Document:

exv10w1

Exhibit
10.1

PURCHASE AND SALE AGREEMENT

by and among

LIFE TIME FITNESS, INC. and

LTF REAL ESTATE COMPANY, INC.,

jointly and severally, as Seller,

and

SENIOR HOUSING PROPERTIES TRUST,

as Purchaser

 

August 21, 2008

 

 

	 	 	 	 	 	 	 	 	 
	SECTION 1. DEFINITIONS	 	 	2	 
	 
	 	 	 	 	 	 	 	 
	 
	 	1.1	 	Agreement	 	 	2	 
	 
	 	1.2	 	Assets	 	 	2	 
	 
	 	1.3	 	Business Day	 	 	2	 
	 
	 	1.4	 	Closing	 	 	3	 
	 
	 	1.5	 	Closing Date	 	 	3	 
	 
	 	1.6	 	Documents	 	 	3	 
	 
	 	1.7	 	FF&E	 	 	3	 
	 
	 	1.8	 	Guarantor	 	 	3	 
	 
	 	1.9	 	Guaranty	 	 	3	 
	 
	 	1.10	 	Improvements	 	 	3	 
	 
	 	1.11	 	Intangible Property	 	 	3	 
	 
	 	1.12	 	Lease	 	 	4	 
	 
	 	1.13	 	Permitted Encumbrances	 	 	4	 
	 
	 	1.14	 	Properties	 	 	4	 
	 
	 	1.15	 	Purchase Price	 	 	4	 
	 
	 	1.16	 	Purchaser	 	 	4	 
	 
	 	1.17	 	Real Property	 	 	4	 
	 
	 	1.18	 	SEC	 	 	4	 
	 
	 	1.19	 	Seller	 	 	4	 
	 
	 	1.20	 	Seller’s Personal Property	 	 	4	 
	 
	 	1.21	 	Surveys	 	 	5	 
	 
	 	1.22	 	Tenant	 	 	5	 
	 
	 	1.23	 	Title Commitments	 	 	5	 
	 
	 	1.24	 	Title Company	 	 	5	 
	 
	 	1.25	 	Title Policies	 	 	5	 
	 
	 	 	 	 	 	 	 	 
	SECTION 2. PURCHASE AND SALE; CLOSING	 	 	5	 
	 
	 	 	 	 	 	 	 	 
	 
	 	2.1	 	Purchase and Sale	 	 	5	 
	 
	 	2.2	 	Closing	 	 	5	 
	 
	 	2.3	 	Purchase Price	 	 	6	 
	 
	 	 	 	 	 	 	 	 
	SECTION 3. TITLE, DILIGENCE MATERIALS, ETC.	 	 	6	 
	 
	 	 	 	 	 	 	 	 
	 
	 	3.1	 	Title and Survey Matters	 	 	6	 
	 
	 	3.2	 	Other Diligence Materials	 	 	6	 
	 
	 	 	 	 	 	 	 	 
	SECTION 4. CONDITIONS TO PURCHASER’S OBLIGATION TO CLOSE	 	 	6	 
	 
	 	 	 	 	 	 	 	 
	 
	 	4.1	 	Closing Documents	 	 	7	 
	 
	 	4.2	 	Title Policies and Surveys	 	 	8	 
	 
	 	4.3	 	Opinion of Counsel	 	 	8	 
	 
	 	 	 	 	 	 	 	 
	SECTION 5. CONDITIONS TO SELLER’S OBLIGATION TO CLOSE	 	 	8	 

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	 	5.1	 	Purchase Price	 	 	8	 
	 
	 	5.2	 	Closing Documents	 	 	8	 
	 
	 	 	 	 	 	 	 	 
	SECTION 6. REPRESENTATIONS AND WARRANTIES OF SELLER	 	 	8	 
	 
	 	 	 	 	 	 	 	 
	 
	 	6.1	 	Status and Authority of the Seller	 	 	8	 
	 
	 	6.2	 	Action of the Seller	 	 	9	 
	 
	 	6.3	 	No Violations of Agreements	 	 	9	 
	 
	 	6.4	 	Litigation	 	 	9	 
	 
	 	6.5	 	Existing Leases, Occupancy
Agreements, Etc.	 	 	9	 
	 
	 	6.6	 	Utilities, Etc.	 	 	9	 
	 
	 	6.7	 	Compliance With Law	 	 	10	 
	 
	 	6.8	 	Not A Foreign Person	 	 	10	 
	 
	 	6.9	 	Hazardous Substances	 	 	10	 
	 
	 	6.10	 	Insurance	 	 	11	 
	 
	 	6.11	 	Financial Statements, Etc.	 	 	11	 
	 
	 	6.12	 	Disclosure	 	 	11	 
	 
	 	 	 	 	 	 	 	 
	SECTION 7. REPRESENTATIONS AND WARRANTIES OF PURCHASER	 	 	12	 
	 
	 	 	 	 	 	 	 	 
	 
	 	7.1	 	Status and Authority of the Purchaser	 	 	12	 
	 
	 	7.2	 	Action of the Purchaser	 	 	12	 
	 
	 	7.3	 	No Violations of Agreements	 	 	12	 
	 
	 	7.4	 	Litigation	 	 	12	 
	 
	 	 	 	 	 	 	 	 
	SECTION 8. APPORTIONMENTS	 	 	13	 
	 
	 	 	 	 	 	 	 	 
	 
	 	8.1	 	Real Property Apportionments	 	 	13	 
	 
	 	8.2	 	Closing Costs	 	 	13	 
	 
	 	8.3	 	Survival	 	 	13	 
	 
	 	 	 	 	 	 	 	 
	SECTION 9. MISCELLANEOUS	 	 	13	 
	 
	 	 	 	 	 	 	 	 
	 
	 	9.1	 	Agreement to Indemnify	 	 	13	 
	 
	 	9.2	 	Publicity	 	 	14	 
	 
	 	9.3	 	Notices	 	 	14	 
	 
	 	9.4	 	Waivers, Etc.	 	 	15	 
	 
	 	9.5	 	Assignment; Successors and Assigns	 	 	16	 
	 
	 	9.6	 	Severability	 	 	16	 
	 
	 	9.7	 	Counterparts, Etc.	 	 	16	 
	 
	 	9.8	 	Governing Law	 	 	16	 
	 
	 	9.9	 	Waiver of Right to Trial by Jury	 	 	17	 
	 
	 	9.10	 	Performance on Business Days	 	 	17	 
	 
	 	9.11	 	Attorneys’ Fees	 	 	17	 
	 
	 	9.12	 	Section and Other Headings	 	 	17	 
	 
	 	9.13	 	Time of Essence	 	 	17	 
	 
	 	9.14	 	Nonliability of Trustees	 	 	18	 

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PURCHASE AND SALE AGREEMENT

     THIS PURCHASE AND SALE AGREEMENT is made as of August 21, 2008, by and among LIFE TIME
FITNESS INC., a Minnesota corporation (“Life Time”), LTF REAL ESTATE COMPANY, INC. (the
“Tenant”, and jointly and severally with Life Time, the “Seller”), and SENIOR
HOUSING PROPERTIES TRUST, a Maryland real estate investment trust (the “Purchaser”).

WITNESSETH:

     WHEREAS, the Seller is the owner of the Properties (all capitalized terms used and not
otherwise defined herein having the meanings ascribed to such terms in Section 1); and

     WHEREAS, the Purchaser desires to purchase the Properties, as more fully set forth below; and

     WHEREAS, the Seller is willing to sell all of the Properties to the Purchaser, subject to and
upon the terms and conditions hereinafter set forth;

     NOW, THEREFORE, in consideration of the mutual covenants herein contained and other good and
valuable consideration, the mutual receipt and legal sufficiency of which are hereby acknowledged,
the Seller and the Purchaser hereby agree as follows:

SECTION 1. DEFINITIONS

     Capitalized terms used in this Agreement shall have the meanings set forth below or in the
Section of this Agreement referred to below:

     1.1 “Agreement” shall mean this Purchase and Sale Agreement, together with
Exhibits A through C attached hereto, as it and they may be amended from time to time as
herein provided.

     1.2 “Assets” shall mean, with respect to any Property, collectively, all of the Real
Property, the Improvements, the FF&E, the Documents and the Intangible Property owned by the Seller
in connection with or relating to such Property.

     1.3 “Business Day” shall mean any day other than a Saturday, Sunday or any other day
on which banking institutions in The Commonwealth of Massachusetts are authorized by law or
executive action to close.

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     1.4 “Closing” shall have the meaning given such term in Section 2.2.

     1.5 “Closing Date” shall have the meaning given such term in Section 2.2.

     1.6 “Documents” shall mean, with respect to any Property (as opposed to the business
conducted at the Properties), all handbooks, documents and other instruments relating to the
maintenance, management or operation of such Property, but specifically excluding all items
included within the category of the Seller’s Personal Property or relating to Seller’s Personal
Property.

     1.7 “FF&E” shall mean, with respect to any Property, all appliances, machinery,
devices, fixtures, appurtenances, equipment, furnishings and articles of tangible personal property
of every kind and nature whatsoever (other than motor vehicles) owned by the Seller and located in
or at, or used in connection with the ownership, operation or maintenance of such Property (as
opposed to the business from time to time conducted at such Property) ,but specifically excluding
all items included within the category of the Seller’s Personal Property.

     1.8 “Guarantor” shall have the meaning given such term in the Lease.

     1.9 “Guaranty” shall have the meaning given such term in the Lease.

     1.10 “Improvements” shall mean all buildings, fixtures, walls (other than demountable
walls and partitions), fences, landscaping and other structures and other improvements of every
kind including, but not limited to, alleyways and connecting tunnels, sidewalks, utility pipes,
conduits and lines (on-site and off-site), parking areas and roadways appurtenant to such buildings
and structures presently situated upon the Real Property.

     1.11 “Intangible Property” shall mean, with respect to any Property, all transferable
or assignable permits, certificates of occupancy, operating permits, sign permits, development
rights and approvals, certificates, licenses, warranties and guarantees (including, without
limitation, contractual warranties and guaranties), and all other transferable intangible property,
miscellaneous rights, benefits and privileges of any kind or character with respect to such
Property, but specifically excluding all items included within the category of the Seller’s
Personal Property.

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     1.12 “Lease” shall mean that certain Lease Agreement, of even date herewith, by and
between the Purchaser, as landlord, and Tenant, as tenant.

     1.13 “Permitted Encumbrances” shall mean, with respect to any Property, (a) liens for
taxes, assessments and governmental charges with respect to such Property not yet due and payable
or due and payable but not yet delinquent; (b) the exceptions to title appearing in the Title
Policy with respect to such Property; and (c) all matters shown on the Survey with respect to such
Property.

     1.14 “Properties” shall mean, collectively, all of the Assets relating to the
properties identified on Exhibit A, the legal descriptions of which are set forth in
Exhibits B-1 through B-4.

     1.15 “Purchase Price” shall mean the sum of One Hundred Million Dollars
($100,000,000), subject to adjustment pursuant to Section 8.

     1.16 “Purchaser” shall have the meaning given such term in the first paragraph of this
Agreement.

     1.17 “Real Property” shall mean, with respect to any Property, the real property
described in the applicable Exhibit B-1 through B-4, together with all easements, rights of
way, privileges, licenses and appurtenances which the Seller may own with respect thereto.

     1.18 “SEC” shall mean the Securities and Exchange Commission.

     1.19 “Seller” shall have the meaning given such term in the first paragraph of this
Agreement.

     1.20 “Seller’s Personal Property” shall mean (a) all items of personal property,
equipment and trade fixtures (so long as the same are not necessary for the operation of the
Improvements and the Properties as opposed to the business from time to time conducted at the
Properties) located in or on the Properties, and whether or however attached to the Improvements,
at any time that are necessary or incidental to the business from time to time conducted at the
Properties, including, without limitation, exercise/fitness equipment, kitchen equipment and
furnishings, work stations, portable or movable partitions, receptionist desks, computer
installations (including computers, computer hardware, raised flooring designated solely for the
computer system, freestanding supplemental air conditioning or cooling systems therefor),
communications systems and equipment, financial services equipment (such as ATM’s), credenzas,
safes, bulletin boards,

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book shelves and file cabinets; (b) all furniture, inventory, machinery (so long as the same
are not necessary for the operation of the Improvements and the Properties as opposed to the
business from time to time conducted at the Properties), racking, shelving, and other personal
property; (c) all personal property, equipment or trade fixtures which is either not owned by the
Purchaser, the Seller or any of their respective Affiliated Persons (as such term is defined in the
Lease), or is on consignment to the Seller or any of its Affiliated Persons, including any personal
property owned by the Seller’s employees or invitees (other than Affiliated Persons of the Seller);
(d) all signs and other forms of business identification; (e) all operating and other permits,
licenses and approvals, warranties, guaranties indemnities and similar rights (so long as the same
are not necessary for the operation of the Improvements and the Properties as opposed to the
business from time to time conducted at the Properties), and (f) all other items of personal
property (so long as the same are not necessary for the operation of the Improvements and the
Properties as opposed to the business from time to time conducted at the Properties).

     1.21 “Surveys” shall have the meaning given such term in Section 3.1.

     1.22 “Tenant” shall have the meaning given such term in the first paragraph of this
Agreement and shall mean the tenant under the Lease.

     1.23 “Title Commitments” shall have the meaning given such term in Section
3.1.

     1.24 “Title Company” shall mean First American Title Insurance Company, whose office
is located at 1900 Midwest Plaza, Minneapolis, Minnesota 55402.

     1.25 “Title Policies” shall have the meaning given such term in Section 4.2.

SECTION 2. PURCHASE AND SALE; CLOSING

     2.1 Purchase and Sale. In consideration of the mutual covenants herein contained, the
Purchaser hereby agrees to purchase from the Seller, and the Seller hereby agrees to sell, all of
the Seller’s right, title and interest in and to the Properties for the Purchase Price, subject to
and in accordance with the terms and conditions of this Agreement.

     2.2 Closing. The purchase and sale of the Properties shall be consummated at a
closing (the “Closing”) to be held at the offices of Sullivan & Worcester LLP, One Post
Office Square, Boston, Massachusetts 02109 (or through the offices of an escrow agent reasonably
satisfactory to the parties without requiring

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the physical presence of the Purchaser or the Seller at the Closing), or at such other
location as the Seller and the Purchaser may agree, at 10:00 a.m., local time, on the date (the
“Closing Date”) that is the later to occur of (a)
[July ___, 2008] and (b) the date as of
which all conditions precedent to the Closing herein set forth have either been satisfied or waived
by the party in whose favor such conditions run.

     2.3 Purchase Price. The Purchase Price, subject to adjustment as provided in
Article 8, shall be paid by the Purchaser to or at the direction of the Seller at the
Closing, in immediately available federal funds by wire transfer to an account or accounts to be
designated by the Seller.

SECTION 3. TITLE, DILIGENCE MATERIALS, ETC.

     3.1 Title and Survey Matters.

     (a) Prior to the execution of this Agreement, the Seller shall have delivered, or cause to
have been delivered, to the Purchaser a preliminary title commitment, having an effective date
within thirty (30) days of this Agreement, for an ALTA extended owner’s policy of title insurance
with respect to each of the Properties, together with complete and legible copies of all
instruments and documents referred to as exceptions to title (collectively, the “Title
Commitments”).

     (b) Prior to the execution of this Agreement, the Seller shall have arranged for the
preparation of an ALTA survey with respect to each of the Properties (collectively, the
“Surveys”), by a licensed surveyor in the jurisdiction in which each such Property is
located, which (i) contains an accurate legal description of such Property, (ii) shows the exact
location, dimension and description (including applicable recording information) of all utilities,
easements, encroachments and other physical matters affecting such Property, the number of striped
parking spaces located thereon and all applicable building set-back lines, (iii) states whether
such Property is located within a 100-year flood plain and (iv) includes a certification in the
form attached hereto as Exhibit C or as modified with the consent of the Purchaser.

     3.2 Other Diligence Materials. The Seller shall have provided the Purchaser and its
representatives with copies, as are in the possession or control of the Seller, of other diligence
materials pertaining to the Properties as reasonably requested by the Purchaser.

SECTION 4. CONDITIONS TO PURCHASER’S OBLIGATION TO CLOSE

     The obligation of the Purchaser to acquire each of the Properties on the Closing Date shall be
subject to the

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satisfaction of the following conditions precedent on and as of such Closing Date:

     4.1 Closing Documents. The Seller shall have delivered to the Purchaser:

     (a) A good and sufficient limited or special warranty deed with covenants against grantor’s
acts, or its local equivalent, in proper statutory form for recording, duly executed and
acknowledged by the Seller, conveying good and marketable title to each of the Properties, free
from all liens and encumbrances other than the Permitted Encumbrances;

     (b) An assignment by the Seller and an assumption by the Purchaser, in form and substance
reasonably satisfactory to the Seller and the Purchaser, duly executed and acknowledged by the
Seller and the Purchaser, of all of the Seller’s right, title and interest, if any, in, to and
under all licenses, permits and agreements affecting the Properties (as opposed to the business
from time to time conducted at the Properties, all to the extent transferable, and excluding any
leases, permits and agreements which are necessary to remain with Seller during the term of the
Lease to operate the Properties;

     (c) One or more bill(s) of sale and assignment agreement(s), in form and substance reasonably
satisfactory to the Seller and the Purchaser, with respect to all of the FF&E, the Documents and
Intangible Property;

     (d) To the extent the same are in the Seller’s possession or control, original, fully executed
copies of all FF&E, Documents and Intangible Property;

     (e) An affidavit as of the Closing Date, in respect of Section 1445 of the Internal Revenue
Code of 1986, as amended, sufficient to provide one exemption under subdivision (b) thereof for the
Seller;

     (f) The Lease, the LTF Guaranty (as such term is defined in the Lease), and all other
documents and instruments required to be delivered pursuant to the Lease, duly executed and
acknowledged by the Tenant and/or other applicable party thereto;

     (g) Certified copies of all charter documents, applicable corporate resolutions and
certificates of incumbency with respect to the Seller, the Tenant and the Guarantor; and

     (h) Such other conveyance documents, certificates, deeds, affidavits and other instruments as
the Purchaser or the Title Company may reasonably require to effectuate the transactions
contemplated by this Agreement, including, without limitation,

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parties in possession and mechanics’ lien affidavits and gap indemnities.

     4.2 Title Policies and Surveys. (a) The Title Company shall be prepared, subject only
to payment of the applicable premium and endorsement fees and delivery of all conveyance documents
in recordable form, to issue a title insurance policy (collectively, the “Title Policies”)
to the Purchaser with respect to each of the Properties, in form and substance satisfactory to the
Purchaser, together with such affirmative coverages as the Purchaser may reasonably require.

     (b) The Purchaser shall have received a Survey with respect to each of the Properties, such
Survey to be consistent with the requirements of Section 3.1.

     4.3 Opinion of Counsel. The Purchaser shall have received a written opinion from
counsel to the Seller, which counsel shall be reasonably acceptable to the Purchaser, in form and
substance reasonably satisfactory to the Purchaser, regarding the organization and authority of the
Seller, Tenant, and each Guarantor.

SECTION 5. CONDITIONS TO SELLER’S OBLIGATION TO CLOSE

     The obligation of the Seller to convey the Properties on the Closing Date to the Purchaser is
subject to the satisfaction of the following conditions precedent on and as of the Closing Date:

     5.1 Purchase Price. The Purchaser shall have delivered to the Seller the Purchase
Price as provided in Section 2.3.

     5.2 Closing Documents. The Purchaser shall have delivered to the Seller:

     (a) Duly executed and acknowledged counterparts of the documents described in Section
4.1, where applicable; and

     (b) Certified copies of all charter documents, applicable resolutions and certificates of
incumbency with respect to the Purchaser.

SECTION 6. REPRESENTATIONS AND WARRANTIES OF SELLER

     To induce the Purchaser to enter into this Agreement, the Seller, with respect to all
Properties, represents and warrants to the Purchaser as follows:

     6.1 Status and Authority of the Seller. The Seller is a corporation duly organized,
validly existing and in good

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standing under the laws of its state of incorporation or formation, and has all requisite
power and authority under the laws of such state and its respective charter documents to enter into
and perform its obligations under this Agreement and to consummate the transactions contemplated
hereby. It has duly qualified to transact business in each jurisdiction in which the nature of the
business conducted by it requires such qualification, except where failure to do so could not
reasonably be expected to have a material adverse effect.

     6.2 Action of the Seller. The Seller has taken all necessary action to authorize the
execution, delivery and performance of this Agreement, and upon the execution and delivery of any
document to be delivered by it on or prior to the Closing Date, such document shall constitute its
valid and binding obligation and agreement, enforceable against the Seller in accordance with its
terms, except as enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws of general application affecting the rights and remedies of creditors.

     6.3 No Violations of Agreements. Neither the execution, delivery or performance of
this Agreement, nor compliance with the terms and provisions hereof, will result in any breach of
the terms, conditions or provisions of, or conflict with or constitute a default under, or result
in the creation of any lien, charge or encumbrance upon any of the Properties pursuant to the terms
of any indenture, mortgage, deed of trust, note, evidence of indebtedness or any other agreement or
instrument by which it is bound.

     6.4 Litigation. To the Seller’s knowledge, it has not received any written notice of
and, to its knowledge, no action or proceeding is pending or threatened and no investigation
looking toward such an action or proceeding has begun, which (a) questions the validity of this
Agreement or any action taken or to be taken pursuant hereto, (b) will result in any material
adverse change in the business, operation, affairs or condition of any of the Properties, or (c)
will result in or subject any of the Properties to a material liability, involves condemnation or
eminent domain proceedings against any part of any of the Properties.

     6.5 Existing Leases, Occupancy Agreements, Etc. The Seller has not entered into any
contract or agreement with respect to the occupancy of the Properties, or any portion thereof,
which will be binding on the Purchaser after the Closing.

     6.6 Utilities, Etc. To the Seller’s knowledge, all utilities and services necessary
for the use and operation of

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the Properties (including, without limitation, road access, gas, water, electricity and
telephone) are available thereto. To the Seller’s knowledge, no fact, condition or proceeding
exists which would result in the termination or impairment of the furnishing of such utilities to
the Properties.

     6.7 Compliance With Law. The Seller has not received written notice that (a) any of
the Properties or the current use and operation thereof violate any material federal, state,
municipal and other governmental statutes, ordinances, by-laws, rules, regulations or any other
legal requirements, including, without limitation, those relating to construction, occupancy,
zoning, adequacy of parking, environmental protection, occupational health and safety and fire
safety applicable thereto; and (b) there is not currently in effect any material license, permit or
other authorization necessary for the current use, occupancy and operation of any of the
Properties. The Seller has not received written notice of any threatened request, application,
proceeding, plan, study or effort which would (x) materially adversely affect the present use or
zoning of any of the Properties, (y) jeopardize the status of any material license, permit or other
authorization necessary for the current use, occupancy or operation of any of the Properties, or
(z) modify or realign any adjacent street or highway in a material and adverse way.

     6.8 Not A Foreign Person. The Seller is not a “foreign person” within the meaning of
Section 1445 of the United States Internal Revenue Code of 1986, as amended, and the treasury
regulations promulgated thereunder.

     6.9 Hazardous Substances.

     (a) Except as described in any environmental report delivered to the Purchaser prior to the
date of this Agreement, the Seller has not received written notice that the Seller nor any tenant
or other occupant or user of any of the Properties, or any portion thereof, has stored or disposed
of (or engaged in the business of storing or disposing of) or has released or caused the release of
any hazardous waste, contaminants, oil, radioactive or other material on, under or off of any of
the Properties, or any portion thereof, the removal of which is required or the maintenance of
which is prohibited or penalized by any applicable Federal, state or local statutes, laws,
ordinances, rules or regulations, and the Seller has not received written notice that any of the
Properties is contaminated with any such hazardous waste, contaminants, oil, radioactive or other
materials, except any such materials maintained in accordance with applicable law.

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     (b) To the Seller’s knowledge Seller has all environmental and pollution control equipment
necessary for (i) compliance in all material respects with all environmental laws, rules,
regulations and ordinances, including the current and prospective requirements thereof (including,
without limitation, all applicable environmental permits) and (ii) operation of the Properties as
presently conducted.

     (c) To the Seller’s knowledge, the Seller has not been named as a potentially responsible
party in connection with any off-site locations to which any hazardous waste, contaminants, oil,
radioactive or other material have been sent by or on behalf of the Seller for disposal, storage,
recycling, or processing and none of the off-site locations where such waste and materials have
been stored, treated, recycled, disposed of or released, has been nominated or identified as a
facility that is subject to an existing or potential claim under any environmental laws, rules,
regulations or ordinances, or for violation or revocation of any of its storage, transfer,
recycling or disposal permits.

     6.10 Insurance. To the Seller’s knowledge, Seller has not received any written notice
from any insurance carrier of defects or inadequacies in any of the Properties which, if
uncorrected, would result in a termination of insurance coverage or a material increase in the
premiums charged therefor.

     6.11 Financial Statements, Etc. The financial statements, operating statistics and
other financial information previously delivered by the Seller to the Purchaser fairly present the
financial condition of the Seller, the Tenant and the Properties in accordance with generally
accepted accounting principles consistently applied and there has been no material adverse change
from the date thereof through the date hereof.

     6.12 Disclosure. To the Seller’s knowledge, there is no fact or condition which
materially and adversely affects the business or condition of any of its Properties which has not
been set forth in this Agreement or in the other documents, certificates or statements furnished to
the Purchaser in connection with the transactions contemplated hereby.

     As used herein, the words “knowledge”, “Seller’s knowledge”, “ to the best of the Seller’s
knowledge”, or a similar phrase shall refer only to the actual, current knowledge, and not
constructive or implied knowledge, of John Heller and Eric Buss, provided that the foregoing
individuals shall have no personal liability in connection herewith. The representations and
warranties made in this Agreement by the Seller is made as of the date hereof and shall be deemed
remade by the Seller as of the Closing Date with the same force and

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effect as if made on, and as of, such date. All representations and warranties made in this
Agreement by the Seller shall survive the Closing.

SECTION 7. REPRESENTATIONS AND WARRANTIES OF PURCHASER

     To induce the Seller to enter in this Agreement, the Purchaser represents and warrants to the
Seller as follows:

     7.1 Status and Authority of the Purchaser. The Purchaser is a Maryland real estate
investment trust duly organized, validly existing and in good standing under the laws of the State
of Maryland, and has all requisite power and authority under the laws of such state and under its
charter documents to enter into and perform its obligations under this Agreement and to consummate
the transactions contemplated hereby. The Purchaser has duly qualified and is in good standing as
a trust or unincorporated business association in each jurisdiction in which the nature of the
business conducted by it requires such qualification, except where the failure to do so could not
reasonably be expected to have a material adverse effect.

     7.2 Action of the Purchaser. The Purchaser has taken all necessary action to
authorize the execution, delivery and performance of this Agreement, and upon the execution and
delivery of any document to be delivered by the Purchaser on or prior to the Closing Date such
document shall constitute the valid and binding obligation and agreement of the Purchaser,
enforceable against the Purchaser in accordance with its terms, except as enforceability may be
limited by bankruptcy, insolvency, reorganization, moratorium or similar laws of general
application affecting the rights and remedies of creditors.

     7.3 No Violations of Agreements. Neither the execution, delivery or performance of
this Agreement by the Purchaser, nor compliance with the terms and provisions hereof, will result
in any breach of the terms, conditions or provisions of, or conflict with or constitute a default
under, or result in the creation of any lien, charge or encumbrance upon any property or assets of
the Purchaser pursuant to the terms of any indenture, mortgage, deed of trust, note, evidence of
indebtedness or any other agreement or instrument by which the Purchaser is bound.

     7.4 Litigation. No investigation, action or proceeding is pending and, to the
Purchaser’s knowledge, no action or proceeding is threatened and no investigation looking toward
such an action or proceeding has begun, which questions the validity of this Agreement or any
action taken or to be taken pursuant hereto.

-12-

 

     The representations and warranties made in this Agreement by the Purchaser shall be continuing
and shall be deemed remade by the Purchaser as of the Closing Date with the same force and effect
as if made on, and as of, such date. The Purchaser’s liability with respect to all representations
and warranties made in this Agreement by the Purchaser shall survive the Closing.

SECTION 8. APPORTIONMENTS

     8.1 Real Property Apportionments. There shall be no apportionments of any items of
income or expense with respect to the Properties on the Closing Date, it being acknowledged and
agreed that the Seller or its affiliates shall be responsible for the payment of all such items as
the owner of the Properties prior to the Closing Date and as the tenant under the Lease on and
after the Closing Date.

     8.2 Closing Costs. The Seller shall pay all of the costs and expenses of closing and
diligence in connection with the transactions contemplated hereby, including, but not limited to
(i) all recording, sales and transfer fees and taxes, escrow fees, title insurance costs (including
base premiums and costs for endorsements), for the owner’s policies and survey costs, market
studies and appraisals, engineering studies and zoning reports, and (ii) all attorneys’ fees and
costs in connection with this transaction, including, but not limited to, the Purchaser’s
attorneys’ fees and expenses and local counsel fees and expenses. The Seller shall in all events
pay all such amounts, and reimburse the Purchaser for any amounts incurred by the Purchaser on
account thereof, regardless of whether the Closing shall occur hereunder and, in connection
therewith, the Seller shall indemnify, defend and hold the Purchaser harmless from and against any
and all loss, cost, damage or expense in connection therewith.

     8.3 Survival. The obligations of the parties under this Section 8 shall
survive the Closing or termination this Agreement.

SECTION 9. MISCELLANEOUS

     9.1 Agreement to Indemnify. Subject to any express provisions of this Agreement to
the contrary, the Seller shall indemnify and hold harmless the Purchaser from and against any and
all obligations, claims, losses, damages, liabilities, and expenses (including, without limitation,
reasonable attorneys’ and accountants’ fees and disbursements) arising out of (a) events,
contractual obligations, acts or omissions of the Seller that occurred in connection with the
ownership or operation of

-13-

 

any Property prior to the Closing or (b) any damage to property of others or injury to or
death of any person or any claims for any debts or obligations occurring on or about or in
connection with any Property or any portion thereof at any time or times prior to the Closing. The
provisions of this Section 9.1 shall survive the Closing and the termination of this
Agreement.

     9.2 Publicity. Except as required by law or SEC regulation, the Seller shall not make
any public statements or press releases with respect to this Agreement and the transactions
contemplated hereby without the Purchaser’s prior written consent. Any use of the Purchaser’s name
by the Seller, or the Seller’s name by the Purchaser, shall require the prior written approval of
the Purchaser or Seller, as the case may be, which may be withheld in the Purchaser’s or Seller’s,
as the case may be, sole discretion.

     9.3 Notices. (a) Any and all notices, demands, consents, approvals, offers, elections
and other communications required or permitted under this Agreement shall be deemed adequately
given if in writing and the same shall be delivered either in hand, by telecopier with written
acknowledgment of receipt, or by mail or Federal Express or similar expedited commercial carrier,
addressed to the recipient of the notice, postpaid and registered or certified with return receipt
requested (if by mail), or with all freight charges prepaid (if by Federal Express or similar
carrier).

     (b) All notices required or permitted to be sent hereunder shall be deemed to have been given
for all purposes of this Agreement upon the date of acknowledged receipt, in the case of a notice
by telecopier, and, in all other cases, upon the date of receipt or refusal, except that whenever
under this Agreement a notice is either received on a day which is not a Business Day or is
required to be delivered on or before a specific day which is not a Business Day, the day of
receipt or required delivery shall automatically be extended to the next Business Day.

     (c) All such notices shall be addressed,

     If to the Seller, to:

LTF Real Estate Company, Inc.

2902 Corporate Place

Chanhassen, Minnesota 55317

Attn: Mr. John Heller

[Telecopier No. (952) 947-0099]

Life Time Fitness, Inc.

2902 Corporate Place

Chanhassen, Minnesota 55317

Attn: Mr. Eric J. Buss

-14-

 

[Telecopier No. (952) 947-0099]

     with a copy to:

Faegre & Benson LLP

2200 Wells Fargo Center

90 South Seventh Street

Minneapolis, Minnesota, 55402

Attn: Scott Anderegg and Sandra Dobbles

[Telecopier No. (612) 766-1600]

If to the Purchaser, to:

Senior Housing Properties Trust

400 Centre Street

Newton, Massachusetts 02458

Attn: Mr. David J. Hegarty

[Telecopier No. (617) 796-8349]

     with a copy to:

Sullivan & Worcester LLP

One Post Office Square

Boston, Massachusetts 02109

Attn: Nancy S. Grodberg, Esq.

[Telecopier No. (617) 338-2880]

     (d) By notice given as herein provided, the parties hereto and their respective successors and
assigns shall have the right from time to time and at any time during the term of this Agreement to
change their respective addresses effective upon receipt by the other parties of such notice and
each shall have the right to specify as its address any other address within the United States of
America.

     9.4 Waivers, Etc. Any waiver of any term or condition of this Agreement, or of the
breach of any covenant, representation or warranty contained herein, in any one instance, shall not
operate as or be deemed to be or construed as a further or continuing waiver of any other breach of
such term, condition, covenant, representation or warranty or any other term, condition, covenant,
representation or warranty, nor shall any failure at any time or times to enforce or require
performance of any provision hereof operate as a waiver of or affect in any manner such party’s
right at a later time to enforce or require performance of such provision or any other provision
hereof. This Agreement may not be amended, nor shall any waiver, change, modification, consent or
discharge be effected, except by an instrument in writing executed by or on behalf of the party
against whom enforcement of any amendment, waiver, change, modification, consent or discharge is
sought.

-15-

 

     9.5 Assignment; Successors and Assigns. This Agreement and all rights and obligations
hereunder shall not be assignable by any party without the written consent of the other, except
that (x) the Purchaser may assign this Agreement to any one or more entities wholly owned, directly
or indirectly, by the Purchaser; provided, however, that, in the event this
Agreement shall be assigned to any one or more entities wholly owned, directly or indirectly, by
the Purchaser, the Purchaser named herein shall remain liable for the obligations of the
“Purchaser” hereunder. This Agreement shall be binding upon and shall inure to the benefit of the
parties hereto and their respective legal representatives, successors and permitted assigns. This
Agreement is not intended and shall not be construed to create any rights in or to be enforceable
in any part by any other persons.

     9.6 Severability. If any provision of this Agreement shall be held or deemed to be,
or shall in fact be, invalid, inoperative or unenforceable as applied to any particular case in any
jurisdiction or jurisdictions, or in all jurisdictions or in all cases, because of the conflict of
any provision with any constitution or statute or rule of public policy or for any other reason,
such circumstance shall not have the effect of rendering the provision or provisions in question
invalid, inoperative or unenforceable in any other jurisdiction or in any other case or
circumstance or of rendering any other provision or provisions herein contained invalid,
inoperative or unenforceable to the extent that such other provisions are not themselves actually
in conflict with such constitution, statute or rule of public policy, but this Agreement shall be
reformed and construed in any such jurisdiction or case as if such invalid, inoperative or
unenforceable provision had never been contained herein and such provision reformed so that it
would be valid, operative and enforceable to the maximum extent permitted in such jurisdiction or
in such case.

     9.7 Counterparts, Etc. This Agreement may be executed in two or more counterparts,
each of which shall be deemed an original, but all of which together shall constitute one and the
same instrument. This Agreement constitutes the entire agreement of the parties hereto with
respect to the subject matter hereof and shall supersede and take the place of any other
instruments purporting to be an agreement of the parties hereto relating to the subject matter
hereof.

     9.8 Governing Law. This Agreement shall be interpreted, construed, applied and
enforced in accordance with the laws of The Commonwealth of Massachusetts applicable to contracts
between residents of Massachusetts which are to be performed entirely within Massachusetts,
regardless of (i) where this Agreement is executed or delivered; or (ii) where any

-16-

 

payment or other performance required by this Agreement is made or required to be made; or
(iii) where any breach of any provision of this Agreement occurs, or any cause of action otherwise
accrues; or (iv) where any action or other proceeding is instituted or pending; or (v) the
nationality, citizenship, domicile, principal place of business, or jurisdiction of organization or
domestication of any party; or (vi) whether the laws of the forum jurisdiction otherwise would
apply the laws of a jurisdiction other than Massachusetts; or (vii) any combination of the
foregoing.

     To the maximum extent permitted by applicable law, any action to enforce, arising out of, or
relating in any way to, any of the provisions of this Agreement shall be brought and prosecuted in
such court or courts located in The Commonwealth of Massachusetts as is provided by law; and the
parties consent to the jurisdiction of said court or courts located in the State of Delaware and to
service of process by registered mail, return receipt requested, or by any other manner provided by
law.

     9.9 Waiver of Right to Trial by Jury. Each party hereto hereby irrevocably and
unconditionally waives all right to trial by jury in any action, suit, proceeding, or counterclaim
that relates to or arises out of this Agreement or the acts or failure to act of or by any other
party in the enforcement of any of the terms or provisions of this Agreement or by any other party
in the performance of any of the terms and provisions of this Agreement.

     9.10 Performance on Business Days. In the event the date on which performance or
payment of any obligation of a party required hereunder is other than a Business Day, the time for
payment or performance shall automatically be extended to the first Business Day following such
date.

     9.11 Attorneys’ Fees. If any lawsuit or arbitration or other legal proceeding arises
in connection with the interpretation or enforcement of this Agreement, the prevailing party
therein shall be entitled to receive from the other party the prevailing party’s costs and
expenses, including reasonable attorneys’ fees incurred in connection therewith, in preparation
therefor and on appeal therefore, which amounts shall be included in any judgment therein.

     9.12 Section and Other Headings. The headings contained in this Agreement are for
reference purposes only and shall not in any way affect the meaning or interpretation of this
Agreement.

     9.13 Time of Essence. Time shall be of the essence with respect to the performance of
each and every covenant and obligation, and the giving of all notices, under this Agreement.

-17-

 

     9.14 Nonliability of Trustees. THE DECLARATION OF TRUST ESTABLISHING THE PURCHASER, A
COPY OF WHICH, TOGETHER WITH ALL AMENDMENTS THERETO (THE “DECLARATION”), IS DULY FILED WITH
THE DEPARTMENT OF ASSESSMENTS AND TAXATION OF THE STATE OF MARYLAND, PROVIDES THAT THE NAME “SENIOR
HOUSING PROPERTIES TRUST” REFERS TO THE TRUSTEES UNDER THE DECLARATION COLLECTIVELY AS TRUSTEES,
BUT NOT INDIVIDUALLY OR PERSONALLY, AND THAT NO TRUSTEE, OFFICER, SHAREHOLDER, EMPLOYEE OR AGENT OF
THE PURCHASER SHALL BE HELD TO ANY PERSONAL LIABILITY, JOINTLY OR SEVERALLY, FOR ANY OBLIGATION OF,
OR CLAIM AGAINST, THE PURCHASER. ALL PERSONS DEALING WITH THE PURCHASER, IN ANY WAY, SHALL LOOK
ONLY TO THE ASSETS OF THE PURCHASER FOR THE PAYMENT OF ANY SUM OR THE PERFORMANCE OF ANY
OBLIGATION.

[SIGNATURES ON FOLLOWING PAGES]

-18-

 

     IN WITNESS WHEREOF, the parties have caused this Agreement to be executed as a sealed
instrument as of the date first above written.

	 	 	 	 	 
	 	SELLER:

 	 
	 	LIFE TIME FITNESS, INC.,

a Minnesota corporation

 	 
	 	By:  	/s/ Eric J. Buss
 	 
	 	 	Eric J. Buss 	 
	 	 	Secretary 	 

	 	 	 	 	 
	 	LTF REAL ESTATE COMPANY, INC.,

a Minnesota corporation

 	 
	 	By:  	/s/ Eric J. Buss
 	 
	 	 	Eric J. Buss 	 
	 	 	Secretary 	 

-19-

 

	 	 	 	 	 

	 	 	 	 	 
	 	

PURCHASER:
 	 
	 
	 	SENIOR HOUSING PROPERTIES TRUST,

a Maryland real estate investment trust

 	 
	 	By:  	/s/ David J. Hegarty
 	 
	 	 	David J. Hegarty 	 
	 	 	President 	 
	 

 

Exhibit A

The Properties

Alpharetta, Georgia

Property located at 855 North Point Parkway, Alpharetta, Georgia

Romeoville, Illinois

Property located at 1220 Lakeview Drive, Romeoville, Illinois

Allen, Texas

Property located at 971 State Highway 121, Allen, Texas

Omaha, Nebraska

Property located at 17007 Elm Plaza, Omaha, Nebraska

 

 

Exhibits B-1 through B-4

Legal Descriptions of Properties

[See attached copies.]

-i-

 

Exhibit B-1

Legal Description of Alpharetta, Georgia Property

All That Tract or Parcel of Land lying and being in Land Lot 1189 and 1260, 2nd District, 2nd
Section, the City of Alpharetta, Fulton County, Georgia, being more particularly described as
follows:

To Find The True Point of Beginning commence at the point of intersection of the West right-of-way
of North Point Parkway, having a varying right-of-way and a chamfer to Tradewinds Parkway, and The
True Point of Beginning. Thence, southwesterly, along said chamfer, South 43 degrees 48 minutes 19
seconds West, a distance of 30.77 feet to a point, said point being located on the North
right-of-way of Tradewinds Parkway, having a varying right-of-way; thence, northwesterly, along
said right-of-way, North 89 degrees 58 minutes 03 seconds West, a distance of 27.96 feet to a
point; thence, South 86 degrees 59 minutes 20 seconds West, a distance of 182.62 feet to a point;
thence, along an arc of curve to the right (which has a radius of 470.00 feet, a central angle of
28 degrees 31 minutes 50 seconds and a chord distance of 231.63 feet, along a bearing of North 78
degrees 44 minutes 45 seconds West), an arc distance of 234.04 feet to a point; thence, North 64
degrees 28 minutes 50 seconds West, a distance of 150.27 feet to a point; thence, along an arc of
curve to the left (which has a radius of 547.50 feet, a central angle of 13 degrees 21 minutes 28
seconds and a chord distance of 127.35 feet, along a bearing of North 71 degrees 09 minutes 34
seconds West), an arc distance of 127.64 feet to a point; thence, North 77 degrees 50 minutes 18
seconds West, a distance of 55.22 feet to a point, said point being the beginning of a chamfer;
thence, leaving said Tradewinds Parkway right-of-way, northwesterly, along said chamfer, North 34
degrees 40 minutes 03 seconds West, a distance of 29.17 feet to a point, said point being the
intersection of said chamfer and the Southeast right-of-way of Morris Road, having a varying
right-of-way; thence, northeasterly, along said Morris Road right-of-way, along an arc of curve to
the right (which has a radius of 965.00 feet, a central angle of 17 degrees 49 minutes 56 seconds
and a chord distance of 299.13 feet, along a bearing of North 17 degrees 58 minutes 20 seconds
East), an arc distance of 300.34 feet to a point; thence, along an arc of curve to the right (which
has a radius of 1,330.00 feet, a central angle of 14 degrees 47 minutes 15 seconds and a chord
distance of 342.31 feet, along a bearing of North 34 degrees 16 minutes 56 seconds East), an arc

-ii-

 

distance of 343.26 feet to a point; thence, along an arc of curve to the right (which has a radius
of 930.00 feet, a central angle of 06 degrees 52 minutes 25 seconds and a chord distance of 111.50
feet, along a bearing of North 45 degrees 06 minutes 47 seconds East), an arc distance of 111.57
feet to a point; thence, North 57 degrees 55 minutes 19 seconds East, a distance of 179.02 feet to
a point; thence, along an arc of curve to the right (which has a radius of 918.00 feet, a central
angle of 01 degrees 21 minutes 59 seconds and a chord distance of 21.89 feet, along a bearing of
North 60 degrees 19 minutes 35 seconds East), an arc distance of 21.89 feet to a point; thence,
North 61 degrees 00 minutes 35 seconds East, a distance of 26.18 feet to a point, said point being
the beginning of a chamfer; thence, leaving said Morris Road right-of-way, southeasterly, along
said chamfer, South 73 degrees 59 minutes 25 seconds East, a distance of 28.28 feet to an iron pin
found, said iron pin being located on the Northwest right-of-way of the Old Morris Road, having a
60 foot right-of-way; thence, southeasterly, along said Old Morris Road right-of-way, South 28
degrees 59 minutes 25 seconds East, a distance of 2.74 feet to a point; thence, along an arc of
curve to the right (which has a radius of 1,801.12 feet, a central angle of 09 degrees 09 minutes
47 seconds and a chord distance of 287.74 feet, along a bearing of South 24 degrees 24 minutes 32
seconds East), an arc distance of 288.05 feet to an iron pin found; thence, along an arc of curve
to the left (which has a radius of 252.11 feet, a central angle of 36 degrees 33 minutes 54 seconds
and a chord distance of 158.17 feet, along a bearing of South 44 degrees 13 minutes 30 seconds
East), an arc distance of 160.89 feet to an iron pin found; thence, South 62 degrees 30 minutes 26
seconds East, a distance of 20.00 feet to an iron pin found, said iron pin being located at the
beginning of a chamfer; thence, leaving said Old Morris Road right-of-way, southeasterly, along
said chamfer, South 41 degrees 24 minutes 56 seconds East, a distance of 20.00 feet to an iron pin
found, said iron pin being located at the intersection of said chamfer and the Northwest
right-of-way of North Point Parkway, having a varying right-of-way; thence, southwesterly, along
said North Point Parkway right-of-way, along an arc of curve to the left (which has a radius of
686.62 feet, a central angle of 27 degrees 10 minutes 46 seconds and a chord distance of 322.67
feet, along a bearing of South 10 degrees 33 minutes 40 seconds West), an arc distance of 325.71
feet to an iron pin set; thence, South 86 degrees 58 minutes 17 seconds West, a distance of 10.00
feet to an iron pin set; thence, South 02 degrees 27 minutes 41 seconds East, a distance of 192.30
feet to a point, and The True Point of Beginning.

-iii-

 

Exhibit B-2

Legal Description of Romeoville, Illinois Property

Lot 1 in Final Plat of Resubdivision of Lot 3 in Windham Lakes 22nd Resubdivision, being a
Resubdivision in Windham Lakes Resubdivision No. 22, being a Resubdivision of Lot 12 in Windham
Lakes Resubdivision Number 3, a Subdivision of part of the West Half of Section 29, Township 37
North, Range 10 East of the Third Principal Meridian, according to the Plat thereof recorded April
17, 2001 as Document No. R2001-43185, in Will County, Illinois.

-iv-

 

Exhibit B-3

Legal Description of Allen, Texas Property

Being 12.941 acre tract of land situated in the Francis Dosser Survey, Abstract Number 280, Collin
County, Texas, in the City of Allen, being a portion of the tract of land described as Tract B in
the deed to Blue Star Allen, L.P. recorded in Volume 5638, Page 5196, Deed Records of Collin
County, Texas, a portion of the tract of land described as Tract A in the Deed to Blue Star Allen
Land, L.P. recorded in Volume 5638, Page 5127, Deed Records of Collin County, Texas, and also being
all of Lot 1, Block A, StarCreek Commercial an Addition to the City of Allen as recorded in Cabinet
Q, Page 511, Plat Records of Collin County, Texas; said 12.941 acre tract of land being more
particularly described as follows:

Beginning at a 1/4 inch iron rod found in the easterly line of the tract of land described in the
Deed to Wines Family Irrevocable Trust recorded in Volume 2774, Page 647, Deed Records of Collin
County, Texas, near the approximate centerline of County Road Number 150 (an undefined width
right-of-way) for the southwesterly corner of said Tract B; Thence with the easterly line of said
Wines Family Irrevocable Trust Tract and the approximate centerline of County Road Number 150,
North 00 degrees 30 minutes 41 seconds West at a distance of 258.24 feet passing a 1/2 inch iron
rod with a cap stamped “DAA” found for the common westerly corner of said Tract B and said Tract A,
in all a total distance of 671.18 feet to a 5/8 inch iron rod with a cap stamped “Dunaway Assoc,
Inc.” set for corner; Thence departing the easterly line of said Wines Family Irrevocable Trust
Tract, North 64 degrees 36 minutes 21 seconds East a distance of 644.45 feet to a 5/8 inch iron rod
with a cap stamped “Dunaway Assoc, Inc.” set for corner; Thence South 80 degrees 23 minutes 39
seconds East a distance of 148.19 feet to a 5/8 inch iron rod with a cap stamped “Dunaway Assoc,
Inc.” set for corner; Thence North 64 degrees 36 minutes 21 seconds East a distance of 60.02 feet
to a 5/8 inch iron rod with a cap stamped “Dunaway Assoc, Inc.” set for corner; Thence South 25
degrees 23 minutes 39 seconds East a distance of 123.43 feet to a 5/8 inch iron rod with a cap
stamped “Dunaway Assoc, Inc.” set for corner; Thence South 23 degrees 17 minutes 34 seconds East a
distance of 150.00 feet to a 5/8 inch iron rod with a cap stamped “Dunaway Assoc, Inc.” set for
corner; Thence South 25 degrees 23 minutes 39 seconds East a distance of 21.21 feet passing the
common line of said Tract A and said Tract B, in all

-v-

 

a total distance of 200.00 feet to a 5/8 inch iron rod with a cap stamped “Dunaway Assoc, Inc.” set
for corner; Thence South 19 degrees 36 minutes 21 seconds West a distance of 35.36 feet to a 5/8
inch iron rod with a cap stamped “Dunaway Assoc, Inc.” set for corner; Thence South 64 degrees 36
minutes 21 seconds West a distance of 200.00 feet to a 5/8 inch iron rod with a cap stamped
“Dunaway Assoc, Inc.” set for corner; Thence South 60 degrees 47 minutes 00 seconds West a distance
of 150.00 feet to a 5/8 inch iron rod with a cap stamped “Dunaway Assoc, Inc.” set for corner;
Thence South 64 degrees 36 minutes 21 seconds West a distance of 293.85 feet to a 5/8 inch iron rod
with a cap stamped “Dunaway Assoc, Inc.” set for the point of curvature of a curve to the left
having a radius of 1,560.00 feet; Thence southwesterly along said curve through a central angle of
13 degrees 43 minutes 09 seconds an arc distance of 373.53 feet with a chord bearing of South 57
degrees 44 minutes 47 seconds West and a chord distance of 372.64 feet to a 5/8 inch iron rod with
a cap stamped “Dunaway Assoc, Inc.” set for corner in the northerly line of the tract of land
described in the Deed to Bryan Bush recorded in Volume 1598, Page 373, Deed Records of Collin
County, Texas, also being the southerly line of the aforementioned Tract B; Thence with the common
line of said Tract B and said Bush Tract, South 88 degrees 51 minutes 41 seconds West a distance of
70.51 feet to the point of beginning; Containing a computed area of 12.941 acres (563,705 square
feet) of land.

-vi-

 

Exhibit B-4

Legal Description of Omaha, Nebraska Property

Lot 2, Legacy Replat 12, a subdivision in Douglas County, Nebraska.

-vii-

 

Exhibit C

Form of Surveyor’s Certificate

SURVEYOR’S CERTIFICATE

	TO: 	 	Senior Housing Properties Trust,

and its assignees or nominees

400 Centre Street

Newton, MA 02458

	 	RE: 	 	Survey Entitled “________________________” dated _________ ___, 2008, prepared by
____________

     The undersigned hereby certifies that the above-referenced survey was prepared from an actual
on-the-ground instrument survey of the subject premises; that the same accurately shows the
location of the boundaries of the subject premises and the location of all streets, highways,
alleys and public ways crossing or abutting said premises; that the dimensions of the improvements
and the locations thereof with respect to the boundaries are accurately shown as the same were
situated on
     (date)     
          ,
               ; that there are no encroachments by improvements
appurtenant to adjoining premises upon the subject premises, nor from the subject premises, unless
shown thereon; that all buildings and structures, if any, lie wholly within all applicable building
restriction lines as provided by the City of _________, if any, and do not violate any
restriction or other recorded agreements set forth in the title insurance commitment for the
subject premises dated ______ ___, ______, issued to you by _________ Title Insurance Company,
Commitment No.
____________ (the “Title Commitment”); that all easements and rights of way which
are appurtenant to or burden the subject premises are: (i) referred to in the Title Commitment or
(ii) apparent from a visual inspection are delineated thereon, and are located other than through
the existing building shown hereon;

     The total number of striped parking spaces on the subject property is ______, including ______
designated handicap spaces

     Said described property is located within an area having a Zone Designation _________ by the
Federal Emergency Management Agency (FEMA), on Flood Insurance Rate Map No. _______________, with a

-viii-

 

date of identification of ____________, for Community No. ____________, in
_________ County, State of __________________ , which is the current Flood Insurance Rate Map
for the community in which said premises is situated. The property [does/does not] lie in a flood
hazard zone.

     The property [does/does not] lie within any area subject to regulation by Federal, state or
municipal authority as inland or coastal wetlands, beach, estuary or the like.

     Access to and egress from the subject premises and the improvements and structures thereon to
_________ Street, a public way, are provided by the means indicated thereon.

     Visible above ground evidence of municipal water, storm sewer facilities and telephone, gas
and electric services of public utilities are available in the locations indicated thereon.

     The undersigned hereby certifies that the square footage of each parcel delineated on the
above-referenced survey is as set forth thereon, that all such parcels are contiguous without any
strips, gaps or gores existing between any of said parcels, and that said parcels, when combined,
form and create one complete and uninterrupted parcel without any strips, gaps or gores.

     This map or plat and the survey on which it is based were made in accordance with laws
regulating surveying in the State of ____________, and with the “Minimum Standard Detail
Requirements for ALTA/ACSM Land Title Surveys,” jointly established and adopted by ALTA and ACSM in
2005 and includes Items 1, 2, 3, 4, 6, 7(a)(b1)(c), 8, 9, 10, 11(a), 14 and 15 in Table A contained
therein. Pursuant to the Accuracy Standards as adopted by ALTA, NSPS, and ACSM and in effect on
the date of this certification, undersigned further certifies that proper field procedures,
instrumentation, and adequate survey personnel were employed in order to achieve results comparable
to those outlined in the “Minimum Angle, Distance, and Closure Requirements for Survey Measurements
Which Control Land Boundaries for ALTA/ACSM Land Title Surveys.”

Dated: _________ ___, 2008

	 	 	 	 	 
	 	 	 
	
 	 	 
	Registered Land Surveyor 	 	 
	#________________

[Surveyor’s Seal] 	 	 

-ix-exv10w2

Exhibit 10.2

LEASE AGREEMENT,

dated as of August 21, 2008,

by and among

SNH LTF PROPERTIES LLC,

as Landlord,

and

LTF REAL ESTATE COMPANY, INC.,

as Tenant

 

 

Table of Contents

	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Page	 
	 
	 	 	 	 	 	 	 	 
	ARTICLE 1 DEFINITIONS 	 	 	1	 
	 
	 	1.1	 	Acquiring Guarantor	 	 	1	 
	 
	 	1.2	 	Additional Charges	 	 	1	 
	 
	 	1.3	 	Affiliated Person	 	 	2	 
	 
	 	1.4	 	Agreement	 	 	2	 
	 
	 	1.5	 	Applicable Laws	 	 	2	 
	 
	 	1.6	 	Award	 	 	2	 
	 
	 	1.7	 	Business Day	 	 	3	 
	 
	 	1.8	 	Capital Addition	 	 	3	 
	 
	 	1.9	 	Capital Expenditure	 	 	3	 
	 
	 	1.10	 	Change in Control	 	 	3	 
	 
	 	1.11	 	Claims	 	 	3	 
	 
	 	1.12	 	Code	 	 	3	 
	 
	 	1.13	 	Commencement Date	 	 	4	 
	 
	 	1.14	 	Condemnation	 	 	4	 
	 
	 	1.15	 	Condemnor	 	 	4	 
	 
	 	1.16	 	Date of Taking	 	 	4	 
	 
	 	1.17	 	Default	 	 	4	 
	 
	 	1.18	 	Disbursement Rate	 	 	4	 
	 
	 	1.19	 	Easement Agreement	 	 	4	 
	 
	 	1.20	 	Encumbrance	 	 	4	 
	 
	 	1.21	 	Entity	 	 	5	 
	 
	 	1.22	 	Environment	 	 	5	 
	 
	 	1.23	 	Environmental Obligation	 	 	5	 
	 
	 	1.24	 	Environmental Notice	 	 	5	 
	 
	 	1.25	 	Equity Interest	 	 	5	 
	 
	 	1.26	 	Event of Default	 	 	5	 
	 
	 	1.27	 	Extended Terms	 	 	5	 
	 
	 	1.28	 	Facility Mortgage	 	 	5	 
	 
	 	1.29	 	Facility Mortgagee	 	 	5	 
	 
	 	1.30	 	Fair Market Value	 	 	5	 
	 
	 	1.31	 	Financial Officer’s Certificate	 	 	6	 
	 
	 	1.32	 	Financials	 	 	6	 
	 
	 	1.33	 	Fiscal Year	 	 	6	 
	 
	 	1.34	 	Fitness Center	 	 	6	 
	 
	 	1.35	 	Fixed Term	 	 	6	 
	 
	 	1.36	 	Fixtures	 	 	6	 
	 
	 	1.37	 	FMV Rent	 	 	6	 
	 
	 	1.38	 	GAAP	 	 	7	 
	 
	 	1.39	 	Government Agencies	 	 	7	 
	 
	 	1.40	 	Guarantor	 	 	7	 
	 
	 	1.41	 	Guaranty	 	 	7	 
	 
	 	1.42	 	Hazardous Substances	 	 	7	 
	 
	 	1.43	 	Immediate Family	 	 	8	 
	 
	 	1.44	 	Impositions	 	 	9	 
	 
	 	1.45	 	Insurance Requirements	 	 	10	 
	 
	 	1.46	 	Interest Rate	 	 	10	 
	 
	 	1.47	 	Land	 	 	10	 

i

 

Table of Contents

(continued)

	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Page	 
	 
	 	 	 	 	 	 	 	 
	 
	 	1.48	 	Landlord	 	 	10	 
	 
	 	1.49	 	Landlord Default	 	 	10	 
	 
	 	1.50	 	Landlord Liens	 	 	10	 
	 
	 	1.51	 	Lease Year	 	 	11	 
	 
	 	1.52	 	Leased Improvements	 	 	11	 
	 
	 	1.53	 	Leased Intangible Property	 	 	11	 
	 
	 	1.54	 	Leased Personal Property	 	 	11	 
	 
	 	1.55	 	Leased Property	 	 	11	 
	 
	 	1.56	 	Legal Requirements	 	 	11	 
	 
	 	1.57	 	Lien	 	 	11	 
	 
	 	1.58	 	LTF	 	 	12	 
	 
	 	1.59	 	LTF Guaranty	 	 	12	 
	 
	 	1.60	 	Management Agreement	 	 	12	 
	 
	 	1.61	 	Manager	 	 	12	 
	 
	 	1.62	 	Minimum Rent	 	 	12	 
	 
	 	1.63	 	Notice	 	 	12	 
	 
	 	1.64	 	Offer	 	 	12	 
	 
	 	1.65	 	Officer’s Certificate	 	 	12	 
	 
	 	1.66	 	Overdue Rate	 	 	12	 
	 
	 	1.67	 	Parent	 	 	12	 
	 
	 	1.68	 	Permitted Encumbrances	 	 	13	 
	 
	 	1.69	 	Permitted Use	 	 	13	 
	 
	 	1.70	 	Person	 	 	13	 
	 
	 	1.71	 	Property	 	 	13	 
	 
	 	1.72	 	Qualified Appraiser	 	 	13	 
	 
	 	1.73	 	Rent	 	 	13	 
	 
	 	1.74	 	Rent Adjustment Rate	 	 	13	 
	 
	 	1.75	 	SEC	 	 	13	 
	 
	 	1.76	 	Security Deposit	 	 	13	 
	 
	 	1.77	 	State	 	 	14	 
	 
	 	1.78	 	Subsidiary	 	 	14	 
	 
	 	1.79	 	Substitute Property	 	 	14	 
	 
	 	1.80	 	Substitution Date	 	 	14	 
	 
	 	1.81	 	Successor Landlord	 	 	14	 
	 
	 	1.82	 	Tangible Net Worth	 	 	14	 
	 
	 	1.83	 	Tenant	 	 	14	 
	 
	 	1.84	 	Tenant’s Personal Property	 	 	15	 
	 
	 	1.85	 	Term	 	 	15	 
	 
	 	1.86	 	Unsuitable for Its Permitted Use	 	 	15	 
	 
	 	1.87	 	Work	 	 	16	 
	ARTICLE 2 LEASED PROPERTY AND TERM	 	 	16	 
	 
	 	2.1	 	Leased Property	 	 	16	 
	 
	 	2.2	 	Condition of Leased Property	 	 	17	 
	 
	 	2.3	 	Fixed Term	 	 	18	 
	 
	 	2.4	 	Extended Terms	 	 	18	 
	 
	 	2.5	 	Substitution of Properties; Sale of Non-Economic Property, Etc.	 	 	19	 
	ARTICLE 3 RENT	 	 	24	 

ii

 

Table of Contents

(continued)

	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Page	 
	 
	 	 	 	 	 	 	 	 
	 
	 	3.1	 	Rent	 	 	24	 
	 
	 	3.2	 	Late Payment of Rent, Etc.	 	 	29	 
	 
	 	3.3	 	Net Lease	 	 	29	 
	 
	 	3.4	 	No Termination, Abatement, Etc.	 	 	29	 
	ARTICLE 4 USE OF THE LEASED PROPERTY	 	 	30	 
	 
	 	4.1	 	Permitted Use	 	 	30	 
	 
	 	4.2	 	Compliance with Legal/Insurance Requirements, Etc.	 	 	31	 
	 
	 	4.3	 	Environmental Matters	 	 	32	 
	ARTICLE 5 MAINTENANCE AND REPAIRS	 	 	34	 
	 
	 	5.1	 	Maintenance and Repair	 	 	34	 
	 
	 	5.2	 	Tenant’s Personal Property	 	 	36	 
	 
	 	5.3	 	Yield Up	 	 	36	 
	 
	 	5.4	 	Management Agreement	 	 	37	 
	ARTICLE 6 IMPROVEMENTS, ETC.	 	 	38	 
	 
	 	6.1	 	Improvements to the Leased Property	 	 	38	 
	 
	 	6.2	 	Salvage	 	 	39	 
	ARTICLE 7 LIENS	 	 	39	 
	 
	 	7.1	 	Liens	 	 	39	 
	 
	 	7.2	 	Subordination of Landlord’s Lien	 	 	39	 
	ARTICLE 8 PERMITTED CONTESTS	 	 	40	 
	ARTICLE 9 INSURANCE AND INDEMNIFICATION	 	 	41	 
	 
	 	9.1	 	General Insurance Requirements	 	 	41	 
	 
	 	9.2	 	Waiver of Claims and Subrogation	 	 	45	 
	 
	 	9.3	 	Miscellaneous	 	 	45	 
	 
	 	9.4	 	No Separate Insurance	 	 	46	 
	 
	 	9.5	 	Indemnification of Landlord	 	 	46	 
	ARTICLE 10 CASUALTY	 	 	47	 
	 
	 	10.1	 	Insurance Proceeds	 	 	47	 
	 
	 	10.2	 	Damage or Destruction	 	 	47	 
	 
	 	10.3	 	Damage Near End of Term	 	 	49	 
	 
	 	10.4	 	Tenant’s Property	 	 	50	 
	 
	 	10.5	 	Restoration of Tenant’s Property	 	 	50	 
	 
	 	10.6	 	No Abatement of Rent	 	 	50	 
	 
	 	10.7	 	Waiver	 	 	50	 
	ARTICLE 11 CONDEMNATION	 	 	50	 
	 
	 	11.1	 	Total Condemnation, Etc.	 	 	50	 
	 
	 	11.2	 	Partial Condemnation	 	 	50	 
	 
	 	11.3	 	No Abatement of Rent	 	 	52	 
	 
	 	11.4	 	Temporary Condemnation	 	 	52	 
	 
	 	11.5	 	Allocation of Award	 	 	52	 
	ARTICLE 12 DEFAULTS AND REMEDIES	 	 	53	 
	 
	 	12.1	 	Events of Default	 	 	53	 
	 
	 	12.2	 	Remedies	 	 	56	 
	 
	 	12.3	 	Tenant’s Waiver	 	 	57	 
	 
	 	12.4	 	Application of Funds	 	 	57	 
	 
	 	12.5	 	Landlord’s Right to Cure Tenant’s Default	 	 	58	 
	ARTICLE 13 HOLDING OVER	 	 	58	 
	ARTICLE 14 LANDLORD DEFAULT	 	 	58	 

iii

 

Table of Contents

(continued)

	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Page	 
	 
	 	 	 	 	 	 	 	 
	ARTICLE 15 PURCHASE RIGHTS	 	 	59	 
	ARTICLE 16 SUBLETTING AND ASSIGNMENT	 	 	60	 
	 
	 	16.1	 	Subletting and Assignment	 	 	60	 
	 
	 	16.2	 	Required Sublease Provisions	 	 	63	 
	 
	 	16.3	 	Permitted Sublease	 	 	64	 
	 
	 	16.4	 	Sublease Limitation	 	 	65	 
	ARTICLE 17 ESTOPPEL CERTIFICATES AND FINANCIAL STATEMENTS	 	 	65	 
	 
	 	17.1	 	Estoppel Certificates	 	 	65	 
	 
	 	17.2	 	LTF Financial Statements	 	 	65	 
	 
	 	17.3	 	Other Financial Statements	 	 	67	 
	 
	 	17.4	 	General	 	 	68	 
	ARTICLE 18 LANDLORD’S RIGHT TO INSPECT	 	 	69	 
	ARTICLE 19 EASEMENTS	 	 	69	 
	 
	 	19.1	 	Grant of Easements	 	 	69	 
	 
	 	19.2	 	Exercise of Rights by Tenant	 	 	70	 
	 
	 	19.3	 	Permitted Encumbrances	 	 	70	 
	ARTICLE 20 RIGHT OF FIRST OFFER	 	 	70	 
	 
	 	20.1	 	Right of First Offer	 	 	70	 
	 
	 	20.2	 	Attornment	 	 	71	 
	 
	 	20.3	 	General	 	 	71	 
	ARTICLE 21 REPRESENTATIONS AND WARRANTIES	 	 	72	 
	 
	 	21.1	 	Representations of Tenant	 	 	72	 
	 
	 	21.2	 	Representations of Landlord	 	 	73	 
	ARTICLE 22 FACILITY MORTGAGES	 	 	74	 
	 
	 	22.1	 	Landlord May Grant Liens	 	 	75	 
	 
	 	22.2	 	Subordination of Lease	 	 	75	 
	 
	 	22.3	 	Notice to Mortgagee and Superior Landlord	 	 	77	 
	ARTICLE 23 ADDITIONAL COVENANTS OF TENANT	 	 	77	 
	 
	 	23.1	 	Prompt Payment of Indebtedness	 	 	77	 
	 
	 	23.2	 	Conduct of Business	 	 	77	 
	 
	 	23.3	 	Maintenance of Accounts and Records	 	 	78	 
	 
	 	23.4	 	Notice of Litigation, Etc.	 	 	78	 
	 
	 	23.5	 	Liens and Encumbrances	 	 	78	 
	ARTICLE 24 MISCELLANEOUS	 	 	78	 
	 
	 	24.1	 	Limitation on Payment of Rent	 	 	78	 
	 
	 	24.2	 	No Waiver	 	 	79	 
	 
	 	24.3	 	Remedies Cumulative	 	 	79	 
	 
	 	24.4	 	Severability	 	 	79	 
	 
	 	24.5	 	Acceptance of Surrender	 	 	79	 
	 
	 	24.6	 	No Merger of Title	 	 	80	 
	 
	 	24.7	 	Conveyance by Landlord	 	 	80	 
	 
	 	24.8	 	Quiet Enjoyment	 	 	80	 
	 
	 	24.9	 	No Recordation	 	 	80	 
	 
	 	24.10	 	Notices	 	 	81	 
	 
	 	24.11	 	Construction	 	 	82	 
	 
	 	24.12	 	Counterparts; Headings	 	 	83	 
	 
	 	24.13	 	Applicable Law, Etc.	 	 	83	 
	 
	 	24.14	 	Right to Make Agreement	 	 	83	 
	 
	 	24.15	 	Attorneys’ Fees	 	 	84	 

iv

 

LEASE AGREEMENT

     THIS LEASE AGREEMENT is entered into as of August 21, 2008, by and between SNH LTF PROPERTIES
LLC, a Maryland limited liability company, as landlord, and (ii) LTF REAL ESTATE COMPANY, INC., a
Minnesota corporation, as tenant (“Tenant”).

WITNESSETH:

     WHEREAS, Landlord owns fee simple title to the four (4) Properties (this and other capitalized
terms used and not otherwise defined herein having the meanings ascribed to such terms in
Article 1) described on Exhibits A-1 — A-4; and

     WHEREAS, Landlord wishes to lease the Properties to Tenant and Tenant wishes to lease the
Properties from Landlord, all subject to and upon the terms and conditions herein set forth;

     NOW, THEREFORE, in consideration of the mutual covenants herein contained and other good and
valuable consideration, the mutual receipt and legal sufficiency of which are hereby acknowledged,
Landlord and Tenant hereby agree as follows:

ARTICLE 1

DEFINITIONS

     For all purposes of this Agreement, except as otherwise expressly provided or unless the
context otherwise requires, (a) the terms defined in this Article shall have the meanings assigned
to them in this Article and include the plural as well as the singular, (b) all accounting terms
not otherwise defined herein shall have the meanings assigned to them in accordance with GAAP, (c)
all references in this Agreement to designated “Articles,” “Sections” and other subdivisions are to
the designated Articles, Sections and other subdivisions of this Agreement, and (d) the words
“herein,” “hereof,” “hereunder” and other words of similar import refer to this Agreement as a
whole and not to any particular Article, Section or other subdivision.

     1.1 “Acquiring Guarantor” shall mean any successor in interest to any Guarantor,
which shall be deemed to include, without limitation, any successor in interest to a Guarantor
resulting from any direct or indirect Change in Control of such Guarantor.

     1.2 “Additional Charges” shall have the meaning given such term in Section
3.1.2.

 

 

     1.3 “Affiliated Person” shall mean, with respect to any Person, (a) in the case of
any such Person which is a partnership, any partner in such partnership, (b) in the case of any
such Person which is a limited liability company, any member of such company, (c) any other Person
which is a Parent, a Subsidiary, or a Subsidiary of a Parent with respect to such Person or to one
or more of the Persons referred to in the preceding clauses (a) and (b), (d) any other Person who
is an officer, director, trustee or employee of, or partner in or member of, such Person or any
Person referred to in the preceding clauses (a), (b) and (c), and (e) any other Person who is a
member of the Immediate Family of such Person or of any Person referred to in the preceding clauses
(a) through (d).

     1.4 “Agreement” shall mean this Lease Agreement, including Exhibits A-1 through
A-4 hereto, as it and they may be amended from time to time as herein provided.

     1.5 “Applicable Laws” shall mean all applicable laws, statutes, regulations, rules,
ordinances, codes, licenses, permits and orders, from time to time in existence, of all courts of
competent jurisdiction and Government Agencies, and all applicable judicial and administrative and
regulatory decrees, judgments and orders, including common law rulings and determinations, relating
to injury to, or the protection of, real or personal property or human health or the Environment,
including, without limitation, all valid and lawful requirements of courts and other Government
Agencies pertaining to reporting, licensing, permitting, investigation, remediation and removal of
underground improvements (including, without limitation, treatment or storage tanks, or water, gas
or oil wells), or emissions, discharges, releases or threatened releases of Hazardous Substances,
chemical substances, pesticides, petroleum or petroleum products, pollutants, contaminants or
hazardous or toxic substances, materials or wastes whether solid, liquid or gaseous in nature, into
the Environment, or relating to the manufacture, processing, distribution, use, treatment, storage,
disposal, transport or handling of Hazardous Substances, underground improvements (including,
without limitation, treatment or storage tanks, or water, gas or oil wells), or pollutants,
contaminants or hazardous or toxic substances, materials or wastes, whether solid, liquid or
gaseous in nature.

     1.6 “Award” shall mean all compensation, sums or other value awarded, paid or
received by virtue of a total or partial Condemnation of any of the Leased Property (after
deduction of

-2-

 

all reasonable legal fees and other reasonable costs and expenses, including, without
limitation, expert witness fees, incurred by Landlord, in connection with obtaining any such
award).

     1.7 “Business Day” shall mean any day other than Saturday, Sunday, or any other day
on which banking institutions in The Commonwealth of Massachusetts are authorized by law or
executive action to close.

     1.8 “Capital Addition” shall mean, with respect to any Property, any renovation,
repair or improvement to such Property, the cost of which constitutes a Capital Expenditure.

     1.9 “Capital Expenditure” shall mean any expenditure treated as capital in nature in
accordance with GAAP.

     1.10 “Change in Control” shall mean, with respect to any Person, (a) the acquisition
by any other Person, or two or more other Persons acting in concert, of beneficial ownership
(within the meaning of Rule 13d-3 of the SEC) of 50% or more, or rights, options or warrants to
acquire 50% or more, of the outstanding shares of voting stock of Tenant or any Guarantor, as the
case may be, or (b) the merger or consolidation of (A) Tenant or any Guarantor, as the case may be,
with or into any other Person (other than the merger or consolidation of any Person into Tenant or
such Guarantor that does not result in a Change in Control of Tenant or such Guarantor under clause
(a) of this definition) or (B) any Subsidiary of any Guarantor, the Equity Interests of which, (or
assets of which, if owned by such Guarantor) if not retained by such Guarantor, would result in a
reduction of the Tangible Net Worth of such Guarantor to less than the Required Net Worth, with or
into any Person (other than a consolidation or merger with or into a wholly-owned, direct or
indirect subsidiary of such Guarantor); excluding, however, any such acquisition effected through
the trading of shares conducted in the ordinary course on any applicable stock exchange on which
such shares may be listed.

     1.11 “Claims” shall have the meaning given such term in Article 8.

     1.12 “Code” shall mean the Internal Revenue Code of 1986 and, to the extent
applicable, the Treasury Regulations promulgated thereunder, each as from time to time amended.

-3-

 

     1.13 “Commencement Date” shall mean the date of this Agreement.

     1.14 “Condemnation” shall mean, with respect to any Property, (a) the exercise of any
governmental power with respect to such Property, whether by legal proceedings or otherwise, by a
Condemnor of its power of condemnation, (b) a voluntary sale or transfer of such Property by
Landlord to any Condemnor, either under threat of condemnation or while legal proceedings for
condemnation are pending, or (c) a taking or voluntary conveyance of all or part of such Property,
or any interest therein, or right accruing thereto or use thereof, as the result or in settlement
of any condemnation or other eminent domain proceeding affecting such Property, whether or not the
same shall have actually been commenced.

     1.15 “Condemnor” shall mean any public or quasi-public Person, having the power of
Condemnation.

     1.16 “Date of Taking” shall mean, with respect to any Property, the date the
Condemnor has the right to possession of such Property, or any portion thereof, in connection with
a Condemnation.

     1.17 “Default” shall mean any event or condition which with the giving of notice
and/or lapse of time would ripen into an Event of Default.

     1.18 “Disbursement Rate” shall mean an annual rate of interest, as of the date of
determination, equal to the greater of (i) the Interest Rate and (ii) the per annum rate for
fifteen (15) year U.S. Treasury Obligations as published in The Wall Street Journal plus
four hundred fifty (450) basis points; provided, however, that in no event shall
the Disbursement Rate exceed eleven and one half percent (11.5%).

     1.19 “Easement Agreement” shall mean any conditions, covenants and restrictions,
easements, declarations, licenses and other agreements which are Permitted Encumbrances and such
other agreements as may be granted in accordance with Section 19.1.

     1.20 “Encumbrance” shall have the meaning given such term in Section 22.1.

-4-

 

     1.21 “Entity” shall mean any corporation, general or limited partnership, limited
liability company or partnership, stock company or association, joint venture, association,
company, trust, bank, trust company, land trust, business trust, cooperative, any government or
agency, authority or political subdivision thereof or any other entity.

     1.22 “Environment” shall mean soil, surface waters, ground waters, land, stream,
sediments, surface or subsurface strata and ambient air.

     1.23 “Environmental Obligation” shall have the meaning given such term in Section
4.3.1.

     1.24 “Environmental Notice” shall have the meaning given such term in Section
4.3.1.

     1.25 “Equity Interest” shall mean any and all shares, interests, participations,
rights or other equivalents (whether or not voting) of corporate stock, membership interests of any
limited liability company, partnership interests of any partnership and any other equity security
or ownership interest in a Person.

     1.26 “Event of Default” shall have the meaning given such term in Section
12.1.

     1.27 “Extended Terms” shall have the meaning given such term in Section 2.4.

     1.28 “Facility Mortgage” shall mean any Encumbrance placed upon the Leased Property,
or any portion thereof, in accordance with Article 22.

     1.29 “Facility Mortgagee” shall mean the holder of any Facility Mortgage.

     1.30 “Fair Market Value” shall mean, with respect to any Property, the price that a
willing buyer not compelled to buy would pay a willing seller not compelled to sell for such
Property, (a) assuming the same is unencumbered by this Lease, (b) assuming such seller shall pay
the closing costs generally
paid by a seller of real property in the state in which such property is located and that such
buyer shall pay closing costs generally paid by a buyer of real property in the state in which such
property is located, and (b) not taking into account any

-5-

 

reduction in value resulting from any
indebtedness to which such property is subject.

     1.31 “Financial Officer’s Certificate” shall mean, as to any Person, a certificate of
the chief executive officer, chief financial officer or chief accounting officer (or such officers’
authorized designee) of such Person, duly authorized, accompanying the financial statements
required to be delivered by such Person pursuant to Section 17.2, in which such officer
shall certify (a) that such statements have been properly prepared in accordance with GAAP and are
true, correct and complete in all material respects and fairly present the consolidated financial
condition of such Person at and as of the dates thereof and the results of its and their operations
for the periods covered thereby, and (b), in the event that the certifying party is an officer of
Tenant and the certificate is being given in such capacity, certify that no Event of Default has
occurred and is continuing hereunder.

     1.32 “Financials” shall mean, for any Fiscal Year or fiscal quarter of any Person,
annual audited and quarterly unaudited financial statements, as the case may be, of such Person
prepared on a consolidated basis, including such Person’s consolidated balance sheet and the
related statements of income and cash flows, all in reasonable detail, and setting forth in
comparative form the corresponding figures for the corresponding period in the preceding Fiscal
Year, and prepared in accordance with GAAP throughout the periods reflected.

     1.33 “Fiscal Year” shall mean the calendar year or such other annual period
designated by Tenant and approved by Landlord.

     1.34 “Fitness Center” shall mean, with respect to any Property, collectively, the
athletic club/fitness center/wellness center from time to time operated on such Property.

     1.35 “Fixed Term” shall have the meaning given such term in Section 2.3.

     1.36 “Fixtures” shall have the meaning given such term in Section 2.1(d).

     1.37 “FMV Rent” shall mean the minimum base rental that a willing tenant not
compelled to rent would pay a willing

-6-

 

landlord not compelled to lease for the use and occupancy of
the Leased Property (including all Capital Additions, but specifically excluding, without
limitation, (A) Capital Additions consisting of one or more additional structures annexed to any
portion of the Leased Improvements with respect to any Property, or the material expansion of the
Leased Improvements, which are constructed and paid for by Tenant during the Term in order to
improve materially the quality of the Fitness Center located at such Property and which addition or
expansion is not otherwise required by the terms of this Lease, and (B) the payment by Tenant of
Additional Charges as contemplated by this Agreement) on the terms and conditions of this Agreement
for the term in question, and determined in accordance with the provisions of Section
3.1.1(c).

     1.38 “GAAP” shall mean generally accepted accounting principles consistently applied.

     1.39 “Government Agencies” shall mean any court, agency, authority, board (including,
without limitation, environmental protection, planning and zoning), bureau, commission, department,
office or instrumentality of any nature whatsoever of any governmental or quasi-governmental unit
of the United States or any State or any county or any political subdivision of any of the
foregoing, whether now or hereafter in existence, having jurisdiction over Tenant or the Leased
Property or any portion thereof or any Fitness Center operated thereon.

     1.40 “Guarantor” shall mean LTF, and each and every other Acquiring Guarantor and
each such Guarantor’s permitted successors and assigns, expressly excluding, however, any such
Guarantor released from its liabilities and obligations under its Guaranty pursuant to the terms of
Section 16.1.

     1.41 “Guaranty” shall mean the LTF Guaranty, and each and every other guaranty
agreement executed by a Guarantor in favor of Landlord pursuant to which Tenant’s obligations under
this Agreement are guaranteed, together with all modifications, amendments and supplements thereto.

     1.42 “Hazardous Substances” shall mean any substance:

     (a) the presence of which requires or may hereafter require notification, investigation
or remediation under any federal, state or local statute, regulation, rule, ordinance,
order, action or policy; or

-7-

 

     (b) which is or becomes defined as a “hazardous waste”, “hazardous material” or
“hazardous substance” or “pollutant” or “contaminant” under any present or future federal,
state or local statute, regulation, rule or ordinance or amendments thereto including,
without limitation, the Comprehensive Environmental Response, Compensation and Liability Act
(42 U.S.C. et seq.) and the Resource Conservation and Recovery Act (42
U.S.C. section 6901 et seq.) and the regulations promulgated thereunder; or

     (c) which is toxic, explosive, corrosive, flammable, infectious, radioactive,
carcinogenic, mutagenic or otherwise hazardous and is or becomes regulated by any
governmental authority, agency, department, commission, board, agency or instrumentality of
the United States, any state of the United States, or any political subdivision thereof; or

     (d) the presence of which on the Leased Property, or any portion thereof, causes or
materially threatens to cause an unlawful nuisance upon the Leased Property, or any portion
thereof, or to adjacent properties or poses or materially threatens to pose a hazard to the
Leased Property, or any portion thereof, or to the health or safety of persons on or about
the Leased Property, or any portion thereof; or

     (e) without limitation, which contains gasoline, diesel fuel or other petroleum
hydrocarbons or volatile organic compounds; or

     (f) without limitation, which contains polychlorinated biphenyls (PCBs) or asbestos or
urea formaldehyde foam insulation; or

     (g) without limitation, which contains or emits radioactive particles, waves or
material.

     1.43 “Immediate Family” shall mean, with respect to any individual, such individual’s
spouse, parents, brothers, sisters, children (natural or adopted), stepchildren, grandchildren,
grandparents, parents-in-law, brothers-in-law, sisters-in-law, nephews and nieces.

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     1.44 “Impositions” shall mean, collectively, all taxes (including, without
limitation, all taxes imposed under the laws of any State, as such laws may be amended from time to
time, and all ad valorem, sales and use, or similar taxes as the same relate to or are imposed upon
Landlord, Tenant or the business conducted upon the Leased Property), assessments (including,
without limitation, all assessments for public improvements or benefit, whether or not commenced or
completed, or due and payable, prior to the date hereof), water, sewer or other rents and charges,
excises, tax levies, fees (including, without limitation, license, permit, inspection,
authorization and similar fees), and all other governmental charges, in each case whether general
or special, ordinary or extraordinary, or foreseen or unforeseen, of every character in respect of
the Leased Property or the business conducted thereon by Tenant (including all interest and
penalties thereon due to any failure in payment by Tenant), which at any time prior to, during or
in respect of the Term hereof may be assessed or imposed on or in respect of or be a lien upon (a)
Landlord’s interest in the Leased Property, (b) the Leased Property or any part thereof or any rent
therefrom or any estate, right, title or interest therein, (c) any occupancy, operation, use or
possession of, or sales from, or activity conducted on, or in connection with the Leased Property
or the leasing or use of the Leased Property or any part thereof by Tenant or (d) as a result of
the sale, exchange or other disposition of the Leased Property (including, without limitation, any
Substitute Property) by LTF, Tenant or any of their Affiliated Persons, to Landlord, including,
without limitation, any bulk sales, excise or like tax; provided, however, that
nothing contained herein shall be construed to require Tenant to pay and the term “Impositions”
shall not include (i) any tax based on net income, excess profits or other similar tax imposed on
Landlord and based on Landlord’s net income or net worth, (ii) any net revenue tax of Landlord,
(iii) any transfer fee, capital gains tax or other tax imposed with respect to the sale, exchange
or other disposition by Landlord of the Leased Property or the proceeds thereof, (iv) any single
business, gross receipts tax, transaction privilege, rent or
similar taxes as the same relate to or are imposed upon Landlord, (v) any interest or
penalties imposed on Landlord as a result of the failure of Landlord to file any return or report
timely and in the form prescribed by law or to pay any tax or imposition, except to the extent such
failure is a result of a breach by Tenant of its obligations pursuant to Section 3.1.2,
(vi) any impositions imposed on Landlord that are a result of

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Landlord not being considered a
“United States person” as defined in Section 7701(a)(30) of the Code, (vii) any impositions that
are enacted or adopted by their express terms as a substitute for any tax that would not have been
payable by Tenant pursuant to the terms of this Agreement, (viii) any impositions imposed as a
result of a breach of covenant or representation by Landlord in any agreement governing Landlord’s
conduct or operation or as a result of the negligence or willful misconduct of Landlord or (ix) any
estate, inheritance, succession, gift or similar tax imposed on Landlord.

     1.45 “Insurance Requirements” shall mean all terms of any insurance policy required
by this Agreement and all requirements of the issuer of any such policy and all orders, rules and
regulations and any other requirements of the National Board of Fire Underwriters (or any other
body exercising similar functions) binding upon Landlord, Tenant, any Manager or the Leased
Property.

     1.46 “Interest Rate” shall mean nine percent (9%) per annum.

     1.47 “Land” shall have the meaning given such term in Section 2.1(a).

     1.48 “Landlord” shall have the meaning given such term in the preambles to this
Agreement and shall also include its permitted successors and assigns.

     1.49 “Landlord Default” shall have the meaning given such term in Article 14.

     1.50 “Landlord Liens” shall mean liens on or against the Leased Property or any
payment of Rent (a) which result from any act of, grant by, agreement of, or any claim against,
Landlord or any owner of a direct or indirect interest in the Leased Property, or which result from
any violation by Landlord of any
terms of this Agreement, or (b) which result from liens in favor of any taxing authority by
reason of any tax owed by Landlord or any fee owner of a direct or indirect interest in the Leased
Property; provided, however, that “Landlord Lien” shall not include any
lien resulting from any tax for which Tenant is obligated to pay or indemnify Landlord against
until such time as Tenant shall have already paid to or on behalf of Landlord the tax or the
required indemnity with respect to the same or any action taken by Landlord at Tenant’s request.

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     1.51 “Lease Year” shall mean any Fiscal Year or portion thereof during the Term.

     1.52 “Leased Improvements” shall have the meaning given such term in Section
2.1(b).

     1.53 “Leased Intangible Property” shall mean, with respect to the Leased Property,
all transferable or assignable (a) permits, certificates of occupancy, operating permits, sign
permits, development rights and approvals granted by any public body or by any private party
pursuant to a recorded instrument relating to the Leased Property, (b) certificates, licenses,
warranties and guarantees owned or held by Landlord, and (c) any and all reserved and other rights
relating to the Leased Property and the documents and agreements creating or otherwise pertaining
to the Leased Property.

     1.54 “Leased Personal Property” shall have the meaning given such term in Section
2.1(e).

     1.55 “Leased Property” shall have the meaning given such term in Section 2.1.

     1.56 “Legal Requirements” shall mean all federal, state, county, municipal and other
governmental statutes, laws, rules, orders, regulations, ordinances, judgments, decrees and
injunctions affecting the Leased Property or the maintenance, construction, alteration or operation
thereof, whether now or hereafter enacted or in existence, including, without limitation, (a) all
permits, licenses, authorizations, certificates of need, authorizations and regulations necessary
to operate any Property for its Permitted Use, and (b) all covenants, agreements, restrictions and
encumbrances contained in any instruments at any time in force affecting any Property,
including those which may (i) require material repairs, modifications or alterations in or to
any Property or (ii) in any way materially and adversely affect the use and enjoyment thereof, but
excluding any requirements arising as a result of Landlord’s status as a real estate investment
trust.

     1.57 “Lien” shall mean any mortgage, security interest, pledge, collateral
assignment, or other encumbrance, lien or charge of any kind, or any transfer of property or assets
for the purpose of subjecting the same to the payment of indebtedness or performance of any other
obligation in priority to payment of its general creditors.

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     1.58 “LTF” shall mean Life Time Fitness, Inc., a Minnesota corporation, and its
permitted successors and assigns.

     1.59 “LTF Guaranty” shall mean that certain Guaranty of Lease Agreement, dated as of
the date hereof, from LTF to Landlord guaranteeing the payment and performance by Tenant of all of
Tenant’s obligations under this Agreement.

     1.60 “Management Agreement” shall mean, with respect to any Property, any operating
or management agreement from time to time entered into by Tenant with respect to such Property in
accordance with the provisions of this Agreement, together with all amendments, modifications and
supplements thereto.

     1.61 “Manager” shall mean, with respect to any Property, the operator or manager
under any Management Agreement from time to time in effect with respect to such Property, and its
permitted successors and assigns.

     1.62 “Minimum Rent” shall mean shall mean Nine Million Ninety Thousand Nine Hundred
Nine and 12/100 Dollars ($9,090,909.12) per annum, subject to adjustment as hereinafter provided.

     1.63 “Notice” shall mean a notice given in accordance with Section 24.10.

     1.64 “Offer” shall have the meaning given such term in Section 2.5.

     1.65 “Officer’s Certificate” shall mean a certificate signed by an officer or other
duly authorized individual of the
certifying Entity duly authorized by the board of directors or other governing body of the
certifying Entity.

     1.66 “Overdue Rate” shall mean, on any date, a per annum rate of
interest equal to the lesser of fifteen percent (15%) and the maximum rate then permitted under
applicable law.

     1.67 “Parent” shall mean, with respect to any Person, any Person which owns directly,
or indirectly through one or more Subsidiaries or Affiliated Persons, fifty percent (50%) or more
of the voting or beneficial interest in, or otherwise has the right or power (whether by contract,
through ownership of securities or otherwise) to control, such Person.

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     1.68 “Permitted Encumbrances” shall mean, with respect to any Property, all rights,
restrictions, and easements of record set forth on Schedule B to the applicable owner’s title
insurance policy issued to Landlord with respect to such Property, plus any other encumbrances as
may have been granted or caused by Landlord or otherwise consented to in writing by Landlord from
time to time.

     1.69 “Permitted Use” shall mean, with respect to any Property, any use of such
Property permitted pursuant to Section 4.1.1.

     1.70 “Person” shall mean any individual or Entity, and the heirs, executors,
administrators, legal representatives, successors and assigns of such Person where the context so
admits.

     1.71 “Property” shall have the meaning given such term in Section 2.1.

     1.72 “Qualified Appraiser” shall mean any disinterested person who is a member in
good standing of the American Institute of Real Estate Appraisers or the American Society of Real
Estate Counselors (or the successor to either of such organizations) and who has had not less than
ten (10) years’ experience in appraising and valuing health clubs/fitness centers/wellness centers
of the size, type and nature of the Leased Property.

     1.73 “Rent” shall mean, collectively, the Minimum Rent and Additional Charges.

     1.74 “Rent Adjustment Rate” shall mean an annual rate equal to the lesser of (x)
seven percent (7%) and (y) the sum of the per annum rate for ten (10) year U.S. Treasury
Obligations as published in The Wall Street Journal as of the date of the sale or rejection
(or deemed rejection) of an Offer pursuant to Section 2.5, plus one hundred (100) basis
points.

     1.75 “SEC” shall mean the Securities and Exchange Commission.

     1.76 “Security Deposit” shall have the meaning given such term in Section
16.1.

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     1.77 “State” shall mean, with respect to any Property, the state, commonwealth or
district in which such Property is located.

     1.78 “Subsidiary” shall mean, with respect to any Person, any Entity (a) in which
such Person owns directly, or indirectly, the shares of stock, equity interest or other beneficial
interest having ordinary voting power to elect a majority of the board of directors (or appoint
other comparable managers) of such Entity, or (b) which such Person otherwise has the right or
power to control (whether by contract, through ownership of securities or otherwise).

     1.79 “Substitute Property” shall have the meaning given such term in Section 2.5.

     1.80 “Substitution Date” shall have the meaning given such term in Section 2.5.

     1.81 “Successor Landlord” shall have the meaning given such term in Section
22.2.

     1.82 “Tangible Net Worth” shall mean, with respect to any Person (determined on a
consolidated basis), the excess of total assets over total liabilities, total assets and total
liabilities each to be determined in accordance with GAAP, excluding, however, from the
determination of total assets: (a) goodwill, organizational expenses, research and development
expenses, trademarks, trade names, copyrights, patents, patent applications, licenses and rights in
any thereof, and other similar intangibles; (b) all deferred charges or unamortized debt discount
and expense; (c) all reserves carried and not
deducted from assets; (d) treasury stock and capital stock, obligations or other securities
of, or capital contributions to, or investments in, any Subsidiary; (e) securities which are not
readily marketable; (f) any write-up in the book value of any asset resulting from a revaluation
thereof subsequent to the Commencement Date; (g) deferred gain; and (h) any items not included in
clauses (a) through (g) above that are treated as intangibles in conformity with GAAP.

     1.83 “Tenant” shall have the meaning given such term in the preambles to this
Agreement and shall also include its permitted successors and assigns.

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     1.84 “Tenant’s Personal Property” shall mean (a) all items of personal property,
equipment and trade fixtures (so long as the same are not necessary for the operation of the
Improvements and the Property as opposed to the business from time to time conducted at the
Property) located in or on the Leased Property, and whether or however attached to the Leased
Improvements, at any time that are necessary or incidental to the business from time to time
conducted at the Leased Property, including, without limitation, exercise/fitness equipment,
kitchen equipment and furnishings, work stations, portable or movable partitions, receptionist
desks, computer installations (including computers, computer hardware, raised flooring designated
solely for the computer system, freestanding supplemental air conditioning or cooling systems
therefor), communications systems and equipment, financial services equipment (such as ATM’s),
credenzas, safes, bulletin boards, book shelves and file cabinets; (b) all furniture, inventory,
machinery (so long as the same are not necessary for the operation of the Improvements and the
Property as opposed to the business from time to time conducted at the Property), racking,
shelving, and other personal property; (c) all personal property, equipment or trade fixtures which
is either not owned by Landlord, Tenant or any of their respective Affiliated Persons, or is on
consignment to Tenant or any of its Affiliated Persons, including any personal property owned by
Tenant’s, subtenant’s, employees or invitees (other than Affiliated Persons of Tenant); (d) all
signs and other forms of business identification; (e) all operating and other permits, licenses and
approvals, warranties, guaranties indemnities and similar rights (so long as the same are not
necessary for the operation of the Improvements and the Property as opposed to the business
from time to time conducted at the Property), and (f) all other items of personal property (so
long as the same are not necessary for the operation of the Improvements and the Property as
opposed to the business from time to time conducted at the Property).

     1.85 “Term” shall mean, collectively, the Fixed Term and the Extended Terms, to the
extent properly exercised pursuant to the provisions of Section 2.4, unless sooner
terminated pursuant to the provisions of this Agreement.

     1.86 “Unsuitable for Its Permitted Use” shall mean, with respect to any Property, a
state or condition of such Property such that (a) following any damage or destruction involving
such Property, such Property cannot be operated on a commercially

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practicable basis for its
Permitted Use and it cannot reasonably be expected to be restored to substantially the same
condition as existed immediately before such damage or destruction, and as otherwise required by
Section 10.2.4, within twelve (12) months following such damage or destruction or such
longer period of time as to which business interruption insurance is available to cover Rent and
other costs related to the applicable Property following such damage or destruction, or (b) as the
result of a partial taking by Condemnation, such Property cannot be operated, in the good faith
judgment of Tenant, on a commercially practicable basis for its Permitted Use.

     1.87 “Work” shall have the meaning given such term in Section 10.2.4.

ARTICLE 2

LEASED PROPERTY AND TERM

     2.1 Leased Property. Upon and subject to the terms and conditions hereinafter set
forth, Landlord leases to Tenant and Tenant leases from Landlord all of Landlord’s right, title and
interest in and to all of the following (each of items (a) through (g) below which, as of the
Commencement Date, relates to any single Fitness Center, a “Property” and, collectively,
the “Leased Property”):

     (a) those certain tracts, pieces and parcels of land, as more particularly described in
Exhibits A-1 through A-4, attached hereto and made a part hereof (the
“Land”);

     (b) all buildings, structures and other improvements of every kind including, but not
limited to, alleyways and connecting tunnels, sidewalks, utility pipes, conduits and lines
(on-site and off-site), parking areas and roadways appurtenant to such buildings and
structures presently situated upon the Land (collectively, the “Leased
Improvements”);

     (c) all easements, rights and appurtenances relating to the Land and the Leased
Improvements;

     (d) all equipment, machinery, fixtures, and other items of property, now or hereafter
permanently affixed to or incorporated into the Leased Improvements, including, without
limitation, all furnaces, boilers, heaters,

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electrical equipment, heating, plumbing,
lighting, ventilating, refrigerating, incineration, air and water pollution control, waste
disposal, air-cooling and air-conditioning systems and apparatus, sprinkler systems and fire
and theft protection equipment, all of which, to the maximum extent permitted by law, are
hereby deemed by the parties hereto to constitute real estate, together with all
replacements, modifications, alterations and additions thereto, but specifically excluding
all items included within the category of Tenant’s Personal Property (collectively, the
“Fixtures”);

     (e) all machinery, equipment, furnishings, moveable walls or partitions, or other
personal property of any kind or description necessary for the operation of the Improvements
at the Property as opposed to the business from time to time conducted at the Property, and
located on or in the Leased Improvements, and all modifications, replacements, alterations
and additions to such personal property, except items, if any, included within the category
of Fixtures, but specifically excluding all items included within the category of Tenant’s
Personal Property (collectively, the “Leased Personal Property”);

     (f) all of the Leased Intangible Property but specifically excluding all items included
within the category of Tenant’s Personal Property; and

     (g) any and all leases of space in the Leased Improvements, if any.

     2.2 Condition of Leased Property. Tenant acknowledges receipt and delivery of
possession of the Leased Property and Tenant accepts the Leased Property in its “as is” condition,
subject to the rights of parties in possession, the existing state of title, including all
covenants, conditions, restrictions, reservations, mineral leases, easements and other matters of
record or that are visible or apparent on the Leased Property, all applicable Legal Requirements,
the lien of any financing instruments, mortgages and deeds of trust existing prior to the
Commencement Date or permitted by the terms of this Agreement, and such other matters which would
be disclosed by an inspection of the Leased Property and the record title thereto or by an accurate
survey thereof. TENANT REPRESENTS THAT IT HAS INSPECTED THE LEASED PROPERTY AND ALL OF THE
FOREGOING AND HAS FOUND THE CONDITION THEREOF SATISFACTORY AND IS NOT RELYING ON

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ANY REPRESENTATION
OR WARRANTY OF LANDLORD OR LANDLORD’S AGENTS OR EMPLOYEES WITH RESPECT THERETO AND TENANT WAIVES
ANY CLAIM OR ACTION AGAINST LANDLORD IN RESPECT OF THE CONDITION OF THE LEASED PROPERTY. LANDLORD
MAKES NO WARRANTY OR REPRESENTATION, EXPRESS OR IMPLIED, IN RESPECT OF THE LEASED PROPERTY OR ANY
PART THEREOF, EITHER AS TO ITS FITNESS FOR USE, DESIGN OR CONDITION FOR ANY PARTICULAR USE OR
PURPOSE OR OTHERWISE, AS TO THE QUALITY OF THE MATERIAL OR WORKMANSHIP THEREIN, LATENT OR PATENT,
IT BEING AGREED THAT ALL SUCH RISKS ARE TO BE BORNE BY TENANT. To the maximum extent permitted by
law, however, Landlord hereby assigns to Tenant all of Landlord’s rights to proceed against any
predecessor in interest or insurer for breaches of warranties or representations or for latent
defects in the Leased Property. Landlord shall fully cooperate with Tenant in the prosecution of
any such claims, in Landlord’s or Tenant’s name, all at Tenant’s sole cost and expense. Tenant
shall indemnify, defend, and hold harmless Landlord from and against any loss, cost, damage or
liability (including reasonable attorneys’ fees) incurred by Landlord in connection with such
cooperation.

     2.3 Fixed Term. The initial term of this Agreement (the “Fixed Term”) shall
commence on the Commencement Date and shall expire on August 31, 2028.

     2.4 Extended Terms. Provided that no Event of Default shall have occurred and be
continuing, Tenant shall have the right to extend the Term for six (6) consecutive renewal terms of
five (5) years each (each, an “Extended Term” and collectively, the “Extended
Terms”).

     Each Extended Term shall commence on the day succeeding the expiration of the Fixed Term or
the preceding Extended Term, as the case may be. All of the terms, covenants and provisions of
this Agreement shall apply to each such Extended Term, except that (a) Tenant shall have no right
to extend the Term beyond the expiration of the sixth (6th) Extended Term and (b)
Minimum Rent during the first Fiscal Year of the third (3rd), fourth (4th),
fifth (5th) and sixth (6th) Extended Terms shall be adjusted in accordance
with Section 3.1.1(b). Provided that this Agreement shall not have been terminated
pursuant to any provision hereof, the Term shall be automatically extended for an Extended Term,
unless Tenant shall give Landlord Notice not later than twelve months prior to the scheduled
expiration of the then-current Term that Tenant elects not to so extend the Term of this Agreement,
it being understood and agreed that time

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shall be of the essence with respect to the giving of such
Notice. If Tenant shall give Notice that it elects not to extend the Term in accordance with this
Section 2.4, this Agreement shall automatically terminate at the end of the then-current
Term, and Tenant shall have no further option to extend the Term of this Agreement. Otherwise, the
extension of this Agreement shall be automatically effected without the execution of any additional
documents; it being understood and agreed, however, that Tenant and Landlord shall execute such
documents and agreements as either party shall reasonably require to evidence the same.

     2.5 Substitution of Properties; Sale of Non-Economic Property, Etc.

     (a) Substitution of Properties. Subject to the terms of this Section
2.5, provided that (i) no Default or Event of Default shall have occurred and be
continuing, and (ii) not less than one (1) year shall remain in the Term, Tenant
shall have the right, upon not less than thirty (30) days prior written notice to
Landlord, to elect to substitute one or more properties (collectively, the “Substitute
Properties” or individually, “Substitute Property”) for such Property on the
date specified in such notice (the “Substitution Date”). Such notice shall include
(a) an Officer’s Certificate, setting forth in reasonable detail the reason(s) for the
substitution and the proposed Substitution Date, and (b) designate one or more Substitute
Properties for each Property to be substituted for which each such Substitute Property has a
Fair Market Value not less than the Fair Market Value of the Property being replaced at the
time of such proposed substitution.

     (b) Substitution Procedures.

	 	(i)	 	If Tenant shall initiate a substitution pursuant to Section
2.5(a) or 2.5(b), Landlord shall have a period of thirty (30) days within
which to review the designated property or properties and such additional
information to determine if it conforms to the requirements of Sections
2.5(a), 2.5(b) and 2.5(c).
	 
	 	(ii)	 	Landlord shall not be obligated to substitute a property as set forth in this
Section 2.5 unless (i) Landlord shall determine the Fair Market 

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	 	 	 	Value
of the Substitute Property is not less than the Fair Market Value of the
Property proposed to be replaced immediately before such substitution and (ii)
the delivery of an opinion of counsel for Landlord confirming that (w) the
substitution of the Substitute Property for such Property will qualify as an
exchange solely of property of a like-kind under Section 1031 of the Code, in
which, generally, except for “boot”, no gain or loss will be recognized by
Landlord, (x) the substitution will not result in ordinary recapture income to
Landlord pursuant to Section 1250(d)(4) of the Code or any other provision of
the Code, (y) the substitution will result in income, if any, to Landlord of a
type described in Section 856(c)(2) or (3) of the Code and will not result in
the tax imposed under Section
857(b)(6) of the Code, and (z) the substitution, together with all other
substitutions made or requested by Tenant, during the relevant time period,
will not jeopardize the qualification of Landlord as a real estate
investment trust under Sections 856-860 of the Code. Landlord shall use
reasonable efforts to obtain such opinion.

	 	(iii)	 	The Rent under this Agreement shall not be affected by any
substitution.

     (c) If Tenant elects to substitute one or more Substitute Properties for a Property,
the Substitute Property shall become a Property hereunder on the Substitution Date as of
which Tenant shall have delivered to Landlord all of the following:

	 	(i)	 	Current appraisals or other evidence satisfactory to Landlord, in its reasonable
discretion, as to the then current Fair Market Value and the projected residual
values of such Substitute Property and the Property as to which such
substitution is being made;
	 
	 	(ii)	 	All available revenue data relating to the Substitute Property for
the period from the date of opening for business of the Fitness Center on such
Substitute Property to the date of Tenant’s 

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	 	 	 	most recent Fiscal Year end, or for
the most recent three (3) years, whichever is less;

	 	(iii)	 	An Officer’s Certificate certifying that (A) the Substitute
Property has been accepted by Tenant for all purposes of this Agreement and
there has been no unrepaired material damage to the improvements located
thereon, nor is any Condemnation pending or threatened with respect thereto;
(B) all appropriate permits, licenses and certificates (including, but not
limited to, a permanent, unconditional certificate of occupancy and all
licenses, permits and approvals) which are necessary to permit the use of the
Substitute Property in accordance with the provisions of this Agreement have
been obtained
and are in full force and effect; (C) under applicable zoning and land use
laws, ordinances, rules and regulations, the Substitute Property may be used
for the purposes contemplated by this Agreement and all necessary
subdivision approvals, if any, have been obtained; (D) there are no
mechanics’ or materialmen’s liens outstanding or threatened to the knowledge
of Tenant against the Substitute Property arising out of or in connection
with the construction of the improvements thereon, other than those being
contested by Tenant pursuant to Article 8; (E) to the best knowledge
of Tenant, there exists no Default or Event of Default, and no defense,
offset or claim with respect to any sums payable by Tenant hereunder; and
(F) any exceptions to Landlord’s title to the Substitute Property shall not
materially interfere with the intended use of the Substitute Property by
Tenant;
	 
	 	(iv)	 	A limited warranty deed or local equivalent (together with a
landlord estoppel certificate in form and substance satisfactory to Landlord in
its sole discretion) conveying to Landlord title to the Substitute Property
free and clear of any liens or encumbrances, except those approved by Landlord;
	 
	 	(v)	 	An amendment duly executed, acknowledged and delivered by Tenant,
in form and substance 

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	 	 	 	satisfactory to Landlord, amending this Agreement to
correct the legal description of the Land and make such other changes herein as
may be necessary or appropriate under the circumstances;

	 	(vi)	 	Counterparts of a standard owner’s policy of title insurance covering the Substitute
Property (or a valid, binding, unconditional commitment therefor), dated as of
the Substitution Date, in current form and including mechanics’ and
materialmen’s lien coverage, issued to Landlord by a title insurance company
and in the form reasonably satisfactory to Landlord, which policy shall (A)
insure (x) Landlord’s fee title estate
to the Substitute Property, subject to no liens or encumbrances except those
approved by Landlord and (y) that any restrictions affecting the Substitute
Property have not been violated; (B) be in an amount at least equal to the
Fair Market Value of the Substitute Property; and (C) contain such
affirmative coverage endorsements as Landlord shall reasonably request;
	 
	 	(vii)	 	Such third party diligence, including, without limitation,
environmental assessment reports, zoning and building evaluations and other
investigations and materials pertaining to the Property (including, without
limitation, all roofs, electric, mechanical and structural elements, and HVAC
systems) as Landlord may reasonably require;
	 
	 	(viii)	 	Certificates of insurance with respect to the Substitute Property fulfilling the
requirements of Article 9;
	 
	 	(ix)	 	Payment by Tenant of all reasonable costs and expenses paid or incurred by Landlord
in connection with the substitution and conveyance of the Substitute Property
and the Property being replaced, including, but not limited to, (A) reasonable
fees and expenses of counsel, (B) all printing expenses, (C) the amount of
filing, registration and recording taxes and fees of federal, state, county and
other municipal authorities, agencies and other governmental 

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	 	 	 	bodies, including,
without limitation, all registries of deeds, (D) the cost of preparing and
recording, if appropriate, a release of such Property from the lien of any
mortgage (but not any amounts, costs or charges payable under any such
mortgage), (E) brokers’ fees and commissions, (F) documentary stamp and
transfer taxes and any bulk sales, excise or like tax, (G) title insurance
charges and premiums, and (H) escrow fees; and

	 	(x)	 	Such other certificates, documents, opinions of counsel and other
instruments as may be reasonably required by Landlord.

     On the conveyance to Landlord of the Substitute Property on the Substitution Date, Landlord
shall convey the Property being replaced to Tenant by special warranty deed (free and clear of all
liens and encumbrances other than Permitted Encumbrances) and otherwise in its “as is” condition,
without representation or warranty other than those contained in the special warranty deed, but in
no event shall any such representation or warranty extend to any matter arising as a result of the
acts or deeds of Tenant, and all obligations and liabilities of Tenant with respect to such
Property that are intended, by the terms hereof, to survive a termination of this Agreement, shall
survive such conveyance and replacement of such Property with a Substitute Property.

     It is expressly understood and agreed that, notwithstanding anything to the contrary contained
herein, in no event shall the number of Properties substituted hereunder exceed two (2) during the
Term hereof.

     (d) Sale of Non-Economic Property. Subject to the terms of this Section
2.5(d), provided that no Event of Default shall have occurred and be continuing, Tenant
shall have the right, during the Term, to identify one (1), but not more than one (1),
Property that, in Tenant’s reasonable determination, is no longer economic or suitable for
Tenant’s continued use and occupancy of its business operations for the Permitted Use, by
giving Landlord Notice thereof, which Notice shall set forth in reasonable detail the
reasons therefor. Thereafter, Tenant may market such Non-Economic Property for sale to a
third party. If Tenant receives a bona fide offer (an “Offer”) to purchase such

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Property from a Person having the financial capacity to implement the terms of such Offer
which Offer Tenant intends to accept, Tenant shall give Landlord Notice thereof, which
Notice shall include a copy of the Offer executed by such third party. In the event that
Landlord shall fail to accept or reject such Offer within thirty (30) days after receipt of
such Notice, such Offer shall be deemed to be rejected by Landlord. If Landlord shall
accept such Offer, then, effective as of the date of such
sale, this Agreement shall terminate with respect to such Property, and the Minimum
Rent shall be reduced by an amount equal to the product of the net proceeds of sale received
by Landlord multiplied by the Rent Adjustment Rate. If Landlord shall reject (or be deemed
to have rejected) such Offer, then, effective as of the proposed date of such sale, this
Agreement shall terminate with respect to such Property, and the Minimum Rent shall be
reduced by an amount equal to the product of the projected net proceeds determined by
reference to such Offer multiplied by the Rent Adjustment Rate. For purposes of this
Section 2.5(d), “net proceeds” shall be the gross sale proceeds minus any closing costs,
brokerage commissions and other customary closing adjustments.

ARTICLE 3

RENT

     3.1 Rent. Tenant shall pay, in lawful money of the United States of America which
shall be legal tender for the payment of public and private debts, without offset, abatement,
demand or deduction (unless otherwise expressly provided in this Agreement), Minimum Rent to
Landlord and Additional Charges to the party to whom such Additional Charges are payable, during
the Term. All payments to Landlord shall be made by wire transfer of immediately available federal
funds or by other means acceptable to Landlord in its sole discretion.

     3.1.1 Minimum Rent.

     (a) Payments. Upon execution of this Agreement, Tenant shall pay the Minimum
Rent for the period beginning on the Commencement Date and ending October 31, 2008.
Thereafter, Minimum Rent shall be paid in equal quarterly installments in advance on the
25th day of October, 2008 and thereafter on the 25th day of each
January, April, July and

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October during the Term (each, a “Payment Date”). The
installment due each October 25th shall be attributable to the period November
1—January 31, the installment due on each January 25th shall be attributable to
the period February 1-April 30, the installment due each April 25th shall be
attributable to the period March 1-May 31 and the installment due on each May
25th shall be attributable to
the period June 1-September 30. Minimum Rent for any partial quarter shall be prorated
on a per diem basis.

     (b) Increases in Minimum Rent. Minimum Rent shall be adjusted (i) every fifth
(5th) year during the Fixed Term and during the first (1st) and second
(2nd) Extended Terms, to an amount equal to one hundred and ten percent (110%) of
the Minimum Rent for the Fiscal Year preceding such adjustment, and (ii) during the third
(3rd), fourth (4th), fifth (5th) and sixth (6th)
Extended Terms to the greater of (1) the Minimum Rent payable for such Extended Term
determined as though such Extended Term were a continuation of the Fixed or Extended Term in
accordance with Section 3.1.1(b)(i), and (2) the FMV Rent determined as of the
commencement of the third (3rd), fourth (4th), fifth (5th)
or sixth (6th) Extended Term, as applicable.

     (c) Extended Term Rent. FMV Rent shall be determined by agreement between
Landlord and Tenant or, failing agreement by the commencement date of the applicable
Extended Term, Landlord and Tenant shall each select a Qualified Appraiser within five (5)
days of the commencement date of such Extended Term and send Notice thereof to the other.
If either party shall fail to select a Qualified Appraiser within such five (5) day period,
such party shall be deemed to have accepted the FMV Rent determined by the other party’s
Qualified Appraiser. If Landlord and Tenant shall each select a Qualified Appraiser and send
Notice thereof to the other within such five (5) day period, but the two appraisers shall
fail to agree upon the FMV Rent within thirty (30) days of their appointment, then either
Landlord or Tenant, on behalf of both, may then request the American Arbitration Association
to select a third Qualified Appraiser, in which event the two appraisers shall submit their
appraisals to the third appraiser in writing, and such third appraiser shall determine which
of the two appraisals is the FMV Rent. The costs (other than Landlord’s counsel fees)
incurred in connection with such appraisal process shall be borne by

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Tenant and shall be
included as part of the Additional Charges.

     If FMV Rent shall not have been determined as of the commencement date of any Extended
Term, Tenant shall
thereafter, on an interim basis, pay Minimum Rent in an amount determined as though such
Extended Term were a continuation of the Fixed Term or Extended Term, as the case may be,
with the Minimum Rent to be increased for such Extended Term in accordance with Section
3.1.1(b). Upon the determination of the FMV Rent, (1) Minimum Rent shall be readjusted
in accordance with the provisions of Section 3.1.1(b), (2) such readjustment shall
be retroactively applied to the commencement date of such Extended Term, and (3) Tenant
shall pay to Landlord, in addition to the Minimum Rent due on such date pursuant to the
terms of this Agreement, any outstanding Minimum Rent due as a result of such readjustment.

     (d) Adjustments of Minimum Rent Following Disbursements Under Sections 10.2.3 and
11.2. Effective on the date of each disbursement to pay for the cost of any repairs,
maintenance, renovations or replacements pursuant to Sections 10.2.3 and 11.2, the
annual Minimum Rent shall be increased by a per annum amount equal to the
Disbursement Rate times the amount so disbursed. If any such disbursement is made on a day
other the Payment Date for the succeeding quarter hereunder, Tenant shall pay to Landlord on
the Payment Date following such disbursement (in addition to the amount of Minimum Rent
payable with respect to such payment quarter, as adjusted pursuant to this paragraph (d))
the amount by which Minimum Rent for the preceding payment quarter, as adjusted for such
disbursement on a per diem basis, exceeded the amount of Minimum Rent paid by Tenant for
such preceding payment quarter.

     (e) Adjustments of Minimum Rent Following Partial Lease Termination. If this
Agreement shall terminate with respect to any Property but less than all of the Leased
Property, subject to Section 2.5, Minimum Rent shall be reduced by the affected
Property’s allocable share of Minimum Rent as reasonably determined by Landlord and Tenant.

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          3.1.2 Additional Charges. In addition to the Minimum Rent payable hereunder, Tenant
shall pay (or cause to be paid) to the appropriate parties and discharge (or cause to be
discharged) as and when due and payable the following (collectively, “Additional
Charges”):

     (a) Impositions. Subject to Article 8 relating to permitted contests,
Tenant shall pay, or cause to be paid, all Impositions before any fine, penalty, interest or
cost (other than any opportunity cost as a result of a failure to take advantage of any
discount for early payment) may be added for non-payment, such payments to be made directly
to the taxing authorities where feasible, and shall promptly, upon request, furnish to
Landlord copies of official receipts or other reasonably satisfactory proof evidencing such
payments. If any such Imposition may, at the option of the taxpayer, lawfully be paid in
installments (whether or not interest shall accrue on the unpaid balance of such
Imposition), Tenant may exercise the option to pay the same (and any accrued interest on the
unpaid balance of such Imposition) in installments and, in such event, shall pay, or cause
to pay, such installments which are due and payable during the Term as the same become due
and before any fine, penalty, premium, further interest or cost may be added thereto.
Landlord, at its expense, shall, to the extent required or permitted by Applicable Law,
prepare and file, or cause to be prepared and filed, all tax returns and pay all taxes due
in respect of Landlord’s net income, gross receipts, sales and use, single business,
transaction privilege, rent, ad valorem, franchise taxes and taxes on its capital stock, and
Tenant, at its expense, shall, to the extent required or permitted by Applicable Laws and
regulations, prepare and file all other tax returns and reports in respect of any Imposition
as may be required by Government Agencies. Provided no Event of Default shall have occurred
and be continuing, if any refund shall be due from any taxing authority in respect of any
Imposition paid by or on behalf of Tenant, the same shall be paid over to or retained by
Tenant. Landlord and Tenant shall, upon request of the other, provide such data as is
maintained by the party to whom the request is made with respect to the Leased Property as
may be necessary to prepare any required returns and reports. In the event Government
Agencies classify any property covered by this Agreement as personal property, Tenant shall
file, or cause to be filed, all

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personal property tax returns in such jurisdictions where it
may legally so file. Each party shall, to the extent it
possesses the same, provide the other, upon request, with cost and depreciation records
necessary for filing returns for any property so classified as personal property. Where
Landlord is legally required to file personal property tax returns for property covered by
this Agreement, Landlord shall provide Tenant with copies of assessment notices in
sufficient time for Tenant to file a protest. All Impositions assessed against such
personal property shall be (irrespective of whether Landlord or Tenant shall file the
relevant return) paid by Tenant not later than the last date on which the same may be made
without interest or penalty, subject to the provisions of Article 8.

     Landlord shall give prompt Notice to Tenant of all Impositions payable by Tenant hereunder of
which Landlord at any time has knowledge; provided, however, that Landlord’s
failure to give any such notice shall in no way diminish Tenant’s obligation hereunder to pay such
Impositions.

     (b) Utility Charges. Tenant shall pay or cause to be paid all charges for
electricity, power, gas, oil, water and other utilities used in connection with the Leased
Property.

     (c) Insurance Premiums. Tenant shall pay or cause to be paid all premiums for
the insurance coverage required to be maintained pursuant to Article 9.

     (d) Other Charges. Tenant shall pay or cause to be paid all other amounts,
liabilities and obligations, and all amounts payable under any equipment leases and all
agreements to indemnify Landlord under Sections 4.3.2 and 9.5.

     (e) Reimbursement for Additional Charges. If Tenant pays or causes to be paid
property taxes or similar or other Additional Charges attributable to periods after the end
of the Term, whether upon expiration or sooner termination of this Agreement (other than
termination by reason of an Event of Default), Tenant may, within a reasonable time after
the end of the Term, provide Notice to Landlord of its estimate of such amounts. Landlord
shall promptly reimburse Tenant for all payments of such taxes and other similar Additional
Charges that are

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attributable to any period after the Term of this Agreement.

     3.2 Late Payment of Rent, Etc. If any installment of Minimum Rent or Additional
Charges (but only as to those Additional Charges which are payable directly to Landlord) shall not
be paid on its due date, Tenant shall pay Landlord, on demand, as Additional Charges, a late charge
(to the extent permitted by law) computed at the Overdue Rate on the amount of such installment,
from the due date of such installment to the date of payment thereof. To the extent that Tenant
pays any Additional Charges directly to Landlord or any Facility Mortgagee pursuant to any
requirement of this Agreement, Tenant shall be relieved of its obligation to pay such Additional
Charges to the Entity to which they would otherwise be due. If any payments due from Landlord to
Tenant shall not be paid on its due date, Landlord shall pay to Tenant, on demand, a late charge
(to the extent permitted by law) computed at the Overdue Rate on the amount of such installment
from the due date of such installment to the date of payment thereof.

     In the event of any failure by Tenant to pay any Additional Charges when due, Tenant shall
promptly pay and discharge, as Additional Charges, every fine, penalty, interest and cost which is
added for non-payment or late payment of such items. Landlord shall have all legal, equitable and
contractual rights, powers and remedies provided either in this Agreement or by statute or
otherwise in the case of non-payment of the Additional Charges as in the case of non-payment of the
Minimum Rent.

     3.3 Net Lease. The Rent shall be absolutely net to Landlord so that this Agreement
shall yield to Landlord the full amount of the installments or amounts of the Rent throughout the
Term, subject to any other provisions of this Agreement which expressly provide otherwise,
including those provisions for adjustment or abatement of such Rent.

     3.4 No Termination, Abatement, Etc. Except as otherwise specifically provided in
this Agreement, each of Landlord and Tenant, to the maximum extent permitted by law, shall remain
bound by this Agreement in accordance with its terms and shall not take any action without the
consent of the other to modify, surrender or terminate this Agreement. In addition, except as
otherwise expressly provided in this Agreement, Tenant shall not seek, or be entitled to, any
abatement, deduction, deferment or

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reduction of the Rent, or set-off against the Rent, nor shall
the respective obligations of Landlord and Tenant be otherwise affected by reason of (a) any damage
to or destruction of the Leased Property or any portion thereof from whatever cause or any
Condemnation, (b) the lawful or unlawful prohibition of, or restriction upon, Tenant’s use of the
Leased Property, or any portion thereof, or the interference with such use by any Person or by
reason of eviction by paramount title; (c) any claim which Tenant may have against Landlord by
reason of any default (other than a monetary default) or breach of any warranty by Landlord under
this Agreement or any other agreement between Landlord and Tenant, or to which Landlord and Tenant
are parties; (d) any bankruptcy, insolvency, reorganization, composition, readjustment,
liquidation, dissolution, winding up or other proceedings affecting Landlord or any assignee or
transferee of Landlord; or (e) for any other cause whether similar or dissimilar to any of the
foregoing (other than a monetary default by Landlord). Except as otherwise specifically provided
in this Agreement, Tenant hereby waives all rights arising from any occurrence whatsoever, which
may now or hereafter be conferred upon it by law (a) to modify, surrender or terminate this
Agreement or quit or surrender the Leased Property or any portion thereof, or (b) which would
entitle Tenant to any abatement, reduction, suspension or deferment of the Rent or other sums
payable or other obligations to be performed by Tenant hereunder. The obligations of Tenant
hereunder shall be separate and independent covenants and agreements, and the Rent and all other
sums payable by Tenant hereunder shall continue to be payable in all events unless the obligations
to pay the same shall be terminated pursuant to the express provisions of this Agreement.

ARTICLE 4

USE OF THE LEASED PROPERTY

     4.1 Permitted Use.

          4.1.1 Permitted Use. Tenant shall, at all times during the Term, and at any other
time that Tenant shall be in possession of the Leased Property, continuously use and operate, or
cause to be used and operated (except as a result of damage,
destruction or partial or complete Condemnation in accordance with Article 10 and
Article 11, or in connection with any alterations or additions approved by Landlord or
permitted pursuant to Article 6), each Property as an athletic

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club/fitness center/wellness
center as such uses may be operated from time to time in athletic club/fitness center/wellness
center properties owned and/or operated by Tenant and its Affiliated Persons, and any uses
incidental thereto and consistent with comparable brand standards of such other properties of the
type and nature of these facilities. Tenant shall not use (and shall not permit any Person to use)
any Property or any portion thereof for any other use without the prior written consent of
Landlord, which approval shall not be unreasonably withheld, delayed or conditioned. No use shall
be made or permitted to be made of any Property and no acts shall be done thereon which will cause
the cancellation of any insurance policy covering such Property or any part thereof (unless another
adequate policy is available), nor shall Tenant sell or otherwise provide, or permit to be kept,
used or sold in or about any Property any article which may be prohibited by law or by the standard
form of fire insurance policies, or any other insurance policies required to be carried hereunder,
or fire underwriter’s regulations. Tenant shall, at its sole cost, comply or cause to be complied
with all Insurance Requirements.

          4.1.2 Necessary Approvals. Tenant shall proceed with all due diligence and exercise
reasonable efforts to obtain and maintain, or cause to be obtained and maintained, all approvals
necessary to use and operate, for its Permitted Use, each Property and the Fitness Center located
thereon under applicable law.

          4.1.3 Lawful Use, Etc. Tenant shall not, and shall not permit any Person to use or
suffer or permit the use of any Property or Tenant’s Personal Property, if any, for any unlawful
purpose. Tenant shall not, and shall not permit any Person to, commit or suffer to be committed
any waste on any Property, or in any Fitness Center, nor shall Tenant cause or permit any unlawful
nuisance thereon or therein. Tenant shall not, and shall not permit any Person to, suffer nor
permit any Property, or any portion thereof, to be used in such a manner as (i) may materially and
adversely impair Landlord’s title thereto or to any portion thereof, or (ii) may reasonably allow a
claim or claims for adverse usage or adverse possession by the public,
as such, or of implied dedication of such Property or any portion thereof.

     4.2 Compliance with Legal/Insurance Requirements, Etc. Subject to the provisions of
Article 8, Tenant, at its sole expense, shall (i) comply with (or cause to be complied
with)

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all material Legal Requirements and Insurance Requirements in respect of the use, operation,
maintenance, repair, alteration and restoration of the Leased Property and with the terms and
conditions of any ground lease affecting any Property, and (ii) procure, maintain and comply with
(or cause to be procured, maintained and complied with) all material licenses, permits and other
authorizations and agreements required for any use of the Leased Property and Tenant’s Personal
Property, if any, then being made, and for the proper erection, installation, operation and
maintenance of the Leased Property or any part thereof.

     4.3 Environmental Matters.

          4.3.1 Restriction on Use, Etc. During the Term and any other time that Tenant shall
be in possession of any Property, Tenant shall not, and shall not permit any Person to, store,
spill upon, dispose of or transfer to or from such Property any Hazardous Substance, except in
compliance with all Applicable Laws. During the Term and any other time that Tenant shall be in
possession of any Property, Tenant shall maintain (or shall cause to be maintained) such Property
at all times free of any Hazardous Substance (except in compliance with all Applicable Laws).
Tenant shall promptly: (a) upon receipt of notice or knowledge, notify Landlord in writing of any
material change in the nature or extent of Hazardous Substances at any Property, (b) transmit to
Landlord a copy of any report which is required to be filed by Tenant or any Manager with respect
to any Property pursuant to SARA Title III or any other Applicable Law, (c) transmit to Landlord
copies of any citations, orders, notices or other governmental communications received by Tenant or
any Manager or their respective agents or representatives with respect thereto (collectively,
“Environmental Notice”), which Environmental Notice requires a written response or any
action to be taken and/or if such Environmental Notice gives notice of and/or presents a material
risk of any material violation of any Applicable Law and/or presents a material risk of any
material cost, expense, loss or damage (an “Environmental Obligation”), (d) observe and
comply with (and cause to be
observed and complied with) all Applicable Laws relating to the use, maintenance and disposal
of Hazardous Substances and all orders or directives from any official, court or agency of
competent jurisdiction relating to the use or maintenance or requiring the removal, treatment,
containment or other disposition thereof, and (e) pay or otherwise dispose (or cause to be paid or
otherwise disposed) of any fine, charge or Imposition related thereto, unless Tenant or any Manager
shall

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contest the same in good faith and by appropriate proceedings and the right to use and the
value of any of the Leased Property is not materially and adversely affected thereby.

     If, at any time prior to the termination of this Agreement, Hazardous Substances (other than
those maintained in accordance with Applicable Laws) are discovered on any Property (in violation
of Applicable Laws), subject to Tenant’s right to contest the same in accordance with Article
8, Tenant shall take (and shall cause to be taken) all actions and incur any and all expenses,
as are required by any Government Agency and by Applicable Law, (i) to clean up and remove from and
about such Property all Hazardous Substances thereon, (ii) to contain and prevent any further
release or threat of release of Hazardous Substances on or about such Property (in violation of
Applicable Laws) and (iii) to use good faith efforts to eliminate any further release or threat of
release of Hazardous Substances on or about such Property.

          4.3.2 Indemnification of Landlord. Tenant shall protect, indemnify and hold harmless
Landlord and each Facility Mortgagee, their trustees, officers, agents, employees and
beneficiaries, and any of their respective successors or assigns with respect to this Agreement
(collectively, the “Indemnitees” and, individually, an “Indemnitee”) for, from and
against any and all debts, liens, claims, causes of action, administrative orders or notices,
costs, fines, penalties or expenses (including, without limitation, reasonable attorney’s fees and
expenses) imposed upon, incurred by or asserted against any Indemnitee resulting from, either
directly or indirectly, the presence in, upon or under the soil or ground water of any Property
during the Term and any other time that Tenant shall be in possession of any Property or any
properties surrounding such Property of any Hazardous Substances in violation of any Applicable
Law, except to the extent the same arise from the acts or omissions of Landlord or any other
Indemnitee or during
any period that Landlord or a Person designated by Landlord (other than Tenant) is in
possession of such Property from and after the date hereof. Tenant’s duty herein includes, but is
not limited to, costs associated with personal injury or property damage claims as a result of the
presence prior to the expiration or sooner termination of the Term and the surrender of such
Property to Landlord in accordance with the terms of this Agreement of Hazardous Substances in,
upon or under the soil or ground water of such Property in violation of any Applicable Law. Upon
Notice from Landlord and any other of the

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Indemnitees, Tenant shall undertake the defense, at
Tenant’s sole cost and expense, of any indemnification duties set forth herein, in which event,
Tenant shall not be liable for payment of any duplicative attorneys’ fees incurred by any
Indemnitee.

     Tenant shall, upon demand, pay (or cause to be paid) to Landlord, as an Additional Charge, any
cost, expense, loss or damage (including, without limitation, reasonable attorneys’ fees)
reasonably incurred by Landlord and arising from a failure of Tenant to observe and perform (or to
cause to be observed and performed) the requirements of this Section 4.3, which amounts
shall bear interest from the date ten (10) Business Days after written demand therefor is given to
Tenant until paid by Tenant to Landlord at the Overdue Rate.

          4.3.3 Survival. The provisions of this Section 4.3 shall survive the
expiration or sooner termination of this Agreement.

ARTICLE 5

MAINTENANCE AND REPAIRS

     5.1 Maintenance and Repair.

          5.1.1 Tenant’s General Obligations. Tenant shall keep (or cause to be kept), at
Tenant’s sole cost and expense, the Leased Property and all private roadways, sidewalks and curbs
appurtenant thereto (and Tenant’s Personal Property) in good order and repair, reasonable wear and
tear excepted (whether or not the need for such repairs occurs as a result of Tenant’s or any
Manager’s use, any prior use, the elements or the age of the Leased Property or Tenant’s Personal
Property or any portion thereof), and shall promptly make or cause to be
made all necessary and appropriate repairs and replacements thereto of every kind and nature,
whether interior or exterior, structural or nonstructural, ordinary or extraordinary, foreseen or
unforeseen or arising by reason of a condition existing prior to the commencement of the Term
(concealed or otherwise). All repairs shall be made in a good, workmanlike manner, consistent with
industry standards for comparable Fitness Centers in like locales, in accordance with all
applicable federal, state and local statutes, ordinances, codes, rules and regulations relating to
any such work. Tenant shall not take or omit to take (or permit any Person to take or omit to
take) any action, the taking or omission of which would materially and adversely

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impair the value
or the usefulness of the Leased Property or any material part thereof for its Permitted Use.
Tenant’s obligations under this Section 5.1.1 shall be limited in the event of any casualty
or Condemnation as set forth in Article 10 and Article 11 and Tenant’s obligations
with respect to Hazardous Substances are as set forth in Section 4.3.

          5.1.2 Landlord’s Obligations. Except as otherwise expressly provided in this
Agreement, Landlord shall not, under any circumstances, be required to build or rebuild any
improvement on the Leased Property, or to make any repairs, replacements, alterations, restorations
or renewals of any nature or description to the Leased Property, whether ordinary or extraordinary,
structural or nonstructural, foreseen or unforeseen, or to make any expenditure whatsoever with
respect thereto, or to maintain the Leased Property in any way. Except as otherwise expressly
provided in this Agreement, Tenant hereby waives, to the maximum extent permitted by law, the right
to make repairs at the expense of Landlord pursuant to any law in effect on the date hereof or
hereafter enacted. Landlord shall have the right to give, record and post, as appropriate, notices
of nonresponsibility under any mechanic’s lien laws now or hereafter existing.

          5.1.3 Nonresponsibility of Landlord, Etc. All materialmen, contractors, artisans,
mechanics and laborers and other persons contracting with Tenant with respect to the Leased
Property, or any part thereof, are hereby charged with notice that liens on the Leased Property or
on Landlord’s interest therein are expressly prohibited and that they must look solely to Tenant to
secure payment for any work done or material
furnished to Tenant or any Manager or for any other purpose during the term of this Agreement.

     Nothing contained in this Agreement shall be deemed or construed in any way as constituting
the consent or request of Landlord, express or implied, by inference or otherwise, to any
contractor, subcontractor, laborer or materialmen for the performance of any labor or the
furnishing of any materials for any alteration, addition, improvement or repair to the Leased
Property or any part thereof or as giving Tenant any right, power or authority to contract for or
permit the rendering of any services or the furnishing of any materials that would give rise to the
filing of any lien against the Leased Property or any part thereof nor to subject Landlord’s estate
in the Leased Property or any part thereof to liability under any mechanic’s

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lien law of any State
in any way, it being expressly understood Landlord’s estate shall not be subject to any such
liability.

     5.2 Tenant’s Personal Property. Tenant shall provide and maintain (or cause to be
provided and maintained) throughout the Term all such Tenant’s Personal Property as shall be
necessary in order to operate in compliance with applicable material Legal Requirements and
Insurance Requirements and otherwise in accordance with customary practice in the industry for the
Permitted Use. In furtherance, but not in limitation of, the foregoing, Tenant shall have the
right in its sole and absolute discretion from time to time to install, alter, remove and/or
replace such Tenant’s Personal Property as it shall deem to be useful or desirable in connection
with its business in the Leased Property. Tenant and its subtenants further shall have the right
to enter into such agreements and assignments with respect to Tenant’s Personal Property as are
necessary for Tenant or its subtenant to lease or obtain such financing for Tenant’s Personal
Property as Tenant or its subtenant shall desire. Landlord shall execute such landlord consents
and other agreements as shall be reasonably requested by Tenant in connection with any such
agreements and arrangements provided, however, that Tenant shall reimburse Landlord, within ten
(10) days of invoice therefor, for any costs incurred by Landlord in connection with such consents
and agreements and any consents or agreements executed by Landlord pursuant to this paragraph shall
impose no obligations or liabilities on Landlord nor adversely affect any of Landlord’s rights
under this Agreement. To the extent required by Tenant’s lessor or lender thereof, Landlord
shall subordinate to the rights of such lessor or lender Landlord’s rights under Article
15 of this Agreement and any right which Landlord now has or may hereafter have under
Applicable Law to levy or distrain upon any of Tenant’s Personal Property for rent or to claim or
assert title to any of Tenant’s Personal Property, subject to such lender to agreeing to terms
consistent with the provisions of Section 7.2.

     5.3 Yield Up. Upon the expiration or sooner termination of this Agreement, Tenant
shall remove all of Tenant’s Personal Property (other than that purchased by Landlord pursuant to
Article 15) and vacate and surrender the Leased Property to Landlord in substantially the
same condition in which the Leased Property was in on the Commencement Date, except as repaired,
rebuilt, restored, altered or added to as permitted or required by the provisions of this
Agreement, reasonable wear and tear excepted (and casualty damage and Condemnation, in the event

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that this Agreement is terminated following a casualty or Condemnation in accordance with
Article 10 or Article 11 excepted).

     In addition, upon the expiration or earlier termination of this Agreement, Tenant shall, at
Landlord’s sole cost and expense, use its good faith efforts to transfer (or cause to be
transferred) to and cooperate with Landlord or Landlord’s nominee in connection with the processing
of all applications for licenses, operating permits and other governmental authorizations and all
contracts, including contracts with governmental or quasi-governmental Entities which may be
necessary for the use and operation of the Fitness Centers as then operated.

     5.4 Management Agreement. Tenant may from time to time during the Term, enter into,
amend (except as provided in, and subject to the provisions of, clauses (i) and (ii) below) and/or
terminate any Management Agreement delegating operational authority for the day-to-day operation of
the Leased Property (or any portion thereof) to an Affiliated Person of Tenant or LTF, in any such
case without Landlord’s consent; provided that any such Management Agreement (i) shall comply with
the terms and conditions of this Section 5.4, and (ii) is not entered into in connection
with, or simultaneously with (whether through one or a series of transactions), a direct or
indirect Change in Control in violation of the restrictions contained in Section 16.1. 
Except as permitted above, Tenant shall not otherwise enter into, amend or modify any
Management Agreement without Landlord’s prior written consent, which consent shall not be
unreasonably withheld, conditioned or delayed. Any Management Agreement entered into pursuant to
the provisions of this Section 5.4 shall be subordinate to this Agreement and shall
provide, inter alia, that all amounts due from Tenant to the Manager thereunder
shall be subordinate to all amounts due from Tenant to Landlord (provided that, as long as no Event
of Default has occurred and is continuing, Tenant may pay all amounts due to a Manager pursuant to
such Management Agreement) and for termination thereof, at Landlord’s option, upon the termination
of this Agreement.

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ARTICLE 6

IMPROVEMENTS, ETC.

     6.1 Improvements to the Leased Property. Tenant shall not make, construct or install
(or permit to be made, constructed or installed) any Capital Additions without, in each instance,
obtaining Landlord’s prior written consent, which consent shall not be unreasonably withheld,
delayed or conditioned. Notwithstanding the foregoing, Tenant shall have the right, upon notice to
Landlord thereof in the case of Capital Additions costing in excess of $100,000, without Landlord’s
consent, to make, construct or install (or permit to be made, constructed or installed, Capital
Additions that (i) require immediate action in order to prevent imminent harm to person or property
or (ii) are non-structural in nature, cost less than $1,000,000, do not materially and adversely
affect any of the mechanical or building systems therein, or the exterior appearance thereof (other
than renovations, repairs or improvements to the entrances to the Fitness Centers conforming with
entrances to other health, fitness and/or wellness centers owned or operated by Tenant), or reduce
the gross square footage of the Property. Prior to commencing construction of any Capital Addition
requiring Landlord’s consent hereunder, Tenant shall submit to Landlord, in writing, a proposal
setting forth, in reasonable detail, any such proposed improvement and shall provide to Landlord
such plans and specifications, and such permits, licenses, contracts and such other information
concerning the same as Landlord may reasonably request. Landlord shall have thirty (30) days to
review all materials submitted to Landlord
in connection with any such proposal. Failure of Landlord to respond to Tenant’s proposal
within thirty (30) days after receipt of all information and materials requested by Landlord in
connection with the proposed improvement shall be deemed to constitute approval of the same.
Without limiting the generality of the foregoing, such proposal shall indicate the approximate
projected cost of constructing such proposed improvement and the use or uses to which it will be
put. No Capital Addition shall be made which would tie in or connect any Leased Improvements with
any other improvements on property adjacent to the Leased Property (and not part of the Land)
including, without limitation, tie-ins of buildings or other structures or utilities. Except as
permitted herein, Tenant shall not finance the cost of any construction of such improvement by the
granting of a lien on or security interest in

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the Leased Property or such improvement, or Tenant’s
interest therein, without the prior written consent of Landlord, which consent may be withheld by
Landlord in Landlord’s sole discretion. Any such improvements shall, upon the expiration or sooner
termination of this Agreement, remain or pass to and become the property of Landlord, free and
clear of all encumbrances other than Permitted Encumbrances.

     6.2 Salvage. All materials which are scrapped or removed in connection with the
making of either Capital Additions or non-Capital Additions or repairs required by Article
5 shall be or become the property of the party that paid for such work.

ARTICLE 7

LIENS

     7.1 Liens. Subject to Article 8, Tenant shall not, directly or indirectly,
create or allow to remain and shall promptly discharge (or cause to be discharged), at its expense,
any lien, encumbrance, attachment, title retention agreement or claim upon the Leased Property, or
any portion thereof, or Tenant’s leasehold interest therein or any attachment, levy, claim or
encumbrance in respect of the Rent, other than (a) Permitted Encumbrances, (b) restrictions, liens
and other encumbrances which are consented to in writing by Landlord, (c) liens for those taxes of
Landlord which Tenant is not required to pay hereunder, (d) subleases permitted by Article
16, (e) liens for Impositions or for sums resulting from noncompliance
with Legal Requirements so long as the same (i) are not yet due and payable, or (ii) are being
contested in accordance with Article 8, (f) liens of mechanics, laborers, materialmen,
suppliers or vendors incurred in the ordinary course of business that are not yet due and payable
or are for sums that are being contested in accordance with Article 8, (g) any Facility
Mortgages or other liens which are the responsibility of Landlord pursuant to the provisions of
Article 22 and (h) Landlord Liens and any other liens created by or as a result of the
actions or inactions of Landlord.

     7.2 Subordination of Landlord’s Lien. Landlord agrees that, upon the request of any
Person that shall be Tenant’s lessor or secured lender with respect to Tenant’s Personal Property,
Landlord shall negotiate in good faith for the purpose of executing and delivering a commercially
reasonable subordination of Landlord’s rights under Article 15 and

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Landlord’s statutory
lien rights, if any, and a consent and agreement with respect to the respective rights of Landlord
and such Person regarding the interests, in, and the timing and removal of, any Tenant’s Personal
Property, inventory or equipment in which such Person has a security interest (the “Collateral”),
in form and substance reasonably acceptable to Landlord and such Person, so long as such
subordination and agreement (i) provides for the indemnification of Landlord against any claims by
Tenant or any Person claiming through Tenant in connection with the removal of any of the
Collateral by such Person or the exercise of any rights with respect thereto by such Person and any
indemnity from all parties claiming an interest in the Collateral against any claims arising from
the disposal of any Collateral once deemed abandoned, (ii) expressly excludes any claim by such
Person to any right, title or interest in or to any Fixtures, (iii) provides for a reasonable, but
in no event more than sixty (60) days after Notice from Landlord, time frame for the removal of
such Collateral by such Person after the expiration of which such Collateral shall be deemed
abandoned, and (iv) provides for, and shall condition such Person’s right to allow the Collateral
to remain at the Leased Property on, the per diem payment of Minimum Rent due hereunder by such
Person for each day following the date of the expiration or termination of this Agreement that
Landlord permits such Person’s Collateral to remain in the Leased Property. Tenant shall pay all
costs (including legal fees) incurred in connection with the
negotiation of such subordination agreement(s), within ten (10) days of invoice therefor.

ARTICLE 8

PERMITTED CONTESTS

     Tenant shall have the right to contest the amount or validity of any Imposition, Legal
Requirement, Insurance Requirement, Environmental Obligation, lien, attachment, levy, encumbrance,
charge or claim (collectively, “Claims”) as to the Leased Property, by appropriate legal
proceedings, conducted in good faith and with due diligence, provided that (a) the foregoing shall
in no way be construed as relieving, modifying or extending Tenant’s obligation to pay (or cause to
be paid) any Claims as finally determined, (b) such contest shall not cause Landlord or Tenant to
be in default under any mortgage or deed of trust encumbering the Leased Property or any portion
thereof (Landlord agreeing that any such mortgage or deed of

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trust shall permit Tenant to exercise
the rights granted pursuant to this Article 8) or any interest therein or result in or
reasonably be expected to result in a lien attaching to the Leased Property or any portion thereof,
(c) no part of the Leased Property nor any Rent therefrom shall be in any immediate danger of sale,
forfeiture, attachment or loss, and (d) Tenant shall indemnify and hold harmless Landlord from and
against any cost, claim, damage, penalty or reasonable expense, including reasonable attorneys’
fees, incurred by Landlord in connection therewith or as a result thereof. Landlord agrees to join
in any such proceedings if required legally to prosecute such contest, provided that Landlord shall
not thereby be subjected to any liability therefor (including, without limitation, for the payment
of any costs or expenses in connection therewith) unless Tenant agrees by agreement in form and
substance reasonably satisfactory to Landlord, to assume and indemnify Landlord with respect to the
same. Tenant shall be entitled to any refund of any Claims and such charges and penalties or
interest thereon which have been paid by Tenant or paid by Landlord to the extent that Landlord has
been fully reimbursed by Tenant. If Tenant shall fail (x) to pay or cause to be paid any Claims
when finally determined, (y) to provide reasonable security therefor or (z) to prosecute or cause
to be prosecuted any such contest diligently and in good faith, Landlord may, upon reasonable
notice to Tenant (which notice shall not be
required if Landlord shall reasonably determine that the same is not practicable), pay such
charges, together with interest and penalties due with respect thereto, and Tenant shall reimburse
Landlord therefor, upon demand, as Additional Charges.

ARTICLE 9

INSURANCE AND INDEMNIFICATION

     9.1 General Insurance Requirements.

     (a) Tenant shall obtain, pay for and maintain the following insurance on or in
connection with the Leased Property: (i) insurance against all risk of physical loss or
damage to Tenant’s Personal Property and the Leased Improvements and Fixtures as provided
under “special form” coverage, and including perils of fire, lightning, hail, windstorm,
civil commotion, smoke, aircraft and vehicle impact, explosion, vandalism and malicious
mischief, riot, glass breakage, crime, water, mold, weight of snow and ice, sewer backup,
flood coverage for any Property located in a

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designated flood plain, earthquake coverage for
any Property located in a designated earthquake zone under Applicable Law and, to the extent
required by Facility Mortgagee, terrorism insurance (to the extent available on commercially
reasonable terms), in amounts not less than the actual replacement cost of the Leased
Improvements and Fixtures (except that the amount of flood and earthquake coverage need not
exceed a $5,000,0000 per occurrence and annual aggregate limit) and loss of rent insurance
for a period of not less than eighteen (18) months which shall be payable in the event of a
termination of this Agreement with respect to any or all of the Properties pursuant to
Article 10; provided that, if Tenant’s insurance company is unable or unwilling to
include any of all of such specified perils, Tenant shall have the option of purchasing
coverage against such perils from another insurer on a “difference in conditions” form
policy or through a stand-alone policy. Such policies shall contain replacement cost and
agreed amount endorsements and “law and ordinance” coverage (at full replacement cost).
Such policies and endorsements shall contain deductibles not more than $100,000 per
occurrence (or $250,000 per occurrence with respect to flood and earthquake coverage); (ii)
commercial general
liability insurance and business automobile liability insurance (including non-owned
and hired automobile liability) against claims for personal and bodily injury, death or
property damage occurring on, in or as a result of the use of the Leased Property, in an
amount not less than $11,000,000 per occurrence/annual aggregate, on an occurrence basis,
with no self insured retention or deductible, provided, however, that so long as Tenant or
Guarantor has a net worth calculated in accordance with GAAP consistently applied of not
less than $200,000,000, then, the insurance required under this clause (ii) may have a
deductible or self-insured retention of up to $[5,000,000;] (iii) workers’ compensation
insurance in the amount required by Applicable Law and employers’ liability insurance
covering all persons employed by Tenant in connection with any work done on or about any of
the Leased Property; (iv) comprehensive boiler and machinery/equipment breakdown insurance
on any of the Fixtures or any other equipment on or in the Leased Property, in an amount not
less than $5,000,000 per accident for damage to property (and which may be carried as part
of the coverage required under clause (i) above or pursuant to a separate policy or

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endorsement). Either such boiler and machinery policy or the special causes of loss policy
required in clause (i) above shall include at least $1,000,000 per incidence for
off-premises service interruption, and not less than $100,000 per incidence for expediting
expenses, ammonia contamination, and hazardous materials clean-up expense and may contain a
deductible not to exceed $100,000; (v) business income/extra expense insurance at limits
sufficient to cover 100% of the Rent due under this Agreement for a period of not less than
twelve (12) months from time of loss; (vi) during any period in which substantial
alterations at the Leased Property are being undertaken, builder’s risk insurance covering
the total completed value, including all hard and soft costs (which shall include business
interruption coverage) with respect to the Leased Improvements being constructed, altered or
repaired (on a completed value, non-reporting basis), replacement cost of work performed and
equipment, supplies and materials furnished in connection with such construction, alteration
or repair of Leased Improvements or Fixtures, together with such other endorsements as
Landlord may reasonably require, and general liability,
worker’s compensation and automobile liability insurance with respect to the Leased
Improvements being constructed, altered or repaired; and (vii) such other insurance (or
other terms with respect to any insurance required pursuant to this Article 9,
including without limitation amounts of coverage, deductibles, ratings, form of mortgagee
clause) on or in connection with any Property as Landlord or Facility Mortgagee may
reasonably require, which at the time is usual and commonly obtained in connection with
properties similar in type of building size, use and location to the applicable Property or
in connection with loans similar to that secured by the Facility Mortgage.

     (b) All of the insurance required by Section 9.1(a)  shall be written by
companies having a Best’s rating of A:X or above and a claims paying ability rating of A or
better by Standard & Poor’s Rating Services, a division of the McGraw Hill Companies, Inc.
or equivalent rating agency approved by Landlord and Facility Mortgagee in their sole
discretion and which are authorized to write insurance policies by, the State Insurance
Department (or its equivalent) for the states in which the Leased Property are located. The
insurance policies (i) shall be for such

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terms as Landlord may reasonably approve and (ii)
shall be in amounts sufficient at all times to satisfy any coinsurance requirements thereof.
If said insurance or any part thereof shall expire, be withdrawn, become void, voidable,
unreliable or unsafe for any reason, including a breach of any condition thereof by Tenant
or the failure or impairment of the capital of any insurer, or if for any other reason
whatsoever said insurance shall become reasonably unsatisfactory to Landlord, Tenant shall
immediately obtain new or additional insurance reasonably satisfactory to Landlord.

     (c) Each insurance policy referred to in clauses (i), (iv), (v) and (vi) of Section
9.1(a) shall contain standard non-contributory mortgagee clauses in favor of and
acceptable to Facility Mortgagee. Each policy required by any provision of Section
9.1(a), except clause (iii) thereof, shall provide that it may not be cancelled,
substantially modified or allowed to lapse on any renewal date except after thirty (30)
days’ prior written notice to Landlord and Facility Mortgagee. Each insurance policy
shall be primary in relation to any policies which Landlord may elect to carry.

     (d) Tenant shall pay as they become due all premiums for the insurance required by
Section 9.1(a), shall renew or replace each policy and deliver to Landlord evidence
of the payment of the full premium therefor or installment then due at least ten (10) days
prior to the expiration date of such policy, and shall promptly deliver to Landlord all
original certificates of insurance evidencing such coverages or, if required by Landlord,
original or certified policies. All certificates of insurance (including liability coverage)
provided to Landlord and Facility Mortgagee shall be on ACORD Form 27 (or its equivalent).

     (e) Anything in this Article 9 to the contrary notwithstanding, any insurance
which Tenant is required to obtain pursuant to Section 9.1(a) may be carried under a
“blanket” policy or policies covering other properties of Tenant or under an “umbrella”
policy or policies covering other liabilities of Tenant, as applicable; provided that, such
blanket or umbrella policy or policies otherwise comply with the provisions of this
Article 9, and such policy shall reference the Property and shall guarantee a

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minimum limit available with respect to the Property which is equal to the insurance limits
required by this Agreement. Upon request of Landlord, Tenant shall provide to Landlord a
statement of replacement cost of the Property for purposes of updating the insurance
required by Section 9.1(a)(i). The original or a certified copy of each such
blanket or umbrella policy shall promptly be delivered to Landlord upon Landlord’s request.

     (f) Each policy (other than workers’ compensation coverage) shall contain an effective
waiver by the carrier against all claims for payment of insurance premiums against Landlord.

     (g) The insurance referred to in Section 9.1(a)(i), Section 9.1(a)(iv)
and Section 9.1(a)(vi) shall name Landlord as loss payee and Facility Mortgagee as
loss payee and mortgagee, and shall name Tenant as an insured as its interest may appear in
the case of Tenant’s Personal
Property. The insurance referred to in Section 9.1(a)(ii) shall name Landlord
and Facility Mortgagee as additional insureds, and the insurance referred to in Section
9.1(a)(v) shall name Landlord as insured and Facility Mortgagee and Landlord as loss
payee to the extent of the Rent payable to or for the benefit of Landlord as its interest
appears under this Agreement.

     9.2 Waiver of Claims and Subrogation. Tenant agrees that (insofar as and to the
extent that such agreement may be effective without making it impossible to secure insurance
coverage from responsible insurance companies doing business in any State) with respect to any
property loss which is or is required herewith to be covered by insurance carried by Tenant, Tenant
hereby releases Landlord of and from any and all claims with respect to such loss; and further
agrees that its insurance companies shall have no right of subrogation against Landlord on account
thereof, even though extra premium may result therefrom. In the event that any extra premium is
payable by Tenant as a result of this provision, Landlord shall not be liable for reimbursement to
Tenant for such extra premium.

     9.3 Miscellaneous. All loss adjustments shall be payable as provided in Article
10, except that losses under liability and worker’s compensation insurance policies shall be
payable directly to the party entitled thereto. In the event Tenant shall fail to effect (or cause
to be effected) such insurance as

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herein required, to pay (or cause to be paid) the premiums
therefor or to deliver (or cause to be delivered) such policies or certificates to Landlord or any
Facility Mortgagee at the times required, Landlord shall have the right, upon Notice to Tenant, but
not the obligation, to acquire such insurance and pay the premiums therefor, which amounts shall be
payable to Landlord, upon demand, as Additional Charges, together with interest accrued thereon at
the Overdue Rate from the date such payment is made until (but excluding) the date repaid.

     9.4 No Separate Insurance. Tenant shall not take (or permit any Person to take) out
separate insurance, concurrent in form or contributing in the event of loss with that required by
this Article 9, or increase the amount of any existing insurance by securing an additional
policy or additional policies, unless all parties having an insurable interest in the subject
matter of such insurance, including Landlord and all Facility
Mortgagees, are included therein as additional insureds and the loss is payable under such
insurance in the same manner as losses are payable under this Agreement. In the event Tenant shall
take out any such separate insurance or increase any of the amounts of the then existing insurance,
Tenant shall give Landlord prompt Notice thereof.

     9.5 Indemnification of Landlord. Notwithstanding the existence of any insurance
provided for herein and without regard to the policy limits of any such insurance, Tenant shall
protect, indemnify and hold harmless Landlord for, from and against all liabilities, obligations,
claims, damages, penalties, causes of action, costs and reasonable expenses (including, without
limitation, reasonable attorneys’ fees), to the maximum extent permitted by law, imposed upon or
incurred by or asserted against Landlord by reason of the following, except to the extent caused by
Landlord’s gross negligence or willful misconduct: (a) any accident, injury to or death of persons
or loss of or damage to property occurring on or about any Property or adjoining sidewalks or
rights of way, (b) any past, present or future use, misuse, non-use, condition, management,
maintenance or repair by Tenant, any Manager or anyone claiming under any of them of any Property
or Tenant’s Personal Property or any litigation, proceeding or claim by governmental entities or
other third parties to which Landlord is made a party or participant relating to any Property or
Tenant’s Personal Property or such use, misuse, non-use, condition, management, maintenance, or
repair thereof including, failure to perform obligations (other than Condemnation proceedings) to
which

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Landlord is made a party, (c) any Impositions that are the obligations of Tenant to pay
pursuant to the applicable provisions of this Agreement, and (d) any failure on the part of Tenant
or anyone claiming under Tenant to perform or comply with any of the terms of this Agreement.
Tenant, at its expense, shall contest, resist and defend any such claim, action or proceeding
asserted or instituted against Landlord (and shall not be responsible for any duplicative
attorneys’ fees incurred by Landlord) or may compromise or otherwise dispose of the same, with
Landlord’s prior written consent (which consent may not be unreasonably withheld, delayed or
conditioned). The obligations of Tenant under this Section 9.5 are in addition to the
obligations set forth in Section 4.3 and shall survive the termination of this Agreement.

ARTICLE 10

CASUALTY

     10.1 Insurance Proceeds. Except as provided in the last clause of this sentence, all
proceeds payable by reason of any loss or damage to any Property, or any portion thereof, and
insured under any policy of insurance required by Article 9 (other than the proceeds of any
business interruption insurance), shall be paid directly to Landlord (subject to the provisions of
Section 10.2) and all loss adjustments with respect to losses payable to Landlord shall
require the prior written consent of Landlord; provided, however, that, so long as
no Event of Default shall have occurred and be continuing, if such proceeds shall be less than or
equal to Five Hundred Thousand Dollars ($500,000), shall be paid directly to Tenant and such losses
may be adjusted without Landlord’s consent. If Tenant is required to reconstruct or repair any
Property as provided herein, such proceeds shall be paid out by Landlord from time to time for the
reasonable costs of reconstruction or repair of such Property necessitated by such damage or
destruction, subject to and in accordance with the provisions of Section 10.2.4. Provided
no Default or Event of Default has occurred and is continuing, any excess proceeds of insurance
remaining after the completion of the restoration shall be paid to Tenant. In the event that the
provisions of Section 10.2.1 are applicable, the insurance proceeds shall be retained by
the party entitled thereto pursuant to Section 10.2.1.

     10.2 Damage or Destruction.

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     10.2.1 Damage or Destruction of Leased Property. If, during the Term, any Property
shall be totally or partially destroyed such that such Property is thereby rendered Unsuitable for
Its Permitted Use, Landlord may, by the giving of Notice thereof to Tenant, terminate this
Agreement with respect to such affected Property, whereupon, this Agreement shall terminate with
respect to such affected Property and Landlord shall be entitled to retain the insurance proceeds
payable on account of such damage (other than any proceeds relating to Tenant’s Personal Property).
In such event, Tenant shall pay to Landlord the amount of any deductible under the insurance
policies covering such Property, the amount of any uninsured loss and any difference between the
replacement cost of the affected Property and the casualty insurance proceeds therefor.

     10.2.2 Partial Damage or Destruction. If, during the Term, any Property shall be
totally or partially destroyed but the Property is not rendered Unsuitable for Its Permitted Use,
Tenant shall, subject to Section 10.2.3, restore such Property as provided in Section
10.2.4.

     10.2.3 Insufficient Insurance Proceeds. If the cost of the repair or restoration of
the applicable Property exceeds the amount of insurance proceeds received by Landlord and Tenant
pursuant to Section 9.1 (including, without limitation, by reason of an uninsured loss),
Landlord shall have the right (but not the obligation), exercisable at Landlord’s sole election by
Notice to Tenant given within sixty (60) days after Tenant’s Notice of any such deficiency, to
elect to make available for application to the cost of repair or restoration the amount of such
deficiency; provided, however, in such event, upon any disbursement by Landlord
thereof, the Minimum Rent shall be adjusted as provided in Section 3.1.1(d). If Landlord
shall not so elect, Tenant shall, upon the demand of Landlord, contribute any excess amounts needed
to restore such Property. Such difference shall be paid by Tenant to Landlord and held by Landlord,
together with any other insurance proceeds, for application to the cost of repair and restoration.

     10.2.4 Disbursement of Proceeds. In the event Tenant is required to restore any
Property pursuant to Section 10.2, Tenant shall, at its sole cost and expense, commence (or
cause to be commenced) promptly and continue diligently to perform (or cause to be performed) the
repair and restoration of such Property (hereinafter called the “Work”), so as to restore
(or cause to be restored) such Property in material compliance

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with all Legal Requirements and so
that such Property shall be, to the extent practicable, substantially equivalent in value and
general utility to its general utility and value immediately prior to such damage or
destruction. Subject to the terms hereof, Landlord shall advance the insurance proceeds and any
additional amounts otherwise deposited with or paid by Landlord to Tenant regularly during the
repair and restoration period so as to permit payment for the cost of any such restoration and
repair. Any such advances shall be made not more than monthly within ten (10) Business Days after
Tenant submits to Landlord a written requisition and substantiation therefor on AIA Forms G702 and
G703 (or on such other form or forms as may be reasonably acceptable to Landlord). Landlord may,
at its option, condition advancement of such insurance proceeds and other amounts on (i) the
absence of any Event of Default, (ii) its approval of plans and specifications of an architect
satisfactory to Landlord (which approval shall not be unreasonably withheld, delayed or
conditioned), (iii) general contractors’ estimates, (iv) architect’s certificates, (v)
unconditional lien waivers of general contractors, if available, (vi) evidence of approval by all
governmental authorities and other regulatory bodies whose approval is required, and (vii) such
other certificates as Landlord may, from time to time, reasonably require.

     Tenant’s obligation to restore any Property pursuant to this Article 10 and operate
therein shall be subject to the release of available insurance proceeds by the applicable Facility
Mortgagee to Landlord or directly to Tenant.

     10.3 Damage Near End of Term. Notwithstanding any provisions of Section 10.1 or
10.2 to the contrary, if damage to or destruction of any Property occurs during the last
eighteen (18) months of the Term (including any Extended Term) and if such damage or destruction
cannot reasonably be expected to be fully repaired and restored prior to the date that is six (6)
months prior to the end of the Term (including any Extended Term), then either party may, by the
giving of notice thereof to the other party, terminate this Agreement with respect to such affected
Property, whereupon, this Agreement shall terminate with respect to such affected Property and
Landlord shall be entitled to retain the insurance proceeds payable on account of such damage
(other than any proceeds relating to Tenant’s Personal Property).

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     10.4 Tenant’s Property. All insurance proceeds payable by reason of any loss of or
damage to any of Tenant’s Personal Property shall be paid to Tenant.

     10.5 Restoration of Tenant’s Property. If Tenant is required to restore any Property
as hereinabove provided, Tenant shall either (a) restore or cause to be restored all alterations
and improvements made by Tenant and Tenant’s Personal Property, or (b) replace or cause to be
replaced such alterations and improvements and Tenant’s Personal Property with improvements or
items of the same or better quality and utility in the operation of such Property.

     10.6 No Abatement of Rent. This Agreement shall remain in full force and effect and
Tenant’s obligation to make all payments of Rent and to pay all other charges as and when required
under this Agreement shall remain unabated during the Term notwithstanding any damage involving the
Leased Property or any portion thereof. The provisions of this Article 10 shall be
considered an express agreement governing any cause of damage or destruction to the Leased Property
or any portion thereof and, to the maximum extent permitted by law, no local or State statute, law,
rule, regulation or ordinance in effect during the Term which provides for such a contingency shall
have any application in such case.

     10.7 Waiver. Tenant hereby waives any statutory rights of termination which may arise
by reason of any damage or destruction of the Leased Property, or any portion thereof.

ARTICLE 11

CONDEMNATION

     11.1 Total Condemnation, Etc. If either (i) the whole of any Property shall be taken
by Condemnation or (ii) a Condemnation of less than the whole of any Property renders any Property
Unsuitable for Its Permitted Use, this Agreement shall terminate with respect to such Property,
Tenant and Landlord shall seek the Award for their interests in the applicable Property as provided
in Section 11.5.

     11.2 Partial Condemnation. In the event of a Condemnation of less than the whole of
any Property such that such Property
is still suitable for its Permitted Use, Tenant shall, to the extent of the Award and any
additional amounts disbursed by

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Landlord as hereinafter provided, commence (or cause to be
commenced) promptly and continue diligently to restore (or cause to be restored) the untaken
portion of the applicable Leased Improvements so that such Leased Improvements shall constitute a
complete architectural unit of the same general character and condition (as nearly as may be
possible under the circumstances) as such Leased Improvements existing immediately prior to such
Condemnation, in material compliance with all Legal Requirements, subject to the provisions of this
Section 11.2. If the cost of the repair or restoration of the affected Property exceeds
the amount of the Award, Tenant shall give Landlord Notice thereof which notice shall set forth in
reasonable detail the nature of such deficiency and whether Tenant shall pay and assume the amount
of such deficiency (Tenant having no obligation to do so, except that if Tenant shall elect to make
such funds available, the same shall become an irrevocable obligation of Tenant pursuant to this
Agreement). In the event Tenant shall elect not to pay and assume the amount of such deficiency,
Landlord shall have the right (but not the obligation), exercisable at Landlord’s sole election by
Notice to Tenant given within sixty (60) days after Tenant’s Notice of the deficiency, to elect to
make available for application to the cost of repair or restoration the amount of such deficiency;
provided, however, in such event, upon any disbursement by Landlord thereof, the
Minimum Rent shall be adjusted as provided in Section 3.1.1(d). In the event that neither
Landlord nor Tenant shall elect to make such deficiency available for restoration, Landlord may
terminate this Agreement with respect to the affected Property by Notice to Tenant and the entire
Award shall be retained by Landlord.

     Subject to the terms hereof, Landlord shall contribute to the cost of restoration that part of
the Award necessary to complete such repair or restoration, together with severance and other
damages awarded for the taken Leased Improvements and any deficiency Landlord has agreed to
disburse, to Tenant regularly during the restoration period so as to permit payment for the cost of
such repair or restoration. Landlord may, at its option, condition advancement of such Award and
other amounts on (i) the absence of any Event of Default, (ii) its approval of plans and
specifications of an architect satisfactory to Landlord (which approval shall not be unreasonably
withheld,
delayed or conditioned), (iii) general contractors’ estimates, (iv) architect’s certificates,
(v) unconditional lien waivers of general contractors, if available, (vi) evidence of approval by

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all governmental authorities and other regulatory bodies whose approval is required, and (vii) such
other certificates as Landlord may, from time to time, reasonably require. Landlord’s obligation
under this Section 11.2 to disburse the Award and such other amounts shall be subject to
the collection thereof by Landlord. Tenant’s obligation to restore the applicable Leased
Improvements and operate therein shall be subject to the release of the Award by the applicable
Facility Mortgagee to Landlord.

     11.3 No Abatement of Rent. Other than as specifically provided in this Agreement,
this Agreement shall remain in full force and effect and Tenant’s obligation to make all payments
of Rent and to pay all other charges as and when required under this Agreement shall remain
unabated during the Term notwithstanding any Condemnation involving the Leased Property, or any
portion thereof. The provisions of this Article 11 shall be considered an express
agreement governing any Condemnation involving the Leased Property, or any portion thereof, and, to
the maximum extent permitted by law, no local or State statute, law, rule, regulation or ordinance
in effect during the Term which provides for such a contingency shall have any application in such
case.

     11.4 Temporary Condemnation. In the event of any temporary Condemnation of any
Property or Tenant’s interest therein, this Agreement shall continue in full force and effect and
Tenant shall continue to pay (or cause to be paid), in the manner and on the terms herein
specified, the full amount of the Rent. Tenant shall continue to perform and observe (or cause to
be performed and observed) all of the other terms and conditions of this Agreement on the part of
the Tenant to be performed and observed. Provided no Event of Default has occurred and is
continuing, the entire amount of any Award made for such temporary Condemnation allocable to the
Term, whether paid by way of damages, rent or otherwise, shall be paid to Tenant. Tenant shall,
promptly upon the termination of any such period of temporary Condemnation, at its sole cost and
expense, restore the affected Property to the condition that existed immediately prior to such
Condemnation, in material compliance with all applicable Legal Requirements, unless such period of
temporary Condemnation shall extend beyond the expiration of the Term, in
which event Tenant shall not be required to make such restoration.

     11.5 Allocation of Award. Except as provided in Section 11.4 and the second
sentence of this Section 11.5, the total

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Award shall be solely the property of and payable
to Landlord. Any portion of the Award made for the taking of Tenant’s leasehold interest in the
Leased Property, loss of business during the remainder of the Term, the taking of Tenant’s Personal
Property, or Tenant’s removal and relocation expenses shall be the sole property of and payable to
Tenant (subject to the provisions of Section 11.2). In any Condemnation proceedings,
Landlord and Tenant shall each seek its own Award in conformity herewith, at its own expense.

ARTICLE 12

DEFAULTS AND REMEDIES

     12.1 Events of Default. The occurrence of any one or more of the following events
shall constitute an “Event of Default” hereunder:

     (a) should Tenant fail to make any payment of the Rent or any other sum payable
hereunder when due and such failure shall continue for a period of ten (10) days after
Notice thereof from Landlord to Tenant; or

     (b) should Tenant fail to maintain the insurance coverages required under Article
9 and such failure shall continue for a period of ten (10) days after Notice thereof
from Landlord to Tenant; or

     (c) should Tenant default in the due observance or performance of any of the terms,
covenants or agreements contained herein to be performed or observed by it (other than as
specified in clauses (a) and (b) above) and should such default continue for a period of
thirty (30) days after Notice thereof from Landlord to Tenant; provided,
however, that if such default is susceptible of cure but such cure cannot be
accomplished with due diligence within such period of time and if, in addition, Tenant
commences to cure or cause to be cured such default within thirty (30) days after Notice
thereof from Landlord and thereafter
prosecutes the curing of such default with all due diligence, such period of time shall
be extended to such period of time (not to exceed an additional sixty (60) days in the
aggregate) as may be necessary to cure such default with all due diligence; or

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     (d) should any Guarantor be in breach of any obligation under its Guaranty; or

     (e) should LTF fail to timely file such public filings and other financial information
as LTF is required or elects to file with the SEC; or

     (f) should any representation or warranty made by or on behalf of Tenant or any
Guarantor under or in connection with this Agreement or any Guaranty, or in any document,
certificate or agreement delivered in connection herewith or therewith prove to have been
false or misleading in any material respect on the day when made or deemed made and, if such
default is susceptible of cure but such cure cannot be accomplished with due diligence
within thirty (30) days after Notice thereof from Landlord to Tenant or Guarantor, such
period of time and if, in addition, Tenant commences to cure or cause to be cured such
default within thirty (30) days after Notice thereof from Landlord and thereafter prosecutes
the curing of such default with all due diligence, such period of time shall be extended to
such period of time (not to exceed an additional sixty (60) days in the aggregate), as may
be necessary to cure such default with all due diligence; or

     (g) should Tenant or any Guarantor generally not be paying its debts as they become due
or should Tenant or any Guarantor make a general assignment for the benefit of creditors; or

     (h) should any petition be filed by or against Tenant or any Guarantor under the
Federal bankruptcy laws, or should any other proceeding be instituted by or against Tenant
or any Guarantor seeking to adjudicate Tenant or any Guarantor bankrupt or insolvent, or
seeking liquidation, reorganization, arrangement, adjustment or composition of Tenant’s
debts under any law relating to bankruptcy, insolvency or reorganization or relief of
debtors, or
seeking the entry of an order for relief or the appointment of a receiver, trustee,
custodian or other similar official for Tenant or any Guarantor or for any substantial part
of the property of Tenant or any Guarantor and such proceeding is not dismissed within one
hundred eighty (180) days after institution thereof; or

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     (i) should Tenant or any Guarantor cause or institute any proceeding for its
dissolution or termination; or

     (j) should Tenant voluntarily cease operation of any of the Leased Property for its
Permitted Use for a period in excess of thirty (30) consecutive days, except as a result of
damage, destruction or partial or complete Condemnation in accordance with Article 10
and Article 11, in connection with any alterations or additions approved by
Landlord or permitted pursuant to Article 6; or

     (k) should the estate or interest of Tenant in the Leased Property or any part thereof
be levied upon or attached in any proceeding and the same shall not be vacated or discharged
within the later of (x) ninety (90) days after commencement thereof, unless the amount in
dispute is less than One Hundred Thousand Dollars ($100,000), in which case Tenant shall
give notice to Landlord of the dispute but Tenant may defend in any suitable way, and (y)
one hundred eighty (180) days after receipt by Tenant of Notice thereof from Landlord
(unless Tenant shall be contesting such lien or attachment in good faith in accordance with
Article 8); or

     (l) should there occur any direct or indirect Change in Control of Tenant or any
Guarantor, except as otherwise permitted by Article 16; or

     (m) should Tenant fail to provide a Guaranty from any Acquiring Guarantor in accordance
with the provisions of Section 16.1;

then, and in any such event, Landlord, in addition to all other remedies available to it, may
terminate this Agreement with respect to any or all of the Leased Property by giving Notice thereof
to Tenant and upon the expiration of the time, if any, fixed in such Notice, this Agreement shall
terminate with
respect to all or the designated portion of the Leased Property and all rights of Tenant under this
Agreement with respect thereto shall cease. Landlord shall have and may exercise all rights and
remedies available at law and in equity to Landlord as a result of Tenant’s breach of this
Agreement.

     Upon the occurrence of an Event of Default, Landlord may, in addition to any other remedies
provided herein, enter upon the Leased Property or any portion thereof.

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     12.2 Remedies. None of (a) the termination of this Agreement pursuant to Section
12.1, (b) the repossession of the Leased Property or any portion thereof, (c) the failure of
Landlord to relet the Leased Property or any portion thereof, nor (d) the reletting of all or any
of portion of the Leased Property, shall relieve Tenant of its liability and obligations hereunder,
all of which shall survive any such termination, repossession or reletting. In the event of any
such termination, Tenant shall forthwith pay to Landlord all Rent due and payable with respect to
the Leased Property, or terminated portion thereof, through and including the date of such
termination. Thereafter, Tenant, until the end of what would have been the Term of this Agreement
in the absence of such termination, and whether or not the Leased Property or any portion thereof
shall have been relet, shall be liable to Landlord for, and shall pay to Landlord, as current
damages, the Rent and other charges which would be payable hereunder for the remainder of the Term
had such termination not occurred, less the net proceeds, if any, of any reletting of the Leased
Property, or any portion thereof, after deducting all reasonable expenses in connection with such
reletting, including, without limitation, all repossession costs, brokerage commissions, legal
expenses, attorneys’ fees, advertising, expenses of employees, alteration costs and expenses of
preparation for such reletting. Tenant shall pay such current damages to Landlord monthly on the
days on which the Minimum Rent would have been payable hereunder if this Agreement had not been so
terminated with respect to such of the Leased Property.

     At any time after such termination, whether or not Landlord shall have collected any such
current damages, as liquidated final damages beyond the date of such termination, at Landlord’s
election, Tenant shall pay to Landlord an amount equal to the net present value (as determined
utilizing an assumed interest
rate of nine percent (9%) per annum) of the excess, if any, of the Rent and other charges
which would be payable hereunder from the date of such termination (assuming that, for the purposes
of this paragraph, annual payments by Tenant on account of Impositions would be the same as
payments required for the immediately preceding twelve calendar months, or if less than twelve
calendar months have expired since the Commencement Date, the payments required for such lesser
period projected to an annual amount) for what would be the then unexpired term of this Agreement
if the same remained in effect, over the fair market rental for the same period. Nothing contained
in this Agreement

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shall, however, limit or prejudice the right of Landlord to prove and obtain in
proceedings for bankruptcy or insolvency an amount equal to the maximum allowed by any statute or
rule of law in effect at the time when, and governing the proceedings in which, the damages are to
be proved, whether or not the amount be greater than, equal to, or less than the amount of the loss
or damages referred to above.

     In case of any Event of Default, re-entry, expiration and dispossession by summary proceedings
or otherwise, Landlord may, (a) relet the Leased Property or any part or parts thereof, either in
the name of Landlord or otherwise, for a term or terms which may at Landlord’s option, be equal to,
less than or exceed the period which would otherwise have constituted the balance of the Term and
may grant concessions or free rent to the extent that Landlord considers advisable and necessary to
relet the same, and (b) may make such reasonable alterations, repairs and decorations in the Leased
Property or any portion thereof as Landlord, in its reasonable discretion, considers advisable and
necessary for the purpose of reletting the Leased Property; and the making of such alterations,
repairs and decorations shall not operate or be construed to release Tenant from liability
hereunder as aforesaid. Landlord shall in no event be liable in any way whatsoever for any failure
to relet all or any portion of the Leased Property, or, in the event that the Leased Property is
relet, for failure to collect the rent under such reletting. To the maximum extent permitted by
law, Tenant hereby expressly waives any and all rights of redemption granted under any present or
future laws in the event of Tenant being evicted or dispossessed, or in the event of Landlord
obtaining possession of the Leased Property, by reason of the occurrence and continuation of an
Event of Default hereunder.

     12.3 Tenant’s Waiver. IF THIS AGREEMENT IS TERMINATED PURSUANT TO SECTION 12.1 OR
12.2, TENANT WAIVES, TO THE EXTENT PERMITTED BY LAW, ANY RIGHT TO A TRIAL BY JURY IN THE EVENT
OF SUMMARY PROCEEDINGS TO ENFORCE THE REMEDIES SET FORTH IN THIS ARTICLE 12, AND THE
BENEFIT OF ANY LAWS NOW OR HEREAFTER IN FORCE EXEMPTING PROPERTY FROM LIABILITY FOR RENT OR FOR
DEBT.

     12.4 Application of Funds. Any payments received by Landlord under any of the
provisions of this Agreement during the existence or continuance of any Event of Default (and any
payment made to Landlord rather than Tenant due to the existence of any Event of Default) shall be
applied to Tenant’s current and past due obligations under this Agreement in such order as

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Landlord
may determine or as may be prescribed by the laws of the State. Any balance shall be paid to
Tenant.

     12.5 Landlord’s Right to Cure Tenant’s Default. If an Event of Default shall have
occurred and be continuing, Landlord, after Notice to Tenant (which Notice shall not be required if
Landlord shall reasonably determine immediate action is necessary to protect person or property),
without waiving or releasing any obligation of Tenant and without waiving or releasing any Event of
Default, may (but shall not be obligated to), at any time thereafter, make such payment or perform
such act for the account and at the expense of Tenant, and may, to the maximum extent permitted by
law, enter upon the Leased Property or any portion thereof for such purpose and take all such
action thereon as, in Landlord’s reasonable discretion, may be necessary or appropriate therefor.
No such entry shall be deemed an eviction of Tenant. All reasonable costs and expenses (including,
without limitation, reasonable attorneys’ fees) incurred by Landlord in connection therewith,
together with interest thereon (to the extent permitted by law) at the Overdue Rate from the date
such sums are paid by Landlord until repaid, shall be paid by Tenant to Landlord, on demand.

ARTICLE 13

HOLDING OVER

     Any holding over by Tenant after the expiration or sooner termination of this Agreement shall
be treated as a daily tenancy at sufferance at a rate equal to one hundred seventy-five percent
(175%) the Minimum Rent and other charges herein
provided (prorated on a daily basis). Tenant shall also pay to Landlord all damages (direct
or indirect) sustained by reason of any such holding over. Otherwise, such holding over shall be
on the terms and conditions set forth in this Agreement, to the extent applicable. Nothing
contained herein shall constitute the consent, express or implied, of Landlord to the holding over
of Tenant after the expiration or earlier termination of this Agreement.

ARTICLE 14

LANDLORD DEFAULT

     If Landlord shall default in the performance or observance of any of its covenants or
obligations set forth in this

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Agreement or any obligation of Landlord, if any, under any agreement
affecting any Property, the performance of which is not Tenant’s obligation pursuant to this
Agreement, and any such default shall continue for a period of thirty (30) days after Notice
thereof from Tenant to Landlord and any applicable Facility Mortgagee, or such additional period as
may be reasonably required to correct the same, Tenant may declare the occurrence of a
“Landlord Default” by a second Notice to Landlord and to such Facility Mortgagee.
Thereafter, Tenant may forthwith cure the same and, subject to the provisions of the following
paragraph, invoice Landlord for costs and expenses (including reasonable attorneys’ fees and court
costs) incurred by Tenant in curing the same, together with interest thereon (to the extent
permitted by law) from the date Landlord receives Tenant’s invoice until paid, at the Overdue Rate.
Tenant shall have no right to terminate this Agreement for any default by Landlord hereunder and
no right, for any such default, to offset or counterclaim against any Rent or other charges due
hereunder.

ARTICLE 15

PURCHASE RIGHTS

     If and to the extent permitted by any and all lenders or other applicable financing sources of
Tenant, LTF or any of their respective Parents, Subsidiaries or affiliates, Landlord shall have the
option to purchase Tenant’s Personal Property, at the expiration or termination of this Agreement,
for an amount equal to the then fair market value thereof (as determined by
agreement of the parties or, in the absence of such agreement, appraisal), subject to, and
with appropriate price adjustments for, all equipment leases, conditional sale contracts, UCC-1
financing statements and other encumbrances to which such Personal Property is subject (and subject
to the right of any lender or other financing source thereunder to grant or withhold its consent
thereto as provided in any such financing agreements or arrangements relating thereto), provided
that Landlord shall be permitted to assume any such lease, contract, financing or encumbrance to
the extent the same only relates to Tenant’s Personal Property at the Leased Property and Tenant is
released from liability in connection therewith. Upon the expiration or sooner termination of this
Agreement, Tenant shall use its reasonable efforts to transfer and assign, or cause to be
transferred and assigned, to Landlord or its designee, or assist Landlord or its designee in
obtaining, any contracts, licenses,

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and certificates required for the then operation of the Leased
Property.

ARTICLE 16

SUBLETTING AND ASSIGNMENT

     16.1 Subletting and Assignment. Except as provided in Section 16.3, Tenant
shall not, without Landlord’s prior written consent (which consent may be given or withheld in
Landlord’s sole and absolute discretion), assign, mortgage, pledge, hypothecate, encumber or
otherwise transfer this Agreement or sublease or permit the sublease (which term shall be deemed to
include the granting of concessions, licenses and the like), of all or any part of the Leased
Property or suffer or permit this Agreement or the leasehold estate created hereby or any other
rights arising under this Agreement to be assigned, transferred, mortgaged, pledged, hypothecated
or encumbered, in whole or in part, whether voluntarily, involuntarily or by operation of law, or
permit the use or operation of all or any part of the Leased Property by anyone other than Tenant,
any Manager approved by Landlord or permitted pursuant to the applicable provisions of this
Agreement, or the Leased Property or any part thereof to be offered or advertised for assignment or
subletting.

     For purposes of this Section 16.1, an assignment of this Agreement shall be deemed to
include, without limitation, any direct or indirect Change in Control of Tenant or any Guarantor;
provided, however that any assignment of this Agreement (including, without
limitation, any direct or indirect Change in Control of Tenant or any Guarantor) shall not require
Landlord’s consent if each of the following conditions precedent shall have been satisfied: (i) no
Default or Event of Default shall have occurred and be continuing, (ii) after giving effect to any
such transaction constituting an assignment, the successor tenant (the “Successor Tenant”)
or the Acquiring Guarantor, as the case may be, shall have a Tangible Net Worth in excess of Two
Hundred Million Dollars ($200,000,000) (the “Required Net Worth”), and shall be projected
to maintain such Required Net Worth for not less than the succeeding twenty-four (24) months, as
evidenced by audited financials and projections prepared in accordance with GAAP and delivered to
Landlord with an Officer’s Certificate not less than fifteen (15) Business Days prior to the
closing or projected closing of such assignment or Change of Control, (iii) if applicable, each
Guarantor shall have confirmed its obligations under its Guaranty by written

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agreement in form and
substance reasonably satisfactory to Landlord, (iv) any Acquiring Guarantor in connection with such
transaction shall have executed a Guaranty in favor of Landlord, which Guaranty shall be in form
and substance substantially similar to the LTF Guaranty, and (v) any Acquiring Guarantor in
connection with such transaction shall have delivered to Landlord evidence, in form and substance
reasonably satisfactory to Landlord, of the due authorization, execution, delivery and
enforceability of each such Guaranty. Tenant shall give Landlord no less than fifteen (15)
Business Days prior written Notice of such contemplated assignment (including, without limitation,
any such direct or indirect Change in Control), together with such evidence regarding the
satisfaction of the conditions precedent set forth in the foregoing clauses as Landlord shall, in
its sole discretion, require, including, without limitation, audited financial statements for the
immediately preceding five (5) fiscal years of the Successor Tenant and any Acquiring Guarantor
(including, without limitation, balance sheets and related statements of income and cash flows),
and pro forma balance sheets and income statements with respect to the Successor Tenant and any
Acquiring Guarantor following consummation of such assignment (including, without limitation, any
direct or indirect Change in Control).

     Notwithstanding the foregoing, in the event that the Successor Tenant or Acquiring Guarantor
is unable or unwilling
to provide a Guaranty in connection with any such assignment or Change of Control, Tenant may
elect, in lieu thereof, to deposit, or caused to be deposited, with Landlord, fifteen (15) Business
Days prior to the date of closing of such proposed assignment or Change of Control, a cash security
deposit (the “Security Deposit”) in an amount equal to the per annum Minimum Rent then
payable hereunder, which security deposit is to be held by Landlord as security for the payment and
performance of Tenant’s obligations under this Agreement in accordance with the provisions of this
Section 16.1.

     Upon an assignment permitted under this Section 16.1, the transferor Tenant or
Guarantor, as the case may be, shall be released from all liabilities and obligations under this
Agreement or its Guaranty arising subsequent to the effective date of such assignment.

     In the event that Tenant shall at any time during the Term deposit the Security Deposit with
Landlord, the Security Deposit shall be held by Landlord as security for the faithful

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observance
and performance by Tenant of all the terms, covenants and conditions of this Agreement by Tenant to
be observed and performed. The Security Deposit shall not be mortgaged, assigned, transferred or
otherwise encumbered by Tenant without the prior written consent of Landlord and any such act on
the part of Tenant without first having obtained Landlord’s consent shall be without force and
effect and shall not be binding upon Landlord.

     If an Event of Default shall occur and be continuing, Landlord may, as its option and without
prejudice to any other remedy which Landlord may have on account thereof, appropriate and apply the
entire Security Deposit or so much thereof as may be necessary to compensate Landlord toward the
payment of Rent or other sums or loss or damage sustained by Landlord due to such breach on the
part of Tenant, and Tenant shall, upon demand, restore the Security Deposit to the original sum
deposited. It is understood and agreed that the Security Deposit is not to be considered as
prepaid rent, nor shall damages be limited to the amount of the Security Deposit. Provided no
Event of Default shall have occurred and be continuing, any unapplied balance of the Security
Deposit shall be returned in full to Tenant at the end of the Term. Landlord shall have no
obligation to pay interest on the Security Deposit
and shall have the right to commingle the same with Landlord’s other funds. If Landlord
conveys Landlord’s interest under this Agreement, the portion of the Security Deposit so turned
over, or any part thereof not previously applied, may be turned over by Landlord to Landlord’s
grantee, and, if so turned over, Tenant shall look solely to such grantee for proper application of
the Security Deposit in accordance with the terms of this Section 16.1 and the return
thereof in accordance herewith.

     If this Agreement is assigned or if all or any part of the Leased Property is sublet (or
occupied by anybody other than Tenant or any Manager), following an Event of Default Landlord may
collect the rents from such assignee, subtenant or occupant, as the case may be, and apply the net
amount collected to the Rent herein reserved, but no such collection shall be deemed a waiver of
the provisions set forth in the first paragraph of this Section 16.1, the acceptance by
Landlord of such assignee, subtenant or occupant, as the case may be, as a tenant, or a release of
Tenant from the future performance by Tenant of its covenants, agreements or obligations contained
in this Agreement.

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     No subletting or assignment shall in any way impair the continuing primary liability of Tenant
hereunder (unless Landlord and Tenant expressly otherwise agree that Tenant shall be released from
all obligations hereunder), and no consent to any subletting or assignment in a particular instance
shall be deemed to be a waiver of the prohibition set forth in this Section 16.1. No
assignment, subletting or occupancy shall affect any Permitted Use. Any subletting, assignment or
other transfer of Tenant’s interest under this Agreement in contravention of this Section
16.1 shall be voidable at Landlord’s option.

     16.2 Required Sublease Provisions. Any sublease of all or any portion of the Leased
Property entered into on or after the date hereof shall provide (a) that it is subject and
subordinate to this Agreement and to the matters to which this Agreement is or shall be subject or
subordinate; (b) that in the event of termination of this Agreement or reentry or dispossession of
Tenant by Landlord under this Agreement, Landlord may, at its option, terminate such sublease or
take over all of the right, title and interest of Tenant, as sublessor under such sublease, and
such subtenant shall, at Landlord’s option, attorn to
Landlord pursuant to the then executory provisions of such sublease, except that neither
Landlord nor any Facility Mortgagee, as holder of a mortgage or as Landlord under this Agreement,
if such Facility Mortgagee succeeds to that position, shall (i) be liable for any act or omission
of Tenant under such sublease, (ii) be subject to any credit, counterclaim, offset or defense which
theretofore accrued to such subtenant against Tenant, (iii) be bound by any previous modification
of such sublease not consented to in writing by Landlord or by any previous prepayment of more than
one (1) month’s Rent, (iv) be bound by any covenant of Tenant to undertake or complete any
construction of the Leased Property or any applicable portion thereof, (v) be required to account
for any security deposit of the subtenant other than any security deposit actually delivered to
Landlord by Tenant, (vi) be bound by any obligation to make any payment to such subtenant or grant
any credits, except for services, repairs, maintenance and restoration provided for under the
sublease that are performed after the date of such attornment, (vii) be responsible for any monies
owing by Tenant to the credit of such subtenant unless actually delivered to Landlord by Tenant, or
(viii) be required to remove any Person occupying any applicable portion of the Leased Property;
and (c), in the event that such subtenant receives a written Notice

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from Landlord or any Facility
Mortgagee stating that an Event of Default has occurred and is continuing, such subtenant shall
thereafter be obligated to pay all rentals accruing under such sublease directly to the party
giving such Notice or as such party may direct. All rentals received from such subtenant by
Landlord or the Facility Mortgagee, as the case may be, shall be credited against the amounts owing
by Tenant under this Agreement and such sublease shall provide that the subtenant thereunder shall,
at the request of Landlord, execute a suitable instrument in confirmation of such agreement to
attorn. An original counterpart of each such sublease and assignment and assumption, duly executed
by Tenant and such subtenant or assignee, as the case may be, in form and substance reasonably
satisfactory to Landlord, shall be delivered promptly to Landlord and (a) in the case of an
assignment, the assignee shall assume in writing and agree to keep and perform all of the terms of
this Agreement on the part of Tenant to be kept and performed and shall be, and become, jointly and
severally liable with Tenant for the performance thereof and (b) in case of either an assignment or
subletting, Tenant shall remain primarily liable, as principal rather than as surety, for the
prompt payment of the Rent and for the performance and observance of all of the covenants and
conditions to be performed by Tenant hereunder.

     The provisions of this Section 16.2 shall not be deemed a waiver of the provisions set
forth in the first paragraph of Section 16.1.

     16.3 Permitted Sublease Notwithstanding the foregoing, including, without limitation,
Section 16.2, but subject to the provisions of Section 16.4 and any other express
conditions or limitations set forth herein, Tenant may, in each instance after Notice to Landlord,
(a) enter into one or more subleases, licenses, concessions or other occupancy agreements in
furtherance of the Permitted Use with respect to any Property, so long as (i) such subleases,
concessions or other occupancy agreements are incidental to the use of such Property as an athletic
club/fitness center/wellness center as such use may be from time to time be operated in athletic
club/fitness center/wellness center properties owned and/or operated by Tenant and its Affiliated
Persons, and (ii) such subleases, concessions or other occupancy agreements will not violate or
affect any Legal Requirement or Insurance Requirement, and Tenant shall provide such additional
insurance coverage applicable to the activities to be conducted in the space

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covered thereby as
Landlord and any Facility Mortgagee may reasonably require, and (b) enter into one or more
subleases with Affiliated Persons of Tenant or LTF with respect to the Leased Property or any
portion thereof (provided that any such sublease is not entered into in connection with, or
simultaneously with (whether through one or a series of transactions), a direct or indirect Change
in Control in violation of the restrictions contained in Section 16.1).

     16.4 Sublease Limitation. Anything contained in this Agreement to the contrary
notwithstanding, Tenant shall not sublet all or any portion of the Leased Property on any basis
such that the rental to be paid by any sublessee thereunder would be based, in whole or in part, on
the net income or profits derived by the business activities of such sublessee or any other formula
such that any portion of such sublease rental would fail to qualify as “rents from real property”
within the meaning of Section 856(d) of the Code, or any similar or successor provision thereto or
would otherwise disqualify Landlord for treatment under the Code as a real estate investment trust.

ARTICLE 17

ESTOPPEL CERTIFICATES AND FINANCIAL STATEMENTS

     17.1 Estoppel Certificates. At any time and from time to time, upon not less than ten
(10) Business Days prior Notice by either party, the party receiving such Notice shall furnish to
the other an Officer’s Certificate certifying that this Agreement is unmodified and in full force
and effect (or that this Agreement is in full force and effect as modified and setting forth the
modifications), the date to which the Rent has been paid, that no Default or an Event of Default
has occurred and is continuing or, if a Default or an Event of Default shall exist, specifying in
reasonable detail the nature thereof, and the steps being taken to remedy the same, and such
additional information as the requesting party may reasonably request. Any such certificate
furnished pursuant to this Section 17.1 may be relied upon by the requesting party, its
lenders and any prospective purchaser or mortgagee of all or any portion of the Leased Property or
the leasehold estate created hereby.

     17.2 LTF Financial Statements. So long as LTF shall be a Guarantor under this
Agreement, Tenant shall provide, or cause to be provided, to Landlord, financial information as
follows:

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     (a) (i) So long as LTF shall be a registrant with the SEC, by filing such public
filings and other financial information as LTF is required or elects to file with the SEC,
copies of all public filings submitted to the SEC, including, without limitation, quarterly
form 10-Q filings, annual form 10-K filings and other shareholder or debt holder
communications with shareholders or holders of publicly traded debt, provided that copies of
all filings submitted to the SEC through EDGAR shall be deemed to be delivered to Landlord
upon such filing; and (ii) if LTF shall cease to be a registrant with the SEC or to timely
file with the SEC, Tenant shall deliver, or cause to be delivered to Landlord, substantially
similar financial statements as would have been filed had LTF remained a timely filing
public reporting company;

     (b) Annual and quarterly financial statements of Tenant, including Tenant’s balance
sheet and the related statements of income and cash flows, as a part of Guarantor’s
consolidated financial information provided pursuant to the preceding clause (a), with the
parties hereto agreeing that, as of the date of this Agreement, Tenant is not required to
provide separately prepared and delivered financial statements and shall not be so required
during the Term hereof except as may be required pursuant and subject to the terms and
conditions set forth in Section 17.4 below;

     (c) Annually and quarterly during the Term, financial information and operating
statistics with respect to each Property as Landlord may reasonably request, including
revenues, EBITDA, membership and average monthly membership fee, which information Landlord
shall not make public, except as required by law or SEC regulation, or when aggregated with
similar information for a pool or portfolio of other properties;

     (d) Promptly after the sending or filing thereof, to the extent the same are not
publicly available, copies of all reports which Tenant and/or any Guarantor sends to its
security holders generally;

     (e) Promptly after the occurrence thereof, notice of any event or condition that will,
or that Tenant should reasonably believe will, have a material adverse effect on

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any of the
Fitness Centers or on Tenant’s ability to perform its obligations hereunder; and

     (f) Promptly, upon Notice from Landlord, such other information concerning the
business, financial condition and affairs of Tenant, any Guarantor or any Property as
Landlord may reasonably request from time to time.

     17.3 Other Financial Statements. If LTF shall at any time cease to be a Guarantor or
if any other Guarantor shall provide a Guaranty under this Agreement, Tenant shall furnish, or
cause to be furnished, the following statements to Landlord:

     (a) (i) So long as Acquiring Guarantor shall be a registrant with the SEC, by timely
filing such public filings and other financial information as Acquiring Guarantor is
required or elects to file with the SEC, copies of all public filings submitted to the SEC,
including, without limitation, quarterly form 10-Q filings, annual form 10-K filings and
other shareholder or debt holder communications with shareholders or holders of publicly
traded debt, provided that copies of all filings submitted to the SEC through EDGAR shall be
deemed to be delivered to Landlord upon such filing; and (ii) if Acquiring Guarantor shall
cease to be a registrant or timely with the SEC or to timely file with the SEC, Tenant shall
deliver, or cause to be delivered to Landlord, substantially similar financial statements as
would have been filed had Acquiring Guarantor remained a timely filing public reporting
company;

     (b) Annual and quarterly financial statements of Tenant, including Tenant’s balance
sheet and the related statements of income and cash flows, as a part of Acquiring
Guarantor’s consolidated financial information provided pursuant to the preceding clause
(a), with the parties hereto agreeing that, as of the date of this Agreement, Tenant is not
required to provide separately prepared and delivered financial statements and shall not be
so required during the Term hereof except as may be required pursuant and subject to the
terms and conditions set forth in Section 17.4 below;

     (c) Annually and quarterly during the Term, financial information and operating
statistics with respect to each Property as Landlord may reasonably request, including

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revenues, EBITDA, membership and average monthly membership fee, which information Landlord
shall not make public, except as required by law or SEC regulation, or when
aggregated with similar information for a pool or portfolio of other properties;

     (d) Promptly after the sending or filing thereof, to the extent the same are not
publicly available, copies of all reports which Tenant and/or any Guarantor sends to its
security holders generally;

     (e) Promptly after the occurrence thereof, notice of any event or condition that will,
or that Tenant should reasonably believe will, have a material adverse effect on any of the
Fitness Centers or on Tenant’s ability to perform its obligations hereunder; and

     (f) Promptly, upon Notice from Landlord, such other information concerning the
business, financial condition and affairs of Tenant, Guarantor or any Property as Landlord
may reasonably request from time to time.

     17.4 General. In addition, Tenant shall provide Landlord information relating to
Tenant and its operation of the Leased Property, including separately prepared and delivered
financial statements for Tenant, to the extent the same (a) may be required in order for Landlord
to prepare financial statements in accordance with GAAP or to comply with applicable securities
laws and regulations and the SEC’s interpretation thereof, and (b) is of the type that Tenant and
its Affiliated Persons customarily prepare for other of its property owners and/or lenders.

     Landlord shall maintain all such statements and information in the strictest confidence,
except (i) as may be required by Applicable Law or by the rules of any national securities exchange
or automated quotation system to which Landlord or any Affiliated Person of Landlord is or becomes
subject, or (ii) as Landlord reasonably determines necessary and advisable in connection with its
investor relations program, conducted in the normal course, including, without limitation,
disclosure of the rent coverage and other information that Landlord or any Affiliated Person of
Landlord files or may file, from time to time, with the SEC for other tenants of Landlord or any
Affiliated Person of Landlord. Landlord may at any time, and from time to time, provide any
Facility Mortgagee with copies of any of the foregoing statements, subject to Landlord obtaining

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the agreement of such Facility Mortgagee to maintain such statements and the information therein as
confidential.

ARTICLE 18

LANDLORD’S RIGHT TO INSPECT

     Tenant shall permit Landlord and its authorized representatives to inspect all or any portion
of the Leased Property during usual business hours upon not less than forty-eight (48) hours’
notice and to make such repairs as Landlord is permitted or required to make pursuant to the terms
of this Agreement, provided that any inspection or repair by Landlord or its representatives will
not unreasonably interfere with Tenant’s use and operation of the same and further provided that in
the event of an emergency, as determined by Landlord in its reasonable discretion, prior Notice
shall not be necessary.

ARTICLE 19

EASEMENTS

     19.1 Grant of Easements. Provided no Event of Default has occurred and is continuing,
Landlord will join in granting and, if necessary, modifying or abandoning such rights-of-way,
easements and other interests as may be reasonably requested by Tenant for ingress and egress, and
electric, telephone, gas, water, sewer and other utilities so long as:

     (a) the instrument creating, modifying or abandoning any such easement, right-of-way or
other interest is satisfactory to and approved by Landlord (which approval shall not be
unreasonably withheld, delayed or conditioned);

     (b) Landlord receives an Officer’s Certificate from Tenant stating (i) that such grant,
modification or abandonment is not detrimental to the proper conduct of business on such
Property, (ii) the consideration, if any, being paid for such grant, modification or
abandonment (which consideration shall be paid by Tenant), (iii) that such grant,
modification or abandonment does not impair the use or value of such Property for the
Permitted Use, and (iv) that, for as long as this Agreement shall be in

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effect, Tenant will
perform all obligations, if any, of Landlord under any such instrument.

     19.2 Exercise of Rights by Tenant. So long as no Event of Default has occurred and is
continuing, Tenant shall have the right to exercise all rights of Landlord under the Easement
Agreements and, in connection therewith, Landlord shall execute and promptly return to Tenant such
documents as Tenant shall reasonably request. Tenant shall perform all obligations of Landlord
under the Easement Agreements.

     19.3 Permitted Encumbrances. Any agreements entered into in accordance with this
Article 19 shall be deemed a Permitted Encumbrance.

ARTICLE 20

RIGHT OF FIRST OFFER

     20.1 Right of First Offer. If Landlord desires to sell the Leased Property, or if
Landlord shall otherwise receive an offer from a party other than Tenant for any such sale or
transfer which Landlord intends to accept, then Landlord shall, prior to entering into an agreement
with respect to such sale, provide, or shall cause to be provided, written notice (the “ROFO
Notice”) to Tenant of its intention to effect such a transaction, which ROFO Notice shall
specify the cash purchase price for the Leased Property (the “ROFO Purchase Price”), the
terms of payment and the closing date. Tenant shall have fifteen (15) days from the receipt of the
ROFO Notice to notify Landlord in writing (the “ROFO Acceptance Notice”) of its intent to
purchase the Leased Property on the terms and conditions set forth in the ROFO Notice, except that
any sale to Tenant to shall in all events be “AS IS”, “WHERE IS”, without representation or
warranty by Landlord. In the event that, at any time within three hundred sixty five (365) days
after the date that Tenant shall have failed to provide Landlord with a ROFO Acceptance Notice,
Landlord shall elect to sell the Leased Property for a purchase price that is less than ninety
percent (90%) of the ROFO Purchase Price, Landlord shall provide to Tenant a ROFO Notice specifying
such reduced ROFO Purchase Price and Tenant shall have fifteen (15) days from the receipt of the
ROFO Notice in which to deliver a ROFO Acceptance Notice with respect thereto. The negotiation
and execution of a mutually acceptable purchase and sale agreement must occur no more than fifteen
(15) days from Landlord’s receipt of any ROFO

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Acceptance Notice pursuant to this Article 20
for any reason other than bad faith on the part of Landlord. If Tenant shall fails to provide
Landlord with a ROFO
Acceptance Notice within
fifteen (15) days of receipt of any ROFO Notice pursuant to this Article 20, or if a
mutually acceptable purchase and sale agreement is not executed within fifteen (15) days after
receipt of any ROFO Acceptance Notice, then Landlord shall have three hundred sixty-five (365) days
from the date thereof to sell the Leased Property to any third party for a purchase price not less
than the ROFO Purchase Price specified in the applicable ROFO Notice. If at the expiration of any
such three hundred sixty-five (365) day period Landlord shall not have sold the Leased Property,
Tenant shall again have the rights under this Article 20.

     Notwithstanding anything to the contrary contained in this Agreement, Tenant’s rights under
this Article 20 shall be limited to a sale of one or more of the Properties and shall not
include (i) a sale of the Properties as part of a sale of other properties, (ii) a sale of the
Properties as part of a series of related sales of other properties, (iii) any transfer in
connection with any financing (or a foreclosure sale or deed in lieu thereof), (iv) a transfer to
any Affiliated Person of Landlord, (v) a transfer to any Person to whom Landlord sells all or
substantially all of its assets or (vi) any sale of an interest in Landlord.

     20.2 Attornment. If the Leased Property is transferred to a third party in accordance
with this Article 20, Tenant shall attorn to such third party as Landlord so long as such
third party and Landlord notify Tenant in writing of such transfer. At the request of Landlord,
Tenant shall execute such documents confirming the agreement referred to above and such other
agreements as Landlord shall reasonably request, provided that such agreements do not
increase the liabilities and obligations of Tenant hereunder.

     20.3 General. Notwithstanding anything to the contrary contained in this Agreement,
upon the delivery of any ROFO Acceptance Notice by Tenant, no event or circumstances affecting the
Leased Property, including, but not limited to, a Condemnation or casualty, shall give Tenant any
right or option to cancel, surrender or otherwise terminate this Agreement.

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ARTICLE 21

REPRESENTATIONS AND WARRANTIES

     21.1 Representations of Tenant. To induce Landlord to enter into this Agreement,
Tenant represents and warrants to Landlord as follows:

     (a) Status and Authority of Tenant. Tenant is a corporation duly organized,
validly existing and in corporate good standing under the laws of its state of
incorporation. Tenant has all requisite power and authority under the laws of its state of
formation and its charter documents to enter into and perform its obligations under this
Agreement and to consummate the transactions contemplated hereby. Tenant has duly qualified
to transact business in each jurisdiction in which the nature of the business conducted by
it requires such qualification.

     (b) Action of Tenant. Tenant has taken all necessary action to authorize the
execution, delivery and performance of this Agreement, and this Agreement constitutes the
valid and binding obligation and agreement of Tenant, enforceable against Tenant in
accordance with its terms, except as enforceability may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws of general application affecting the
rights and remedies of creditors.

     (c) No Violations of Agreements. Neither the execution, delivery or
performance of this Agreement by Tenant, nor compliance with the terms and provisions
hereof, will result in any breach of the terms, conditions or provisions of, or conflict
with or constitute a default under, or result in the creation of any lien, charge or
encumbrance upon the Leased Property pursuant to the terms of any indenture, mortgage, deed
of trust, note, evidence of indebtedness or any other material agreement or instrument by
which Tenant is bound.

     (d) Litigation. Tenant has received no written notice of and, to Tenant’s
knowledge, no action or proceeding is pending or threatened and no investigation looking
toward such an action or proceeding has begun, which questions the validity of this
Agreement or any action taken or to be taken pursuant hereto, will result in any material
adverse change in the business, operation,

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affairs or condition of the Leased Property, result in or subject the Leased Property
to a material liability, or involves condemnation or eminent domain proceedings against any
material part of the Leased Property.

     (e) Compliance With Law. Except as disclosed in writing to Landlord, to
Tenant’s knowledge, the Leased Property and the use and operation thereof do not violate any
material federal, state, municipal and other governmental statutes, ordinances, by-laws,
rules, regulations or any other legal requirements, including, without limitation, those
relating to construction, occupancy, zoning, adequacy of parking, environmental protection,
occupational health and safety and fire safety applicable thereto; and there are presently
in effect all material licenses, permits and other authorizations necessary for the current
use, occupancy and operation thereof. Tenant has not received written notice of any
threatened request, application, proceeding, plan, study or effort which would materially
adversely affect the present use or zoning of the Leased Property or which would modify or
realign any adjacent street or highway in a manner which would materially adversely affect
the use and operation of the Leased Property.

     (f) Hazardous Substances. Except as disclosed to Landlord or as described in
any environmental report delivered to Landlord, to Tenant’s knowledge, none of Tenant nor
any tenant or other occupant or user of the Leased Property, or any portion thereof, has
stored or disposed of (or engaged in the business of storing or disposing of) or has
released or caused the release of any Hazardous Substances on the Leased Property, or any
portion thereof, the removal of which is required or the maintenance of which is prohibited
or penalized by any Applicable Law, and, to Tenant’s knowledge, except as disclosed to
Landlord or as described in any environmental report delivered to Landlord, the Leased
Property is free from any such Hazardous Substances, except any such materials maintained in
accordance with Applicable Law.

     21.2 Representations of Landlord. To induce Tenant to enter in this Agreement,
Landlord represents and warrants to Tenant as follows:

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     (a) Status and Authority of Landlord. Landlord is a Maryland real estate
investment trust/limited liability company duly organized, validly existing and in good
standing under the laws of the State of Maryland, and has all requisite power and authority
under the laws of such state and under its charter documents to enter into and perform its
obligations under this Agreement and to consummate the transactions contemplated hereby.
Landlord has duly qualified and is in good standing as a trust, unincorporated business
association or limited liability company in each jurisdiction in which the nature of the
business conducted by it requires such qualification.

     (b) Action of Landlord. Landlord has taken all necessary action to authorize
the execution, delivery and performance of this Agreement, and upon the execution and
delivery of this Agreement by Landlord constitutes the valid and binding obligation and
agreement of Landlord, enforceable against Landlord in accordance with its terms, except as
enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or
similar laws of general application affecting the rights and remedies of creditors.

     (c) No Violations of Agreements. Neither the execution, delivery or
performance of this Agreement by Landlord, nor compliance with the terms and provisions
hereof, will result in any breach of the terms, conditions or provisions of, or conflict
with or constitute a default under, or result in the creation of any lien, charge or
encumbrance upon any property or assets of Landlord pursuant to the terms of any indenture,
mortgage, deed of trust, note, evidence of indebtedness or any other agreement or instrument
by which Landlord is bound.

     (d) Litigation. No investigation, action or proceeding is pending and, to
Landlord’s actual knowledge, no action or proceeding is threatened and no investigation
looking toward such an action or proceeding has begun, which questions the validity of this
Agreement or any action taken or to be taken pursuant hereto.

ARTICLE 22

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FACILITY MORTGAGES

     22.1 Landlord May Grant Liens. Without the consent of Tenant, Landlord may, from time
to time, directly or indirectly, create or otherwise cause to exist any lien, encumbrance or title
retention agreement (“Encumbrance”) upon the Leased Property, or any portion thereof or
interest therein, whether to secure any borrowing or other means of financing or refinancing.

     22.2 Subordination of Lease. This Agreement and any and all rights of Tenant
hereunder are, and shall be, subject and subordinate (as applicable) to any ground or master lease,
and all renewals, extensions, modifications and replacements thereof, and to all mortgages and
deeds of trust, which may now or hereafter affect the Leased Property or any portion thereof or any
improvements thereon and/or any of such leases, whether or not such mortgages or deeds of trust
shall also cover other lands and/or buildings and/or leases, to each and every advance made or
hereafter to be made under such mortgages and deeds of trust, and to all renewals, modifications,
replacements and extensions of such leases and such mortgages and deeds of trust and all
consolidations of such mortgages and deeds of trust, provided that the holder
thereof shall agree that it shall recognize and not disturb this Agreement and all of Tenant’s
rights hereunder subject to, and upon, the terms and conditions hereof, including, without
limitation, the provisions of this Article 22. This section shall be self-operative and no
further instrument of subordination shall be required. In confirmation of such subordination,
Tenant shall promptly execute, acknowledge and deliver any instrument that Landlord, the lessor
under any such lease or the holder of any such mortgage or the trustee or beneficiary of any deed
of trust or any of their respective successors in interest may reasonably request to evidence such
subordination; provided that any such instrument shall provide for the recognition and
nondisturbance of this Agreement and all of Tenant’s rights hereunder upon and subject to the terms
and conditions contained herein, including, without limitation, this Section 22.2 and shall
obligate the Facility Mortgagee to permit Landlord to apply insurance proceeds and Awards as
required by this Agreement. Any lease to which this Agreement is, at the time referred to, subject
and subordinate is herein called “Superior Lease” and the lessor of a Superior Lease or its
successor in interest at the time referred to is herein called “Superior Landlord” and any
mortgage or deed of trust to which this Agreement is, at the time referred to, subject and
subordinate is herein called “Superior Mortgage” and

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the holder, trustee or beneficiary of a Superior Mortgage is herein called “Superior
Mortgagee”.

     If any Superior Landlord or Superior Mortgagee or the nominee or designee of any Superior
Landlord or Superior Mortgagee shall succeed to the rights of Landlord under this Agreement (any
such person, “Successor Landlord”), whether through possession or foreclosure action or
delivery of a new lease or deed, or otherwise, at such Successor Landlord’s request, Tenant shall
attorn to and recognize the Successor Landlord as Tenant’s landlord under this Agreement and Tenant
shall promptly execute and deliver any instrument that such Successor Landlord may reasonably
request to evidence such attornment (provided that such instrument does not alter the terms of this
Agreement), whereupon, this Agreement shall continue in full force and effect as a direct lease
between the Successor Landlord and Tenant upon all of the terms, conditions and covenants as are
set forth in this Agreement, except that the Successor Landlord (unless formerly the landlord under
this Agreement or its nominee or designee) shall not be (a) liable in any way to Tenant for any act
or omission, neglect or default on the part of any prior Landlord under this Agreement, (b)
responsible for any monies owing by or on deposit with any prior Landlord to the credit of Tenant
(except to the extent actually paid or delivered to the Successor Landlord), (c) subject to any
counterclaim or setoff which theretofore accrued to Tenant against any prior Landlord, (d) bound by
any modification of this Agreement subsequent to such Superior Lease or Mortgage, or by any
previous prepayment of Rent for more than one (1) month in advance of the date due hereunder, which
was not approved in writing by the Superior Landlord or the Superior Mortgagee thereto, (e) liable
to Tenant beyond the Successor Landlord’s interest in the Leased Property and the rents, income,
receipts, revenues, issues and profits issuing from the Leased Property, (f) responsible for the
performance of any work to be done by the Landlord under this Agreement to render the Leased
Property ready for occupancy by Tenant (subject to Landlord’s obligations with respect to any
insurance or Condemnation proceeds), or (g) required to remove any Person occupying the Leased
Property or any part thereof, except if such person claims by, through or under the Successor
Landlord. Tenant agrees at any time and from time to time to execute a suitable instrument in
confirmation of Tenant’s agreement to attorn, as aforesaid and Landlord agrees to provide Tenant
with an instrument of nondisturbance and attornment from each such Superior Mortgagee

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and Superior Landlord in form and substance reasonably satisfactory to Tenant.
Notwithstanding anything in this Agreement to the contrary, any Successor Landlord shall be liable
to pay to Tenant any portions of insurance proceeds or Awards received by Landlord or the Successor
Landlord required to be paid to Tenant pursuant to the terms of this Agreement, and, as a condition
to any mortgage, lien or lease in respect of the Leased Property, or any portion thereof, and the
subordination of this Agreement thereto, the mortgagee, lienholder or lessor, as applicable, shall
expressly agree, for the benefit of Tenant, to make such payments, which agreement shall be
embodied in an instrument in form reasonably satisfactory to Tenant.

     22.3 Notice to Mortgagee and Superior Landlord. Subsequent to the receipt by Tenant
of Notice from Landlord as to the identity of any Facility Mortgagee or Superior Landlord under a
lease with Landlord, as ground lessee, which includes the Leased Property or any portion thereof as
part of the demised premises and which complies with Section 22.1 (which Notice shall be
accompanied by a copy of the applicable mortgage or lease), no Notice from Tenant to Landlord as to
a default by Landlord under this Agreement shall be effective with respect to a Facility Mortgagee
or Superior Landlord unless and until a copy of the same is given to such Facility Mortgagee or
Superior Landlord at the address set forth in the above described Notice, and the curing of any of
Landlord’s defaults within the applicable notice and cure periods set forth in Article 14
by such Facility Mortgagee or Superior Landlord shall be treated as performance by Landlord.

ARTICLE 23

ADDITIONAL COVENANTS OF TENANT

     23.1 Prompt Payment of Indebtedness. Tenant shall pay or cause to be paid when due
all lawful claims for labor and rents with respect to the Leased Property.

     23.2 Conduct of Business. Tenant shall do or cause to be done all things necessary to
preserve, renew and keep in full force and effect and in good standing its corporate existence and
its rights and licenses necessary to conduct its business at the Leased Property.

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     23.3 Maintenance of Accounts and Records. Tenant shall keep true and accurate records
and books of account of Tenant in relation to the business and financial affairs of Tenant with
respect to the Leased Property in accordance with GAAP. Tenant shall apply accounting principles
in the preparation of the financial statements of Tenant which, in the judgment of and the opinion
of its independent public accountants, are in accordance with GAAP, where applicable, except for
changes approved by such independent public accountants. Tenant shall permit Landlord by its
agents, accountants and attorneys to visit and inspect the Leased Property and examine (and make
copies of) at Tenant’s main offices the records and books of account and to discuss the finances
and business with the officers of Tenant, at such reasonable times as may be requested by Landlord,
upon not less than ten (10) days’ prior notice to Tenant. Upon the request of Landlord (either
telephonically or in writing), Tenant shall provide Landlord within ten (10) days’ of such request
with copies of any information to which Landlord would be entitled in the course of a personal
visit.

     23.4 Notice of Litigation, Etc. Tenant shall give prompt Notice to Landlord of any
litigation or any administrative proceeding to which it may hereafter become a party of which
Tenant has notice or actual knowledge relating to the Leased Property.

     23.5 Liens and Encumbrances. Except as permitted by Section 7.1, Tenant shall
not create or incur or suffer to be created or incurred or to exist any Lien on this Agreement or
the Leased Property, other than the Permitted Encumbrances.

ARTICLE 24

MISCELLANEOUS

     24.1 Limitation on Payment of Rent. All agreements between Landlord and Tenant herein
are hereby expressly limited so that in no contingency or event whatsoever, whether by reason of
acceleration of Rent, or otherwise, shall the Rent or any other amounts payable to Landlord under
this Agreement exceed the maximum permissible under applicable law, the benefit of which may be
asserted by Tenant as a defense, and if, from any circumstance whatsoever, fulfillment of any
provision of this Agreement, at the time performance of such provision shall be due, shall involve
transcending the limit of validity prescribed by law, or if from any circumstances Landlord should
ever

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receive as fulfillment of such provision such an excessive amount, then, ipso
facto, the amount which would be excessive shall be applied to the reduction of the
installment(s) of Minimum Rent next due and not to the payment of such excessive amount. This
provision shall control every other provision of this Agreement and any other agreements between
Landlord and Tenant.

     24.2 No Waiver. No failure by Landlord or Tenant to insist upon the strict
performance of any term hereof or to exercise any right, power or remedy consequent upon a breach
thereof, and no acceptance of full or partial payment of Rent during the continuance of any such
breach, shall constitute a waiver of any such breach or of any such term. To the maximum extent
permitted by law, no waiver of any breach shall affect or alter this Agreement, which shall
continue in full force and effect with respect to any other then existing or subsequent breach.

     24.3 Remedies Cumulative. To the maximum extent permitted by law, each legal,
equitable or contractual right, power and remedy of Landlord or Tenant, now or hereafter provided
either in this Agreement or by statute or otherwise, shall be cumulative and concurrent and shall
be in addition to every other right, power and remedy and the exercise or beginning of the exercise
by Landlord or Tenant (as applicable) of any one or more of such rights, powers and remedies shall
not preclude the simultaneous or subsequent exercise by Landlord of any or all of such other
rights, powers and remedies.

     24.4 Severability. Any clause, sentence, paragraph, section or provision of this
Agreement held by a court of competent jurisdiction to be invalid, illegal or ineffective shall not
impair, invalidate or nullify the remainder of this Agreement, but rather the effect thereof shall
be confined to the clause, sentence, paragraph, section or provision so held to be invalid, illegal
or ineffective, and this Agreement shall be construed as if such invalid, illegal or ineffective
provisions had never been contained therein.

     24.5 Acceptance of Surrender. No surrender to Landlord of this Agreement or of the
Leased Property or any part thereof, or of any interest therein, shall be valid or effective unless
agreed to and accepted in writing by Landlord and no act by Landlord or any representative or agent
of Landlord, other than such a written acceptance by Landlord, shall constitute an acceptance of
any such surrender.

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     24.6 No Merger of Title. It is expressly acknowledged and agreed that it is the
intent of the parties that there shall be no merger of this Agreement or of the leasehold estate
created hereby by reason of the fact that the same Person may acquire, own or hold, directly or
indirectly this Agreement or the leasehold estate created hereby and the fee estate or ground
landlord’s interest in the Leased Property.

     24.7 Conveyance by Landlord. If Landlord or any successor owner of all or any portion
of the Leased Property shall convey all or any portion of the Leased Property in accordance with
the terms hereof other than as security for a debt, and the grantee or transferee of such of the
Leased Property shall expressly assume all obligations of Landlord hereunder arising or accruing
from and after the date of such conveyance or transfer, Landlord or such successor owner, as the
case may be, shall thereupon be released from all future liabilities and obligations of Landlord
under this Agreement with respect to such of the Leased Property arising or accruing from and after
the date of such conveyance or other transfer and all such future liabilities and obligations shall
thereupon be binding upon the new owner.

     24.8 Quiet Enjoyment. Tenant shall peaceably and quietly have, hold and enjoy the
Leased Property for the Term, free of hindrance or molestation by Landlord or anyone claiming by,
through or under Landlord, but subject to (a) any Encumbrance permitted under Article 22 or
otherwise permitted to be created by Landlord hereunder, (b) all Permitted Encumbrances set forth
on Schedule B to the applicable owner’s title insurance policy issued Landlord with respect to such
Property or otherwise permitted under this Agreement, (c) liens as to obligations of Landlord that
are either not yet due or which are being contested in good faith and by proper proceedings,
provided the same do not materially interfere with Tenant’s ability to operate any Fitness Center
and (d) liens that have been consented to in writing by Tenant. Except as otherwise provided in
this Agreement, no failure by Landlord to comply with the foregoing covenant shall give Tenant any
right to cancel or terminate this Agreement or abate, reduce or make a deduction from or offset
against the Rent or any other sum payable under this Agreement, or to fail to perform any other
obligation of Tenant hereunder.

     24.9 No Recordation. Neither Landlord nor Tenant shall record this Agreement.
Landlord and Tenant agree to execute, acknowledge and deliver, at the time of execution hereof, a

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memorandum of this Agreement, and any supplement hereto or thereto, to be recorded in such
manner and in such places as may be reasonably required by the other.

     24.10 Notices.

     (a) Any and all notices, demands, consents, approvals, offers, elections and other
communications required or permitted under this Agreement shall be deemed adequately given
if in writing and the same shall be delivered either in hand, by telecopier with written
acknowledgment of receipt, or by mail or Federal Express or similar expedited commercial
carrier, addressed to the recipient of the notice, postpaid and registered or certified with
return receipt requested (if by mail), or with all freight charges prepaid (if by Federal
Express or similar carrier).

     (b) All notices required or permitted to be sent hereunder shall be deemed to have been
given for all purposes of this Agreement upon the date of acknowledged receipt, in the case
of a notice by telecopier, and, in all other cases, upon the date of receipt or refusal,
except that whenever under this Agreement a notice is either received on a day which is not
a Business Day or is required to be delivered on or before a specific day which is not a
Business Day, the day of receipt or required delivery shall automatically be extended to the
next Business Day.

     (c) All such notices shall be addressed,

     if to Landlord:

c/o Senior Housing Properties Trust

400 Centre Street

Newton, Massachusetts 02458

Attn: Mr. David J. Hegarty

Telecopier No. (617) 796-8349

     with a copy to:

Sullivan & Worcester LLP

One Post Office Square

Boston, Massachusetts 02109

Attn: Nancy S. Grodberg, Esq.

Telecopier No. (617) 338-2880

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     if to Tenant to:

LTF Real Estate Company, Inc.

2902 Corporate Place

Chanhassen, Minnesota 55317

Attn: General Counsel

Telecopier No. (952) 947-0099

     (d) By notice given as herein provided, the parties hereto and their respective
successors and assigns shall have the right from time to time and at any time during the
term of this Agreement to change their respective addresses effective upon receipt by the
other parties of such notice and each shall have the right to specify as its address any
other address within the United States of America.

     24.11 Construction. Anything contained in this Agreement to the contrary
notwithstanding, all claims against, and liabilities of, Tenant or Landlord arising prior to any
date of termination or expiration of this Agreement with respect to the Leased Property shall
survive such termination or expiration. In no event shall Landlord be liable for any consequential
damages suffered by Tenant as the result of a breach of this Agreement by Landlord. Neither this
Agreement nor any provision hereof may be changed, waived, discharged or terminated except by an
instrument in writing signed by the party to be charged. All the terms and provisions of this
Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective
successors and assigns. Each term or provision of this Agreement to be performed by Tenant shall
be construed as an independent covenant and condition. Time is of the essence with respect to the
provisions of this Agreement. Except as otherwise set forth in this Agreement, any obligations of
Tenant (including without limitation, any monetary, repair and indemnification obligations) and
Landlord shall survive the expiration or sooner termination of this Agreement. Tenant hereby
acknowledges that the agreement between Landlord and Tenant to treat this Agreement as a single
lease in all respects was and is of primary importance, and a material inducement, to Landlord to
enter into this Agreement. Without limiting the generality of the foregoing, the parties hereto
acknowledge that this Agreement constitutes a single lease of the Leased Property and is not
divisible notwithstanding any references herein to any

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individual Property and notwithstanding the possibility that certain individual Properties may
be deleted herefrom pursuant to the express provisions of this Agreement.

     24.12 Counterparts; Headings. This Agreement may be executed in two or more
counterparts, each of which shall constitute an original, but which, when taken together, shall
constitute but one instrument and shall become effective as of the date hereof when copies hereof,
which, when taken together, bear the signatures of each of the parties hereto shall have been
signed. Headings in this Agreement are for purposes of reference only and shall not limit or
affect the meaning of the provisions hereof.

     24.13 Applicable Law, Etc. This Agreement shall be interpreted, construed, applied
and enforced in accordance with the laws of The Commonwealth of Massachusetts applicable to
contracts between residents of Massachusetts which are to be performed entirely within
Massachusetts, regardless of (i) where this Agreement is executed or delivered; or (ii) where any
payment or other performance required by this Agreement is made or required to be made; or (iii)
where any breach of any provision of this Agreement occurs, or any cause of action otherwise
accrues; or (iv) where any action or other proceeding is instituted or pending; or (v) the
nationality, citizenship, domicile, principal place of business, or jurisdiction of organization or
domestication of any party; or (vi) whether the laws of the forum jurisdiction otherwise would
apply the laws of a jurisdiction other than Massachusetts; or (vii) any combination of the
foregoing. Notwithstanding the foregoing, the laws of the State shall apply to the perfection and
priority of liens upon and the disposition of any Property.

     To the maximum extent permitted by applicable law, any action to enforce, arising out of, or
relating in any way to, any of the provisions of this Agreement may be brought and prosecuted in
such court or courts located in The Commonwealth of Massachusetts and to service of process by
registered mail, return receipt requested, or by any other manner provided by law.

     24.14 Right to Make Agreement. Each party warrants, with respect to itself, that
neither the execution of this Agreement, nor the consummation of any transaction contemplated
hereby, shall violate any provision of any law, or any judgment, writ, injunction, order or decree
of any court or governmental

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authority having jurisdiction over it; nor result in or constitute a breach or default under
any indenture, contract, other commitment or restriction to which it is a party or by which it is
bound; nor require any consent, vote or approval which has not been given or taken, or at the time
of the transaction involved shall not have been given or taken. Each party covenants that it has
and will continue to have throughout the term of this Agreement and any extensions thereof, the
full right to enter into this Agreement and perform its obligations hereunder.

     24.15 Attorneys’ Fees. If any lawsuit or arbitration or other legal proceeding arises
in connection with the interpretation or enforcement of this Agreement, the prevailing party
therein shall be entitled to receive from the other party the prevailing party’s costs and
expenses, including reasonable attorneys’ fees incurred in connection therewith, in preparation
therefor and on appeal therefrom, which amounts shall be included in any judgment therein.

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     IN WITNESS WHEREOF, the parties have executed this Agreement as a sealed instrument as of the
date above first written.

	 	 	 	 	 
	 	LANDLORD:

SNH LTF PROPERTIES LLC

 	 
	 	By:  	/s/ David J. Hegarty
 	 
	 	 	David J. Hegarty 	 
	 	 	President 	 
	 
	 	TENANT:

LTF REAL ESTATE COMPANY, INC.

 	 
	 	By:  	
 	 
	 	 	Its: 	 	 
	 	 	 	 

 

 

     IN WITNESS WHEREOF, the parties have executed this Agreement as a sealed instrument as of the
date above first written.

	 	 	 	 	 
	 	LANDLORD:

SNH LTF PROPERTIES LLC

 	 
	 	By:  	
 	 
	 	 	David J. Hegarty 	 
	 	 	President 	 
	 
	 	TENANT:

LTF REAL ESTATE COMPANY, INC.

 	 
	 	By:  	/s/ Eric J. Buss
 	 
	 	 	Its: 	 	 
	 	 	 	 

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EXHIBITS A-1 through A-4

Land

[See attached copies.

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Exhibit A-l

Legal Description of Alpharetta, Georgia Property

All That Tract or Parcel of Land
lying and being in Land Lot 1189 and 1260, 2nd District, 2nd Section, the City of
Alpharetta, Fulton County, Georgia, being more particularly described as follows:

To Find The True Point of Beginning commence at the point of intersection of the West
right-of-way of North Point Parkway, having a varying right-of-way and a chamfer to Tradewinds
Parkway, and The True Point of Beginning. Thence, southwesterly, along said chamfer, South 43
degrees 48 minutes 19 seconds West, a distance of 30.77 feet to a point, said point being
located on the North right-of-way of Tradewinds Parkway, having a varying right-of-way; thence,
northwesterly, along said right-of-way, North 89 degrees 58 minutes 03 seconds West, a distance
of 27.96 feet to a point; thence, South 86 degrees 59 minutes 20 seconds West, a distance of
182.62 feet to a point; thence, along an arc of curve to the right (which has a radius of
470.00 feet, a central angle of 28 degrees 31 minutes 50 seconds and a chord distance of 231.63
feet, along a bearing of North 78 degrees 44 minutes 45 seconds West), an arc distance of
234.04 feet to a point; thence, North 64 degrees 28 minutes 50 seconds West, a distance of
150.27 feet to a point; thence, along an arc of curve to the left (which has a radius of 547.50 feet,
a central angle of 13 degrees 21 minutes 28 seconds and a chord distance of 127.35
feet, along a bearing of North 71 degrees 09 minutes 34 seconds West), an arc distance of
127.64 feet to a point; thence, North 77 degrees 50 minutes 18 seconds West, a distance of
55.22 feet to a point, said point being the beginning of a chamfer; thence, leaving said
Tradewinds Parkway right-of-way, northwesterly, along said chamfer, North 34 degrees 40 minutes
03 seconds West, a distance of 29.17 feet to a point, said point being the intersection of said
chamfer and the Southeast right-of-way of Morris Road, having a varying right-of-way; thence,
northeasterly, along said Morris Road right-of-way, along an arc of curve to the right (which
has a radius of 965.00 feet, a central angle of 17 degrees 49 minutes 56 seconds and a chord
distance of 299.13 feet, along a bearing of North 17 degrees 58 minutes 20 seconds East), an
arc distance of 300.34 feet to a point; thence, along an arc of curve to the right (which has a
radius of 1,330.00 feet, a central angle of 14 degrees 47
minutes 15 seconds and a chord distance of 342.31 feet, along a
bearing of North 34 degrees 16 minutes 56 seconds East), an arc

 

 

distance of 343.26 feet to a point; thence, along an arc of curve to the right (which has a radius
of 930.00 feet, a central angle of 06 degrees 52 minutes 25 seconds and a chord distance of 111.50
feet, along a bearing of North 45 degrees 06 minutes 47 seconds East), an arc distance of 111.57
feet to a point; thence, North 57 degrees 55 minutes 19 seconds East, a distance of 179.02 feet to
a point; thence, along an arc of curve to the right (which has a radius of 918.00 feet, a central
angle of 01 degrees 21 minutes 59 seconds and a chord distance of 21.89 feet, along a bearing of
North 60 degrees 19 minutes 35 seconds East), an arc distance of 21.89 feet to a point; thence,
North 61 degrees 00 minutes 35 seconds East, a distance of 26.18 feet to a point, said point being
the beginning of a chamfer; thence, leaving said Morris Road right-of-way, southeasterly, along
said chamfer, South 73 degrees 59 minutes 25 seconds East, a distance of 28.28 feet to an iron pin
found, said iron pin being located on the Northwest right-of-way of the Old Morris Road, having a
60 foot right-of-way; thence, southeasterly, along said Old Morris Road right-of-way, South 28
degrees 59 minutes 25 seconds East, a distance of 2.74 feet to a point; thence, along an arc of
curve to the right (which has a radius of 1,801.12 feet, a central angle of 09 degrees 09 minutes
47 seconds and a chord distance of 287.74 feet, along a bearing of South 24 degrees 24 minutes 32
seconds East), an arc distance of 288.05 feet to an iron pin found; thence, along an arc of curve
to the left (which has a radius of 252.11 feet, a central angle of 36 degrees 33 minutes 54 seconds
and a chord distance of 158.17 feet, along a bearing of South 44 degrees 13 minutes 30 seconds
East), an arc distance of 160.89 feet to an iron pin found; thence, South 62 degrees 30 minutes 26
seconds East, a distance of 20.00 feet to an iron pin found, said iron pin being located at the
beginning of a chamfer; thence, leaving said Old Morris Road right-of-way, southeasterly, along
said chamfer, South 41 degrees 24 minutes 56 seconds East, a distance of 20.00 feet to an iron pin
found, said iron pin being located at the intersection of said chamfer and the Northwest
right-of-way of North Point Parkway, having a varying right-of-way; thence, southwesterly, along
said North Point Parkway right-of-way, along an arc of curve to the left (which has a radius of
686.62 feet, a central angle of 27 degrees 10 minutes 46 seconds and a chord distance of 322.67
feet, along a bearing of South 10 degrees 33 minutes 40 seconds West), an arc distance of 325.71
feet to an iron pin set; thence, South 86 degrees 58 minutes 17 seconds West, a distance of 10.00
feet to an iron pin set; thence, South 02 degrees 27 minutes 41 seconds East, a distance of 192.30
feet to a point, and The True Point of Beginning.

 

 

Exhibit A-2 

Legal Description of Romeoville, Illinois Property

Lot 1 in Final Plat of Resubdivision of Lot 3 in Windham Lakes 22nd Resubdivision, being a
Resubdivision in Windham Lakes Resubdivision No. 22 Document No. R2005-55441, being a Resubdivision
of Lot 12 in Windham Lakes Resubdivision Number 3, a Subdivision of part of the West Half of
Section 29, Township 37 North, Range 10 East of the Third Principal Meridian, according to the Plat
thereof recorded April 17, 2001 as Document No. R2001-43185, in Will County, Illinois.

 

 

Exhibit A-3

Legal Description of Allen, Texas Property

Being 12.941 acre tract of land situated in the
Francis Dosser Survey, Abstract Number 280, Collin County, Texas, in the City of Allen, being a
portion of the tract of land described as Tract B in the deed to Blue Star Allen, L.P. recorded
in Volume 5638, Page 5196, Deed Records of Collin County, Texas, a portion of the tract of land
described as Tract A in the Deed to Blue Star Allen Land, L.P. recorded in Volume 5638, Page
5127, Deed Records of Collin County, Texas, and also being all of Lot 1, Block A, StarCreek
Commercial an Addition to the City of Allen as recorded in Cabinet Q, Page 511, Plat Records of
Collin County, Texas; said 12.941 acre tract of land being more particularly described as
follows:

Beginning at a 1/4 inch iron rod found in the easterly line of the tract of land described in
the Deed to Wines Family Irrevocable Trust recorded in Volume 2774, Page 647, Deed Records of
Collin County, Texas, near the approximate centerline of County Road Number 150 (an undefined
width right-of-way) for the southwesterly corner of said Tract B; Thence with the easterly line
of said Wines Family Irrevocable Trust Tract and the approximate centerline of County Road
Number 150, North 00 degrees 30 minutes 41 seconds West at a distance of 258.24 feet passing a
1/2 inch iron rod with a cap stamped “DAA” found for the common westerly corner of said Tract B
and said Tract A, in all a total distance of 671.18 feet to a 5/8 inch iron rod with a cap
stamped “Dunaway Assoc, Inc.” set for corner; Thence departing the easterly line of said Wines
Family Irrevocable Trust Tract, North 64 degrees 36 minutes 21 seconds East a distance of
644.45 feet to a 5/8 inch iron rod with a cap stamped “Dunaway Assoc, Inc.” set for corner;
Thence South 80 degrees 23 minutes 39 seconds East a distance of 148.19 feet to a 5/8 inch
iron rod with a cap stamped “Dunaway Assoc, Inc.” set for corner; Thence North 64 degrees 36
minutes 21 seconds East a distance of 60.02 feet to a 5/8 inch iron rod with a cap stamped
“Dunaway Assoc, Inc.” set for corner; Thence South 25 degrees 23 minutes 39 seconds East a
distance of 123.43 feet to a 5/8 inch iron rod with a cap stamped “Dunaway Assoc, Inc.” set for
corner; Thence South 23 degrees 17 minutes 34 seconds East a distance of 150.00 feet to a 5/8
inch iron rod with a cap stamped “Dunaway Assoc, Inc.” set for corner; Thence South 25
degrees 23 minutes 39 seconds East a distance of 21.21 feet passing the common line of said
Tract A and said Tract B, in all

 

 

a total distance of 200.00 feet to a 5/8 inch iron rod with a cap stamped “Dunaway Assoc, Inc.” set
for corner; Thence South 19 degrees 36 minutes 21 seconds West a distance of 35.36 feet to a 5/8
inch iron rod with a cap stamped “Dunaway Assoc, Inc.” set for corner; Thence South 64 degrees 36
minutes 21 seconds West a distance of 200.00 feet to a 5/8 inch iron rod with a cap stamped
“Dunaway Assoc, Inc.” set for corner; Thence South 60 degrees 47 minutes 00 seconds West a
distance of 150.00 feet to a 5/8 inch iron rod with a cap stamped “Dunaway Assoc, Inc.” set for
corner; Thence South 64 degrees 36 minutes 21 seconds West a distance of 293.85 feet to a 5/8 inch
iron rod with a cap stamped “Dunaway Assoc, Inc.” set for the point of curvature of a curve to the
left having a radius of 1,560.00 feet; Thence southwesterly along said curve through a central
angle of 13 degrees 43 minutes 09 seconds an arc distance of 373.53 feet with a chord bearing of
South 57 degrees 44 minutes 47 seconds West and a chord distance of 372.64 feet to a 5/8 inch iron
rod with a cap stamped “Dunaway Assoc, Inc.” set for corner in the northerly line of the tract of
land described in the Deed to Bryan Bush recorded in Volume 1598, Page 373, Deed Records of Collin
County, Texas, also being the southerly line of the aforementioned Tract B; Thence with the common
line of said Tract B and said Bush Tract, South 88 degrees 51 minutes 41 seconds West a distance of
70.51 feet to the point of beginning; Containing a computed area of 12.941 acres (563,705 square
feet) of land.

 

 

Exhibit A-4

Legal Description of Omaha, Nebraska Property

Lot 2, Legacy Replat 12, a subdivision in
Douglas County, Nebraska.

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