Exhibit 10.7


 


GUARANTY OF COMPLETION AND NON-RECOURSE
CARVE-OUTS


 


THIS GUARANTY OF COMPLETION
AND NON-RECOURSE CARVE-OUTS (as the same may be amended, supplemented or otherwise modified from time to time, this "Guaranty")
is made as of January 15, 2015 by LIFE CARE COMPANIES LLC, an Iowa limited liability company ("Guarantor") for
the benefit of SENTIO GEORGETOWN, LLC, a Delaware limited liability company (“Lender A”) and SENTIO GEORGETOWN
TRS, LLC, a Delaware limited liability company (“Lender B”).


 


WITNESSETH:


 


WHEREAS, pursuant
to that certain Construction Loan Agreement dated as of the date hereof among WESTMINSTER – LCS GEORGETOWN LLC, an Iowa limited
liability company ("Borrower"), Lender A, and Lender B (together with all renewals, amendments, modifications,
increases and extensions thereof, the "Loan Agreement"), Lender A has agreed to make a construction loan to Borrower
in the maximum principal amount of $40,912,000.00 (“Loan A”), and Lender B has agreed to make a construction
loan to Borrower in the maximum principal amount of $1,000,000.00 (“Loan B”). Loan A is evidenced by that certain
Promissory Note A dated as of even date herewith in the principal amount of Loan A. Loan B is evidenced by that certain Promissory
Note B dated as of even date herewith in the principal amount of Loan B. Lender A and Lender B are referred to herein, individually
and collectively as the context may require, as “Lender”. Loan A and Loan B are referred to herein, individually
and collectively as the context may require, as the “Loan”. Promissory Note A and Promissory Note B are referred
to herein, individually and collectively as the context may require, together with all renewals, amendments, modifications, increases
and extensions thereof, as the “Note”.


 


WHEREAS, the Loan
is secured by that certain Deed of Trust, Assignment of Leases and Rents, Security Instrument and Fixture Filing, by Borrower for
the benefit of Lender dated as of even date herewith (together with all renewals, modifications, increases and extensions thereof,
the "Security Instrument"), which grants Lender a first priority security interest in the real property described
on Exhibit A attached thereto (the "Property"). The Loan Agreement, Note, Security Instrument, and
each of the other documents evidencing or securing the Loan are hereinafter referred to collectively as the "Loan Documents."


 


WHEREAS, Lender
is not willing to make the Loan, or otherwise extend credit, to Borrower unless Guarantor unconditionally guarantees payment and
performance to Lender of the Guaranteed Obligations (as herein defined).


 


WHEREAS, Guarantor
is the owner of direct or indirect interests or has a financial interest in Borrower, and Guarantor will directly benefit from
Lender's making the Loan to Borrower.


 


NOW, THEREFORE,
as an inducement to Lender to make the Loan to Borrower and to extend such additional credit as Lender may from time to time agree
to extend under the Loan Documents, and for other good and valuable consideration, the receipt and legal sufficiency of which are
hereby acknowledged, Guarantor does hereby agree as follows:


 




    	 



    	 



    

 


ARTICLE
1


 


DEFINED
TERMS


 


Section 1.1           Defined
Terms. As used herein, the following terms have the following meanings:


 


(a)          “Guaranteed
Carveout Obligations” means the obligations or liabilities of Borrower or Guarantor to Lender for any Losses incurred
by Lender arising out of or in connection with the following:


 


(i)          fraud
or any intentional material written misrepresentation by Borrower or Guarantor made in the Loan Documents or in connection with
the application for the Loan;


 


(ii)         material
physical waste committed on the Property through any intentional act of Borrower, or the removal by Borrower of any portion of
the Property in violation of the terms of the Loan Documents whenever an Event of Default exists;


 


(iii)        subject
to any right to contest such matters, as provided in the Loan Documents, failure to pay any valid property taxes or liens, which
would be superior to the lien or security title of the Security Instrument or the other Loan Documents, to the extent funds for
payment of the amount claimed by any such lien claimant are available for advance under the Loan or from Operating Cash Flow;


 


(iv)        all
reasonable third party legal costs and expenses (including attorneys’ fees) reasonably incurred by Lender in connection with
litigation or other legal proceedings involving the collection or enforcement of this Guaranty or arising in connection with the
Loan after the occurrence and during the continuance of an Event of Default, or reasonably incurred in connection with the enforcement
or realization by Lender of its lien on the Property if Borrower or Guarantor in bad faith contests or interferes with any such
action taken by Lender;


 


(v)         a
default by Borrower of any covenant contained in that certain Environmental Indemnity Agreement dated as of the date of the Loan
Agreement given by Borrower and Guarantor to Lender; provided, however, that such default shall not be a Guaranteed Carveout Obligation
if such default is fully cured on or before the expiration of the Cure Period (as defined below). As used in this Section 1.1(a)(v),
the term “Cure Period” means a ninety (90) day period commencing on Lender’s written notice to
Guarantor of the default; provided, however, if (i) the subject default is, by its nature, not readily susceptible to cure within
ninety (90) days, and (ii) Guarantor or Borrower commences that cure process within the initial ninety (90) day period and diligently
pursues it to completion within one hundred eighty (180) days of the initial default, then that default shall not constitute a
Guaranteed Carveout Obligation;


 




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(vi)        the
misapplication or conversion by Borrower of (A) any insurance proceeds paid by reason of any loss, damage or destruction to
the Property, (B) any awards or other amounts received in connection with the condemnation of all or a portion of the Property,
or (C) any rents, income, or cash flow of the Property while an Event of Default exists;


 


(vii)       any
security deposits or other refundable deposits collected with respect to the Property which are not delivered to Lender upon a
sale or foreclosure of the Property or other action in lieu thereof, except to the extent any such security deposits were applied
in accordance with the terms and conditions of any of the applicable leases or residency agreements prior to the occurrence of
the Event of Default that gave rise to such sale or foreclosure or other action in lieu thereof or used by Borrower to pay bona
fide Operating Expenses of the Property;


 


(viii)      Borrower’s
failure to maintain any one or more of the insurance policies required under the Loan Documents to the extent funds for payment
for the premiums due for such policies are available for advance under the Loan or from Operating Cash Flow; or


 


(ix)         Borrower’s
breach of any of the following covenants of the Loan Agreement: Section 8.1 (Single Purpose Entity), or Section 8.11
(Compliance).


 


(x)          Borrower’s
breach of any of the covenants in Section 7.2 of the Loan Agreement, but only if Borrower had actual knowledge of such breach
on or before the date that Lender acquires the Property by foreclosure or deed-in-lieu thereof.


 


(xi)         Any
federal, state, or local Governmental Authority revokes or suspends any license or permit required by applicable law in order to
operate the Property as an independent living, assisted living, and memory care senior housing community and such revocation or
suspension is still in effect as of the date that Lender acquires the Property by foreclosure or deed-in-lieu thereof.


 


(b)        “Guaranteed
Obligations” means, collectively, the Guaranteed Carveout Obligations, the Guaranteed Performance Obligations, and
the Guaranteed Springing Obligations.


 


(c)         “Guaranteed Performance Obligations” means:


 


(i)          the
prompt and complete payment and performance of the obligations of Borrower to construct and complete the construction of the Project
substantially in accordance with Applicable Laws, the Plans, and the Approved Budget, on or before the Construction Completion
Date, subject to delays from Force Majeure Events, free and clear of all liens (other than those contemplated by the Loan Documents);
and


 




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(ii)         the
obligation to keep the Loan in balance, as described in Section 4.4 of the Loan Agreement.


 


(d)       “Guaranteed
Springing Obligations” means the entire Debt, but only from and after the occurrence of one or more of the events
described in Section 2.4 hereof.


 


(e)        “Losses”
means any and all actual third party claims, suits, liabilities (including, without limitation, strict liabilities), actions, proceedings,
obligations, debts, demands, causes of action, damages (excluding consequential, special, indirect or incidental damages), actual
out-of-pocket losses, fines, penalties, charges, fees, actual out-of-pocket costs and expenses (including without limitation reasonable
third party attorneys’ fees and expenses), judgments, awards and amounts paid in settlement of whatever kind or nature (including
but not limited to reasonable third attorneys’ fees and other third party costs of defense); provided, however, the term
“Losses” shall not include any special or punitive damages.


 


Section 1.2         Loan
Agreement. Any capitalized term used in this Guaranty and not otherwise defined herein shall have the meaning ascribed to such
term in the Loan Agreement.


 


ARTICLE
2



guarantees


 


Section 2.1        Conditional
Guaranty and Exculpation. Guarantor hereby irrevocably and unconditionally guarantees to Lender and its successors and assigns
the payment in full of the Debt and all amounts due and payable to Lender A and Lender B under the Loan Documents (including the
Participation Amount if applicable). However, except as set forth in Sections 2.2, 2.3, and 2.4, Guarantor shall have no
personal liability for the Debt or the obligations under the Loan Documents, and Lender’s recourse for collection of the
Debt and enforcement of the obligations under the Loan Documents shall be limited to Borrower and the collateral for the Loan.
The limitation on Guarantor’s personal liability in the immediately preceding sentence is referred to herein as the “Exculpation”.


 


Section 2.2        Reservation
of rights under the Bankruptcy Code. Notwithstanding the Exculpation, Lender shall not be deemed to have waived any right which
Lender may have under Section 506(a), 506(b), 1111(b) or any other provisions of the U.S. Bankruptcy Code to file a claim
against Borrower’s and Guarantor’s bankruptcy estate for the full amount of the Debt or to require that all collateral
for the Loan shall continue to secure all of the Debt accordance with the Loan Documents.


 


Section 2.3         Guaranty
of Guaranteed Carveout Obligations. Notwithstanding the Exculpation, Guarantor hereby irrevocably and unconditionally guarantees
to Lender and its successors and assigns the payment of the Guaranteed Carveout Obligations as and when the same shall be due and
payable. Guarantor hereby irrevocably and unconditionally covenants and agrees that Guarantor is liable for the Guaranteed Carveout
Obligations as a primary obligor.


 




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Section 2.4        Guarantied
Springing Obligations. The Exculpation shall be null and void, and Guarantor shall be personally liable for the entire amount
of the Debt as a primary obligor, from and after the occurrence of any of the following events: (i) the Property or any part thereof
becomes an asset in a voluntary bankruptcy or insolvency proceeding under the U.S. Bankruptcy Code, or in an involuntary bankruptcy
or insolvency proceeding brought by Guarantor or an Affiliate of Guarantor, or in an involuntary bankruptcy or insolvency proceeding
in which Borrower, Guarantor or an Affiliate of Guarantor has colluded or conspired with the person bringing such action, which
proceeding is not dismissed within ninety (90) days after it is filed, together with all reasonable third party legal costs and
expenses (including attorneys’ fees) reasonably incurred by Lender arising from or relating thereto, (ii) Borrower or
Guarantor fails to obtain Lender’s prior written consent to any voluntary Transfer for which Borrower or Guarantor is required
to obtain such prior written consent under the Loan Documents before consummating any such Transfer, or (iii) Borrower, Guarantor,
or any Affiliate of Guarantor contests or interferes with, directly or indirectly, the exercise by Lender of its rights and remedies
with respect to the Property or other collateral for the Loan, including the making of any motion, the filing of any counterclaim,
or the seeking of any injunction or restraint, other than a good faith dispute as to the existence of an Event of Default, unless
Borrower, Guarantor, or the applicable Affiliate is adjudicated, in a final and non-appealable judgment, to be the prevailing party
with respect thereto.


 


Section 2.5        Guaranty
of Performance Obligations.


 


(a)       Guarantor
hereby unconditionally and irrevocably guarantees to Lender, as a primary obligor, the timely performance of the Guaranteed Performance
Obligations, subject to Lender’s performance of its obligations under Section 2.5(b). If an Event of Default occurs
and is continuing with respect to any of the Guaranteed Performance Obligations, and upon notice from Lender to Guarantor at the
address set forth and in the manner prescribed in Section 7.2 below for giving notice, Guarantor agrees to assume all responsibility
for the Guaranteed Performance Obligations.


 


(b)       After
Lender’s notice to Guarantor for performance of the Guaranteed Performance Obligations, Guarantor shall be entitled to request
and draw remaining undisbursed Loan funds for the purpose of completing the construction of the Improvements and pre-opening services
contemplated by the Development Agreement (but not in excess of the committed amount of the Loan). Lender shall disburse such funds
for the purpose of, and to the extent necessary for, performance of the Guaranteed Performance Obligations, provided that: (i)
Guarantor must have unconditionally reaffirmed in writing its obligations hereunder with respect to the Guaranteed Performance
Obligations and be performing the Guaranteed Performance Obligations or causing the performance of the Guaranteed Performance Obligations
with due diligence (including, without limitation, ensuring that the Loan remains In Balance); (ii) all such disbursements shall
be secured by the Security Instrument and the other Loan Documents with the same priority as all previous disbursements to Borrower;
and (iii) Guarantor shall otherwise be complying, or shall cause Borrower to otherwise comply, with all of the remaining terms
and conditions of the Loan Documents (including the terms and conditions applicable to draws of undisbursed Loan funds). Lender
shall waive compliance with terms and conditions that are personal to Borrower, provided that failure to perform such personal
terms and conditions does not, in any material respect, impair the timely completion of the Guaranteed Performance Obligations
or the operation, use, or value of the Property and Improvements.


 




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(c)       If,
after Lender’s notice to Guarantor for performance of the Guaranteed Performance Obligations, Guarantor commits one or more
defaults (and such defaults continue beyond any applicable notice or Cure Period) in its performance of the Guaranteed Performance
Obligations as and when required by Section 2.5(a) above, and without limiting any other right or remedy of Lender hereunder
or under the other Loan Documents, then Lender may, at its option, after first having given at least ten (10) days’ prior
written notice and opportunity to cure (within such ten (10) day period) to Guarantor at the address set forth and in the manner
prescribed in Section 7.2 below for giving notice, complete the Improvements either before or after commencement of foreclosure
proceedings or before or after exercise of any other right or remedy of Lender against Borrower or Guarantor, and may expend such
sums as Lender, in its discretion, deems necessary or advisable to complete the Improvements. The amount of any and all expenditures
made by Lender for the foregoing purposes in excess of the allocations of undisbursed Loan proceeds for the completion of construction
of the Improvements shall be due and payable by Guarantor to Lender upon demand, together with interest as provided in the Loan
Documents. Lender does not have and shall never have any obligation to complete the Improvements or to take any action to cause
such completion.


 


(d)       Notwithstanding
anything to the contrary in this Guaranty, if Lender completes the Improvements in accordance with subsection (c) above, then Guarantor’s
liability with respect to the Guaranteed Performance Obligations shall be limited to the amount by which the costs to complete
the Improvements exceed (i) the aggregate hard costs and soft costs budgeted for the Improvements in the Initial Approved Budget
approved by Lender as of the date of this Guaranty less (ii) any amounts for such costs previously advanced by Lender to Borrower.


 


(e)       Completion
of the Improvements (and satisfaction of the Guaranteed Performance Obligations) for purposes of this Guaranty shall be deemed
to have occurred upon (i) Lender’s receipt of a certificate of substantial completion (AIA Document G704) executed by Architect
with respect to the Improvements, (ii) Lender’s receipt of a certificate of temporary or permanent occupancy or such other
documentation, if any, as is customarily issued by the applicable Governmental Authority upon substantial completion of shell building
improvements, and (iii) Lender’s receipt of written confirmation from the Title Company that no liens have been filed against
the Property which have not been bonded around in accordance with the Loan Documents, and expiration of the statutory period within
which mechanics liens may be filed with respect to construction of the Improvements.


 


Section 2.6        Nature
of Guaranty. This Guaranty is an irrevocable, absolute, continuing guaranty of payment and not a guaranty of collection. This
Guaranty may not be revoked by Guarantor and shall continue to be effective with respect to any Guaranteed Carveout Obligations
arising or created after any attempted revocation by Guarantor. This Guaranty may be enforced by Lender and any subsequent holder
of either Note permitted under the Loan Agreement and shall not be discharged by the assignment or negotiation of all or part of
either Note, in each case made in accordance with the Loan Agreement.


 




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Section 2.7        Guaranteed
Obligations Not Reduced by Offset. The Guaranteed Obligations and the liabilities and obligations of Guarantor to Lender hereunder
shall not be reduced, discharged or released because or by reason of any existing or future offset, claim or defense of Borrower,
or any other party, against Lender or against payment of the Guaranteed Obligations, whether such offset, claim or defense arises
in connection with the Guaranteed Obligations (or the transactions creating the Guaranteed Obligations) or otherwise.


 


Section 2.8        Payment
By Guarantor. If all or any part of the Guaranteed Obligations shall not be punctually paid when due, whether at demand, maturity,
acceleration or otherwise, Guarantor shall, immediately upon demand by Lender, and without presentment, protest, notice of protest,
notice of non-payment, notice of intention to accelerate the maturity, notice of acceleration of the maturity, or any other notice
whatsoever, pay in lawful money of the United States of America, the amount due on the Guaranteed Obligations to Lender at Lender’s
address as set forth herein. Such demand(s) may be made at any time coincident with or after the time for payment of all or part
of the Guaranteed Obligations, and may be made from time to time with respect to the same or different items of Guaranteed Obligations.
Such demand shall be deemed made, given and received in accordance with the notice provisions hereof.


 


Section 2.9        No
Duty To Pursue Others. It shall not be necessary for Lender (and Guarantor hereby waives any rights which Guarantor may have
to require Lender), in order to enforce the obligations of Guarantor hereunder, first to (i) institute suit or exhaust its
remedies against Borrower or others liable on the Loan or the Guaranteed Obligations or any other person, (ii) enforce Lender’s
rights against any collateral which shall ever have been given to secure the Loan, (iii) enforce Lender’s rights against
any other guarantors of the Guaranteed Obligations, (iv) join Borrower or any others liable on the Guaranteed Obligations
in any action seeking to enforce this Guaranty, (v) exhaust any remedies available to Lender against any collateral which
shall ever have been given to secure the Loan, or (vi) resort to any other means of obtaining payment of the Guaranteed Obligations.
Lender shall not be required to mitigate damages or take any other action to reduce, collect or enforce the Guaranteed Obligations.


 


Section 2.10      Waivers.
Guarantor agrees to the provisions of the Loan Documents, and hereby waives notice of (i) any loans or advances made by Lender
to Borrower, (ii) acceptance of this Guaranty, (iii) any amendment or extension of the Note, the Security Instrument
or of any other Loan Documents, (iv) the execution and delivery by Borrower and Lender of any other loan or credit agreement
or of Borrower’s execution and delivery of any promissory notes or other documents arising under the Loan Documents or in
connection with the Property, (v) the occurrence of any breach by Borrower or an Event of Default, (vi) Lender’s
transfer or disposition of the Guaranteed Obligations, or any part thereof, in accordance with the terms of the Loan Agreement
(vii) sale or foreclosure (or posting or advertising for sale or foreclosure) of any collateral for the Guaranteed Obligations,
(viii) protest, proof of non-payment or default by Borrower, or (ix) any other action at any time taken or omitted by
Lender, and, generally, all demands and notices of every kind in connection with this Guaranty, the Loan Documents, any documents
or agreements evidencing, securing or relating to any of the Guaranteed Obligations and the obligations hereby guaranteed except
for any notices expressly required under any of the Loan Documents.


 




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Section 2.11      Effect
of Bankruptcy. In the event that, pursuant to any insolvency, bankruptcy, reorganization, receivership or other debtor relief
law, or any judgment, order or decision thereunder, or any agreement, stipulation or settlement, Lender must rescind or restore
any payment, or any part thereof, received by Lender in satisfaction of the Guaranteed Obligations, as set forth herein, any prior
release or discharge from the terms of this Guaranty given to Guarantor by Lender shall be without effect, and this Guaranty shall
remain in full force and effect. It is the intention of Borrower and Guarantor that Guarantor’s obligations hereunder shall
not be discharged except by Guarantor’s performance of such obligations and then only to the extent of such performance.


 


Section 2.12       Waiver
of Subrogation, Reimbursement and Contribution. Notwithstanding anything to the contrary contained in this Guaranty, Guarantor
hereby unconditionally and irrevocably waives, releases and abrogates any and all rights Guarantor may now or hereafter have under
any agreement, at law or in equity (including, without limitation, any law subrogating the Guarantor to the rights of Lender),
to assert, prior to the indefeasible payment and discharge in full of the Debt and the performance of all obligations under the
Loan, any claim against or seek contribution, indemnification or any other form of reimbursement from Borrower or any other party
liable for payment of any or all of the Guaranteed Obligations or for any payment made by Guarantor under or in connection with
this Guaranty or otherwise.


 


Section 2.13      Borrower.
The term “Borrower” as used herein shall include any new or successor corporation, association, partnership
(general or limited), joint venture, trust or other individual or organization formed as a result of any merger, reorganization,
sale, transfer, devise, gift or bequest of Borrower or any interest in Borrower.


 


ARTICLE
3



EVENTS AND CIRCUMSTANCES NOT REDUCING

OR DISCHARGING GUARANTOR’S OBLIGATIONS


 


Guarantor hereby consents
and agrees to each of the following, and agrees that Guarantor’s obligations under this Guaranty shall not be released, diminished,
impaired, reduced or adversely affected by any of the following, and waives any common law, equitable, statutory or other rights
(including without limitation rights to notice) which Guarantor might otherwise have as a result of or in connection with any of
the following:


 


Section 3.1        Modifications.
Any renewal, extension, increase, modification, alteration or rearrangement of all or any part of the Indebtedness, the Note, the
Security Instrument, the other Loan Documents, or any other document, instrument, contract or understanding between Borrower and
Lender, or any other parties, pertaining to the Guaranteed Obligations or any failure of Lender to notify Guarantor of any such
action.


 




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Section 3.2        Adjustment.
Any adjustment, indulgence, forbearance or compromise that might be granted or given by Lender to Borrower or any other guarantor
of the Loan (or any portion thereof).


 


Section 3.3       Condition
of Borrower or Guarantor. The insolvency, bankruptcy, arrangement, adjustment, composition, liquidation, disability, dissolution
or lack of power of Borrower, Guarantor or any other party at any time liable for the payment of all or part of the Guaranteed
Obligations; or any sale, lease or transfer of any or all of the assets of Borrower or Guarantor, or any changes in the shareholders,
partners or members of Borrower or Guarantor; or any reorganization of Borrower or Guarantor.


 


Section 3.4        Invalidity
of Guaranteed Obligations. The invalidity, illegality or unenforceability of all or any part of the Guaranteed Obligations,
or any document or agreement executed in connection with the Guaranteed Obligations, for any reason whatsoever, including without
limitation the fact that (i) the Guaranteed Obligations, or any part thereof, exceeds the amount permitted by law, (ii) the
act of creating the Guaranteed Obligations or any part thereof is ultra vires, (iii) the officers or representatives
executing the Note, the Security Instrument or the other Loan Documents or otherwise creating the Guaranteed Obligations acted
in excess of their authority, (iv) the Guaranteed Obligations violate applicable usury laws, (v)  Borrower has valid
defenses, claims or offsets (whether at law, in equity or by agreement) which render the Guaranteed Obligations wholly or partially
uncollectible from Borrower (provided that the foregoing shall not waive any claim by Borrower or Guarantor contesting the existence
of an Event of Default), (vi) the creation, performance or repayment of the Guaranteed Obligations (or the execution, delivery
and performance of any document or instrument representing part of the Guaranteed Obligations or executed in connection with the
Guaranteed Obligations, or given to secure the repayment of the Guaranteed Obligations) is illegal, uncollectible or unenforceable,
or (vii) the Note, the Security Instrument or any of the other Loan Documents have been forged or otherwise are irregular
or not genuine or authentic, it being agreed that Guarantor shall remain liable hereon regardless of whether Borrower or any other
person be found not liable on the Guaranteed Obligations or any part thereof for any reason.


 


Section 3.5       Release
of Obligors. Any full or partial release of the liability of Borrower on the Guaranteed Obligations, or any part thereof, or
of any co-guarantors, or any other person or entity now or hereafter liable, whether directly or indirectly, jointly, severally,
or jointly and severally, to pay, perform, guarantee or assure the payment of the Guaranteed Obligations, or any part thereof,
it being recognized, acknowledged and agreed by Guarantor that Guarantor may be required to pay the Guaranteed Obligations in full
without assistance or support of any other party, and Guarantor has not been induced to enter into this Guaranty on the basis of
a contemplation, belief, understanding or agreement that other parties will be liable to pay or perform the Guaranteed Obligations,
or that Lender will look to other parties to pay or perform the Guaranteed Obligations.


 


Section 3.6        Other
Collateral. The taking or accepting of any other security, collateral or guaranty, or other assurance of payment, for all or
any part of the Guaranteed Obligations.


 




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Section 3.7        Release
of Collateral. Any release, surrender, exchange, subordination, deterioration, waste, loss or impairment (including without
limitation negligent, willful, unreasonable or unjustifiable impairment) of any collateral, property or security at any time existing
in connection with, or assuring or securing payment of, all or any part of the Guaranteed Obligations.


 


Section 3.8        Care
and Diligence. The failure of Lender or any other party to exercise diligence or reasonable care in the preservation, protection,
enforcement, sale or other handling or treatment of all or any part of such collateral, property or security, including but not
limited to any neglect, delay, omission, failure or refusal of Lender (i) to take or prosecute any action for the collection
of any of the Guaranteed Obligations or (ii) to foreclose, or initiate any action to foreclose, or, once commenced, prosecute
to completion any action to foreclose upon any security therefor, or (iii) to take or prosecute any action in connection with
any instrument or agreement evidencing or securing all or any part of the Guaranteed Obligations.


 


Section 3.9         Unenforceability.
The fact that any collateral, security, security interest or lien contemplated or intended to be given, created or granted as security
for the repayment of the Guaranteed Obligations, or any part thereof, shall not be properly perfected or created, or shall prove
to be unenforceable or subordinate to any other security interest or lien, it being recognized and agreed by Guarantor that Guarantor
is not entering into this Guaranty in reliance on, or in contemplation of the benefits of, the validity, enforceability, collectability
or value of any of the collateral for the Guaranteed Obligations.


 


Section 3.10       Merger.
The reorganization, merger or consolidation of Borrower into or with any other corporation or entity.


 


Section 3.11      Preference.
Any payment by Borrower to Lender is held to constitute a preference under bankruptcy laws, or for any reason Lender is required
to refund such payment or pay such amount to Borrower or someone else.


 


Section 3.12       Other
Actions Taken or Omitted. Any other action taken or omitted to be taken with respect to the Loan Documents, the Guaranteed
Obligations, or the security and collateral therefor, whether or not such action or omission prejudices Guarantor or increases
the likelihood that Guarantor will be required to pay the Guaranteed Obligations pursuant to the terms hereof. It is the unambiguous
and unequivocal intention of Guarantor that Guarantor shall be obligated to pay the Guaranteed Obligations when due, notwithstanding
any occurrence, circumstance, event, action, or omission whatsoever, whether contemplated or not contemplated, and whether or not
otherwise or particularly described herein, which obligation shall be deemed satisfied only upon the full and final payment and
satisfaction of the Guaranteed Obligations.


 


ARTICLE
4



REPRESENTATIONS AND WARRANTIES; covenants


 


To induce Lender to enter
into the Loan Documents and extend credit to Borrower, Guarantor represents, warrants and covenants to Lender as follows:


 




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Section 4.1        Benefit.
Guarantor is an owner of an indirect interest in Borrower, and has received, or will receive, direct or indirect benefit from the
making of this Guaranty with respect to the Guaranteed Obligations.


 


Section 4.2        Familiarity
and Reliance. Guarantor is familiar with, and has independently reviewed books and records regarding, the financial condition
of Borrower and is familiar with the value of any and all collateral intended to be created as security for the payment of the
Note or Guaranteed Obligations; however, Guarantor is not relying on such financial condition or the collateral as an inducement
to enter into this Guaranty.


 


Section 4.3        No
Representation By Lender. Neither Lender nor any other party has made any representation, warranty or statement to Guarantor
in order to induce Guarantor to execute this Guaranty.


 


Section 4.4       Legality.
The execution, delivery and performance by Guarantor of this Guaranty and the consummation of the transactions contemplated hereunder
do not, and will not, contravene or conflict with any law, statute or regulation whatsoever to which Guarantor is subject or constitute
a default (or an event which with notice or lapse of time or both would constitute a default) under, or result in the breach of,
any indenture, mortgage, Security Instrument, charge, lien, or any contract, agreement or other instrument to which Guarantor is
a party or which may be applicable to Guarantor. This Guaranty is a legal and binding obligation of Guarantor and is enforceable
in accordance with its terms, except as limited by bankruptcy, insolvency or other laws of general application relating to the
enforcement of creditors’ rights.


 


Section 4.5        Survival
of Representations and Warranties. All representations and warranties made by Guarantor herein shall survive the execution
hereof and payment of the Loan in full.


 


ARTICLE
5



Financial Covenants.


 


Section 5.1        Definitions. As used in this Article 5, the following terms shall have the respective meanings set forth below:


 


(a)       “Consolidated
Subsidiaries” shall mean each Subsidiary of Guarantor, the financial statements of which shall be (or should have been)
consolidated with the financial statements of Guarantor in accordance with GAAP.


 


(b)       “GAAP”
shall mean generally accepted accounting principles, consistently applied.


 




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(c)       “Liquid
Assets” shall mean assets in the form of cash, cash equivalents, obligations of (or fully guaranteed as to principal
and interest by) the United States or any agency or instrumentality thereof (provided the full faith and credit of the United States
supports such obligation or guarantee), certificates of deposit issued by a commercial bank having net assets of not less than
$500 million, securities listed and traded on a recognized stock exchange or traded over the counter and listed in the National
Association of Securities Dealers Automatic Quotations, or liquid debt instruments that have a readily ascertainable value and
are regularly traded in a recognized financial market. Liquid Assets shall also include unfunded lines of credit of Guarantor,
provided that, at the time of determination, Guarantor demonstrates to Lender’s reasonable satisfaction that draws on such
lines of credit are available upon demand or upon satisfaction of conditions that can be readily and promptly satisfied by Guarantor.


 


(d)       “Net
Worth” shall mean, as of a given date, the sum of (x) members’ equity as shown on financial statements delivered
to Lender in accordance with the terms of the Loan Documents, plus (y) any adjustment taken for straight-line rent accounting,
plus (z) subject to the following sentence, the face amount of Subordinated Shareholder Notes Payable. “Subordinated Shareholder
Notes Payable” means notes payable by Guarantor or its Consolidated Subsidiaries to former employees, provided that the
amount of such notes may be added to Net Worth for purposes of this Agreement only to the extent that (i) such notes are fully
disclosed in the financial statements delivered to Lender in accordance with the terms of the Loan Documents, (ii) the amount of
such notes is not included in or has been deducted from members’ equity as shown on such financial statements, and (iii)
by the terms of such notes, Guarantor’s obligations under such notes are fully subordinated to payment in full of all obligations
of Guarantor to Lender and other unsecured creditors of Guarantor.


 


(e)       “Subsidiary”
shall mean any Affiliate of Guarantor that is controlled by Guarantor.


 


Section 5.2        Covenants.
 Until all of the Loan A Debt, the Loan B Debt (including the Participation Amount), and the Guaranteed Obligations have
been paid and performed in full, Guarantor shall:


 


(a)       As
of any applicable measuring period maintain (i) a Net Worth in excess of Fifteen Million and No/100 Dollars ($15,000,000.00) until
Construction Completion and thereafter a Net Worth in excess of Five Million and No/100 Dollars ($5,000,000.00), and (b) Liquid
Assets of at least Four Million and No/100 Dollars ($4,000,000.00) until Construction Completion, and thereafter Liquid Assets
of at least Two Million Five Hundred Thousand and No/100 Dollars ($2,500,000.00).


 


(b)       Deliver
to Lender within five (5) Business Days of receipt, copies of any default notices received by Guarantor or its Consolidated Subsidiaries
in respect of any indebtedness of Guarantor or its Consolidated Subsidiaries in excess of $1,000,000.


 


(c)        Comply
with the terms of Section 8.7 of the Loan Agreement applicable to Guarantor.


 


Section 5.3        Prohibited
Transactions. Guarantor shall not, at any time while a default in the payment of the Guaranteed Obligations has occurred
and is continuing, either (i) enter into or effectuate any transaction with any Affiliate of Guarantor, including the payment of
any dividend or distribution to a shareholder, or the redemption, retirement, purchase or other acquisition for consideration of
any stock in Guarantor or (ii) sell, pledge, mortgage or otherwise transfer to any Person any of Guarantor’s assets, or any
interest therein, in either case, which could have the effect of reducing the Net Worth of Guarantor below the amount required
to be maintained pursuant to Section 5.2(a).


 




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ARTICLE
6



SUBORDINATION OF CERTAIN INDEBTEDNESS


 


Section 6.1        Subordination
of All Guarantor Claims. As used herein, the term “Guarantor Claims” shall mean all debts and liabilities
of Borrower to Guarantor, whether such debts and liabilities now exist or are hereafter incurred or arise, or whether the obligations
of Borrower thereon be direct, contingent, primary, secondary, several, joint and several, or otherwise, and irrespective of whether
such debts or liabilities be evidenced by note, contract, open account, or otherwise, and irrespective of the person or persons
in whose favor such debts or liabilities may, at their inception, have been, or may hereafter be created, or the manner in which
they have been or may hereafter be acquired by Guarantor. The Guarantor Claims shall include without limitation all rights and
claims of Guarantor against Borrower (arising as a result of subrogation or otherwise) as a result of Guarantor’s payment
of all or a portion of the Guaranteed Obligations. Whenever an Event of Default exists, Guarantor shall not receive or collect,
directly or indirectly, from Borrower or any other party any amount upon the Guarantor Claims.


 


Section 6.2       Claims
in Bankruptcy. In the event of receivership, bankruptcy, reorganization, arrangement, debtor’s relief, or other insolvency
proceedings involving Guarantor as debtor, Lender shall have the right to prove its claim in any such proceeding so as to establish
its rights hereunder and receive directly from the receiver, trustee or other court custodian dividends and payments which would
otherwise be payable upon Guarantor Claims. Guarantor hereby assigns such dividends and payments to Lender. Should Lender receive,
for application upon the Guaranteed Obligations, any such dividend or payment which is otherwise payable to Guarantor, and which,
as between Borrower and Guarantor, shall constitute a credit upon the Guarantor Claims, then upon payment to Lender in full of
the Guaranteed Obligations, Guarantor shall become subrogated to the rights of Lender to the extent that such payments to Lender
on the Guarantor Claims have contributed toward the liquidation of the Guaranteed Obligations, and such subrogation shall be with
respect to that proportion of the Guaranteed Obligations which would have been unpaid if Lender had not received dividends or payments
upon the Guarantor Claims.


 


Section 6.3        Payments
Held in Trust. In the event that, notwithstanding anything to the contrary in this Guaranty, Guarantor should receive any funds,
payment, claim or distribution which is prohibited by this Guaranty, Guarantor agrees to hold in trust for Lender an amount equal
to the amount of all funds, payments, claims or distributions so received, and agrees that Guarantor shall have absolutely no dominion
over the amount of such funds, payments, claims or distributions so received except to pay them promptly to Lender, and Guarantor
covenants promptly to pay the same to Lender.


 




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Section 6.4        Liens
Subordinate. Guarantor agrees that any liens, security interests, judgment liens, charges or other encumbrances upon Borrower’s
assets securing payment of the Guarantor Claims shall be and remain inferior and subordinate to any liens, security interests,
judgment liens, charges or other encumbrances upon Borrower’s assets securing payment of the Guaranteed Obligations, regardless
of whether such encumbrances in favor of Guarantor or Lender presently exist or are hereafter created or attach. Without the prior
written consent of Lender, Guarantor shall not (i) exercise or enforce any creditor’s right Guarantor may have against
Borrower, or (ii) foreclose, repossess, sequester or otherwise take steps or institute any action or proceedings (judicial
or otherwise, including without limitation the commencement of, or joinder in, any liquidation, bankruptcy, rearrangement, debtor’s
relief or insolvency proceeding) to enforce any liens, mortgage, deeds of trust, security interests, collateral rights, judgments
or other encumbrances on assets of Borrower held by Guarantor.


 


ARTICLE
7



MISCELLANEOUS


 


Section 7.1        Waiver.
No failure to exercise, and no delay in exercising, on the part of Lender, any right hereunder shall operate as a waiver thereof,
nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right.
The rights of Lender hereunder shall be in addition to all other rights provided by law. No modification or waiver of any provision
of this Guaranty, nor consent to departure therefrom, shall be effective unless in writing and no such consent or waiver shall
extend beyond the particular case and purpose involved. No notice or demand given in any case shall constitute a waiver of the
right to take other action in the same, similar or other instances without such notice or demand.


 


Section 7.2        Notices.
Any notice, demand, statement, request or consent made hereunder shall be in writing, addressed to the address, as set forth below,
of the party to whom such notice is to be given, or to such other address as Guarantor or Lender, as the case may be, shall designate
in writing, and shall be deemed to be received by the addressee on (i) the day such notice is personally delivered to such
addressee, (ii) the third (3rd) business day following the day such notice is deposited with the United States postal service
first class certified mail, return receipt requested, or (iii) the business day following the day on which such notice is
delivered to a nationally recognized overnight courier delivery service. The addresses of the parties hereto are as follows:


 


Guarantor:



Life Care Companies LLC

Capital Square

400 Locust Street, Suite 820

Des Moines, IA 50309-2334

Attention: Diane Bridgewater


 




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with a copy to:


 


Davis Brown Law Firm

215-10th Street, Suite 1300

Des Moines, IA 50309

Attention: Frank Carroll


 


Lender:


 


As provided in the Loan Agreement


 


Section 7.3        Governing
Law. This Guaranty shall be governed by and construed in accordance with the laws of the State in which the real property encumbered
by the Security Instrument is located and the applicable laws of the United States of America.


 


Section 7.4        Invalid
Provisions. If any provision of this Guaranty is held to be illegal, invalid, or unenforceable under present or future laws
effective during the term of this Guaranty, such provision shall be fully severable and this Guaranty shall be construed and enforced
as if such illegal, invalid or unenforceable provision had never comprised a part of this Guaranty, and the remaining provisions
of this Guaranty shall remain in full force and effect and shall not be affected by the illegal, invalid or unenforceable provision
or by its severance from this Guaranty, unless such continued effectiveness of this Guaranty, as modified, would be contrary to
the basic understandings and intentions of the parties as expressed herein.


 


Section 7.5        Amendments.
This Guaranty may be amended only by an instrument in writing executed by the party or an authorized representative of the party
against whom such amendment is sought to be enforced.


 


Section 7.6        Parties
Bound; Assignment; Joint and Several. This Guaranty shall be binding upon and inure to the benefit of the parties hereto and
their respective successors, assigns and legal representatives; provided, however, that Guarantor may not, without the prior written
consent of Lender, assign any of its rights, powers, duties or obligations hereunder. If more than one Person executes this Guaranty,
the obligations of such Persons hereunder shall be joint and several.


 


Section 7.7        Headings.
Section headings are for convenience of reference only and shall in no way affect the interpretation of this Guaranty.


 


Section
7.8        Recitals. The recital and introductory paragraphs hereof are a part
hereof, form a basis for this Guaranty and shall be considered prima facie evidence of the facts and documents
referred to therein.


 


Section 7.9         Counterparts.
To facilitate execution, this Guaranty may be executed in as many counterparts as may be convenient or required. It shall not be
necessary that the signature of, or on behalf of, each party, or that the signature of all persons required to bind any party,
appear on each counterpart. All counterparts shall collectively constitute a single instrument. It shall not be necessary in making
proof of this Guaranty to produce or account for more than a single counterpart containing the respective signatures of, or on
behalf of, each of the parties hereto. Any signature page to any counterpart may be detached from such counterpart without impairing
the legal effect of the signatures thereon and thereafter attached to another counterpart identical thereto except having attached
to it additional signature pages.


 




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Section 7.10      Rights
and Remedies. If Guarantor becomes liable for any indebtedness owing by Borrower to Lender, by endorsement or otherwise, other
than under this Guaranty, such liability shall not be in any manner impaired or affected hereby and the rights of Lender hereunder
shall be cumulative of any and all other rights that Lender may ever have against Guarantor. The exercise by Lender of any right
or remedy hereunder or under any other instrument, or at law or in equity, shall not preclude the concurrent or subsequent exercise
of any other right or remedy.


 


Section 7.11      Other
Defined Terms. Any capitalized term utilized herein shall have the meaning as specified in the Loan Agreement or the other
Loan Documents, unless such term is otherwise specifically defined herein.


 


Section 7.12      Entirety.
THIS GUARANTY EMBODIES THE FINAL, ENTIRE AGREEMENT OF GUARANTOR AND LENDER WITH RESPECT TO GUARANTOR’S GUARANTY OF THE GUARANTEED
OBLIGATIONS AND SUPERSEDES ANY AND ALL PRIOR COMMITMENTS, AGREEMENTS, REPRESENTATIONS, AND UNDERSTANDINGS, WHETHER WRITTEN OR ORAL,
RELATING TO THE SUBJECT MATTER HEREOF. THIS GUARANTY IS INTENDED BY GUARANTOR AND LENDER AS A FINAL AND COMPLETE EXPRESSION OF
THE TERMS OF THE GUARANTY, AND NO COURSE OF DEALING BETWEEN GUARANTOR AND LENDER, NO COURSE OF PERFORMANCE, NO TRADE PRACTICES,
AND NO EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OR DISCUSSIONS OR OTHER EXTRINSIC EVIDENCE OF ANY NATURE
SHALL BE USED TO CONTRADICT, VARY, SUPPLEMENT OR MODIFY ANY TERM OF THIS GUARANTY AGREEMENT. THERE ARE NO ORAL AGREEMENTS BETWEEN
GUARANTOR AND LENDER.


 


Section 7.13       Waiver
of Right To Trial By Jury. GUARANTOR AND LENDER EACH HEREBY AGREES NOT TO ELECT A TRIAL BY JURY OF ANY ISSUE TRIABLE OF RIGHT
BY JURY, AND WAIVES ANY RIGHT TO TRIAL BY JURY FULLY TO THE EXTENT THAT ANY SUCH RIGHT SHALL NOW OR HEREAFTER EXIST WITH REGARD
TO THIS GUARANTY, THE NOTE, THE SECURITY INSTRUMENT, OR THE OTHER LOAN DOCUMENTS, OR ANY CLAIM, COUNTERCLAIM OR OTHER ACTION ARISING
IN CONNECTION THEREWITH. THIS WAIVER OF RIGHT TO TRIAL BY JURY IS GIVEN KNOWINGLY AND VOLUNTARILY BY GUARANTOR AND LENDER, AND
IS INTENDED TO ENCOMPASS INDIVIDUALLY EACH INSTANCE AND EACH ISSUE AS TO WHICH THE RIGHT TO A TRIAL BY JURY WOULD OTHERWISE ACCRUE.
EACH PARTY IS HEREBY AUTHORIZED TO FILE A COPY OF THIS PARAGRAPH IN ANY PROCEEDING AS CONCLUSIVE EVIDENCE OF THIS WAIVER BY
THE OTHER PARTY.


 






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Section 7.14         Survival.
Guarantor shall have no liability for Guaranteed Carveout Obligations based upon any action first occurring or condition first
existing after the Loan has been paid in full or there has been a judgment of foreclosure of the Security Instrument, exercise
of any power of sale, or delivery of a deed in lieu of foreclosure of the Security Instrument (that has been accepted by Lender)
(the “Termination Date”). Except in the case of fraud, any claim against Guarantor for Guaranteed Carveout
Obligations must be brought on or before the one (1) year anniversary of the Termination Date. Except for Guaranteed Carveout Obligations,
all obligations hereunder shall survive the Termination Date.


 


The remainder of this page is left
blank. The signature page(s) follow.


 




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EXECUTED
as of the day and year first above written.


 


	 	GUARANTOR:
	 	 
	 	LIFE CARE COMPANIES LLC, an Iowa limited liability company
	 	 
	 	/s/ Joel D. Nelson
	 	Name: Joel D. Nelson
	 	Title: President and COO