Exhibit 10.1





GUARANTY OF LEASE

AND LETTER OF CREDIT AGREEMENT

THIS GUARANTY OF LEASE AND LETTER OF CREDIT AGREEMENT(this "Guaranty") is executed as of October 7, 2002 by Alterra Healthcare Corporation, a Delaware corporation ("Guarantor"), in favor of the JER/NHP Senior Living Acquisition, LLC, a Delaware limited liability company ("Landlord").

R E C I T A L S

A G R E E M E N T S

NOW, THEREFORE, in consideration of Landlord entering into the Lease with Tenant, and other good and valuable consideration the receipt and sufficiency of which are hereby acknowledged, Guarantor agrees as follows:

Guarantor hereby absolutely and unconditionally guarantees to Landlord the following (collectively, the "Guaranteed Obligations"):

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This Guaranty shall apply notwithstanding any extension or renewal of the Lease, or any holdover following the expiration or termination of the Term or any renewal or extension of the Term.

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All rights, remedies and recourses afforded to Landlord by reason of this Guaranty, or otherwise, are separate and cumulative and may be pursued separately, successively or concurrently, as occasion therefor shall arise and are non-exclusive and shall in no way limit or prejudice any other legal or equitable right, remedy or recourse which Landlord may have.

If for any reason whatsoever Tenant now or hereafter becomes indebted to Guarantor or any Affiliate of Guarantor, such indebtedness and all interest thereon shall at all times be subordinate in all respects to the Guaranteed Obligations. Notwithstanding anything to the contrary contained in this Guaranty or any payments made by Guarantor, Guarantor shall not have any right of subrogation in or under the Lease or the Letter of Credit Agreement or to participate in the rights and benefits accruing to Landlord thereunder, all such rights of subrogation and participation, together with all of the contractual, statutory, or common law rights which Guarantor may have to be reimbursed for any payments Guarantor may make to, or performance by Guarantor of any of the Guaranteed Obligations for the benefit of, Landlord pursuant to this Guaranty, being hereby expressly waived and released.

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This Guaranty and all rights and duties of Guarantor and Landlord arising from this Guaranty shall be governed by, construed and enforced in accordance with the laws of the State of California, without regard to the conflict of law rules of such State.  All disputes arising under or relating to this Guaranty shall be litigated in the state and/or federal courts in Orange County, California and all related appellate courts, and the parties hereby consent to the jurisdiction of such courts.

If Landlord or Guarantor brings any action to interpret or enforce this Guaranty, or for damages for any alleged breach thereof, the prevailing party in any such action shall be entitled to reasonable attorneys' fees and costs as awarded by the court in addition to all other recovery, damages and costs.

At any time, and at the request of Landlord, Guarantor shall execute and deliver to Landlord a certificate ratifying and confirming all of Guarantor's obligations and liabilities under this Guaranty.

Guarantor acknowledges that it will benefit from the execution and continued existence of the Lease, and Guarantor further acknowledges that Landlord will be relying upon Guarantor's guarantee, representations, warranties and covenants contained herein.

This Guaranty may be executed in multiple counterparts, each of which shall be an original, but all of which shall constitute but one instrument.  The signature page of any counterpart may be detached therefrom and reattached to any other counterpart to physically form a single document.

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All notices, requests and demands under this Guaranty shall be in writing and sent by personal delivery, U.S. certified or registered mail (return receipt requested, postage prepaid) or FedEx or similar generally recognized overnight carrier regularly providing proof of delivery, addressed as follows:

If to Tenant:

With a copy to:

If to Landlord:

And:

With a copy to:

And:

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

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IN WITNESS WHEREOF, Guarantor has executed this Guaranty as of the date first set forth above.

"GUARANTOR"

ALTERRA HEALTHCARE CORPORATION,
a Delaware corporation





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







Witness: /s/ Joyce Hansen     Witness: /s/ Kathy M. Helling

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