<PAGE>

                                                                   EXHIBIT 10.57

                     GUARANTY OF AGREEMENT REGARDING LEASES

      THIS GUARANTY OF AGREEMENT REGARDING LEASES (this "Guaranty") is made and
entered into to be effective as of October 2, 2004 (the "Effective Date"), by
ALTERRA HEALTHCARE CORPORATION, a Delaware corporation ("Guarantor"), in favor
of PSLT-ALS PROPERTIES HOLDINGS, LLC, a Delaware limited liability company
("PSLT-ALS Holdings").

                                    RECITALS:

      WHEREAS, as of the Effective Date, PSLT-ALS Holdings and ALS Properties
Holding Company, LLC, a Delaware limited liability company, as tenant ("ALS
Holdings"), have executed and entered into (i) that certain Agreement Regarding
Leases, and (ii) a certain Agreement Regarding ARL (the Agreement Regarding
Leases, as so modified, and as the same may be renewed, extended, or further
amended or modified from time to time, the "Agreement Regarding Leases"),
pertaining to the Facilities. Capitalized terms used but not otherwise defined
herein shall have the meanings ascribed to such terms in the Agreement Regarding
Leases;

      WHEREAS, Guarantor is a direct or indirect owner of 100% of the beneficial
ownership interest in ALS Holdings, and Guarantor will derive substantial direct
and indirect benefits from the transactions contemplated by the Agreement
Regarding Leases; and

      WHEREAS, it is a condition to the entering into of the Agreement Regarding
Leases by PSLT-ALS Holdings that Guarantor shall have executed and delivered
this Guaranty.

      NOW, THEREFORE, in consideration of the foregoing and for other good and
valuable consideration the receipt and sufficiency of which are hereby
acknowledged by Guarantor, and in order to induce PSLT-ALS Holdings to enter
into the Agreement Regarding Leases, Guarantor hereby agrees as follows:

      Section 1. GUARANTY. Guarantor hereby unconditionally and irrevocably
guarantees (i) the full and prompt payment of all Alterra Rent Payments and
other sums required to be paid by ALS Holdings under the Agreement Regarding
Leases, (ii) the full and timely performance of all other terms, conditions,
covenants and obligations of ALS Holdings under the Agreement Regarding Leases
(as same may be amended, renewed, extended or modified), and (iii) any and all
expenses (including reasonable attorneys' fees and expenses) incurred by
PSLT-ALS Holdings in enforcing any rights under the Agreement Regarding Leases
or this Guaranty (such obligations, collectively, are referred to as the
"Guaranteed Obligations"). Guarantor agrees that this Guaranty is a guarantee of
payment and performance, not collection, and that Guarantor is primarily liable
and responsible for the payment and performance of the Guaranteed Obligations.
It is not necessary for PSLT-ALS Holdings, in order to enforce payment and
performance by Guarantor under this Guaranty, first or contemporaneously to
institute suit or exhaust remedies against ALS Holdings or others liable for any
of the Guaranteed Obligations or to enforce rights against any collateral
securing any of it. With the exception of the defense of

<PAGE>

prior payment, performance, or compliance by ALS Holdings or Guarantor of the
Guaranteed Obligations which Guarantor is called upon to pay, or the defense
that PSLT-ALS Holdings' claim against Guarantor hereunder is barred by the
applicable statute of limitations, all defenses of the law of guaranty or
suretyship, including, without limitation, substantive defenses and procedural
defenses, are waived and released by Guarantor to the extent permitted by law.
Except as provided in the preceding sentence, under no circumstances will the
liability of Guarantor under this Guaranty be terminated either with respect to
any period of time when the liability of ALS Holdings under the Agreement
Regarding Leases continues, or with respect to any circumstances as to which the
Guaranteed Obligations have not been fully discharged by payment, performance or
compliance.

      Section 2. GUARANTY ABSOLUTE. Guarantor guarantees that the Guaranteed
Obligations will be paid and performed strictly in accordance with the terms of
the Agreement Regarding Leases. The liability and responsibilities of Guarantor
under this Guaranty shall be absolute and unconditional, shall not be subject to
any counterclaim, setoff, or deduction and shall not be released, discharged,
affected or impaired by (i) any change in the time, manner, or place of payment
or performance of any of the Guaranteed Obligations, or any other amendment or
waiver of, or any consent to or departure from, or termination of, the Agreement
Regarding Leases or any of the Property Leases, (ii) any release or discharge of
ALS Holdings or any Alterra Lessee in any bankruptcy, receivership or other
similar proceedings, (iii) the impairment, limitation or modification of the
liability of ALS Holdings or the estate of ALS Holdings in bankruptcy or any
Alterra Lessee or the estate of any Alterra Lessee in bankruptcy, or of any
remedy for the enforcement of ALS Holdings' liability under the Agreement
Regarding Leases, resulting from the operation of any present or future
provisions of any bankruptcy code or other statute or from the decision in any
court, the rejection or disaffirmance of the Agreement Regarding Leases in any
such proceedings, or the assignment or transfer of the Agreement Regarding
Leases by ALS Holdings, (iv) any failure, omission or delay on the part of
PSLT-ALS Holdings to enforce, assert or exercise any right, power or remedy
conferred on or available to PSLT-ALS Holdings in or by the Agreement Regarding
Leases or this Guaranty, or any action on the part of PSLT-ALS Holdings granting
indulgence or extension in any form whatsoever or any invalidity, irregularity
or unenforceability as to ALS Holdings of all or any part of the Guaranteed
Obligations or any security therefor, (v) the waiver by PSLT-ALS Holdings of the
performance or observance by ALS Holdings or Guarantor of any of the agreements,
covenants, terms or conditions contained in the Agreement Regarding Leases or
this Guaranty, (vi) any merger, consolidation, reorganization or similar
transaction involving ALS Holdings even if ALS Holdings ceases to exist as a
result of (and is not the surviving party in) such transaction, (vii) the
inability of PSLT-ALS Holdings or ALS Holdings to enforce any provision of the
Agreement Regarding Leases for any reason, (viii) any change in the corporate
relationship between ALS Holdings and Guarantor or any termination of such
relationship, (ix) any change in the ownership of all or any part of the
membership interests in ALS Holdings, (x) the inability of ALS Holdings to
perform, or the release of ALS Holdings or Guarantor from the performance of,
any obligation, agreement, covenant, term or condition under the Agreement
Regarding Leases or this Guaranty by reason of any law, regulation or decree,
now or hereafter in effect, or (xi) any disability or other defense of ALS
Holdings. PSLT-ALS Holdings and ALS Holdings, without notice to or consent by
Guarantor, may at any time or times enter into such modifications, extensions,
amendments, or other covenants with respect to the Agreement Regarding Leases as
they may deem appropriate and Guarantor shall not be released thereby, but shall
continue to be

                                       2

<PAGE>

fully liable for the payment and performance of all liabilities, obligations and
duties of ALS Holdings under the Agreement Regarding Leases as so modified,
extended or amended.

      Section 3. REINSTATEMENT. Guarantor further agrees that, if at any time
all or any part of any payment applied to any of the Guaranteed Obligations is
or must be rescinded or returned for any reason whatsoever (including, without
limitation, the insolvency, bankruptcy or reorganization of Guarantor), such
Guaranteed Obligations shall, for the purposes of this Guaranty, to the extent
that such payment is or must be rescinded or returned, be deemed to have
continued in existence, notwithstanding such application, and this Guaranty
shall continue to be effective or be reinstated, as the case may be, as to such
Guaranteed Obligations, all as though such application had not been made.

      Section 4. CERTAIN ACTIONS. PSLT-ALS Holdings may, from time to time, at
its discretion and without notice to Guarantor, take any or all of the following
actions: (a) retain or obtain the primary or secondary obligation of any obligor
or obligors, in addition to Guarantor, with respect to any of the Guaranteed
Obligations; (b) extend or renew for one or more periods (regardless of whether
longer than the original period), or release or compromise any obligation of
Guarantor hereunder or any obligation of any nature of any other obligor
(including, without limitation, ALS Holdings) with respect to any of the
Guaranteed Obligations; or (c) release or fail to perfect any lien upon or
security interest in, or impair, surrender, release or permit any substitution
or exchange for, all or any part of any property securing any of the Guaranteed
Obligations or any obligation hereunder, or extend or renew for one or more
periods (regardless of whether longer than the original period) or release or
compromise any obligations of any nature of any obligor with respect to any such
property.

      Section 5. WAIVER. To the extent permitted by applicable law, Guarantor
hereby expressly waives: (i) notice of the acceptance of this Guaranty, (ii)
except as otherwise provided in the Agreement Regarding Leases or this Guaranty,
notice of the existence or creation or non-payment of all or any of the
Guaranteed Obligations, (iii) presentment, demand, notice of dishonor, protest
and all other notices whatsoever except as otherwise provided in the Agreement
Regarding Leases or this Guaranty, and (iv) all diligence in collection or
protection of or realization upon the Guaranteed Obligations or any part
thereof, any obligation hereunder, or any security for or guaranty of any of the
foregoing.

      Section 6. WAIVER OF SUBROGATION. Guarantor hereby waives all rights of
subrogation which it may at any time otherwise have as a result of this Guaranty
to the claims of PSLT-ALS Holdings against ALS Holdings and all contractual,
statutory or common law rights of reimbursement, contribution or indemnity from
ALS Holdings which it may at any time otherwise have as a result of this
Guaranty prior to final payment and satisfaction of the Guaranteed Obligations.

      Section 7. MISCELLANEOUS.

      7.1 Amendments, Etc. No amendment or waiver of any provision of this
Guaranty nor consent to any departure by Guarantor therefrom shall be effective
unless the same shall be in writing and signed by PSLT-ALS Holdings.

                                       3

<PAGE>

      7.2 Addresses for Notices. All notices hereunder shall be in writing,
personally delivered, delivered by overnight courier service, sent by facsimile
transmission (with confirmation of receipt), or sent by certified mail, return
receipt requested, addressed as follows, or to such other address as shall be
designated by Guarantor or PSLT-ALS Holdings in written notice to the other
party:

      If to ALS Holdings:       ALS Properties Holding Company, LLC
                                c/o Alterra Healthcare Corporation
                                6737 W. Washington Street, Suite 2300
                                Milwaukee, Wisconsin  53214
                                Attention: Mr. Mark W. Ohlendorf
                                Telephone: (414) 918-5403
                                Facsimile: (414) 918-5055

      with a copy to:           Alterra Healthcare Corporation
                                c/o Alterra Healthcare Corporation
                                6737 W. Washington Street, Suite 2300
                                Milwaukee, Wisconsin  53214
                                Attention: Mr. Mark W. Ohlendorf
                                Telephone: (414) 918-5403
                                Facsimile: (414) 918-5055

      and to:                   Rogers & Hardin LLP
                                229 Peachtree Street
                                2700 International Tower
                                Atlanta, Georgia 30303
                                Attention: Alan C. Leet, Esq.
                                Telephone: (404) 420-4616
                                Facsimile: (404) 525-2224

      If to Guarantor:          Alterra Healthcare Corporation
                                c/o Alterra Healthcare Corporation
                                6737 W. Washington Street, Suite 2300
                                Milwaukee, Wisconsin  53214
                                Attention: Mr. Mark W. Ohlendorf
                                Telephone: (414) 918-5403
                                Facsimile: (414) 918-5055

      with a copy to:           Rogers & Hardin LLP
                                229 Peachtree Street
                                2700 International Tower
                                Atlanta, Georgia 30303
                                Attention: Alan C. Leet, Esq.
                                Telephone: (404) 420-4616
                                Facsimile: (404) 525-2224

                                       4

<PAGE>

      If to PSLT-ALS Holdings:  PSLT-ALS Properties Holdings, LLC
                                c/o Provident Senior Living Trust
                                600 College Road East, Suite 3400
                                Princeton, New Jersey 08540
                                Attention: General Counsel
                                Telephone: (609) 720-0825
                                Facsimile: (609) 720-0826

      with a copy to:           Sidley Austin Brown & Wood LLP
                                787 Seventh Avenue
                                New York, New York 10019
                                Attention: Scott Freeman, Esq.
                                Telephone: (212) 839-7358
                                Facsimile: (212) 839-5599

      7.3 No Waiver; Remedies. No failure on the part of PSLT-ALS Holdings to
exercise, and no delay in exercising, any right hereunder shall operate as a
waiver thereof; nor shall any single or partial exercise of any right hereunder
preclude any other or further exercise thereof or the exercise of any other
right. The remedies herein provided are cumulative and not exclusive of any
other remedies available at law or equity.

      7.4 Continuing Guaranty; Transfer of Interest. This Guaranty shall create
a continuing guaranty and will (i) remain in full force and effect until payment
and performance in full and satisfaction of the Guaranteed Obligations, (ii) be
binding upon Guarantor and its successors and assigns, and (iii) inure, together
with the rights and remedies of PSLT-ALS Holdings hereunder, to the benefit of
PSLT-ALS Holdings and its successors, as permitted under the Agreement Regarding
Leases. Without limiting the generality of the foregoing clause, if and when
PSLT-ALS Holdings assigns or otherwise transfers any interest held by it under
the Agreement Regarding Leases to any other person, that other person shall
thereupon become vested with all the benefits held by PSLT-ALS Holdings under
this Guaranty.

      Section 8. GOVERNING LAW. THIS GUARANTY SHALL BE GOVERNED BY, AND
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

      Section 9. INDUCEMENT TO LANDLORD. Guarantor acknowledges and agrees that
the execution and delivery of this Guaranty by Guarantor to PSLT-ALS Holdings
has served as a material inducement to PSLT-ALS Holdings to execute and deliver
the Agreement Regarding Leases, and Guarantor further acknowledges and agrees
that but for the execution and delivery of this Guaranty by Guarantor, PSLT-ALS
Holdings would not have executed and delivered the Agreement Regarding Leases.

      Section 10. INTENTIONALLY DELETED.

      Section 11. INTENTIONALLY DELETED.

      Section 12. SUBMISSION TO JURISDICTION. Guarantor hereby irrevocably
submits to the non-exclusive jurisdiction of any State or Federal court located
in New York

                                       5

<PAGE>

County, New York State over any action, suit or proceeding to enforce or defend
any right under this Guaranty or otherwise arising from or relating to this
Guaranty, and Guarantor irrevocably agrees that all claims in respect of any
such action, suit or proceeding may be heard and determined in such court.
Guarantor hereby irrevocably waives, to the fullest extent that it may
effectively do so, the defense of an inconvenient forum or venue to the
maintenance of any such action, suit or proceeding. Guarantor hereby agrees that
a final, non-appealable judgment in any such action, suit or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on the judgment or
in any other manner provided by law.

      Section 13. WAIVER OF JURY TRIAL. Guarantor hereby waives, to the fullest
extent permitted by applicable law, any right to a trial by jury in any action,
suit or proceeding to enforce or defend any rights under this Guaranty or any
other transaction document or any amendment, instrument, document or agreement
delivered or which may in the future be delivered in connection herewith or
arising from or relating to any relationship existing in connection with this
guaranty, and agrees, to the fullest extent permitted by applicable law, that
any such action, suit or proceeding shall be tried before a court and not before
a jury.

      Section 14. COOPERATION, FURTHER ASSURANCES. Guarantor covenants, and
agrees to sign, execute and deliver or cause to be signed, executed and
delivered and to do or make, or to cause to be done or make, upon the written
request of PSLT-ALS Holdings, any and all agreements, instruments, papers,
deeds, acts or things, supplemental, confirming or otherwise, as may be
reasonably required by PSLT-ALS Holdings for the purpose of, or in connection
with, the transaction contemplated hereby. Upon full and final payment and
performance of the Guaranteed Obligations, PSLT-ALS Holdings agrees to execute a
release for the benefit of Guarantor, in form and content reasonably
satisfactory to PSLT-ALS Holdings. Notwithstanding anything to the contrary
contained herein, this Guaranty shall survive for a period of twenty four (24)
months after the expiration or earlier termination of the Agreement Regarding
Leases, and Guarantor shall be liable to PSLT-ALS Holdings hereunder for any
Guaranteed Obligations which arise during such period and relate to matters
which (i) occurred during the term of the Agreement Regarding Leases or (ii) ALS
Holdings is otherwise required to indemnify PSLT-ALS Holdings against pursuant
to the terms of the Agreement Regarding Leases.

      Section 15. INTENTIONALLY DELETED.

      Section 16. DELIVERY OF FINANCIAL INFORMATION. Guarantor hereby agrees to
cause ALS Holdings to deliver the financial information of Guarantor required to
be delivered to PSLT-ALS Holdings pursuant to Paragraph 9(d) of the Agreement
Regarding Leases and further agrees that any such financial information of
Guarantor so delivered may, without the prior consent of, or notice to,
Guarantor, be disclosed in offering memoranda or prospectuses, or similar
publications in connection with syndications, private placements or public
offerings of PSLT-ALS Holdings' (or PSLT-ALS Holdings' direct or indirect
Parent's) securities or interests, and any other reporting requirements under
applicable federal and state laws, including those of any successor to PSLT-ALS
Holdings. Guarantor agrees to provide such other reasonable information
necessary to facilitate a private placement or a public offering or to satisfy
the SEC or regulatory disclosure requirements. Guarantor agrees to cause its
independent accountants, at PSLT-ALS Holdings' cost, to consent to the inclusion
of their audit report issued with respect to

                                       6
<PAGE>

such financial statements in any registration statement or other filing under
federal and state laws and to provide the underwriters participating in any
offering of securities or interests of PSLT-ALS Holdings (or PSLT-ALS Holdings'
direct or indirect Parent) with a standard accountant's "comfort" letter with
regard to the financial information of Guarantor included or incorporated by
reference into any prospectus or other offering document. Guarantor also agrees
to make available to any underwriter participating in an offering of PSLT-ALS
Holdings' (or PSLT-ALS Holdings' direct or indirect Parent's) securities or
interests, and any attorney, accountant or other agent or representative
retained by an underwriter (an "Inspector"), all financial and other records and
pertinent corporate documents of Guarantor as shall be reasonably necessary to
enable them to exercise their due diligence responsibility, and cause
Guarantor's directors, officers and employees to supply all information
requested by any such Inspector in connection with such offering. Upon request
of PSLT-ALS Holdings, Guarantor shall notify PSLT-ALS Holdings of any necessary
corrections to information PSLT-ALS Holdings proposes to publish within a
reasonable period of time (not to exceed three (3) Business Days) after being
informed thereof by PSLT-ALS Holdings.

      Section 17. INDEMNITY.

      17.1 Indemnity. Guarantor shall indemnify, defend, protect and hold
harmless PSLT-ALS Holdings, its Affiliates, its direct and indirect Parent,
directors, employees, agents and each Person, if any, who controls PSLT-ALS
Holdings or any such Affiliate within the meaning of Section 15 of the
Securities Act of 1933 or Section 20 of the Securities Exchange Act of 1934, and
any placement agent or underwriter with respect to any syndication, private
placement or public offering, from and against all Losses (defined below) that
any Indemnified Party (defined below) may at any time suffer or incur in
connection with or relating to any Third Party Claim (defined below) that arises
out of or is based upon any untrue statement of any material fact contained in
any information or documents furnished by Guarantor, ALS Holdings, the Alterra
Lessees or their respective Affiliates pursuant to Section 16 hereof or the
Agreement Regarding Leases or any Property Lease, as applicable, or arising out
of, or which are based upon, the omission or alleged omission to state therein a
material fact required to be stated in such information or necessary in order to
make the statements in such information not materially misleading. Any and all
of such Losses shall become part of the Guaranteed Obligations for which
Guarantor is liable hereunder. Any claim for indemnification under this Section
17 shall be subject to the provisions and procedures set forth in this Section
17. Guarantor shall not have any indemnification obligations under this Section
17 with respect to financial statements delivered to PSLT-ALS Holdings following
the date that PSLT-ALS Holdings or PSLT-ALS Holdings' direct or indirect Parent
no longer separately includes, or incorporates by reference, Guarantor's
financial information in its public filings. PSLT-ALS Holdings and/or its direct
or indirect Parent will continue to separately include, or incorporate by
reference, Guarantor's financial statements in its public filings until such
time as PSLT-ALS Holdings' and/or its direct or indirect Parent's attorneys and
accountants reasonably determine that such separate inclusion or incorporation
by reference of Guarantor's financial information in its public filings is no
longer necessary.

      17.2 Notification of Third Party Claims. (a) A Person that may be entitled
to be indemnified under this Section 17 (the "Indemnified Party"), shall
promptly notify the party or parties liable for such indemnification (the
"Indemnifying Party") in writing of any pending or threatened claim or demand by
a third party, including any Governmental Authority, that the Indemnified Party
has determined has given or could reasonably give rise to a right of
indemnification under this Section 17 (including a pending or

                                       7

<PAGE>

threatened claim or demand asserted by a third party, including any Governmental
Authority, against the Indemnified Party, such claim being a "Third Party
Claim"), describing in reasonable detail the facts and circumstances with
respect to the subject matter of such claim or demand; provided, however, that
the failure to provide such notice shall not release the Indemnifying Party from
any of its obligations under this Section 17 except to the extent the
Indemnifying Party is actually prejudiced by such failure.

            (b) Upon receipt of a notice of a claim for indemnity from an
Indemnified Party pursuant to Section 17.2(a), and subject to Section 17.2(d),
the Indemnifying Party may, by notice to the Indemnified Party delivered within
ten (10) Business Days of the receipt of notice of such claim, assume the
defense and control of any Third Party Claim but shall allow the Indemnified
Party a reasonable opportunity to participate in the defense of such Third Party
Claim with its own counsel and at its own expense. The Indemnified Party may
take any actions reasonably necessary to defend such Third Party Claim prior to
the time that it receives a notice from the Indemnifying Party as contemplated
by the preceding sentence. The Indemnifying Party shall select counsel,
contractors and consultants of recognized standing and competence. To the extent
the principal remedy sought in any Third Party Claim is equitable relief, the
Indemnifying Party shall consult with the Indemnified Party as to the selection
of counsel to defend such Third Party Claim. Each Indemnified Party, shall, and
shall cause each of its Affiliates and Representatives to, cooperate in good
faith with the Indemnifying Party in the defense of any Third Party Claim. The
Indemnifying Party shall not be authorized to consent to a settlement of, or the
entry of any judgment arising from, any Third Party Claim, without the consent
of any Indemnified Party, provided that the Indemnified Party shall not withhold
its consent if such settlement or judgment involves solely the payment of money
without any finding or admission of any violation of any Law (defined below) or
admission of any wrongdoing and the Indemnifying Party shall (i) pay or cause to
be paid all amounts arising out of such settlement or judgment concurrently with
the effectiveness of such settlement and (ii) obtain, as a condition of any
settlement or judgment, a complete and unconditional release of each relevant
Indemnified Party from any and all liability in respect of such Third Party
Claim.

            (c) If an Indemnified Party determines in good faith that it is
reasonably likely that a Third Party Claim would materially adversely affect it
other than as a result of monetary damages for which it would be entitled to
indemnification under this Agreement (including with respect to remediation of
any environmental matters), the Indemnified Party may, by notice to the
Indemnifying Party, assume the exclusive right to defend, compromise or settle
such Third Party Claim with its own counsel and at its own expense; provided,
however, that the Indemnifying Party will not be bound by any determination of a
Third Party Claim so defended or any compromise or settlement effected without
its written consent.

            (d) Notwithstanding the foregoing, no Indemnifying Party shall have
any liability under this Section 17 for any Losses arising out of or relating to
any Third Party Claim that is settled or compromised by an Indemnified Party
without the consent of such Indemnifying Party (which consent shall not be
unreasonably withheld or delayed).

                                       8

<PAGE>

      17.3 Payment; Interest on Payment. If any Third Party Claim shall have
been finally determined (including if any Action (defined below) for
indemnification under this Section 17 shall have been finally determined), the
amount of such final determination shall be paid to the Indemnified Party, on
demand in immediately available funds. A Third Party Claim or Action and the
liability for and amount of Losses, shall be deemed to be "finally determined"
for purposes of this Section 17 when the parties to such Third Party Claim or
Action have so determined by mutual agreement or, if disputed, when a final
non-appealable Governmental Order (defined below) with respect thereto shall
have been entered. Any amounts not paid when due pursuant to this Section 17
shall bear interest from the date thereof until the date paid at a rate equal to
the rate publicly announced from time to time by Citibank, N.A. as its prime or
base rate. Nothing in this Section 17 shall operate to bar an Indemnified Party
from seeking and (where appropriate) obtaining interest on any claim to the
extent ordered by a court adjudicating any Action brought by the Indemnified
Party against an Indemnifying Party.

      17.4 Additional Indemnification Provisions. (a) The parties hereto agree,
for themselves and on behalf of any of their respective Related Parties and
Representatives, that, with respect to each indemnification obligation in this
Section 17, (i) all Losses shall be net of any Eligible Insurance Proceeds (as
defined below) and (ii) in no event shall the Indemnifying Party have liability
to the Indemnified Party for any punitive, incidental, special, indirect or
consequential damages, except to the extent that the Indemnified Party pays
punitive, incidental, special, indirect or consequential damages to a third
party in respect of a Third Party Claim.

            (b) Any amount payable by an Indemnifying Party pursuant to this
Section 17 shall be paid promptly and payment shall not be delayed pending any
determination of Eligible Insurance Proceeds or Retained Insurance Proceeds (as
defined below). In any case where an Indemnified Party recovers from a third
Person, any amount in respect of any Loss for which such Indemnified Party has
actually been reimbursed by an Indemnifying Party pursuant to this Section 17
(other than Retained Insurance Proceeds), such Indemnified Party shall promptly
pay over to the Indemnifying Party the amount so recovered (after deducting
therefrom the amount of expenses incurred by it in procuring such recovery), but
not in excess of the sum of (i) any amount previously paid by the Indemnifying
Party to or on behalf of the Indemnified Party in respect of such Loss and (ii)
any amount expended by the Indemnifying Party in pursuing or defending any claim
arising out of such matter.

            (c) All payments required to be made by an Indemnifying Party under
this Section 17 to any Indemnified Party shall be without set-off, counterclaim
or deduction of any kind.

            (d) If any portion of Losses to be reimbursed by the Indemnifying
Party may be covered, in whole or in part, by third-party insurance coverage
(each, an "Insurance Policy"), the Indemnified Party shall promptly give notice
thereof to the Indemnifying Party (a "Notice of Insurance"). If the Indemnifying
Party so requests within 30 days after receipt of a Notice of Insurance, the
Indemnified Party shall use its commercially reasonable efforts to collect the
maximum amount of insurance proceeds thereunder, in which event (i) all such
proceeds actually received, net of costs reasonably incurred by the Indemnified
Party in seeking such collection, shall be considered "Eligible Insurance
Proceeds" and (ii) the Indemnifying Party shall reimburse the Indemnified Party
for all reasonable costs incurred in connection with such

                                       9

<PAGE>

collection and the amount of any prospective or retroactive increase in premiums
actually paid by the Indemnified Party under the Insurance Policy (as such
increased premiums are incurred) directly related to the payment of Eligible
Insurance Proceeds for such Loss for three years following the next renewal of
such Insurance Policy. If the Indemnifying Party does not request that the
Indemnified Party seek coverage of any portion of such Loss under the Insurance
Policy within 30 days after receipt of a Notice of Insurance, (i) any proceeds
that the Indemnified Party may receive thereunder shall be considered "Retained
Insurance Proceeds" and (ii) the Indemnifying Party shall have no liability for
any premium increases thereunder relating to the collection of such Retained
Insurance Proceeds.

            (e) If the indemnification provided for in this Section 17 is
unavailable or insufficient to hold harmless an Indemnified Party, then each
Indemnifying Party shall contribute to the amount paid or payable by such
Indemnified Party as a result of such Losses in such proportion as is
appropriate to reflect the relative fault of Guarantor, on the one hand, and
PSLT-ALS Holdings, on the other hand, in connection with the statements or
omissions which resulted in such Losses as well as any other relevant equitable
considerations. The relative fault shall be determined by reference to, among
other things, whether the untrue statement of a material fact or the omission to
state a material fact relates to information supplied by PSLT-ALS Holdings, on
the one hand, or by Guarantor, on the other hand, and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such untrue statement or omission.

            (f) Notwithstanding anything to the contrary in this Section 17, to
the extent that the Indemnified Party or an Affiliate realizes an actual Tax (as
defined below) benefit as a result of the event giving rise to the indemnity
payment hereunder (such as, by way of example but not limitation, a Tax savings
resulting from the payment of an indemnified amount that is deductible by the
Indemnified Party, in a case in which the indemnity payment itself does not give
rise to gross income for Tax purposes), the Indemnified Party shall promptly
rebate to the Indemnifying Party the amount of such Tax benefit.

      17.5 Mitigation of Losses. Each of the parties agrees to take all
reasonable steps to mitigate their respective Losses upon and after becoming
aware of any event or condition which would reasonably be expected to give rise
to any Losses that are indemnifiable hereunder. The Indemnifying Party shall not
be liable for Losses hereunder to the extent that such Losses resulted solely
from the Indemnified Party's failure to mitigate its Losses in accordance with
the preceding sentence.

      17.6 No Recourse to Parent Entities. PSLT-ALS Holdings and its existing
and future Affiliates (collectively, the "Releasing Parties") do hereby
absolutely release and discharge each of (i) FEBC-ALT Investors LLC, Emeritus
Corporation, NW Select LLC, their respective existing and future Affiliates
(other than Guarantor and its Subsidiaries) and their respective existing and
future officers and directors and (ii) the existing and future officers and
directors of Guarantor and its Subsidiaries (collectively, the "Releasees") from
any and all Losses which any of the Releasing Parties ever had or now has or
have or hereafter can, shall or may have, for, upon or by reason of any matter,
cause or thing whatsoever to the extent arising from, in connection with,
related to or as a result of (a) the matters addressed in this Section 17, and
(b) any action or inaction of any of the Releasees relating to or associated
with the foregoing, in each case, relating to any period from the beginning of
the world to the end of time, regardless of

                                       10

<PAGE>

when brought; provided, however, such release and discharge shall not release or
discharge (i) any Releasee from any Losses to the extent arising from, in
connection with, related to or as a result of any fraud, gross negligence or
willful misconduct by or on behalf of such Releasee, or (ii) Guarantor, ALS
Holdings, the Alterra Lessees or any of their respective successors and assigns
from their respective obligations under this Guaranty, the Agreement Regarding
Leases, the Property Leases, the Lease Guaranties (as defined in the Property
Leases) and any and all of the other documents or agreements entered into with
respect to any of the foregoing documents.

      17.7 Definitions. For purposes of this Section 17, the following terms
shall have the meanings set forth below:

            "Action" means any civil, criminal or administrative action, suit,
demand, claim, arbitration, hearing, litigation, dispute or other proceeding or
investigation by or before any Governmental Authority or arbitrator.

            "Code" means the United States Internal Revenue Code of 1986, as
amended.

            "Governmental Authority" means any United States federal, state or
local or any supra-national or non-U.S. government, political subdivision,
governmental, regulatory or administrative authority, instrumentality, agency,
body or commission, self-regulatory organization or any court, tribunal, or
judicial or arbitral body.

            "Governmental Order" means any order, writ, judgment, injunction,
decree, stipulation, determination or award entered by or with any Governmental
Authority.

            "Law" means any U.S. federal, state, local or non-U.S. statute, law,
ordinance, regulation, rule, code, order or other requirement or rule of law.

            "Losses" means, without duplication, all losses, damages, costs,
expenses, liabilities, obligations and claims of any kind (including any Action
brought by any Governmental Authority or Person), including reasonable
attorneys' fees and costs of investigation.

            "Representative" of a Person means the directors, officers,
stockholders, partners, members, employees, trustees, counsel, controlling
persons (if any), representatives and agents of such Person, and each of the
heirs, executors, successors and permitted assigns of any of the foregoing.

            "Tax" or "Taxes" means (i) any federal, state, local or foreign net
income, gross income, gross receipts, windfall profit, severance, property,
production, sales, use, license, excise, franchise, employment, payroll,
withholding, alternative or add-on minimum, ad valorem, value-added, transfer
(including real estate transfer taxes), stamp, or environmental tax (including
taxes under Code Section 59A), or any other tax, custom, duty, governmental fee
or other like assessment or charge of any kind whatsoever, together with any
interest or penalty, addition to tax or additional amount imposed by any
Governmental Authority; and (ii) any liability of PSLT-ALS Holdings or any
Provident Lessor for the payment of amounts with respect to payments of a type
described in clause (i) as a result of being a member of an affiliated,
consolidated, combined or unitary group, or as a result of any obligation of
PSLT-ALS

                                       11

<PAGE>

Holdings or any Provident Lessor under any Tax sharing arrangement or Tax
indemnity arrangement.

            [THE REMAINDER OF THIS PAGE IS INTENTIONALLY BLANK]

                                       12

<PAGE>

      Guarantor has caused this Guaranty to be effective as of the Effective
Date.

                                               GUARANTOR:

                                               ALTERRA HEALTHCARE CORPORATION,
                                               a Delaware corporation
                                                   /s/ Kristin A. Ferge
                                               By:_____________________________
                                                   Name:  Kristin A. Ferge
                                                   Title: CFO/VP

<PAGE>

                                 ACKNOWLEDGMENT

STATE OF WISCONSIN     )
                       ) SS
COUNTY OF MILWAUKEE    )

            On this 18 day of October, 2004, before me, the undersigned officer,
personally appeared Kristin Ferge, personally known to me, or proved to me on
the basis of satisfactory evidence, and who acknowledged that he/she is the
CFO/VP of ALTERRA HEALTHCARE CORPORATION, a Delaware corporation, and that as
such officer, being duly authorized to do so pursuant to the company's bylaws or
a resolution of its board of directors, executed, subscribed and acknowledged
the foregoing instrument for the purposes therein contained, by signing the name
of the company by himself in his authorized capacity as such officer, as his
free and voluntary act and deed and the free and voluntary act and deed of the
company.

            IN WITNESS WHEREOF, I hereunto set my hand and official seal.
                                      /s/ Amy Hickman
                                      __________________________________________
[NOTARIAL SEAL]                       Notary Public       Amy M. Hickman

                                      My Commission Expires:  7/1/07
                                      __________________________________________