exv10w3






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:



 









 





     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.



[Remainder of page intentionally left blank.]




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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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