GUARANTY

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Exhibit: 10.39

GUARANTY

THIS GUARANTY ("GUARANTY") made as of December 31, 2004, by ALTERRA

HEALTHCARE CORPORATION ("GUARANTOR"), a Delaware corporation, to and for the

benefit of MERRILL LYNCH CAPITAL, a Division of Merrill Lynch Business Financial

Services Inc., a Delaware corporation, its successors and assigns ("LENDER").

R E C I T A L S

A. On or about the date hereof, AHC Purchaser Holding II, Inc., a

Delaware corporation ("BORROWER") and Lender entered into that certain Mezzanine

Loan Agreement ("LOAN AGREEMENT") whereby Lender agreed to make a loan (the

"LOAN") available to Borrower in the maximum aggregate principal amount at any

time outstanding not to exceed the sum of TEN MILLION and No/100ths Dollars

($10,000,000.00), to allow Owner to refinance the Projects. Capitalized terms

used and not otherwise defined herein shall have the meanings given to them in

the Loan Agreement.

B. In connection with the Loan, Borrower has executed and delivered

that certain Promissory Note (the "NOTE") in favor of Lender of even date

herewith in the maximum aggregate principal amount of the Loan, payment of which

is evidenced and secured by (i) a first priority collateral assignment of the

issued and outstanding stock in Borrower (the "ASSIGNMENT"), and (ii) the other

Loan Documents.

C. Guarantor will derive material financial benefit from the Loan

evidenced and secured by the Note, the Assignment and the other Loan Documents.

D. Lender has relied on the statements and agreements contained

herein in agreeing to make the Loan. The execution and delivery of this Guaranty

by Guarantor is a condition precedent to the making of the Loan by Lender.

AGREEMENTS

NOW, THEREFORE, intending to be legally bound, Guarantor, in

consideration of the matters described in the foregoing Recitals, which Recitals

are incorporated herein and made a part hereof, and for other good and valuable

consideration the receipt and sufficiency of which are acknowledged, hereby

covenants and agrees for the benefit of Lender and its successors, indorsees,

transferees, participants and assigns as follows:

1. Guarantor absolutely, unconditionally and irrevocably guarantees:

(a) the full and prompt payment of the principal of and interest on

the Note when due, whether at stated maturity, upon acceleration or

otherwise, and at all times thereafter, and the full and prompt payment of

all sums which may now be or may hereafter become due and owing under the

Note, the Loan Agreement and the other Loan Documents;

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(b) the prompt, full and complete performance of all of Borrower's

obligations under each and every covenant contained in the Loan Documents;

and

(c) the full and prompt payment of any Enforcement Costs (as

hereinafter defined in Section 7 hereof).

All amounts due, debts, liabilities and payment obligations described in

subsections (a), (b) and (c) of this Section 1 shall be hereinafter collectively

referred to as the "INDEBTEDNESS." All payments under this Guaranty must be made

in lawful money of the United States of America and in current funds. Any amount

received by the Lender from any collateral or security for the Loan Documents

may be applied by it towards any sums due under or in respect of the Loan

Documents, in such order of application as is provided for under the applicable

Loan Documents, or if not so provided for, then in such order as the Lender may

from time to time elect in its sole discretion. Subject to the preceding

sentence, the Lender shall have the right to determine how, when and what

application of payments and credits, whether derived from the Borrower or any

other source, shall be made on the amounts due Lender under the Loan Documents.

Without limiting any of the foregoing, Guarantor acknowledges and agrees it is

an Environmental Indemnitor (as defined in the Loan Agreement) and agrees to be

liable under (and in accordance with) the provisions of Article 6 of the Loan

Agreement for all liabilities and performance obligations of an Environmental

Indemnitor thereunder.

2. In the event of any default by Borrower in the payment of the

Indebtedness, after the expiration of any applicable cure or grace period,

Guarantor agrees, on demand by Lender or any holder of the Note (which demand

may be made concurrently with notice to Borrower that Borrower is in default of

its obligations), to pay the Indebtedness regardless of any defense, right of

set-off or claims which Borrower or Guarantor may have against Lender or the

holder of the Note.

All of the remedies set forth herein and/or provided for in any of

the other Loan Documents or at law or equity shall be equally available to

Lender, and the choice by Lender of one such alternative over another shall not

be subject to question or challenge by Guarantor or any other person, nor shall

any such choice be asserted as a defense, setoff, recoupment or failure to

mitigate damages in any action, proceeding, or counteraction by Lender to

recover or seeking any other remedy under this Guaranty, nor shall such choice

preclude Lender from subsequently electing to exercise a different remedy. The

parties have agreed to the alternative remedies provided herein in part because

they recognize that the choice of remedies in the event of a default hereunder

will necessarily be and should properly be a matter of good faith business

judgment, which the passage of time and events may or may not prove to have been

the best choice to maximize recovery by Lender at the lowest cost to Borrower

and/or Guarantor. It is the intention of the parties that such good faith choice

by Lender be given conclusive effect regardless of such subsequent developments.

All sums payable under this Guaranty shall be payable (i) within

fifteen (15) days after demand thereof if no other date or time period for

payment is specified therein, and (ii) without reduction for any offset, claim,

counterclaim or defense.

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3. Guarantor does hereby (a) waive notice of acceptance of this Guaranty

by Lender and any and all notices and demands of every kind which may be

required to be given by any statute, rule or law, (b) agree to refrain from

asserting, until after repayment in full of the Loan, any defense, right of

set-off, right of recoupment or other claim which Guarantor may have against

Borrower, (c) waive any defense, right of set-off, right of recoupment or other

claim which Guarantor or Borrower may have against Lender or the holder of the

Note, (d) waive any and all rights Guarantor may have under any anti-deficiency

statute or other similar protections, (e) prior to the indefeasible payment in

full of the Indebtedness, waive all rights at law or in equity to seek

subrogation, contribution, indemnification or any other form of reimbursement or

repayment from Borrower or any other person or entity now or hereafter primarily

or secondarily liable for any of the Indebtedness, (f) waive presentment for

payment, demand for payment, notice of nonpayment or dishonor, protest and

notice of protest, diligence in collection and any and all formalities which

otherwise might be legally required to charge Guarantor with liability, (g)

waive the benefit of all appraisement, valuation, marshalling, forbearance,

stay, extension, moratorium laws in effect, (h) waive any defense based on the

incapacity, lack of authority, death or disability of any other person or entity

or the failure of Lender to file or enforce a claim against the estate of any

other person or entity in any administrative, bankruptcy or other proceeding,

(i) waive any defense based on an election of remedies by Lender, whether or not

such election may affect in any way the recourse, subrogation or other rights of

Guarantor against the Borrower, any other guarantor or any other person in

connection with the Indebtedness, (j) waive any failure by Lender to inform

Guarantor of any facts Lender may now or hereafter know about Borrower, the

Projects, the Loan, or the transactions contemplated by the Loan Agreement, it

being understood and agreed that Lender has no duty so to inform and that

Guarantor is fully responsible for being and remaining informed by Borrower of

all circumstances bearing on the risk of nonperformance of Borrower's

obligations, (k) waive any defense based on the failure of the Lender to (i)

provide notice to Guarantor of a sale or other disposition (including any

collateral sale pursuant to the Uniform Commercial Code) of any of the security

for any of the Indebtedness, or (ii) conduct such a sale or disposition in a

commercially reasonable manner, (1) waive any defense based on the negligence of

the Lender in administering the Loan (including, but not limited to, the failure

to perfect any security interest in any collateral for the Loan), or taking or

failing to take any action in connection therewith, or based on the federal

Equal Credit Opportunity Act and applicable regulations or the Equal Credit

Opportunity Act and applicable regulations of any state, (m) waive the defense

of expiration of any statute of limitations affecting the liability of Guarantor

hereunder or the enforcement hereof, (n) waive any right to file any "Claim" (as

defined below) as part of, and any right to request consolidation of any action

or proceeding relating to a Claim with, any action or proceeding filed or

maintained by Lender to collect any indebtedness of Guarantor to Lender

hereunder or to exercise any rights or remedies available to Lender under the

Financing Documents, at law, in equity or otherwise, (o) agree that the Lender

shall have no obligation to obtain, perfect or retain a security interest in any

property to secure any of the Indebtedness or this Guaranty (including any

mortgage or security interest contemplated by the Loan Documents), or to protect

or insure any such property, (p) waive any obligation Lender may have to

disclose to Guarantor any facts the Lender now or hereafter may know or have

reasonably available to it regarding the Borrowers or their financial condition,

whether or not the Lender has a reasonable opportunity to communicate such facts

or has reason to believe that any such facts are unknown to Guarantor or

materially increase the risk to Guarantor beyond the risk Guarantor

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intend to assume hereunder, and (q) agree that the Lender shall not be liable in

any way for any decrease in the value or marketability of any property securing

any of the Indebtedness which may result from any action or omission of the

Lender in enforcing any part of this Guaranty or any portion of the Loan. Credit

may be granted or continued from time to time by Lender to Borrower without

notice to or authorization from Guarantor, regardless of the financial or other

condition of Borrower at the time of any such grant or continuation. Lender

shall have no obligation to disclose or discuss with Guarantor its assessment of

the financial condition of Borrower. Guarantor acknowledges that no

representations of any kind whatsoever have been made by Lender. No modification

or waiver of any of the provisions of this Guaranty shall be binding upon Lender

except as expressly set forth in a writing duly signed and delivered by Lender.

For purposes of this section, the term "Claim" shall mean any claim, action or

cause of action, defense, counterclaim, set-off or right of recoupment of any

kind or nature against the Lender, its officers, directors, employees, agents,

members, actuaries, accountants, trustees or attorneys, or any affiliate of the

Lender in connection with the making, closing, administration, collection or

enforcement by the Lender of the indebtedness evidenced by the Note or the

obligations evidenced by the Loan Documents (including this Guaranty).

4. Guarantor further agrees that Guarantor's liability as guarantor shall

not be impaired or affected by any renewals or extensions which may be made from

time to time, with or without the knowledge or consent of Guarantor, of the time

for payment of interest or principal under the Note or by any forbearance or

delay in collecting interest or principal under the Note, or by any waiver by

Lender under the Loan Agreement, the Assignment or any other Loan Document, or

by Lender's failure or election not to pursue any other remedies it may have

against Borrower or Guarantor, or by any change or modification in the Note,

Loan Agreement, the Assignment or any other Loan Document, or by the acceptance

by Lender of any additional security or any increase, substitution or change

therein, or by the release by Lender of any security or any withdrawal thereof

or decrease therein, or by the application of payments received from any source

to the payment of any obligation other than the Indebtedness even though Lender

might lawfully have elected to apply such payments to any part or all of the

Indebtedness, it being the intent hereof that, Guarantor shall remain liable for

the payment of the Indebtedness until the Indebtedness has been paid in full,

notwithstanding any act or thing which might otherwise operate as a legal or

equitable discharge of a surety. Guarantor further understands and agrees that

Lender may at any time enter into agreements with Borrower to amend and modify

and/or increase the principal amount of, interest rate applicable to or other

economic and non-economic terms of the Note, Loan Agreement, the Assignment or

other Loan Documents, and may waive or release any provision or provisions of

the Note, Loan Agreement, the Assignment or any other Loan Document, and, with

reference to such instruments, may make and enter into any such agreement or

agreements as Lender and Borrower may deem proper and desirable, without in any

manner impairing or affecting this Guaranty or any of Lender's rights hereunder

or Guarantor's obligations hereunder and Guarantor's obligations hereunder shall

apply to the Note, Loan Agreement, Mortgages and other Loan Documents as so

amended, modified, extended, renewed or increased.

5. This is an absolute, present and continuing guaranty of payment and not

of collection. Guarantor agrees that this Guaranty may be enforced by Lender

without the necessity at any time of resorting to or exhausting any other

security or collateral given in connection herewith or with the Note, Loan

Agreement, the Assignment or any of the other Loan Document

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through foreclosure or sale proceedings, as the case may be, under the

Assignment or otherwise, or resorting to any other guaranties, and Guarantor

hereby waives any right to require Lender to join Borrower in any action brought

hereunder or to commence any action against or obtain any judgment against

Borrower or to pursue any other remedy or enforce any other right. Guarantor

further agrees that nothing contained herein or otherwise shall prevent Lender

from pursuing concurrently or successively all rights and remedies available to

it at law and/or in equity or under the Note, Loan Agreement, the Assignment or

any other Loan Document, and the exercise of any of Lender's rights or the

completion of any of Lender's remedies shall not constitute a discharge of

Guarantor's obligations hereunder, it being the purpose and intent of Guarantor

that the obligations of Guarantor hereunder shall be absolute, independent and

unconditional under any and all circumstances whatsoever. None of Guarantor's

obligations under this Guaranty or any remedy for the enforcement thereof shall

be impaired, modified, changed or released in any manner whatsoever by any

impairment, modification, change, release or limitation of the liability of

Borrower under the Note, Loan Agreement, the Assignment or other Loan Document

or by reason of the bankruptcy of Borrower or by reason of any creditor or

bankruptcy proceeding instituted by or against Borrower. This Guaranty shall

continue to be effective or be reinstated (as the case may be) if at any time

payment of all or any part of any sum payable pursuant to the Note, Loan

Agreement, the Assignment or any other Loan Document is rescinded or otherwise

required to be returned by Lender upon the insolvency, bankruptcy, dissolution,

liquidation, or reorganization of Borrower, or upon or as a result of the

appointment of a receiver, intervenor, custodian or conservator of or trustee or

similar officer for, Borrower or any substantial part of its property, or

otherwise, all as though such payment to Lender had not been made, regardless of

whether Lender contested the order requiring the return of such payment. In the

event of the foreclosure of the Assignment and of a deficiency, Guarantor hereby

promises and agrees forthwith to pay the amount of such deficiency

notwithstanding the fact that recovery of said deficiency against Borrower would

not be allowed by applicable law; however, the foregoing shall not be deemed to

require that Lender institute foreclosure proceedings or otherwise resort to or

exhaust any other collateral or security prior to or concurrently with enforcing

this Guaranty.

6. In the event Lender or any holder of the Note shall assign the Note to

any lender or other entity to secure a loan from such lender or other entity to

Lender or such holder for an amount not in excess of the amount which will be

due, from time to time, from Borrower to Lender under the Note with interest not

in excess of the rate of interest which is payable by Borrower to Lender under

the Note, Guarantor will accord full recognition thereto and agree that all

rights and remedies of Lender or such holder hereunder shall be enforceable

against Guarantor by such lender or other entity with the same force and effect

and to the same extent as would have been enforceable by Lender or such holder

but for such assignment; provided, however, that unless Lender shall otherwise

consent in writing, Lender shall have an unimpaired right, prior and superior to

that of its assignee or transferee,