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HomeMy WebLinkAbout9.a. Public Private Partnership project consideration EXECUTIVE SUMMARY City Council Regular Meeting: April 5, 2022 AGENDA ITEM: Consider Public Private Partnership to AGENDA SECTION: facilitate Recreation Center project New Business PREPARED BY: Logan Martin, City Administrator AGENDA NO. 9.a. Dan Schultz, Park & Rec Director ATTACHMENTS: Letter of Intent; Land Purchase & Sale APPROVED BY: LJM Agreement RECOMMENDED ACTION: Motion to approve a Letter of Intent for a Recreational Facility Lease with LTF Lease Company, LLC. Motion to approve a Purchase Agreement with Akron 42, LLC to acquire approximately 29 acres in the northeast quadrant of Akron Avenue and Hwy 42. BACKGROUND The City has been working for many years to respond to resident demands for increased indoor recreation amenities and spaces. After a considerable amount of work, City staff are prepared to recommend a Letter of Intent (LOI) be authorized with a private operational partner, as well as a purchase agreement to acquire the land for this facility. A complete history on this initiative would be lengthy, but records dating back to 2008 show that a number of public, private, and non-profit options to fulfill this need have been explored. More recently, the City engaged market analyst Ballard King in 2017 to do a full analysis of the City’s market viability for recreation amenities along with an exploration of various options to operate a facility. The Ballard King study confirmed a few key factors. First, there is a strong market demand for recreational, fitness, and athletic facilities in Rosemount. The City’s demographics indicate a higher than typical rate of families with young children, a younger population overall compared to the national average, and a higher than typical median household income. Diving deeper, the analysis utilized consumer spending trends to assert that Rosemount families have an untapped “spending potential index” in the entertainment and recreation category. Ballard King then worked with an architect to consider construction and operation options for a recreational facility. Ultimately, it was determined that the City would lose a significant amount (over $500,000) annually if it chose to operate a facility. A variety of factors lead to this revenue loss, including the high overhead needed to staff an 87,000 S.F. facility, an estimated $29 million construction, the City’s inability to garner market-rates for memberships due to our lack of name-brand recognition, and on-going costs to maintain and upkeep a facility. Based on this realization, the City Council directed staff to pursue operational partners for a facility. Partnership Opportunities Numerous possible partnerships were explored by the City for this project. One option included engaging a private staffing agency to provide employees for the various roles within the facility. The option that received the most initial consideration and investigation was to partner with a non-profit recreation provider. In that scenario, the City would construct and own a 60,000 S.F. facility, with daily operations executed by the non-profit. The City would evenly share all maintenance costs and would be exposed to potential annual costs if the facility had a net-negative revenue report. The last scenario explored was a public private partnership with an operator. In this scenario, the City contributes 50% of the construction costs, with the private operator paying the remaining 50%. The operator would also be fully responsible for all ongoing maintenance, site upkeep, and annual operational revenue loss. A table comparing options is below. Non-Profit Operator Private Operator City Cost toward construction $21,000,000 $21,000,000 Building Size 60,000 S.F. 107,000 S.F. Annual Building and Site Maint. $225,000 / year $0 Long-Term Saving for Maint. $195,000 / year $0 Property Taxes Received $0 +/- $250,000 (1/3 rec’d by City) Annual Lease Payment $0 $600,000 / year (approx.) (after bonds are paid off) When considering the financial benefits, increased amenities provided, and the economic development impact to the area, the public private partnership option is the preferred route. As such, the City engaged in conversations with an operator on this opportunity. The operator the City is proposing to partner with is Life Time Inc. Life Time is a Minnesota based athletic club operator with over 180 clubs nationwide, and they have proven themselves as a premier provider of these facilities. Staff has met with Life Time officials on a regular basis over the last 2 years to finalize the details of this arrangement, and we are excited about this opportunity and the impact it will have on the City. Letter of Intent The two parties have established a Letter of Intent (LOI) that memorializes the partnership developed between the City and Life Time. This is a non-binding LOI that will be utilized to establish the long-term lease arrangement with Life Time. A summary of the deal points is below.  Life Time will operate an approx. 107,000 SF facility featuring indoor / outdoor pool and water slides, indoor and outdoor café / bistro (with liquor sales), exercise facilities, gyms, outdoor pickleball courts, child’s play areas, salon and day spa, etc.  Estimated Project cost of $48 million o City contributes $21 million o Life Time funds $27 million  City owns the building and retains the asset in perpetuity o Life Time leases the building from the City o Annual lease payment is equal to their portion of the bond payment (i.e. payments for the $27 million portion of the debt) o City acts as financial lender for the deal, utilizing bond capacity to acquire funds. City assumes risk of lease default by operator. A new tenant would be pursued in that instance, or the sale of the City-owned asset would occur to pay off any remaining bond debt.  Life Time pays to furnish and maintain the building for the life of the lease o No annual City costs to maintain or repair the building or grounds  Rosemount residents receive the following benefits: o No initiation fee o Reduced monthly rates ($10 off for individual, $15 off for couple, $20 off for family) o Optional “summer membership” from June – August reduced by $50 for individuals, $75 for couples, and $75 for families (to support pool utilization and span the summer break for students) o 4 guests passes per household annually for the first 5 years o A scholarship fund will be created (funded by City and Life Time) to assist a segment of families in need  Life Time pays all taxes and utilities (estimated $250,000 a year in taxes)  30-year lease, with renewal options o Annual lease in years 31-40 will be ½ of the debt service payment (approx. $600,000 to $700,000 based on final bond amounts) If approved by the City Council, the terms of the LOI will be transitioned into a Lease Agreement with Life Time. The Lease will be considered by their Board of Directors in May, with authorization by the City Council coming thereafter. Land Sale The parcel of land considered for this project has consistently remained the northeast quadrant of Akron Ave. and Hwy 42. Staff has negotiated with the land owners of that parcel, and a proposed Purchase Agreement is attached and recommended for approval. The agreement sets the land price at $135,000 per acre, which is a fair market value as confirmed by a market study. The entire site is approximately 29 acres, with approximately 11 acres needed for the Life Time project. The purchase agreement encompasses the entire site, which provided an easier transaction and the site control desired in order to master plan the entire quadrant. The City is responsible for acquiring the acreage needed for the Life Time project, and we will be assigning the purchase opportunity to a development partner that we’ve engaged who has interest in developing the remainder of the site. A number of contingencies remain in the land sale agreement in order to protect the City and our partners. A traditional due diligence period of 120 days is in place to secure land use approvals and complete a site analysis. Most importantly, the land sale is contingent upon the City finalizing operation and lease agreements with Life Time. It is also contingent upon our ability to attain bond financing to complete the construction of the project. As evidenced by the detail of this memo, this has been a very lengthy process and is highly complex. The actions requested of the City Council on April 5 will serve as a major milestone in this project, however it will not finalize the transaction and is not the last action of the City Council. Future important steps will be action by the Life Time Board of Directors in May, a subsequent Lease Agreement approval in mid- summer, land use applications for the actual project, and final construction bids and bond financing to complete the work. If the project receives approvals across all required steps over the coming months, site preparation would begin this fall, with construction spanning all of 2023. A facility would be open to guests in early 2024. RECOMMENDATION Staff recommends the City Council approve a Letter of Intent for a Recreational Facility Lease with LTF Lease Company, LLC. Staff also recommends a motion to approve a Purchase Agreement with Akron 42, LLC to acquire approximately 29 acres in the northeast quadrant of Akron Avenue and Hwy 42. CITY OF ROSEMOUNT DAKOTA COUNTY, MINNESOTA RESOLUTION 2022-38 A RESOLUTION APPROVING A LETTER OF INTENT FOR A RECREATIONAL FACILITY LEASE WITH LTF LEASE COMPANY, LLC WHEREAS, LTF Lease Company, LLC, a Delaware limited liability company (“Tenant”) has proposed that the City of Rosemount, Minnesota (the “City”) construct an approximately 107,000 square foot health and fitness facility with outdoor recreational uses to be located at the NE corner of 145th Street West and Akron Avenue, Rosemount, Minnesota (the “Project”) to be leased to the Tenant; and WHEREAS, both the City and the Tenant desire to approve the Letter of Intent (the “Letter of Intent”) outlining the terms for the construction, leasing and financing of the Project to be set forth in a definitive lease and related documents. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Rosemount, Minnesota (the “Council”), as follows: 1. The Letter of Intent as presented to the Council is hereby approved in all respects, in substantially the form submitted, and the City Administrator is hereby authorized and directed to negotiate definitive agreements consistent with the Letter of Intent on behalf of the City for future consideration by the Council, and hereby authorizes the Mayor and the City Clerk to execute, on behalf of the City, the acceptance of the Letter of Intent. 2. The approval hereby given to the Letter of Intent includes approval of such additional details therein as may be necessary and appropriate and such modifications thereof, deletions therefrom and additions thereto as may be necessary and appropriate and approved by legal counsel to the City and by the City Administrator, subject to the following conditions: (a) such modifications do not materially adversely affect the interests of the City; and (b) such modifications do not contravene or violate any policy of the City or applicable provision of law. This Resolution and the Letter of Intent shall not constitute an offer and shall not be binding on the City until the date of execution of the definitive agreements as provided in the resolution approving such definitive agreements. 3. As set forth in the Letter of Intent, execution of definitive agreements and any proposed obligations of the City thereunder are subject to satisfaction of conditions precedent thereto including, without limitation, approval by the City Council after a public hearing as required by Minnesota law. RS125-24-784661.v2 th ADOPTED this 5 day of April, 2022. _______________________________________ William H. Droste, Mayor ATTEST: Jessie Paque, Deputy City Clerk 2 RS125-24-784661.v2 CERTIFICATION STATE OF MINNESOTA ) COUNTY OF DAKOTA ) ss CITY OF ROSEMOUNT ) I am the duly appointed, acting and qualified Deputy City Clerk of the City of Rosemount, Dakota County, Minnesota and do hereby certify that I have examined the City of Rosemount records and th the Minute Book of said City for the meeting of the 5 day of April, 2022. The attached RESOLUTION APPROVING A LETTER OF INTENT FOR A RECREATIONAL FACILITY LEASE WITH LTF LEASE COMPANY, LLC was approved by the City Council and is a true and correct copy of said Resolution. th IN WITNESS WHEREOF, I have hereunto set my hand and seal of said City this 5 day of April, 2022. Jessie Paque, Deputy City Clerk City of Rosemount Dakota County, Minnesota RS125-24-784661.v2 April 1, 2022 Mr. Logan Martin City Administrator City of Rosemount th 2875 145 Street West Rosemount, MN 55068-4997 th Re: Property located at the NE Corner of 145 Street West and Akron Avenue, Rosemount, Minnesota Dear Mr. Martin: The following is a summary of the terms and conditions upon which LTF Lease Company, LLC is willing to commit to lease space at the above-referenced development in accordance with a mutually acceptable, written lease agreement (referred to herein as the “Lease”). This letter of intent (“Letter of Intent”) is non-binding except as specifically set forth herein and neither Landlord (defined below) nor LTF Lease Company, LLC will be bound unless the Lease is executed, except for those provisions specifically set forth herein. City of Rosemount, Minnesota, a Minnesota municipal corporation Landlord: (“Landlord”) LTF Lease Company, LLC, a Delaware limited liability company Tenant: (“Tenant”). Life Time, Inc., a Minnesota corporation, will unconditionally guarantee Tenant’s obligations under the Lease. A to be constructed single-tenant building to be located at the NE Building: th corner of 145 Street West and Akron Avenue, Rosemount, MN, as depicted on Exhibit B attached hereto (the “Building”). The premises will consist of approximately 107,000 square feet (the Premises: entire Building) and include a portion of the land as depicted on Exhibit A attached hereto, constituting approximately 13 acres (the “Premises”). The Premises is part of a larger development as shown on the site Development: plan (the “Site Plan”) set forth on Exhibit B attached hereto (the “Development”). Landlord will own the portion of the Development depicting the Premises on the Site Plan. Initial Lease Term: 30 years. The Initial Lease Term and any Renewal Options are collectively referred to herein as the “Term”. Renewal Options: Two, 5-year renewal options. 1 RS125-24-779343.v4 Annual Base Rent will be fixed for the Term, as follows: Annual Base Rent: INITIAL LEASE TERM ANNUAL BASE RENT Exact numbers will be added as an addendum to the Lease when the Bonds are priced. The Annual Base Rent will equal the amount of the annual debt service payment (principal and interest) above debt service on Landlord’s $21MM initial contribution paid in monthly installments of 1/12 of such annual amount. Tenant’s portion of Bond payments will be structured to commence after projected completion date as determined by Tenant, as Construction Manager. RENEWAL OPTIONS st 1 Renewal Option 50% of the average Annual Base Rent payable during the last year of the Initial Lease Term nd 2 Renewal Option 50% of the average Annual Base Rent payable during the last year of the Initial Lease Term Landlord’s investment in the acquisition and construction of the Bonds; Cost Over-Runs: Premises is limited to $21,000,000. Subject to satisfaction of all conditions required by law, Landlord will obtain General Obligation Bonds issued in an amount not to exceed $48,000,000 (the “Bonds”). The Bonds will be used to fund the acquisition, development and construction of the Premises, the Building and Landlord’s Work. Tenant will be solely responsible for all costs to acquire, develop and construct the Premises, the Building and Landlord’s Work in excess of $48,000,000. In the event the costs to acquire, develop and construct the Premises, the Building and Landlord’s Work exceed $48,000,000, Tenant will deposit in escrow with the Title Company (defined below) funds equal to the amount necessary to pay all costs to acquire, develop and construct the Premises, the Building and Landlord’s Work in excess of $48,000,000. Utilities will be separately metered to the Premises. Tenant will pay Utilities: all utility expenses for the Premises during the Term. 2 RS125-24-779343.v4 Landlord shall, at its sole cost and expense, create a separate tax Real Estate Taxes: parcel for the Premises. Real estate taxes will be separately assessed for the Premises. Tenant will pay all real estate taxes for the Premises during the Term, commencing upon the Rent Commencement Date. Tenant shall pay the real estate taxes for the Premises directly to the appropriate taxing authority when due. Maintenance and Tenant shall repair, replace and maintain the Premises (interior and exterior) and all of Tenant’s personal property therein during the Insurance: Term. Tenant’s obligation to lease the Premises in accordance with the Tenant’s Contingencies: Lease is subject to the satisfaction or waiver of each of the following contingencies (each, a “Tenant’s Contingency,” and collectively, “Tenant’s Contingencies”) prior to the dates herein specified (subject to any extensions described below): (a) Tenant will have a period ending the earlier of (i) one hundred twenty (120) day inspection from the effective date of the Lease or (ii) August 17, 2022 (the “Inspection Period”), to review any and all documents, materials and due diligence information relating to the Premises, including without limitation, Phase I and Phase II (if recommended) environmental reports, utilities, protective covenants, wetlands study, storm water retention/filtration, zoning, site conditions (including, but not limited to, tree mitigation, grading, clearing), site planning, review of any association documents, design guidelines, restrictive covenants or any other private governing authority documents, feasibility study of the Premises (collectively, the “Due Diligence Materials”). Subject to obtaining necessary information from Akron 42, LLC (the “Seller”), Landlord will respond to any comments or requests from Tenant regarding the Due Diligence Materials within three (3) days after receipt of such comment or request; During the Inspection Period, Tenant will have the right to enter onto the Premises to conduct any testing of the Premises, subject to the terms of the Purchase and Sale Agreement regarding the Premises between Landlord and the Seller (the “PSA”). Should Tenant at any time during the Inspection Period conclude that it does not want to proceed with the transaction contemplated in the Lease for any reason or no reason, then Tenant will notify Landlord, the Lease shall terminate and Tenant shall have no further obligations under the Lease. Furthermore, if Landlord has not received a notice of satisfaction or waiver from Tenant to Landlord, then the foregoing conditions shall be deemed to have not been satisfied prior to the expiration of the Inspection Period, the Lease 3 RS125-24-779343.v4 shall automatically terminate effective as of the expiration of the Inspection Period and Tenant shall have no further liability under the Lease. Notwithstanding the foregoing, if Landlord has not received a notice of satisfaction or waiver on or prior to expiration of Inspection Period, Landlord may, within ten (10) days after expiration of the Inspection Period, send a written notice to Tenant and Tenant will have ten (10) days after receipt of such notice to notify Landlord of the non-satisfaction, satisfaction or waiver the applicable Tenant’s Contingency before the Lease is deemed automatically terminated. (b) Prior to the expiration of the Inspection Period, Landlord, Tenant and all applicable third parties will have agreed upon the final form of REA to be recorded against the Development at the time of Landlord’s acquisition of the Premises. The REA will include, at minimum, the use restrictions set forth on Exhibit C attached hereto agreed to by private owners of adjacent property in the Development, Tenant’s exclusive use provision, shared utility provisions, self-park requirements and related parking restrictions, and shared signage provisions. Tenant expects the main roadways within the Development to be private roads. (c) Upon expiration of the Inspection Period or upon Tenant waiving Tenant’s Contingencies of the Inspection Period, Landlord shall obtain, at its sole cost and expense, including payment of all costs and fees (e.g., development, impact, school, public art, utility setup, utility connection, etc.) and on behalf of Tenant, the following approvals within \[Exact timing TBD – deadline will not exceed the land closing date in the PSA)\] (the “Approval Period”): any and all final, non-appealable approvals and entitlements from the City of Rosemount or any other municipality or other third party to allow the operation and construction of the Health Club (as defined herein) on the Premises, including without limitation, zoning, required subdivision(s), access, signage, special use permits, variances, licenses for outdoor elements of the Health Club, an on-site presale facility and any other approvals that may be required for use of the Premises by Tenant as a health and fitness club of approximately 107,000 square feet, and also including use of the Premises twenty-four (24) hours a day, seven days a week, all such approvals not containing any conditions which are not acceptable to Tenant in its sole discretion and after expiration of any applicable appeals period (collectively, the “Approvals”); (d) Prior to expiration of the Approval Period, Landlord and Tenant will have agreed upon the final form of Construction Management Agreement to be signed by the parties prior to commencement of bidding and construction of the Premises (the “Construction Management Agreement”) pursuant to which Tenant, in 4 RS125-24-779343.v4 cooperation with Landlord’s City Engineer, shall agree to provide at no cost to Landlord, (i) all design and architectural services for the site plan and plat of the Development, including without limitation, all utilities and infrastructure for the site, and the construction of the Building, (ii) prepare bid packets and conduct public bidding for all work on the Premises and all utilities and infrastructure in the Development in accordance with MN Stat. Sections 471.345 – 471.462, and (iii) provide Construction Management services for all work performed under such contracts. If Landlord shall be unable to procure any of the Approvals at any time during the Approval Period or if Tenant determines that all or any of Tenant’s Contingencies will not be or have not been satisfied prior to expiration of the Approval Period, Tenant shall have the option at any time on or prior to expiration of the Approval Period to either exercise self-help and elect to obtain any remaining Approvals. (e) Prior to the date on which Tenant accepts delivery of the Premises with the Landlord’s Work (as defined herein) complete (the “Possession Date”), Tenant shall have obtained a leasehold title insurance policy in form and content acceptable to Tenant from a title company to be selected by Tenant (the “Title Company”). (f) Prior to the expiration of the Approval Period, Tenant shall have obtained approval from the Board of Directors of Life Time, Inc. (g) Prior to the expiration of the Approval Period \[Exact timing of Approval Period TBD – deadline will not exceed the land closing date in the PSA)\], Landlord shall have acquired fee simple title to the Premises and Mark Nordland (or his approved successors or assigns) shall have acquired fee simple title to the remainder of the Development; provided, however, that prior to the expiration of the Approval Period, Tenant shall execute a contingent assignment of the PSA with Landlord pursuant to which Tenant will agree to purchase the remainder of the Development upon satisfaction of all other Approval Period contingencies to the Lease if Mark Nordland (or his approved successors or assigns) fails to acquire such property by the required closing date. Rent Commencement Tenant’s obligation to pay Rent shall commence on the date Tenant opens the Health Club (as defined herein) for business in the Date: Premises to the general public in accordance with the scheduled payment dates for the Bonds (the “Rent Commencement Date”). The Premises shall be operated as a health and fitness facility of Permitted Use: approximately 107,000 square feet with outdoor recreation uses, 5 RS125-24-779343.v4 including, but not limited to, outdoor pool, water slides, outdoor café/bistro with seating, outdoor child’s play area, outdoor exercise areas, outdoor fields and outdoor tennis, indoor pools, indoor tennis, café/bistro with liquor sales, racquetball/squash, tennis lessons (both indoor and outdoor), group classes, free weights, weight and aerobic training, cardio equipment, circuit training, child care, hair salon, day spa, medi-spa, café/bistro inside the Premises (with food sales for on-premises and off-premises consumption) with additional outdoor seating, liquor sales in the Premises, physical therapy, chiropractic care, medical office, collaborative office, “co- working” or shared workspace, sale of health and fitness-related merchandise and/or any other use related to healthy living, healthy aging, healthy working or a healthy way of life (collectively, the “Health Club”) including, at Tenant’s option, use of the Premises twenty-four (24) hours a day, seven (7) days a week, and any other use compatible with the primary health and fitness facility function of the Premises and specifically excluding any uses listed in Exhibit E (collectively, and together with the Health Club, the “Permitted Use”). Tenant may not assign the Lease or sublet the whole or any part of Assignment/Sublet: the Premises without the prior consent of Landlord, which consent shall not be unreasonably withheld, delayed, or conditioned. Tenant shall, however, have the right to enter into an assignment of the Lease or a sublease of the Premises, without Landlord’s consent, to (i) an entity controlling, controlled by or under common control with Tenant, Life Time, Inc. or Life Time Group Holdings, Inc. including, without limitation, any change in control or management or an initial public offering of such entity, Tenant, Life Time, Inc., or Life Time Group Holdings, Inc. or any affiliate thereof, (ii) an entity which succeeds to Tenant’s or Life Time, Inc.’s or Life Time Group Holdings Inc.’s business by merger, consolidation, initial public offering, or other form of corporate reorganization, (iii) an entity which acquires all or substantially all of Tenant’s or Life Time, Inc.’s or Life Time Group Holdings Inc.’s assets or stock, (iv) an entity which acquires one or more of Tenant’s or Life Time, Inc.’s or Life Time Group Holdings, Inc.’s locations, or (iv) a real estate investment trust formed by Tenant or by any entity described in (i), (ii) or (iii) above. Further, Tenant shall have the right to sublease up to 10% of the leasable square footage of the Premises for a Permitted Use without Landlord’s consent. In the event of an authorized assignment or sublease of the Lease, Tenant shall be forever released from any further liability and obligations under the Lease; provided that such assignee shall unconditionally assume all of Tenant’s obligations under the Lease. 6 RS125-24-779343.v4 Pursuant to the Construction Management Agreement, Tenant shall Landlord’s Work: agree to provide Landlord with complete drawings, plans and specifications for the construction of the infrastructure, roads and related improvements for the Development, including the Premises, and all of the Landlord’s Work (as defined herein). Within ten (10) days after the execution date of the Lease, Landlord agrees to provide Tenant, to the extent in the possession or control of Landlord or its agents or representatives, the following: (i) a current ALTA/ACSM Survey of the Development including the Premises; (ii) soil tests of the Development including the Premises; (iii) a site plan of the Development including the Premises showing the location of existing utilities; (iv) a final grading plan for the Development including the Premises; (v) a copy of Landlord’s title insurance commitment/policy for the Development including Premises and all accompanying encumbrance documentation; (vi) the estimated market value of the tax parcel of which the Premises will be a part; and (vii) environmental reports for the Development including the Premises. Landlord is responsible for any and all off-site work and any and all off-site costs arising as a result of the Landlord’s Work or Tenant’s Work to the extent of the proceeds of the Bonds up to $48,000,000 and subject to the publicly bid contracts and Tenant shall be responsible for any costs in excess of $48,000,000 to deliver Landlord’s Work. The Premises (including the Building) shall be delivered by Landlord to Tenant air-tight, water-tight and free of hazardous materials. Landlord shall deliver possession of the Premises to Tenant with all work described on the attached Exhibit D (“Landlord’s Work”) complete and acceptable to Tenant to the extent of the proceeds of the Bonds up to $48,000,000 and subject to the publicly bid contracts and Tenant shall be responsible for any costs in excess of $48,000,000 to deliver Landlord’s Work. Landlord represents that the Landlord’s Work shall be constructed in a good and workmanlike manner and in accordance with all applicable zoning, municipal, county, state and federal laws, ordinances and regulations and any covenants or restrictions of record (collectively, “Applicable Laws”); provided that Tenant shall agree to be responsible for ensuring compliance therewith in its role as Construction Manager under the Construction Management Agreement. Landlord agrees to diligently proceed with the Landlord’s Work and will deliver possession of the Premises to Tenant with the Landlord’s Work complete no later than \[TBD\]. Tenant acknowledges that Tenant will manage the construction and 7 RS125-24-779343.v4 completion of the Landlord’s Work by such deadline pursuant to the Construction Management Agreement. In the event that the Landlord’s Work is not yet fully complete, but is sufficiently completed so that Tenant can begin Tenant’s Work (as defined herein) without materially interfering with the completion of the Landlord’s Work, Tenant will be permitted early entry to the Premises for the purpose of beginning Tenant’s Work. Notwithstanding Tenant’s right to early entry to the Premises, the Possession Date shall not occur until the Landlord’s Work is fully complete and accepted by Tenant in accordance with the terms of the Lease. Landlord shall pay all costs to purchase and develop the Premises Landlord’s Contribution: and all hard construction costs to develop and construct the Premises (including the Building) and the infrastructure for the Development, including without limitation all infrastructure, on- site and off-site improvement expenses to the extent of the proceeds of the Bonds up to $48,000,000 and subject to the publicly bid contracts and Tenant shall be responsible for any costs in excess of $48,000,000 to deliver Landlord’s Work. Tenant shall pay for the soft costs it incurs in its design of the Premises and the infrastructure planning for the Development (including the Premises) and the furnishing and installation of Tenant’s desired fixtures, furniture and equipment in the Building (“Tenant’s Work”). Tenant shall have the right, at Tenant’s expense, to install on all Signage: building elevations its standard sign package. Tenant shall have the right to display “opening soon,” “grand opening” and promotional banners from time to time after execution of the Lease. It is understood that the Lease is contingent upon applicable local government authorities’ approval of Tenant’s signage. Tenant shall have the right, at its sole cost and expense, to install and maintain its sign panels on the pylon sign and/or monument sign(s) within the Development. Tenant’s sign panels shall be in the top panel position on the pylon and/or monument sign(s). Tenant shall not be obligated to pay for or contribute to the costs of the initial construction of the pylon and/or monument sign(s). Tenant or the operator under the REA shall be responsible for the maintenance and repair of the pylon and/or monument sign structures and shall also be responsible for providing electricity to the pylon and/or monument sign(s). Landlord represents that there will be sufficient parking spaces in Parking: the Development for Tenant’s use in addition to all other tenants/owners/occupants; Tenant acknowledges that the site plan 8 RS125-24-779343.v4 Tenant provides pursuant to the Construction Management Agreement shall initially address this requirement. The Development shall not share any parking and each parcel shall park to code, without variance. Such parking restrictions shall be set forth in the REA. The definition of “Force Majeure” in the Lease shall include, but Force Majeure: shall not be limited to, plague, epidemic, pandemic, contagion, outbreaks of infectious disease, the coronavirus \[COVID-19\] pandemic, or any other public health crisis, and shall include any quarantine, stay-at-home orders, operational restrictions or shutdowns, construction-related restrictions, slowdowns or stoppages, or any other measure taken by any government authority in response thereto (collectively, a “Public Health Event”). Once the Bonds have been issued, all Rent shall be due regardless of any Force Majeure. Landlord shall provide space for Tenant to place a presale Presale: membership trailer at the Premises at least six (6) months prior to Tenant’s grand opening of the Health Club. The dedicated space shall be provided free of any costs or expenses. (1) Tenant will not charge an enrollment fee to residents of the Resident Incentives: City of Rosemount to obtain memberships. (2) During each of the first five years after the City issues a certificate of occupancy for the Building, Tenant will cooperate with Landlord to provide up to 4 guest passes per household within the City of Rosemount. After the initial five-year period, Tenant and Landlord will re-evaluate the guest pass benefits. (3) Tenant and Landlord will work together to establish a program to make memberships available to residents of the City of Rosemount that meet certain income qualifications. (4) Tenant will make available to residents of the City of Rosemount: (a) A 3-month membership for the months of June, July and August, the total cost of which will be discounted by $50 for individual memberships, $75 for couple memberships, and $100 for a family of 3 or more. (b) Regular memberships that will be discounted by $10 for individual memberships, $15 for couple memberships, and $20 for a family of 3 or more, from the monthly rate then in effect. (c) For clarity, residents cannot receive both discounts set forth in (a) and (b) above in a 12-month period. Residents may choose only one. 9 RS125-24-779343.v4 Landlord and Tenant represent and warrant to each other that they Brokerage: have not dealt with brokers, finders or the like in connection with this transaction, and agree to indemnify each other and to hold each other harmless against all claims, damages, costs or expenses of or for any other such fees or commissions resulting from their actions or agreements regarding the execution or performance of this transaction, and will pay all costs of defending any action or lawsuit brought to recover any such fees or commissions incurred by the other party, including reasonable attorney’s fees. Provided, however, that Landlord shall be entitled to consult with commercial real estate brokers in determining commercially reasonable rental rates for the Lease at Landlord’s sole cost and expense. Encumbrances and To Landlord’s knowledge, there are no restrictions, covenants, easements or other encumbrances on the Development, including Restrictions: the Premises. The Landlord’s $21,000,000 contribution to the cost of the Business Subsidy: construction of the Building is a business subsidy and the requirements of Minnesota Statutes, Sections 116J.993 through 116J.995 (the “Business Subsidy Law”) apply. Landlord and Tenant will further discuss the wage and job goals under Landlord’s business subsidy policy and the Business Subsidy Law with respect to the Premises. Participation and requirements to be determined in the Lease. Landlord agrees to utilize Tenant’s lease form as the basis for the Lease Form: Lease. All other terms set forth in the Lease shall be as agreed to by the parties. Please sign below to indicate your willingness to proceed with negotiations on the terms outlined herein. Should a lease agreement acceptable to both parties not be executed and delivered to each party, this Letter of Intent shall be deemed null and void and of no force or effect, and neither party shall have any liability or obligation to the other based on this Letter of Intent or any discussions between the parties, whether prior to, contemporaneous with, or subsequent to the execution hereof, except as specifically set forth herein. Notwithstanding anything to the contrary in this Letter of Intent, Landlord expressly agrees not to negotiate with an outside party with respect to a lease or other transaction with respect to the Premises for a period of ninety (90) days from the date Landlord signs this Letter of Intent and Landlord expressly agrees that this paragraph is binding between the parties. The individuals signing this Letter of Intent on behalf of Landlord each warrants that he/she has authority to execute this Letter of Intent on behalf of Landlord and to bind Landlord accordingly. Please execute the acceptance below no later than April 6, 2022 or this Letter of Intent will be deemed withdrawn. Yours very truly, 10 RS125-24-779343.v4 Aaron Koehler Vice President, Development Life Time Agreed and Accepted this _____ day of April, 2022. City of Rosemount, Minnesota By: Its: Mayor By: Its: City Clerk cc: Kari Broyles, Life Time, Inc. 11 RS125-24-779343.v4 EXHIBIT A LAND \[Will be a portion of Outlots J and O, Prestwick Place\] A-1 RS125-24-779343.v4 EXHIBIT B SITE PLAN FOR BUILDING, PREMISES AND DEVELOPMENT B-1 RS125-24-779343.v4 EXHIBIT C LIST OF PROHIBITED USES UNDER REA No portion of the Development shall be used for any of the following uses or purposes: (a) motor vehicle service, fuel or gas stations, motor vehicle repairs including without limitation any body and fender repair work, car washes, or the displaying, renting, leasing, or sale of any automobile, truck, boat, trailer or other motor or recreational vehicle that is not entirely conducted inside of a building; (b) a venture whose primary business is operation of video or arcade games; (c) adult book or video store; (d) health or fitness club, gym or any commercial facility used for physical exercise or individual or group fitness or athletic training regardless of whether such business charges membership dues, class fees or any other arrangement; (e) Yoga studio or facility; (f) Pilates studio or facility, (g) cycle studio or facility (e.g. SoulCycle), (h) Barre studio or facility; (i) any specialty fitness studio or facility; (j) boutique gym, fitness training facility (e.g. Orange Theory); (k) hair salon or nail salon; (l) day spa/spa, and/or any establishment that offers any or all of the services typically included in a day spa/spa, including, but not limited to, an operation that provides any of the following services massage therapy, hydrotherapy, facials, or body treatments, (m) medi-spa; (n) chiropractic; (o) physical therapy; (p) sale of nutritional products or supplements; (q) weight loss clinic; (r) café or restaurant whose food offerings primarily consist of organic and/or healthy food offerings; C-4 RS125-24-779343.v4 (s) collaborative office, “co-working” or shared workspace use; (t) a pet store or overnight boarding pet daycare and/or facilities; (u) warehouse or industrial use; (v) self-storage facility; (w) fast food restaurant (e.g. McDonald’s); (x) any use with a drive-through other than (A) a coffee shop (for example, Starbucks or Caribou Coffee), (B) banking facilities, (C) cleaners, if otherwise permitted herein), or pharmacies (such as CVS or Walgreens); (y) liquor store, (z) bar, restaurant or other establishment whose liquor sales exceed 15% of its gross revenues; (aa) convenience store; (bb) establishment for the sale of guns or other firearms; (cc) tattoo or piercing parlor; (dd) so-called “head shops,” which are defined as facilities primarily used for selling products intended to assist, aid, or used in conjunction with the consumption of illegal drugs; (ee) sale or provision of marijuana, whether for therapeutic, medicinal or other purposes; (ff) any public or private nuisance; (gg) any obnoxious odor except customary odors emanating from restaurants; (hh) any fire, explosion or other damaging or dangerous hazard, including the storage, display, or sale of explosives or fireworks; (ii) any distillation (other than so-called micro-brewing of beer), refining, smelting, agriculture or mining operations; (jj) any mobile home or trailer court, labor camp, junk yard, stock yard or animal raising; provided, however, that, notwithstanding the foregoing, pet shops shall be permitted; (kk) any drilling for and/or removal of subsurface substances; C-4 RS125-24-779343.v4 (ll) any dumping of garbage or refuse, other than in enclosed receptacles intended for such purpose; (mm) any cemetery, mortuary or similar service establishment; (nn) any fire sale, bankruptcy sale (unless pursuant to a court order) or auction operation; (oo) any church, synagogue, mosque or other place of worship or other religious use; (pp) any entertainment, recreation or amusement use, whether directed to children or adults, including, but not limited to, any one or more of the following: theatre, skating rink, bowling alley, teenage discotheque, discotheque, dance hall, video game parlor, pool room, massage parlor, off-track betting facility, casino, card club, bingo parlor, facility containing gaming or gambling equipment, planned play environment, arcade games, amusement gallery, rides, video or redemption games, play for fun casino games, golf simulations, rodeo simulations, other sport simulations and carnival activities; (qq) any school, training, or educational facility, including but not limited to: beauty schools, barber colleges, nursery schools, day cares, diet centers, reading rooms, places of instruction or other operations catering primarily to students or trainees rather than to customers; provided however, this prohibition shall not be applicable to on-site employee training by an occupant incidental to the conduct of its business, a learning center for children and teenagers such as Sylvan Learning Center, any school affiliated with an accredited public university, college, or junior college; (rr) any second-hand or thrift stores, or flea markets; (ss) any dry cleaning facilities utilizing hazardous substances with an on- premises plant; provided, however, that nothing contained herein shall preclude a drop- off/pick-up dry cleaning business as long as no cleaning services are conducted at such location; (tt) warehousing or storage facilities of any kind unless incidental to another use permitted on the premises; (uu) call center or similar use; and (vv) use or occupancy of a building by a discount or reduced-price general or specialty retailer or merchandiser, including, but not limited to, Wal-Mart, K-Mart, Sam’s Club, T. J. Maxx, or Marshall’s. C-4 RS125-24-779343.v4 EXHIBIT D LANDLORD’S WORK Landlord’s Work includes all infrastructure improvements, all off-site improvements, and construction of the Premises (interior and exterior) pursuant to the approved, Tenant-provided plans. Tenant will install its customary fixtures, furniture and equipment as the Tenant’s Work. E-1 RS125-24-779343.v4 EXHIBIT E LIST OF PROHIBITED USES OF PREMISES No portion of the Premises shall be used for any of the following uses or purposes: (a) motor vehicle service, fuel or gas stations, motor vehicle repairs including without limitation any body and fender repair work, car washes, or the displaying, renting, leasing, or sale of any automobile, truck, boat, trailer or other motor or recreational vehicle that is not entirely conducted inside of a building; (b) a venture whose primary business is operation of video or arcade games; (c) adult book or video store; (d) warehouse or industrial use; (e) self-storage facility; (f) liquor store, (g) establishment for the sale of guns or other firearms; (h) tattoo or piercing parlor; (i) so-called “head shops,” which are defined as facilities primarily used for selling products intended to assist, aid, or used in conjunction with the consumption of illegal drugs; (j) sale or provision of marijuana, whether for therapeutic, medicinal or other purposes; (k) any public or private nuisance; (l) any obnoxious odor except customary odors emanating from restaurants; (m) any fire, explosion or other damaging or dangerous hazard, including the storage, display, or sale of explosives or fireworks; (n) any distillation (other than so-called micro-brewing of beer), refining, smelting, agriculture or mining operations; (o) any mobile home or trailer court, labor camp, junk yard, stock yard or animal raising; provided, however, that, notwithstanding the foregoing, pet shops shall be permitted; (p) any drilling for and/or removal of subsurface substances; E-1 RS125-24-779343.v4 (q) any dumping of garbage or refuse, other than in enclosed receptacles intended for such purpose; (r) any cemetery, mortuary or similar service establishment; (s) any fire sale, bankruptcy sale (unless pursuant to a court order) or auction operation; (t) any church, synagogue, mosque or other place of worship or other religious use; (u) any second-hand or thrift stores, or flea markets; (v) any dry cleaning facilities utilizing hazardous substances with an on- premises plant; provided, however, that nothing contained herein shall preclude a drop- off/pick-up dry cleaning business as long as no cleaning services are conducted at such location; (w) warehousing or storage facilities of any kind unless incidental to another use permitted on the premises; (x) call center or similar use; and (y) use or occupancy of a building by a discount or reduced-price general or specialty retailer or merchandiser, including, but not limited to, Wal-Mart, K-Mart, Sam’s Club, T. J. Maxx, or Marshall’s. E-1 RS125-24-779343.v4 CITY OF ROSEMOUNT DAKOTA COUNTY, MINNESOTA RESOLUTION 2022-37 A RESOLUTION APPROVING A PURCHASE AGREEMENT WITH AKRON 42, LLC WHEREAS, the City of Rosemount, Minnesota (the “City”), proposes to acquire real property legally described as Outlot J and Outlot O, Prestwick Place, Dakota County, Minnesota (the “Development Site”) in the City; WHEREAS, Akron 42, LLC, a Minnesota limited liability company (the “Seller”) and the City have negotiated that certain Purchase and Sale Agreement (the “Purchase Agreement”) for the acquisition of the Development Site; and WHEREAS, both the Seller and the City desire to approve the Purchase Agreement in order to facilitate the acquisition of the Development Site. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Rosemount, Minnesota, as follows: 1. Subject to all of the contingencies set forth therein, the City Council hereby approves the Purchase Agreement, and hereby authorizes the Mayor and the City Clerk to execute, on behalf of the City, the Purchase Agreement and to carry out, on behalf of the City, the City’s obligations thereunder when all conditions precedent thereto have been satisfied. 2. The approval hereby given to the Purchase Agreement includes approval of such additional details therein as may be necessary and appropriate and such modifications thereof, deletions therefrom and additions thereto as may be necessary and appropriate and approved by legal counsel to the City and by the City Administrator, subject to the following conditions: (a) such modifications do not materially adversely affect the interests of the City; and (b) such modifications do not contravene or violate any policy of the City or applicable provision of law. This Resolution shall not constitute an offer and the purchase agreement shall not be effective until the date of execution thereof. th ADOPTED this 5 day of April, 2022. _______________________________________ William H. Droste, Mayor ATTEST: Jessie Paque, Deputy City Clerk RS125-24-788373.v2 CERTIFICATION STATE OF MINNESOTA ) COUNTY OF DAKOTA ) ss CITY OF ROSEMOUNT ) I am the duly appointed, acting and qualified Deputy City Clerk of the City of Rosemount, Dakota County, Minnesota and do hereby certify that I have examined the City of Rosemount records and the Minute Book of said City for the meeting of the 5th day of April, 2022. The attached RESOLUTION APPROVING A PURCHASE AGREEMENT WITH AKRON 42, LLC was approved by the City Council and is a true and correct copy of said Resolution. IN WITNESS WHEREOF, I have hereunto set my hand and seal of said City this 5th day of April, 2022. Jessie Paque, Deputy City Clerk City of Rosemount Dakota County, Minnesota RS125-24-788373.v2 {00302648 15} 1 RS220-402-774237.v6 PURCHASE AND SALE AGREEMENT THIS PURCHASE AND SALE AGREEMENT (“Agreement”) is made and entered into as of the last date executed below (the “Effective Date”), by and between Akron 42, LLC, a Minnesota limited liability company (“Seller”), and the City of Rosemount, Minnesota, a Minnesota municipal corporation (“Buyer”). Seller and Buyer may be collectively referred to as the “Parties” and, singularly, as a “Party.” RECITALS A. Seller is the owner of the real property legally described on the attached Exhibit A, comprised of the portion thereof generally depicted on the attached Exhibit B as “Outlot A” (the “Health Club Property”), and the portion thereof generally depicted on the attached Exhibit B as “Outlots B, C, D, and E”) (the “Residual Property”). B. Buyer desires to purchase from Seller and Seller desires to sell to Buyer, together with and subject to all privileges, easements, and rights appurtenant to the real property and all improvements and fixtures located thereon, the following property: (i) The Health Club Property; and (ii) The Residual Property. C. Buyer intends to enter one or more agreements with Life Time Inc. or its affiliates or subsidiaries (“Life Time”) to grant Life Time an interest in the Health Club Property following Closing and under which Life Time would operate a health club on the Health Club Property (the “Recreational Facility”). Accordingly, in consideration of the foregoing, and in consideration of the mutual covenants herein contained, which each of the Parties hereto acknowledge is adequate and sufficient, it is hereby agreed as follows: ARTICLE I PURCHASE AND SALE 1.1 Recitals Incorporated. The foregoing recitals, and the definitions contained therein are incorporated into this Agreement as if fully set forth herein. 1.2 Agreement of Purchase and Sale. Seller agrees to sell to Buyer, and Buyer agrees to purchase from Seller, the Health Club Property and the Residual Property which, in the aggregate, will comprise all of the property described on Exhibit A. 1.3 Purchase Price and Manner of Payment. The purchase price for the Health Club Property and the Residual Property shall be equal to $135,000.00 per acre (the “Purchase Price”), payable as follows: (i) $50,000.00 in earnest money (“Earnest Money”), to be deposited by wire transfer of immediately available funds in escrow with First American Title Insurance Company, 121 South 8th Street, Suite 1250, Minneapolis, MN 55402 (the “Title DocuSign Envelope ID: 33A8699A-2C56-42FA-82A7-99A22EFEFFAA {00302648 15} 2 RS220-402-774237.v6 Company”), within 3 Business Days of the Effective Date (the “Opening Date of Escrow”), which Earnest Money is to be held by the Title Company in an escrow account and credited or disbursed in accordance with the provisions hereof and pursuant to the Joint Escrow Instructions attached hereto as Exhibit C; (ii) The balance of the Purchase Price shall be paid i n full at Closing by wire transfer of immediately available funds. The Earnest Money is refundable to Buyer if Buyer terminates this Agreement under Sections 3.4, 4.5, or 11.2(a), and is otherwise non-refundable. ARTICLE 2 PROPERTY IDENTIFICATION 2.1 Platting. During the Inspection Period, Buyer shall prepare for recording at Closing a re-plat of the property described on Exhibit A (the “Re-Plat”) and separately identifying the Health Club Property and the Residual Property, in accordance with Buyer’s typical processes and standards for the same. Prior to Closing, under no circumstances shall Seller be obligated to execute and deliver the Re-Plat, and the Re-Plat shall not be recorded prior to Closing without the prior written approval of Seller. The loc ation, area, and description of the Health Club Property and the Residual Property as provided in the approved and recorded Re- Plat shall be final and binding for purposes of identifying the Health Club Property and the Residual Property under this Agreement. As between the Parties, regardless of who prepares the Re-Plat Documentation, all drawings, documentation, and information related to the Re-Plat (the “Re-Plat Documentation”) will be the property of Seller until Closing, when it shall become the property of Buyer. If this Agreement is terminated for any reason, all Re-Plat Documentation then in existence shall be delivered to Seller. ARTICLE 3 TITLE AND SURVEY 3.1 Title Examination. Within 5 Business Days of the Opening Date of Escrow, Seller shall order a title insurance commitment (the “Title Commitment”) for an ALTA title policy (the “Title Policy”) issued by the Title Company and covering the Health Club Property and the Residual Property, accompanied by copies of all recorded documents affecting the Health Club Property and the Residual Property with proper searches for bankruptcies, judgments, liens, and assessments. Seller shall pay the cost of the title search, any other costs related to issuance of the initial Title Commitment, and for the preparation and recordation of curative title documents in connection with any Title Objections (defined in Section 3.4) that Seller elects to cure pursuant to Section 3.4. Buyer shall pay the premium for any Title Policy, including any endorsements or additional coverage, any costs for updates to the Title Commitment, and for the preparation and recordation of curative title documents unrelated to Title Objections that Seller has elected to cure. 3.2 Survey. Seller shall provide Buyer a current ALTA/NSPS land survey of the Health Club Property and the Residual Property (the “Survey”). DocuSign Envelope ID: 33A8699A-2C56-42FA-82A7-99A22EFEFFAA {00302648 15} 3 RS220-402-774237.v6 3.3 Conveyance of Title; Permitted Exceptions. Seller shall convey and transfer title to the Health Club Property and the Residual Property, subject only to the Permitted Exceptions. The phrase “Permitted Exceptions” shall be defined as all matters shown on the Title Commitment and Survey to which Buyer does not object as set forth in Section 3.4, the Re- Plat, and any other matter specifically identified as a Permitted Exception hereunder. 3.4 Title Objections; Cure of Title Objections. Buyer shall have 30 days from receipt of the Title Commitment and Survey (the “Objection Deadline”) to notify Seller, in writing, of any objections as Buyer may have to anything affecting title as contained in the Title Commitment or the Survey (the “Title Objections,” whether one or more). Any items shown on the Survey or the Title Commitment that are not the subject of Title Objections received on or before the Objection Deadline shall be a Permitted Exception. If Seller does not cure Buyer’s Title Objections within 30 days following expiration of the Objection Deadline, Buyer may elect to either: (a) waive the uncured Title Objections, accept title subject to the Title Objections, and proceed to Closing, in which event the uncured Title Objections shall be considered Permitted Exceptions, and in which case the Parties shall remain obligated to perform pursuant to the terms of this Agreement, with no reduction of Purchase Price; or (b) terminate this Agreement by written notice to Seller given on or before the date that is 5 Business Days after expiration of such 30 day cure period. Buyer’s failure to affirmatively make an election under the preceding sentence shall be deemed an election to waive the uncured Title Objections and proceed to Closing under subparagraph (a). Seller has no obligation to cure any Title Objections. Upon any termination of this Agreement pursuant to this Section, the Earnest Money shall be refunded by the Title Company to Buyer upon written confirmation by Buyer and Seller of the termination of this Agreement. 3.5 Northern Natural Gas Easement. The Parties acknowledge that currently the Health Club Property and the Residual Property are encumbered by an abandoned 100 ft. wide Gas Pipeline Easement along the northern edge of the Project, filed with the Dakota County Recorder’s Office as Document Number 1917503 (the “Northern Natural Gas Easement”) and that there is a pipeline and/or related materials and equipment located with in the Northern Natural Gas Easement (the “Pipeline”). The Northern Natural Gas Easement and the existence and location of the Pipeline shall automatically be deemed a Permitted Exception, in connection with which a Title Objection may not be made. ARTICLE 4 CONTINGENCIES 4.1 Right of Inspection. This Agreement is contingent upon Buyer being satisfied with the condition of the Health Club Property and the Residual Property. Within 5 Business Days of the Effective Date, Seller shall provide to Buyer all of the following that are in Seller’s possession: (a) all land and engineering surveys, (b) all soil tests and environmental reports, (c) all traffic studies, and (d) other similar materials relating to the physical and environmental condition of the Health Club Property and the Residual Property. Beginning on the Opening Date of Escrow, Buyer and its agents shall have until August 17, 2022 to inspect all aspects of the Health Club Property and the Residual Property (the “Inspection Period”). During the Inspection Period, Buyer, Life Time, and their agents and representatives shall have the right to access the Health Club Property and the Residual Property to make all inspections, DocuSign Envelope ID: 33A8699A-2C56-42FA-82A7-99A22EFEFFAA {00302648 15} 4 RS220-402-774237.v6 investigations, and testing as the Buyer deems necessary in connection with the transactions contemplated by this Agreement. Buyer agrees that its on-site inspections of the Health Club Property and the Residual Property shall be conducted with reasonable prior notice to Seller. Buyer shall pay all costs and expenses of such inspections, investigations, and testing. Buyer shall repair any damage caused to the Health Club Property and the Residual Property by such inspections, investigations, and testing and restore the Health Club Property and the Residual Property to its condition as of the Effective Date. Buyer agrees to indemnify and hold Seller harmless from all claims, liens, costs, expenses, or damages, including reasonable attorneys’ fees and court costs, for any third-party claims or demands and any property damages, personal injuries, or death resulting from such activities by Buyer, Life Time, and their agents and representatives. This obligation of Buyer shall not be construed to require Buyer to perform any removal or remediation of any Hazardous Substances as defined in any applicable Environmental Law (as defined in Section 6.1(g)) revealed by Buyer’s actions under this Section. These obligations of Buyer shall survive Closing or any termination of this Agreement. 4.2 Life Time Agreements. This Agreement is also contingent upon Buyer entering into and executing all agreements with Life Time that the Buyer deems necessary in connection with the construction and operation of the Recreational Facility on the Health Club Property (the “Life Time Agreements”). 4.3 Development Agreement for the Residual Property. This Agreement is also contingent upon Buyer entering into a development agreement with the Permitted Assignee (defined in Section 12.4) of this Agreement with terms that Buyer deems necessary in connection with the development of the Residual Property (the “Development Agreement”). 4.4 Financing. This Agreement is also contingent upon Buyer obtaining financing that is sufficient for the Buyer to complete the construction of the Recreational Facility on the Health Club Property (the “Financing”). 4.5 Buyer’s Right of Termination. Buyer may terminate this Agreement by written notice to Seller, given on or prior to expiration of the Inspection Period, if the condition of the Health Club Property or the Residual Property (the “Inspection Contingency”) is not acceptable to Buyer for any reason or no reason whatsoever. Buyer may terminate this Agreement by written notice to Seller, given on or prior to September 1, 2022 (the “Approval Period”), if (a) Buyer is unable to execute satisfactory Life Time Agreements (the “Life Time Contingency”), (b) Buyer is unable to execute a satisfactory Development Agreement (the “Development Agreement Contingency”), or (c) obtain financing that is sufficient for the Buyer to complete construction of the Recreational Facility (the “Financing Contingency”). Buyer may extend the Approval Period for up to two additional 30 day periods by giving written notice Seller prior to the expiration of the Approval Period. 4.6 Refund of Earnest Money. Timely exercise of Buyer’s right to terminate under Section 4.5 is Buyer’s sole remedy and recourse for non-satisfaction of any contingency set forth in this Article 4. If Buyer terminates this Agreement under Section 4.5, as required herein, the Earnest Money shall be promptly refunded by the Title Company to Buyer. If Buyer does not terminate this Agreement under Section 4.5 (a) on or prior to the expiration of the Inspection Period, then this Agreement shall no longer be subject to the Inspection Contingency, or (b) on or prior to the expiration of the Approval Period, then this Agreement shall no longer be subject DocuSign Envelope ID: 33A8699A-2C56-42FA-82A7-99A22EFEFFAA {00302648 15} 5 RS220-402-774237.v6 to the Life Time Contingency, the Developer Agreement Contingency, or the Financing Contingency, and if not timely terminated under Section 4.5 the Parties shall proceed to Closing notwithstanding any provision of this Article 4 to the contrary, and the Earnest Money shall become non-refundable unless stated otherwise in this Agreement. ARTICLE 5 ADDITIONAL COVENANTS 5.1 Operations. Prior to Closing, Seller shall operate the Health Club Property and the Residual Property so as to keep it in good condition, reasonable wear and damage by casualty and condemnation excepted. Seller shall maintain the Health Club Property and the Residual Property in its current condition and not perform any grading activities or construct any improvements on the Health Club Property and the Residual Property during the term of this Agreement. 5.2 Additional Encumbrances. Seller shall not permit any restrictions, easements, leases, liens, and other encumbrances affecting the Health Club Property and the Residual Property to be recorded or otherwise placed or permitted to be placed against the Health Club Property or the Residual Property on or following the Effective Date and prior to Closing, except as may be explicitly contemplated herein or with Buyer’s prior written consent. ARTICLE 6 REPRESENTATIONS AND WARRANTIES 6.1 Representations and Warranties of Seller. Seller makes the following limited representations to Seller’s knowledge. For purposes of this Agreement, the Seller’s knowledge is limited to the actual knowledge of Jonathan Aune, who shall not have any personal liability for any of the following representations and warranties: (a) Organization and Authority. Seller has the requisite power and authority to enter into and perform this Agreement and all agreements and documents referenced herein and to convey and transfer the Health Club Property and the Residual Property to Buyer in accordance with this Agreement. The persons signing this Agreement and Seller’s closing documents on behalf of Seller have the authority and authorization to do so. (b) Rights of Others Regarding the Health Club Property and the Residual Property. Seller has not entered into any other contracts for the sale or lease of the Health Club Property and the Residual Property. Seller has not granted any leases, licenses, rights of first refusal, or options to purchase the Health Club Property or the Residual Property or any other rights to others that prevent the consummation of this Agreement. Seller will not enter into any contracts relating to the lease or sale of the Health Club Property or the Residual Property with any other party unless this Agreement is terminated pursuant to its terms. (c) Proceedings. There is no action, litigation, governmental investigation, condemnation, eminent domain, or other legal proceeding pending against the Health Club Property or the Residual Property. DocuSign Envelope ID: 33A8699A-2C56-42FA-82A7-99A22EFEFFAA {00302648 15} 6 RS220-402-774237.v6 (d) Compliance with Laws. Seller has received no written notice of any violations of applicable laws, codes, ordinances, and regulations with respect to the Health Club Property or the Residual Property.(e) No Other Persons with Rights of Possession. There are no tenants, occupants, or other persons with a right of possession to all or any part of the Health Club Property or the Residual Property. (f) No Mechanic’s Liens. There has been no labor or material furnished to the Health Club Property or the Residual Property for which payment has not been made. (g) Hazardous Substances. Seller has not received written notice from any public authority or private party that the Health Club Property or the Residual Property is in violation of any applicable Environmental Law. As used herein, the term “Environmental Law” shall mean the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended (42 U.S.C. § 9601 et seq.), the Resource Conservation and Recovery Act, as amended (42 U.S.C. § 6901 et seq.), the Toxic Substances Control Act, as amended (15 U.S.C. § 2601 et seq.), the Clean Air Act, as amended (42 U.S.C. § 7401 et seq.), the Federal Water Pollution Control Act, as amended (33 U.S.C. § 1251 et seq.), the Safe Drinking Water Act, as amended (42 U.S.C. § 300f et seq.), and any state counterpart or equivalent of any of the foregoing. (h) Underground Storage Tank. Seller has no knowledge of any underground storage tank located on the Health Club Property or the Residual Property. (i) Wells. Seller has no knowledge of a well located on the Health Club Property or the Residual Property. (j) Septic Systems. Seller has no knowledge of any septic systems or septic drain fields on the Health Club Property or the Residual Property. The provisions of this Section 6.1 shall survive Closing. The representations and warranties contained in this Section shall be true and correct on the Effective Date and the Closing Date. Seller shall indemnify and hold Buyer harmless from any damages sustained by Buyer that were caused by Seller’s material breach of any of the above representations and warranties, but only if the claim for indemnification is made within six (6) months after the Closing Date. Subject to Seller’s express representations, warranties and covenants in this Agreement, Buyer is purchasing, and Seller shall sell and convey to Buyer, the Health Club Property and the Residual Property in its existing condition on the Closing Date AS-IS, WHERE-IS, and WITH- ALL-FAULTS, with respect to all facts, circumstance, conditions, and defects. Except for Seller’s express representations and warranties contained in this Agreement, Seller disclaims, and Buyer acknowledges that Seller has not made, any warranty or representation, express or implied, written or oral, statutory or otherwise, of any nature whatsoever with respect to the Health Club Property or the Residual Property, including without limitation representation, use of the Health Club Property or the Residual Property for Buyer’s intended use, the condition of the Health Club Property or the Residual Property, past or present use, development, investment potential, tax ramifications or consequences, present or future zoning, habitability, merchantability, fitness or suitability for any purpose, or any other matter with respect to the DocuSign Envelope ID: 33A8699A-2C56-42FA-82A7-99A22EFEFFAA {00302648 15} 7 RS220-402-774237.v6 Health Club Property or the Residual Property. Except for Seller’s express representations and warranties contained in this Agreement, all other warranties, either express or implied, of the physical condition (including environmental condition) of the Health Club Property or the Residual Property are void. Buyer acknowledges that it and its representatives have or before Closing will have fully inspected the Health Club Property and the Residual Property or will be provided with an adequate opportunity to do so, are or will be fully familiar with the financial and physical (including without limitation environmental) condition thereof. 6.2 Representations and Warranties of Buyer. Buyer represents and warrants to Seller as follows: (a) Organization and Authority. Buyer has the requisite power and authority to enter into and perform this Agreement and all agreements and documents referenced herein and to acquire all of the Health Club Property and the Residual Property in accordance with this Agreement. The person signing this Agreement and Buyer’s closing documents on behalf of the Buyer is authorized to do so. (b) Consents. As of the Closing Date, Buyer will have obtained all consents and approvals required to consummate the transactions contemplated in this Agreement. (c) Indemnification for Buyer’s Investigation. Buyer shall promptly pay when due any and all charges related to its inspections, investigations, and testing of the Health Club Property and the Residual Property. The representations and warranties contained in this Section shall survive Closing and shall be true and correct on the Effective Date and the Closing Date. Buyer shall indemnify and hold Seller harmless from any damages sustained by Seller that were caused by Buyer’s material breach of any of the above representations and warranties, but only if the claim for indemnification is made within six (6) months from the Closing Date. ARTICLE 7 CLOSING 7.1 Time and Place of Closing. The closing of the purchase and sale transaction contemplated by this Agreement (“Closing”) shall occur fifteen (15) days after the expiration, or Buyer’s waiver, of the Approval Period, or if there have been any extensions of the Approval Period pursuant to Section 4.5 of this Agreement, the closing shall occur fifteen (15) days after the expiration of the extension (the “Closing Date”) or such earlier date as may be agreed by the Parties, at the offices of the Title Company. Closing may occur through deliveries by the Parties of those documents and funds described in Sections 7.2 and 7.3 hereof into a closing escrow to be administered by the Title Company. 7.2 Seller’s Obligations at Closing. As a condition of Buyer’s obligations to close and purchase the Health Club Property and the Residual Property at Closing, Seller shall: (a) Deed. Deliver to Buyer a duly executed limited warranty deed to the Health Club Property and the Residual Property in recordable form (the “Deed”), subject to the Permitted Exceptions, any liens, encumbrances, adverse claims or other matters DocuSign Envelope ID: 33A8699A-2C56-42FA-82A7-99A22EFEFFAA {00302648 15} 8 RS220-402-774237.v6 which Buyer has created or to which Buyer is a party, and all applicable laws, ordinances, and regulations. (b) Authority. Deliver to Buyer such evidence as Title Company may reasonably require as to the authority of the persons executing documents on behalf of Seller. (c) Seller’s Affidavit. Deliver to Buyer an affidavit duly executed by Seller that on the Closing Date, there are no outstanding unsatisfied judgments, tax liens, or bankruptcies against or involving Seller or the Health Club Property or the Residual Property; that there has been no skill, labor, or material furnished to the Health Club Property or the Residual Property at the request of Seller for which payment has not been made; and that there are no unrecorded interests in the Health Club Property or the Residual Property known to Seller. (d) FIRPTA Affidavit. Deliver to Buyer an affidavit duly executed by Seller that Seller is not a “foreign person” and containing such other information as required by section 1445 of the Internal Revenue Code. (e) Bring-Down Certificate. Deliver to Buyer an Affidavit duly executed by Seller that reaffirms the truth and accuracy of Seller’s representations and warranties set forth in this Agreement. (f) Other Documents. Deliver to Buyer all other documents reasonably necessary to consummate the transaction contemplated by this Agreement. 7.3 Buyer’s Obligations at Closing. As a condition to Seller’s obligations to close and sell the Health Club Property and the Residual Property at Closing, Buyer shall: (a) Purchase Price. Pay to Seller the Purchase Price by wire transfer of immediately available funds. (b) Authority. Deliver to Seller such evidence as Seller’s counsel and/or the Title Company may reasonably require as to the authority of the persons executing documents on behalf of Buyer. (c) Other Documents. Deliver to Seller all other documents reasonably necessary to consummate the transaction contemplated by this Agreement. 7.4 Closing Costs. In addition to any allocation of costs and fees set forth in other sections of this Agreement, Seller and Buyer agree to the payment of costs in connection with Closing this transaction as follows: (a) Closing Fee. On the Closing Date, Seller shall pay any reasonable and customary fee or charge imposed by the Title Company or other closing agent for Closing this transaction, including escrow fees. (b) Conveyance Fee. On the Closing Date, Seller shall pay the state deed tax for the recording of the deed to be delivered by Seller under this Agreement. DocuSign Envelope ID: 33A8699A-2C56-42FA-82A7-99A22EFEFFAA {00302648 15} 9 RS220-402-774237.v6 (c) Recording Fee. On the Closing Date, Buyer shall pay the cost of recording the Deed, the Re-Plat, and all agreements and documents related to the transactions contemplated by Sections 4.2, 4.3, and 4.4. (d) Corrective Costs. On or before the Closing Date, Seller shall pay the cost of recording all documents necessary to place record title in the condition warranted by Seller in this Agreement. (e) Attorneys’ Fees. Buyer and Seller shall pay their own attorneys’ fees for the transaction contemplated by this Agreement, except as set forth in Section 12.13. (f) Other Costs. Any other costs required to be paid by Buyer or Seller pursuant to this Agreement not previously paid by Buyer or Seller prior to Closing shall be allocated between the Parties in the customary manner for closing of commercial properties in the Minneapolis/St. Paul metropolitan area. ARTICLE 8 REAL ESTATE TAXES AND SPECIAL ASSESSMENTS On or before the Closing Date, Seller shall pay all real estate taxes and installments of special assessments for the Health Club Property and the Residual Property that are due and payable in years prior to the year of Closing. Real estate taxes due and installments of special assessments payable in the year of Closing, shall be prorated between Seller and Buyer as of the Closing Date, with Buyer being responsible for all such taxes and special assessments due on and after the Closing Date. Taxes due and payable in the year of Closing will need to be paid by Seller and Buyer at Closing in order to record the Re-Plat. Notwithstanding the foregoing, Buyer shall assume and pay all amounts due or coming due in connection with any improvements contemplated or authorized in the Joint Development and Cost Sharing Agreement dated March 20, 2008 (Document No. 2581677), including any such amounts constituting levied, pending or deferred special assessments, and whether such improvements are completed before or after Closing. ARTICLE 9 BROKERS Seller and Buyer represent, warrant, and covenant to each other that they have not dealt with or through any real estate broker, agent, salesperson, finder, or the like relevant to the transactions contemplated under this Agreement, except for Andy Heieie of Colliers International and Ted Gonsior of Jones Lang LaSalle Brokerage, Inc. (together “Seller’s Broker”). Seller shall be responsible for paying any commission due to Seller’s Broker. Seller and Buyer agree to indemnify, defend, and hold harmless each other from and against all claims, demands, liabilities, damages, losses, costs, and expenses (including attorneys’ fees and costs) resulting from the claim of any other party for any commissions or fees arising by reason of the conduct of the indemnifying Party. This indemnification provision shall survive Closing or any termination of this Agreement. ARTICLE 10 CASUALTY AND EMINENT DOMAIN DocuSign Envelope ID: 33A8699A-2C56-42FA-82A7-99A22EFEFFAA {00302648 15} 10 RS220-402-774237.v6 10.1 Casualty. Seller agrees to maintain Seller’s current insurance coverage on the Health Club Property and the Residual Property until Closing. If the Health Club Property and the Residual Property are materially damaged or destroyed prior to the Closing Date, Seller shall give notice to Buyer and assign and transfer to Buyer all assignable rights or interest in and to any insurance proceeds payable on account of such casualty upon Closing of this transaction. 10.2 Eminent Domain. If eminent domain proceedings are commenced prior to the Closing Date against all or any part of the Health Club Property or the Residual Property, Seller shall immediately give notice to Buyer, together with a legal description of the real property being taken, and Buyer shall have the right, at its option, to terminate this Agreement by giving written notice to Seller. If Buyer does not give such notice within 15 days following Seller’s notice, then the Parties shall proceed to Closing, with no reduction in the Purchase Price, and Seller shall assign to Buyer all of Seller’s right, title, and interest to appear in and receive any award from such proceeding. In the event any awards are made prior to Closing, Seller shall place such awards in escrow with the Title Company, which will release such awards to Buyer upon Closing or to Seller upon termination of this Agreement. ARTICLE 11 DEFAULT AND REMEDIES 11.1 Default. Buyer or Seller shall be in default under this Agreement if either fails to observe, perform, or comply with any material term, condition, or obligation of this Agreement and such failure continues for a period of 10 days after written notice thereof given pursuant to Section 12.5. 11.2 Remedies. Buyer or Seller shall have the following remedies upon default: (a) Buyer’s Remedies. Upon Seller’s default under this Agreement, Buyer shall be entitled to one of the following remedies: (i) terminate this Agreement pursuant to law by written notice to Seller, in which event the Earnest Money shall be returned to Buyer; (ii) waive the default by Seller and proceed to Closing without adjustment to the Purchase Price; or (iii) obtain the specific performance of this Agreement by Seller, which action shall be commenced on or before six (6) months after the date of Seller’s default. (b) Seller’s Remedies. Upon Buyer’s default under this Agreement, Seller shall be entitled to one of the following remedy: (i) terminate this Agreement pursuant to law by written notice to Buyer and to retain the Earnest Money as liquidated damages; or (ii) waive the default by Buyer and proceed to Closing without adjustment to the Purchase Price. The rights and remedies of this Section shall survive Closing or any termination of this Agreement. Buyer and Seller waive all other right and remedies for breach of this Agreement. DocuSign Envelope ID: 33A8699A-2C56-42FA-82A7-99A22EFEFFAA {00302648 15} 11 RS220-402-774237.v6 ARTICLE 12 MISCELLANEOUS 12.1 Successors or Assigns. This Agreement shall be binding upon and inure to the benefit of the Parties, and their respective successors and assigns. 12.2 Severability. In the event any provision of this Agreement shall be held to be invalid, unenforceable, or in conflict with the law of the jurisdiction, the remaining provisions of this Agreement shall continue to be valid, enforceable, and not be affected by such holding. 12.3 Waiver. No term or condition of this Agreement will be deemed waived or amended unless expressed in writing. The waiver of any condition or the breach of any term will not be a waiver of any subsequent breach of the same or any other term or condition. 12.4 Assignment. Buyer may not assign Buyer’s rights under this Agreement without the prior written consent of Seller, except as provided in the following sentence. Buyer may make a partial assignment of its rights and obligations with regard to the Residual Property under this Agreement to Nordland Partners, LLC (or an affiliate entity thereof) or Life Time (each, a “Permitted Assignee”) upon satisfaction of all of the following conditions (a “Permitted Assignment”): (a) the Inspection Period and Approval Period have expired or have been waived by Buyer; (b) Buyer is not in default or breach of this Agreement; (c) such assignee shall assume, for the benefit of Seller and in a writing provided to Seller, all of Buyer’s rights and obligations in connection with the Residual Property under this Agreement (the “Assumed Obligations”); and (d) advanced written notice of such assignment is provided to Seller. No assignment of Buyer’s rights and obligations hereunder shall relieve Buyer of any of its obligations hereunder, unless the assignment is a Permitted Assignment and Buyer shall have also delivered to Seller an agreement, in form reasonably acceptable to Seller, under which Life Time Inc. or another party reasonably acceptable to Seller commits to guaranty performance of the obligations assumed by the Permitted Assignee, including the Permitted Assignee’s obligation to close on the acquisition of the Residual Property and pay the corresponding portion of the Purchase Price concurrent with closing on the Health Club Property. Any assignment or delegation in violation of this Section 12.4 shall be void and of no effect whatsoever. 12.5 Notices. Any notice required or permitted pursuant to this Agreement shall be in writing and delivered by Fed Ex or UPS overnight delivery service with proof of delivery. All notices shall be addressed to the Party and the Party’s counsel, as set forth below. Notices shall be deemed given upon the date of delivery. If to Seller: U.S. Home Corporation DocuSign Envelope ID: 33A8699A-2C56-42FA-82A7-99A22EFEFFAA {00302648 15} 12 RS220-402-774237.v6 ATTN: Jon Aune 16305 36th Ave. N., Suite 600 Plymouth, MN 55446 With copies to: Vantage Law Group, PLLC ATTN: Jerry Perron 125 SE Main Street, Suite 250 Minneapolis, MN 55414 If to Buyer: City of Rosemount ATTN: City Administrator 2875 145th Street West Rosemount, MN 55068-4997 With copies to: Kennedy & Graven, Chartered ATTN: Sarah Sonsalla Fifth Street Towers 150 South Fifth Street, Suite 700 Minneapolis, MN 55402 Notwithstanding the foregoing, any notice given pursuant to Minnesota Statutes Section 559.21 shall comply with the notice provisions required by said Section 559.21. 12.6 Third Party Beneficiaries. Except as explicitly contemplated by Section 12.4, the provisions of this Agreement and of the documents to be executed and delivered at Closing are for the benefit of Buyer and Seller only and are not for the benefit of any third party, explicitly including Life Time. No third party shall have the right to enforce the provisions of this Agreement or the documents to be executed and delivered at Closing. 12.7 Termination. If this Agreement is terminated by either Buyer or Seller pursuant to a right of termination expressly set forth in this Agreement, neither Party shall have any further rights or obligations under this Agreement, except for the obligation, if any, to refund the Earnest Money, except for any rights or obligations that expressly survive such termination. Upon Seller’s request in the event of any such termination, Buyer shall execute a quit claim deed or other instrument that is reasonable in form to memorialize the occurrence and effect of such termination. 12.8 Time. For purposes of this Agreement, “Business Days” are defined as Monday through Friday, excluding any day on which the offices of federally chartered banks in Minnesota are closed for business. Time is of the essence for the performance of this Agreement. Should the date for the giving of any notice, the performance of any act, or the end of any period provided for herein fall on a non-Business Day, such date shall be extended to the next Business Day. DocuSign Envelope ID: 33A8699A-2C56-42FA-82A7-99A22EFEFFAA {00302648 15} 13 RS220-402-774237.v6 12.9 Governing Law. This Agreement shall in all respects be interpreted, construed, and enforced according to the substantive and procedural laws of the State of Minnesota. 12.10 Counterparts. This Agreement may be executed separately and independently in any number of counterparts and each and all of which together shall be deemed to have been executed simultaneously and regarded as one agreement dated the Effective Date. This Agreement may be executed and delivered by facsimile or e-mail transmission and a copy of Seller’s and/or Buyer’s signature on this Agreement shall be as binding as an original signature. 12.11 Captions. The captions and headings contained in this Agreement are for convenient reference only and shall not affect the interpretation of this Agreement. 12.12 Construction. Seller and Buyer and their respective counsel have reviewed and revised this Agreement. Seller and Buyer acknowledge that the normal rule of construction to the effect that any ambiguities are to be resolved against the drafting Party shall not be employed in the interpretation of this Agreement. 12.13 Attorneys’ Fees and Costs. In the event of litigation arising out of breach or claimed breach of this Agreement, the prevailing Party shall be entitled to recover from the other Party all costs and expenses incurred as a result, including attorneys’ fees and costs. 12.14 Survival. Except to the extent set forth in this Agreement, all of the terms of this Agreement shall merge into and shall not survive and be enforceable after Closing and delivery of the deed. 12.15 Waiver of Jury Trial. SELLER AND BUYER HEREBY WAIVE TRIAL BY JURY IN ANY ACTION, PROCEEDING, OR COUNTERCLAIM (WHETHER ARISING IN TORT OR CONTRACT) BROUGHT BY SUCH PARTY AGAINST THE OTHER ON ANY MATTER ARISING OUT OF OR IN ANY WAY CONNECTED WITH THIS AGREEMENT. 12.16 Entire Agreement/Amendment. This Agreement constitutes the entire agreement between the Parties with respect to the subject matter herein and fully supersedes all prior written or oral agreements between the Parties with respect to such matters. No other agreement, statement, or promise made by any Party and no amendment, modification, or other change of any provision of this Agreement shall be effective unless in writing signed by the Parties. 12.17 Further Assurances. Each of the Parties shall execute and deliver such additional documents, instruments, conveyances, and assurances and take such further actions as may be required to carry out the provisions of this Agreement and give effect to the transactions contemplated hereby. [Signature Pages Follows] DocuSign Envelope ID: 33A8699A-2C56-42FA-82A7-99A22EFEFFAA {00302648 15} 14 RS220-402-774237.v6 THIS PURCHASE AND SALE AGREEMENT has been executed and delivered as of the Effective Date. SELLER: Akron 42, LLC By: U.S. Home Corporation, its Manger By: Name: Jonathan Aune Its: Vice President of Land Operations Date: _____________________________________ This is the Seller signature page to that certain Purchase and Sale Agreement between Akron 42, LLC and City of Rosemount, MN DocuSign Envelope ID: 33A8699A-2C56-42FA-82A7-99A22EFEFFAA March 14, 2022 {00302648 15} 15 RS220-402-774237.v6 THIS PURCHASE AND SALE AGREEMENT has been executed and delivered as of the Effective Date. BUYER: City of Rosemount, Minnesota By: Bill Droste Its: Mayor By: ______________________________________ Erin Fasbender Its: City Clerk Date: _____________________________________ This is the Buyer signature page to that Purchase and Sale Agreement between Akron 42, LLC and City of Rosemount, MN DocuSign Envelope ID: 33A8699A-2C56-42FA-82A7-99A22EFEFFAA {00302648 15} 16 RS220-402-774237.v6 Exhibit A Legal Description of the Health Club Property and Residual Property [Outlot J and Outlot O, Prestwick Place, Dakota County, Minnesota] DocuSign Envelope ID: 33A8699A-2C56-42FA-82A7-99A22EFEFFAA {00302648 15} 17 RS220-402-774237.v6 Exhibit B Preliminary Depiction of the Health Club Property (Outlot A) and the Residual Property (Outlots B, C, D, and E) DocuSign Envelope ID: 33A8699A-2C56-42FA-82A7-99A22EFEFFAA {00302648 15} 18 RS220-402-774237.v6 Exhibit C Joint Escrow Instructions THESE JOINT ESCROW INSTRUCTIONS (these “Escrow Instructions”) are made and entered into among Akron 42, LLC (“Seller”), City of Rosemount, Minnesota (“Buyer”), and First American Title Insurance Company (“Title Company”), effective as of ____________, 2021. Seller, Buyer, and Title Company may be referred to individually as a “Party,” and collectively as the “Parties.” The Parties mutually agree as follows: 1. Seller and Buyer are parties to that certain Purchase and Sale Agreement dated ______________, 2021 (the “Agreement”), with respect to that certain real property identified in the Agreement. 2. Buyer has agreed to pay earnest money (the “Earnest Money”) pursuant to Section 1.3(i) of the Agreement. 3. Title Company hereby agrees to hold the Earnest Money in escrow until the earliest of the Closing Date under the Agreement or the distribution of the Earnest Money in accordance with the terms of the Agreement. 4. In the event of a dispute between any of the Parties hereto as to their respective rights and interests hereunder, including, without limitation, the disposition of the Earnest Money, Title Company shall be entitled to hold the Earnest Money until receipt of a jointly signed Termination Agreement by the Parties, or until such dispute shall have been resolved pursuant to Minnesota Statutes Section 559.21. 5. Title Company will have no liability or responsibility other than to act as an escrow agent hereunder and to hold, invest, pay, and disburse the Earnest Money pursuant to the terms of the Agreement. Any charges for Title Company’s services will be paid by Seller. 6. Title Company’s address for notices is: First American Title Insurance Company, 121 South 8th Street, Suite 1250, Minneapolis, MN 55402, ATTN: Mike Broyles. IN WITNESS WHEREOF, the Parties have executed this Escrow Agreement as of the date above. AKRON 42, LLC CITY OF ROSEMOUNT, MINNESOTA By: U.S. Home Corporation, its Manager By: By: Its: Its: FIRST AMERICAN TITLE INSURANCE COMPANY By: Its: ____________ DocuSign Envelope ID: 33A8699A-2C56-42FA-82A7-99A22EFEFFAA