent permitted by applicable law, by
         amortizing, prorating, allocating, and spreading throughout the full
         stated term of the Tranche A Loan (and any extensions of the term
         thereof that may be hereafter granted) all such interest at any time
         contracted for, charged, or received from the Company or otherwise by
         the Holder so that the rate of interest on account of the Tranche A
         Loan, as so calculated is uniform throughout the term thereof. If the
         Company is exempt or hereafter becomes exempt from applicable usury
         statutes or for any other reason the rate of interest to be charged on
         the Tranche A Loan is not limited by law, none of the provisions of
         this paragraph shall be construed so as to limit or reduce the interest
         or other consideration payable under this Agreement or the Note or
         under the instrument securing payment thereof. The terms and provisions
         of this paragraph shall control and supersede every other provision of
         all agreements between the parties hereto.

         3.2. Maturity. Unless the same shall become due earlier as a result of
acceleration of the maturity, the Tranche A Loan shall mature on the first
anniversary of the Closing Date at which time the outstanding principal balance
of the Tranche A Loan and all accrued and unpaid interest shall become due and
payable.

         3.3. Prepayments. The Company may from time to time prepay the Tranche
A Loan, in whole or in part, at any time. Any partial prepayment shall be
applied first to interest which is accrued and unpaid and then to principal.

         3.4. Manner of Payment. The Company shall make payments in respect of
the Tranche A Loan (including principal and interest) by wire transfer of
immediately available funds to the account specified by the Holder.

<PAGE>   6

         3.5.     Events of Default.  Each of the following constitutes an
"Event of Default":

                  (i) default for five (5) days in the payment when due of
         interest on the Tranche A Loan;

                  (ii) default in payment when due of the principal of the
         Tranche A Loan;

                  (iii) failure by the Company for 15 days after notice from the
         Holder to comply with the provisions described under Article VI hereof;
         provided, however, if the curing of such failure may not reasonably be
         accomplished within such time frame, the Company shall have such
         additional time as is necessary to effect such cure (not to exceed 30
         days);

                  (iv) failure by the Company for 30 days after notice from the
         Holder to comply with any of its other covenants or agreements in this
         Agreement or the Note; provided, however, if the curing of such failure
         may not reasonably be accomplished within such time frame, the Company
         shall have such additional time as is necessary to effect such cure
         (not to exceed 60 days);

                  (v) any of the representations or warranties of the Company
         set forth in this Agreement or incorporated herein by reference or set
         forth in any statement or schedule delivered pursuant to this Agreement
         was untrue or incorrect in any material respect as of the date of
         execution of this Agreement or as of the Closing Date as if made on
         such date;

                  (vi) default by the Company or any of its Subsidiaries under
         any mortgage, indenture or instrument under which there may be issued
         or by which there may be secured or evidenced any Indebtedness of the
         Company or any of its Subsidiaries, whether such Indebtedness now
         exists, or is created after the date hereof, which default results in
         the acceleration of such Indebtedness prior to its express maturity and
         the principal amount of such Indebtedness, together with the principal
         amount of any other such Indebtedness the maturity of which has been so
         accelerated, aggregates $5,000,000 or more;

                  (vii) failure by the Company or any of its Subsidiaries to pay
         final judgments aggregating in excess of $1,000,000, which judgments
         are not paid, discharged or stayed for a period of 45 days;

                  (viii) the Company or any of its Subsidiaries pursuant to or
         within the meaning of Bankruptcy Law:

                           (a) commences a voluntary case,

                           (b) consents to the entry of an order for relief
                  against it in an involuntary case,

<PAGE>   7

                           (c) consents to the appointment of a custodian of it
                  or for all or substantially all of its property,

                           (d) makes a general assignment for the benefit of its
                  creditors, or

                           (e) generally is not paying its debts as they become
                  due; or

                  (ix) a court of competent jurisdiction enters an order or
         decree in an involuntary case or proceeding under any Bankruptcy Law
         that:

                           (a) is for relief against the Company or any of its
                  Subsidiaries;

                           (b) appoints a custodian of the Company or any of its
                  Subsidiaries or for all or substantially all of the property
                  of the Company or any of its Subsidiaries; or

                           (c) orders the liquidation of the Company or any of
                  its Subsidiaries;

         and the order or decree remains unstayed and in effect for 60
         consecutive days.

         3.6.     Acceleration.

                  (a) Declaration of Acceleration. If any Event of Default
         occurs and is continuing, the Holder may, upon notice to the Company,
         declare the Tranche A Loan to be due and payable immediately; and upon
         any such declaration all principal and interest on the Tranche A Loan
         shall become immediately due and payable; provided, however, in the
         case of an Event of Default arising from certain events of bankruptcy
         or insolvency described in clauses (viii) and (ix) of Section 3.5
         hereof, with respect to the Company or any Subsidiary, the Tranche A
         Loan shall ipso facto become due and payable without further action or
         notice on the part of the Holder.

                  (b) Rescission. At any time after a declaration of
         acceleration with respect to the Tranche A Loan, the Holder may, in its
         sole discretion, rescind and cancel such declaration and its
         consequences. No such rescission shall affect any subsequent Default or
         impair any right with respect thereto.

         3.7. Other Remedies. If an Event of Default occurs and is continuing,
the Holder may pursue any available remedy to collect the payment of principal
and interest (including interest at the Default Interest Rate) on the Tranche A
Loan or to enforce the performance of any provision of the Note or this
Agreement. A delay or omission by the Holder in exercising any right or remedy
accruing upon an Event of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default. All remedies are
cumulative to the extent permitted by law.

<PAGE>   8

         3.8. Waiver Of Past Defaults. The Holder may waive any existing Default
or Event of Default and its consequences under this Agreement. Upon any such
waiver, such Default shall cease to exist, and any Event of Default arising
therefrom shall be deemed to have been cured for every purpose of this
Agreement; but no such waiver shall extend to any subsequent or other Default or
impair any right consequent thereon.

         3.9. Priorities. Any sums collected by the Holder hereunder and under
the Note shall be applied first to all costs and expenses of collection,
including reasonable attorneys' fees, then to accrued and unpaid interest
(including at the Default Interest Rate to the extent applicable) and then to
principal.

                                   ARTICLE IV
                       Conditions to Lender's Obligations

         4.1. Conditions. Lender's obligation to make the Tranche A Loan shall
be subject to the prior satisfaction of the following conditions, except to the
extent waived by Lender in writing:

                  (a) Company shall have paid to the Lender the loan fee with
         respect to the Tranche A Loan and the commitment fee with respect to
         the Tranche B Loan required pursuant to Section 2.4, above, and shall
         have reimbursed Lender for the fees and expenses for which Company is
         liable pursuant to the terms of Section 7.4, below, to the extent
         documented to Company as of the Closing.

                  (b) With respect to the Collateral Real Estate:

                           (i) Company shall have provided evidence reasonably
                  satisfactory to Lender that the purchase price paid by the
                  Company for the Collateral Real Estate aggregated not less
                  than Eleven Million Dollars ($11,000,000.00);

                           (ii) none of the parcels shall be subject to any Lien
                  unacceptable to Lender;

                           (iii) Lender shall have received the commitment for
                  the issuance by Chicago Title & Trust Company of an ALTA
                  lender's policy of title insurance (without standard
                  exceptions and with such endorsement as directed by Lender)
                  with respect to each parcel (collectively, the "Title
                  Commitments") and

                           (iv) Company shall have executed and caused to be
                  duly recorded mortgages in favor of Lender in forms reasonably
                  acceptable to Lender and its counsel encumbering each and have
                  shall provided evidence thereof to Lender.

                  (c) Holding shall have performed its obligations to issue and
         sell shares of its convertible preferred stock to Lender pursuant to
         the Subscription and Organizational Agreement.

<PAGE>   9

                  (d) Holding shall have guaranteed the Tranche A Loan in form
         and substance satisfactory to Lender and its counsel and shall have
         pledged to Lender as collateral security for the performance of its
         obligations pursuant to such guaranty all of the issued and outstanding
         shares of Purchaser in form and substance satisfactory to Lender and
         its counsel.

                  (e) Company shall have entered into an agreement with
         Meditrust Acquisition Company LLC, New Meditrust Company LLC and T and
         F Properties, LP to purchase certain assisted living and dementia care
         residences for an aggregate price of approximately $59.1 million in
         form and substance reasonably satisfactory to Lender and its counsel
         (the "Meditrust Agreement"), and the rights of "purchaser" under such
         Meditrust Agreement shall have been assigned to Purchaser.

                  (f) Lender shall have received an opinion of Rogers & Hardin,
         counsel to Company and Holding, in form and substance acceptable to the
         Lender and its counsel.

                  (g) Each of the representations and warranties of the Company
         set forth in this Agreement or incorporated herein by reference or set
         forth in any statement or schedule delivered pursuant to this Agreement
         are true and correct in all material respects as of the date of
         execution of this Agreement and as of the date of the Closing Date as
         if made on such date;

                  (h) The Company shall not be in default with respect to any of
         its covenants and agreements set forth in Article VI of this Agreement
         or set forth elsewhere in this Agreement;

                  (i) No Default or Event of Default shall have occurred and be
         continuing;

                  (j) Lender shall have received a copy of the Company's
         executed term sheet with GMAC Commercial Mortgage ("GMAC") relating to
         mortgage financing for the purchase of 19 assisted living residences,
         as described therein (such financing, the "Proposed GMAC Financing").

         4.2. Waiver; Termination. Lender may waive in writing any of the
conditions to its obligations set forth in Section 4.1 in its sole discretion.
If the conditions to Lender's obligations set forth in Section 4.1, shall not
have been satisfied or waived by Lender on or before December 30, 1999, Lender
may, in its sole discretion, terminate this Agreement without any liability on
the part of the Lender to any other Person.

<PAGE>   10

                                    ARTICLE V
                         Representations and Warranties

         5.1. Representations and Warranties of the Company. In order to induce
the Lender to enter into this Agreement, the Company represents and warrants to
the Lender, which representation and warranties shall survive the Closing and be
independent of any investigation or lack of investigation of Company made by or
on behalf of Lender, as follows:

                  (a) Organization and Standing; Issued and Outstanding Shares.
         Each of the Company, Holding and Purchaser is duly incorporated and
         validly existing under the laws of the State of Delaware, and has all
         requisite corporate power and authority to own or lease its properties
         and assets and to conduct its business as it has been and is proposed
         to be conducted. Each of the Company, Holding and Purchaser is
         qualified to do business and in good standing in each jurisdiction in
         which the failure to so qualify could have a material adverse effect
         upon its assets, properties, liabilities, financial condition, results
         of operations or business. Purchaser has no Subsidiaries and Holding
         has no Subsidiaries other than Purchaser. The Certificate of
         Incorporation of each of Holding and Purchaser is in the form
         previously provided to Lender and the issued and outstanding capital
         stock of each is as set forth in Schedule 5.1(a).

                  (b) Indebtedness and Contracts of Holding and Purchaser.
         Except for the Subscription and Organizational Agreement, the Meditrust
         Agreement, such Contracts or Indebtedness as are contemplated hereby or
         thereby as set forth on Schedule 5.1(b), neither Holding nor Purchaser
         has any Indebtedness or is a party to any Contracts (whether formal or
         informal, written or oral, firm or contingent).

                  (c) Capacity of the Company; Consents; Execution of
         Agreements. The Company has the requisite power, authority, and
         capacity to enter into this Agreement, the Subscription and
         Organizational Agreement and the agreements contemplated hereby and
         thereby and to perform the transactions and obligations to be performed
         by the Company hereunder and thereunder. Except as described on
         Schedule 5.1(c) hereto, no consent, authorization, approval, license,
         permit or order of, or filing with, any Person or Governmental
         Authority is required in connection with the execution and delivery of
         this Agreement, the Subscription and Organizational Agreement and
         agreements contemplated thereby, or the performance by the Company of
         the transactions and obligations to be performed by it hereunder and
         thereunder, except as contemplated by said agreements. The failure to
         obtain any of the consents described on Schedule 5.1(c) prior to the
         Closing Date will not have a material adverse effect upon the Company's
         assets, properties, liabilities, financial condition, results of
         operations or business. The execution and delivery of this Agreement,
         the Subscription and Organizational Agreement and agreements
         contemplated thereby by the Company, and the performance of the
         transactions and obligations contemplated hereby and thereby by the
         Company have been duly authorized by all requisite action of the
         Company and Holding, as applicable. This Agreement has been, and the
         Subscription and Organizational Agreement and agreements contemplated
         thereby will be, duly executed

<PAGE>   11

         and delivered by a duly authorized officer of the Company and
         constitutes, or when executed and delivered will constitute, a valid
         and legally binding agreement of the Company, enforceable in accordance
         with its terms, except as enforcement thereof may be limited by
         bankruptcy, insolvency, reorganization, moratorium or other similar
         laws, both state and federal, affecting the enforcement of creditors'
         rights or remedies in general from time to time in effect and the
         exercise by courts of equity powers or their application of principles
         of public policy.

                  (d) Status of Note. The Note to be issued hereunder, when
         issued by the Company to the Lender pursuant to the terms of this
         Agreement, will be duly authorized and validly issued.

                  (e) Conflicts; Defaults. The execution and delivery of this
         Agreement, the Subscription and Organizational Agreement and agreements
         contemplated thereby by the Company, the execution by Company of the
         Meditrust Agreement and the execution by Holding of a guaranty of the
         Tranche A Loan and a pledge of the shares of Purchaser to secure such
         guaranty, and the performance by the Company and Purchaser of the
         transactions and obligations contemplated hereby and thereby to be
         performed by each will not (i) violate, conflict with, or constitute a
         default under any of the terms or provisions of its certificate of
         incorporation or bylaws, or any provisions of, or result in the
         acceleration of any obligation under, any Contract, note, debt
         instrument, security agreement, or other instrument to which the
         Company, Purchaser or any other Subsidiary is a party or by which the
         Company, Purchaser or any other Subsidiary or any of their respective
         assets is bound; (ii) result in the creation or imposition of any Liens
         or claims upon the assets of the Company, Purchaser or any other
         Subsidiary or their issued and outstanding capital stock (except as
         contemplated by this Agreement); (iii) constitute a violation of any
         law, statute, judgment, decree, order, rule, or regulation of a
         Governmental Authority applicable to the Company, Purchaser or any
         other Subsidiary; or (iv) constitute an event which, after notice or
         lapse of time or both, would result in any of the foregoing. The
         Company is not presently in violation of any provision of its
         certificate of incorporation or bylaws. Neither the Company nor any
         Subsidiary is presently in default in any material respect under any of
         the terms or provisions of any of its material Contracts, notes, debt
         instruments, security agreements, or other instruments, or any order,
         judgment, or decree relating to it or its business or by which it or
         any of its assets is bound.

                  (f) Periodic Reports. The Company has timely filed with the
         SEC all periodic reports heretofore required to be filed by it pursuant
         to the 1934 Act and all such periodic reports (including the financial
         statements or information forming a part thereof) are complete and
         comply, in all material respects, with the requirements of the SEC
         applicable to such periodic reports and financial statements.

                  (g) Compliance with Laws. The Company is not in violation of,
         nor do any of its operations violate in any respect, any statute, law,
         or regulation of any Governmental Authority applicable to the Company,
         any of its assets, or the conduct of its business

<PAGE>   12

         ("Applicable Laws"), the violation of which reasonably could be
         anticipated to have a material adverse effect upon the Company's
         assets, properties, liabilities, financial condition, results of
         operations or business, and no material expenditures are or, based on
         present requirements, will be required of the Company in order for it
         to comply or remain in compliance with any Applicable Laws.

                  (h) Litigation. The Company is not a party to any material
         legal action, suit, claim, investigation or proceeding which is not
         adequately described in a periodic report heretofore filed by the
         Company with the SEC and, to the best of the Company's knowledge and
         belief after due inquiry, there exist no facts or circumstances which
         reasonably could be anticipated to result in any such action, suit,
         claim, investigation, or proceeding.

                  (i) Taxes. The Company has prepared and duly and timely filed
         with each appropriate Governmental Authority, all material federal,
         state, municipal, local and foreign tax returns, information returns
         and other reports required to be filed on or before the date of this
         Agreement and has paid all material taxes required to be paid by the
         Company prior to the date of this Agreement in respect of the periods
         covered by such returns and reports, except such taxes as are being
         contested in good faith.

                  (j) Environmental Compliance. The Company and its Subsidiaries
         are in compliance with all applicable federal, state and local laws and
         requirements (including permit requirements) relating to the protection
         of health or the environment in connection with the ownership,
         operation and condition of its properties and business, except where
         failure to comply would not have material adverse effect.

                  (k) Securities Laws. No consent, authorization, approval,
         permit, or order of or filing with any Governmental Authority is
         required in order for the Company to execute and deliver this Agreement
         or to offer, issue, sell, or deliver the Note. Based in part on the
         representations of the Lender and under the circumstances contemplated
         hereby and under current laws and regulations, the offer, issuance,
         sale and delivery of the Note to the Lender is exempt from the
         prospectus delivery and registration requirements of the 1933 Act.

                  (l) Hedging Obligations. Company and its Subsidiaries do not
         have any outstanding Hedging Obligations except to the extent entered
         into pursuant to and in compliance with any credit agreements to which
         they may be a party.

                  (m) Disclosure. The Company has fully responded to all written
         requests for information and has accurately answered, to the best of
         the Company's knowledge and belief after due inquiry, all written
         questions from the Lender concerning the assets, properties,
         liabilities, financial condition, results of operations, business and
         prospects of the Company, and has not knowingly withheld any facts
         relating thereto which it reasonably believed to be material with
         respect to the assets, properties, liabilities, financial condition,
         results of operations, business or prospects of the Company. No

<PAGE>   13

         information in this Agreement, or in any Schedule or Exhibit attached
         to this Agreement or delivered to Lender in connection herewith,
         contains any untrue statement of a material fact or when considered
         together with all such information delivered to the Lender omits to
         state any material fact necessary in order to make the statements made
         in the light of the circumstances under which they were made, when
         taken as a whole, not misleading. The disclosures made in writing by
         the Company in connection with this Agreement do not contain any untrue
         statement of a material fact nor omit to state a material fact
         necessary to make the statements made therein not misleading. There is
         no fact or circumstance relating to the Company which materially and
         adversely affects or in the future may, in the reasonable business
         judgment of the Company, be expected materially and adversely to affect
         the same which has not been set forth in this Agreement or the
         Schedules hereto.

                 (n) Changes in Circumstances. Since September 30, 1999, the
         Company has not suffered any material adverse change in its assets,
         properties, liabilities, financial condition, results of operations,
         business or prospects except for (i) the previously announced charge to
         be incurred in the fourth quarter of 1999 (the amount of which charge
         has not yet been determined or disclosed) and (ii) the effect on future
         periods of the Company's announced reduction in future new development
         activities.

                 (o) Contracts. Except for this Agreement, the Subscription and
         Organizational Agreement and the agreements contemplated hereby and
         thereby, the Company has filed all material contracts required to be
         filed by Item 601(b)(10) of Regulation S-K under the 1933 Act and the
         1934 Act.

         5.2     Representations and Warranties of the Lender. The Lender
represents and warrants to the Company that:

                 (a) Investment Intent. The Note is being acquired for its own
         account and not with the view to, or for resale in connection with, any
         distribution or public offering thereof within the meaning of the 1933
         Act. The Lender understands that the Note has not been registered under
         the 1933 Act by reason of its issuance in a transaction exempt from the
         registration and prospectus delivery requirements of the 1933 Act
         pursuant to Section 4(2) thereof. It further understands that the Note
         will bear the following legend and agrees that it will hold the Note
         subject thereto:

                  THIS NOTE HAS NOT BEEN REGISTERED PURSUANT TO THE SECURITIES
                  ACT OF 1933 OR ANY STATE SECURITIES LAW. NEITHER THIS NOTE NOR
                  ANY PORTION HEREOF OR INTEREST HEREIN MAY BE SOLD, ASSIGNED,
                  TRANSFERRED, PLEDGED OR OTHERWISE DISPOSED OF UNLESS THE SAME
                  IS REGISTERED UNDER SAID ACT AND ANY APPLICABLE STATE
                  SECURITIES LAW, OR UNLESS AN EXEMPTION FROM SUCH REGISTRATION
                  IS AVAILABLE AND THE COMPANY SHALL HAVE RECEIVED, AT THE
                  EXPENSE OF THE HOLDER HEREOF, EVIDENCE OF SUCH EXEMPTION
                  REASONABLY

<PAGE>   14

                  SATISFACTORY TO THE COMPANY (WHICH MAY INCLUDE, AMONG OTHER
                  THINGS, AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY).

                  (b) Capacity of the Lender; Execution of Agreement. Lender has
         all requisite power, authority, and capacity to enter into this
         Agreement, and to perform the transactions and obligations to be
         performed by it hereunder. This Agreement has been duly authorized,
         executed and delivered by it and constitutes its valid and legally
         binding obligation, enforceable in accordance with its terms, except as
         enforcement thereof may be limited by bankruptcy, insolvency,
         reorganization, moratorium or other similar laws, both state and
         federal, affecting the enforcement of creditors' rights or remedies in
         general from time to time in effect and the exercise by courts of
         equity powers or their application of principles of public policy.

                  (c) Accredited Investor. The Lender and each member of Lender
         is an "accredited investor" as defined in Rule 501 (a) of Regulation D
         promulgated under the 1933 Act.

                                   ARTICLE VI
                            Covenants and Agreements

         6.1.      Affirmative Covenants. So long as any Indebtedness remains
outstanding under this Agreement and the Note, the Company covenants and agrees
that it will and will cause each Subsidiary to:

                  (a) Certain Information and SEC Reports. Furnish to Lender in
         form and substance satisfactory to Lender:

                           (i) within five (5) days after the Company learns of
                  the commencement or overtly threatened commencement of any
                  material claim or suit, legal or equitable, or of any
                  administrative, arbitration, or other similar proceeding
                  against the Company or any of its Subsidiaries, or any of
                  their respective businesses, assets, or properties which claim
                  or proceeding, if determined adversely to the Company or such
                  Subsidiary, would be likely to have a material adverse effect
                  on the Company and its Subsidiaries, taken as a whole, written
                  notice of the nature and extent of such suit or proceeding;

                           (ii) within five (5) days after the Company learns of
                  any circumstance or event which reasonably can be expected to
                  have a material adverse effect on the assets, properties,
                  liabilities, financial condition, results of operations,
                  business, or prospects of the Company, written notice of the
                  nature and extent of such circumstance or event;

<PAGE>   15

                           (iii) simultaneous with the transmission thereof to
                  Company's shareholders, copies of (or notice from an EDGAR
                  watch service of) all financial statements, proxy statements,
                  reports and any other general written communications which the
                  Company sends to its shareholders and copies (or notice from
                  an EDGAR watch service of) of all registration statements and
                  all regular, special or periodic reports which it files with
                  the SEC or with any securities exchange on which any of its
                  securities are then listed, and copies of all press releases
                  and other statements made available generally by the Company
                  to the public concerning material developments in the
                  Company's businesses; and

                           (vii) within ten (10) days after the Holder makes a
                  reasonable request therefor, such other data relating to the
                  business, affairs and financial condition of the Company or
                  any of its Subsidiaries.

                  (b) Taxes. Pay and discharge all taxes and other governmental
         charges before the same shall become overdue, unless and to the extent
         only that such payment is being contested in good faith.

                  (c) Insurance. Maintain insurance coverage on its physical
         assets and against other business risks in such amounts and of such
         types as are customarily carried by companies similar in size and
         nature, and in the event of acquisition of additional property, real or
         personal, or of incurrence of additional risks of any nature, increase
         such insurance coverage in such manner and to such extent as prudent
         business judgment and present practice would dictate.

                  (d) Examination of Books. Permit the Lender, through its
         authorized attorneys, accountants and representatives, to examine the
         Company's books, accounts, records, ledgers and assets of every kind
         and description at all reasonable times upon oral or written request of
         the Lender, at the Company's cost and expense (provided that so long as
         the Company shall not be in default, the Company shall be obligated to
         pay for no more than one (1) such examination per year).

                  (e) Notification of Events of Default, Acceleration or
         Material Adverse Effect. Promptly notify the Lender of any condition or
         event which constitutes, or with the passage of time and/or the giving
         of notice would constitute, an Event of Default under this Agreement or
         of any acceleration of the maturity of any Indebtedness aggregating $5
         million or more of the Company, and promptly inform Lender of the
         existence or occurrence of any condition or event (other than
         conditions having an effect on the economy in general) which could
         reasonably be anticipated to have a material adverse effect upon the
         Company's financial condition.

                  (f) Maintenance of Licenses. Maintain in good standing all
         licenses required by any Governmental Authority that may be necessary
         or required for the Company and its Subsidiaries to carry on their
         respective businesses, where the failure to maintain such

<PAGE>   16

         licenses would have a material adverse effect on the Company and its
         Subsidiaries taken as a whole.

                  (g) ERISA Compliance. Comply with all material requirements
         imposed by ERISA as presently in effect or hereafter promulgated,
         including but not limited to, the minimum funding requirements of any
         defined contribution employee benefit plan ("Pension Plan").

                  (h) Compliance with Law. Comply in all material respects with
         all applicable laws, rules, regulations and orders of any Governmental
         Authority, such compliance to include, without limitation, paying
         before the same become delinquent all taxes, assessments, and
         governmental charges imposed upon it or upon its property, including
         without limitation the Collateral Real Estate, except to the extent
         that compliance with any of the foregoing is then being contested in
         good faith by appropriate legal proceedings and with respect to which
         adequate financial reserves have been established on the books and
         records of the Company and except where the failure to comply would not
         have a material adverse effect on the Company and its Subsidiaries,
         taken as a whole.

                 (i) Right of Co-Investment. Prior to issuing any equity
         securities (otherwise than upon the exercise of currently outstanding
         stock options or upon the conversion of currently outstanding
         convertible debentures) for aggregate proceeds of in excess of $25
         million at any time prior to December 31, 2000 (an "Alterra Equity
         Transaction"), the Company shall use reasonable efforts to afford
         Lender the opportunity to co-invest in the Alterra Equity Transaction
         by converting the outstanding Indebtedness under this Agreement and the
         Note into an equity investment in the Company on the terms of the
         Alterra Equity Investment; provided, however, that (i) such
         co-investment right must be exercised by Lender at the time of
         execution of the definitive purchase agreement for the Alterra Equity
         Transaction, and (ii) as a minority participant in such Alterra Equity
         Transaction, Lender acknowledges that its control and voting rights may
         be substantially limited (in the manner required by the principal
         investor in such Alterra Equity Investment).

                 (j) Title Insurance. At the request of Lender, the Company
         shall purchase mortgagee title insurance for the Lender pursuant to the
         Title Commitments.

         6.2. Negative Covenants. The Company covenants and agrees that so long
as any Indebtedness remains outstanding under this Agreement and the Note,
without the prior written consent of Lender, Company will not:

                 (a) No Mergers, Etc. Enter into any merger or consolidation or
         sell, lease, transfer or dispose of all, substantially all, or any
         material part of its assets, except in the ordinary course of its
         business.

                 (b) Limitations on Indebtedness. Become or remain obligated, or
         suffer or permit any Subsidiary to become or remain obligated, for any
         Indebtedness, except:

<PAGE>   17

                           (i)  Indebtedness arising pursuant to this Agreement;
                  and

                           (ii) other Indebtedness, whether now outstanding or
                  hereafter incurred, provided that the sum of all of the
                  Indebtedness of the Company and the Subsidiaries at any time
                  outstanding on a consolidated basis (excluding, however, any
                  Indebtedness arising as a result of acquisitions or business
                  combinations effected after the date of this Agreement) does
                  not exceed $1,850,000,000.00.

                  (c) Limitations on Mortgages. Create or permit to exist any
         Lien on the Collateral Real Estate, other than Permitted Liens and
         mortgages in favor of Lender.

                                   ARTICLE VII
                                  Miscellaneous

         7.1. Waiver and Amendments. No failure or delay on the part of Lender
in the exercise of any power or right, and no course of dealing between Company
and Lender, shall operate as a waiver of such power or right, nor shall any
single or partial exercise of any power or right preclude other or further
exercise thereof or the exercise of any other power or right. Remedies provided
for herein are cumulative and not exclusive of any remedies which may be
available to the Lender at law or in equity. No notice to or demand on the
Company required hereunder or under the Note shall in any event entitle Company
to any other or further notice or demand in similar or other circumstances or
constitute a waiver of the right of Lender to any other or further action and
any circumstances without notice or demand. No amendment, modification or waiver
of, or consent with respect to, any provision of this Agreement or the Note
shall in any event be effective unless the same shall be in writing and signed
and delivered by Lender. Any waiver of any provision of this Agreement or the
Note, and any consent to any departure by Company from the terms of any
provision of this Agreement or the Note, shall be effective only in the specific
instance and for the specific purpose for which given.

         7.2. Notices. All notices and other communications required or
permitted under this Agreement shall be in writing and, if mailed by prepaid
registered or certified mail, return receipt requested, shall be deemed to have
been received on the earlier of the date shown on the receipt or three (3)
Business Days after the post-mark date thereof. Notices may be given by
recognized overnight courier services and shall be deemed to have been received
as of the regularly scheduled time for delivery established by such courier
service. In addition, notices hereunder may be delivered by hand in which event
the notice shall be deemed effective when delivered or by telecopy in which case
it shall be deemed effective upon confirmation of transmission. All notices and
other communications under this Agreement shall be given to the parties hereto
at the following addresses:

<PAGE>   18

         If to Company:

                  Alterra Healthcare Corporation
                  450 N. Sunnyslope Rd., Suite 300
                  Brookfield, WI 53005
                  Attention: President
                  Fax: (414) 789-6182

         With a copy to:

                  Rogers & Hardin
                  2700 International Tower
                  229 Peachtree Street, N.E.
                  Atlanta, Georgia, 30303
                  Attn: Alan Leet, Esq.
                  Fax: (404) 525-2224

         If to Lender:

                  RDVEPCO, L.L.C.
                  c/o RDV Corporation
                  126 Ottawa Avenue, N.W.
                  500 Grand Bank Building
                  Grand Rapids, Michigan 49503
                  Attention: President
                  Fax: (616) 454-4654

         With a copy to:

                  Mr. Robert Haveman
                  190 River Avenue
                  Suite 300
                  Holland, Michigan 49423
                  Fax: (616) 494-8110

                  and

                  Hecht & Lentz
                  333 Bridge, N.W., Suite 330
                  Grand Rapids, MI 49504
                  Attention: David M. Hecht, Esq.
                  Fax: (616) 776-7203

Any party hereto may change the address to which notices shall be directed under
this Section by giving written notice of such change to the other parties.

<PAGE>   19

         7.3. Restriction on Transfer. The Lender acknowledges that the Note has
not been registered under the Securities Act of 1933, as amended, (the "1933
Act") or the securities laws of any state. Accordingly, the Note may not be sold
or otherwise disposed of or transferred, unless such sale, disposition or
transfer is registered under the 1933 Act and applicable state securities laws
or unless the Company has received an opinion of counsel reasonably acceptable
to the Company that such sale, disposition or transfer is exempt from such
registration. The Note shall bear a restrictive legend to the foregoing effect.

         7.4. Expenses. Company shall reimburse Lender for all of its reasonable
out-of-pocket expenses incurred in the negotiation, preparation, execution and
delivery of this Agreement, the Note, the Share Purchase Agreement and, if not
consummated the Tranche B loan documentation and related matters, and all
related due diligence, including, without limitation, the expenses of legal
counsel and accountants. Company shall also reimburse Holder for all of its
out-of-pocket expenses incurred in the administration, waiver, modification and
enforcement of any of its rights under this Agreement and the Note, including,
without limitation, the reasonable expenses of legal counsel and accountants. In
addition, Company shall be responsible for any documentary taxes incurred in
connection with the transactions contemplated by this Agreement and the Note.

         7.5. Severability. Any provision of this Agreement which is prohibited
or unenforceable in any jurisdiction, shall as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof or affecting the validity or
enforceability of such provision in any other jurisdiction.

         7.6. Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of Michigan without giving effect to
any choice or conflict of law provision or rule (whether of the State of
Michigan or any other jurisdiction) that would cause the application of the laws
of any jurisdiction other than the State of Michigan.

         7.7. Successors and Assigns. This Agreement shall be binding upon
Company and Lender and their respective successors and assigns, and shall inure
to the benefit of Company and Lender and their successors and assigns.

         7.8. Headings. Headings used in this Agreement are for convenience only
and shall not be used in connection with the interpretation of any provision
hereof.

         7.9. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all such
separate counterparts shall together constitute one and the same instrument.

                            * * * * * * * * * * * * *

<PAGE>   20

         IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by the undersigned thereunto duly authorized as of the date first
written above.

                         THE COMPANY:

                         ALTERRA HEALTHCARE CORPORATION

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

                         LENDER:

                         RDVEPCO, L.L.C.

                         By:  EDP Assisted Living Properties, L.L.C.,
                                a member

                              By:  Elsa D. Prince Living Trust u/a dated
                                     January 27, 1976

                                     By:   /s/ Elsa D. Prince
                                        -----------------------------------
                                          Elsa D. Prince, Trustee<PAGE>   1
                                                                  EXHIBIT 10.121

                           AHC PURCHASER HOLDING, INC.
                    SUBSCRIPTION AND ORGANIZATIONAL AGREEMENT

         SUBSCRIPTION AND ORGANIZATIONAL AGREEMENT (the "Agreement"), dated as
of December 13, 1999, between AHC PURCHASER HOLDING, INC., a Delaware
corporation having an office at 450 North Sunnyslope Rd., Suite 300, Brookfield,
WI 53005 (the "Company"), and RDVEPCO, L.L.C., a Michigan limited liability
company having an office at c/o RDV Corporation, 126 Ottawa Avenue, N.W., 500
Grand Bank Building, Grand Rapids, MI 49503 (the "Investor"), and ALTERRA
HEALTHCARE CORPORATION, a Delaware corporation having an office at 450 North
Sunnyslope Rd., Suite 300, Brookfield, WI 53005 ("Alterra").

                              W I T N E S S E T H:

         WHEREAS, Alterra and the Investor have caused the Company's Certificate
of Incorporation attached hereto as Exhibit A (the "Certificate") to be filed
with the Secretary of State of the State of Delaware;

         WHEREAS, Alterra and Investor desire to complete the organization of
the Company;

         WHEREAS, Alterra desires to subscribe for an aggregate of 1,857 shares
(the "Common Shares") of the Company's common stock, $.01 par value per share
(the "Common Stock"), pursuant to the terms and conditions hereinafter set
forth;

         WHEREAS, the Investor desires to subscribe for an aggregate of 1,000
shares (the "Preferred Shares") of the Company's convertible preferred stock,
$0.01 par value (the "Preferred Stock"), which will, when issued, have a
liquidation preference of $1,000 per share and the designations, powers,
preferences, rights, qualifications, limitations and restrictions set forth in
the Certificate, pursuant to the terms and conditions hereinafter set forth; and

         WHEREAS, the Common Shares and the Preferred Shares are collectively
referred to herein as the "Shares".

         NOW, THEREFORE, in consideration of the premises, and the respective
representations and warranties hereinafter set forth, the Company, Alterra and
the Investor agree as follows:

         1. SUBSCRIPTION

<PAGE>   2

                    1.1 Alterra, intending to be legally bound, hereby
irrevocably subscribes for and agrees to purchase the Common Shares, subject to
the conditions set forth in paragraph 1.3, below.

                    1.2 The Investor, intending to be legally bound, hereby
irrevocably subscribes for and agrees to purchase the Preferred Shares, subject
to the conditions set forth in paragraph 1.3, below.

                    1.3 The obligation of Alterra to purchase the Common Shares
and the obligation of the Investor to purchase the Preferred Shares is
conditioned upon the simultaneous closing of the "Tranche A Loan" pursuant to
the Loan Agreement, dated as of the date hereof, between Alterra and Investor
(the "Loan Agreement").

                2.  PURCHASE AND CLOSING

                    2.1 At the Closing (as hereinafter defined), the Company
shall issue and sell to (i) Alterra, and Alterra shall purchase from the
Company, the Common Shares; and (ii) the Investor, and the Investor shall
purchase from the Company, the Preferred Shares.

                    2.2 The aggregate consideration to be paid by the Investor
to the Company for the Preferred Shares (the "Preferred Purchase Price") at the
Closing shall be $1,000,000.00. The aggregate consideration to be paid by
Alterra to the Company for the Common Shares (the "Common Purchase Price") at
the Closing shall be $100.00 and the assignment to the Company of Alterra's
rights under that certain Agreement of Purchase and Sale dated as of November
30, 1999 by and between Alterra, Meditrust Acquisition Company LLC, New
Meditrust Company LLC and T and F Properties, LP (the "Purchase Agreement").

                    2.3 The closing of the purchase and sale of the Shares (the
"Closing") shall take place at 1:00 P.M. EST time on Monday, December 13, 1999
or on such date and at such time as the parties shall mutually select. The
Closing shall take place at the offices of the Company or at such other place or
in such other manner (including by exchange of deliverables via fax and air
courier) as the Company, Alterra and the Investor agree.

                    2.4 At Closing, the Company shall deliver the following to
the Investor:

                         (a) a certificate, in due and proper form, representing
                    the Preferred Shares purchased upon which a legend
                    substantially in the following form will be endorsed:

                         "THE SHARES REPRESENTED BY THIS CERTIFICATE AND THE
                         SHARES OF COMMON STOCK INTO WHICH THE SHARES
                         REPRESENTED BY THIS CERTIFICATE MANY BE CONVERTED

                                       2

<PAGE>   3

                         HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
                         1933. THE SHARES HAVE BEEN ACQUIRED FOR INVESTMENT AND
                         MAY NOT BE SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE
                         OF AN EFFECTIVE REGISTRATION STATEMENT FOR THESE SHARES
                         UNDER THE SECURITIES ACT OF 1933 OR AN EXEMPTION FROM
                         REGISTRATION IS AVAILABLE"; and

                         (b) a certificate of an authorized officer of the
                    Company confirming the accuracy as of the Closing of the
                    matters set forth in Section 4 of this Agreement.

                    2.5. At the Closing, the Company shall deliver the following
to Alterra:

                           (a) a certificate, in due and proper form,
                  representing the Common Shares purchased upon which a legend
                  substantially in the following form will be endorsed:

                                    "THE SHARES REPRESENTED BY THIS CERTIFICATE
                           HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
                           1933. THE SHARES HAVE BEEN ACQUIRED FOR INVESTMENT
                           AND MAY NOT BE SOLD, TRANSFERRED OR ASSIGNED IN THE
                           ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR
                           THESE SHARES UNDER THE SECURITIES ACT OF 1933 OR AN
                           EXEMPTION FROM REGISTRATION IS AVAILABLE"; and

                           (b) a certificate of an authorized officer of the
                  Company confirming the accuracy as of the Closing of the
                  matters set forth in Section 4 of this Agreement.

                    2.6 At Closing, (i) the Investor shall deliver the Preferred
Purchase Price to the Company in immediately available funds by wire transfer to
a bank in the United States designated by the Company; and (ii) Alterra shall
deliver the Common Purchase Price, with the cash portion thereof to be delivered
in immediately available funds.

                                       3

<PAGE>   4

         3. REPRESENTATIONS AND ACKNOWLEDGEMENTS OF THE INVESTOR AND ALTERRA

                    3.1 The Investor hereby acknowledges, represents and
warrants to (which representations and will be true and correct as of the date
of the Closing as if the Agreement were made on the date of Closing), and agrees
with, the Company as follows:

                              (a) The Investor is acquiring the Preferred Shares
                         for its own account as principal, for investment
                         purposes only, and not with a view to, or for, resale,
                         distribution or fractionalization thereof, in whole or
                         in part;

                              (b) The Investor acknowledges its understanding
                         that the offering and sale of the Preferred Shares is
                         intended to be exempt from registration under the
                         Securities Act of 1933, as amended (the "1933 Act"), by
                         virtue of Section 4(2) of the 1933 Act and the
                         provisions of Regulation D thereunder. In furtherance
                         thereof, the Investor represents and warrants to and
                         agrees with the Company as follows:

                                    (i) the Investor has the financial ability
                              to bear the economic risk of its investment, has
                              adequate means for providing for its current needs
                              and has no need for liquidity with respect to its
                              investment in the Company;

                                    (ii) the Investor is a corporation, trust,
                              estate benefit plan, partnership or other entity
                              which comes within a category of "accredited
                              investor" as that term is defined in Rule 501(a)
                              of Regulation D under the 1933 Act (17 C.F.R.
                              230.501(a));

                              (c) The Investor:

                                    (i) has had access to the Company's files
                              and records (including, without limitation, the
                              files and records of its wholly-owned subsidiary,
                              AHC Purchaser, Inc. ("AHC Subsidiary"))
                              (collectively, the "Documents") and understands
                              and has evaluated the risks of a purchase of the
                              Preferred Shares, and has relied solely on the
                              information contained in the Documents;

                                    (ii) has been provided an opportunity to
                              obtain additional information concerning the
                              Company and AHC Subsidiary and has been given the
                              opportunity to ask questions of and receive
                              answers from the Company concerning the items and
                              conditions of this investment, and has been given
                              the

                                       4

<PAGE>   5

                                    opportunity to obtain such additional
                                    information necessary to verify the accuracy
                                    of the information contained in the
                                    Documents or that which was otherwise
                                    provided in order for the Investor to
                                    evaluate the merits and risks of purchase of
                                    the Preferred Shares, and has not been
                                    furnished any other offering literature or
                                    prospectus except as mentioned herein;

                                            (iii) has not relied on any oral
                                    representation or oral information in
                                    connection with the offering of the
                                    Preferred Shares which is not contained in
                                    this Agreement or in the Documents; and

                                            (iv) has determined that the
                                    Preferred Shares are a suitable investment
                                    and that at the time of Closing, the
                                    Investor could bear a complete loss of its
                                    investment.

                                    (d) The Investor represents, warrants and
                           agrees that it will not sell or otherwise transfer
                           the Preferred Shares or the shares of the Company's
                           common stock into which the Preferred Shares may be
                           converted unless registered under the 1933 Act or in
                           reliance upon an exemption therefrom, and fully
                           understands and agrees that it must bear the economic
                           risk of its purchase for an indefinite period of time
                           because, among other reasons, the Preferred Shares or
                           underlying securities have not been registered under
                           the 1933 Act or under the securities laws of certain
                           states and, therefore, cannot be resold, pledged,
                           assigned or otherwise disposed of other than pursuant
                           to an exception from registration under the 1933 Act
                           and any other applicable securities laws.

                                    (e) The person signing this Agreement on
                           behalf of Investor has been duly authorized by
                           Investor to do so.

                                    (f) The execution and delivery by the
                           Investor of and the performance by the Investor of
                           its obligations under this Agreement will not
                           contravene any provision of applicable law or the
                           governing documents of the Investor or any agreement
                           or other instrument binding upon the Investor, or any
                           judgment, or decree of any governmental body, agency
                           or court having jurisdiction over the Investor, and
                           no consent approval, authorization or order of, or
                           qualification with, any governmental body or agency
                           is required for the performance by the Investor of
                           its obligations under this Agreement in accordance
                           with its terms.

                                       5

<PAGE>   6

                                    (g) The Investor has been duly organized, is
                           validly existing and is in good standing under the
                           laws of the State of Michigan. The Investor has full
                           limited liability company power and authority to
                           enter into this Agreement and this Agreement has been
                           duly and validly authorized, executed and delivered
                           by the Investor and constitutes the legal, valid and
                           binding obligations of the Investor, enforceable
                           against the Investor in accordance with its terms,
                           except as such enforcement may be limited by the laws
                           effecting creditors rights generally and general
                           equitable principles.

                    3.2 Alterra hereby acknowledges, represents and warrants to
(which representations and will be true and correct as of the date of the
Closing as if the Agreement were made on the date of Closing), and agrees with,
the Company as follows:

                                    (a) Alterra is acquiring the Common Shares
                           for its own account as principal, for investment
                           purposes only, and not with a view to, or for,
                           resale, distribution or fractionalization thereof, in
                           whole or in part;

                                    (b) Alterra acknowledges its understanding
                           that the offering and sale of the Shares is intended
                           to be exempt from registration under the 1933 Act, by
                           virtue of Section 4(2) of the 1933 Act and the
                           provisions of Regulation D thereunder. In furtherance
                           thereof, Alterra represents and warrants to and
                           agrees with the Company as follows:

                                            (i) Alterra has the financial
                                    ability to bear the economic risk of its
                                    investment, has adequate means for providing
                                    for its current needs and has no need for
                                    liquidity with respect to its investment in
                                    the Company;

                                            (ii) Alterra is a corporation,
                                    trust, estate benefit plan, partnership or
                                    other entity which comes within a category
                                    of "accredited investor" as that term is
                                    defined in Rule 501(a) of Regulation D under
                                    the 1933 Act (17 C.F.R. 230.501(a));

                                    (c) Alterra:

                                            (i) has had access to the Documents
                                    and understands and has evaluated the risks
                                    of a purchase of the Common Shares, and has
                                    relied solely on the information contained
                                    in the Documents;

                                            (ii) has been provided an
                                    opportunity to obtain additional information
                                    concerning the Company and AHC

                                       6

<PAGE>   7

                                    Subsidiary and has been given the
                                    opportunity to ask questions of and receive
                                    answers from the Company concerning the
                                    items and conditions of this investment, and
                                    has been given the opportunity to obtain
                                    such additional information necessary to
                                    verify the accuracy of the information
                                    contained in the Documents or that which was
                                    otherwise provided in order for the Investor
                                    to evaluate the merits and risks of purchase
                                    of the Preferred Shares, and has not been
                                    furnished any other offering literature or
                                    prospectus except as mentioned herein;

                                            (iii) has not relied on any oral
                                    representation or oral information in
                                    connection with the offering of the
                                    Preferred Shares which is not contained in
                                    this Agreement or in the Documents; and

                                            (iv) has determined that the Common
                                    Shares are a suitable investment and that at
                                    the time of Closing, Alterra could bear a
                                    complete loss of its investment.

                                    (d) Alterra represents, warrants and agrees
                           that it will not sell or otherwise transfer the
                           Common Shares unless registered under the 1933 Act or
                           in reliance upon an exemption therefrom, and fully
                           understands and agrees that it must bear the economic
                           risk of its purchase for an indefinite period of time
                           because, among other reasons, the Common Shares have
                           not been registered under the 1933 Act or under the
                           securities laws of certain states and, therefore,
                           cannot be resold, pledged, assigned or otherwise
                           disposed of other than pursuant to an exception from
                           registration under the 1933 Act and any other
                           applicable securities laws.

                                    (e) The person signing this Agreement on
                           behalf of Alterra has been duly authorized by Alterra
                           to do so.

                                    (f) The execution and delivery by Alterra of
                           and the performance by Alterra of its obligations
                           under this Agreement will not contravene any
                           provision of applicable law or the governing
                           documents of Alterra or any agreement or other
                           instrument binding upon Alterra, or any judgment, or
                           decree of any governmental body, agency or court
                           having jurisdiction over the Investor, and no consent
                           approval, authorization or order of, or qualification
                           with, any governmental body or agency is required for
                           the performance by Alterra of its obligations under
                           this Agreement in accordance with its terms.

                                       7

<PAGE>   8

                                    (g) Alterra has been duly organized, is
                           validly existing and is in good standing under the
                           laws of the State of Delaware. Alterra has full
                           corporate power and authority to enter into this
                           Agreement and this Agreement has been duly and
                           validly authorized, executed and delivered by Alterra
                           and constitutes the legal, valid and binding
                           obligations of Alterra, enforceable against Alterra
                           in accordance with its terms, except as such
                           enforcement may be limited by the laws effecting
                           creditors rights generally and general equitable
                           principles.

                    3.3 Alterra and the Investor hereby acknowledge that they
have directed and caused the Certificate to be filed with the Secretary of State
of the State of Delaware and they have reviewed, and do hereby acknowledge their
approval of, the other organizational documents of the Company (together with
the Agreement, the "Organizational Documents") consisting of the Organizational
Minutes of the Company's Board of Directors attached hereto as Exhibit B, the
Company's Bylaws attached hereto as Exhibit C and the forms of the certificate
for each of the Common Stock and the Preferred Stock attached hereto as Exhibits
D-1 and D-2, respectively.

         4. COMPANY REPRESENTATIONS, WARRANTIES AND COVENANTS

         The Company hereby acknowledges, represents and warrants to, and agrees
with the Investor and Alterra (which representations and will be true and
correct as of the date of the Closing as if the Agreement were made on the date
of Closing) as follows:

                    4.1 The Company is validly existing and is in good standing
under the laws of the State of Delaware. As a result of the execution or
approval of the Organizational Documents by the Company or the other signatories
thereto (as the case may be), the Company has full corporate power and authority
to enter into this Agreement and this Agreement has been duly and validly
authorized, executed and delivered by the Company and constitutes the legal,
valid and binding obligation of the Company, enforceable against the Company in
accordance with its terms, except as such enforcement may be limited by laws
effecting creditors rights generally and general equitable principles. The sole
business of the Company is to serve as the parent company of AHC Subsidiary, and
the Company shall not engage in any business or activity other than (i) the
transactions contemplated by this Agreement, the Loan Agreement and by such
other agreements as may be contemplated thereby and (ii) serving as the parent
company of AHC Subsidiary. Immediately after the Closing, the Company shall
assign its rights under the Purchase Agreement to AHC Subsidiary in connection
with the initial capitalization thereof.

                    4.2 The execution and delivery by the Company of, and the
performance by the Company of its obligations under this Agreement in accordance
with the terms of this Agreement will not (a) contravene any provision of
applicable law or the charter documents or by-laws of the Company or any
agreement or other instrumental body, agency or court

                                       8

<PAGE>   9

having jurisdiction over the Company, or (b) give any third party rights to
acquire capital stock of the Company. No filing (except for such filings as may
be required under applicable state and federal securities laws), notice,
consent, approval, authorization or order of, or qualification with, any
governmental body or agency is required for the performance by the Company of
its obligations under this Agreement in accordance with the terms of this
Agreement.

                    4.3 The Documents do not, and through the date of the
Closing will not, contain an untrue statement of a material fact or omit to
state a material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading.

                    4.4 All of the Common Shares and the Preferred Shares have
been duly authorized and, when issued in accordance herewith, shall be validly
issued, fully paid, non-assessable and free of preemptive or similar rights. The
Company does not have any class of authorized stock other than Common Stock and
Preferred Stock. Except for Alterra with respect to the Common Shares and the
Investors with respect to the Preferred Shares (including the Common Stock
issuable upon the conversion thereof pursuant to the Certificate), no person has
any right to receive any additional shares of capital stock of the Company. In
addition, the shares of Common Stock issuable upon the conversion of the
Preferred Shares, when issued as provided in the Certificate shall be validly
issued and fully paid and non-assessable, and such shares shall not be subject
to any preemptive or similar rights.

                    4.5 The Company is not in violation of its charter or bylaws
and is not in default in the performance of any bond, debenture, note or any
other evidence of indebtedness or any indenture, mortgage, deed of trust,
license, contract, lease or other instrument to which the Company is a party or
by which it is bound, or to which any of the property or assets of the Company
is subject, except such as have been waived or which would not have, singly or
in the aggregate, a material adverse effect on the company, taken as a whole.

                    4.6 There is no litigation or governmental proceeding
pending, or to the knowledge of the Company, threatened against, or involving
the property or the business of the Company, or, to the best knowledge of the
Company which would adversely affect the condition (financial or otherwise),
business, prospects or results of operations of the Company, taken as a whole.

                    4.7 Except as set forth in the Certificate, there is no
existing option, warrant, call, right, commitment or other agreement of any
character to which the Company is a party requiring, and there are no securities
of the Company outstanding which upon conversion or exchange would require the
issuance, sale or transfer of any additional shares of capital stock

                                       9

<PAGE>   10

or other equity securities of the Company or other securities convertible into,
exchangeable for or evidencing the right to subscribe for or purchase shares of
capital stock or other equity securities of the Company. The Company is not a
party to any voting trust or other voting agreement with respect to any of the
shares of the Common Stock or to any agreement relating to the issuance, sale,
redemption, transfer or other disposition of the capital stock of the Company,
except as set forth in the Certificate.

                    4.8 The Company at all times will keep sufficient shares of
its Common Stock available for issuance upon the conversion of the Preferred
Stock.

                    4.9 The foregoing representations, warranties and agreements
shall survive the Closing.

         5. PREFERRED STOCK PUT OPTION

                    5.1 Alterra hereby grants to Investor the right to sell to
Alterra all, but not less than all, of the Preferred Shares to be purchased by
Investor pursuant to this Agreement pursuant to the terms and conditions set
forth herein (the "Put Option"). The Put Option shall be exercisable by the
Investor (assuming that the Preferred Shares have not previously been redeemed
by the Company in accordance with the Certificate) at any time from and after
March 1, 2000 if and only if AHC Subsidiary shall not have closed on the
acquisition of assisted living and (Alzheimer's care residences having an
aggregate purchase price of in excess of $30 million pursuant to the Purchase
Agreement. The Put Option shall be exercised by written notice from the Investor
to Alterra at any time from and after March 1, 2000.

                    5.2 The purchase price for each of the Preferred Shares
payable upon the exercise of the Put Option shall be equal to the sum of (i)
$1,000 (the liquidation preference per Preferred Share), (ii) any accrued and
unpaid dividends thereon (whether or not declared) at the time that the Put
Option is exercised and (iii) an escalating amount equal to $1,500 if the Put
Option is exercised at any time on or before March 31, 2000, which amount shall
increase by $300 per month thereafter (commencing with April 2000) through the
date that such Put Option is exercised. The repurchase of the Preferred Shares
pursuant to the exercise of the Put Option shall be closed ten (10) business
days following the exercise of the Put Option at the principal executive offices
of Alterra at 1:00 p.m. Milwaukee time unless the parties shall designate a
different date, time and place for such closing. At such closing: (i) Investor
shall deliver to Alterra an instrument evidencing the transfer of all of the
Preferred Shares, free and clear of all security interest, liens and
restrictions, together with such other documents as Alterra may reasonably
request in connection therewith; and (ii) Alterra shall deliver to Investor, by
bank wire transfer to an account designated by Investor, payment of the purchase
price payable pursuant to this Section 5.2, together with such other documents
as Investor may reasonably request.

                                       10

<PAGE>   11

         6. MISCELLANEOUS

                    6.1 Complete Agreement; Modification of Agreement. The
Agreement constitutes the complete agreement between the parties with respect to
the subject matter hereof and may not be modified, altered or amended excepted
by an agreement in writing signed by company and Investor.

                    6.2 Waiver of Jury Trial. THE PARTIES HERETO WAIVE ALL RIGHT
TO TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS
UNDER THE LOAN DOCUMENTS.

                    6.3 Severability. Wherever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement shall be prohibited by or
invalid under applicable law, such provision shall be ineffective to the extent
of such prohibition or invalidity, without invalidating the remainder of such
provision or the remaining provision of this Agreement.

                    6.4 Parties. This Agreement shall be binding upon, and inure
to the benefit of, the successors of Company, Alterra and the Investor.

                    6.5 Governing Law. Except as to matters of internal
corporate law, which shall be governed by the general corporation law of
Delaware, in all other respects, including all matters of construction, validity
and performance, this Agreement and the obligations arising hereunder shall be
governed by, and construed and enforced in accordance with, the laws of the
State of Michigan applicable to contracts made and performed in such state,
without regard to the principles thereof regarding conflict of laws, and any
applicable laws of the United States of America.

                    6.6 Notices. Except as otherwise provided herein, whenever
it is provided herein that any notice, demand, request, consent, approval,
declaration or other communication shall or may be given to or served upon any
of the parties by another, or whenever any of the parties desires to give or
serve upon another any communication with respect to this Agreement, each such
notices, demand, request, consent, approval, declaration or other communication
shall be in writing and either shall be delivered in person with receipt
acknowledged or by registered or certified mail, return receipt requested,
postage prepaid, telecopied and confirmed by telecopy answerback or recognized
overnight courier service addressed as follows:

                                       11

<PAGE>   12

         (a)      If to Investor at:
                  c/o RDV Corporation
                  126 Ottawa Avenue, N.W.
                  500 Grand Bank Building
                  Grand Rapids, Michigan 49503

                  Attn:  President
                  Fax: 616-454-4654

                  With copies to:

                  Hecht & Lentz
                  333 Bridge St., N.W.
                  Suite 330
                  Grand Rapids, MI  49504

                  Attn:  David M. Hecht, Esq.
                  Fax:     616-776-7203

         (b)      If to Company or Alterra at:
                  c/o Alterra Healthcare Corporation
                  450 North Sunnyslope Rd.
                  Suite 300
                  Brookfield, MI  53005

                  Attn:  Chief Executive Officer
                  Fax:     414-789-6677

                  With Copies to:

                  Rogers & Hardin
                  229 Peachtree St., N.E.
                  2700 International Tower
                  Atlanta, GA  30303

                  Attn:  Alan C. Leet, Esq.
                  Fax:     404-525-2224

or at such other address as may be substituted by notice given as herein
provided. The giving of any notice required hereunder may be waived in writing
by the party entitled to receive such notice. Every notice, demand, request,
consent, approval, declaration or other communication hereunder shall be deemed
to have been duly given or served on the date on

                                       12

<PAGE>   13

which personally delivered, with receipt acknowledged, telecopied and confirmed
by telecopy answerback, as of the regularly scheduled time for delivery if
delivered by a recognized delivery service or three (3) Business Days after the
same shall have been deposited in the United States mail. Failure or delay in
delivering copies of nay notice, demand, request, consent, approval, declaration
or other communication to the persons designated above to receive copies shall
in no way adversely affect the effectiveness of such notice, demand, request,
consent, approval, declaration or other communication.

         6.7 Counterparts; Facsimile. This Agreement may be executed by
facsimile signature and in any number of separate counterparts, each of which
shall, collectively and separately, constitute one agreement.

                  IN WITNESS WHEREOF, this Agreement has been duly executed as
of the date first written above.

                                 AHC PURCHASER HOLDING, INC.

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

                                 RDVEPCO, L.L.C.

                                 By: EDP Assisted Living Properties, L.L.C.,
                                          a member

                                       By: Elsa D. Prince Living Trust u/a dated
                                               January 27, 1976

                                             By: /s/ Elsa D. Prince
                                                -------------------------------
                                                 Elsa D. Prince, Trustee

                                 ALTERRA HEALTHCARE CORPORATION

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

                                       13

<PAGE>   14

                                    ARTICLE 1

           The name of the Corporation is AHC PURCHASER HOLDING, INC.

                                    ARTICLE 2

                  The address of the Corporation's registered office in the
State of Delaware is 1209 Orange Street, in the City of Wilmington, County of
New Castle, Delaware 19801. The name of its registered agent at such address is
The Corporation Trust Company.

                                    ARTICLE 3

                  The nature of the business or purposes to be conducted or
promoted by the Corporation is to engage solely in the following activities: (i)
the investment in and ownership of AHC Purchaser, Inc., a Delaware corporation
(the "Subsidiary"); and (ii) to perform its obligations and exercise its rights
arising under (a) the Subscription and Organizational Agreement dated as of
December 13, 1999 by and among the Company, RDVEPCO, L.L.C. (the "LLC") and
Alterra Healthcare Corporation ("Alterra"), (b) the Loan Agreement (the "Loan
Agreement") dated as of December 13, 1999 between LLC and Alterra, (c) the
Guaranty dated as of December 13, 1999 made by the Corporation in favor of the
LLC, (d) the Stock Pledge Agreement dated as of December 13, 1999 between the
Corporation and the LLC, and (e) such other agreements and instruments as are
contemplated by, the Loan Agreement and the Corporation shall have the power and
authority to exercise all powers enumerated in the General Corporation Law of
the State Delaware necessary or convenient to the conduct, promotion or
attainment of the business or purposes set forth herein.

                                    ARTICLE 4

                  The total number of shares of all classes of stock which the
Corporation has authority to issue is 3,857 shares, of which 2,857 shares shall
be Common Stock, with par value of $.01 per share (the "Common Stock") and 1,000
shares shall be preferred stock, with $0.01 par value (the "Preferred Stock").

                  The designation and the powers, preferences and rights of the
shares of Common Stock are as follows:

<PAGE>   15

                  1. Shares of Common Stock may be issued from time to time as
the Board of Directors shall determine and on such terms and for such
consideration as shall be fixed by the Board of Directors. Each share of Common
Stock shall be equal to every other share of Common Stock in every respect.

                  2. Each holder of Common Stock shall be entitled at all
meetings of stockholders to one vote for each share of Common Stock held by it
of record on the books of the Corporation.

                  3. Following the conversion of the Preferred Stock pursuant to
the terms thereof, the holders of thirty percent (30%) of the then outstanding
shares of Common Stock shall have the right to compel an orderly liquidation of
the Corporation and the pro rata distribution of the funds thereby available to
be distributed to all of the holders of the Common Stock, and upon the exercise
of such liquidation right, the Corporation, as the sole stockholder of the
Subsidiary, shall take all action necessary to liquidate the Subsidiary.

         The relative designations, powers, preferences, right, qualifications,
limitations and restrictions of 1,000 shares of Preferred Stock, designated the
"Convertible Preferred Stock", each of $.01 par value, are as follows:

         For the purposes of this Certificate of Incorporation, "Corporation"
shall mean AHC Purchaser Holding, Inc.

         "Board of Directors" shall mean the board of directors of the
Corporation.

         "Common Stock" shall mean the 2,857 authorized shares of common stock,
$.01 par value per share of the Corporation.

         "Conversion Price" shall have the meaning provided in Subsection
(d)(6)(F) hereof.

         "Conversion Rate" shall have the meaning provided in Subsection (d)(1)
hereof.

         "Invested Amount" per share of Preferred Stock shall mean $1,000.00,
adjusted for subdivisions or combinations of the Preferred Stock. "Original
Issue Date" shall have the meaning provided in Subsection (d)(4) hereof.

         "Preferred Stock" shall mean the 1,000 shares of Convertible Preferred
Stock, $.01 par value, hereby designated.

         "Stockholders" shall mean the holders of the Preferred Stock and the
holders of the Common Stock.

                                      -2-

<PAGE>   16

         The preferences, limitations and relative rights granted to and imposed
upon the Preferred Stock are as follows:

         (a) Dividend Rights. From and after the Original Issue Date, the
holders of outstanding shares of Preferred Stock shall be entitled to receive
dividends at an annual rate of $80.00 per share, payable quarterly on or before
the end of each fiscal quarters of the Corporation, as and when declared by the
Board of Directors, prior and in preference to any declaration of payment of any
dividend on the Common Stock of the Corporation. Such dividends shall be
cumulative and shall accrue (on a daily basis) from the Original Issue Date,
whether or not declared by the Board of Directors of the Corporation. Without
the prior written consent of the holders of a majority of the outstanding
Preferred Stock, voting separately as a class, no dividends shall be paid with
respect to the Common Stock of the Corporation at any time as, and for so long
as any shares of the Preferred Stock remain outstanding. Notwithstanding the
foregoing, no dividends may be paid with respect to the Common Stock of the
Corporation until all dividends declared or accrued on all outstanding shares of
the Preferred Stock have been set apart and paid. Except as expressly set forth
in Section (d), the Corporation shall be under no obligation to pay such
dividends unless so declared by the Board of Directors.

         (b) Liquidation Rights. In the event of liquidation, dissolution or
winding up of the Corporation, or a Sale or Merger (defined below), each holder
of an outstanding share of the Preferred Stock shall be entitled to receive in
exchange for and in redemption of his Preferred Stock by reason of the ownership
thereof, (i) in the case of a liquidation, dissolution or winding up of the
Corporation, from any funds legally available for distribution to Stockholders,
and (ii) in the case of a Sale or Merger, from the net proceeds therefrom
(defined for these purposes to mean the proceeds whether cash, securities or
property, available for distribution to Stockholders or payable to the
Stockholders by reason of the Sale or Merger), an amount equal to the Invested
Amount, plus the amount of all accrued and unpaid dividends thereon (whether or
not declared) on such share from the Original Issue Date (the "Liquidation
Value").

         For purposes of this Section (b), a "Sale or Merger" of the Corporation
shall mean (i) the sale of all or substantially all the Corporation's assets and
(ii) the acquisition of the Corporation by another entity (other than an entity
that is wholly-owned by Alterra Healthcare Corporation, a Delaware corporation)
by way of merger or consolidation resulting in the exchange of the outstanding
shares of the Corporation for securities or consideration issued, or caused to
be issued, by the acquiring corporation or its parent or subsidiary.

         All the preferential amounts to be paid to the holders of the Preferred
Stock under this Section (b) shall be paid or set apart for payment before the
payment or setting apart for payment of any amount for, or the distribution of
any assets of the Corporation to, the holders of the Common Stock or any class
or series of stock of the Corporation ranking junior to the Preferred Stock in
connection with a liquidation, dissolution or winding up, or a Sale or Merger.
If the assets or surplus funds to be distributed to the holders of the Preferred
Stock are insufficient to permit the payment to such holders of the full amounts
payable to such holders, the assets and surplus funds legally available for
distribution shall be distributed ratably among the holders of

                                      -3-

<PAGE>   17

the Preferred Stock in proportion to the full amount each such holder is
otherwise entitled to receive.

         (c) Voting Rights. Except as otherwise provided in this Certificate of
Incorporation, each share of the Preferred Stock shall be non-voting. Each
holder of a share of the Preferred Stock shall be entitled to receive the same
prior notice of any Stockholders' meeting as provided to the holders of Common
Stock in accordance with the Bylaws of the Corporation, as well as prior notice
of all Stockholder actions to be taken by legally available means in lieu of
meeting, but, except as expressly provided in this Section (c) and, except for
those matters required by law, or by the terms hereof, to be submitted to a
class vote of the holders of Preferred Stock, the holders of the Preferred Stock
shall not be entitled to vote with holders of the Common Stock upon any matter
submitted to a vote of Stockholders. Fractional votes in any event shall not be
permitted, and any fractions shall be disregarded in computing voting rights.

         Notwithstanding anything contained in this Section (c) to the contrary,
should the Corporation fail for any reason (i) to redeem the Preferred Stock
under the conditions and in accordance with the terms of Section (b) hereof,
(ii) to issue Common Stock in conversion of the Preferred Stock as provided in
Section (d) hereof, or (iii) to comply with the protective provisions of Section
(f) hereof, and should such failure continue for a period of thirty consecutive
(30) days, then, for so long as said failure remains uncured, the holders of
Preferred Stock shall be entitled, at any annual meeting of the Stockholders or
any special meeting called for such purpose, voting together as a single class,
to elect the smallest number of members of the Board of Directors necessary to
constitute a majority of the full Board of Directors of the Corporation, and the
holders of the Common Stock shall elect the remaining Directors. If, prior to
the end of the term of any director elected as aforesaid by the holders of
shares of the Preferred Stock, a vacancy in the office of such director shall
occur by reason of death, resignation, removal or disability, or for any other
reason, the right to fill such vacancy shall be vested in the holders of the
Preferred Stock unless the right of such holders to elect such director shall
have ceased as provided hereafter. At any time after such power to elect a
majority of directors shall have so vested in the Preferred Stock, the Secretary
of the Corporation may, and, upon the written request of the holders of record
of ten percent (10%) or more of the then outstanding shares of the Preferred
Stock, addressed to the Secretary at the principal office of the Corporation,
the Secretary shall, call a special meeting of the holders of Preferred Stock
for the election of the directors to be elected by them as hereinabove provided,
to be held within thirty (30) days after such call and at the place and upon the
notice provided by law and in the Bylaws of the Corporation for the holding of
meetings of Stockholders. If any such special meeting required to be called as
above provided shall not be called by the Secretary within thirty (30) days
after receipt of any such request, then the holders of record of ten percent
(10%) or more in amount of the Preferred Stock then-outstanding may designate in
writing one of their number to call such meeting, and the person so designated
may call such meeting to be held at the place and upon the notice above
provided, and for that purpose shall have access to the Stock ledger of the
Corporation. If any such special meeting shall be called by the Secretary of the
Corporation or by the holders of the Preferred Stock as above provided, and if
the holders of at least a majority of the Preferred Stock then outstanding and
entitled to vote at such meeting shall be present or

                                      -4-

<PAGE>   18

represented by proxy at such meeting or any adjournment thereof, then, by vote
of the holders of at least a majority of such Preferred Stock present or so
represented at such meeting, the then authorized number of directors of the
Corporation shall be increased by two fold plus one and, at such meeting, the
holders of the Preferred Stock shall be entitled to elect the additional
directors so provided for, but any directors so elected shall hold office only
until their respective successors are duly elected and qualified at the annual
meeting of Stockholders or special meeting held in place thereof next succeeding
their election. At such time, if any, as the holders of the Preferred Stock
shall obtain the redemption referred to in clause (i) above, or obtain
rectification of the failure to respect, or restoration of, the rights
referenced in clause (iii) above, as the case may be, then the terms of office
of all persons elected as directors by such holders shall forthwith terminate,
and the number of directors shall be reduced accordingly. The foregoing remedy
shall not be deemed exclusive, and shall be in addition to all other rights and
remedies available at law or equity to t he holders of Preferred Stock.

         (d) Conversion. The holders of the Preferred Stock shall have
conversion rights as follows (the "Conversion Rights"):

               (1) Conversion. Each share of Preferred Stock shall be
         convertible, at the option of the holder thereof, at any time after
         December 31, 2000 at the office of the Corporation or any transfer
         agent for the Preferred Stock, into Common Stock at the initial
         Conversion Rate of one (1) fully paid and nonassessable share of Common
         Stock for each share of Preferred Stock, subject, however, to the
         adjustments described below. (The quotient obtained by dividing the
         number of shares of Common Stock into which each share of Preferred
         Stock may be converted by one is hereinafter referred to as the
         "Conversion Rate." The initial Conversion Rate shall be one (1).) Such
         conversion shall be deemed to have been made immediately prior to the
         close of business on the date of the surrender of the shares of
         Preferred Stock to be converted in accordance with the procedures
         described in Subsection (d)(3) below. The Corporation shall pay to the
         holder thereof promptly following such surrender all declared or
         accrued but unpaid dividend on the shares of Preferred Stock so
         converted to, and including, the date of such conversion; provided,
         however, that the Corporation may, at its option, in lieu of making a
         full cash payment of all such declared or accrued but unpaid dividends,
         make payment thereof in that number of whole shares of Common Stock
         calculated by dividing the total of such declared or accrued but unpaid
         dividends due such holder by the fair market value per share of the
         Common Stock, as determined in good faith by the Corporation's Board of
         Directors.

               (2) Treatment of Fractional Shares. No fractional shares of
         Common Stock shall be issued upon conversion of Preferred Stock, and
         any shares of Preferred Stock surrendered for conversion that would
         other wise result in a fractional share of Common Stock shall be
         redeemed at the then effective Conversion Price per share, payable as
         promptly as possible when funds are legally available therefor.

                                      -5-

<PAGE>   19

               (3) Mechanics of Conversion. Before any holder of Preferred Stock
         shall be entitled to convert the same into shares of Common Stock
         pursuant to Subsection (d)(1) above, such holder shall surrender the
         certificate or certificates for such shares of Preferred Stock, duly
         endorsed, at the office of the Corporation or of any transfer agent of
         the Preferred Stock, and shall give written notice to the Corporation
         at such office of the name or names in which such holder wishes the
         certificate or certificates for shares of Common Stock to be issued if
         different from the name shown on the books and records of the
         Corporation. Said conversion notice shall also contain such
         representations as may reasonably be required by the Corporation to the
         effect that the shares to be received upon conversion are not being
         acquired and will not be transferred in any way that might violate the
         then applicable laws. The Corporation shall, as soon as practicable
         thereafter and in no event later than thirty (30) days after the
         delivery of said conversion notice, issue and deliver at such office to
         such holder of Preferred Stock, or to the nominee or nominees of such
         holder, a certificate or certificates for the number of shares of
         Common Stock to which such holder shall be entitled as aforesaid. The
         person or persons entitled to receive the shares of Common Stock
         issuable upon a conversion pursuant to Subsection (d)(1) shall be
         treated for all purposes as the record holder or holders of such shares
         of Common Stock as of the effective date of conversion specified in
         such section. All certificates issued upon the exercise or occurrence
         of the conversion shall contain a legend governing restrictions upon
         such shares imposed by law or agreement of the holder or his
         predecessors.

               (4) Adjustment for Subdivisions or Combinations of Common Stock.
         In the event the Corporation at any time or from time to time after the
         original issuance by the Corporation of Preferred Stock (hereinafter
         referred to as the "Original Issue Date") effects a subdivision or
         combination of its outstanding Common Stock into a greater or lesser
         number of shares without a proportionate and corresponding subdivision
         or combination of its outstanding Preferred Stock, then and in each
         such event the Conversion Rate shall be increased or decreased
         proportionately.

               (5) Adjustments for Dividends, Distributions and Common Stock
         Equivalents. In the event the Corporation at any time or from time to
         time after the Original Issue Date shall make or issue, or fix a record
         date for the determination of holders of Common Stock entitled to
         receive, a dividend or other distribution payable in additional shares
         of Common Stock or other securities or rights convertible into or
         entitling the holder thereof to receive additional shares of Common
         Stock (hereinafter referred to as "Common Stock Equivalents") without
         payment of any consideration by such holder of such Common Stock
         Equivalents or the additional shares of Common Stock, and without a
         proportionate and corresponding dividend or other distribution to
         holders of Preferred Stock, then and in each such event the maximum
         number of shares (as set forth in the instrument relating thereto
         without regard to any provisions contained therein for subsequent
         adjustment of such number) of Common Stock issuable in payment of such
         dividend or distribution or upon conversion or exercise of such Common
         Stock Equivalents shall be deemed, for purposes of this Subsection
         (d)(5), to be issued and outstanding as of the time of such

                                      -6-

<PAGE>   20

         issuance or, in the event such a record date shall have been fixed, as
         of the close of business on such record date. In each such event the
         Conversion Rate shall be increased as of the time of such issuance or,
         in the event such a record date shall have been fixed, as of the close
         of business on such record date, by multiplying the Conversion Rate by
         a fraction:

                        (A) the numerator of which shall be the total number of
                  shares of Common Stock (x) issued and outstanding or deemed
                  pursuant to the terms hereof to be issued and outstanding (not
                  including any shares described in clause (y) immediately
                  below), immediately prior to the time of such issuance or the
                  close of business on such record date, plus (y) the number of
                  shares of Common Stock issuable in payment of such dividend or
                  distribution or upon conversion or exercise of such Common
                  Stock Equivalents; and

                        (B) the denominator of which shall be the total number
                  of shares of Common Stock issued and outstanding or deemed to
                  be issued and outstanding immediately prior to the time of
                  such issuance or the close of business on such record date;

                  provided, however, that (i) if such record date shall have
         been fixed and such dividend is not fully paid or if such distribution
         is not fully made on the date fixed therefor, the Conversion Rate shall
         be recomputed accordingly as of the close of business on such record
         date and thereafter the Conversion Rate shall be adjusted pursuant to
         this Subsection (d)(5) as of the time of actual payment of such
         dividends or distributions; or (ii) if such Common Stock Equivalents
         provide, with the passage of time or otherwise, for any decrease in the
         number of shares of Common Stock issuable upon conversion or exercise
         thereof (or upon the occurrence of a record date with respect thereto),
         the Conversion Rate computed upon the original issue thereof (or upon
         the occurrence of a record date with respect thereto), and any
         subsequent adjustments based thereon, shall, upon any such decrease be
         coming effective, be recomputed to reflect such decrease insofar as it
         affects the rights of conversion or exercise of the Common Stock
         Equivalents then outstanding; or (iii) upon the expiration of any
         rights of conversion or exercise under any unexercised Common Stock
         Equivalents, the Conversion Rate computed upon the original issue
         thereof (or upon the occurrence of a record date with respect thereto),
         and any subsequent adjustments based thereon, shall, upon such
         expiration, be recomputed as if the only additional shares of Common
         Stock issued were the shares of such Common Stock, if any, actually
         issued upon the conversion or exercise of such Common Stock
         Equivalents; or (iv) in the event of issuance of Common Stock
         Equivalents that expire by their terms not more than sixty (60) days
         after the date of issuance thereof, no adjustments of the Conversation
         Rate shall be made until the expiration or exercise of all such Common
         Stock Equivalents, whereupon such adjustment shall be made in the
         manner provided in this Subsection (d)(5).

                                      -7-

<PAGE>   21

                  (6) Adjustment of Conversion Rate for Diluting Issues. Except
         as otherwise provided in this Subsection (d)(6), in the event the
         Corporation sells or issues any Common Stock or Common Stock
         Equivalents at a per share consideration (as defined be low) less than
         the Conversion Price (as such term is defined Subsection (d)(6)(F)
         below) then in effect for the Preferred Stock, then the Conversion Rate
         (and, thereby, the Conversion Price) then in effect shall be adjusted
         as provided in paragraphs (A), (B), (C) and (F) hereof. For purposes of
         the foregoing, the per share consideration with respect to the sale or
         issuance of Common Stock shall be the price per share received by the
         Corporation, prior to the payment of any expenses, commissions,
         discounts and other applicable costs. With respect to the sale or
         issuance of Common Stock Equivalents that are convertible into or
         exchangeable for Common Stock without further consideration, the per
         share consideration shall be determined by dividing the maximum number
         of shares (as set forth in the instrument relating thereto without
         regard to any provisions contained therein for subsequent adjustment of
         such number) of Common Stock issuable with respect to such Common Stock
         Equivalents into the aggregate consideration received by the
         Corporation upon the sale of issuance of such Common Stock Equivalents.
         With respect to the issuance of other Common Stock Equivalents, the per
         share consideration shall be determined by dividing the maximum number
         of shares (as set forth in the instrument relating thereto without
         regard to any provisions contained therein for subsequent adjustment of
         such number) of Common Stock issuable with respect to such Common Stock
         Equivalents into the total aggregate consideration received by the
         Corporation upon the sale or issuance of such Common Stock Equivalents
         plus the total consideration receivable by the Corporation upon the
         conversion or exercise of such Common Stock Equivalents. The issuance
         of Common Stock or Common Stock Equivalents for no consideration shall
         be deemed to be an issuance at a per share consideration of $.01. In
         connection with the sale or issuance of Common Stock and/or Common
         Stock Equivalents for non-cash consideration, the amount of
         consideration shall be determined by the Board of Directors of the
         Corporation

                  As used herein, "Additional Shares of Common Stock" shall mean
         either shares of Common Stock issued subsequent to the Original Issue
         Date or, with respect to the issuance of Common Stock Equivalents, the
         maximum number of shares (as set forth in the instrument relating
         thereto without regard to any provisions contained therein for
         subsequent adjustment of such number) of Common Stock issuable in
         exchange for, upon conversion of, or upon exercise of such Common Stock
         Equivalents.

                           (A) Upon each issuance of Common Stock for a per
                  share consideration less than the Conversion Price in effect
                  on the date of such issuance, the Conversion Rate of the
                  Preferred Stock in effect on such date shall be adjusted by
                  multiplying it by a fraction:

                                    (x) the numerator of which shall be the
                           number of shares of Common Stock outstanding
                           immediately prior to the issuance of such

                                      -8-

<PAGE>   22

                           Additional Shares of Common Stock, plus the number of
                           such Additional shares of Common Stock so issued, and

                                    (y) the denominator of which shall be the
                           number of shares of Common Stock outstanding
                           immediately prior to the issuance of such Additional
                           shares of Common Stock plus the number of shares of
                           Common Stock that the aggregate net consideration
                           received by the Corporation for the total number of
                           such Additional Shares of Common Stock so issued
                           would purchase at the Conversion Price then in
                           effect.

                           (B) Upon each issuance of Common Stock Equivalents,
                  exchangeable without further consideration into Common Stock,
                  for a per share consideration less than the Conversion Price
                  in effect on the date of such issuance, the Conversion Rate of
                  the Preferred Stock in effect on such date shall be adjusted
                  as in paragraph (A) of this Subsection (d)(6) on the basis
                  that the related Additional Shares of Common Stock are to be
                  treated as having been issued on the date of issuance of the
                  Common Stock Equivalents, and the aggregate consideration
                  received by the Corporation for such Common Stock Equivalents
                  shall be deemed to have been received for such Additional
                  Shares of Common Stock.

                           (C) Upon each issuance of Common Stock Equivalents
                  other than those described in paragraph (B) of this Subsection
                  (d)(6), for a per share consideration less than the Conversion
                  Price in effect on the date of such issuance, the Conversion
                  Rate of the Preferred Stock in effect on such date shall be
                  adjusted as in paragraph (A) of this Subsection (d)(6) on the
                  basis that the related Additional Shares of Common Stock are
                  to be treated as having been issued on the date of issuance of
                  such Common Stock Equivalents, and the aggregate consideration
                  received and receivable by the Corporation on conversion or
                  exercise of such Common Stock Equivalents shall be deemed to
                  have been received for such Additional Shares of Common Stock.

                           (D) Once any Additional Shares of Common Stock have
                  been treated as having been issued for the purpose of this
                  Subsection (d)(6), they shall be treated as issued and
                  outstanding shares of Common Stock whenever any subsequent
                  calculations must be made pursuant hereto, provided that on
                  the expiration of any options, warrants or rights to purchase
                  Additional Shares of Common Stock, the termination of any
                  rights to convert or exchange for Additional Shares of Common
                  Stock, or the expiration of any options or rights related to
                  such convertible or exchangeable securities on account of
                  which an adjustment in the Conversion Rate has been made
                  previously pursuant to this Subsection (d)(6), the Conversion
                  Rate shall forthwith be readjusted to such Conversion Rate as
                  would have obtained had the adjustment made upon the issuance
                  of such options, warrants, rights, securities or options or
                  rights related to such securities been made upon the basis of
                  the issuance of only the number of shares of Common

                                      -9-

<PAGE>   23

                  Stock actually issued upon the exercise of such options,
                  warrants or rights, upon the conversion or exchange of such
                  securities or upon the exercise of the options or rights
                  related to such securities.

                           (E) The foregoing notwithstanding, no adjustment of
                  the conversion Rate (and, thereby, the Conversion Price) shall
                  be made as a result of the issuance of:

                                    (x) any shares of Common Stock upon the
                           conversion of shares of Preferred Stock;

                                    (y) any shares of Common Stock pursuant to
                           which the Conversion Rate and Conversion Price are
                           adjusted under Subsection (4) or (5) of this Section
                           (d); or

                                    (z) any shares of Common Stock issued
                           pursuant to the exchange, conversion or exercise of
                           any Common Stock Equivalents that have previously
                           been incorporated into computations hereunder on the
                           date when such Common Stock Equivalents were issued;
                           or

                           (F) The Conversion Price at any one time hereunder
                  shall be equal to the quotient obtained by dividing the
                  Invested Amount (defined in Section (b) above) by the then
                  effective Conversion Rate. The initial Conversion Price
                  hereunder shall be $1,000.00.

                  (7) De Minimis Adjustments. No adjustment to the Conversion
         Rate (and, thereby, the Conversion Price) shall be made if such
         adjustment would result in a change in the Conversion Price of less
         than $.01. Any adjustment of less than $.01 that is not made shall be
         carried forward and shall be made at the time of, and together with,
         any subsequent adjustment that, on a cumulative basis, amounts to an
         adjustment of $.01 or more in the Conversion Price.

                  (8) No Impairment. Except as provided in Section (f) hereof,
         the Corporation shall not, by amendment of this Certificate of
         Incorporation or its Bylaws or through any reorganization, transfer of
         assets, consolidation, merger, dissolution, issue or sale of securities
         or any other voluntary action, avoid or seek to avoid the observance or
         performance of any of the terms to be observed or performed hereunder
         by the Corporation, but shall at all times in good faith assisting the
         carrying out of all the provisions of this Section (d) and in the
         taking of all such action as may be necessary or appropriate in order
         to protect the Conversion Rights of the holders of the Preferred Stock
         against impairment.

                  (9) Certificate as to Adjustments. Upon the occurrence of each
         adjustment or readjustment of the Conversion Rate pursuant to this
         Section (d), the Corporation at its expense shall promptly compute such
         adjustment or readjustment in accordance with the terms hereof and
         prepare and furnish to each holder of Preferred Stock a certificate

                                      -10-

<PAGE>   24

         setting forth such adjustment or readjustment and showing in detail the
         facts upon which such adjustment or readjustment is based. The
         Corporation shall, upon the written request at any time of any holder
         of Preferred Stock, furnish or cause to be furnished to such holder a
         like certificate setting forth (i) such adjustments and readjustments,
         (ii) the Conversion Rate at that time in effect, and (iii) the number
         of shares of Common Stock and the amount, if any, of other property
         that at that time would be received upon the conversion of Preferred
         Stock.

                  (10) Notices of Record Date. In the event of any taking by the
         Corporation of a record of the holders of any class of securities other
         than Preferred Stock for the purpose of determining the holders thereof
         who are entitled to receive any dividend or other distribution, any
         Common Stock Equivalents or any right to subscribe for, purchase or
         other wise acquire any shares of stock of any class or any other
         securities or property, or to receive any other right, the Corporation
         shall mail to each holder of Preferred Stock, at least twenty (20) days
         prior to the date specified therein, a notice specifying the date on
         which any such record is to be taken for the purpose of such dividend,
         distribution or rights, and the amount and character of such dividend,
         distribution or rights.

                  (11) Reservation of Stock Issuable Upon Conversion. The
         Corporation shall at all times reserve and keep available out of its
         authorized but unissued shares of Common Stock solely for the purpose
         of effecting the conversion of the shares of the Preferred Stock such
         number of its shares of Common Stock as shall from time to time be
         sufficient to effect the conversion of all outstanding shares of the
         Preferred Stock; and if at any time the number of authorized but
         unissued shares of Common Stock shall be insufficient to effect the
         conversion of all then outstanding shares of the Preferred Stock, the
         Corporation shall take such corporate action as may, in the opinion of
         its counsel, be necessary to increase its authorized but unissued
         shares of Common Stock to such number of shares as shall be sufficient
         for such purpose.

         (e) Redemption of Preferred Stock. The Corporation may redeem all (but
not less than all) of the shares of Preferred Stock from the holders thereof at
any time after the Original Issue Date by delivering to such holders a
redemption notice (the "Redemption Notice") and by paying in cash to such holder
or holders in respect of each such shares the Redemption Price (defined below)
within ninety (90) days of the Redemption Notice. The price payable for each
redeemed share of Preferred Stock (the "Redemption Price") shall be equal to the
Appraised Value (as determined below) of each such share on as as-if-converted
basis; provided, however, that notwithstanding the foregoing, the amount payable
to such holder of a share of Preferred Stock in redemption thereof shall in no
event be less than the Invested Amount plus the aggregate amount of all accrued
and unpaid dividends (whether or not declared) thereon through the date of such
Redemption Notice, and shall be increased if necessary to equal the Liquidation
Value, and in no event shall be more than, and shall be decreased if necessary
to equal, an amount (the "Redemption Cap") equal to the Invested Amount plus the
sum of (i) the aggregate amount of all accrued and unpaid dividends (whether or
not declared) thereon through the date of such Redemption Notice and (ii) $1,500
if the Preferred Stock is redeemed on or before March

                                      -11-

<PAGE>   25
31, 2000, which amount shall increase by $300 per share of Preferred Stock for
each month (or portion thereof) following March 2000 in which such redemption
does not occur (e.g., the amount contemplated by this clause (ii) shall be
$1,800 for any redemption effected in April 2000, $2,100 for any redemption
effected in May 2000, etc.). Should the holders of the Preferred Stock and the
Corporation be unable to agree during the twenty (20)-day period immediately
succeeding the delivery of a Redemption Notice as to the Appraised Value without
the employment of appraisers, then the holders of the Preferred Stock and the
Corporation shall each select an appraiser experienced in the business of
evaluating or appraising the market value of commercial real estate and
long-term care and/or assisted living facilities (or similar businesses), and
the appraisers so selected (the "Initial Appraisers") shall appraise such shares
to be redeemed. If the difference between the resulting appraisals is not
greater than ten percent (10%) of the higher appraisal, then the average of the
appraisals shall be deemed the Appraised Value; otherwise, the Initial
Appraisers shall select an additional appraiser who shall be experienced in a
manner similar to the Initial Appraisers (the "Additional Appraiser"). If the
Initial Appraisers fail to select such Additional Appraiser as provided above,
then either the holders of the Preferred Stock or the Corporation may apply,
after written notice to the other, to any judge of any court of general
jurisdiction for the appointment of such Additional Appraiser. The Additional
Appraiser shall appraise such shares to be redeemed as of the date of the
redemption and shall forthwith give written notice of his determination to the
Corporation and the holders of the Preferred Stock. The Appraised Value shall
then be established by averaging all determinations of value, and then,
disregarding the value determination that deviates most from such average,
averaging the remaining value determinations. The Corporation shall pay the
expenses and fees of the appraisers selected hereby. Notwithstanding the
foregoing, the Corporation may always elect by written notice to the holders of
Preferred Stock to redeem the Preferred Stock by paying the Redemption Cap per
share, whereupon a determination of Appraised Value shall not be necessary. For
all purposes hereof, the Appraised Value shall be determined assuming that: (i)
the Corporation shall have caused its wholly-owned subsidiary, AHC Purchaser,
Inc., a Delaware corporation (the "Subsidiary"), to sell each of the assisted
living or dementia care facilities owned by the Subsidiary for the fair market
value thereof without regard to (x) the encumbrance of any management agreement
or other agreement with any affiliate of the Corporation or the Subsidiary
relating thereto and (y) the competitive impact of any assisted living facility
that is, or has been announced by Alterra Healthcare Corporation ("Alterra"), or
one of its affiliates, to be, owned, operated or managed by Alterra or any such
affiliate (excluding any facility then owned, operated, managed or under
development or construction by Alterra or any such affiliate as of the date of
this Certificate of Incorporation); (ii) the Subsidiary shall have satisfied all
of its liabilities with the proceeds of such sale; (iii) the remaining proceeds
shall have been distributed to the Corporation in complete liquidation of the
Subsidiary; and (iv) in turn, the complete liquidation of the Corporation with
the holders of the Preferred Stock receiving the greater of Liquidation Value
and the amount such holders would receive if they exercised the Conversion
Rights.

         Upon the determination of the Redemption Price, each holder of shares
to be redeemed shall surrender the certificate representing such shares to the
Corporation and shall receive payment of the Redemption Price therefor in cash.
Redemption hereunder is subject to the legal

                                      -12-

<PAGE>   26

availability of funds and to the extent delayed will occur as soon thereafter as
funds are legally available therefor, with the determination of the Redemption
Price to be made as of the date that the Corporation is first legally entitled
to effect such redemption; provided, however, that any such delay shall
nevertheless be subject to the remedial voting rights described in Section (c)
hereof.

         (f) Protective Provisions. In addition to any other rights provided by
law, so long as any shares of Preferred Stock shall be outstanding, except where
the vote or written consent of the holders of a greater number of shares is
required by law or by the Certificate of Incorporation, without first obtaining
the affirmative vote or written consent of the holders of not less than
two-thirds of such outstanding shares of Preferred Stock, the Corporation shall
not:

                  (1) merge or consolidate with or into, or permit any
         subsidiary to merge or consolidate with or into, any other corporation,
         corporations, entity or entities;

                  (2) sell, abandon, transfer, lease or otherwise dispose of all
         or substantially all its properties or assets;

                  (3) voluntarily dissolve, liquidate, or wind up or carry out
         any partial liquidation, distribution or transaction in the nature of a
         partial liquidation or distribution;

                  (4) create or authorize the creation or increase the
         authorized amount of any additional class or series of shares of stock;
         increase the authorized amount of Preferred Stock; issue any additional
         shares of stock of any class or series other than (i) the 1,857 shares
         of Common Stock outstanding prior to the filing of this Certificate of
         Incorporation with the Secretary of State of the State of Delaware,
         (ii) the 1,000 shares of Preferred Stock to be issued pursuant to this
         Certificate of Incorporation and (iii) shares of Common Stock issued
         upon conversion of the Preferred Stock in accordance herewith; or
         create or authorize any obligation or security convertible into shares
         of Preferred Stock or into shares of any other class or series of
         stock, whether voting or non-voting; regardless of whether any such
         creation, authorization or increase shall be by means of amendment to
         the Certificate of Incorporation, or by merger, consolidation or
         otherwise;

                  (5) amend or repeal any provision of, or add any provision to,
         the Corporation's Certificate of Incorporation or Bylaws, or file any
         certificate of designations, preferences and rights of any series of
         stock of the Corporation, if such action would alter or change the
         preferences, rights, privileges or powers of, or the restrictions
         provided for the benefit of, the Preferred Stock;

                  (6) pay any dividends with respect to any Common Stock; or

                  (7) as the sole stockholder of the Subsidiary, vote for or
         otherwise consent to amend or repeal any provision of, or add any
         provision to, the Subsidiary's Certificate of Incorporation.

                                      -13-

<PAGE>   27

         (g) Notices. Any notice required by the provision hereof to be given to
the holders of shares of Preferred Stock shall be deemed given as of the second
business day following deposit with the United States Postal Service,
first-class, postage prepaid, and addressed to each holder of record at his
address appearing on the books of the Corporation.

                                    ARTICLE 5

        The name and mailing address of the incorporator are as follows:

                NAME                                  ADDRESS

             Alan C. Leet                             2700 International Tower
                                                      229 Peachtree Street, N.E.
                                                      Atlanta, Georgia  30303

                                    ARTICLE 6

                  In furtherance and not in limitation of the powers conferred
by statute, the Board of Directors shall have the power to make, adopt, amend
and repeal the bylaws of the Corporation, including, to the extent permitted by
law, any bylaw adopted by the stockholders of the Corporation unless such bylaw
specifically provides that it may not be amended or repealed by the Board of
Directors.

                                    ARTICLE 7

                  Meetings of stockholders may be held within or without the
State of Delaware, as the Bylaws may provide. The books of the Corporation may
be kept outside the State of Delaware at such place or places as may be
designated from time to time by the Board of Directors or in the Bylaws of the
Corporation. Election of Directors need not be by written ballot unless the
Bylaws of the Corporation so provide.

                                    ARTICLE 8

                  The Corporation reserves the right to amend, alter, change or
repeal any provision contained in this Certificate of Incorporation in the
manner now or hereafter prescribed herein and by the laws of the State of
Delaware, and all rights conferred upon stockholders herein are granted subject
to this reservation.

                                      -14-

<PAGE>   28

                                    ARTICLE 9

                  The Corporation shall have the power and authority to
indemnify any person who was or is a party or is threatened to be made a party
to any threatened, pending or completed action, suit or proceeding, whether
civil, criminal, administrative or investigative and whether or not by or in the
right of the Corporation, by reason of the fact that he or she is or was a
Director, officer, employee or agent of the Corporation, or is or was serving at
the request of the Corporation as a Director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise,
against expenses, judgments, fines and amounts paid in settlement to the maximum
extent permitted by the General Corporation Law of the State of Delaware or
other applicable law.

                                   ARTICLE 10

                  No Director of the Corporation shall be personally liable to
the Corporation or its stockholders for monetary damages for breach of fiduciary
duty as a Director; provided, however, that the foregoing clause shall not apply
to any liability of a Director (i) for any breach of the Director's duty of
loyalty to the Corporation or its stockholders, (ii) for acts or omissions not
in good faith or which involve intentional misconduct or a knowing violation of
law, (iii) under Section 174 of the General Corporation Law of the State of
Delaware, or (iv) for any transaction from which the Director derived an
improper personal benefit.

                                   ARTICLE 11

         Notwithstanding any provision hereof to the contrary, in order to
preserve and ensure its separate and distinct corporate identity, in addition to
the other provisions set forth in this Certificate of Incorporation, the
Corporation shall conduct its affairs in accordance with the following
provisions:

                  1. It shall maintain separate corporation records and books of
account from those of its parent and any affiliate;

                  2. Its Board of Directors shall hold appropriate meetings (or
act by unanimous consent) to authorize all appropriate corporate actions, and in
authorizing such actions, shall observe all corporate formalities;

                  3. It shall maintain financial statements separate from its
parent and any affiliate;

                  4. It shall maintain an arm's length relationship with its
parent and any affiliate;

                                      -15-

<PAGE>   29

                  5. It shall not enter into any contract or agreement with any
affiliate except upon terms and conditions that are intrinsically fair and
substantially similar to those that would be available on an arm's-length basis
with third parties other than an affiliate; and

                  6. It shall not sell, transfer or encumber any interest in the
Subsidiary other than as contemplated by the Loan Agreement and the agreements
and instruments contemplated thereby.

                  For purposes of this Article 11, the following terms shall
have the following meanings:
                  "affiliate" means any person controlling or controlled by or
under common control with the parent, including, without limitation (i) any
person who has a familial relationship, by blood, marriage or otherwise with any
director, officer or employee of the Corporation, its parent, or any affiliate
thereof and (ii) any person which receives compensation for administrative,
legal or accounting services from this corporation, its parent or any affiliate.
For purposes of this definition, "control" when used with respect to any
specified person, means the power to direct the management and policies of such
person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise, and the ownership of 10% or more of the
voting interest in any entity shall be deemed to constitute control of such
entity; and the terms "controlling" and "controlled" have meanings correlative
to the foregoing.

                  "parent" means, with respect to a corporation, any other
corporation owning or controlling, directly or indirectly, fifty percent (50%)
or more of the voting stock of the Corporation.

                  "person" means any individual, corporation, partnership,
limited liability company, joint venture, association, joint stock company,
trust (including any beneficiary

                                      -16-

<PAGE>   30

thereof), unincorporated organization, or government or any agency or political
subdivision thereof.

                                   ARTICLE 12

         That certain AHC Purchaser Holding, Inc. Subscription and
Organizational Agreement dated as of December 13, 1999 by and among the
Corporation, Alterra and the LLC is hereby made a part of this Certificate of
Incorporation and incorporated by reference as if fully set forth herein and a
conformed copy (without its exhibits) is attached hereto as Exhibit A.

                  I, the undersigned, being the incorporator hereinbefore named,
for the purpose of forming a corporation pursuant to the General Corporation Law
of the State of Delaware, do make this Certificate of Incorporation, hereby
declaring and certifying that this is my act and deed and the facts stated
herein are true, and accordingly have hereunto set my hand on this 13th day of
December, 1999.

                                             -----------------------------------
                                             Alan C. Leet, Incorporator

                                      -17-

<PAGE>   31

                       ACTION OF THE BOARD OF DIRECTORS OF
                           AHC PURCHASER HOLDING, INC.
                       TAKEN BY UNANIMOUS WRITTEN CONSENT
                      IN LIEU OF AN ORGANIZATIONAL MEETING

         Pursuant to Sections 108 and 141(f) of the General Corporation Law of
the State of Delaware, the undersigned, being all of the members of the Board of
Directors of AHC PURCHASER HOLDING, INC., a Delaware corporation (the
"Corporation"), do hereby consent to and adopt the following resolutions by
unanimous written consent (the "Consent") in lieu of a special meeting and
hereby waive any and all rights to notice of the time, place or purpose of such
meeting to consider the actions taken herein and hereby direct that this
instrument be filed with the minutes of the proceedings of the Board.

         RESOLVED, that the Certificate of Incorporation of the Corporation, a
copy of which is attached hereto as Exhibit "A" and incorporated herein by this
reference, as certified by the Secretary of State of the State of Delaware on
December 13, 1999, is hereby accepted and approved for the Corporation;

         RESOLVED, that the following named persons are hereby declared elected
to the offices of the Corporation set forth opposite their respective names to
serve as such officers pursuant to the Bylaws:

              William F. Lasky           Chief Executive Officer, President
              Steven L. Vick             Chief Operating Officer
              Thomas E. Komula           Vice President, Secretary, Treasurer
              David M. Boitano           Vice President, Assistant Secretary
              Mark W. Ohlendorf          Vice President, Assistant Secretary
              John D. Peterson           Vice President, Assistant Secretary
              Mark Chapman               Vice President

         RESOLVED, that the Corporation shall have an executive committee (the
"Executive Committee") comprised of two (2) members. The Board of Directors
hereby delegates to the Executive Committee all of the powers and authority of
the Board of Directors in the management of the business and affairs of the
Corporation, except for such powers and authority which may not by law be
delegated to a committee of the Board of Directors of the Corporation. Any
action of the Executive Committee may be taken by a written instrument signed by
all the members of the Executive Committee, and such action shall be fully
effective as if taken at a meeting of the Executive Committee. The Executive
Committee shall keep regular minutes of the transactions of their meetings and
shall cause them to be recorded in books kept for that purpose in the office of
the Corporation. The Board shall have the power at any time to change the
membership of, to increase or decrease the membership of, to fill all vacancies
in and to discharge the Executive Committee of the Board, or any member thereof,
either with or without cause. The

<PAGE>   32

presence of all the members of the Executive Committee shall be required to
constitute a quorum for the transaction of any business at any meeting of the
Executive Committee, and all matters shall be decided at any such meeting by the
affirmative vote of all the members of the Executive Committee present.

         RESOLVED, that the initial members of the Executive Committee shall be
Thomas E. Komula and Mark W. Ohlendorf, each to serve in such capacity until the
next annual meeting of the Board of Directors or until his successor is duly
elected and qualified.

         RESOLVED, that the form of share certificate attached hereto as Exhibit
"B" and incorporated herein by this reference is hereby adopted as the form of
certificate to represent the shares of common stock of the Corporation;

         RESOLVED, that the form of share certificate attached hereto as Exhibit
"C" and incorporated herein by this reference is hereby adopted as the form of
certificate to represent the shares of preferred stock of the Corporation;

         RESOLVED, that the AHC Purchaser Holding, Inc. Subscription and
Organizational Agreement of the Corporation, Alterra Healthcare Corporation and
RDVEPCO, L.L.C. attached hereto as Exhibit "D" and incorporated herein by this
reference, is hereby accepted in accordance with its terms;

         RESOLVED, that each of the Chief Executive Officer, President, any Vice
President, the Secretary and any Assistant Secretary of the Corporation is
hereby authorized to note acceptance upon said subscription agreement for the
Corporation and that the officers of the Corporation specified in the Bylaws are
hereby directed to issue share certificates to said subscriber in accordance
with said subscription agreement;

         RESOLVED, that said shares, when issued in accordance with the
Subscription and Organizational Agreement and the resolutions adopted hereby,
shall be fully paid and nonassessable;

         RESOLVED, that the fiscal year of the Corporation shall end on December
31;

         RESOLVED, that each of the Chief Executive Officer, President, any Vice
President, the Secretary and any Assistant Secretary of the Corporation is
hereby authorized to take all steps necessary to qualify the Corporation to do
business in such other states or foreign jurisdictions as the President or any
Vice President may from time to time deem necessary, including, but not limited
to, the appointment of statutory agents in such states upon whom all legal
processes may be served;

                                      -2-

<PAGE>   33

         RESOLVED, that each of the Chief Executive Officer, President or any
Vice President of the Corporation is hereby authorized to execute and deliver,
on behalf of the Corporation, all contracts, deeds and other instruments,
including, without limitation, the execution and delivery of all such documents
as the Chief Executive Officer, President or any Vice President of the
Corporation shall deem appropriate in connection with any business transactions
into which the Corporation shall enter in fulfillment of its purpose, and the
officers of the Corporation are hereby authorized to take such actions, in the
name and on behalf of the Corporation, as any of them in his or her sole
discretion deems necessary or appropriate to perform the Corporation's
obligations under and enforce the terms and conditions of all such contracts,
deeds and other instruments;

         RESOLVED, that the officers are hereby authorized to establish a
banking relationship with any banking institution they deem proper, and all
actions taken by the officers to so establish a banking relationship are hereby
ratified, adopted and approved; that each of the Chief Executive Officer,
President, any Vice President, the Secretary, any Assistant Secretary and the
Treasurer of the Corporation is authorized to make checks and drafts against
funds deposited therein on behalf of the Corporation and to enter into loan
agreements with said banking institution as they deem proper in the best
interest of the Corporation; and that the Secretary and each Assistant Secretary
are each hereby authorized to execute and certify any standard form banking
resolutions or agreements required by any such banking institution, attaching a
copy of such resolutions to these minutes whereupon such resolutions shall be
deemed to have been duly adopted by the Board of Directors as a part of this
Consent;

         RESOLVED, that the Board hereby further authorizes, empowers and
directs each of the Chief Executive Officer, President of the Corporation, and
such other officers of the Corporation as the Chief Executive Officer, President
may authorize, empower and direct, to take any and all such actions, and to pay
over to, execute and deliver and file and record, as the case may be, any and
all such documents, agreements, instruments, certificates or instructions
(however characterized or described) as he or any such officers may deem
necessary or advisable in order to carry into effect the purposes and intent of
the foregoing resolutions as shall be evidenced conclusively by the taking of
such actions or the execution and delivery and the filing and recording, as the
case may be, of such documents, agreements, instruments, certificates or
instructions; and

         RESOLVED, that any and all actions heretofore taken and any and all
documents, agreements, instruments, certificates or instructions (however
characterized or described) heretofore executed and delivered or filed and
recorded, as the case may be, on behalf of the Corporation, by any duly elected
officer of the Corporation in order to carry into effect

                                      -3-

<PAGE>   34

the purposes and intent of the foregoing resolutions or the transactions
contemplated therein or thereby are hereby ratified, confirmed, adopted and
approved, in all respects.

         This Consent may be executed in counterparts, each of which shall be an
original but all of which taken together shall constitute one and the same
instrument.

                         [SIGNATURES ON FOLLOWING PAGE]

                                      -4-

<PAGE>   35

         WITNESS the consent of the Directors of the Corporation given as of
this     day of December, 1999, which shall be the effective date of this
instrument.

                                              ---------------------------------
                                              THOMAS E. KOMULA

                                              ---------------------------------
                                              WILLIAM F. LASKY

                                              ---------------------------------
                                              MARK W. OHLENDORF

                                              ---------------------------------
                                              STEVEN L. VICK

                                      -5-

<PAGE>   36

                                     BYLAWS
                                       OF
                           AHC PURCHASER HOLDING, INC.

                             A Delaware Corporation

                                    ARTICLE 1

                                     OFFICES

         Section 1.1 Registered office. The registered office of the Corporation
in the State of Delaware shall be at 1209 Orange Street, in the City of
Wilmington, County of New Castle, Delaware 19801. The name of its registered
agent at such address shall be The Corporation Trust Company.

         Section 1.2 Other offices. The Corporation may also have offices at
such other places, both within and without the State of Delaware, as the Board
of Directors (the "Board") may from time to time determine or the business of
the Corporation may require.

                                    ARTICLE 2
                            MEETINGS OF STOCKHOLDERS

         Section 2.1 Place and Time of Meetings. An annual meeting of the
stockholders shall be held for the purpose of electing directors and conducting
such other business as may properly come before the meeting. The date, time and
place of the annual meeting, either within or without the State of Delaware,
shall be determined by resolution of the Board of Directors. Special meetings of
stockholders for any other purpose may be held at such time and place, within or
without the State of Delaware, as shall be stated in the notice of the meeting
or in a duly executed waiver of notice thereof. Special meetings of the
stockholders may be called by the President for any purpose and shall be called
by the Secretary if directed by the Board of Directors.

         Section 2.2 Notice of Meetings. Except as otherwise required by law,
notice of each meeting of the stockholders, whether annual or special, shall be
given not less than ten (10) nor more than sixty (60) days before the date of
the meeting to each stockholder of record entitled to vote at such meeting by
delivering a written notice thereof to the stockholder personally, or by
depositing such notice in the United States mail, in a postage prepaid envelope,
directed to the stockholder at stockholder's post office address furnished by
stockholder to the Secretary of the Corporation for such purpose or, if
stockholder has not furnished to the Secretary stockholder's address for such
purpose, then at stockholder's post office address last known to the Secretary,
or by transmitting a notice thereof to stockholder at such address by telegraph,
cable or facsimile telecommunication. Notice shall be deemed

<PAGE>   37

given upon delivery (if by hand) or upon deposit in the mail (if by mail) or
upon stockholder's receipt (if by telegraph, cable or facsimile).

         Except as otherwise expressly required by law, no publication of any
notice of a meeting of the stockholders shall be required. Every notice of a
meeting of the stockholders shall state the place, date and hour of the meeting,
and, in the case of a special meeting, shall also state the purpose or purposes
for which the meeting is called. Notice of any meeting of stockholders shall not
be required to be given to any stockholder who waives such notice, and such
notice shall be deemed waived by any stockholder who attends such meeting in
person or by proxy, except by a stockholder who attends such meeting for the
express purpose of objecting, at the beginning of the meeting, to the
transaction of any business because the meeting is not lawfully called or
convened.

         Section 2.3 Adjournments. Any meeting of stockholders, annual or
special, may adjourn from time to time to reconvene at the same or some other
place and notice need not be given of any such adjourned meeting if the time and
place thereof are announced at the meeting at which the adjournment is taken,
unless such notice is otherwise expressly required by law or hereunder. At the
adjourned meeting, the Corporation may transact any business that might have
been transacted at the original meeting. If the adjournment is for more than 30
days, or if after the adjournment a new record date is fixed for the adjourned
meeting, the notice of the adjourned meeting shall be given to each stockholder
of record entitled to vote at the adjourned meeting. At the adjourned meeting,
the Corporation may transact any business that might have been transacted at the
original meeting.

         Section 2.4 List of Stockholders. The Secretary shall make, at least
ten (10) days before every meeting of stockholders, a complete list of the
stockholders entitled to vote at such meeting, arranged in alphabetical order
and specifying the address and the number of shares registered in the name of
each stockholder. Such list shall be open to the examination of any stockholder,
for any purpose germane to the meeting, during ordinary business hours, for a
period of at least ten (10) days prior to the meeting, either at a place within
the city where the meeting is to be held, which place shall be specified in the
notice of the meeting or, if not so specified, at the place where the meeting is
to be held. The list shall also be produced and kept at the place of the meeting
during the whole time thereof and may be inspected by any stockholder who is
present. Upon the willful neglect or refusal of the Directors to produce such a
list at any meeting for the election of Directors, they shall be ineligible for
election to any office at such meeting. The stock ledger shall be the only
evidence of which stockholders are entitled to examine the stock ledger, the
list required by this section or the books of the Corporation, or to vote in
person or by proxy at any meeting of stockholders.

                                       2

<PAGE>   38

         Section 2.5 Quorum. Except as otherwise provided by law or the
Certificate of Incorporation, at each meeting of stockholders the presence in
person or by proxy of the holders of shares of stock having a majority of the
votes that could be cast by the holders of all outstanding shares of stock
entitled to vote at the meeting shall be necessary and sufficient to constitute
a quorum. If a quorum is not present, the holders of the shares present in
person or represented by proxy at the meeting, and entitled to vote thereat,
shall have the power to adjourn the meeting to another time and/or place by the
affirmative vote of the holders of a majority of such shares.

         Section 2.6 Voting; Proxies.

                  (a) At each meeting of the stockholders, each stockholder
shall be entitled to vote in person or by proxy each share or fractional share
of the stock of the Corporation having voting rights on the matter in question
and held by the stockholder and registered in the stockholder's name on the
books of the Corporation:

                           (i) on the date fixed pursuant to Section 7.5 of
                  these Bylaws as the record date for the determination of
                  stockholders entitled to notice of and to vote at such
                  meeting; or

                           (ii) if no such record date is so fixed, then (a) at
                  the close of business on the day next preceding the day on
                  which notice of the meeting is given or (b) if notice of the
                  meeting is waived, at the close of business on the day next
                  preceding the day on which the meeting is held.

                  (b) Unless otherwise provided in a shareholders agreement,
persons holding stock of the Corporation in a fiduciary capacity shall be
entitled to vote such stock. Persons whose stock is pledged shall be entitled to
vote such shares, unless in the pledgor's transfer on the books of the
Corporation he expressly empowered the pledgee to vote such shares, in which
case only the pledgee or the pledgee's proxy may represent and vote such stock.
Stock having voting power standing of record in the names of two or more
persons, whether fiduciaries, members of a partnership, joint tenants in common,
tenants by entirety or otherwise, or with respect to which two or more persons
have the same fiduciary relationship, shall be voted in accordance with the
provisions of the General Corporation Law of the State of Delaware.

                  (c) Unless otherwise provided in a shareholders agreement,
voting rights may be exercised by the stockholder entitled thereto in person or
by the stockholder's proxy appointed by an instrument in writing, subscribed by
such stockholder or by his attorney thereunto authorized and delivered to the
secretary of the meeting; provided, however, that no

                                       3

<PAGE>   39

proxy shall be voted or acted upon after three years from its date, unless that
proxy shall provide for a longer period. A duly executed proxy shall be
irrevocable if it so states and if, and only for so long as, it is coupled with
an interest sufficient in law to support an irrevocable power. A stockholder who
may have given a proxy prior to any meeting shall not, solely by attending such
meeting, revoke the same unless he notifies the secretary of the meeting of his
intent to revoke the proxy, in writing, prior to the voting of the proxy. At any
meeting of the stockholders at which a quorum is present, all matters (except as
otherwise provided in the Certificate of Incorporation, in these Bylaws or by
law) shall be decided by the vote of a majority in voting interest of the
stockholders present in person or by proxy and entitled to vote thereat and
thereon. Voting at any meeting of the stockholders on any question need not be
by ballot, unless so directed by the chairman of the meeting. On a vote by
ballot each ballot shall be signed by the stockholder voting, or by his proxy,
if there be such proxy, and it shall state the number of shares voted.

         Section 2.7 Conduct of Meetings. Meetings of stockholders shall be
presided over by the Chairman of the Board, if any, or in his or her absence by
the President, or in his or her absence by a Vice President, or in the absence
of the foregoing persons by a Chairman designated by the Board of Directors, or
in the absence of such designation by a Chairman chosen at the meeting by the
stockholders attending. The Corporation's Secretary shall act as secretary of
the meeting, but in his or her absence the Chairman of the meeting may appoint
any person to act as secretary of the meeting.

         Section 2.8 Action Without Meeting. Any action required or permitted to
be taken at any annual or special meeting of stockholders of the Corporation may
be taken without a meeting, without prior notice and without a vote, if a
consent in writing setting forth the action so taken shall be signed by the
holders of outstanding stock having not less than the minimum number of votes
that would be necessary to authorize or take such action at a meeting at which
all shares entitled to vote thereon were present and voted. Prompt notice of the
taking of the corporate action without a meeting by less than unanimous written
consent shall be given to those stockholders who have not consented in writing.
Any action taken pursuant to such written consent of the stockholders shall have
the same force and effect as if taken by the stockholders at a meeting thereof.

                                    ARTICLE 3
                               BOARD OF DIRECTORS

         Section 3.1 General Powers. The property, business and affairs of the
Corporation shall be managed by the Board.

                                       4

<PAGE>   40

         Section 3.2 Number and Term of Office. The number of directors shall be
initially as set forth in the Certificate of Incorporation of the Corporation or
as fixed by the Incorporator of the Corporation, and shall thereafter be as
fixed by the Board of Directors. Directors need not be stockholders of the
Corporation. The exact number of directors shall be as established by resolution
of the Board in conformity with applicable laws. The directors of the
Corporation shall hold office until their successors shall have been duly
elected or appointed and shall qualify or until their resignation or removal in
the manner hereinafter provided.

         Section 3.3 Election of Directors. The Board of Directors shall
initially consist of the persons named as directors by the incorporator, and
each director so elected shall hold office until the first annual meeting of the
stockholders or until a successor is elected and qualified. At the first annual
meeting of the stockholders and at each annual meeting thereafter, the
stockholders shall elect directors, each of whom shall hold office for a term of
one year or until a successor is elected and qualified.

         Section 3.4 Resignations; Removal. Any director of the Corporation may
resign at any time by giving written notice to the Board or to the Secretary of
the Corporation. Any such resignation shall take effect at the time specified
therein or, if the time is not specified, immediately upon its receipt by the
Board or Secretary. Unless otherwise specified in the notice, the acceptance of
such resignation shall not be necessary to make it effective. Any director may
be removed at any time, with or without cause, by the holders of a majority of
shares of stock of the Corporation then entitled to vote at an election of
directors, except as otherwise provided by statute.

         Section 3.5 Vacancies. Any vacancy in the Board, whether because of
death, resignation, disqualification, an increase in the number of directors or
any other cause, may be filled by the remaining directors or by the shareholders
by a plurality of the votes cast at a meeting of stockholders. Each director so
chosen to fill a vacancy shall hold office until his successor shall have been
elected and shall qualify or until he shall resign or shall have been removed in
the manner provided herein.

         Section 3.6 Place of Meeting, Etc. The Board may hold any of its
meetings at such place or places within or without the State of Delaware as the
Board may from time to time by resolution designate or as shall be designated by
the person or persons calling the meeting or in the notice or a waiver of notice
of any such meeting.

         Directors may participate in any regular or special meeting of the
Board by means of conference telephone or similar communications equipment
pursuant to which all persons

                                       5

<PAGE>   41

participating in the meeting of the Board can hear each other, and such
participation shall constitute presence in person at such meeting.

         Section 3.7 Annual Meeting. The Board shall meet as soon as practicable
after each annual election of directors, and notice of such annual meeting shall
not be required.

         Section 3.8 Regular Meetings. Regular meetings of the Board may be held
at such times as the Board shall from time to time by resolution determine. If
any day fixed for a regular meeting shall be a legal holiday at the place where
the meeting is to be held, then the meeting shall be held at the same hour and
place on the next succeeding business day not a legal holiday. Except as
required by law, notice of regular meetings need not be given.

         Section 3.9 Special Meetings. Special meetings of the Board shall be
held whenever called by the President or a majority of the authorized number of
directors. Except as otherwise provided by law or by these Bylaws, notice of the
time and place of each such special meeting shall be mailed to each director,
addressed to him at his residence or usual place of business, at least three (3)
days before the day on which the meeting is to be held, or shall be sent to him
at such place by facsimile telecommunication, telegraph or cable or be delivered
personally not less than forty-eight (48) hours before the time at which the
meeting is to be held. Except where otherwise required by law or by these
Bylaws, notice of the purpose of a special meeting need not be given. Notice of
any meeting of the Board shall not be required to be given to any director who
is present at such meeting other than a director who attends such meeting for
the express purpose of objecting, at the beginning of the meeting, to the
transaction of any business because the meeting is not lawfully called or
convened.

         Section 3.10 Quorum and Manner of Acting. Except as otherwise provided
in these Bylaws or by law, the presence of a majority of the authorized number
of directors shall be required to constitute a quorum for the transaction of
business at any meeting of the Board, and all matters shall be decided at any
such meeting, a quorum being present, by the affirmative votes of a majority of
the directors present. If no quorum exists, a majority of directors present at
any meeting may adjourn the same from time to time until a quorum is present.
Notice of any adjourned meeting need not be given.

         Section 3.11 Action by Consent. Any action required or permitted to be
taken at any meeting of the Board or of any committee thereof may be taken
without a meeting if a written consent thereto is signed by all members of the
Board or of such committee, as the case may be, and such written consent is
filed with the minutes of the proceedings of the Board or committee.

                                       6

<PAGE>   42

         Section 3.12 Compensation. The directors shall receive only such
compensation for their services as directors as may be allowed by resolution of
the Board. The Board may also provide that the Corporation shall reimburse each
director for any expense incurred on account of attendance at any meetings of
the Board or committees of the Board. Neither the payment of such compensation
nor the reimbursement of such expenses shall be construed to preclude any
director from serving the Corporation or its subsidiaries in any other capacity
and receiving compensation therefor.

         Section 3.13 Committees. By resolution passed by a majority of the
whole Board, the Board may designate one or more committees, each committee to
consist of one or more of the directors of the Corporation. Any such committee,
to the extent provided in the Board's resolution and except as otherwise limited
by law, shall have and may exercise all the powers and authority of the Board in
the management of the business and affairs of the Corporation, and may authorize
the seal of the Corporation to be affixed to all papers requiring it. Any such
committee shall keep written minutes of its meetings and report the same to the
Board at the next regular meeting of the Board. In the absence or
disqualification of a member of a committee and that member's alternate, if the
Board appoints alternates, the member or members thereof present at any meeting
and not disqualified from voting (whether or not the member or members
constitute a quorum) may unanimously appoint another member of the Board to act
at the meeting in the place of any such absent or disqualified member.

         Section 3.14 Committee Rules. Each committee of the Board of Directors
may fix its own rules of procedure and shall hold its meetings as provided by
such rules, except as may otherwise be provided by resolution of the Board
designating such committee, but in all cases the presence of at least a majority
of the members of such committee shall be necessary to constitute a quorum.

         Section 3.15 Presumption of Assent. A director of the Corporation who
is present at a meeting of the Board of Directors or any committee designated by
the Board at which action on any corporate matter is taken shall be deemed to
have assented to the action taken unless his dissent is entered in the minutes
of the meeting or unless he files his written dissent to such action with the
person acting as the Secretary of the meeting before the adjournment thereof or
forwards such dissent by registered mail to the Secretary of the Corporation
immediately after the adjournment of the meeting. Such right to dissent shall
not apply to a director who voted in favor of such action.

                                       7

<PAGE>   43

                                    ARTICLE 4
                                    OFFICERS

         Section 4.1 Number. The officers of the Corporation shall be chosen by
the Board and shall consist of a President, a Secretary, a Treasurer and such
other officers and assistant officers as may be deemed necessary or desirable by
the Board of Directors. The Board may, if it so determines, elect one or more
Vice Presidents and may choose a Chairman of the Board and Chief Executive
Officer from among its members. Any number of offices may be held by the same
person. In its discretion, the Board of Directors may choose not to fill any
office for any period as it may deem advisable, except the offices of President
and Secretary.

         Section 4.2 Election; Term of Office; Qualifications. The officers of
the Corporation, except such officers as may be appointed in accordance with
Section 4.3, shall be elected annually by the Board at the first meeting thereof
held after the election of the Board. Each officer shall hold office until his
successor has been duly chosen and qualifies or until his resignation or removal
in the manner hereinafter provided.

         Section 4.3 Assistants, Agents and Employees, Etc. In addition to the
officers specified in Section 4.1, the Board may appoint such other assistants,
agents and employees as it may deem necessary or advisable, including one or
more Assistant Secretaries, and one or more Assistant Treasurers, each of whom
shall hold office for such period, have such authority and perform such duties
as the Board may from time to time determine. The Board may delegate to any
officer of the Corporation or any committee of the Board the power to appoint,
remove and prescribe the duties of any such assistants, agents or employees.

         Section 4.4 Resignation; Removal. Any officer or agent may resign at
any time upon written notice to the Board or the Secretary of the Corporation.
Any officer or agent elected or appointed by the Board of Directors may be
removed by the Board of Directors whenever in its judgment the best interests of
the Corporation would be served thereby, but such removal shall be without
prejudice to the contract rights, if any, of the person so removed.

         Section 4.5 Vacancies. A vacancy in any office caused by death,
resignation, removal, disqualification or otherwise, may be filled by the Board
for the unexpired portion of the term of that office by a majority vote of the
directors then in office.

                                       8

<PAGE>   44

         Section 4.6 Chairman of the Board and Chief Executive Officer
("Chairman"). The Chairman, if one is elected, shall preside at all meetings of
the Board and stockholders; shall have, with the assistance of the President,
general responsibility for the active management of the business of the
Corporation; and shall perform such other duties and have such other powers as
the Board may from time to time prescribe. In addition to the President, the
Chairman shall have authority to execute bonds, mortgages and other contracts
(whether or not requiring a seal), except where required or permitted by law to
be otherwise signed and executed and except where the signing and execution
thereof are expressly delegated by the Board to some other officer or agent of
the Corporation.

         Section 4.7 The President. The President, subject to guidance and
assistance of the Chairman of the Board, if one is elected, shall preside at all
meetings of the stockholders; shall have general and active management of the
business of the Corporation; shall, in the absence of the Chairman, preside at
meetings of the Board and stockholders; and shall see that all orders and
resolutions of the Board are carried into effect. The President shall execute
bonds, mortgages and other contracts requiring a seal, under the seal of the
Corporation, except where required or permitted by law to be otherwise signed
and executed and except where the signing and execution thereof are expressly
delegated by the Board to some other officer or agent of the Corporation.

         Section 4.8 Vice President. The Vice President, or if there shall be
more than one, the vice presidents in the order determined by the Board, shall,
in the absence or disability of the President, perform the duties and exercise
the powers of the President and shall perform such other duties and have such
other powers as the Board or the Chairman may, from time to time, determine or
these bylaws may prescribe.

         Section 4.9 Secretary and Assistant Secretaries. The Secretary shall
attend all meetings of the Board and all meetings of the stockholders; shall
record all the proceedings of the meetings of the stockholders and of the Board
in a book to be kept for that purpose; and shall perform like duties for the
Board's standing committees when required. The Secretary shall give, or cause to
be given, notice of all meetings of the stockholders and special meetings of the
Board; shall perform such other duties as may be prescribed by the Board or
President, under whose supervision he or she shall act; shall have custody of
the corporate seal of the Corporation; and shall have authority to affix the
same to any instrument requiring it and, when it is so affixed, may attest it by
his or her signature. The Board may give general authority to any other officer
to affix the seal of the Corporation and to attest the affixing by his or her
signature. The Assistant Secretary, or if there be more than one, the assistant
secretaries in the order determined by the Board, shall, in the absence or
disability of the Secretary, perform the duties and exercise the powers of the
Secretary and shall perform such other duties and have such other powers as the
Board may from time to time prescribe.

                                       9

<PAGE>   45

         Section 4.10 Treasurer and Assistant Treasurer. The Treasurer shall
have the custody of the corporate funds and securities; shall keep full and
accurate accounts of receipts and disbursements in books belonging to the
Corporation; shall deposit all monies and other valuable effects in the name and
to the credit of the Corporation as may be ordered by the Board taking proper
vouchers for such disbursements; and shall render to the President and to the
Board, at its regular meetings or when the Board so requires, an account of the
Corporation. If required by the Board, the Treasurer shall give the Corporation
a bond (which shall be rendered every six (6) years) in such sums and with such
surety or sureties as shall be satisfactory to the Board for the faithful
performance of the duties of the office of Treasurer and for the restoration to
the Corporation, in case of death, resignation, retirement or removal from
office, of all books, papers, vouchers, money and other property of whatever
kind in the possession or under the control of the Treasurer belonging to the
Corporation. The Assistant Treasurer, or if there shall be more than one, the
assistant treasurers in the order determined by the Board, shall, in the absence
or disability of the Treasurer, perform the duties and exercise the powers of
the Treasurer and shall perform such other duties and have such other powers as
the Board may from time to time prescribe.

         Section 4.11 Compensation. The compensation of the officers of the
Corporation shall be fixed from time to time by the Board. None of such officers
shall be prevented from receiving such compensation by reason of the fact that
he or she is also a director of the Corporation. Nothing contained herein shall
preclude any officer from serving the Corporation, or any subsidiary
corporation, in any other capacity and receiving such compensation by reason of
the fact that he or she is also a director of the Corporation.

                                    ARTICLE 5
                                 INDEMNIFICATION

         Section 5.1 Action, Etc. Other Than by or in the Right of the
Corporation. The Corporation may indemnify any person who was or is a party or
is threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative
(other than an action by or in the right of the Corporation) by reason of the
fact that he is or was a director, officer, employee or agent of the
Corporation, or is or was serving at the request of the Corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, against expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred by him in connection with such action, suit or proceeding if he acted
in good faith and in a manner he reasonably believed to be in or not opposed to
the best interests of the Corporation, and, with respect to any criminal action
or proceeding, had no reasonable cause to believe his conduct was unlawful. The
termination of any action, suit

                                       10

<PAGE>   46

or proceeding by judgment, order, settlement or conviction, or upon a plea of
nolo contenders or its equivalent, shall not of itself create a presumption that
the person did not act in good faith and in a manner he reasonably believed to
be in or not opposed to the best interests of the Corporation, or, with respect
to any criminal action or proceeding, that he had reasonable cause to believe
that his or her conduct was unlawful.

         Section 5.2 Actions, Etc., by or in the Right of the Corporation. The
Corporation may indemnify any person who was or is a party or is threatened to
be made a party to any threatened, pending or completed action or suit by or in
the right of the Corporation to procure a judgment in its favor by reason of the
fact that he is or was a director, officer, employee or agent of the
Corporation, or is or was serving at the request of the Corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, against expenses (including attorneys, fees)
actually and reasonably incurred by him in connection with the defense or
settlement of such action or suit if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
Corporation; provided, however, except that no indemnification shall be made in
respect of any claim, issue or matter as to which such person shall have been
adjudged to be liable for negligence or misconduct in the performance of his
duty to the Corporation unless and only to the extent that the Court of Chancery
of the State of Delaware or the court in which such action or suit was brought
shall determine upon application that, despite the adjudication of liability but
in view of all the circumstances of the case, such person is fairly and
reasonably entitled to indemnity for such expenses as the Court of Chancery of
the State of Delaware or such other court shall deem proper.

         Section 5.3 Determination of Right of Indemnification. Any
indemnification under Section 5.1 or 5.2 (unless ordered by a court) shall be
made by the Corporation only as authorized in the specific case upon a
determination that indemnification of the director, officer, employee or agent
is proper in the circumstances because he has met the applicable standard of
conduct set forth in Section 5.1 or 5.2. Such determination shall be made (i) by
the Board by a majority vote of a quorum consisting of directors who were not
parties to such action, suit or proceeding, or (ii) if such a quorum is not
obtainable, or, even if obtainable a quorum of disinterested directors so
directs, by independent legal counsel in a written opinion or (iii) by the
stockholders.

         Section 5.4 Indemnification Against Expenses of Successful Party.
Notwithstanding the other provisions of this Article, to the extent that a
director, officer, employee or agent of the Corporation has been successful on
the merits or otherwise in defense of any action, suit or proceeding referred to
in Section 5.1 or 5.2, or in defense of any claim, issue or matter therein, he
shall be indemnified against expenses (including attorneys' fees) actually and
reasonably incurred by him in connection therewith.

                                       11

<PAGE>   47

         Section 5.5 Prepaid Expenses. Expenses incurred by an officer or
director in defending a civil, criminal, administrative, or investigative
action, suit or proceeding may be paid by the Corporation in advance of the
final disposition of such action, suit or proceeding as authorized by the Board
in the specific case upon receipt of an undertaking by or on behalf of the
director or officer to repay such amount if it shall ultimately be determined
that he or she is not entitled to be indemnified by the Corporation as
authorized in this Article. Such expenses (including attorneys' fees) incurred
by other employees and agents may be so paid upon such terms and conditions, as
the Board deems appropriate.

         Section 5.6 Other Rights and Remedies. The indemnification and
advancement of expenses provided by, or granted pursuant to, this Article shall
not be deemed exclusive of any other rights to which those seeking
indemnification or advancement of expenses may be entitled under any Bylaws,
agreement, vote of stockholders or disinterested directors or otherwise, both as
to action in his official capacity and as to action in another capacity while
holding such office, and shall continue as to a person who has ceased to be a
director, officer, employee or agent and shall inure to the benefit of the
heirs, executors and administrators of such a person.

         Section 5.7 Insurance. Upon resolution passed by the Board, the
Corporation may purchase and maintain insurance on behalf of any person who is
or was a director, officer, employee or agent of the Corporation, or is or was
serving at the request of the Corporation as a director, officer, employee or
agent of another corporation, partnership, joint venture, trust or other
enterprise, against any liability asserted against him and incurred by him in
any such capacity, or arising out of his status as such, whether or not the
Corporation would have the power to indemnify him against such liability under
the provisions of this Article.

         Section 5.8 Constituent Corporations. For the purposes of this Article,
references to "the Corporation" include all constituent corporations absorbed in
a consolidation or merger as well as the resulting or surviving corporation, so
that any person who is or was a director, officer, employee or agent of such a
constituent corporation or is or was serving at the request of such constituent
corporation as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise shall stand in the same
position under the provisions of this Article with respect to the resulting or
surviving corporation as he would if he had served the resulting or surviving
corporation in the same capacity.

         Section 5.9 Other Enterprises, Fines, and Serving at Corporation's
Request. For the purposes of this Article, references to "other enterprises"
shall include employee benefit plans; references to "fines" shall include any
excise taxes assessed on a person with respect to any employee benefit plan; and
references to "serving at the request of the Corporation" shall

                                       12
<PAGE>   48

include any service as a director, officer, employee or agent of the Corporation
that imposes duties on, or involves services by, such director, officer,
employee, or agent with respect to an employee benefit plan, its participants or
beneficiaries; and a person who acted in good faith and in a manner he
reasonably believed to be in the interest of the participants and beneficiaries
of an employee benefit plan shall be deemed to have acted in a manner "not
opposed to the best interests of the Corporation" as used in this Article.

                                    ARTICLE 6
                 CONTRACTS, CHECKS, DRAFTS, BANK ACCOUNTS, ETC.

         Section 6.1 Execution of Contracts. The Board, except as otherwise
provided in these Bylaws, may authorize any officer or officers, agent or
agents, to enter into any contract or execute any instrument in the name and on
behalf of the Corporation, and such authority may be general or confined to
specific instances. It may appoint, or authorize any officer or officers to
appoint, one or more transfer clerks or one or more transfer agents and one or
more registrars, and may require all certificates for stock to bear the
signature or signatures of any of them.

         Section 6.2 Checks, Drafts, Etc. All checks, drafts or other orders for
payment of money, notes or other evidence of indebtedness, issued in the name of
or payable to the Corporation, shall be signed or endorsed by such person or
persons and in such manner as, from time to time, shall be determined by
resolution of the Board. Each such officer, assistant, agent or attorney shall
give such bond, if any, as the Board may require.

         Section 6.3 Deposits. All funds of the Corporation not otherwise
employed shall be deposited from time to time to the credit of the Corporation
in such banks, trust companies or other depositories as the Board may select, or
as may be selected by any officer or officers, assistant or assistants, agent or
agents, or attorney or attorneys of the Corporation to whom such power is
delegated by the Board. For the purpose of deposit and for the purpose of
collection for the account of the Corporation, the President, any Vice President
or the Treasurer (or any other officer or officers, assistant or assistants,
agent or agents, or attorney or attorneys of the Corporation who shall from time
to time be determined by the Board) may endorse, assign and deliver checks,
drafts and other orders for the payment of money that are payable to the order
of the Corporation.

         Section 6.4 General and Special Bank Accounts. The Board may from time
to time authorize the opening and keeping of general and special bank accounts
with such banks, trust companies or other depositories as the Board may select
or as may be selected by any officer or officers, assistant or assistants, agent
or agents, or attorney or attorneys of the Corporation

                                       13

<PAGE>   49

to whom such power is delegated by the Board. The Board may make such special
rules and regulations with respect to such bank accounts, not inconsistent with
the provisions of these Bylaws, as it may deem expedient.

                                    ARTICLE 7
                                      STOCK

         Section 7.1 Certificates for Stock. Every owner of stock of the
Corporation shall be entitled to have a certificate or certificates, to be in
such form as the Board shall prescribe, certifying the number and class of
shares of the stock of the Corporation owned by him. The certificates
representing shares of such stock shall be numbered in the order in which they
are issued and shall be signed in the name of the Corporation by the President
or a Vice President, and by the Secretary or an Assistant Secretary or by the
Treasurer or an Assistant Treasurer. Any or all of the signatures on the
certificates may be a facsimile. If any officer, transfer agent or registrar who
has signed, or whose facsimile signature has been placed upon, any such
certificate, has ceased to be such officer, transfer agent or registrar before
such certificate is issued, such certificate may nevertheless be issued by the
Corporation with the same effect as though the person who signed such
certificate, or whose facsimile signature was placed thereupon, were such
officer, transfer agent or registrar at the date of issue. A record shall be
kept of the respective names of the persons, firms or corporations owning the
stock represented by such certificates, the number and class of shares
represented by such certificates, respectively, and the respective dates
thereof, and in case of cancellation, the respective dates of cancellation.
Every certificate surrendered to the Corporation for exchange or transfer shall
be cancelled, and no new certificate or certificates shall be issued in exchange
for any existing certificate until such existing certificate shall have been so
cancelled, except as provided in Section 7.4.

         Section 7.2 Transfers of Stock. Transfers of shares of stock of the
Corporation shall be made only on the books of the Corporation by the registered
holder thereof, or by his attorney thereunto authorized by power of attorney
duly executed and filed with the Secretary, or with a transfer clerk or a
transfer agent appointed as provided in Section 7.3, and upon surrender of the
certificate or certificates for such shares properly endorsed and the payment of
all taxes thereon. The person in whose name shares of stock stand on the books
of the Corporation shall be deemed by the Corporation to be the owner thereof
for all purposes. Whenever any transfer of shares is made for collateral
security, and not absolutely, such fact shall be so expressed in the entry of
transfer if, when the certificate or certificates are presented to the
Corporation for transfer, both the transferor and the transferee request the
Corporation to do so.

                                       14

<PAGE>   50

         Section 7.3 Regulations. The Board may make such rules and regulations
as it may deem expedient (if not inconsistent with these Bylaws) concerning the
issue, transfer and registration of certificates for shares of the stock of the
Corporation. It may appoint, or authorize any officer or officers to appoint,
one or more transfer clerks or one or more transfer agents and one or more
registrars, and may require all certificates for stock to bear the signature or
signatures of any of them.

         Section 7.4 Lost, Stolen, Destroyed and Mutilated Certificates. In any
case of loss, theft, destruction or mutilation of any certificate of stock,
another may be issued in its place upon proof of such loss, theft, destruction
or mutilation and upon the giving of a bond of indemnity to the Corporation in
such form and in such sum as the Board may direct; provided, however, that a new
certificate may be issued without requiring any bond when, in the judgment of
the Board, it is proper to do so.

         Section 7.5 Fixing Date for Determination of Stockholders of Record. In
order that the Corporation may determine the stockholders entitled to notice of
or to vote at any meeting of stockholders (or any adjournment thereof) or to
express consent to corporate action in writing without a meeting, or entitled to
receive payment of any dividend or other distribution or allotment of any
rights, or entitled to exercise any rights in respect of any other change,
conversion or exchange of stock or for the purpose of any other lawful action,
the Board may fix, in advance, a record date, which shall not be more than sixty
(60) nor less than ten (10) days before the date of such meeting, nor more than
sixty (60) days prior to any other action. If, in any case involving the
determination of stockholders for any purpose other than notice of or voting at
a meeting of stockholders or expressing consent to corporate action without a
meeting, the Board shall not fix such a record date, then the record date for
determining stockholders for such purpose shall be the close of business on the
day on which the Board adopts the resolution relating thereto. A determination
of stockholders entitled to notice of or to vote at a meeting of stockholders
shall apply to any adjournment of such meeting; provided, however, that the
Board may fix a new record date for the adjourned meeting.

                                    ARTICLE 8
                                  MISCELLANEOUS

         Section 8.1 Fiscal Year. The fiscal year of the Corporation shall be
determined by resolution of the Board.

         Section 8.2 Seal. The Board shall provide a corporate seal, which shall
be in the form of a circle and shall bear the name of the Corporation and words
and figures showing that the Corporation was incorporated in the State of
Delaware and the year of incorporation.

                                       15

<PAGE>   51

         Section 8.3 Waiver of Notices. Whenever notice is required to be given
by these Bylaws, by the Certificate of Incorporation or by law, the person
entitled to said notice may waive such notice in writing, either before or after
the time stated therein, and such waiver shall be deemed equivalent to notice.

         Section 8.4 Amendments. These Bylaws, or any of them, may be amended,
modified, repealed or adopted and new Bylaws may be made (i) by the Board,
acting at any meeting of the Board, or (ii) by the stockholders, at any annual
meeting of stockholders, without previous notice, or at any special meeting of
stockholders, provided that notice of such proposed amendment, modification,
repeal or adoption is given in the notice of special meeting. Any Bylaws made or
altered by the stockholders may be altered or repealed by either the Board or
the stockholders.

                                       16

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00005-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00005-of-00352.parquet"}]]