Exhibit 10.27

 

GUARANTY AGREEMENT

 

THIS GUARANTY AGREEMENT (“Guaranty”) made as of December 31, 2014, by SENTIO
HEALTHCARE PROPERTIES, INC., a Maryland corporation (“Guarantor”), to and for
the benefit of KEYBANK NATIONAL ASSOCIATION, a national banking association, as
administrative agent for the benefit of the Lenders, its successors and assigns
(“Agent”).

 

RECITALS

 

A.           On or about the date hereof, Sumter Place Owner, LLC, a Delaware
limited liability company (collectively with Sumter Grand Borrower after the
Sumter Grand Closing, “Borrowers”), Agent and the Lenders entered into that
certain Secured Loan Agreement (“Loan Agreement”) whereby the Lenders agreed to
make a secured term loan (the “Loan”) available to Borrowers in the maximum
aggregate amount at any time outstanding not to exceed the sum of Fifty-Three
Million One Hundred Fifty-Four Thousand Six Hundred and No/100 Dollars
($53,154,600.00), for the acquisition of the leasehold covering the Sumter Place
Project and the equity in Sumter Grand Borrower in connection with the Projects.

 

B.           In connection with the Loan, Borrowers have executed and delivered
one or more promissory notes (collectively, the “Notes”), of even date herewith
and payable to the order of the Lenders in the aggregate amount of
$53,154,600.00, payment of which is secured by (i) the Mortgages and (ii) the
other Loan Documents.

 

C.           Guarantor will derive financial benefit from the Loan evidenced and
secured by the Notes, the Mortgages and the other Loan Documents.

 

D.           The Lenders have 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 the Lenders.

 

E.           Initially capitalized terms used and not otherwise defined herein
shall have the meanings respectively ascribed to them in the Loan Agreement.

 

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
with Agent for the benefit of the Lenders and their respective successors,
indorsees, transferees, participants and assigns as follows:

 

1.          Guarantor absolutely, unconditionally and irrevocably guarantees to
Lender:

 

(a)          the full and prompt payment of any Enforcement Costs (as
hereinafter defined in Section 8 hereof);

 

(b)          any loss, damage, cost, expense, liability or obligation suffered
or incurred by the Lenders arising out of, on account of, or in connection with
the misapplication or conversion of any tenant security deposits, insurance
proceeds, condemnation awards, or any proceeds from the sale of a portion of any
Project received by any Borrower and not delivered over to Agent or used to
restore the Project in accordance with the terms of the Loan Agreement;

 

(c)          any loss, damage, cost, expense, liability or obligation suffered
or incurred by the Lenders arising out or on account of or based upon any fraud
or willful misrepresentation of a material fact by any Borrower or Guarantor in
any document executed or presented to Agent or any Lender in connection with the
Loan;

 

GUARANTY AGREEMENTPage 1

 

 

(d)          any amount(s) necessary to repair or replace any damage to or
destruction of any Project which is the result of willful misconduct or gross
negligence on the part of any Borrower including, without limitation, waste, any
act of arson or malicious destruction by any Borrower;

 

(e)          any loss, damage, cost, expense, liability or obligation suffered
or incurred by the Lenders out of or on account of or based upon the failure to
maintain insurance as required by the Loan Documents or the failure to timely
pay insurance premiums for any such required insurance for any Project;

 

(f)          any loss, damage, cost, expense, liability or obligation suffered
or incurred by the Lenders out of or on account of or based upon the failure to
timely pay any valid real estate taxes for any Project which could create liens
on any portion of any Project which would be superior to the lien or security
title of the applicable Mortgage or the other Loan Documents, to the full extent
of the amount claimed by any such lien claimant, except to the extent such loss
results from Lenders’ failure to pay any valid real estate taxes for any Project
from funds escrowed pursuant to the terms of the Loan Agreement;

 

(g)          the aggregate amount outstanding under the Loan Documents upon any
Borrower (i) making a general assignment for the benefit of its creditors;
(ii) filing a petition, answer or consent seeking, or having entered against it
an order for relief (or any similar remedy) under any provision of Title 11 of
the United States Code or any other federal, state or foreign Law relating to
insolvency, bankruptcy, rehabilitation, liquidation or reorganization, or
consent to the institution of any proceedings thereunder; (iii) convening a
meeting of its creditors, or any class thereof, for the purpose of effecting a
moratorium upon or extension or composition of its debts; (iv) admitting in
writing that it is generally not able to pay its debts as they mature; or
(v) applying for a consent to the appointment of a receiver, trustee, custodian,
liquidator or other similar official of all or a portion of its assets; and

 

(h)          any loss, damage, cost, expense, liability or obligation suffered
or incurred by the Lenders arising out of, on account of, or in connection with
a distribution by any Borrower of Monthly Excess Cash Flow in violation of the
provisions of the Loan Documents.

 

All amounts due, debts, liabilities and payment obligations described in
subsections (a) – (h) of this Section 1 shall be hereinafter collectively
referred to as the “Guaranteed Indebtedness.”

 

2.          In the event of any default by Borrowers in the payment of the
Guaranteed Indebtedness, after the expiration of any applicable cure or grace
period, Guarantor agrees, on demand by Agent or the holder of any Note, to pay
the Guaranteed Indebtedness regardless of any defense, right of set-off or
claims which any Borrower or Guarantor may have against Agent or any Lender or
the holder of any Note.

 

3.          All of the remedies set forth herein and/or provided for in any of
the Loan Documents or at law or equity shall be equally available to Agent and
the Lenders, and the choice by Agent or the Lenders 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, or failure
to mitigate damages in any action, proceeding, or counteraction by Agent to
recover or seeking any other remedy under this Guaranty, nor shall such choice
preclude Agent 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 Agent and the Lenders at the lowest cost
to Borrowers and/or Guarantor. It is the intention of the parties that such good
faith choice by Agent or any Lender be given conclusive effect regardless of
such subsequent developments.

 

GUARANTY AGREEMENTPage 2

 

 

4.          Guarantor does hereby (a) waive notice of acceptance of this
Guaranty by Agent and the Lenders 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 or other claim which such Guarantor may have against any
Borrower, (c) waive any defense, right of set-off or other claim which any
Borrower or Guarantor may have against any Agent, any Lender, or the holder of
any Note, (d) waive any and all rights such Guarantor may have under any
anti-deficiency statute or other similar protections, (e) 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 such Guarantor with liability, and
(f) waive any failure by Agent or any Lender to inform such Guarantor of any
facts Agent or any Lender may now or hereafter know about any Borrower, any
Project, the Loan, or the transactions contemplated by the Loan Agreement, it
being understood and agreed that neither Agent nor any Lender has any duty so to
inform and that such Guarantor is fully responsible for being and remaining
informed by Borrowers of all circumstances bearing on the risk of nonperformance
of any Borrower’s obligations. Credit may be granted or continued from time to
time by the Lenders to any Borrower without notice to or authorization from
Guarantor, regardless of the financial or other condition of such Borrower at
the time of any such grant or continuation. Neither Agent nor any Lender shall
have any obligation to disclose or discuss with Guarantor its assessment of the
financial condition of such Borrower. Guarantor acknowledges that no
representations of any kind whatsoever have been made by Agent or any Lender. No
modification or waiver of any of the provisions of this Guaranty shall be
binding upon Agent or any Lender except as expressly set forth in a writing duly
signed and delivered by Agent on behalf of the Lenders.

 

5.          Guarantor further agrees that Guarantor’s liability as guarantor
shall in 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 such
Guarantor of the time for payment of interest or principal under the Notes or by
any forbearance or delay in collecting interest or principal under the Notes, or
by any waiver by Agent or any Lender under the Loan Agreement, any Mortgage or
any other Loan Documents, or by Agent’s or any Lender’s failure or election not
to pursue any other remedies it may have against any Borrower or Guarantor, or
by any change or modification in any Note, the Loan Agreement, any Mortgage or
any other Loan Document, or by the acceptance by Agent or any Lender of any
additional security or any increase, substitution or change therein, or by the
release by Agent or any 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 Guaranteed Indebtedness even though
Agent or any Lender might lawfully have elected to apply such payments to any
part or all of the Guaranteed Indebtedness, it being the intent hereof that,
subject to Agent’s and the Lenders’ compliance with the terms of this Guaranty,
Guarantor shall remain liable for the payment of the Guaranteed Indebtedness,
until the Guaranteed 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 Agent and the Lenders may
at any time enter into agreements with Borrowers to amend and modify the Notes,
the Loan Agreement, the Mortgages or other Loan Documents, and may waive or
release any provision or provisions of the Notes, the Loan Agreement, the
Mortgages and other Loan Documents or any thereof, and, with reference to such
instruments, may make and enter into any such agreement or agreements as Agent,
the Lenders and Borrowers may deem proper and desirable, without in any manner
impairing or affecting this Guaranty or any of Agent’s or Lenders’ rights
hereunder or Guarantor’s obligations hereunder.

 

6.          This is an absolute, present and continuing guaranty of payment and
not of collection. Guarantor agrees that this Guaranty may be enforced by Agent
on behalf of the Lenders without the necessity at any time of resorting to or
exhausting any other security or collateral given in connection herewith or with
the Notes, the Loan Agreement, any Mortgage or any of the other Loan Documents
through foreclosure or sale proceedings, as the case may be, under any Mortgage
or otherwise, or resorting to any other guaranties, and Guarantor hereby waives
any right to require Agent or any Lender to join any Borrower in any action
brought hereunder or to commence any action against or obtain any judgment
against any Borrower or to pursue any other remedy or enforce any other right.
Guarantor further agrees that nothing contained herein or otherwise shall
prevent Agent on behalf of the Lenders from pursuing concurrently or
successively all rights and remedies available to it at law and/or in equity or
under the Notes, the Loan Agreement, any Mortgage or any other Loan Documents,
and the exercise of any of its rights or the completion of any of its remedies
shall not constitute a discharge of Guarantor’s obligations hereunder, it being
the purpose and intent of such Guarantor that the obligations of such 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 any Borrower under the Notes, the Loan
Agreement, any Mortgage or other Loan Documents or by reason of the bankruptcy
of any Borrower or by reason of any creditor or bankruptcy proceeding instituted
by or against any 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 Notes, the Loan Agreement, any Mortgage or any other
Loan Document is rescinded or otherwise required to be returned by Agent or any
Lender upon the insolvency, bankruptcy, dissolution, liquidation, or
reorganization of any Borrower, or upon or as a result of the appointment of a
receiver, intervenor, custodian or conservator of or trustee or similar officer
for, any Borrower or any substantial part of its property, or otherwise, all as
though such payment to Agent or such Lender had not been made, regardless of
whether Agent or such Lender contested the order requiring the return of such
payment. In the event of the foreclosure of the Mortgage 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
Borrowers would not be allowed by applicable law; however, the foregoing shall
not be deemed to require that Agent on behalf of the Lenders institute
foreclosure proceedings or otherwise resort to or exhaust any other collateral
or security prior to or concurrently with enforcing this Guaranty.

 

GUARANTY AGREEMENTPage 3

 

 

7.          In the event any Lender or any holder of any Note shall assign any
Note to any lender or other entity to secure a loan from such lender or other
entity to any Lender or such holder for an amount not in excess of the amount
which will be due, from time to time, from Borrowers to any Lender under such
Note with interest not in excess of the rate of interest which is payable by
Borrowers under such Note, Guarantor will accord full recognition thereto and
agree that all rights and remedies of such Lender or such holder hereunder shall
be enforceable against such Guarantor by such lender or other entity with the
same force and effect and to the same extent as would have been enforceable by
such lender or such holder but for such assignment; provided, however, that
unless Agent shall otherwise consent in writing, Agent shall have an unimpaired
right, prior and superior to that of its assignee or transferee, to enforce this
Guaranty for Lender’s benefit to the extent any portion of the Guaranteed
Indebtedness or any interest therein is not assigned or transferred.

 

8.          If: (a) this Guaranty is placed in the hands of an attorney for
collection or is collected through any legal proceeding; (b) an attorney is
retained to represent Agent or any Lender in any bankruptcy, reorganization,
receivership, or other proceedings affecting creditors’ rights and involving a
claim under this Guaranty; (c) an attorney is retained to provide advice to
Agent or any Lender or other representative of Agent or any other Lender in any
proceedings whatsoever in connection with this Guaranty and Agent or such Lender
prevails in such proceedings, then Guarantor shall pay to Agent or such Lender
upon demand all reasonable attorney’s fees, costs and expenses incurred in
connection therewith (all of which are referred to herein as “Enforcement
Costs”), in addition to all other amounts due hereunder, regardless of whether
all or a portion of such Enforcement Costs are incurred in a single proceeding
brought to enforce this Guaranty as well as the other Loan Documents.

 

9.          The parties hereto intend and believe that each provision in this
Guaranty comports with all applicable local, state and federal laws and judicial
decisions. However, if any provision or provisions, or if any portion of any
provision or provisions, in this Guaranty is found by a court of law to be in
violation of any applicable local, state or federal ordinance, statute, law,
administrative or judicial decision, or public policy, and if such court should
declare such portion, provision or provisions of this Guaranty to be illegal,
invalid, unlawful, void or unenforceable as written, then it is the intent of
all parties hereto that such portion, provision or provisions shall be given
force to the fullest possible extent that they are legal, valid and enforceable,
that the remainder of this Guaranty shall be construed as if such illegal,
invalid, unlawful, void or unenforceable portion, provision or provisions were
not contained therein, and that the rights, obligations and interest of Agent
and the Lenders under the remainder of this Guaranty shall continue in full
force and effect.

 

10.         TO THE GREATEST EXTENT PERMITTED BY LAW, GUARANTOR HEREBY WAIVES ANY
AND ALL RIGHTS TO REQUIRE MARSHALLING OF ASSETS BY AGENT. WITH RESPECT TO ANY
SUIT, ACTION OR PROCEEDINGS RELATING TO THIS GUARANTY (EACH, A “PROCEEDING”),
AGENT (BY ITS ACCEPTANCE HEREOF) AND GUARANTOR IRREVOCABLY (A) SUBMITS TO THE
NON-EXCLUSIVE JURISDICTION OF THE STATE AND FEDERAL COURTS HAVING JURISDICTION
IN THE CITY OF CLEVELAND AND STATE OF OHIO, AND (B) WAIVES ANY OBJECTION WHICH
IT MAY HAVE AT ANY TIME TO THE LAYING OF VENUE OF ANY PROCEEDING BROUGHT IN ANY
SUCH COURT, WAIVES ANY CLAIM THAT ANY PROCEEDING HAS BEEN BROUGHT IN AN
INCONVENIENT FORUM AND FURTHER WAIVES THE RIGHT TO OBJECT, WITH RESPECT TO SUCH
PROCEEDING, THAT SUCH COURT DOES NOT HAVE JURISDICTION OVER SUCH PARTY. NOTHING
IN THIS GUARANTY SHALL PRECLUDE AGENT FROM BRINGING A PROCEEDING IN ANY OTHER
JURISDICTION NOR WILL THE BRINGING OF A PROCEEDING IN ANY ONE OR MORE
JURISDICTIONS PRECLUDE THE BRINGING OF A PROCEEDING IN ANY OTHER JURISDICTION.
AGENT AND GUARANTOR FURTHER AGREE AND CONSENT THAT, IN ADDITION TO ANY METHODS
OF SERVICE OF PROCESS PROVIDED FOR UNDER APPLICABLE LAW, ALL SERVICE OF PROCESS
IN ANY PROCEEDING IN ANY OHIO STATE OR UNITED STATES COURT SITTING IN THE CITY
OF CLEVELAND AND MAY BE MADE BY CERTIFIED OR REGISTERED MAIL, RETURN RECEIPT
REQUESTED, DIRECTED TO THE APPLICABLE PARTY AT THE ADDRESS INDICATED BELOW, AND
SERVICE SO MADE SHALL BE COMPLETE UPON RECEIPT; EXCEPT THAT IF SUCH PARTY SHALL
REFUSE TO ACCEPT DELIVERY, SERVICE SHALL BE DEEMED COMPLETE FIVE (5) DAYS AFTER
THE SAME SHALL HAVE BEEN SO MAILED.

 

GUARANTY AGREEMENTPage 4

 

 

11.         Any indebtedness of any Borrower to Guarantor now or hereafter
existing is hereby subordinated to the payment of the Guaranteed Indebtedness.
Guarantor agrees that, until the entire Guaranteed Indebtedness has been paid in
full, no Guarantor will seek, accept, or retain for its own account, any payment
from such Borrower on account of such subordinated debt. Any payments to
Guarantor on account of such subordinated debt shall be collected and received
by Guarantor in trust for the Lenders and shall be paid over to Agent for the
benefit of the Lenders on account of the Guaranteed Indebtedness without
impairing or releasing the obligations of Guarantor hereunder.

 

12.         Any amounts received by the Lenders from any source on account of
the Loan may be utilized by the Lenders for the payment of the Guaranteed
Indebtedness and any other obligations of any Borrower to the Lenders in such
order as the Lenders may from time to time elect. Additionally, if the
Guaranteed Indebtedness guaranteed hereby is less than the full indebtedness
evidenced by the Notes, all rents, proceeds and avails of each Project,
including proceeds of realization of the Lenders’ collateral, shall be deemed
applied on the Guaranteed Indebtedness of Borrowers to the Lenders that is not
guaranteed by Guarantor until such unguaranteed indebtedness of Borrowers to the
Lenders has been fully repaid before being applied upon the Guaranteed
Indebtedness guaranteed by Guarantor.

 

13.         GUARANTOR AND AGENT (BY ITS ACCEPTANCE HEREOF) HEREBY WAIVE ANY
RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY
RIGHT UNDER THIS GUARANTY OR ANY OTHER LOAN DOCUMENT OR RELATING THERETO OR
ARISING FROM THE LENDING RELATIONSHIP WHICH IS THE SUBJECT OF THIS GUARANTY AND
AGREE THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT
BEFORE A JURY.

 

14.         Any notice, demand, request or other communication which any party
hereto may be required or may desire to give hereunder shall be in writing and
shall be deemed to have been properly given (a) if hand delivered, when
delivered; (b) if mailed by United States Certified Mail (postage prepaid,
return receipt requested), three Business Days after mailing (c) if by Federal
Express or other reliable overnight courier service, on the next Business Day
after delivered to such courier service or (d) if by telecopier on the day of
transmission so long as copy is sent on the same day by overnight courier as set
forth below:

 

Guarantor:

Sentio Healthcare Properties, Inc.

189 South Orange Avenue, Suite 1700

Orlando, Florida 32801

Attention:        John Mark Ramsey

Attention:        Scott Larche

Attention:        Sharon Kaiser

Telephone:         (407) 999-7679

Facsimile:           (407) 999-5210

    With a copy to:

Foley & Lardner LLP

111 North Orange Avenue, Suite 1800

Orlando, Florida 32801

Attention:        Michael A. Okaty, Esq.

Telephone:         (407) 244-3229

Facsimile:           (407) 648-1743

 

GUARANTY AGREEMENTPage 5

 

 

Agent:

KeyBank National Association

Mailcode: OH-01-51-0311

4910 Tiedeman Road, 3rd Floor

Brooklyn, Ohio 44144

Attention:        Amy L. MacLearie, KREC Commercial Loan Closer-Assistant Vice
President

Telephone:         (216) 813-6935

Facsimile:           (216) 357-6383

    With a copy to:

Alfred G. Kyle, Esq.

Bracewell & Giuliani LLP

1445 Ross Avenue, Suite 3800

Dallas, Texas 75202

Telephone:         (214) 758-1660

Facsimile:           (214) 758-8360

 

or at such other address as the party to be served with notice may have
furnished in writing to the party seeking or desiring to serve notice as a place
for the service of notice.

 

15.         In order to induce the Lenders to make the Loan, Guarantor makes the
following representations and warranties to the Agent for the benefit of the
Lender set forth in this Section. Guarantor acknowledges that but for the truth
and accuracy of the matters covered by the following representations and
warranties, the Lenders would not have agreed to make the Loan:

 

(a)          Guarantor is duly formed, validly existing, and in good standing in
its state of organization and has qualified to do business and is in good
standing in any state in which it is necessary in the conduct of its business;

 

(b)          Guarantor maintains an office at the address set forth for such
party in Section 14;

 

(c)          Any and all balance sheets, net worth statements, and other
financial data with respect to Guarantor which have heretofore been given to
Agent or any Lender by or on behalf of Guarantor fairly and accurately present
the financial condition of Guarantor in all material respects as of the
respective dates thereof;

 

(d)          The execution, delivery, and performance by Guarantor of this
Guaranty does not and will not contravene or conflict with (i) any Laws, order,
rule, regulation, writ, injunction or decree now in effect of any Government
Authority, or court having jurisdiction over Guarantor, (ii) any contractual
restriction binding on or affecting Guarantor or Guarantor’s property or assets
which may adversely affect Guarantor’s ability to fulfill its obligations under
this Guaranty, (iii) the instruments creating any trust holding title to any
assets included in Guarantor’s financial statements, or (iv) the organizational
documents of Guarantor;

 

(e)          This Guaranty creates legal, valid, and binding obligations of
Guarantor enforceable in accordance with its terms;

 

(f)          there is no action, proceeding, or investigation pending or, to the
knowledge of Guarantor, threatened or affecting Guarantor, which may adversely
affect Guarantor’s ability to fulfill its material obligations under this
Guaranty. There are no judgments or orders for the payment of money rendered
against Guarantor for an amount in excess of $100,000 which have been
undischarged for a period of ten (10) or more consecutive days or the
enforcement of which is not stayed by reason of a pending appeal or otherwise.
Guarantor is not in default under any agreements which may adversely affect
Guarantor’s ability to fulfill its obligations under this Guaranty; and

 

(g)          All statements set forth in the Recitals are true and correct.

 

GUARANTY AGREEMENTPage 6

 

 

All of the foregoing representations and warranties shall be deemed remade on
the date of the first disbursement of Loan proceeds, on the date of each advance
of Loan proceeds, and upon any extension of the Loan pursuant to the Loan
Agreement. Guarantor hereby agrees to indemnify and hold Agent and each Lender
free and harmless from and against all loss, cost, liability, damage, and
expense, including reasonable attorney’s fees and costs, which Agent or any
Lender may sustain by reason of the inaccuracy or breach of any of the foregoing
representations and warranties as of the date the foregoing representations and
warranties are made and are remade.

 

16.         Guarantor shall deliver or cause to be delivered to Agent all of the
applicable financial statements to be delivered in accordance with the terms of
the Loan Agreement.

 

17.         This Guaranty shall be binding upon the heirs, executors, legal and
personal representatives, successors and assigns of Guarantor.

 

18.         This Guaranty shall be construed and enforced in accordance with,
and the rights of the parties shall be governed by, the law of the State of New
York excluding choice-of-law principles of the law of such state that would
require the application of the laws of a jurisdiction other than such state.

 

19.         The Lenders shall be entitled to honor any request for Loan proceeds
made by Borrowers and shall have no obligation to see to the proper disposition
of such advances. Guarantor agrees that its obligations hereunder shall not be
released or affected by reason of any improper disposition by Borrowers of such
Loan proceeds.

 

20.         This Guaranty may be executed in any number of counterparts and by
different parties hereto in separate counterparts, each of which when so
executed shall be deemed to be an original and all of which taken together shall
constitute one and the same instrument.

 

GUARANTY AGREEMENTPage 7

 

 

IN WITNESS WHEREOF, Guarantor has delivered this Guaranty in the State of Ohio
as of the date first written above.

 

  GUARANTOR:       SENTIO HEALTHCARE PROPERTIES, INC., a Maryland   corporation
      By: /s/ John Mark Ramsey     John Mark Ramsey, Authorized Signatory

 

GUARANTY AGREEMENTPage 8