OMEGA HEALTHCARE INVESTORS INC
GUARANTY BY OHI FOR BENEFIT OF GECC
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>4
<FILENAME>ex102.txt
<DESCRIPTION>GUARANTY BY OHI FOR BENEFIT OF GECC
<TEXT>
                                                               Loan No. 70004093

                                    GUARANTY

     THIS GUARANTY (this "Guaranty"), dated as of the 23rd day of June, 2003, is
made by OMEGA HEALTHCARE INVESTORS,  INC., a Maryland corporation ("Guarantor"),
for the benefit of GENERAL ELECTRIC CAPITAL CORPORATION, a Delaware corporation,
in its  capacity  as Agent for the  Lenders (as Agent and Lenders are defined in
the Loan Agreement as defined below).

                                    RECITALS

     A. Financial Accommodations. OHI ASSET, LLC, OHI ASSET (FL), LLC, OHI ASSET
(IN),  LLC, OHI ASSET (LA),  LLC, OHI ASSET (TX),  LLC, OHI ASSET (ID), LLC, OHI
ASSET (MI/NC),  LLC, OHI ASSET (OH),  LLC, OHI ASSET (MO),  LLC, OHI ASSET (CA),
LLC,  DELTA  INVESTORS I, LLC, DELTA  INVESTORS II, LLC, NRS VENTURES,  LLC, OHI
(ILLINOIS),   INC.,  OHI  (INDIANA),   INC.  and  STERLING   ACQUISITION   CORP.
(collectively,   "Borrowers"),  Agent  and  Lenders  are  concurrently  herewith
entering into that certain Loan  Agreement  (the "Loan  Agreement")  dated as of
even  date  herewith   pursuant  to  which   Lenders   shall  extend   financial
accommodations to Borrowers.

     B.  Inducement.  To induce  Lenders to extend to  Borrowers  the  financial
accommodations set forth in the Loan Agreement,  Guarantor is willing to execute
and deliver this Guaranty.

     In  consideration  of the  foregoing,  and  for  other  good  and  valuable
consideration,  the receipt and  sufficiency  of which are hereby  acknowledged,
Guarantor hereby agrees as follows:

1. DEFINED TERMS

     All capitalized  terms used herein and not otherwise defined shall have the
meanings assigned to such terms in the Loan Agreement.

2. THE GUARANTY

     2.1  Guaranty of  Obligations.  Guarantor  unconditionally  and  absolutely
guarantees to Agent and Lenders the full and prompt payment and performance when
due, whether at maturity or earlier, by reason of acceleration or otherwise, and
at all times  thereafter,  of the  indebtedness,  liabilities and obligations of
every kind and nature of Borrowers to Agent and/or  Lenders  arising under or in
any way  relating  to the Loan  Agreement  or any of the other  Loan  Documents,
howsoever created, incurred or evidenced,  whether direct or indirect,  absolute
or contingent,  now or hereafter  existing,  due or to become due, and howsoever
owned,   held  or  acquired  by  Agent   and/or   Lenders   (collectively,   the
"Obligations"),  subject to and in accordance  with the terms and  conditions of
the Loan  Agreement  and the other Loan  Documents.  Without  limitation  to the
foregoing,  the  Obligations  shall include (a) all  reasonable  attorneys'  and
paralegals' fees,  including the cost of inside attorneys and paralegals,  costs
and  expenses  and all court costs and costs of appeal  incurred by Agent and/or
Lenders in collecting any amount due Agent and/or Lenders under this Guaranty or
in prosecuting  any action against any Borrower or Guarantor with respect to all
or any part of the  Obligations,  and (b) all interest,  fees and the reasonable
costs and  expenses due Agent  and/or  Lenders  after the filing of a bankruptcy
petition by or against any  Borrower  regardless  of whether such amounts can be
collected during the pendency of the bankruptcy proceedings.

     2.2 Continuing Guaranty; Guaranty of Payment. This Guaranty is a continuing
guaranty of the  Obligations  until  terminated in accordance  with Section 7.17
below,  and Guarantor  agrees that the  obligations of Guarantor to Agent and/or
Lenders  hereunder  shall be  primary  obligations,  shall not be subject to any
counterclaim, set-off, abatement, deferment or defense based upon any claim that
Guarantor  may have against  Agent and/or any Lender,  any Borrower or any other
person or entity.

     2.3  Liability of Guarantor Not  Affected.  Until  terminated in accordance
with Section  7.17 below,  this  Guaranty  shall remain in full force and effect
without regard to, and shall not be released,  discharged or affected in any way
by, any circumstances or condition, including, without limitation:

(a)  the attempt or the absence of any attempt by Agent and/or Lenders to obtain
     payment or  performance by Borrowers or any other  guarantor  (this being a
     guaranty of payment and performance and not of collection);

(b)  Agent's  and/or  Lenders'  delay  in  enforcing   Guarantor's   obligations
     hereunder  or of any other  party  under the Loan  Documents,  or any prior
     partial  exercise by Agent and/or Lenders of any right or remedy  hereunder
     or under any of the other Loan Documents;

(c)  any  renewal,  extension,  substitution,  modification,  replacement  of or
     indulgence  with  respect to, the  Obligations,  all of which Agent  and/or
     Lenders is hereby authorized to make;

(d)  the fact that  Borrowers are not liable for the payment or  performance  of
     the Obligations,  or any portion thereof, for any reason whatsoever (except
     as a result of actual  payment by Borrowers and receipt  thereof by Agent),
     Guarantor being liable for the Obligations  notwithstanding  that Borrowers
     may not be;

(e)  any  sale,  exchange,  release,  surrender  or  other  disposition  of,  or
     realization  upon,  any  collateral   securing  the  Obligations,   or  any
     settlement or compromise of any guaranties of the Obligations, or any other
     obligation of any person or entity with respect to the Loan Documents;

(f)  the acceptance by Agent and/or  Lenders of any additional  security for the
     Obligations;

(g)  the lack of  validity  or  enforceability  of, or Agent's  and/or  Lenders'
     waiver  or  consent  with  respect  to,  any  provision  of any  instrument
     evidencing,  securing or otherwise relating to the Obligations, or any part
     thereof, including, without limitation, the Loan Documents;

(h)  the failure by Agent and/or Lenders to take any steps to perfect, maintain,
     or enforce its security interests or remedies under the Loan Documents,  or
     to preserve  its rights to or protect any security or  collateral,  for the
     Obligations;

(i)  any  voluntary  or  involuntary  bankruptcy,  insolvency,   reorganization,
     arrangement,   readjustment,  assignment  for  the  benefit  of  creditors,
     composition,   receivership,   liquidation,   marshalling   of  assets  and
     liabilities or similar event or proceedings with respect to any Borrower or
     Guarantor,  as applicable,  or any of their respective properties (each, an
     "Insolvency Proceeding"),  or any action taken by Agent and/or Lenders, any
     trustee or receiver or by any court in any such proceeding;

(j)  the failure by Agent and/or  Lenders to file or enforce a claim against the
     estate  (either in an  Insolvency  Proceeding or other  proceeding)  of any
     Borrower or Guarantor;

(k)  in any  proceeding  under  Title 11 of the  United  States  Code (11 U.S.C.
     Section 101 et seq.), as amended (the "Bankruptcy  Code"): (i) any election
     by Agent and/or Lenders under Section  1111(b)(2) of the  Bankruptcy  Code,
     (ii) any  borrowing  or grant of a security  interest  by any  Borrower  as
     debtor-in-possession  under Section 364 of the Bankruptcy  Code,  (iii) the
     inability of Agent and/or  Lenders to enforce the  Obligations  against any
     Borrower by application of the automatic stay  provisions of Section 362 of
     the  Bankruptcy  Code, or (iv) the  disallowance,  under Section 502 of the
     Bankruptcy Code, of all or any portion of Agent's and/or Lenders'  claim(s)
     against any Borrower for repayment of the Obligations;

(l)  the failure of Guarantor to receive  notice of any intended  disposition of
     the collateral for the Obligations;

(m)  any merger or  consolidation of any Borrower into or with any other entity,
     or any sale,  lease or  transfer  of any of the assets of any  Borrower  or
     Guarantor to any other person or entity;

(n)  any  change  in  the  ownership  of any  Borrower,  or  any  change  in the
     relationship  between any Borrower and Guarantor or any  termination of any
     such relationship;

(o)  the dissolution or other change in status of any Borrower or Guarantor;

(p)  the making of additional  loans to Borrowers,  the increase or reduction of
     the maximum principal amount of the Obligations,  the increase or reduction
     in the  interest  rate  provided in the Notes,  or any other  modification,
     amendment, release or waiver of the terms of the Loan Documents;

(q)  the  absence,   impairment  or  loss  of  any  right  of  reimbursement  or
     subrogation or other right or remedy of Guarantor; and

(r)  any  other  circumstance  which  might  otherwise  constitute  a  legal  or
     equitable  discharge  or defense of any  Borrower,  Guarantor  or any other
     guarantor.

     Guarantor  hereby  expressly  waives  and  surrenders  any  defense  to its
liability under this Guaranty based upon any of the foregoing  acts,  omissions,
agreements, waivers or matters, whether or not Guarantor had notice or knowledge
of same. It is the purpose and intent of this Guaranty that the  obligations  of
Guarantor  hereunder  shall be  absolute  and  unconditional  under  any and all
circumstances.

     2.4  Rights of Agent  and/or  Lenders.  Agent  and/or  Lenders  are  hereby
authorized,  without notice to or demand of Guarantor and without  affecting the
liability of Guarantor hereunder, to take any of the following actions from time
to time in accordance  with the terms and conditions of the Loan  Agreement,  to
the extent applicable: (a) increase or decrease the amount of, or renew, extend,
accelerate or otherwise  change the time for payment of, or other terms relating
to,  the  Obligations,  or  otherwise  modify,  amend or change the terms of any
promissory note or other agreement evidencing, securing or otherwise relating to
any of the Obligations,  including, without limitation, the making of additional
advances thereunder;  (b) accept and apply any payments on or recoveries against
the Obligations from any source, and any proceeds of any security  therefor,  to
the  Obligations in such manner,  order and priority as Agent and/or Lenders may
elect in their sole  discretion;  (c) take,  hold,  sell,  release or  otherwise
dispose  of all or any  security  for the  Obligations  or the  payment  of this
Guaranty; (d) settle,  release,  compromise,  collect or otherwise liquidate the
Obligations or any portion thereof; (e) accept, hold, substitute, add or release
any other guaranty or endorsements of the Obligations; and (f) at any time after
maturity  of the  Obligations,  appropriate  and  apply  toward  payment  of the
Obligations (i) any  indebtedness due or to become due from Agent and/or Lenders
to  Guarantor,  and (ii) any moneys,  credits,  or other  property  belonging to
Guarantor  at any time held by or coming  into the  possession  of Agent  and/or
Lenders or any affiliates thereof, whether for deposit or otherwise.

     Without  limiting the generality,  scope or meaning of any of the foregoing
or any other provision of this Guaranty, Guarantor:

(a)  acknowledges  that Section 2856 of the California Civil Code authorizes and
     validates waivers of a guarantor's  rights of subrogation and reimbursement
     and  certain  other  rights  and  defenses  available  to  Guarantor  under
     California law;

(b)  waives  all  rights of  subrogation,  reimbursement,  indemnification,  and
     contribution  and all other  rights  and  defenses  that are or may  become
     available by reason of Sections 2787 to 2855, inclusive,  of the California
     Civil Code;

(c)  waives all rights and  defenses  arising  out of an election of remedies by
     Agent and/or  Lenders,  even though that  election of  remedies,  such as a
     nonjudicial   foreclosure   with  respect  to  security  for  a  guaranteed
     obligation,   has  destroyed   Guarantor's   rights  of   subrogation   and
     reimbursement  against  Borrowers  by the  operation of Section 580d of the
     California Code of Civil Procedure or otherwise;

(d)  waives  all  rights  and  defenses  that  Guarantor  may have  because  the
     Borrowers'  debt is secured  by real  property.  This  means,  among  other
     things:

     (i)  Agent and Lenders may collect from Guarantor without first foreclosing
          on any real or personal property Collateral pledged by Borrowers;

     (ii) If Agent or Lenders foreclose on any real property  Collateral pledged
          by any Borrower:

          (1)  the amount of the debt may be reduced only by the price for which
               that  Collateral  is sold at the  foreclosure  sale,  even if the
               Collateral is worth more than the sale price; and

          (2)  Agent and Lenders may collect  from  Guarantor  even if Agent and
               Lenders,  by  foreclosing  on the real property  Collateral,  has
               destroyed any right Guarantor may have to collect from Borrowers.

(e)  waives all rights and defenses,  if any, now or hereafter arising under the
     laws of the State of  Illinois  and all other  states  where a Property  is
     located, which are the same as or similar to the rights and defenses waived
     as described above.

     This is an unconditional and irrevocable  waiver of any rights and defenses
Guarantor may have because  Borrowers'  debt is secured by real property.  These
rights and  defenses  include,  but are not  limited  to, any rights or defenses
based upon Sections 580a,  580b,  580d, or 726 of the  California  Code of Civil
Procedure.

     2.5 Subordination.  All indebtedness now or hereafter owing by Borrowers to
Guarantor for borrowed money or otherwise is hereby  subordinated to the payment
of the Obligations,  and, (a) during the continuation of a default  hereunder or
under any of the other Loan Documents,  Guarantor shall not accept any principal
payment with respect to such  subordinated  indebtedness  until  satisfaction in
full of the Obligations,  and (b) during the continuation of an Event of Default
hereunder or under any of the other Loan  Documents,  Guarantor shall not accept
payment  of  all  or  any  portion  of  such  subordinated   indebtedness  until
satisfaction  in full of the  Obligations.  All  security  interests,  liens and
encumbrances which Guarantor now or hereafter may have upon any of the assets of
Borrowers,  or  any  one of  them,  are  hereby  subordinated  to  all  security
interests,  liens and encumbrances heretofore, now or hereafter granted to Agent
and/or Lenders pursuant to the Loan Documents.

3. GUARANTOR'S WAIVERS

     3.1 Statutes of Limitation.  Guarantor  irrevocably  waives all statutes of
limitation as a defense to any action or proceeding brought against Guarantor by
Agent and/or Lenders, to the fullest extent permitted by law.

     3.2 Election of Remedies.  Guarantor  irrevocably  waives any defense based
upon an election of remedies made by Agent and/or  Lenders or any other election
afforded to Agent and/or Lenders pursuant to applicable law, including,  without
limitation,  (a) any election to proceed by judicial or nonjudicial  foreclosure
or by UCC sale or by deed or  assignment  in lieu  thereof,  or any  election of
remedies  which  destroys or  otherwise  impairs the  subrogation  rights of the
Guarantor  or the rights of the  Guarantor  to proceed  against any Borrower for
reimbursement, or both, (b) the waiver by Agent and/or Lenders, either by action
or inaction of Agent  and/or  Lenders or by  operation  of law, of a  deficiency
judgment  against any Borrower,  and (c) any election  pursuant to an Insolvency
Proceeding.

     3.3 Rights of Subrogation and Other Rights.  Guarantor  irrevocably  waives
(a)  all  rights  at  law  or  in  equity  to  seek  subrogation,  contribution,
indemnification  or any  other  form of  reimbursement  or  repayment  from  any
Borrower or any other person or entity now or hereafter primarily or secondarily
liable for any of the  Obligations for any  disbursements  made by any Guarantor
under or in connection  with this  Guaranty,  (b) all claims of any kind or type
against  any  Borrower  as a result of any payment  made by  Guarantor  to Agent
and/or  Lenders,  and  (c) any  right  to  participate  in any  security  now or
hereafter held by Agent and/or Lenders.  In furtherance,  and not in limitation,
of the  foregoing,  Guarantor  agrees that any payment to Agent  and/or  Lenders
pursuant  to this  Guaranty  shall be deemed a  contribution  to the  capital of
Borrowers or other obligated party and shall not constitute Guarantor a creditor
of Borrowers or such other party.  Guarantor  further  agrees that to the extent
the waiver of its rights of  subrogation as set forth herein is found by a court
of competent  jurisdiction to be void or voidable for any reason,  any rights of
subrogation  Guarantor may have against  Borrowers or against any  collateral or
security  for any of the  Obligations  shall be junior  and  subordinate  to any
rights Agent and/or Lenders may have against  Borrowers and to all right,  title
and interest Agent and/or Lenders may have in such collateral or security.

     3.4 Demands and Notices.  Guarantor  irrevocably  waives all  presentments,
demands for  performance,  protests,  notices of protest,  notices of  dishonor,
notices  of  acceptance  of this  Guaranty  and of the  existence,  creation  or
incurring  of new or  additional  Obligations,  notices of defaults or Events of
Default by Borrowers or any other person liable for the  Obligations and demands
and  notices of every kind that may be  required  to be given by any  statute or
rule or law.

     3.5 Borrowers  Information.  Guarantor  irrevocably  waives (a) any duty of
Agent  and/or  Lenders to advise  Guarantor  of any  information  known to Agent
and/or  Lenders  regarding  the  financial  condition of Borrowers (it being the
obligation of Guarantor to keep informed regarding such condition),  and (b) any
defense  based on any  claim  that  Guarantor's  obligations  exceed or are more
burdensome than those of Borrowers.

     3.6 Limitation of Liability.  Guarantor  irrevocably waives any impairment,
modification,  change,  release or  limitation  of the  liability of, or stay of
actions or lien enforcement proceedings against,  Borrowers or Guarantor,  their
property,  or their estate in  bankruptcy,  resulting  from the operation of any
provision of the state or federal  bankruptcy  laws, or from the decision of any
court.

     3.7 Lack of Diligence.  Guarantor  irrevocably waives any and all claims or
defenses based upon lack of diligence in: (a) collection of any Obligations; (b)
protection  of  any  collateral  or  other  security  for  the  Indebtedness  or
Obligations; or (c) realization upon the other Loan Documents.

     3.8 Other  Defenses.  Guarantor  irrevocably  waives  any  other  defenses,
set-offs or  counterclaims  which may be available to Borrowers  and any and all
other  defenses now or at any time hereafter  available to Guarantor  (including
without limitation those given to sureties) at law or in equity,  except for the
defense that payment has actually been made and received by Agent.

4. REPRESENTATIONS AND WARRANTIES

     Guarantor represents and warrants to Agent and Lenders as follows:

     4.1  Guarantor  Existence;  Authority.  Guarantor  is a  corporation,  duly
organized,  validly existing and in good standing under the laws of the State of
Maryland with its principal  place of business at 9690 Deereco Road,  Suite 100,
Timonium,  Maryland  21093.  Guarantor  is  qualified  to do  business  in those
jurisdictions  in which the character of the properties  owned by it or in which
the transaction of its business makes its qualification necessary.  Guarantor is
the sole member of each LLC Borrower and owns one hundred  percent (100%) of the
membership interests in each LLC Borrower,  free and clear of all liens, claims,
and  encumbrances,  except  as  otherwise  created  under  the  Loan  Documents.
Guarantor  is the  sole  stockholder  of each  Corporate  Borrower  and owns one
hundred percent (100%) of the outstanding stock in each Corporate Borrower, free
and clear of all liens,  claims,  and encumbrances,  except as otherwise created
under the Loan  Documents.  Guarantor  has full right,  power and  authority  to
execute this Guaranty and the Loan  Documents on its own behalf and on behalf of
each Borrower.

     4.2  Enforcement.  This  Guaranty  has been duly  authorized,  executed and
delivered  and  constitutes  the duly  authorized,  legally  valid  and  binding
obligation of Guarantor,  enforceable  in accordance  with its terms,  except as
such   enforcement  may  be  limited  by  applicable   bankruptcy,   insolvency,
reorganization,  moratorium,  or other similar laws, now or hereafter in effect,
relating to or affecting  the  enforcement  of creditors'  rights  generally and
except that the remedy of specific  performance and other equitable remedies are
subject to judicial discretion.

     4.3 Guarantor's  Organizational  Documents. A true and complete copy of the
articles  of  incorporation  and  by-laws of  Guarantor  and all other  material
documents  creating  and  governing  Guarantor  (collectively,   the  "Guarantor
Incorporation  Documents")  have been  furnished  to  Agent.  There are no other
material agreements, oral or written, among any of the shareholders of Guarantor
relating to Guarantor.  The Guarantor Incorporation Documents were duly executed
and delivered, are in full force and effect, and binding upon and enforceable in
accordance  with  their  terms,  except as such  enforcement  may be  limited by
applicable bankruptcy, insolvency, reorganization,  moratorium, or other similar
laws,  now or hereafter in effect,  relating to or affecting the  enforcement of
creditors'  rights generally and except that the remedy of specific  performance
and other  equitable  remedies  are  subject to judicial  discretion.  No breach
exists under the Guarantor  Incorporation  Documents and no act has occurred and
no condition  exists which,  with the giving of notice or the passage of time or
both, would constitute a breach under the Guarantor Incorporation Documents.

     4.4 Financial  Statements.  All financial  statements  and other  financial
information  of Guarantor  furnished or to be furnished to Agent and/or  Lenders
(a) are or will be true and  correct  in all  material  respects  and do or will
represent fairly in all material  respects the financial  condition of Guarantor
(including all contingent  liabilities)  as of the respective  dates in question
and the results of operations for the respective periods indicated, and (b) were
or will be prepared in accordance with generally accepted accounting principles,
or such other accounting  principles as may be reasonably acceptable to Agent at
the time of their preparation,  consistently applied. There has been no material
adverse  change  since  March  31,  2003  in  Guarantor's  structure,   business
operations, credit, prospects or financial condition.

     4.5 No Defaults.  There is no existing  event of default,  and no event has
occurred which with the passage of time and/or the giving of notice or both will
constitute  an event of default,  under any  agreement  to which  Guarantor is a
party,  which event of default could reasonably be expected to create a Material
Adverse  Effect.  Neither  the  execution  and  delivery  of this  Guaranty  nor
compliance  with the terms and provisions  hereof will (a) violate any presently
existing applicable law,  regulation,  order, writ,  injunction or decree of any
court  or  governmental  department,   commission,   board,  bureau,  agency  or
instrumentality,  or (b)  conflict  or be  inconsistent  with,  or result in any
default (with due notice or lapse of time or both) under, any agreement to which
Guarantor is bound,  except for any  conflict,  inconsistency  or default  which
would not reasonably be expected to have a Material Adverse Effect.

     4.6 No Litigation.  Except as set forth on Exhibit 4.6 hereto, there are no
actions, suits or proceedings pending or, to Guarantor's  knowledge,  threatened
against  Guarantor  before  any  court  or  any  governmental,   administrative,
regulatory,  adjudicatory or arbitrational  body or agency of any kind which, if
decided  adversely,  would  reasonably  be expected  to have a Material  Adverse
Effect.

     4.7 Accuracy. Neither this Guaranty nor any document,  financial statement,
credit information,  certificate or statement  heretofore  furnished or required
herein to be  furnished  to Agent  and/or  Lenders  by  Guarantor  contains  any
materially  untrue  statement of material fact or omits to state a material fact
necessary  in order to make the  statements  contained  herein  or  therein  not
misleading as of the date such statement was made; provided,  however,  that any
representation  in respect of any  furnished  document,  financial  statement or
information  that was received by Guarantor from any third party which is not an
Affiliate  of any  Borrower or Guarantor in respect of any Project or any of the
Health Care Facilities is limited in all respects to Guarantor's knowledge.

     4.8 Foreign  Ownership.  Guarantor  is not and will not be, and no legal or
beneficial interest of an Affiliate of Guarantor is or will be held, directly or
indirectly, by a "foreign corporation",  "foreign partnership", "foreign trust",
"foreign  estate",  "foreign  person",  "affiliate"  of a "foreign  person" or a
"United  States  intermediary"  of a  "foreign  person"  within  the  meaning of
Sections 897 and 1445 of the Internal  Revenue Code of 1986, as amended ("IRC"),
the Foreign  Investments  in Real  Property Tax Act of 1980,  the  International
Foreign  Investment  Survey Act of 1976,  the  Agricultural  Foreign  Investment
Disclosure Act of 1978, or the regulations promulgated pursuant to such Acts set
forth above in this Section 4.8 or any amendments to such Acts.

     4.9  Solvency.  Guarantor is solvent and there has been no: (a)  assignment
made for the  benefit  of the  creditors  of  Guarantor;  (b)  appointment  of a
receiver  for  Guarantor or for the property of  Guarantor;  or (c)  bankruptcy,
reorganization, or liquidation proceeding instituted by or against Guarantor.

     4.10  Public  Debt.  The  execution  and  delivery of the  applicable  Loan
Documents by Borrowers  and  Guarantor  will not violate the terms of or cause a
breach or default under any outstanding  indebtedness  of Guarantor,  including,
without  limitation,  the 6.95%  Notes due  August  2007  (the  "Public  Debt").
Guarantor  has  delivered  to Agent a complete  and correct copy of all material
documents evidencing the Public Debt.

     4.11 Government Regulations. Guarantor is not an "investment company" or an
"affiliated  person"  of, or  "promoter"  or  "principal  underwriter"  for,  an
"investment company," as such terms are defined in the Investment Company Act of
1940.  Guarantor is not subject to regulation  under the Public Utility  Holding
Company  Act of 1935,  the  Federal  Power  Act,  or any other  federal or state
statute that restricts or limits its ability to incur Indebtedness or to perform
its obligations hereunder.  The making of the Loan by Lenders to Borrowers,  the
application of the proceeds  thereof and repayment  thereof will not violate any
provision  of any such  statute or any rule,  regulation  or order issued by the
Securities and Exchange Commission.

     4.12 Margin  Regulations.  Guarantor  is not  engaged,  nor will it engage,
principally or as one of its important activities,  in the business of extending
credit for the purpose of  "purchasing" or "carrying" any "margin stock" as such
terms are defined in  Regulation U of the Federal  Reserve Board as now and from
time to time  hereafter in effect (such  securities  being referred to herein as
"Margin  Stock").  Guarantor  does  not own any  Margin  Stock,  and none of the
proceeds of the Loan or other extensions of credit under the Loan Agreement will
be used,  directly or indirectly,  for the purpose of purchasing or carrying any
Margin Stock, for the purpose of reducing or retiring any indebtedness  that was
originally  incurred  to  purchase  or carry any  Margin  Stock or for any other
purpose that might cause the Loan or other  extensions  of credit under the Loan
Agreement to be considered a "purpose  credit" within the meaning of Regulations
T, U or X of the Federal Reserve Board.  Guarantor will not take or permit to be
taken any action that might cause any Loan Document to violate any regulation of
the Federal Reserve Board.

     4.13 Taxes. All tax returns, reports and statements,  including information
returns,  required by any  Governmental  Authority to be filed by Guarantor have
been filed with the appropriate Governmental Authority and, except to the extent
that  appropriate  reserves  therefor  have  been  made  and  are  disclosed  on
Guarantor's balance sheet, all charges have been paid prior to the date on which
any fine,  penalty,  interest or late charge may be added thereto for nonpayment
thereof  (or any such  fine,  penalty,  interest,  late  charge or loss has been
paid). Exhibit 4.13 hereto sets forth as of the Closing Date those taxable years
for which  Guarantor's  tax returns are currently  being audited by the Internal
Revenue Service (the "IRS") or any other applicable Governmental Authority,  and
any  assessments  or threatened  assessments in connection  with such audit,  or
otherwise  currently  outstanding.  Except as  described on Exhibit 4.13 hereto,
Guarantor  has not  executed  or filed  with the IRS or any  other  Governmental
Authority any  agreement or other  document  extending,  or having the effect of
extending, the period for assessment or collection of any taxes.

     4.14 ERISA.

     4.14.1.  Exhibit  4.14 hereto  lists (a) all ERISA  Affiliates  and (b) all
Plans and separately  identifies all Pension  Plans,  including  Title IV Plans,
Multiemployer  Plans,  ESOPs and Welfare  Plans,  including all Retiree  Welfare
Plans.  Copies of all such  listed  Plans,  together  with a copy of the  latest
IRS/DOL  5500-series  form for each such  Plan,  have been  delivered  to Agent.
Except  with  respect  to  Multiemployer  Plans,  each  Qualified  Plan has been
determined  by the IRS to  qualify  under  Section  401 of the IRC,  the  trusts
created  thereunder  have  been  determined  to be  exempt  from tax  under  the
provisions of Section 501 of the IRC, and, to Guarantor's knowledge, nothing has
occurred that would cause the loss of such  qualification or tax-exempt  status.
Each Plan is in compliance with the applicable  provisions of ERISA and the IRC,
including  the timely  filing of all  reports  required  under the IRC or ERISA,
including  the  statement  required  by  29  CFR  Section  2520.104-23.  Neither
Guarantor nor any ERISA Affiliate has failed to make any contribution or pay any
amount due as required by either  Section 412 of the IRC or Section 302 of ERISA
or the terms of any such Plan.  Neither  Guarantor  nor any ERISA  Affiliate has
engaged in a  "prohibited  transaction,"  as defined in Section 406 of ERISA and
Section  4975 of the IRC,  in  connection  with any  Plan,  that  would  subject
Guarantor to a material tax on prohibited transactions imposed by Section 502(i)
of ERISA or Section 4975 of the IRC.

     4.14.2.  Except as set forth on Exhibit 4.14  hereto:  (a) no Title IV Plan
has any Unfunded  Pension  Liability;  (b) no ERISA Event or event  described in
Section  4062(e) of ERISA with  respect to any Title IV Plan has  occurred or is
reasonably  expected to occur;  (c) there are no pending or, to the knowledge of
Guarantor,  threatened  claims  (other  than  claims for  benefits in the normal
course), sanctions, actions or lawsuits, asserted or instituted against any Plan
or any Person as fiduciary or sponsor of any Plan; (d) neither Guarantor nor any
ERISA  Affiliate has incurred or reasonably  expects to incur any liability as a
result of a complete or partial withdrawal from a Multiemployer Plan; (e) within
the last five (5) years no Title IV Plan of Guarantor or any ERISA Affiliate has
been terminated, whether or not in a "standard termination" as that term is used
in Section  4041(b)(1)  of ERISA,  nor has any Title IV Plan of Guarantor or any
ERISA  Affiliate  (determined  at any time  within the last five (5) years) with
Unfunded Pension  Liabilities been transferred outside of the "controlled group"
(within the meaning of Section  4001(a)(14)  of ERISA) of Guarantor or any ERISA
Affiliate  (determined at such time);  (f) except in the case of any ESOP, stock
or membership  interests of Guarantor and its ERISA  Affiliates makes up, in the
aggregate,  no more than ten percent (10%) of fair market value of the assets of
any Plan  measured on the basis of fair market value as of the latest  valuation
date of any  Plan;  and (g) no  liability  under  any  Title  IV Plan  has  been
satisfied with the purchase of a contract from an insurance  company that is not
rated  AAA by the  Standard  & Poor's  Corporation  or an  equivalent  rating by
another nationally recognized rating agency.

     4.15 Guarantor's  Knowledge.  Any  representation and warranty made in this
Guaranty which is explicitly limited "to Guarantor's knowledge", shall mean that
such  representation  and  warranty  is made to the  actual  knowledge  (without
inquiry) of any of the following people or their respective  successors:  (a) C.
Taylor Pickett, Chief Executive Officer of Guarantor, (b) Daniel J. Booth, Chief
Operating Officer of Guarantor,  (c) Robert Stephenson,  Chief Financial Officer
of Guarantor, or (d) R. Lee Crabill, Jr., Senior Vice President of Operations of
Guarantor.

5. EVENTS OF DEFAULT

     Upon  the  occurrence  of  any of  the  following  events  and  during  the
continuance  thereof,  at the option of Agent or at the  direction  of Requisite
Lenders,  Agent  and/or  Lenders  may,  upon  written  notice  to  Borrowers  or
Guarantor,  declare  any or all of the  Obligations,  whether  or not then  due,
immediately due and payable by Guarantor  under this Guaranty,  and Agent and/or
Lenders shall be entitled to enforce the obligations of Guarantor hereunder.

     5.1 Loan Agreement Event of Default. The occurrence of any Event of Default
under the Loan Agreement.

     5.2 Failure to Pay or Perform.  Guarantor  fails to pay or perform,  within
five (5) days after written notice  thereof from Agent to Guarantor,  any of the
Obligations under this Guaranty.

     5.3 Guarantor Financial Covenants.  The breach of any covenant set forth in
Section 6.1, 6.2, 6.3, 6.4 or 6.5 below.

     5.4  Other  Guarantor  Covenants  and  Representations.  The  breach of any
covenant  (other  than  matters   referenced   elsewhere  in  this  Article  5),
representation  or  warranty  which is not cured  within  thirty (30) days after
written  notice  thereof from Agent to  Guarantor;  provided,  however,  if such
breach  cannot by its nature be cured  within  thirty (30) days,  and  Guarantor
diligently pursues the curing thereof (and then in all events cures such failure
within ninety (90) days after the original notice thereof),  Guarantor shall not
be in default  hereunder;  provided,  further,  that such cure period  shall not
apply to the breach of any  representation  or warranty which, by its nature, is
not curable.

     5.5  Revocation  or  Termination  of Guaranty.  This Guaranty is revoked or
terminated by Guarantor.

     5.6  Dissolution.  Guarantor  dissolves or  liquidates,  or the business of
Guarantor is suspended or terminated for any reason.

6. COVENANTS

     6.1  Leverage  Ratio.  Guarantor's  Leverage  Ratio  shall not  exceed  the
following amounts for the following periods:

     ------------------------------- --------------------------------
        Periods                         Maximum Leverage Ratio
     ------------------------------- --------------------------------
        Periods ending September 30,               6.00:1.00
        2003 through June 30, 2004
     ------------------------------- --------------------------------
        Periods ending September 30,               5.75:1.00
        2004 through June 30, 2005
     ------------------------------- --------------------------------
        Periods ending September 30,               5.50:1.00
        2005 through June 30, 2006
     ------------------------------- --------------------------------
        Periods after June 30, 2006                5.00:1.00
     ------------------------------- --------------------------------

     Guarantor's  "Leverage Ratio" shall mean (a) Guarantor's total consolidated
indebtedness for borrowed money divided by (b) Guarantor's Adjusted Consolidated
Net Income (as  defined  below)  over the  previous  twelve  (12) month  period.
Guarantor's  Leverage Ratio shall be calculated on a quarterly basis,  beginning
September 30, 2003.

     "Guarantor's   Adjusted   Consolidated   Net  Income"   means   Guarantor's
consolidated net income as set forth on its income statement,  over the previous
twelve (12) month  period,  calculated  in accordance  with  generally  accepted
accounting  principles consistent with standards utilized by Agent in connection
with its  underwriting  of the Loan,  excluding  (a)  interest,  (b) taxes,  (c)
depreciation,  (d)  amortization,  (e) in aggregate  over the entire Term of the
Loan,  up to  $35,000,000  for certain  one time,  non-cash  loss or  impairment
charges  related to certain  investments  and termination of certain third party
leases satisfactory to Agent, (f) in aggregate over the entire Term of the Loan,
$5,000,000 of costs  associated  with  collections of and reserves taken against
account  receivables  associated  with formerly  owned and operated  Health Care
Facilities,  (g) in aggregate  over the entire Term of the Loan,  $5,000,000  of
litigation  settlement charges,  and (h) non-cash charges resulting from changes
in generally  accepted  accounting  principles or the  application  thereof with
respect to financial  derivatives such as interest rate swaps or caps; provided,
that  calculation  of  Guarantor's  Adjusted  Consolidated  Net Income shall not
include  those one time  charges and costs made or incurred by  Guarantor in the
quarterly  periods  ending  December 31, 2002,  March 31, 2003 and June 30, 2003
which are listed on Exhibit  6.1  hereto,  nor shall such one time  charges  and
costs  listed  on  Exhibit  6.1  hereto  be  subject  to or  count  against  the
limitations  to the  exclusions  over the Term of the Loan  described in clauses
(e), (f), (g) or (h) above.

     6.2 Fixed Charge  Coverage Ratio.  Guarantor's  Fixed Charge Coverage Ratio
shall be greater than 1.75:1.00 at all times during the Term. Guarantor's "Fixed
Charge  Coverage  Ratio"  shall  mean  the  ratio  of (a)  Guarantor's  Adjusted
Consolidated  Net Income  over the  previous  twelve (12) month  period,  to (b)
payments of interest and  principal  due on any  indebtedness  of Guarantor on a
consolidated basis during the same period; provided, that all principal payments
made (i) on or prior to the Closing Date,  (ii) in respect of the Revolving Loan
or the Swing Line Loan, (iii) as non-regularly scheduled prepayments of the Term
Loan,  (iv) in  respect  of any of the IRBs and (v) in  respect  of  Guarantor's
Public Debt (but only to the extent such  Public Debt is  refinanced  other than
through proceeds of borrowings under the Loan Agreement), shall be excluded from
any calculation of Guarantor's  Fixed Charge Coverage Ratio.  Guarantor's  Fixed
Charge  Coverage  Ratio  shall be  calculated  on a quarterly  basis,  beginning
September 30, 2003.

     6.3 Net  Worth.  Guarantor's  consolidated  net  worth as set  forth on its
balance sheet shall be equal to or greater than $270,000,000 at all times during
the Term. Guarantor's net worth shall be calculated in accordance with generally
accepted  accounting  principles  consistent with standards utilized by Agent in
connection  with  its  underwriting  of the Loan and  shall be  calculated  on a
quarterly basis, beginning September 30, 2003.

     6.4   Recourse   Indebtedness.   Guarantor   shall  not  incur   additional
indebtedness  for  Borrowed  Money which is recourse to  Guarantor  in an amount
greater than $50,000,000 in the aggregate  (excluding  indebtedness set forth on
Guarantor's  most recent balance sheet delivered to Agent and excluding the Loan
and  this  Guaranty).  "Borrowed  Money"  shall  mean (a) all  indebtedness  for
borrowed money,  (b) all obligations  evidenced by bonds,  debentures,  notes or
similar  instruments,  or upon which interest payments are customarily made, (c)
that  portion of  obligations  with  respect to capital  leases that is properly
classified as a liability on a balance sheet in  conformity  with GAAP,  (d) any
obligations  issued or assumed as the  deferred  purchase  price of  property or
services  purchased,  (e) all Borrowed  Money of others secured by (or for which
the  holder  of  such  Borrowed  Money  has an  existing  right,  contingent  or
otherwise,  to be secured  by) any lien on, or payable  out of the  proceeds  of
production from, any property or asset owned, held or acquired, (f) all guaranty
obligations of Guarantor in respect of any Borrowed Money of any other person or
entity,  (g) the  maximum  amount of all  standby  letters  of credit  issued or
bankers'  acceptances  facilities  created  for the  account of  Guarantor  and,
without duplication,  all drafts drawn thereunder (to the extent  unreimbursed),
and (h) the  principal  balance  outstanding  under  any  synthetic  lease,  tax
retention  operating lease,  off-balance sheet loan or similar off-balance sheet
financing product plus any accrued interest thereon.

     6.5  Dividend  Payouts.  Guarantor  shall  not  make any  distributions  of
dividends except for (a) accrued preferred  dividends as of the Closing Date and
(b)  no  more  than  ninety-five   percent  (95%)  of  Guarantor's  "Funds  from
Operations",  as defined in the White Paper on Funds from Operations approved by
the Board of  Governors of the National  Association  of Real Estate  Investment
Trusts.

     6.6 Guarantor Incorporation Documents. Guarantor shall not amend, modify or
terminate, or permit the amendment, modification or termination of the Guarantor
Incorporation  Documents in any material  respect  without Agent's prior written
consent, which consent shall not be unreasonably withheld or delayed.

     6.7  Determination of Compliance By Agent.  Agent shall  determine,  in its
reasonable discretion, whether Guarantor has complied with each of the foregoing
covenants in this Article 6.

7. MISCELLANEOUS

     7.1  Revival  and  Reinstatement.  If at any  time  all or any  part of any
payment theretofore applied by Agent and/or Lenders to any of the Obligations is
or must be  rescinded  or  returned  by  Agent  and/or  Lenders  for any  reason
whatsoever  (including,  without  limitation,  the  insolvency,   bankruptcy  or
reorganization  of any Borrower),  such  Obligations  shall, for the purposes of
this  Guaranty,  to the extent such payment is or must be rescinded or returned,
be deemed to have continued in existence,  notwithstanding  such  application by
Agent and/or  Lenders,  and this Guaranty  shall  continue to be effective or be
reinstated,  as the case may be, as to such Obligations,  and Guarantor shall be
fully liable  therefore,  all as though such application by Agent and/or Lenders
had not been made.

     7.2 No  Marshaling.  Agent and Lenders  have no  obligation  to marshal any
assets  in  favor of  Guarantor,  or  against  or in  payment  of (a) any of the
Obligations,  or (b) any  other  obligation  owed to  Agent  and/or  Lenders  by
Guarantor, any Borrower or any other person.

     7.3 No  Modification,  Waiver or  Release  Without  Writing.  Except as may
otherwise  be expressly  set forth  herein,  this  Guaranty may not be modified,
amended, revised, revoked, terminated,  changed or varied in any way whatsoever,
nor shall any waiver of any of the  provisions  of this Guaranty be binding upon
Agent or Lenders,  except as expressly  set forth in a writing duly  executed by
Agent and Lenders. No waiver by Agent or Lenders of any default shall operate as
a waiver of any other default or the same default on a future  occasion,  and no
action by Agent or Lenders permitted hereunder shall in any way affect or impair
Agent's or Lenders' rights or the obligations of Guarantor under this Guaranty.

     7.4   Assignment;   Successors  and  Assigns.   Guarantor  may  not  assign
Guarantor's  obligations  or  liability  under  this  Guaranty.  Subject  to the
preceding  sentence,  this Guaranty shall be binding upon the parties hereto and
their respective heirs, executors,  successors,  representatives and assigns and
shall inure to the benefit of the parties hereto and their respective successors
and assigns.  Agent and/or Lenders may, without notice to anyone, sell or assign
the Obligations, the Notes or other Loan Documents or any part thereof, or grant
participations  therein, and in any such event each and every assignee or holder
of, or  participant  in, all or any of the  Obligations  shall have the right to
enforce this  Guaranty,  by suit or otherwise for the benefit of such  assignee,
holder, or participant,  as fully as if herein by name  specifically  given such
right,  but Agent  and/or  Lenders  shall have an  unimpaired  right,  prior and
superior to that of any such assignee,  holder or  participant,  to enforce this
Guaranty for the benefit of Agent and/or Lenders.

     7.5  Integration.  This Guaranty is the entire  agreement of Guarantor with
respect to the subject  matter of this  Guaranty,  provided  that this  Guaranty
shall not in any way limit or abrogate the  obligations  of Guarantor  under the
other Loan Documents, including, without limitation, the Environmental Indemnity
of even date herewith.

     7.6 Rights  Cumulative.  All of Agent's and/or  Lenders'  rights under this
Guaranty and the other Loan  Documents are  cumulative.  The exercise of any one
right does not exclude the exercise of any other right given in this Guaranty or
the other Loan  Documents  or any other  right of Agent  and/or  Lenders not set
forth in this  Guaranty or the other Loan  Documents.  If there is more than one
Guarantor hereunder, Agent and/or Lenders may exercise their rights and remedies
against  any one or more of such  Guarantors  and the  failure  of Agent  and/or
Lenders to proceed against one or more of such  Guarantors  shall not affect the
liability of the Guarantor under this Guaranty.

     7.7  Severability.  Whenever possible each provision of this Guaranty shall
be interpreted in such manner as to be effective and valid under applicable law,
but if any  provision of this  Guaranty  shall be prohibited by or invalid under
such law, such provision shall be ineffective to the extent of such  prohibition
or  invalidity,  without  invalidating  the  remainder of such  provision or the
remaining provisions of this Guaranty.

     7.8 Material Inducement;  Consideration.  Guarantor acknowledges and agrees
that  Agent and  Lenders  are  specifically  relying  upon the  representations,
warranties,   agreements   and   waivers   contained   herein   and  that   such
representations,  warranties,  agreements  and  waivers  constitute  a  material
inducement  to Agent and Lenders to accept this  Guaranty  and to enter into the
Loan  Agreement and the  transaction  contemplated  therein.  Guarantor  further
acknowledges  that it expects to benefit  from  Lenders'  extension of financing
accommodations to Borrowers  because of its relationship to Borrowers,  and that
it is executing this Guaranty in consideration of that anticipated benefit.

     7.9 Indemnification.  Guarantor agrees to indemnify, pay and hold Agent and
Lenders  and  their  respective  officers,  directors,  employees,  agents,  and
attorneys  (collectively,  the "Indemnitees")  harmless from and against any and
all liabilities,  obligations,  losses, damages, penalties,  actions, judgments,
suits,  claims,  costs,  expenses  and  disbursements  of  any  kind  or  nature
whatsoever  (including the reasonable fees and disbursements of counsel for such
Indemnitees in connection  with any  investigative,  administrative  or judicial
proceeding commenced or threatened, whether or not any such Indemnitees shall be
designated  a party  thereto)  that may be imposed on,  incurred by, or asserted
against  such  Indemnitees,  in any manner  relating  to or arising  out of this
Guaranty or the exercise of any right or remedy of Agent or Lenders hereunder or
under the other  documents  pertaining  to the  Obligations  (collectively,  the
"Indemnified Liabilities"); provided, that Guarantor shall have no obligation to
any Indemnitees  under this Section 7.9 with respect to Indemnified  Liabilities
arising from the gross negligence or willful misconduct of any Indemnitees. Upon
written request by any  Indemnitees,  Guarantor will undertake,  at its own cost
and  expense,   on  behalf  of  such  Indemnitees,   using  counsel   reasonably
satisfactory to such Indemnitees,  the defense of any legal action or proceeding
whether  or not such  Indemnified  Person  shall be a party and for  which  such
Indemnified  Person is entitled to be indemnified  pursuant to this Section 7.9.
At Agent's  or  Requisite  Lenders'  option  and upon  prior  written  notice to
Guarantor,  Agent may, at  Guarantor's  expense,  prosecute  or defend any third
party claim or action involving the validity or enforceability of this Guaranty.
To the extent that the undertaking to indemnify, pay and hold harmless set forth
in this Section 7.9 may be  unenforceable  because it is violative of any law or
public  policy,  Guarantor  shall  contribute  the  maximum  portion  that it is
permitted  to  pay  and  satisfy  under   applicable  law  to  the  payment  and
satisfaction of all Indemnified  Liabilities  incurred by the Indemnitees or any
of them.

     7.10 Counterparts.  This Guaranty may be executed in counterparts,  each of
which shall be deemed an original, but all of which, when taken together,  shall
be deemed one and the same agreement.

     7.11  Governing  Law. This  Guaranty  shall be governed by and construed in
accordance  with the internal laws of the State of Illinois,  without  regard to
conflicts of law provisions.

     7.12 Joint and Several  Obligations.  If this  Guaranty is executed by more
than  one  Guarantor  then  all  of  the  covenants,  obligations,   agreements,
indemnities,  representations and warranties of the Guarantors  contained herein
shall be joint and several.

     7.13 VENUE. GUARANTOR,  AND BY THEIR ACCEPTANCE OF THIS GUARANTY, AGENT AND
LENDERS,  HEREBY  CONSENT  TO THE  JURISDICTION  OF ANY STATE OR  FEDERAL  COURT
LOCATED WITHIN THE COUNTY OF COOK, STATE OF ILLINOIS AND IRREVOCABLY AGREE THAT,
SUBJECT TO  AGENT'S  ELECTION,  ALL  ACTIONS OR  PROCEEDINGS  ARISING  OUT OF OR
RELATING TO THIS GUARANTY SHALL BE LITIGATED IN SUCH COURTS.  GUARANTOR,  AND BY
THEIR  ACCEPTANCE  OF THIS  GUARANTY,  AGENT AND LENDERS,  EXPRESSLY  SUBMIT AND
CONSENT TO THE  JURISDICTION  OF THE  AFORESAID  COURTS AND WAIVE ANY DEFENSE OF
FORUM NON CONVENIENS. GUARANTOR, AND BY THEIR ACCEPTANCE OF THIS GUARANTY, AGENT
AND LENDERS, HEREBY WAIVE PERSONAL SERVICE OF ANY AND ALL PROCESS AND AGREE THAT
ALL SUCH  SERVICE OF PROCESS  MAY BE MADE UPON  GUARANTOR,  AGENT AND LENDERS BY
CERTIFIED OR REGISTERED MAIL, RETURN RECEIPT REQUESTED,  ADDRESSED TO GUARANTOR,
AGENT  AND  LENDERS,  AT THE  ADDRESSES  SET  FORTH IN  SECTION  9.8 OF THE LOAN
AGREEMENT.

     7.14  WAIVER OF JURY  TRIAL.  GUARANTOR,  AND BY THEIR  ACCEPTANCE  OF THIS
GUARANTY,  AGENT AND LENDERS, HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO A TRIAL BY
JURY IN ANY ACTION OR PROCEEDING  BASED UPON, OR RELATED TO, THE SUBJECT  MATTER
OF THIS GUARANTY AND THE BUSINESS  RELATIONSHIP THAT IS BEING ESTABLISHED.  THIS
WAIVER IS KNOWINGLY,  INTENTIONALLY  AND VOLUNTARILY  MADE BY GUARANTOR,  AND BY
THEIR  ACCEPTANCE  OF THIS  GUARANTY,  AGENT AND  LENDERS.  AGENT,  LENDERS  AND
GUARANTOR  ACKNOWLEDGE  THAT NEITHER AGENT,  LENDERS OR GUARANTOR NOR ANY PERSON
ACTING ON BEHALF OF AGENT,  LENDERS OR GUARANTOR HAS MADE ANY REPRESENTATIONS OF
FACT TO INDUCE THIS  WAIVER OF TRIAL BY JURY OR HAS TAKEN ANY  ACTIONS  WHICH IN
ANY WAY MODIFY OR NULLIFY ITS EFFECT.

     7.15 WAIVERS  UNDER THIS  GUARANTY.  THE WAIVERS SET FORTH IN THIS GUARANTY
(INCLUDING,  WITHOUT  LIMITATION,  SECTIONS 7.13 AND 7.14 ABOVE) ARE  KNOWINGLY,
INTENTIONALLY,  AND  VOLUNTARILY  MADE BY  GUARANTOR,  AGENT  AND  LENDERS,  AND
GUARANTOR, AGENT AND LENDERS ACKNOWLEDGE THAT NEITHER GUARANTOR,  AGENT, LENDERS
NOR ANY PERSON ACTING ON BEHALF OF ANY OF THEM, HAS MADE ANY  REPRESENTATIONS OF
FACT TO INDUCE THESE  WAIVERS OR IN ANY WAY TO MODIFY OR NULLIFY  THEIR  EFFECT.
GUARANTOR, AGENT AND LENDERS FURTHER ACKNOWLEDGE THAT THEY HAVE BEEN REPRESENTED
(OR HAVE HAD THE  OPPORTUNITY TO BE  REPRESENTED) IN THE SIGNING OR ACCEPTING OF
THIS GUARANTY AND IN THE MAKING OF THESE WAIVERS BY  INDEPENDENT  LEGAL COUNSEL,
SELECTED  OF THEIR OWN FREE  WILL,  AND THAT THEY  HAVE HAD THE  OPPORTUNITY  TO
DISCUSS THESE WAIVERS WITH COUNSEL.

     7.16 Disclosure of  Information.  Agent and/or Lenders shall have the right
(but  shall be under no  obligation)  to make  available  to any  party  for the
purpose of granting  participations  in or selling,  transferring,  assigning or
conveying  all or any part of the Loan  (including  any  governmental  agency or
authority and any prospective bidder at any foreclosure sale of any Project) any
and all  information  which Agent  and/or  Lenders may have with  respect to any
Project and  Borrowers,  whether  provided by Borrowers,  Guarantor or any third
party or obtained as a result of any environmental assessments. Guarantor agrees
that  Agent  and  Lenders  shall  have no  liability  whatsoever  as a result of
delivering any such information to any third party, and Guarantor,  on behalf of
itself,  its  Affiliates and its  successors  and assigns,  hereby  releases and
discharges  Agent and Lenders from any and all liability,  claims,  damages,  or
causes of action,  arising out of,  connected with or incidental to the delivery
of any such information to any third party.

     7.17  Termination  of Guaranty.  This  Guaranty  shall  terminate  upon the
indefeasible  payment  in full of the  Obligations  and the  termination  of any
further  obligations of Lenders to extend any credit to the Borrowers  under the
Loan Documents.


                            [SIGNATURE PAGE FOLLOWS]

<PAGE>



     The  undersigned  has duly  executed  this Guaranty as of the date and year
first above written.

                                       OMEGA HEALTHCARE INVESTORS, INC.,
                                       a Maryland corporation

                                       By:    /S/ DANIEL J. BOOTH
                                              ----------------------------
                                       Name:  Daniel J. Booth
                                       Its:   Chief Operating Officer


</TEXT>
</DOCUMENT>
