Alterra Healthcare 10-K 2002 FY Annual report

Exhibit 10.20

FIRST AMENDMENT TO
MEMORANDUM OF UNDERSTANDING


         ThisFIRST AMENDMENT TO MEMORANDUM OF UNDERSTANDING (this “Amendment”) is made and entered into as of December 30, 2002, amongALTERRA HEALTHCARE CORPORATION, a Delaware corporation (“Guarantor”),ALS LEASING, INC., a Delaware corporation (“Tenant”) andJER/NHP SENIOR LIVING ACQUISITION, LLC, a Delaware limited liability company (“Landlord”).

R E C I T A L S

A.        Landlord and Tenant entered into that certain Master Lease dated October 7, 2002 (the “Lease”) pursuant to which Tenant has leased from Landlord the Premises as described therein.

B.        Pursuant to its separate Guaranty of Master Lease and Letter of Credit Agreement dated October 7, 2002, Guarantor unconditionally guaranteed to Landlord, among other things, the performance by Tenant under the Lease.

C.        Pursuant to that certain Memorandum of Understanding dated October 7, 2002 (the “Original Memorandum of Understanding”), Tenant and Guarantor requested, and Landlord agreed, to forbear from exercising certain remedies available to Landlord upon a bankruptcy filing by Guarantor and certain other potential defaults under the Lease and the Guaranty. Initially capitalized terms used but not otherwise defined in this Amendment shall have the meanings given to them in the Original Memorandum of Understanding.

D.        Guarantor and Tenant have requested, and Landlord has agreed, to modify certain terms and provisions of the Original Memorandum of Understanding, and to clarify certain terms and provisions of the Lease, as hereinafter set forth.

A G R E E M E N T

        NOW, THEREFORE, in consideration of the foregoing Recitals (which by this reference are incorporated herein), and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:

1.        Filing Deadline. The definition of the Filing Deadline in Section 7 of the Original Memorandum of Understanding is hereby deleted in its entirety and the following substituted in lieu thereof:

“Filing Deadline” shall mean January 31, 2003.

2.        Insurance. The final sentence of Section 3 of the Original Memorandum of Understanding is hereby deleted in its entirety, and the following substituted in lieu thereof:




Upon the earlier of the Plan Effective Date or June 30, 2003, whichever first occurs, Guarantor shall have in place the policies of insurance required under Section 6 of the Lease, as modified by Schedule 2 to the Lease.

3.        Section 1 of the Original Memorandum of Understanding is hereby modified and amended by deleting the period at the end of subparagraph (c) and substituting in lieu thereof the following:

“;or”

and, in addition, adding the following new subparagraph (d):

(d) An Event of Default arising under Section 12(d)(ii) or (iii) or Section 12(f)(ii) of the Lease as a result of Guarantor's pledge of the stock of Tenant as security for debtor in possession financing, where (A) such pledge occurs during the pendency of a Conforming Bankruptcy Proceeding and (B) such pledge is expressly subject and subordinate to (i) the Stock Pledge dated October 7, 2002 and (ii) the prior stock pledge of the stock of Tenant given by Guarantor to Landlord and certain affiliates of Landlord dated April 9, 2002.

4.        For purposes of clarifying certain terms of the Lease, Landlord and Tenant agree that a single-parent-captive insurance program that is fully funded as of the Plan Effective Date for a policy term of one (1) year shall satisfy the requirements of the final sentence of Section 5 to Schedule 3 to the Lease.

        Except as modified herein, Guarantor, Tenant and Landlord acknowledge and agree that the Lease and Original Memorandum of Understanding are in full force and effect and are hereby ratified, confirmed and affirmed in all respects. Tenant and Guarantor hereby further acknowledge the full force and effect of, and ratify their respective obligations under, the Guaranty, the LC Agreement and the Stock Pledge, in each case without modification or amendment. Hereafter, all references to the “Memorandum of Understanding” shall mean and refer to the Memorandum of Understanding as amended by this Amendment.



        IN WITNESS WHEREOF, this Amendment has been executed byTENANT,GUARANTOR andLANDLORD as of the date first written above.

“TENANT”

ALS LEASING, INC.,
a Delaware corporation


By:/s/ Mark Ohlendorf        
Name:Mark Ohlendorf        
Title:Vice President        


Witness:/s/ Patrick F. Kennedy                        Witness:/s/ Peter E. Pickette___________


“GUARANTOR”

ALTERRA HEALTHCARE CORPORATION,
a Delaware corporation


By:/s/ Mark Ohlendorf        
Name:Mark Ohlendorf        
Title:Senior Vice President        


Witness:/s/ Patrick F. Kennedy                        Witness:/s/ Peter E. Pickette___________



“LANDLORD”

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

By:        JER/NHP SENIOR HOUSING LLC,
a Delaware limited liability company,
its sole member

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

By: /s/Donald D. Bradley
Name: Donald D. Bradley
Title: Senior Vice President and General Counsel


Witness:                 Witness: