Exhibit 10.3
GUARANTY AGREEMENT
     THIS GUARANTY AGREEMENT (this “Agreement”) is made and given as of
August 21, 2008, by LIFE TIME FITNESS, INC., a Minnesota corporation (the
“Guarantor”), for the benefit of SNH LTF PROPERTIES LLC, a Maryland limited
liability company, (together with its successors and assigns, the “Landlord”).
WITNESSETH:
     WHEREAS, pursuant to a Lease Agreement, dated as of the date hereof (the
“Lease”), the Landlord has agreed to lease to LTF Real Estate Company, Inc., a
Minnesota corporation and an indirect wholly owned subsidiary of the Guarantor
(the “Tenant”), and the Tenant has agreed to lease from the Landlord, certain
real and personal property, together with certain related improvements, as more
particularly described in the Lease; and
     WHEREAS, it is a condition precedent to the Landlord’s entering into the
Lease that the Guarantor guarantee all of the payment and performance
obligations of the Tenant with respect to the Lease; and
     WHEREAS, the transactions contemplated by the Lease are of direct material
benefit to the Guarantor;
     NOW, THEREFORE, in consideration of the foregoing and for other good and
valuable consideration, the mutual receipt and legal sufficiency of which are
hereby acknowledged, the Guarantor hereby agrees as follows:
     1. Certain Terms. Capitalized terms used and not otherwise defined in this
Agreement shall have the meanings ascribed to such terms in the Lease.
     2. Guaranteed Obligations. For purposes of this Agreement, the term
“Guaranteed Obligations” shall mean the payment and performance of each and
every obligation of the Tenant to the Landlord under the Lease or relating
thereto, whether now existing or hereafter arising, and including, without
limitation, the payment of the full amount of the Rent payable under the Lease.
     3. Representations and Covenants. The Guarantor hereby represents,
warrants, covenants, and agrees that:

 

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     3.1 Incorporation of Representations and Warranties. The representations
and warranties of the Tenant and its Affiliated Persons set forth in the Lease
and the Purchase Agreement of even date herewith among the Guarantor, the
Landlord and the Tenant are true and correct on and as of the date hereof in all
material respects.
     3.2 Performance of Covenants and Agreements. The Guarantor hereby agrees to
take all lawful action in its power to cause the Tenant duly and punctually to
perform all of the covenants and agreements set forth in the Lease.
     3.3 Validity of Agreement. The Guarantor has duly and validly executed and
delivered this Agreement; this Agreement constitutes the legal, valid and
binding obligation of the Guarantor, enforceable against the Guarantor in
accordance with its terms, except as the enforceability thereof may be subject
to bankruptcy, fraudulent conveyance, insolvency, reorganization, moratorium and
other laws relating to or affecting creditors’ rights generally and subject to
general equitable principles, regardless of whether enforceability is considered
in a proceeding at law or in equity, and law of general applicability in the
jurisdictions where the Leased Property is located and the Commonwealth of
Massachusetts; and the execution, delivery and performance of this Agreement has
been duly authorized by all requisite action of each of the Guarantor and such
execution, delivery and performance by the Guarantor will not result in any
breach of the terms, conditions or provisions of, or conflict with or constitute
a default under, or result in the creation of any lien, charge or encumbrance
upon any of the property or assets of the Guarantor pursuant to the terms of,
any indenture, mortgage, deed of trust, note, other evidence of indebtedness,
agreement or other instrument to which it may be a party or by which it or any
of its property or assets may be bound, or violate any provision of law, or any
applicable order, writ, injunction, judgment or decree of any court or any order
or other public regulation of any governmental commission, bureau or
administrative agency.
     3.4 Payment of Expenses. The Guarantor agrees, as principal obligor and not
as guarantor only, to pay to the Landlord forthwith, upon demand, in immediately
available federal funds, all costs and expenses (including reasonable attorneys’
fees and disbursements) incurred or expended by the Landlord in connection with
the enforcement of this Agreement, together with interest on amounts recoverable
under this Agreement from the time such amounts become due until payment at the
Overdue Rate. The Guarantor’s covenants and agreements set

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forth in this Section 3.4 shall survive the termination of this Agreement.
     3.8 Legal Existence of Guarantor. The Guarantor shall do or cause to be
done all things necessary to preserve and keep in full force and effect its
legal existence.
     3.9 Compliance. The Guarantor shall use reasonable efforts to comply in all
material respects with all applicable statutes, rules, regulations and orders
of, and all applicable restrictions imposed by, all governmental authorities in
respect of the conduct of its business and the ownership of its property
(including, without limitation, applicable statutes, rules, regulations, orders
and restrictions relating to environmental, safety and other similar standards
or controls).
     3.10 Insurance. The Guarantor shall maintain, with financially sound and
reputable insurers, insurance with respect to its properties and business
against loss or damage of the kinds customarily insured against by owners of
established reputation engaged in the same or similar businesses and similarly
situated, in such amounts and by such methods as shall be customary for such
owners and deemed adequate by the Guarantor.
     3.11 Financial Statements, Etc. The financial statements previously
delivered fairly present the financial condition of the Guarantor in accordance
with generally accepted accounting principles consistently applied and there has
been no material adverse change from the date thereof through the date hereof.
     3.12 No Change in Control. Except as otherwise expressly permitted pursuant
to the terms of the Lease, the Guarantor shall not permit the occurrence of any
direct or indirect Change in Control of the Tenant or the Guarantor.
     3.13 Financial Condition of Guarantor. The Guarantor shall at all times
maintain a Tangible Net Worth in excess of Two Hundred Million Dollars
($200,000,000) and shall, from time to time, upon Landlord’s request (but no
less frequently than quarterly), provide an Officer’s Certificate with respect
thereto, which shall, inter alia, set forth the calculation thereof and
otherwise be in form and substance reasonably satisfactory to Landlord.
     4. Guarantee. The Guarantor hereby unconditionally guarantees that the
Guaranteed Obligations which are monetary obligations shall be paid in full when
due and payable, whether

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upon demand, at the stated or accelerated maturity thereof pursuant to the
Lease, or otherwise, and that the Guaranteed Obligations which are performance
obligations shall be fully performed at the times and in the manner such
performance is required by the Lease. With respect to the Guaranteed Obligations
which are monetary obligations, this guarantee is a guarantee of payment and not
of collectibility and is absolute and in no way conditional or contingent. In
case any part of the Guaranteed Obligations shall not have been paid when due
and payable or performed at the time performance is required, the Guarantor
shall, within five (5) Business Days after receipt of notice from the Landlord,
pay or cause to be paid to the Landlord the amount thereof as is then due and
payable and unpaid (including interest and other charges, if any, due thereon
through the date of payment in accordance with the applicable provisions of the
Lease) or perform or cause to be performed such obligations in accordance with
the Lease.
     5. Set-Off. The Guarantor hereby authorizes the Landlord, at any time and
without notice to set off the whole or any portion or portions of any or all
sums credited by or due from the Landlord to it against amounts payable under
this Agreement. The Landlord shall promptly notify the Guarantor of any such
set-off made by the Landlord and the application made by the Landlord of the
proceeds thereof.
     6. Unenforceability of Guaranteed Obligations, Etc. If the Tenant is for
any reason under no legal obligation to discharge any of the Guaranteed
Obligations (other than because the same have been previously discharged in
accordance with the terms of the Lease), or if any other moneys included in the
Guaranteed Obligations have become unrecoverable from the Tenant by operation of
law or for any other reason, including, without limitation, the invalidity or
irregularity in whole or in part of any Guaranteed Obligation or of the Lease or
any limitation on the liability of the Tenant thereunder not contemplated by the
Lease or any limitation on the method or terms of payment thereunder which may
now or hereafter be caused or imposed in any manner whatsoever, the guarantees
contained in this Agreement shall nevertheless remain in full force and effect
and shall be binding upon the Guarantor to the same extent as if the Guarantor
at all times had been the principal debtor on all such Guaranteed Obligations.
     7. Additional Guarantees. This Agreement shall be in addition to any other
guarantee or other security for the Guaranteed Obligations and it shall not be
prejudiced or rendered unenforceable by the invalidity of any such other

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guarantee or security or by any waiver, amendment, release or modification
thereof.
     8. Consents and Waivers, Etc. The Guarantor hereby acknowledges receipt of
a correct and complete copies of the Lease and any and all agreements, documents
and other instruments directly or indirectly relating thereto, and consents to
all of the terms and provisions thereof, as the same may be from time to time
hereafter amended or changed in accordance with the terms and conditions
thereof, and, except as otherwise provided herein, to the maximum extent
permitted by applicable law, waives (a) presentment, demand for payment, and
protest of nonpayment, of any principal of or interest on any of the Guaranteed
Obligations, (b) notice of acceptance of this Agreement and of diligence,
presentment, demand and protest, (c) notice of any default hereunder and any
default, breach or nonperformance or Event of Default under any of the
Guaranteed Obligations or the Lease, (d) notice of the terms, time and place of
any private or public sale of any collateral held as security for the Guaranteed
Obligations, (e) demand for performance or observance of, and any enforcement of
any provision of, or any pursuit or exhaustion of rights or remedies against the
Tenant or any other guarantor of the Guaranteed Obligations, under or pursuant
to the Lease, or any agreement directly or indirectly relating thereto and any
requirements of diligence or promptness on the part of the holders of the
Guaranteed Obligations in connection therewith, and (f) to the extent it
lawfully may do so, any and all demands and notices of every kind and
description with respect to the foregoing or which may be required to be given
by any statute or rule of law and any defense of any kind which it may now or
hereafter have with respect to this Agreement, or the Lease or the Guaranteed
Obligations (other than that the same have been discharged in accordance with
the terms of the Lease).
     9. No Impairment, Etc. The obligations, covenants, agreements and duties of
the Guarantor under this Agreement shall not be affected or impaired by any
assignment or transfer in whole or in part of any of the Guaranteed Obligations
without notice to the Guarantor, or any waiver by the Landlord or any holder of
any of the Guaranteed Obligations or by the holders of all of the Guaranteed
Obligations of the performance or observance by the Tenant or any other
guarantor of any of the agreements, covenants, terms or conditions contained in
the Guaranteed Obligations or the Lease or any indulgence in or the extension of
the time for payment by the Tenant or any other guarantor of any amounts payable
under or in connection with the Guaranteed Obligations or the Lease or any other
instrument or

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agreement relating to the Guaranteed Obligations or of the time for performance
by the Tenant or any other guarantor of any other obligations under or arising
out of any of the foregoing or the extension or renewal thereof (except that
with respect to any extension of time for payment or performance of any of the
Guaranteed Obligations granted by the Landlord or any other holder of such
Guaranteed Obligations to the Tenant, the Guarantor’s obligations to pay or
perform such Guaranteed Obligation shall be subject to the same extension of
time for performance), or the modification or amendment (whether material or
otherwise) of any duty, agreement or obligation of the Tenant or any other
guarantor set forth in any of the foregoing, or the voluntary or involuntary
sale or other disposition of all or substantially all the assets of the Tenant
or any other guarantor or insolvency, bankruptcy, or other similar proceedings
affecting the Tenant or any other guarantor or any assets of the Tenant or any
such other guarantor, or the release or discharge of the Tenant or any such
other guarantor from the performance or observance of any agreement, covenant,
term or condition contained in any of the foregoing without the consent of the
holders of the Guaranteed Obligations by operation of law, or any other cause,
whether similar or dissimilar to the foregoing.
     10. Reimbursement, Subrogation, Etc. The Guarantor hereby covenants and
agrees that it will not enforce or otherwise exercise any rights of
reimbursement, subrogation, contribution or other similar rights against the
Tenant (or any other person against whom the Landlord may proceed) with respect
to the Guaranteed Obligations prior to the payment in full of all amounts owing
with respect to the Lease, and until all indebtedness of the Tenant to the
Landlord shall have been paid in full, the Guarantor shall not have any right of
subrogation, and the Guarantor waives any defense it may have based upon any
election of remedies by the Landlord which destroys its subrogation rights or
its rights to proceed against the Tenant for reimbursement, including, without
limitation, any loss of rights the Guarantor may suffer by reason of any rights,
powers or remedies of the Tenant in connection with any anti-deficiency laws or
any other laws limiting, qualifying or discharging the indebtedness to the
Landlord. Until all obligations of the Tenant pursuant to the Lease shall have
been paid and satisfied in full, the Guarantor further waives any right to
enforce any remedy which the Landlord now has or may in the future have against
the Tenant, any other guarantor or any other person and any benefit of, or any
right to participate in, any security whatsoever now or in the future held by
the Landlord.

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     11. Defeasance. This Agreement shall terminate at such time as the
Guaranteed Obligations have been paid and performed in full and all other
obligations of the Guarantor to the Landlord under this Agreement have been
satisfied in full; provided, however, if at any time, all or any part of any
payment applied on account of the Guaranteed Obligations is or must be rescinded
or returned for any reason whatsoever (including, without limitation, the
insolvency, bankruptcy or reorganization of the Tenant), this Agreement, to the
extent such payment is or must be rescinded or returned, shall be deemed to have
continued in existence notwithstanding any such termination.
     12. Notices. (a) Any and all notices, demands, consents, approvals, offers,
elections and other communications required or permitted under this Agreement
shall be deemed adequately given if in writing and the same shall be delivered
either in hand, by telecopier with written acknowledgment of receipt, or by mail
or Federal Express or similar expedited commercial carrier, addressed to the
recipient of the notice, postpaid and registered or certified with return
receipt requested (if by mail), or with all freight charges prepaid (if by
Federal Express or similar carrier).
     (b) All notices required or permitted to be sent hereunder shall be deemed
to have been given for all purposes of this Agreement upon the date of
acknowledged receipt, in the case of a notice by telecopier, and, in all other
cases, upon the date of receipt or refusal, except that whenever under this
Agreement a notice is either received on a day which is not a Business Day or is
required to be delivered on or before a specific day which is not a Business
Day, the day of receipt or required delivery shall automatically be extended to
the next Business Day.
     (c) All such notices shall be addressed,
     if to the Landlord to:
     c/o Senior Housing Properties Trust
     400 Centre Street
     Newton, Massachusetts 02458
     Attn: Mr. David J. Hegarty
     [Telecopier No. (617) 796-8349]
     if to the Guarantor to:
     Life Time Fitness, Inc.
     2902 Corporate Place
     Chanhassen, Minnesota 55317

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     Attn: General Counsel
     [Telecopier No. (952) 947-0099]
     (d) By notice given as herein provided, the parties hereto and their
respective successors and assigns shall have the right from time to time and at
any time during the term of this Agreement to change their respective addresses
effective upon receipt by the other parties of such notice and each shall have
the right to specify as its address any other address within the United States
of America.
     13. Successors and Assigns. Whenever in this Agreement any of the parties
hereto is referred to, such reference shall be deemed to include the successors
and assigns of such party, including without limitation the holders, from time
to time, of the Guaranteed Obligations; and all representations, warranties,
covenants and agreements by or on behalf of each of the Guarantor which are
contained in this Agreement shall inure to the benefit of the Landlord’s
successors and assigns, including without limitation said holders, whether so
expressed or not.
     14. Applicable Law. This Agreement, the Lease and any other instruments
executed and delivered to evidence, complete or perfect the transactions
contemplated hereby and thereby shall be interpreted, construed, applied and
enforced in accordance with the laws of The Commonwealth of Massachusetts
applicable to contracts between residents of Massachusetts which are to be
performed entirely within Massachusetts, regardless of (i) where any such
instrument is executed or delivered; or (ii) where any payment or other
performance required by any such instrument is made or required to be made; or
(iii) where any breach of any provision of any such instrument occurs, or any
cause of action otherwise accrues; or (iv) where any action or other proceeding
is instituted or pending; or (v) the nationality, citizenship, domicile,
principal place of business, or jurisdiction of organization or domestication of
any party; or (vi) whether the laws of the forum jurisdiction otherwise would
apply the laws of a jurisdiction other than The Commonwealth of Massachusetts;
or (vii) any combination of the foregoing.
     To the maximum extent permitted by applicable law, any action to enforce,
arising out of, or relating in any way to, any of the provisions of this
Agreement may be brought and prosecuted in such court or courts located in The
Commonwealth of Massachusetts and to service of process by registered mail,
return receipt requested, or by any other manner provided by law.

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     NOTWITHSTANDING ANY TERM OR PROVISION OF THIS AGREEMENT TO THE CONTRARY,
EACH OF LANDLORD AND GUARANTOR HEREBY ABSOLUTELY, IRREVOCABLY AND
UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY LITIGATION, CLAIM, ACTION, SUIT OR
PROCEEDING, AT LAW OR IN EQUITY, ARISING OUT OF, PERTAINING TO OR IN ANY WAY
ASSOCIATED WITH THIS AGREEMENT OR THE COVENANTS, UNDERTAKINGS, REPRESENTATIONS
OR WARRANTIES SET FORTH HEREIN OR THE RELATIONSHIPS OF THE PARTIES HERETO.
     16. Modification of Agreement. No modification or waiver of any provision
of this Agreement, nor any consent to any departure by the Guarantor therefrom,
shall in any event be effective unless the same shall be in writing and signed
by the Landlord, and such modification, waiver or consent shall be effective
only in the specific instances and for the purpose for which given. No notice to
or demand on the Guarantor in any case shall entitle the Guarantor to any other
or further notice or demand in the same, similar or other circumstances. This
Agreement may not be amended except by an instrument in writing executed by or
on behalf of the party against whom enforcement of such amendment is sought.
     17. Waiver of Rights by the Landlord. Neither any failure nor any delay on
the Landlord’s part in exercising any right, power or privilege under this
Agreement shall operate as a waiver thereof, nor shall a single or partial
exercise thereof preclude any other or further exercise or the exercise of any
other right, power or privilege.
     18. Severability. In case any one or more of the provisions contained in
this Agreement should be invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability of the remaining provisions contained
herein shall not in any way be affected or impaired thereby, but this Agreement
shall be reformed and construed and enforced to the maximum extent permitted by
applicable law.
     19. Entire Contract. This Agreement constitutes the entire agreement
between the parties hereto with respect to the subject matter hereof and shall
supersede and take the place of any other instruments purporting to be an
agreement of the parties hereto relating to the subject matter hereof.
     20. Headings; Counterparts. Headings in this Agreement are for purposes of
reference only and shall not limit or otherwise affect the meaning hereof. This
Agreement may be executed in any number of counterparts, each of which shall be
an original, but all of which together shall constitute one instrument, and in
pleading or proving any provision of this

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Agreement, it shall not be necessary to produce more than one of such
counterparts.
     21. Remedies Cumulative. No remedy herein conferred upon the Landlord is
intended to be exclusive of any other remedy, and each and every remedy shall be
cumulative and shall be in addition to every other remedy given hereunder or now
or hereafter existing at law or in equity or by statute or otherwise.
     22. NON-LIABILITY OF TRUSTEES. THE DECLARATION OF TRUST ESTABLISHING THE
LANDLORD, A COPY OF WHICH, TOGETHER WITH ALL AMENDMENTS THERETO (THE
“DECLARATION”), IS DULY FILED WITH THE DEPARTMENT OF ASSESSMENTS AND TAXATION OF
THE STATE OF MARYLAND, PROVIDES THAT THE NAME “SNH ALT LEASED PROPERTIES TRUST”
REFERS TO THE TRUSTEES UNDER THE DECLARATION COLLECTIVELY AS TRUSTEES, BUT NOT
INDIVIDUALLY OR PERSONALLY, AND THAT NO TRUSTEE, OFFICER, SHAREHOLDER, EMPLOYEE
OR AGENT OF THE LANDLORD SHALL BE HELD TO ANY PERSONAL LIABILITY, JOINTLY OR
SEVERALLY, FOR ANY OBLIGATION OF OR CLAIM AGAINST, THE LANDLORD. ALL PERSONS
DEALING WITH THE LANDLORD, IN ANY WAY, SHALL LOOK ONLY TO THE ASSETS OF THE
LANDLORD FOR THE PAYMENT OF ANY SUM OR THE PERFORMANCE OF ANY OBLIGATION.
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     WITNESS the execution hereof under seal as of the date above first written.

            LIFE TIME FITNESS, INC.,
a Minnesota corporation
      /s/ Eric J. Buss       Eric J. Buss      Secretary     

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