<PAGE>   1

                                                                   EXHIBIT 10.87

                               SAN FRANCISCO LEASE



<PAGE>   2

                               ATHLETIC CLUB LEASE
                            San Francisco, California





LANDLORD:         CB-1 ENTERTAINMENT PARTNERS LP

TENANT:        S.F. SPORTS CLUB, INC.

DATE:             As of June 1, 1997


<PAGE>   3

                          INDEX OF MAJOR DEFINED TERMS



<TABLE>
<CAPTION>
DEFINED TERM                                                                   PAGE
------------                                                                   ----
<S>                                                                            <C>
AAA                                                                             16
Abatement Notice                                                                56
Actual Statement                                                                17
Additional Rent                                                                 10
Affiliate                                                                        9
Agency                                                                          52
Agency Requirements                                                             53
All-risk                                                                        33
Allowance                                                                        1
Annual Base Rent                                                                10
Antennae                                                                        58
Assignment Date                                                                 44
Assignment Notice                                                               44
Building                                                                         1
Building Improvements                                                            1
CC&R                                                                            19
Claims                                                                          32
Club                                                                             1
Commencement Date                                                                3
Common Area Expenses                                                            11
Common Areas                                                                     2
Condominium Association                                                         19
Condominium Documents                                                           19
Control                                                                         45
CPI                                                                             51
Cure Period                                                                     56
DDA                                                                             52
Deadline Date                                                                   57
Default                                                                         42
Depository                                                                      39
Development                                                                      1
Fair Market Parking Rate                                                        51
Financial Officer                                                               38
First-class                                                                     19
Floor Area                                                                       2
Force Majeure                                                                   57
Four Seasons Standard                                                           22
Hazardous Materials                                                             20
Hotel                                                                            9
Hotel Management Agreement                                                       9
</TABLE>



<PAGE>   4

<TABLE>
<CAPTION>
DEFINED TERM                                                                   PAGE
------------                                                                   ----
<S>                                                                            <C>
Improvements                                                                     1
In-Lieu Tax                                                                     26
Initial Annual Base Rent Amount                                                 10
Initial Term                                                                     3
Jobs Program                                                                    53
Landlord                                                                         1
Landlord Delay                                                                   5
Landlord Offer                                                                  38
Landlord's Contribution                                                          1
Landlord's First Substantial Completion Estimate Notice                          6
Landlord's Insurance                                                            35
Landlord's Second Substantial Completion Estimate Notice                         6
Lease                                                                            1
Lease Year                                                                       6
Marriott Bill                                                                    8
Marriott Hotel                                                                   8
Marriott Hotel Guests                                                            8
Minimum Landlord's Work                                                          4
Monthly Base Rent                                                               11
Mortgagee Non-Disturbance Agreement                                             47
New York Athletic Club Lease                                                    15
Non-Disturbance Agreement                                                       46
Noticed Lender                                                                  55
Operating Expenses                                                              12
Option                                                                           7
Option Date                                                                      7
Option Period                                                                    7
Other Primary Hotel Operator                                                    22
Partial Taking                                                                  41
Person                                                                          45
Premises                                                                         1
Primary Hotel                                                                    8
Primary Hotel Bill                                                               9
Primary Hotel Guests                                                             8
Prime Rate                                                                      43
Property                                                                         2
Real property taxes                                                             26
Receipts Tax                                                                    26
Rent                                                                            10
Requirements                                                                    52
Scheduled Completion Date                                                       3
Secured Lender                                                                  40
Senior Interest Holders                                                         46
</TABLE>



                                       ii
<PAGE>   5

<TABLE>
<CAPTION>
DEFINED TERM                                                                   PAGE
------------                                                                   ----
<S>                                                                            <C>
Senior Interests                                                                46
Signage Approval Factors                                                        55
Substantial Taking                                                              41
Substantially Complete                                                           3
Tax Year                                                                        24
Taxes                                                                           24
Temporary Closures                                                              42
Tenant                                                                           1
Tenant Acceptance Notice                                                        38
Tenant Delay                                                                     4
Tenant Installation                                                             58
Tenant Revision                                                                  5
Tenant Termination Costs                                                        38
Tenant's Insurance Share                                                        40
Tenant's Share                                                                  15
Tenant's Work                                                                    3
Term                                                                             7
Termination Notice                                                              56
Total Taking                                                                    41
Trade Fixtures                                                                   2
Unexpired Lease Term                                                            38
Uninsured Contribution Amount                                                   37
Work Letter                                                                      1
</TABLE>



                                      iii
<PAGE>   6

                               ATHLETIC CLUB LEASE
                            San Francisco, California


        THIS LEASE (the "LEASE") is made as of the 1st day of June, 1997, by and
between CB-1 ENTERTAINMENT PARTNERS LP, a California limited partnership
("LANDLORD") and S.F. SPORTS CLUB, INC., a Delaware corporation ("TENANT").

1.      Premises and Common Areas.

Premises. Landlord hereby leases to Tenant and Tenant hereby leases from
        Landlord the space (the "PREMISES") in a building (the "BUILDING") to be
        constructed on that certain parcel of real property, in which the
        Improvements (as defined herein) are to be constructed, more
        particularly described in Exhibit A attached hereto and made a part
        hereof. This Lease is subject to all matters of record affecting the
        Property (as defined herein) and all matters that would be revealed by
        an accurate survey of the Property. The Premises shall constitute part
        of a development (the "DEVELOPMENT") as shown on the site plan attached
        hereto as Exhibit B and made a part hereof. The Premises are designated
        on the non-hatched portion of Exhibit B, with all depictions thereon
        being subject to normal construction variances and tolerances, and as
        otherwise provided in this Lease. Landlord, at its sole cost, shall, in
        accordance with the work letter agreement attached hereto as Exhibit C
        and made a part hereof (the "WORK LETTER"), perform Landlord's Work (as
        defined therein) and as part of Landlord's Work, shall cause the utility
        connections specified in the Work Letter to be available in the
        locations specified in the Work Letter.

Construction of Premises. Tenant shall cause the Premises to be improved with
        improvements (the "IMPROVEMENTS") in accordance with the Work Letter
        (defined as the "BUILDING IMPROVEMENTS" in the Work Letter) and, subject
        to Force Majeure (as defined herein), to the extent provided herein and
        within the time(s) set forth in the Work Letter. The Improvements are to
        be used as a first-class athletic club facility (the "CLUB") more
        particularly described in Article 8 hereof. The design of the
        Improvements shall be subject to Landlord's approval, as provided in the
        Work Letter. In accordance with the terms of the Work Letter, Landlord
        shall provide Tenant with a contribution in an amount not to exceed Nine
        Million Five Hundred Thousand and 00/100 Dollars ($9,500,000.00) (the
        "LANDLORD'S CONTRIBUTION" and/or the "ALLOWANCE"). Tenant shall equip
        the Club with all required Trade Fixtures (as defined herein) as may be
        necessary to operate the Club in accordance with Section 8.1 hereof.
        Title to the Improvements and all alterations and additions thereto and
        replacements thereof (other than Trade Fixtures) thereafter constructed
        or installed on the Premises shall be and remain in Landlord. All Trade
        Fixtures, however, shall remain Tenant's property, subject to permitted
        customary third (3rd) party financing subject to and in accordance with
        Section 46 hereof, upon the expiration or earlier termination of this
        Lease; provided, however, Tenant shall not have the right to remove any
        Trade Fixtures until Tenant shall cure any Default (as defined herein)
        or, at the termination of the term hereof as a result of any such
        Default, until Tenant complies with its payment obligations set forth
        herein. "TRADE FIXTURES" means



<PAGE>   7

        Tenant's athletic equipment and machines and all of Tenant's furniture
        and other personal property not affixed to the Premises in such a manner
        as to do material damage upon their removal. The Premises and the
        Improvements are sometimes hereinafter collectively referred to as the
        "PROPERTY."

Common  Areas. Tenant shall have the non-exclusive right to use the Common Areas
        (as defined herein), in common with other tenants and/or occupants of
        the Development, subject to the Condominium Documents (as defined
        herein), the CC&R (as defined herein) and any other nondiscriminatory
        rules and regulations that Landlord and/or the Condominium Association
        (as defined herein), as applicable, shall adopt for the Development so
        long as such CC&R and rules and regulations do not (i) materially
        interfere with Tenant's ability to conduct normal business operations;
        (ii) materially increase Tenant's obligations under this Lease, or (iii)
        materially decrease Tenant's rights under this Lease. "COMMON AREAS"
        means all common areas and facilities of the Development that are now or
        hereafter made available for the non-exclusive and general use,
        convenience and benefit of Tenant and/or Tenant's customers, employees,
        agents and invitees, including common monuments and signs;
        transportation facilities areas including bus stops, taxi-limousine
        stands, and bicycle parking areas; trash enclosures; landscaped areas;
        areas designated as pedestrian walkways or pedestrian bridges; and
        parking areas.

Control of Common Areas. Provided Landlord does not unreasonably interfere with,
        hinder or obstruct Tenant's use of the Premises or Tenant's ability to
        conduct business from the Premises, and does not otherwise materially
        diminish any of Tenant's rights pursuant to this Lease, Landlord
        reserves, the right from time to time:

                To make changes to the Common Areas, or their design, including
        changes in the location, size, shape and number of driveways, entrances,
        parking areas, loading and unloading areas, ingress, egress, direction
        of traffic, landscaped areas and walkways. Landlord shall keep Tenant
        apprised as to any proposed change to the Common Areas or their design;
        and

                To close temporarily any portions of the Common Areas for
        maintenance purposes so long as reasonable access to the Premises
        remains available, including reasonable access from the parking areas of
        the Building to the Premises.

        Landlord agrees that rerouting of pedestrian walkways within the Common
        Areas and/or rerouting of vehicles within the Common Areas shall not be
        done in a manner which would materially hinder or obstruct Tenant's
        ability to conduct business from the Premises.

Definition of Floor Area. The term "FLOOR AREA" as used in this Lease shall mean
        the rentable square footage of the Premises (or, where applicable, of
        other premises located or proposed in or outside the Development),
        measured from the exterior surface of building walls (and from
        extensions thereof, in the case of openings), and from the exterior
        surface



                                      -2-
<PAGE>   8

        of any demising partitions. At such time as the Improvements have been
        constructed, Landlord shall deliver to Tenant a notice which sets forth
        the Floor Area of the Premises together with reasonable documentation
        evidencing Landlord's determination of the Floor Area of the Premises.
        Tenant shall have ten (10) days following the receipt of Landlord's
        notice of the determination of the Floor Area in which to deliver to
        Landlord a notice objecting to such determination. In the event Tenant
        does not so deliver such objection notice, then, in such event,
        Landlord's calculation shall be deemed accepted by Tenant and
        incorporated herein by this reference. In the event that Tenant delivers
        such a notice to Landlord, Landlord and Tenant shall have thirty (30)
        days in which to work together to calculate the Floor Area of the
        Premises. In the event Landlord and Tenant cannot so agree, then, until
        agreement is reached, either party may submit such dispute to
        arbitration in accordance with the rules of the San Francisco,
        California chapter of the AAA (as defined herein) and the party deemed
        less correct in such dispute shall pay the other party's costs of such
        arbitration. Except as expressly provided to the contrary in this
        Section 1.5, the procedure for arbitration shall be governed by the
        proceedings set forth in Section 7.3 hereof. Landlord and Tenant
        acknowledge that the projected Floor Area of the Premises shall be
        approximately 94,774 square feet.

2.      Term.



                                      -3-
<PAGE>   9

Commencement. This Lease constitutes a binding agreement and the obligations of
        Landlord and Tenant hereunder shall be effective upon execution and
        delivery of this Lease by both Landlord and Tenant. However, the initial
        term ("INITIAL Term") of this Lease shall commence upon the date (the
        "COMMENCEMENT DATE") which is the earlier of (i) the date upon which
        Tenant commences normal business operations from the Premises (it being
        understood that the use of the Development as described in Section 2.2
        hereof shall not be deemed to constitute normal business operations from
        the Premises by Tenant) and (ii) the date (a) which is the later of (A)
        six (6) months after Landlord shall "Substantially Complete" (as defined
        herein) the Minimum Landlord's Work (as defined herein) and (B) twelve
        (12) months after the installation of the concrete decks on floors
        2,3,4, and 5 of the Premises (the "SCHEDULED COMPLETION DATE"), the
        Scheduled Completion Date being extended by any period that Tenant using
        reasonable diligence shall have been unable to (aa) substantially
        complete the Improvements in accordance with the Work Letter
        (collectively, "TENANT'S WORK") by the Scheduled Completion Date due to
        Landlord Delays (as defined herein) and/or (bb) to conduct normal
        business operations in the Premises as a result of the non-completion of
        Landlord's Work by the Scheduled Completion Date (subject to extension
        due to Tenant Delays (as defined herein)) and (b) on which the Premises
        are reasonably accessible (1) from the parking areas of the Building and
        the parking areas of the Building are reasonably accessible and usable
        for parking purposes and (2) by pedestrians from the Common Areas.
        "SUBSTANTIALLY COMPLETE" means (as certified by Landlord's architect)
        complete subject to the completion of minor punch-list type items or
        other minor components of Landlord's Work or the Minimum Landlord's
        Work, as applicable, the performance of which will not materially
        interfere with Tenant's Work to ready the Premises for Tenant's use and
        occupancy thereof. Landlord shall diligently proceed to complete said
        punch list items. "MINIMUM LANDLORD'S Work" means Landlord's Work as
        describe in the Work Letter exclusive of base building systems,
        mechanical systems and operational elevators. If Landlord shall be
        delayed in substantially completing Landlord's Work, the Minimum
        Landlord's Work and/or the Common Areas and such delay shall be caused
        by or shall arise out of or in connection with any of the following
        (each a "TENANT DELAY"):

                        Tenant's direction that Landlord delay in proceeding
                with any segment or part of Landlord's Work, the Minimum
                Landlord's Work and/or the Common Areas (except under
                circumstances where the basis for such direction is the fact
                that Landlord must rectify an error in Landlord's Work, the
                Minimum Landlord's Work and/or the Common Areas that is not
                otherwise attributable to Tenant); or

                        the performance of work by any person, or entity
                employed or hired by Tenant or on behalf of Tenant that actually
                delays Landlord in the completion of Landlord's Work, the
                Minimum Landlord's Work and/or the Common Areas, provided that
                if Landlord shall be aware of any such delay, Landlord shall
                immediately notify Tenant thereof and Tenant fails to remedy any
                such delay by the end of the second (2nd) day following receipt
                of Landlord's notice of any such delay; or



                                      -4-
<PAGE>   10

                        any acts or omissions of Tenant, or of any Affiliate (as
                defined herein) of Tenant, provided that if Landlord shall be
                aware of any such delay, Landlord shall immediately notify
                Tenant thereof and Tenant fails to remedy any such delay by the
                end of the second (2nd) day following receipt of Landlord's
                notice of any such delay; or

                        Tenant's unreasonable delay or refusal in making changes
                to the Work Letter reasonably requested by Landlord; or

                        any breach of any of the terms of this Lease by Tenant
                that delays Landlord in substantially completing Landlord's
                Work, the Minimum Landlord's Work and/or the Common Areas,
                provided that if Landlord shall be aware of any such delay,
                Landlord shall immediately notify Tenant thereof and Tenant
                fails to remedy any such delay by the end of the second (2nd)
                day following receipt of Landlord's notice of any such delay; or

                        any unreasonable failure on Tenant's part to-cooperate
                with Landlord in connection with Landlord's performance of
                Landlord's Work, the Minimum Landlord's Work and/or the Common
                Areas;

        then notwithstanding anything in this Lease to the contrary, Landlord's
        Work and/or the Minimum Landlord's Work shall be deemed to be
        Substantially Complete as of the date that substantial completion would
        have occurred but for such delay and the Common Areas shall be deemed to
        be accessible and reasonably usable as of the date that the Common Areas
        would have been accessible and reasonably usable but for such delay, as
        applicable.

        If Tenant desires a change in the Work Letter or Tenant requests for any
        materials, finishes or installation not originally contemplated by this
        Lease or contained in the Work Letter, Tenant shall submit to Landlord
        the proposed change or request (herein called a "TENANT REVISION"). A
        Tenant Revision shall be subject to Landlord's approval, which approval
        shall not be unreasonably withheld or delayed, and, if so approved,
        Landlord shall cause to be prepared and shall submit to Tenant for its
        approval or disapproval, an estimate of the delays in performance of
        Landlord's Work resulting from Tenant's request for a Tenant Revision
        and an estimate of the incremental increased cost to Landlord to
        complete Landlord's Work as a result of such Tenant Revision, as
        reasonably determined by Landlord. Tenant shall approve or disapprove
        the estimate within five (5) days after receipt of such estimate. In the
        event Tenant shall approve any such estimate, any delays resulting from
        a Tenant Revision shall be deemed a Tenant Delay and Tenant shall be
        solely responsible for any increased cost to complete Landlord's Work
        resulting from a Tenant Revision and all such costs shall be paid by
        Tenant to Landlord within thirty (30) days after rendition of a bill
        therefor. If Tenant shall fail to respond within such five (5) day
        period, then a Tenant Revision shall be deemed withdrawn.
        Notwithstanding



                                      -5-
<PAGE>   11

        Tenant's approval or disapproval of Landlord's estimate with respect to
        a Tenant Revision, Tenant shall be responsible for all professional fees
        associated with Landlord's review of a Tenant Revision and the
        preparation of Landlord's estimate(s) and revised construction documents
        in connection therewith.

        For all purposes hereof, "LANDLORD DELAY" means the delay in the
        Substantial Completion of Tenant's Work to be the extent caused by or
        arising out of or in connection with any of the following:

                        (i) Landlord's direction that Tenant delay in proceeding
                with any segment or part of Tenant's Work (except under
                circumstances where the basis for such direction is the fact
                that Tenant must rectify an error in Tenant's Work that is not
                otherwise attributable to Landlord); or

                        (ii) the performance of work by any person, or entity
                employed or hired by Landlord or on behalf of Landlord that
                actually delays Tenant in the completion of Tenant's Work,
                provided that if Tenant shall be aware of any such delay, Tenant
                shall immediately notify Landlord thereof and Landlord fails to
                remedy any such delay by the end of the second (2nd) day
                following receipt of Tenant's notice of any such delay; or

                        (iii) any acts or omissions of Landlord or of any
                Affiliate of Landlord, (except in connection with the exercise
                of any of Landlord's rights expressly set forth in this Lease
                and/or the Work Letter) provided that if Tenant shall be aware
                of any such delay, Tenant shall immediately notify Landlord
                thereof and Landlord fails to remedy any such delay by the end
                of the second (2nd) day following receipt of Tenant's notice of
                any such delay; or

                        (iv) any breach of any of the terms of this Lease by
                Landlord, including, without limitation, the funding of the
                Allowance subject to and in accordance with the terms and
                conditions of this Lease, that delays Tenant in substantially
                completing Tenant's Work provided that if Tenant shall be aware
                of any such delay, Tenant shall immediately notify Landlord
                thereof and Landlord fails to remedy any such delay by the end
                of the second (2nd) day following receipt of Tenant's notice of
                any such delay; or

                        (v) the non-completion of Landlord's Work as of the date
                on which the concrete decks are installed on floors 2,3,4 and 5
                of the Premises and Tenant commences the performance of Tenant's
                Work if and to the extent any such delay would not have occurred
                had Landlord's Work been Substantially Completed as of such date
                and Tenant has endeavored, in good faith, to use good
                construction practice, but at no additional cost to Tenant, to
                complete Tenant's Work as expeditiously as reasonably possible
                under the circumstances and notwithstanding such non-completion
                of Landlord's Work as of the date on which the concrete



                                      -6-
<PAGE>   12
                decks are installed on floors 2, 3, 4 and 5 of the Premises,
                provided that if Tenant shall be aware of any such delay, Tenant
                shall immediately notify Landlord thereof.

        With limiting any provisions of this Lease, any dispute between the
        parties as to whether a Tenant Delay or Landlord Delay has occurred or
        the amount of such delay shall be subject to arbitration pursuant to
        Section 7.3 hereof.

        The parties shall execute an acknowledgment that Landlord's Work and/or
        the Minimum Landlord's Work has been completed (or deemed to be
        completed) and that the Common Areas are accessible and reasonably
        usable (or deemed to be accessible and reasonably usable) and that the
        Commencement Date has occurred, as soon as reasonably practicable
        thereafter. Neither Landlord's failure to request, nor Tenant's failure
        to execute, such agreement shall affect the Commencement Date. Landlord
        shall provide Tenant (i) notice not less than one hundred twenty (120)
        days prior to the date that Landlord anticipates Landlord shall
        Substantially Complete Landlord's Work ("LANDLORD'S FIRST SUBSTANTIAL
        COMPLETION ESTIMATE NOTICE") and (ii) a second notice to Tenant
        ("LANDLORD'S SECOND SUBSTANTIAL COMPLETION ESTIMATE NOTICE") not less
        than thirty (30) days prior to the date that Landlord anticipates
        Landlord shall Substantially Complete Landlord's Work, in each case
        without taking into account any acceleration of the date Landlord's Work
        shall be deemed to have been Substantially Complete as a result of one
        or more Tenant Delays. The Initial Term shall terminate on the twentieth
        (20th) anniversary of the Commencement Date. Reference in this Lease to
        "LEASE YEAR" shall mean each successive twelve (12) month period during
        the Term (as defined herein) commencing on January 1 and ending December
        31 (or such other twelve (12) month period as shall be reasonably
        designated by Landlord), provided that the first Lease Year shall begin
        upon the Commencement Date and end on December 31 of the calendar year
        in which the Commencement Date occurs, and the last Lease Year shall end
        on the last day of the Initial Term or the last day of the last
        exercised Option Period (as defined herein) hereunder. "TERM" as used
        herein shall mean the Initial Term and all validly exercised Option
        Periods.

 Access Prior to Commencement Date. Until the earlier of (i) the Commencement
        Date and (ii) the date on which a termination notice is served by either
        Landlord or Tenant pursuant to Section 54 hereof, and subject to all
        applicable laws and ordinances, Tenant shall be entitled to maintain an
        office either within the Development or at a location suitable therefor
        reasonably acceptable to Landlord and Tenant, or, at Landlord's
        election, on the surface parking area (if any) adjacent to said
        Development, all at no cost to Tenant for Monthly Base Rent, Common Area
        Expenses or real property taxes (as such terms are defined herein), for
        its pre-opening and construction period activity. Tenant shall be
        entitled to hang a banner or other signage in the Development, subject
        to compliance with applicable laws, regulations, permits, approvals,
        ordinances, the Condominium Documents (if applicable) and the CC&R and
        subject to Landlord's prior approval of all Signage Approval Factors (as
        defined herein). Such office shall be deemed to constitute



                                      -7-
<PAGE>   13

        a part of the Premises for all purposes (including, without limitation,
        Article 19 hereof (Indemnification) and Article 20 hereof (Insurance)
        and Tenant's obligation to pay for utilities), but Tenant shall not be
        required to pay Monthly Base Rent, Common Area Expenses or real property
        taxes with respect thereto. If Landlord makes available the surface
        parking area for the purpose of such temporary office, it shall be
        Tenant's obligation, at its sole cost, to provide a trailer for Tenant's
        use on such parking area and to pay all costs and expenses and bear all
        liabilities associated therewith.

3.      Options to Extend.

        Landlord hereby grants to Tenant three (3) successive options (each an
"OPTION" and collectively, the "OPTIONS") to extend the term of this Lease, each
for a one hundred sixty-eight (168) month period (each an "OPTION PERIOD" and,
collectively, the "OPTION PERIODS"), upon the same terms and conditions as those
set forth in this Lease for the Initial Term (except that no options to extend
other than the Options are granted). In order to exercise an Option, Tenant must
give notice to Landlord of its intention to exercise the applicable Option on or
before the date (the "OPTION DATE") which is six (6) months prior to the end of
the Initial Term or the previous Option Period, as applicable; provided,
however, that it shall be a condition precedent to the exercise of each Option
that Tenant shall not be in Default as of the respective Option Date. Tenant's
election not to exercise an Option, or the passage of an Option Date without
exercise of the subject Option, shall thereby terminate the subsequent Option or
Options. The Options are personal to Tenant and may not be assigned except in
connection with a permitted assignment of Tenant's interest in this Lease.
Landlord shall deliver to Tenant a notice reminding Tenant of Tenant's right to
exercise an Option not more than six (6) months and not less than thirty (30)
days prior to the date Tenant may first exercise an Option, provided that in no
event shall Landlord's failure to deliver such notice impose any liability on
Landlord's part; however if Landlord fails to deliver such notice the time for
Tenant's exercise of an Option shall be extended, if necessary, to the date
which is thirty (30) days from the date of delivery of such notice from
Landlord.

4.      Membership.

        Tenant agrees to provide both daily passes and membership on the
following terms and conditions set forth in this Article 4. In addition, all
Club daily passes and memberships shall be subject to the nondiscriminatory
rules and regulations promulgated by Tenant for use of the Club.

        Marriott Hotel Guests. Tenant shall permit room guests of the existing
        adjoining convention hotel, currently being operated as a Marriott Hotel
        (such hotel, the "MARRIOTT HOTEL" and such room guests of such hotel,
        the "MARRIOTT HOTEL GUESTS") to have access to the Club to use the
        facilities therein at such times as the Club is open for business in
        consideration for daily fee payments equal to seventy-five percent (75%)
        of the otherwise applicable daily rate of guests of the Club members;
        provided, however, Tenant shall only be obligated to permit up to one
        hundred (100) Marriott Hotel Guests daily. The operator of



                                      -8-
<PAGE>   14

        the Marriott Hotel shall be responsible for billing and collecting
        payment from the Marriott Hotel Guests directly, and shall make all
        payments to Tenant on a monthly basis. Tenant shall issue the operator
        of the Marriott Hotel a bill ("MARRIOTT BILL") payable on the tenth
        (10th) day of each calendar month, with such Marriott Bill to be based
        on the actual number of daily passes Tenant provided to the Marriott
        Hotel Guests for the previous calendar month. If the operator of the
        Marriott Hotel does not pay in full the Marriott Bill within thirty (30)
        days from its receipt of the Marriott Bill, then, in such event , Tenant
        may deliver a termination notice to the operator of the Marriott Hotel
        terminating the right of the Marriott Hotel and Marriott Hotel Guests to
        use the Club until payment in full of all amounts due. Such termination
        notice shall be delivered by Tenant and be effective five (5) days
        following delivery of such notice to the operator of the Marriott Hotel.
        In the event the Marriot Hotel shall fail to perform any of the terms
        and conditions contained in this Section 4.1 on its part to be
        performed, Landlord shall be under no obligation or liability whatsoever
        to Tenant; provided, however, that until such time as Tenant and the
        Marriot Hotel shall have entered into an agreement with respect to this
        Section 4.1 (a copy of which Tenant shall promptly deliver to Landlord),
        Landlord shall reasonably cooperate with Tenant in seeking to obtain the
        performance of the Marriott Hotel with respect to such applicable terms
        and conditions of this Section 4.1.

Other Hotel Guests. Tenant shall permit room guests of the to-be constructed
        hotel in the Development, currently contemplated to be operated as a
        Four Seasons Hotel (such hotel (which, for purposes of this Lease, shall
        include any extended stay facilities operated in connection therewith or
        otherwise by Landlord, the operator thereof or a successor or assign of
        either), the "PRIMARY HOTEL", and such room guests of such hotel
        (including such extended stay component), the "PRIMARY HOTEL GUESTS") to
        have access to the Club to use the facilities therein at such times as
        the Club is open for business in consideration for a reasonable daily
        fee payment. Tenant hereby agrees and covenants that in no event shall
        the daily fee charged to the Primary Hotel Guests exceed the daily fee
        charged to Marriot Hotel Guests. The operator of the Primary Hotel shall
        be responsible for billing and collecting payment from the Primary Hotel
        Guests directly, and shall make all payments to Tenant on a monthly
        basis. Tenant shall issue the operator of the Primary Hotel a bill
        ("PRIMARY HOTEL BILL") payable on the tenth (10th) day of each calendar
        month, with such Primary Hotel Bill to be based on the actual number of
        daily passes Tenant provided to the Primary Hotel Guests for the
        previous calendar month. If the operator of the Primary Hotel does not
        pay in full the Primary Hotel Bill within thirty (30) days from its
        receipt of the Primary Hotel Bill, then, in such event , Tenant may
        deliver a termination notice to the operator of the Primary Hotel
        terminating the right of the Primary Hotel and Primary Hotel Guests to
        use the Club until payment in full of all amounts due. Such termination
        notice shall be delivered by Tenant and be effective five (5) days
        following delivery of such notice to the operator of the Primary Hotel.
        In the event the Primary Hotel shall fail to perform any of the terms
        and conditions contained in this Section 4.2 on its part to be
        performed, Landlord shall be under no obligation or liability whatsoever
        to Tenant; provided, however, that until such time as Tenant and the
        Primary Hotel shall have entered into an agreement with respect to this
        Section 4.2 (a



                                      -9-
<PAGE>   15

        copy of which Tenant shall promptly deliver to Landlord), (a) Landlord
        shall reasonably cooperate with Tenant in seeking to obtain the
        performance of the Primary Hotel with respect to such applicable terms
        and conditions of this Section 4.2 and (b) so long as Landlord or an
        Affiliate (as defined herein) of Landlord is the owner of the Primary
        Hotel, Landlord shall pay to Tenant the portion(s) of any Primary Hotel
        Bill which the operator of the Primary Hotel does not pay to Tenant in
        full in accordance with this Section 4.2 within thirty (30) days after
        Landlord's receipt of the applicable Primary Hotel Bill and a statement
        describing in reasonable detail the portion(s) thereof which remain due.
        For purposes of this Section 4.2, "AFFILIATE" shall mean a Person (as
        defined herein) which shall (i) control (as defined herein), (ii) be
        under the control of, or (iii) be under common control with the Person
        in question.

0.1     Performance by Marriott Hotel and Primary Hotel. If the Marriott Hotel
        and/or the Primary Hotel (collectively and generically, the "HOTEL")
        shall default in any of their respective obligations under Section 4.1
        or 4.2 hereof, or there shall exist a bona fide dispute with the Hotel
        under Section 4.1 or 4.2 hereof and Tenant notifies Landlord in writing
        that Tenant has previously notified the Hotel of such dispute and that
        such default or notice has been disregarded or not reasonably
        satisfactorily acted upon, then upon Tenant's written request and
        provided Tenant is not in default under this Lease, Landlord shall use
        reasonable efforts to enforce Landlord's rights under the applicable
        hotel management agreement with the Hotel (collectively and generically,
        the "HOTEL MANAGEMENT AGREEMENT") for Tenant's benefit, including,
        without limitation, giving notices, claims and demands to and on the
        Hotel. Tenant shall reimburse Landlord for all costs incurred in
        connection with the enforcement of such rights. Notwithstanding the
        foregoing, Landlord shall have no obligation to commence any action at
        law or in equity to obtain any relief sought by Tenant by reason of the
        Hotel's breach of the Hotel's obligations under Section 4.1 or 4.2
        hereof. If, after written request from Tenant, Landlord shall fail or
        refuse to take appropriate action for the enforcement of Landlord's
        rights against the Hotel with respect to Section 4.1 or 4.2 hereof,
        Tenant shall have the right to take such action in Tenant's own name,
        and for such purpose and only to such extent, all of the rights of
        Landlord under the applicable Hotel Management Agreement are hereby
        conferred upon and conditionally assigned to Tenant and Tenant hereby is
        subrogated to such rights to the extent that the same shall apply to
        Section 4.1 or 4.2 hereof; provided, however, that (a) Tenant shall only
        have such rights if Tenant shall not be in default under this Lease and
        (b) Landlord shall have the right to require Tenant to discontinue such
        action if in the reasonable opinion of Landlord such action may cause a
        default, cancellation, forfeiture or termination of the Hotel Management
        Agreement or any Senior Interest. If any such action against the Hotel
        in Tenant's name shall be barred by reason of lack of privity,
        non-assignability or otherwise, Tenant may take such action in
        Landlord's name provided Tenant has obtained the prior written consent
        of Landlord, and that copies of all papers and notices of all
        proceedings shall be promptly given to Landlord so that Landlord may be
        kept fully informed in respect thereof.



                                      -10-
<PAGE>   16

0.2     Residential Occupants. Tenant agrees that all applications for
        membership in the Club submitted by the residential occupants and their
        families at the Development shall be automatically and promptly accepted
        provided that each such individual shall observe the rules and
        regulations reasonably promulgated by Tenant from time to time with
        respect to the use of the Club which rules and regulations shall be
        consistent with the rules and regulations customarily promulgated by
        operators of first-class coed athletic clubs and shall not be enforced
        in a discriminatory manner.

0.3     Other Occupants. Subject to availability, Tenant agrees that all
        applications for membership in the Club submitted by employees or
        principals of any of the tenants in the Development shall be
        automatically and promptly accepted provided that each such individual
        shall observe the rules and regulations reasonably promulgated by Tenant
        from time to time with respect to the use of the Club which rules and
        regulations shall be consistent with the rules and regulations
        customarily promulgated by operators of first-class coed athletic clubs
        and shall not be enforced in a discriminatory manner.

5.      Rent.

        Rent shall be calculated and payable as follows:

Annual Base Rent. During the Initial Term Tenant agrees to pay Landlord annual
        base rent for the Premises (the "ANNUAL BASE RENT") at the rate of Three
        Million and 00/100 Dollars ($3,000,000.00) per annum (the "INITIAL
        ANNUAL BASE RENT AMOUNT"). In addition to Annual Base Rent, Tenant
        agrees to pay as "ADDITIONAL RENT" (sometimes referred to as "ADDITIONAL
        RENT") all other charges payable by Tenant pursuant to the terms of this
        Lease. Annual Base Rent together with all such additional rent is
        collectively referred to herein as "RENT". Tenant shall pay Annual Base
        Rent and, except as provided otherwise herein, Additional Rent, in equal
        monthly installments on the first day of each month (each such equal
        monthly installment of Annual Base Rent is referred to herein as
        "MONTHLY BASE RENT"). If for any reason the Initial Term (or any Option
        Period) commences or ends on a day other than the first day of a
        calendar month (other than a termination resulting from a Default), then
        Rent for the first month and for the last month of the Term shall be
        prorated in the proportion that the number of days during the first and
        last months of the Term bears to the actual number of days in such
        months. All Rent shall be paid to Landlord, without prior demand or
        notice, in lawful money of the United States of America, at such place
        as Landlord may from time to time reasonably designate in writing and
        shall be due and payable on the first day of each month. Rent shall be
        paid to Landlord on the date due without notice or demand, and without
        abatement, deduction or set-off except as otherwise expressly set forth
        in this Lease. No payment by Tenant or receipt by Landlord of a lesser
        amount than the Annual Base Rent or Additional Rent, nor shall any
        endorsement or statement on any check or in any letter accompanying any
        check or payment, as Annual Base Rent or Additional Rent, be deemed an
        accord and satisfaction, and Landlord may accept such check or payment
        without prejudice to



                                      -11-
<PAGE>   17

        Landlord's right to recover the balance of such Annual Base Rent and
        Additional Rent or pursue any other remedy provided in this Lease or by
        law.

Cost Abatement

                Provided that Tenant shall not then be in default of any of
Tenant's obligations under this Lease (following notice thereof), Tenant shall
be entitled to an aggregate credit of $1,000,000 to be applied against (i) the
monthly installments of Common Area Expenses or Operating Expenses (as
hereinafter defined), as applicable, payable by Tenant in accordance with
Section 7 hereof, (ii) the installments of Taxes (as hereinafter defined)
payable in accordance with Section 12 hereof and (iii) the sums payable by
Tenant in accordance with Section 36 hereof for use of parking spaces located at
the Development.

6.      Club Name.

        Tenant shall be entitled to operate the Club under the name "The Sports
Club/San Francisco," although Tenant has no obligation to use such name. Tenant
shall not use the name "Millennium" or the name of the Primary Hotel in the
operating name of the Club.

7.      Common Area Expenses/Operating Expenses.

Definition. Commencing upon the Commencement Date, Tenant shall pay, in addition
        to Monthly Base Rent, all assessments and charges which are assessed
        against or incurred in connection with the Premises and/or the Common
        Areas, all assessments and charges which are assessed against or
        incurred in connection with the CC&R which are reasonably allocable to
        the Premises and/or the Common Areas and all charges assessed with
        respect to the Premises by the Condominium Association (collectively,
        "COMMON AREA EXPENSES"). If at any time during the Term the Premises
        shall not be subject to a condominium form of ownership, then in lieu of
        paying charges assessed by the Condominium Association, Tenant shall pay
        to Landlord Tenant's Share (as defined herein) of Operating Expenses (as
        defined herein). "OPERATING EXPENSES" shall mean all costs incurred by
        Landlord (except as hereafter defined) in connection with the operation
        of the Development for each successive twelve (12) month period (as
        designated by Landlord) occurring in whole or in part during the Term
        (and any renewals). Tenant hereby acknowledges that Operating Expenses
        shall include the following costs (by way of illustration, but not
        limitation): real property taxes and assessments and any taxes or
        assessments hereafter imposed in lieu thereof with respect to the
        Building, including the Common Areas; water and sewer charges; dues and
        fees paid to civic organizations and associations in which Landlord is a
        member in the jurisdiction in which the Building is located, provided
        that it is then customary for landlords of similar buildings to be
        members of such organizations and associations and to charge tenants any
        such dues and fees by means of operating expenses or otherwise;
        accounting fees; legal fees; management fees with respect to the
        Development, (not in excess of four percent (4%) of the total revenue
        derived by Landlord from Landlord's operation of the Development and



                                      -12-
<PAGE>   18

        not in excess of the management fees which are included as an operating
        expense or otherwise in the other leases for commercial space in the
        Building between Landlord and other commercial tenants of the Building);
        utilities; janitorial services; parking patrol; labor; utilities
        surcharges or any other costs levied, assessed or imposed by, or at the
        direction of, or resulting from, statutes or regulations or
        interpretations thereof, promulgated by any federal, state, regional,
        municipal or local government authority in connection with the use or
        occupancy of the Building, including the Common Areas; the cost in
        excess of net insurance and condemnation proceeds of any capital
        improvements (amortized over such period as Landlord shall determine
        together with interest at the rate actually incurred by Landlord from a
        third party lender on the unamortized balance) made to the Building,
        including the Common Areas, but only if incurred by Landlord (i) to
        comply with any governmental law, rule or regulation which may become
        effective after the date of this Lease or any CC&R (other than in
        connection with the initial construction of the Development by Landlord
        (exclusive of Tenant's Work and/or any Tenant Revision)), or (ii) where
        the present value of the projected costs of the improvement (including,
        original purchase cost, installation and subsequent repairs and
        replacements) is less than the present value of the amount reasonably
        anticipated to be saved with respect to the applicable component(s) of
        Operating Expense(s) or Common Area Expense(s), as applicable, payable
        by Tenant subject to and in accordance with this Article 7 as the result
        of such capital improvement over the remainder of the Initial Term or an
        exercised Option Period, as applicable; supplies; materials; equipment;
        tools; payroll expenses; rental of personal property used in the
        maintenance and other upkeep of the Building (to the extent related to
        the Premises and/or the Common Areas (e.g., those service facilities
        and/or areas of the Building which are used to provide Building services
        to the Premises and/or the Common Areas or used in connection with the
        operation and maintenance of the Premises and/or the Common Areas)),
        including the Common Areas; costs and expenses of gardening, landscaping
        and irrigation; maintenance of signs; personal property taxes levied on
        or attributable to personal property used in connection with the
        Building (to the extent related to the Premises and/or the Common Areas
        (e.g., those service facilities and/or areas of the Building which are
        used to provide Building services to the Premises and/or the Common
        Areas or used in connection with the operation and maintenance of the
        Premises and/or the Common Areas)), including the Common Areas;
        reasonable audit or verification fees in connection with this Article 7;
        and costs and expenses (whether or not capitalized) of repairs,
        resurfacing, maintenance, painting, lighting, cleaning, steam cleaning,
        refuse removal, parking patrol, sweeping, sealcoating, restriping and
        similar items to the extent includable in Operating Expenses or Common
        Area Expenses, as applicable, subject to and in accordance with this
        Article 7. Operating Expenses and Common Area Expenses, as applicable,
        shall not include: depreciation of any kind, including on any buildings
        or parking structures located within the Development or on any
        equipment; construction costs incurred in improving or modifying space
        for new tenants of the Development or renovating space vacated by any
        tenant; any costs which are reimbursable by (i) tenants of the
        Development (other than through their payment of Operating Expenses
        and/or Common Area Expenses, as applicable), (ii) other third parties,
        or (iii) proceeds of insurance; Landlord's executive



                                      -13-
<PAGE>   19

        salaries; real estate brokers' commissions; or principal or interest on
        any indebtedness (except as specifically permitted above).

Exclusions. In addition to the exclusions from Operating Expenses and Common
        Area Expenses set forth in Section 7.1 hereof, Operating Expenses and
        Common Area Expenses shall not include the following:

                the cost of capital expenditures except for those specifically
        described in Section 7;

                costs incurred with respect to goods or services (including
        utilities, capital improvements, maintenance and repair) supplied to the
        Common Areas to the extent that such goods or services are designed for
        the exclusive or primary use or benefit of another tenant or tenants
        (provided that if such goods or services are for the primary use or
        benefit of another tenant or tenants, the cost thereof shall be included
        in Operating Expenses and Common Area Expenses, as applicable, to the
        extent it is fair and equitable to do so);

                costs incurred to the extent that such costs are reimbursed by
        insurance;

                any ground lease or master lease payments;

                legal fees incurred by Landlord in connection with (1) the
        preparation, negotiation and enforcement of leases, subleases and lease
        renewals, (2) the purchase or transfer or disposition of all or any part
        of the Development or any interest therein and (3) any financing or
        refinancing with respect to the Development;

                all leasing costs with respect to the Development, including
        hard and soft costs of tenant improvements and preparation of any
        premises, tenant concessions, advertising costs and brokerage
        commissions;

                costs of purchasing or installing artwork or signage (it being
        agreed that the cost of any such signage that identifies the Development
        may be included within Common Area Expenses and Operating Expenses, as
        applicable);

                costs of any rental or lease of equipment or capital items that
        if purchased (whether outright or financed) would otherwise be excluded
        from Operating Expenses or Common Area Expenses, as applicable;

                costs paid to Affiliates of Landlord in excess of market rates;

                fines, penalties, late payment charges, and interest thereon,
        and other amounts imposed in lieu thereof, the payment of which is
        attributable to Landlord's failure to act in a commercially reasonable
        manner;



                                      -14-
<PAGE>   20

                costs to the extent arising from or relating to the negligence
        or willful misconduct of Landlord or Landlord's agents, principals,
        employees, licensees or Affiliates;

                Landlord's general overhead and general administrative expenses;

                costs for repair or maintenance covered by warranties or service
        contracts (however, the costs of the warranties or service contracts
        shall be includable in Common Area Expenses and Operating Expenses, as
        applicable);

                expenditures required by Landlord's failure to comply with laws,
        regulations or orders, which are required to be complied with by
        Landlord under this Lease (except to the extent expressly permitted in
        Section 7.1 hereof);

                costs to repair latent or patent defects with respect to the
        Development or Landlord's Work;

                costs incurred due to the violation by Landlord or any other
        occupant of the Development of the terms or conditions of any lease;

                costs arising from or relating to the presence of Hazardous
        Materials (as defined herein) in or about the Development;

                any costs associated with the initial construction of the
        Development and failure by Landlord to construct the Development in
        accordance with applicable legal requirements as of the date Landlord
        shall Substantially Complete Landlord's Work (exclusive of any such
        costs arising out of Tenant's Work and/or any Tenant Revision);

                insurance premiums, but only if and to the extent Landlord is
        reimbursed for the cost thereof by Landlord's insurers;

                bad debt expenses resulting from Landlord's negligence or
        improper acts;

                costs of charitable or political contributions and fees and dues
        paid to trade associations (other than as provided in Section 7.1
        hereof);

                any cost payable by Tenant pursuant to other Sections of this
        Lease; and

                any Operating Expenses or Common Area Expenses, as applicable,
        reasonably allocable to any parking structure located within the
        Development.

Building Insurance. Except for Landlord's cost of the all-risk property
        insurance for the Improvements, as addressed in Section 20.4 hereof, if
        Landlord's cost of obtaining Landlord's Insurance (as defined herein)
        for the Property and/or the Building and the



                                      -15-
<PAGE>   21

        operations thereof exceeds the cost of obtaining such insurance for the
        first twelve (12) months following the Commencement Date, Tenant shall
        pay to Landlord, in a manner similar to this Section 7.3 within thirty
        (30) days after being billed therefore, an amount equal to Tenant's
        Share of such increased cost.

        "TENANT'S SHARE" shall mean a percentage equal to the quotient obtained
        by dividing the Floor Area of the Premises (subject to Section 7.6
        hereof) by the total number of square feet of Floor Area in the other
        tenantable portions of the Development as of the date of the Actual
        Statement (as defined herein) for the applicable Lease Year. Landlord
        and Tenant acknowledge that at this time it is not possible to determine
        the equitable allocation of all components of Operating Expenses or
        Common Area Expenses, as applicable. Accordingly, Landlord shall use
        commercially reasonable efforts from time to time to equitably adjust
        Tenant's Share of some or all of the components of Operating Expenses to
        a percentage other than that which would be arrived at by the
        methodology hereinbefore described for the determination of Tenant's
        Share, so as to ensure that Tenant will pay Tenant's equitable share of
        Operating Expenses and if and to the extent applicable and the same
        shall not result in an increase in the payment of Common Area Expenses
        or Operating Expenses, as applicable, by Tenant in accordance with this
        Article 7, that the methodology employed by Landlord to determine
        Tenant's equitable share of Operating Expenses is substantially
        consistent with the methodology employed in connection with that certain
        lease between an Affiliate of Landlord, as landlord and an Affiliate of
        Tenant, as tenant, for certain space in New York, New York (the "NEW
        YORK ATHLETIC CLUB LEASE") for calendar years 1996 and 1997 or to
        equitably adjust some or all of the components of Common Area Expenses,
        so as to ensure that Tenant will pay Common Area Expenses in accordance
        with the methodology hereinbefore described in Section 7.1 hereof and,
        if and to the extent applicable and the same shall not result in an
        increase in the payment of Common Area Expenses or Operating Expenses,
        as applicable, by Tenant in accordance with this Article 7, the
        methodology employed in connection with the New York Athletic Club Lease
        for calendar years 1996 and 1997 (it being agreed and acknowledged that
        in each instance in which the methodology employed in connection with
        this Lease shall contradict or be inconsistent with the aforementioned
        methodology employed in connection with the New York Athletic Club
        Lease, such aforementioned methodology employed in connection with the
        New York Athletic Club Lease shall prevail and govern if and to the
        extent applicable and such employment shall not result in an increase in
        the payment of Common Area Expenses or Operating Expenses, as
        applicable, by Tenant in accordance with this Article 7.) In the event
        Tenant shall dispute Landlord's determination as to the equitable
        allocation of any component of Operating Expenses or Common Area
        Expenses, as applicable, and if Landlord and Tenant shall have been
        unable to resolve such dispute, within thirty (30) days following the
        date that Tenant shall have notified Landlord of such dispute, then,
        provided that Tenant shall pay all such amounts as billed by Landlord on
        or before the due dates for payment, Tenant may submit such dispute to
        binding arbitration in accordance with the following provisions hereof
        within ten (10) days next following the



                                      -16-
<PAGE>   22

        giving of any notice by Tenant to Landlord stating that it wishes such
        dispute to be determined by arbitration. Landlord and Tenant shall each
        give notice to the other setting forth the name and address of an
        arbitrator designated by the party giving such notice within ten (10)
        days after Landlord's receipt of Tenant's arbitration notice. If either
        party shall fall to give notice of such designation within said ten (10)
        days, then the arbitrator to be chosen by such party shall be chosen in
        the same manner as hereinafter provided for the appointment of the third
        arbitrator in the case where the two arbitrators chosen hereunder are
        unable to agree upon such appointment. The two arbitrators shall
        designate a third arbitrator. If the two arbitrators shall fail to agree
        upon the designation of a third arbitrator within ten (10) days after
        the designation of the second arbitrator, then either party may apply to
        the American Arbitration Association or any successor organization
        thereto ("AAA") for the designation of such arbitrator; provided,
        however, nothing contained herein shall be construed to require
        submission of any dispute to the AAA. All arbitrators shall be persons
        who shall have had at least ten (10) years experience in the business of
        operating or managing commercial real estate in San Francisco,
        California and shall not be affiliated with either Landlord or Tenant.
        The three arbitrators shall conduct such hearings as they deem
        appropriate, making their determination in writing and giving notice to
        Landlord and Tenant of their determination within ten (10) days, if at
        all possible, after the designation of the third arbitrator; the
        concurrence of any two of said arbitrators shall be binding upon
        Landlord and Tenant. Any award of the arbitrators shall be limited to
        the determination as to whether Landlord made an equitable allocation of
        the component(s) of Operating Expenses or Common Area Expenses, as
        applicable which are the subject of such dispute. If it is determined
        that Landlord has not equitably allocated a component(s) of Operating
        Expenses or Common Area Expenses, as applicable, then the arbitrators
        shall determine the equitable allocation thereof. The determination in
        any arbitration held pursuant to this Section 7.3 shall be final and
        binding upon Landlord and Tenant. Each party shall pay its own counsel
        fees and expenses, if any, in connection with any arbitration under this
        Section 7.3, and each party shall pay the fees and expenses of the one
        of the two (2) original arbitrators appointed by or for such party and
        the fees and expenses of the third arbitrator shall be shared by the
        parties equally; it being agreed that if it shall be determined in the
        arbitration that Landlord has not equitably allocated a component(s) of
        Operating Expenses or Common Area Expenses, as applicable, and as a
        result thereof Tenant shall have made an overpayment of Operating
        Expenses or Common Area Expenses, as applicable, by more than five
        percent (5%), then, Landlord shall pay the reasonable actual
        out-of-pocket cost of the arbitration proceeding incurred by Tenant not
        to exceed $7,500.00, and the amount of any such overpayment shall be
        credited against the next installment (or installments if the credit
        exceeds the amount of the next installment) of Monthly Base Rent due
        under this Lease and if the amount of the credit exceeds the amount of
        the subsequent installment(s) of Monthly Base Rent due under this Lease,
        the excess shall be refunded to Tenant within thirty (30) days after the
        aforementioned arbitration determination with interest thereon at the
        Prime Rate (as defined herein) from the date of such overpayment.



                                      -17-
<PAGE>   23

Statements. As soon as possible after the beginning of the Initial Term,
        Landlord shall give to Tenant a statement estimating the Common Area
        Expenses or Operating Expenses, as applicable for the first Lease Year.
        Thereafter, Landlord shall give Tenant, prior to the expiration of each
        Lease Year, a statement estimating the Common Area Expenses or Operating
        Expenses, as applicable for the following Lease Year. The estimated
        Common Area Expenses or Operating Expenses, as applicable, shall be the
        applicable estimated amounts described in this Section 7. The estimated
        Common Area Expenses or Operating Expenses, as applicable, shall be
        divided into twelve (12) equal monthly installments (or, as to the first
        and last Lease Year, divided by the number of calendar months in such
        Lease Year), and Tenant shall pay to Landlord Tenant's monthly
        installment of such Common Area Expenses or Operating Expenses, as
        applicable, on the first day of each month during the Term as additional
        rent. If, in any Lease Year, the actual Common Area Expenses or
        Operating Expenses, as applicable, are less than the estimated payments
        made by Tenant for such Lease Year, as evidenced in Landlord's statement
        (the "ACTUAL STATEMENT") of actual Common Area Expenses or Operating
        Expenses, as applicable, for such Lease Year (which Landlord shall
        deliver to Tenant within ninety (90) days after the expiration of each
        Lease Year), then any overpayment made by Tenant on the monthly
        installment basis shall be credited towards the next monthly
        installment(s) falling due and the estimated monthly installments of
        Common Area Expenses or Operating Expenses, as applicable, shall be
        adjusted to reflect such lower amounts. Similarly, if, in any Lease
        Year, the actual Common Area Expenses or Operating Expenses, as
        applicable, are greater than the estimated payments made by Tenant for
        such Lease Year as evidenced in the Actual Statement for such Lease
        Year, then Tenant shall pay the amount of such difference to Landlord
        within thirty (30) days after invoice; provided, however, that if the
        amount due exceeds 1/2 of Monthly Base Rent then in effect, Tenant may
        pay such amount in thirty (30) day installments with each installment in
        the amount of the lesser of the remainder due or 1/2 of the Monthly Base
        Rent then in effect. Notwithstanding that the Term may have terminated
        or expired and Tenant has vacated the Premises, when the final
        determination is made of the actual Common Area Expenses or Operating
        Expenses, as applicable, for the last Lease Year, Tenant shall
        immediately pay to Landlord any increase due over the estimated Common
        Area Expenses or Operating Expenses, as applicable, paid by Tenant and,
        conversely, any overpayment made in the event actual Common Area
        Expenses or Operating Expenses, as applicable, decrease, shall be
        rebated by Landlord to Tenant within thirty (30) days after such
        determination. The foregoing provision shall survive the expiration or
        earlier termination of this Lease.

Audit.  Upon prior notice, but not more frequently than once each Lease Year,
        Tenant shall have the right to examine Landlord's books and records with
        regard to Common Area Expenses or Operating Expenses, as applicable,
        during normal business hours. If Tenant disputes the amount of Common
        Area Expenses or Operating Expenses, as applicable, set forth in any
        Actual Statement delivered by Landlord or otherwise paid by Tenant,
        Tenant must notify Landlord of such dispute in writing within three (3)
        months following Tenant's receipt of the Actual Statement. Tenant's
        failure to notify Landlord of a dispute



                                      -18-
<PAGE>   24

        within said three (3) month period shall be deemed Tenant's acceptance
        and approval of the accuracy of the Actual Statement. Provided Tenant
        has timely given the required dispute notice and has paid the amounts
        claimed to be due under the Actual Statement (including the disputed
        amount), Tenant shall have the right, to be exercised, if at all, not
        later than three (3) months after the date Tenant gave the dispute
        notice, to cause Landlord's books and records with respect to the
        relevant Lease Year to be audited by a certified public accountant, or
        by another Tenant representative mutually acceptable to Landlord and
        Tenant. The amounts payable under Section 7.4 hereof by Landlord to
        Tenant or by Tenant to Landlord, as the case may, be shall be
        appropriately adjusted on the basis of such audit. If such audit
        discloses a liability for further refund by Landlord to Tenant in excess
        of five percent ( 5%) of the Common Area Expense payments or Operating
        Expense payments, as applicable, previously made by Tenant for such
        Lease Year, Landlord shall pay for the reasonable cost of the audit not
        to exceed $7,500.00; otherwise, Tenant shall pay for the cost of the
        audit. Notwithstanding the foregoing, if any audit conducted by Tenant
        discloses that Landlord over-reported Common Area Expenses or Operating
        Expenses by more than five percent (5%) for the period covered by the
        audit, then Tenant shall be entitled to audit Common Area Expenses or
        Operating Expenses, as applicable, for all preceding years as to which
        records are available. Landlord shall be obligated to maintain said
        records for sixty (60) months (but for no such longer period of time)
        after the end of each Lease Year except if a dispute with respect
        thereto is then pending under Section 7.3 hereof.

Notwithstanding anything to the contrary contained herein, if in any Lease Year
        during which Tenant shall be paying Operating Expenses the total Floor
        Area of buildings in the Development which are tenantable is not fully
        occupied, then the Operating Expenses for such Lease Year shall be
        deemed to be an amount that would be incurred if such total Floor Area
        were occupied for such Lease Year, but in no event shall Tenant be
        required to pay more than ninety-five percent (95%) of the actual
        Operating Expenses.

8.      Use.

Permitted Use. The Premises shall be used exclusively for a first-class coed
        athletic club operated by an operator with first-class expertise,
        reputation and experience, and Tenant shall not use or permit the
        Premises to be used for any other purpose, or by an operator other than
        Tenant or an Affiliate of Tenant, without the prior consent of Landlord.
        As used herein, "FIRST-CLASS" shall mean comparable to other athletic
        clubs with comparable facilities operated by Tenant or Tenant's
        Affiliates as of the date hereof. As a part of the athletic club
        operated from the Premises, Tenant shall be entitled to use portions of
        the Premises for uses complementary to an athletic club (but only in
        support of Tenant's primary operation as an athletic club), such as a
        pro shop, child care facility, delicatessen, so long as the type and
        quality of such complementary uses are consistent with the services
        offered in other first-class athletic clubs; provided, however, no food
        or beverages (other than primarily for consumption at the Premises)
        shall be sold from the Premises. Any complementary uses may be achieved
        through a license, which license



                                      -19-
<PAGE>   25

        shall (i) be subject to all terms and conditions of this Lease but shall
        not otherwise require Landlord's prior approval and (ii) other than with
        respect to the complimentary uses in the Reebok Sports Club/New York as
        of the date hereof, not conflict with an exclusive use granted by
        Landlord to any then current tenant or any future tenant or occupant of
        the Development of which Landlord has advised Tenant.

Compliance with Laws.

                Tenant shall not use or occupy the Premises in violation of (a)
        law or the certificate of occupancy issued for the Improvements or the
        Building, (b) any condominium declaration, offering plan, by-laws, house
        rules, and other requirements, instruments or declarations (collectively
        the "CONDOMINIUM DOCUMENTS") now or hereafter ratified by any
        condominium association or equivalent (the "CONDOMINIUM ASSOCIATION")
        having jurisdiction over the Premises, (c) any private covenants,
        conditions or restrictions or reciprocal easement agreements
        (collectively, the "CC&R") which may now or hereafter be recorded
        encumbering the Development or (d) any liquor license issued with
        respect to the Club, and shall, upon notice from Landlord, discontinue
        any use of the Premises which is in violation of law or of said
        certificate of occupancy, or is a violation of the Condominium
        Documents, the CC&R or said liquor license. Notwithstanding the
        foregoing, after the date hereof Landlord shall not amend or modify any
        existing CC&R or create new CC&R's or Condominium Documents which
        materially adversely affect any of Tenant's rights hereunder or
        materially increase its obligations hereunder.

                Tenant shall comply with any law or directive of any
        governmental authority having jurisdiction which by reason of the nature
        of Tenant's particular use or occupancy shall impose any duty upon
        Tenant or Landlord with respect to the Premises or with respect to the
        use or occupancy thereof.

                Tenant shall not do or permit to be done anything which will
        increase the cost of (unless Tenant pays such increased cost) or which
        will invalidate any fire, extended coverage or any other insurance
        policy covering the Improvements and/or property located therein or the
        Building. In the event Tenant does or permits anything to be done which
        increases the cost of any insurance maintained by Landlord hereunder,
        Tenant shall promptly, upon demand, as Landlord's sole remedy for such
        increase (but without limiting any other remedies that may be available
        to Landlord if the cause of such increase is otherwise violative of any
        provisions of this Lease), reimburse Landlord for such increase. Tenant
        shall not do or permit anything to be done in or about the Premises
        which will in any way obstruct or interfere with the rights of other
        tenants or occupants of the Development, or use or allow the Premises to
        be used for any unlawful purpose, nor shall Tenant cause, maintain or
        permit any nuisance in, on or about the Premises; Landlord, however,
        acknowledges that certain noise and vibration are incident to Tenant's
        use of the Premises, and that to the extent the same shall not exceed
        noise levels generated by other athletic clubs in similar types of
        buildings and shall not otherwise



                                      -20-
<PAGE>   26

        exceed the legally permissible decibel levels, the same shall not
        constitute a nuisance for the purposes hereof.

                Tenant shall not commit or suffer to be committed any waste in
        or upon the Premises.

                Tenant shall be responsible for obtaining, at Tenant's sole cost
        and expense, all required licenses and/or permits authorizing the use of
        the Premises for an athletic and social club and Tenant's cooking
        operations with respect to the Club subject to and in accordance with
        this Lease.

Hazardous Materials.

                Tenant shall not use or permit any hazardous, toxic or
        radioactive materials ("HAZARDOUS MATERIALS")to be brought upon, kept or
        used in or about the Premises, the Improvements or any portion of the
        Development by Tenant, its agents, employees or contractors, unless such
        Hazardous Materials are necessary or useful to and customarily used in
        Tenant's business and will be used, kept and stored in a manner that
        complies with all laws regulating any such Hazardous Materials. In
        addition, Tenant shall be entitled to use general office supplies,
        normal janitorial supplies, supplies used in maintaining its equipment
        and swimming pool supplies in a manner that complies with all laws
        regulating their use. If Tenant breaches the covenants and obligations
        set forth herein or, if the presence of Hazardous Materials on, in or
        about the Premises, the Improvements or any other portion of the
        Development caused or permitted by Tenant, its agents, employees or
        contractors results in contamination of the Premises, the Improvements
        or any other portion of the Development, then Tenant shall indemnify,
        defend and hold Landlord and the owner(s) and operator(s) of the Common
        Areas free and harmless from and against any and all claims, judgments,
        damages, penalties, fines, costs, liabilities and losses (including
        diminution in the value of the Premises and/or the Common Areas, damages
        for the loss or restriction on use of rentable or useable space or of
        any amenity of the Premises, the Improvements or any other portion of
        the Development, and sums paid in settlement of claims, attorneys' fees,
        consultants' fees and expert fees) which arise during or after the Term
        as a result of such contamination. This indemnification by Tenant of
        Landlord and the owner(s) and operator(s) of the Common Areas, includes
        any and all costs incurred in connection with any investigation of site
        conditions or any clean up, remedial, removal or restoration work
        required by any federal, state or local governmental agency or political
        subdivision because of the presence of such Hazardous Materials in, on
        or about the Premises, the Improvements or any portion of the
        Development, including the soil or ground water on or under the
        Development. The provisions of this Section 8.3(i) shall survive the
        expiration or earlier termination of this Lease.

                Landlord shall not cause or permit any Hazardous Materials to be
        brought upon, kept or used in or about the Premises or any other portion
        of the Development by



                                      -21-
<PAGE>   27

        Landlord, its agents, employees or contractors unless such Hazardous
        Materials are used, kept and stored in a manner that complies with all
        laws regulating such Hazardous Materials. If Landlord breaches the
        covenants and obligations set forth herein or if contamination of the
        Premises or any other portion of the Development by Hazardous Materials
        otherwise occurs which is caused by Landlord or its agents, then
        Landlord shall indemnify, defend and hold Tenant free and harmless from
        and against any and all claims, judgments, damages (but not
        consequential damages), penalties, fines, costs and liabilities and
        losses (including any diminution in the value of the Club, and sums paid
        in settlement of claims, attorneys' fees, consultants' fees and expert
        fees) which arise during or after the Term as a result of such
        contamination. This indemnification by Landlord of Tenant includes any
        and all costs incurred in connection with any investigation of site
        conditions or any clean up, remedial, removal or restoration work
        required by any federal, state or local governmental agency or political
        subdivision because of the presence of such Hazardous Materials in or
        about the Premises. The provisions of this Section 8.3(ii) shall survive
        the expiration or earlier termination of this Lease.

Restrictions.

                So long as this Lease remains in full force and effect and
Tenant is operating a Club and facilities related to the operation of such Club
in at least seventy-five percent (75%) of the Premises subject to Temporary
Closures (as defined herein), Landlord hereby agrees that neither Landlord, nor
any individual(s), firm or corporation controlled by, controlling or under
common control with Landlord shall lease to, sublease to, consent to an
assignment or sublease to, operate, own or become financially interested in, (a)
any other Club within the Development, provided that an athletic club may be
operated within the Primary Hotel not to exceed 840 square feet of Floor Area in
the aggregate, or (b) any tenant or occupant of the Development which provides
spa services or operates a beauty salon within the Development provided Tenant
is providing spa services in the Premises and/or operating a beauty salon in the
Premises subject to and in accordance with this Lease and subject to Temporary
Closures (after a reasonable period of time after the Commencement Date to
prepare the Premises for same) and if the operator of the Primary Hotel is the
Four Seasons or an Affiliate thereof, in a manner consistent with the typical
standard of operation with respect thereto of the Four Seasons in the United
States as of the date hereof (the "FOUR SEASONS STANDARD") or otherwise in a
manner consistent with the typical standard of operation with respect thereto of
the then operator of the Primary Hotel in the United States (the "OTHER PRIMARY
HOTEL OPERATOR"); provided, however, that with respect to the standard of
operation of an Other Primary Hotel Operator any such standard of operation
shall not increase (except to a de minimis extent) the cost and expense to
Tenant (which will not be recouped by Tenant) to provide spa services in the
Premises and/or operate a beauty salon in the Premises beyond that which Tenant
would have incurred in connection with the Four Seasons Standard and Tenant
shall not be required to remodel and/or reformat the portions of the Premises
providing spa services and/or being operated as a beauty salon as a direct
result of the conversion from the Four Seasons Standard to the standard of
operation of an Other Primary Hotel Operator.



                                      -22-
<PAGE>   28

9.      Notices.

        All notices, consents, approvals, determinations and other
communications required or permitted to be given hereunder must be in writing
and may be given only by personal delivery, overnight delivery, facsimile
transmission or by mail, and if given by mail shall be deemed sufficiently given
only if sent by registered or certified mail, return receipt requested, to the
following address of the party to receive such notice. Notices shall be deemed
received if sent in compliance with the aforesaid requirements, upon actual
receipt for notices given by personal delivery or facsimile and upon the earlier
of actual receipt or three (3) business days after deposit of any notice in the
United States mail if sent by registered or certified mail.


         If to Landlord:                 c/o Millennium Partners
                                         1995 Broadway, 3rd Floor
                                         New York, New York 10023
                                         Attention:  Chief Financial Officer
                                         Fax:  (212) 579-0662

         With a copy to:                 Battle Fowler LLP
                                         75 East 55th Street
                                         New York, New York 10022
                                         Attention:  Eric R. Landau, Esq.
                                         Fax:  (212) 856-7805

         If to Tenant:                   SCC Sports Club, Inc.
                                         11100 Santa Monica Boulevard
                                         Suite 300
                                         Los Angeles, California  90025
                                         Attention:  Real Estate Dept.
                                         Fax:  (310) 479-8879

         With a copy to:                 Resch Polster Alpert & Berger LLP
                                         10390 Santa Monica Boulevard
                                         Fourth Floor
                                         Los Angeles, California 90025
                                         Attention:  Ronald M. Resch, Esq.
                                         Fax:  (310) 552-3209

        Either party may specify a different address for notice purposes by
written notice to the other pursuant to this Article 9.

10.     Brokers.

Landlord and Tenant each warrant to the other that such party has not had any
dealings with any real estate broker or agent in connection with the negotiation
of this Lease, and that such party knows of no real estate broker or agent who
is or might be entitled to a commission in



                                      -23-
<PAGE>   29

connection with this Lease. If Landlord or Tenant has dealt with any person or
real estate broker or agent with respect to the transaction contemplated by this
Lease, the party so dealing with such person or broker or agent shall be solely
responsible for the payment of any fee due such person or broker or agent and
such party shall hold the other free and harmless from and against any liability
in respect thereto, including attorneys' fees and costs.

11.     Holding Over.

        If Tenant holds over after the expiration or earlier termination of this
Lease without the express consent of Landlord, Tenant shall become a tenant at
sufferance only, at a rental rate equal to one hundred twenty-five percent
(125%) of the Monthly Base Rent in effect upon the date of such expiration or
earlier termination (prorated on a daily basis), plus one hundred percent (100%)
of the other elements of Rent, and otherwise subject to the terms, covenants and
conditions herein specified, so far as applicable. Acceptance by Landlord of
Rent after such expiration or earlier termination shall not result in a renewal
of this Lease. The foregoing provisions of this Article 11 are in addition to
and do not affect Landlord's right of re-entry or any rights of Landlord
hereunder or as otherwise provided by law.


12.     Taxes.

Payment. Commencing upon the Commencement Date, Tenant shall be liable for and
        shall pay to Landlord, as additional rent and in the manner hereinafter
        provided, all (i) real property taxes, (ii) personal property taxes,
        (iii) general and special assessments, (iv) water and sewer taxes,
        bonds, assessments and related charges, (v) excises, levies, license and
        permit fees and (vi) all other governmental charges, general and
        special, ordinary and extraordinary, of any kind and nature whatsoever,
        which at any time during or applicable to the Term may be assessed,
        levied, confirmed, imposed upon, or become due and payable out of or in
        respect of, or become a lien on the Premises, the Improvements or any
        portion thereof (collectively "TAXES"). Tenant's payment of Taxes shall
        be payable by Tenant in the same number of installments as taxes are due
        from Landlord to the applicable taxing authorities and shall be due from
        Tenant to Landlord thirty (30) days prior to the date such taxes, or
        installments thereof, are due from Landlord to the taxing authorities.
        If during the Term, Taxes are required to be paid to the taxing
        authorities in full or in monthly, quarterly or other installments, on
        any other date or dates than as presently required, then, the Taxes
        shall be correspondingly accelerated or revised so that same are due
        thirty (30) days before the date such Taxes, or installments thereof,
        are due from Landlord to the taxing authorities. Notwithstanding the
        foregoing, if Landlord is obligated to make monthly escrows of Taxes to
        any Senior Interest Holder and as a result thereof, Landlord requires
        all tenants of the Building under leases with Landlord to make escrows
        of Taxes, then in lieu of the manner of payment referred to above, on
        the first day of the month following the furnishing to Tenant of a
        statement of Taxes, Tenant shall pay to Landlord a sum equal to 1/12th
        of the payment of Taxes shown thereon to be due for such fiscal year for
        real estate tax purposes adopted by the applicable taxing authority then
        imposing taxes (the "TAX YEAR") multiplied by the number of months of
        the Term



                                      -24-
<PAGE>   30

        then elapsed since the commencement of such Tax Year. Tenant shall
        continue to pay to Landlord a sum equal to 1/12th of the payment of
        Taxes shown on such statement on the first day of each succeeding month
        until the first day of the month following the month in which Landlord
        shall deliver to Tenant a new statement of Taxes. If the escrows of
        Taxes required to be made by Landlord with any Senior Interest Holder
        are required to be made other than monthly, then the obligations of
        Tenant referred to in the immediately preceding two (2) sentences shall
        be appropriately modified so that Tenant shall make the payment of Taxes
        to Landlord in the same number of installations as Landlord is required
        to make to such Senior Interest Holder. In the event the escrows of
        Taxes required to be made by Landlord with any Senior Interest Holder
        are held in an interest bearing account, then Tenant's payment of Taxes
        shall be reduced by Tenant's Share of the actual interest received by
        Landlord in connection therewith. If Landlord shall not furnish to
        Tenant a statement of Taxes prior to the commencement of such Tax Year,
        then Tenant shall continue to make monthly installment payments based
        upon the previous Tax Year's statement of Taxes until Landlord shall
        furnish a new statement of Taxes with respect to the then current Tax
        Year. If Landlord furnishes a statement of Taxes for a Tax Year
        subsequent to the commencement thereof, promptly after the statement of
        Taxes is furnished to Tenant, Landlord shall give notice to Tenant
        stating whether the amount previously paid by Tenant to Landlord for the
        current Tax Year was greater or less than the installments of Tenant's
        payment of Taxes for the current Tax Year, and (1) if there shall be a
        deficiency, Tenant shall pay the amount thereof within thirty (30) days
        after demand therefor, or (2) if there shall have been an overpayment,
        such excess shall be refunded to Tenant within thirty (30) days of the
        rendition of the aforementioned statement to Tenant. If there shall be
        any increase or decrease in Taxes for any Tax Year, whether during or
        after such Tax Year, then Landlord shall furnish a revised statement of
        Taxes for such Tax Year, and Tenant's payment of Taxes for such Tax Year
        shall be adjusted and paid or credited, as the case may be,
        substantially in the same manner as provided in the preceding sentence.
        If the Tax Year established by the applicable taxing authority shall be
        changed, any Taxes for the Tax Year prior to such change which are
        included within the new Tax Year and which were the subject of a prior
        statement of Taxes shall be apportioned for the purpose of calculating
        Tenant's payment of Taxes payable with respect to such new Tax Year.

        If a separate real property tax bill is not issued for the Premises at
        any time during the Term, but Landlord receives a tax bill for a larger
        parcel of real property including the Premises, Landlord shall bill
        Tenant for a pro rata share of such taxes. Landlord shall provide Tenant
        with an invoice therefor together with a detailed explanation of any
        proration, which proration shall be made on the basis of Tenant's Share
        of the ratio between Floor Area of the Premises and the total square
        feet of the Floor Area of the other tenantable portions of the taxed
        unit of which the Premises form part. If Landlord shall receive any
        bills, assessments or other official notices regarding any such taxes or
        other charges, it shall promptly forward the same to Tenant, but an
        inadvertent failure (or failures) to do so shall not be deemed a breach
        hereof. All such taxes, assessments, charges and the like billed
        directly to Tenant or passed on to Tenant by Landlord and paid



                                      -25-
<PAGE>   31

        by Tenant pursuant to the provisions of this Section 12.1 shall be
        excluded from Common Area Expenses or Operating Expenses, as applicable.
        All taxes becoming a lien upon the Premises or any portion thereof
        during the first and last Tax Year shall be prorated between Landlord
        and Tenant to the first and last day of the Term, respectively. Upon
        Tenant's request in writing, Landlord shall furnish to Tenant proof
        reasonably satisfactory to Tenant of payment of the matters referred to
        in this Article. If the Premises are separately assessed for real
        property taxes, Tenant shall have the right, following notice to
        Landlord, to protest, contest or object to the amount or validity of any
        such taxes, impositions or assessments; provided, however, that this
        right to contest shall not be deemed or construed to relieve, modify or
        extend Tenant's obligation to pay any such tax, imposition or assessment
        before delinquency thereof unless Tenant has provided a bond or other
        security satisfactory to Landlord. Tenant shall indemnify and defend
        Landlord and save Landlord harmless from all costs, liabilities and
        expenses incurred in connection with such proceedings.

Trade Fixtures. Tenant shall be liable for and shall pay, before delinquency,
        all taxes levied against Trade Fixtures.

Protest.Tenant shall have the right, at its sole cost, to request Landlord, by
        notice to Landlord given not less than ten (10) days before the last
        date for filing any necessary protest or petition or taking any other
        necessary action, to initiate and prosecute any proceeding for the
        purpose of reducing the assessed valuation of the Premises for tax
        purposes. In the event that Tenant in good faith shall request Landlord,
        pursuant to the preceding sentence, to initiate and prosecute any
        proceeding, Landlord shall, subject to the requirements imposed by any
        mortgage of Landlord's interests in the Development, at Tenant's sole
        expense, take all steps reasonably necessary to commence such proceeding
        and thereafter shall diligently prosecute the same to completion. Any
        actual out-of-pocket costs, including reasonable attorneys' fees,
        incurred by Landlord in connection with any such proceeding brought at
        Tenant's request shall be payable upon demand, as Additional Rent, by
        Tenant to Landlord. Any refund of moneys received by Landlord resulting
        from such proceeding attributable to the Premises and relating to real
        property taxes which may have been paid by Tenant shall be refunded by
        Landlord to Tenant, together with all accrued interest which is awarded
        thereon and received by Landlord; provided that if any such refund shall
        be made with respect to Landlord's property other than the Premises,
        then Tenant's right to the same shall be limited to its pro rata portion
        thereof, after payment or credit first (to the extent such monies are
        received by Landlord from the taxing authority), to Tenant for
        Landlord's costs previously paid by Tenant to Landlord as above provided
        and second (after all costs incurred by Landlord have been recovered),
        for any other actual out-of-pocket costs, including reasonable
        attorneys' fees, incurred by Tenant in connection with any such
        proceeding. Tenant's rights to refunds under this Section 12.3, if any,
        shall survive the expiration of this Lease.

Definition. As used in this Article 12, the term "REAL PROPERTY TAXES" shall
        include any form of assessment, license fee, license tax, business
        license fee, commercial rental tax, levy,



                                      -26-
<PAGE>   32

        charge, tax or similar imposition, imposed by any authority having the
        direct power to tax, including any city, county, state or federal
        government, or any school, agricultural, lighting, drainage or other
        improvement or special assessment district thereof, as against any legal
        or equitable interest of Landlord in the Premises, including, but not
        limited to, the following: any tax on Landlord's ""right" to rent or
        "right" to other income from the Premises or as against Landlord's
        business of leasing the Premises; any assessment, tax, fee, levy or
        charge in substitution, partially or totally, of any assessment, tax,
        fee, levy or charge previously included, within the definition of real
        property taxes ("IN-LIEU TAX"); any assessment, tax, fee, levy or charge
        allocable to or measured by the area of the Premises or the rent payable
        hereunder ("RECEIPTS TAX"), including any gross income tax or excise tax
        levied by the state, city or federal government, or any political
        subdivision thereof, with respect to the receipt of such rent, or upon
        or with respect to the possessing, leasing, operating, managing,
        maintaining, altering, repairing, using or occupying by Tenant of the
        Premises or any portion thereof; any assessment, tax, fee, levy or
        charge upon this transaction or upon any document to which Tenant is a
        transferring party creating or transferring an interest or an estate in
        the Premises; any assessment, fee, levy or charge by any governmental
        agency related to any transportation plan, fund or system instituted
        within the geographic area of which the Premises are a part; and
        reasonable legal and other professional fees, costs and disbursements
        incurred in connection with proceedings to reasonably contest, determine
        or reduce real property taxes. Notwithstanding any provision of this
        Article 12 expressed or implied to the contrary, Tenant shall not be
        required to pay any documentary transfer taxes or recording taxes
        incurred by Landlord or Landlord's federal or state income, franchise,
        inheritance or estate taxes or any local income, franchise, inheritance
        or estate taxes, or other taxes in lieu thereof, except for any In-Lieu
        Tax or any Receipts Tax.

13.     Condition of Premises.

Landlord's Work. Landlord hereby agrees to cause to be completed those acts
        and/or improvements described as the Landlord's Work in the Work Letter
        within the time(s) set forth therein, subject to Force Majeure or any
        Tenant Delay. Landlord hereby agrees that all work to be performed by
        Landlord pursuant to the Work Letter shall be constructed by Landlord or
        Landlord's contractor in a good and workmanlike first-class manner and
        in full compliance with all governmental regulations, ordinances and
        laws existing at the time of construction. Landlord agrees to abide by
        its obligations, if any, under the CC&R. By taking possession of the
        Premises upon completion of the Landlord's Work and for commencement of
        the construction of the Improvements, Tenant shall be deemed to have:
        (i) acknowledged that Landlord's Work is substantially complete and is
        accepted "as is" and "with all faults"; (ii) accepted the Premises as
        suitable for the purposes for which the Premises are leased; and (iii)
        acknowledged that the Premises are in a good and satisfactory condition,
        except as otherwise expressly provided in the Work Letter. Landlord
        hereby disclaims, and Tenant hereby waives to the full extent permitted
        by law, any implied warranty that the Premises are suitable for Tenant's
        intended commercial purpose, and any and all other implied warranties
        (whether arising by virtue of statute,



                                      -27-
<PAGE>   33

        case law or otherwise). The foregoing provisions shall not be construed
        to relieve Landlord from its obligations which are expressly set forth
        in this Lease.

Design  Changes. In order to provide Landlord with the necessary flexibility in
        the planning and organizing of the Building, Tenant agrees that the
        design of the Building (including the location of the demising walls for
        the Premises) and elements of Landlord's Work shall be subject to such
        changes as Landlord shall deem to be necessary or beneficial to the
        Building or its tenants; provided, however, that the resulting Premises
        shall be substantially equivalent for Tenant's purposes as prior to such
        changes.

14.     Alterations.

Landlord's Approval. From and after the later of (i) the Commencement Date, or
        (ii) completion of the Improvements, Tenant, without obtaining
        Landlord's prior consent, may only make alterations, additions or
        improvements in or to the Premises which (a) are nonstructural in
        nature, and (b) do not affect the exterior of the Premises or other
        exterior portions of the Improvements (but only to the extent generally
        visible from the Common Areas). All alterations, additions and
        improvements other than those described in clauses (a) and (b) hereof
        shall require Landlord's prior written consent. Before proceeding with
        any alteration, addition or improvement which requires Landlord's prior
        written consent hereunder, Tenant shall submit to Landlord plans and
        specifications, including any applicable mechanical, electrical and
        plumbing drawings, for the work to be done, which plans and
        specifications shall require Landlord's approval. If Landlord shall
        disapprove of any of Tenant's plans and specifications, Tenant shall be
        advised of the reasons for such disapproval.

Requirements. Tenant agrees to provide Landlord with notice of all alterations,
        additions or improvements Tenant intends to make to the Premises whether
        or not they require Landlord's prior consent as provided above. Tenant
        shall cause Tenant's contractor to obtain on behalf of Tenant and at
        Tenant's sole cost and expense all necessary governmental permits and
        certificates for the commencement and prosecution of any alteration,
        addition or improvement and for final approval thereof upon completion.
        All such work shall be done at such times and in such manner as Landlord
        may from time to time designate. Tenant covenants and agrees that all
        work done by Tenant shall be performed in full compliance with the
        Condominium Documents, the CC&R, in full compliance with all laws,
        rules, orders, ordinances, regulations and requirements of all
        governmental agencies, offices, and boards having jurisdiction, and in
        full compliance with the rules, regulations and requirements of any
        insurance rating bureau having jurisdiction of the Premises or the
        Building. Before commencing any work, Tenant shall give Landlord at
        least ten (10) days notice of the proposed commencement of such work in
        order to provide Landlord with an opportunity to post notices of
        nonresponsibility. Tenant further covenants and agrees that any
        mechanic's lien recorded against the Premises or the Building for work
        claimed to have been done for, or materials claimed to have been
        furnished to Tenant, will be discharged by Tenant, by bond or otherwise,
        as



                                      -28-
<PAGE>   34
        provided in Article 16 hereof. All alterations, additions or
        improvements upon the Premises made by either party, including all
        wallcovering, built-in cabinetry, paneling and the like, shall, at
        Landlord's option, upon the expiration or earlier termination of this
        Lease become the property of Landlord, and shall, at such time, remain
        upon, and be surrendered by Tenant with the Premises, as a part thereof.

Removal. All articles of personal property and movable furniture, including
        Trade Fixtures and any other of Tenant's furniture and equipment which
        are installed by Tenant at its expense in the Premises shall be and
        remain the property of Tenant and may be removed by Tenant at any time
        during the Term provided Tenant repairs any damage caused by such
        removal. If Tenant shall fail to remove all of its effects from the
        Premises upon the expiration or earlier termination of this Lease, for
        any cause whatsoever, Landlord may, at it option, remove the same in any
        manner that Landlord shall choose, and store said effects without
        liability to Tenant for loss thereof so long as Landlord exercises
        reasonable care in doing so. In such event, Tenant agrees to pay
        Landlord upon demand any and all reasonable expenses actually paid to
        third parties incurred in such removal, including court costs and
        attorneys' fees and storage charges on such effects for any length of
        time that the same shall be in Landlord's possession. Landlord may, at
        its option, upon at least ten (10) business days' prior notice to Tenant
        of the date, time and place of the sale of such effects, or any of the
        same, sell any such affects at a private sale and without legal process,
        for such price as Landlord may obtain and apply the proceeds of such
        sale to any amounts due under this Lease from Tenant to Landlord and to
        the expense incident to the removal and sale of said effects. Any rights
        of Landlord under this Section 14.3 shall be subject to the rights of
        lienholders with a security interest in Tenant's personal property
        pursuant to Section 1.2 hereof.

16.     Repairs.

Tenant's Obligations. Except as otherwise hereinafter provided, Tenant, at
        Tenant's sole cost and expense, shall (i) keep, maintain (including
        necessary replacements) and preserve the Property and every portion
        thereof, all equipment, facilities and amenities used in connection
        therewith and all items located on or about the Property, including
        elevators servicing the Premises, plumbing, mechanical systems, floors
        and utility systems (including HVAC system) and all portions thereof in
        first-class condition and repair, (ii) when and if needed, at Tenant's
        sole cost and expense (subject to the damage and destruction provisions
        herein), make all repairs to the Property and every portion thereof
        including the interior walls but excluding the structural columns
        described in Section 15.2 hereof, (iii) repaint the interior and the
        exterior of the Improvements as necessary, (iv) replace all broken
        window glass, and (v) repair all facilities except for the structural
        elements described in Section 15.2 hereof. Tenant's obligation to keep,
        maintain, preserve and repair the Premises shall specifically extend to
        the cleanup and removal of all Hazardous Materials to the extent
        required by Tenant in Article 8 hereof. Tenant shall, upon the
        expiration or earlier termination of the Term, surrender the Property to
        Landlord in its condition as of the commencement of Tenant's operation
        of the Club for member



                                      -29-
<PAGE>   35

        use, usual and ordinary wear and tear and any alterations, additions and
        improvements permitted under this Lease excepted, and except as
        otherwise provided in Articles 21 and 22 hereof. Landlord shall have no
        obligation to alter, remodel, improve, repair, decorate or paint the
        Property or any part thereof, except as provided in Section 15.2 hereof
        and except for cleanup and removal of Hazardous Materials to the extent
        required in Article 8 hereof. The parties hereto affirm that Landlord
        has made no representations to Tenant respecting the condition of the
        Property except as specifically set forth in Article 13 hereof. In
        addition, the parties hereto affirm that Landlord shall have absolutely
        no obligation to keep, maintain or repair any portion of the interior of
        the Premises except as herein expressly provided. Landlord shall be
        responsible for repairs to the Property caused by the negligence or
        willful misconduct of Landlord or its employees, agents, or contractors.
        Notwithstanding the foregoing, to the extent that insurance carried by
        Landlord or Tenant provides coverage for the cost of any maintenance or
        repair or replacement which is Tenant's obligation pursuant hereto,
        Tenant shall be entitled to all benefits of such insurance.

Landlord's Obligations. Subject to the last sentence of this Section 15.2,
        Landlord shall (subject to reimbursement therefor pursuant to Section 7
        hereof) keep, maintain and repair, or cause to be kept, maintained and
        repaired, the Building (exclusive of the Property) and the Common Areas
        in a first-class manner and be responsible for the repair and
        maintenance of the structural elements of the Development except to the
        extent that the necessity for any repair or maintenance shall be
        attributable to alterations performed by or through Tenant or by the
        negligence or willful misconduct of Tenant or its employees, agents,
        contractors, licensees or invitees. Notwithstanding the foregoing,
        Landlord shall (without being subject to reimbursement therefor pursuant
        to Section 7 hereof) repair all defects in Landlord's construction of
        the Club (if and to the extent expressly provided in the Work Letter)
        and Common Areas. Landlord shall grant easements and/or grant rights of
        way to the extent necessary for utility companies to bring those
        services identified in the Work Letter to the Premises.

16.     Liens.

        Except with respect to a security agreement, financing statement,
financing lien or other instrument securing the financing of Trade Fixtures and
Tenant's other furniture, fixtures, equipment and improvements approved by
Landlord, Tenant shall not permit to be recorded against the Premises or any
portion of the Development or against Tenant's leasehold interest in the
Premises, any mechanics', materialmen's or other liens, including any state,
federal or local Hazardous Material clean-up liens for which Tenant is
responsible under Article 8 hereof. Landlord shall have the right at all
reasonable times to post and keep posted on the Premises any notices which it
deems necessary for protection from such liens. If any such lien is recorded,
and is not discharged by Tenant by bond or otherwise within thirty (30) days
after the recording thereof, Landlord may, without waiving its rights and
remedies based on such breach of Tenant and without releasing Tenant from any of
its obligations, cause such liens to be released by any means it shall deem
proper, including payment in satisfaction of the claim giving rise to such



                                      -30-
<PAGE>   36

lien. Tenant shall pay to Landlord on demand, upon notice by Landlord, any sums
incurred by Landlord to remove such liens, together with Landlord's reasonable
attorneys' fees and other expenses incurred by Landlord in connection with
obtaining such release and interest on such sums at the lesser of (i) the rate
of twelve percent (12%) per annum and (ii) the highest rate then legally
permissible from the date of such payment by Landlord. Tenant expressly reserves
the right to contest the validity of any such liens and to post bonds suitable
to cause the release of any such liens so long as (a) prior to any such contest
(and no later than thirty (30) days after such lien has been filed) Tenant at
its sole expense provides to Landlord a bond indemnifying against such lien that
complies with all applicable laws, and (b) Tenant contests such lien diligently
and in good faith; provided, however, the foregoing right of Tenant to contest
any such lien shall not impair or otherwise affect Tenant's indemnification and
other obligations with respect to such lien.

17.     Entry by Landlord.

        During normal business hours upon giving at least one (1) business day's
prior notice to Tenant (except in the case of emergencies, in which case no
notice shall be necessary), Landlord reserves and shall at any and all
reasonable times have the right to enter the Premises and the Improvements to
(i) inspect the same, (ii) show the Premises and the Improvements to prospective
lenders or purchasers (and prospective tenants during the last twelve (12)
months of the Term), (iii) post notices of nonresponsibility, and (iv) alter,
improve or repair the Common Areas or any other portion of the Development, all
without being deemed guilty of any eviction of Tenant or breach of quiet
enjoyment and without abatement or reduction of rent. Landlord shall provide
Tenant with the opportunity to escort Landlord with regard to any entry pursuant
hereto (except in case of an emergency). Landlord shall indemnify Tenant and
hold Tenant harmless from and against any and all claims, damages, losses or
costs (excluding consequential damages) actually incurred by Tenant as a result
of Landlord's entry upon the Premises pursuant to this Article 17 to the extent
not covered by insurance carried by Tenant or required to be carried by Tenant
hereunder. Landlord may, in order to carry out such purposes, erect scaffolding
and other necessary structures if reasonably required by the character of the
work to be performed, provided that to the extent within Landlord's reasonable
control, the business of Tenant shall be interfered with as little as is
reasonably practicable (it being agreed that Landlord shall not be required to
employ overtime or premium labor). It is understood and agreed that no provision
of this Lease shall be construed as obligating Landlord to perform any repairs,
alterations or decorations except as otherwise expressly agreed herein by
Landlord.

18.     Utilities and Services.

From and after Substantial Completion of Landlord's Work, Tenant agrees to pay
        all charges for utilities and services used by it in the Premises,
        including, but not limited to, gas, electricity, telephone, sanitary
        sewer, storm drainage, water, and trash collection. Landlord shall
        supply hot water for heat as described in the Work Letter to such
        distribution facilities designated in the Design Development Plans (as
        defined in the Work Letter). Tenant shall maintain in good working order
        and make all necessary



                                      -31-
<PAGE>   37

        repairs and replacements to such distribution facilities to the extent
        the same are located within or exclusively service the Premises, at
        Tenant's own cost and expense. Such hot water shall be supplied to the
        Premises at such times and periods as Tenant shall reasonably require
        for conducting its business at the Premises in the manner contemplated
        by this Lease and the Work Letter (not to exceed eighteen (18) hours per
        day). Landlord shall supply (or cause to be supplied) chilled water to
        the Premises as described in the Work Letter at such hours (not to
        exceed eighteen (18) hours per day) as Tenant may designate. Within
        thirty (30) days following demand therefor, Tenant shall pay to
        Landlord, as Additional Rent, Landlord's then established charges which
        shall not exceed one hundred percent (100%) of Landlord's out-of-pocket
        costs for the quantities of such hot water and chilled water (except as
        otherwise specifically provided in the Work Letter) as Tenant may
        consume, as shown on the meter(s) installed by Landlord (but maintained
        by Tenant). Subject to Landlord's obligation to make utility easements
        and rights of way available pursuant to the provisions of Section 15.2
        hereof and to bring utility lines to the Premises pursuant to Section
        1.1 hereof, Landlord shall not be liable for damages or otherwise for
        any failure or interruption of any utility or other service furnished to
        the Premises, unless such failure shall be due to the negligence or
        willful misconduct of Landlord, its agents, licensees or employees and
        is not covered by rent abatement and business interruption insurance
        carried or required to be carried by Tenant. Subject to Landlord's
        obligation to make utility easements and rights of way available
        pursuant to the provisions of Section 15.2 hereof and to bring utility
        lines to the Premises pursuant to Section 1.1 hereof, Landlord does not
        warrant that any of the utilities and services mentioned herein will be
        free from interruptions caused by repair, renewals, improvements,
        alterations, strikes, lockouts, accidents, inability of Landlord to
        obtain fuel or supplies, or any other cause or causes beyond the
        reasonable control of Landlord. Any such interruption of service shall
        never be deemed an eviction or disturbance of Tenant's use and
        possession of the Premises, or any part thereof, or give Tenant any
        right to terminate this Lease.

Tenant agrees that it will not install any equipment which will exceed or
        overload the capacity of any utility facilities, and that if any
        equipment installed by Tenant shall require additional utility
        facilities in excess of those specified in the Work Letter, the same
        shall be installed at Tenant's expense in accordance with plans and
        specifications to be approved in writing by Landlord in accordance with
        the standards set forth in Article 14 hereof.

19.     Indemnification.

Tenant's Indemnity. Notwithstanding (i) the limits of Tenant's insurance
        specified in Section 20.1 hereof and (ii) whether Tenant's insurance
        shall be in full force and effect, Tenant shall indemnify, defend and
        hold Landlord and the Condominium Association (if applicable) harmless
        from all costs, expenses, penalties, claims, demands and liabilities
        ("CLAIMS") arising from Tenant's use of the Property or the conduct of
        its business or from any activity, work, or thing done by Tenant in or
        about the Premises. Tenant shall further indemnify, defend and hold
        Landlord and the Condominium Association (if



                                      -32-
<PAGE>   38

        applicable) harmless from all Claims arising from any Default, or
        arising from any act, neglect, fault or omission of Tenant or of its
        agents, employees or licensees in the Premises, or arising from any act,
        neglect, fault or omission of Tenant's invitees in the Premises, and
        from and against all costs, attorneys' fees, expenses and liabilities
        incurred in connection with such Claim or any action or proceeding
        brought thereon, but this indemnity shall not extend to Claims to the
        extent resulting from negligent acts or omissions or willful misconduct
        of Landlord or the Condominium Association, as applicable, their
        respective employees, agents, licensees or invitees, to consequential or
        punitive damages or to Claims that are as applicable covered by property
        insurance carried by Landlord or the Condominium Association or required
        to be carried by Landlord hereunder. In case any action or proceeding
        shall be brought against Landlord and/or the Condominium Association, as
        applicable, by reason of any such Claim, Tenant, upon notice from
        Landlord and/or the Condominium Association, as applicable, shall defend
        the same at Tenant's expense by counsel approved by Landlord and/or the
        Condominium Association, as applicable. Tenant, as a material part of
        the consideration to Landlord, hereby assumes all risk of damage to
        property or injury to persons in, upon or about the Property from any
        cause whatsoever, except that for which Landlord may be liable pursuant
        to the indemnity contained in Section 19.2 hereof.

Landlord's Indemnity. Landlord shall indemnify, defend and hold Tenant harmless
        from any and all Claims arising from any activity, work, or thing done
        by Landlord in or about the Development (exclusive of the Premises).
        Landlord shall further indemnify, defend and hold Tenant harmless from
        all Claims arising from any breach or default in the performance of any
        obligation to be performed by Landlord under the terms of this Lease or
        arising from any act, neglect, fault or omission of Landlord or of its
        licensees, invitees, agents or employees within the Development
        (exclusive of the Premises) (provided, however, it is agreed that
        tenants or other occupants of the Development and their respective
        licensees, invitees, agents or employees shall not be deemed to be
        Landlord's licensees, invitees, agents or employees) and from and
        against all costs, attorneys' fees, expenses and liabilities incurred in
        connection with such Claims or any action or proceeding brought thereon,
        but this indemnity shall not extend to Claims to the extent resulting
        from the negligent acts or omissions or willful misconduct of Tenant,
        its employees, agents or licensees, to consequential or punitive damages
        or to Claims that are covered by property insurance carried by Tenant or
        required to be carried by Tenant hereunder. In case any action or
        proceeding shall be brought against Tenant by reason of any such Claims,
        Landlord, upon notice from Tenant, shall defend the same at Landlord's
        expense by counsel approved by Tenant; it being agreed that Battle
        Fowler LLP and/or counsel designated by Landlord's insurer are
        acceptable to Tenant for such purpose.

No Release of Insurers. Tenant's and Landlord's indemnification obligations
        under Sections 19.1 and 19.2 hereof are not intended to and shall not
        relieve any insurance carrier of its obligations under policies carried
        by Landlord or Tenant, and such indemnification obligations shall
        survive the expiration or earlier termination of this Lease.



                                      -33-
<PAGE>   39

20.     Insurance.

Tenant's Insurance. Tenant shall, during the Term and any other period of
        occupancy of the Premises, at its sole cost and expense, keep in full
        force and effect the following insurance:

                Property. Standard form property insurance insuring against the
        perils of fire, extended coverage, vandalism, malicious mischief,
        special extended coverage ("ALL-RISK") and sprinkler leakage, covering
        all property owned by Tenant, for which Tenant is legally liable or that
        was installed solely at Tenant's expense, and which is located on the
        Premises, including interior improvements, furniture, fittings,
        installations, Trade Fixtures, equipment, facilities and any other
        personal property and any alterations, additions and improvements
        constructed by Tenant pursuant to Section 14.1 hereof (but excluding any
        property required to be insured by Landlord under Section 20.4 hereof),
        in an amount not less than the full replacement cost thereof. All
        proceeds from the insurance required under this Section 20.1(i) shall be
        used for the repair, restoration or replacement of the damaged or
        destroyed property unless this Lease terminates pursuant to Section 21
        hereof, in which event the provisions of Section 20.3 hereof shall
        control.

                Liability. Comprehensive General Liability Insurance insuring
        Tenant against any liability arising out of the lease, use, occupancy or
        maintenance of the Premises and all areas appurtenant thereto. Such
        insurance shall be in the amount of not less than $5,000,000.00 Combined
        Single Limit for injury to, or death of, one or more persons in an
        occurrence, and for damage to tangible property (including loss of use)
        in an occurrence. Any such coverage requirement may be satisfied by an
        umbrella policy. Such policies shall insure the hazards of premises and
        operations, independent contractors, contractual liability (covering the
        indemnity contained in Section 19 hereof) and shall (a) name Landlord,
        the Condominium Association (if applicable) and any mortgagee of
        Landlord as additional insureds, (b) contain a cross liability
        provision, and (c) contain a provision that "the insurance provided
        Tenant hereunder shall be primary and noncontributing with any other
        insurance available to Landlord or the Condominium Association," so long
        as such provision may be available.

                Workers' Compensation. Workers' Compensation and Employer's
        Liability insurance (as required by state law).

                Rental Interruption. Twelve (12) months rent abatement and
        business interruption insurance which shall cover Tenant's monetary
        obligations under this Lease and any direct or indirect loss of earnings
        attributable to perils insured against under extended coverage all-risk
        property insurance; provided, however, that Tenant shall be entitled to
        self-insure such risk.

                Liquor. Liquor liability insurance coverage with commercially
        reasonable coverage limits, but in no event less than $5,000,000.00 per
        occurrence, naming



                                      -34-
<PAGE>   40

        Landlord, the Condominium Association and any mortgagee of Landlord as
        additional insureds. Any such coverage requirement may be satisfied by
        an umbrella policy.

Requirements. All policies required of Tenant shall be written by an insurer
        satisfactory to Landlord. Prior to the date Tenant enters the Premises,
        but in no event later than sixty (60) days after the execution of this
        Lease, Tenant shall deliver to Landlord copies of policies or
        certificates evidencing the existence of the amounts and forms of
        coverage required (or, in the event of self-insuring as permitted in
        Section 20.1(iv) hereof only, evidence of the net worth of Tenant or a
        Person providing a guaranty of this Lease to Landlord of not less than
        $10,000,000). No such policy shall be cancelable or reducible in
        coverage except after thirty (30) days' prior written notice to
        Landlord. Tenant shall, within thirty (30) days prior to the expiration
        of any such policies, furnish Landlord with renewals, certificates of
        insurance, or "binders" thereof, and, if Tenant fails to do so within
        ten (10) days following notice of such failure, then, upon an additional
        notice to Tenant, Landlord may order such insurance and charge the cost
        thereof to Tenant as Additional Rent. If Landlord obtains any insurance
        that is the responsibility of Tenant under this Article 20, Landlord
        shall deliver to Tenant a statement setting forth the cost of any such
        insurance and showing in reasonable detail the manner in which it has
        been computed, and, if obtainable, a certificate of insurance naming
        Tenant as the insured or as an additional insured. Tenant's obligation
        to carry insurance provided for in this Article 20 may be satisfied by
        inclusion within the coverage of any blanket policy or policies of
        insurance carried or maintained by Tenant, provided that the coverage
        required herein will not be reduced or diminished by reason of the use
        of such blanket policies of insurance.

Proceeds Upon Termination. In the event of damage to or destruction of the
        Improvements resulting in termination of this Lease pursuant to Article
        21 hereof, (i) Landlord shall be entitled to all proceeds of the
        insurance required to be maintained under Section 20.4 hereof (subject
        to Landlord's obligation to cause such proceeds to be disbursed for the
        purposes of restoration, as herein provided) and (ii) Tenant shall
        immediately pay to Landlord all of its property insurance proceeds, if
        any, plus any deductible amount (subject to the limitation described
        below) relating to the Improvements and all other items of property
        which would have become Landlord's property upon expiration or earlier
        termination of this Lease absent such damage or destruction (but not
        relating to Trade Fixtures or Tenant's other equipment, furniture or
        personal property). Notwithstanding the foregoing, Tenant shall not be
        required to pay any such deductible amounts to Landlord unless Landlord
        can reasonably demonstrate that Landlord has entered into a new lease
        with a non-Affiliate of Landlord for an athletic club in the Premises
        for a lease term of not less than ten (10) years within twelve (12)
        months after the termination of this Lease.

Landlord's Insurance. Landlord may, but shall not be obligated to, take out and
        carry any form or forms of insurance ("LANDLORD'S INSURANCE") as it may
        reasonably determine advisable, or as may be required by Landlord's
        mortgagee; provided, however, that



                                      -35-
<PAGE>   41

        Landlord shall be required to carry (i) Comprehensive General Liability
        Insurance in amounts not less than those required of Tenant pursuant to
        Section 20.1 hereof and (ii) insurance against any peril insurable under
        an all-risk property insurance policy covering the Improvements,
        exclusive of any item insured by Tenant pursuant to Section 20.1(i)
        hereof, in an amount which is one hundred percent (100%) of the full
        replacement cost of the Improvements. Landlord's obligation to carry the
        all-risk property insurance provided for in this Section 20.4 may be
        satisfied by inclusion of the Improvements within the coverage of any
        blanket policy or policies of insurance carried or maintained by
        Landlord, provided that the coverage required herein will not be reduced
        or diminished by reason of the use of such blanket policies of
        insurance. Tenant shall reimburse Landlord, as Additional Rent payable
        in equal monthly installments, the cost of the all-risk property
        insurance for the Improvements required by this Section 20.4 commencing
        within thirty (30) days following demand therefor, and the premiums for
        such insurance will not be included in the Insurance Escalation (as
        defined herein). In the event such all-risk property insurance covers
        improvements other than the Improvements, Tenant's pro rata share will
        be that proportion that the Floor Area of the Improvements bears to the
        total Floor Area of all improvements covered by such policy.

Insurance Escalation. Except for Landlord's cost of the all-risk property
        insurance for the Improvements, as addressed in Section 20.4 hereof, if
        Landlord's cost of obtaining Landlord's Insurance for the Property
        and/or the Building and the operations thereof exceeds the cost of
        obtaining such insurance for the first twelve (12) months following the
        Commencement Date, Tenant shall pay to Landlord, as Additional Rent,
        within thirty (30) days, after being billed therefore, an amount equal
        to Tenant's Share of such increased cost.

Compliance. Landlord and Tenant shall promptly comply with all reasonable
        requirements of the insurance authority or of any insurer now or
        hereafter relating to the Premises.

Waiver  of Subrogation. All policies of all-risk, fire, extended coverage or
        similar property insurance which either party obtains or is required to
        maintain in connection with the Development, and the insurance required
        to be obtained by Tenant pursuant to the provisions of Section 20.1 (iv)
        hereof, and, if obtainable, all liability policies, shall include or
        shall be deemed to include a clause or endorsement denying the insurer
        any rights of subrogation against the other party. Landlord and Tenant
        waive all rights of recovery against the other for injury or loss due to
        hazards covered by insurance containing or deemed to contain such a
        waiver of subrogation clause or endorsement to the extent of the injury
        or loss covered thereby.

21.     Damage or Destruction.

(i) Tenant's Reconstruction. In the event the Improvements shall be damaged
        by fire or other perils and this Lease shall not be terminated as
        hereafter provided, Tenant, at its sole cost and expense, shall within a
        period of thirty (30) days thereafter, commence repair,



                                      -36-
<PAGE>   42

        reconstruction and restoration of the Improvements to their condition
        existing immediately prior to such damage and prosecute the same
        diligently to completion in compliance with all applicable laws, and
        this Lease shall continue in full force and effect unless this Lease is
        terminated as hereinafter provided. Any such repair, reconstruction and
        restoration shall be performed strictly in accordance with the
        provisions of Article 14 hereof and Tenant shall be entitled to apply
        the insurance proceeds to the repair, reconstruction and restoration in
        the manner provided in Section 21.2 hereof. If at any time Tenant shall
        fail to prosecute such work of repair or rebuilding with diligence, then
        Landlord may give to Tenant notice of such failure and if such failure
        continues for twenty (20) days thereafter, then Landlord, in addition to
        all other rights which it may have, may, at Tenant's sole cost and
        expense, enter upon the Premises, provide labor and/or materials, cause
        the performance of any contract and/or take such other action as it may
        deem advisable to prosecute such work. For this purpose, any contracts
        made by Tenant for purposes of accomplishing repair, reconstruction and
        restoration of the Improvements shall be in a form assignable to
        Landlord and shall be subject to Landlord's approval. Landlord shall be
        entitled to reimbursement for its costs and expenses in performing such
        work from any insurance proceeds and any other moneys held by the
        Depository (as defined herein) for application to the cost of such work
        in accordance with Section 21.2 hereof. All costs and expenses incurred
        by Landlord in carrying out such work for which it is not reimbursed by
        the Depository shall be paid by Tenant upon demand, which demand may be
        made by Landlord periodically as such costs and expenses are incurred,
        in addition to any damages to which Landlord may be entitled hereunder.

                (ii) Uninsured Casualty. In the event the Improvements shall be
        damaged by peril which is not covered by insurance required to be
        maintained hereunder (or which is otherwise maintained), and if a duly
        qualified contractor certifies, in good faith and fair dealing, that the
        amount required to repair such damage exceeds the Uninsured Contribution
        Amount (as defined herein), Tenant shall have the option to terminate
        this Lease upon giving notice to Landlord of its exercise of such
        termination option within sixty (60) days after such damage or
        destruction. Upon such termination of this Lease, the parties shall be
        released without further obligations to the other coincident with the
        surrender of possession of the Premises to Landlord, except for items
        which theretofore accrued and are then unpaid and any obligations
        specified in this Lease which are to survive the termination of this
        Lease. Notwithstanding the foregoing, in the event that Tenant exercises
        its option to terminate this Lease pursuant to the provisions of this
        Section 21.1 (ii), Landlord shall have the option, exercisable within
        thirty (30) days after Landlord's receipt of Tenant's termination
        notice, to notify Tenant that Landlord elects to fund the amount
        required to repair such damage and destruction in excess of the
        Uninsured Contribution Amount (as defined herein), in which case such
        repair, reconstruction and restoration shall be performed pursuant to
        the procedures set forth in this Section 21.1(ii), except that Tenant
        shall contribute the Uninsured Contribution Amount and Landlord shall
        fund any additional amounts necessary to accomplish such repair,
        reconstruction and restoration. The "UNINSURED CONTRIBUTION AMOUNT"
        shall be



                                      -37-
<PAGE>   43

        Five Hundred Thousand ($500,000.00) Dollars if the casualty occurs
        during the first (180) calendar months of the Initial Term, which amount
        shall be reduced at the beginning of the one hundred ninety third
        (193rd) calendar month of the Initial Term, and every twelve (12) months
        thereafter, by One Hundred Thousand ($100,000.00) Dollars, until (but
        not including) the beginning of the last twelve (12) months of the
        Initial Term. The One Hundred Thousand ($100,000.00) Dollars Uninsured
        Contribution Amount in effect for the last twelve (12) months of the
        Initial Term shall remain throughout any Option Periods.

                (iii) Landlord Termination. In the event that any portion of the
        Development (including the Building) shall be damaged to such an extent
        that Landlord, the Condominium Association or any of Landlord's lenders
        shall elect not to restore same, then Landlord shall have the right to
        terminate this Lease within ninety (90) days following the date of the
        damage or destruction or, if applicable, within a reasonable time after
        Landlord shall have been notified of the Condominium Association's or
        lender's decision not to restore. Upon such termination of this Lease,
        the parties shall be released without further obligations to the other
        coincident with the surrender of possession of the Premises to Landlord,
        except for items which theretofore accrued and are then unpaid and any
        obligations specified in this Lease which are to survive the termination
        of this Lease. Subject to the rights of Landlord's lenders and/or the
        Condominium Association, Landlord shall not elect to terminate this
        Lease unless a material portion of the Development (i.e., more than
        twenty five percent (25%)) shall have been damaged. Landlord agrees that
        if (1) this Lease is terminated by Landlord pursuant to this Section
        21.1(iii) and Landlord thereafter reconstructs, restores or repairs the
        Building or the Premises, (2) at the time of such casualty Tenant is
        then operating a Club (including support facilities) within at least
        seventy-five percent (75%) of the Premises, (3) at the time of such
        casualty no monetary Default (as defined herein) and/or material Default
        shall have occurred and be continuing under this Lease, (4) at the time
        of such casualty, the Unexpired Lease Term (as defined herein) is at
        least five (5) years or Tenant exercises an Option for an Option Period,
        regardless of whether Tenant then would otherwise have the right to
        exercise same, by delivering written notice to Landlord simultaneously
        with the delivery to Landlord of the Tenant Acceptance Notice (as
        defined herein) subject to and in accordance with this Section
        21.1(iii), (5) within one-hundred eighty (180) days following the
        termination of this Lease pursuant to this Section 21.1 (iii), Tenant
        shall deliver to Landlord a statement signed and certified by the chief
        financial officer of Tenant, if Tenant is a corporation, by a managing
        member, if Tenant is a limited liability company, or by the chief
        financial officer of a corporate general partner of Tenant, if Tenant is
        a partnership (such person, the "FINANCIAL OFFICER"), to be true and
        correct disclosing in reasonable detail the aggregate amount of costs
        and expenses actually incurred by Tenant as the result of the cessation
        of Tenant's business operations in the Premises and such termination of
        this Lease (e.g., including, without limitation, the unrecouped costs
        and expenses actually incurred by Tenant in connection with the
        development of a Club in the Premises and reimbursement to Tenant's Club
        members of membership fees) which are not covered by insurance



                                      -38-
<PAGE>   44

        maintained by Tenant or otherwise reimbursed to Tenant (collectively,
        the "TENANT TERMINATION COSTS") and (6) at the time of the Landlord
        Offer (as defined herein), Tenant or an Affiliate of Tenant is then
        operating a first-class coed athletic club, Landlord shall not operate a
        Club in the Premises or offer to lease or accept any offer to lease the
        Premises to any party within a period of five (5) years after such
        termination of this Lease unless Landlord shall have first offered in
        writing (the "LANDLORD OFFER") to lease the Premises to Tenant on the
        terms and conditions of this Lease (including, without limitation, any
        unexercised Option Periods) for a term equal to the unexpired portion of
        the term of this Lease as of such termination date (the "UNEXPIRED LEASE
        TERM") calculated as if this Lease had not been terminated and Tenant
        shall not have accepted such offer by notice to Landlord within thirty
        (30) days after such offer is given to Tenant (the "TENANT ACCEPTANCE
        NOTICE"). Notwithstanding the foregoing, in the event that Tenant
        exercises its option to lease the Premises pursuant to this Section 21.1
        (iii), Landlord shall have the option, exercisable within thirty (30)
        days after Landlord's receipt of the Tenant Acceptance Notice, to
        nullify the Tenant Acceptance Notice by delivering to Tenant written
        notice and paying to Tenant the Tenant Termination Costs. Upon Tenant's
        receipt of such nullification notice and the payment of the Tenant
        Termination Costs, the Tenant Acceptance Notice shall be deemed null and
        void and of no force and effect and Tenant shall be deemed to have
        waived and relinquished its right to lease the Premises and Landlord
        shall at any and all times thereafter be entitled to lease all or any
        portion of the Premises to others at such rental and upon such terms and
        conditions as Landlord in its sole discretion may desire.

Depository. The "DEPOSITORY" shall be a bank or trust company authorized to do
        business in the State of California, with a net worth of at least
        $10,000,000.00 selected by Tenant and approved by Landlord; provided,
        however, that if (i) Tenant does not make such a selection within ten
        (10) business days after notice and demand by Landlord, then Landlord
        may select the Depository and (ii) if Landlord has a lender whose loan
        is secured by the Property, then anyone, excluding Landlord or any
        Affiliate of Landlord, designated by such lender shall be the
        Depository. Subject to Section 21.5 hereof, all property insurance
        moneys recovered on account of damage or destruction to the Improvements
        shall be applied to the payment of the cost of repairing and replacing
        the Improvements. If net available insurance moneys shall be
        insufficient to pay the entire cost of such work, then Tenant shall bear
        the cost thereof in excess of the net available insurance moneys. Except
        for work which is reasonably expected to cost less than $100,000.00
        (with respect to which Landlord shall hold the proceeds), the Depository
        shall hold insurance proceeds with respect to the Improvements and shall
        disburse said proceeds during the course of the work of repair,
        reconstruction and restoration in accordance with the provisions set
        forth below unless the Depository is Landlord's lender or a designee of
        such lender, in which event the provisions of the loan documentation
        shall control. The Depository shall not be required to make
        disbursements more often than at thirty (30) day intervals. Landlord,
        Tenant and the Depository shall reasonably, promptly and in good faith
        prepare and execute reasonable and appropriate instructions for
        disbursement of the proceeds which shall include a procedure for receipt
        of



                                      -39-
<PAGE>   45

        certificates, plans, notices, lien releases and applications for
        payment. Notwithstanding anything to the contrary contained herein,
        disbursement of such insurance proceeds shall in all events (i) be
        subject to such requirements as may be imposed by the Condominium
        Association and/or any mortgagee of Landlord and (ii) include a
        procedure for a retainage of ten percent (10%) of the cost of the work
        from each draw disbursed in connection with such restoration until at
        least thirty (30) days after the completion of all work. If, after all
        of said work shall be completed in accordance with the terms of this
        Lease and all governmental approvals and permits required have been
        obtained, there are funds held by the Depository for application to the
        cost of such work in excess of the amounts withdrawn, then such funds
        (after first applying such funds to the costs and expenses of the
        Depository) shall be delivered to Tenant; provided, however, that if the
        funds held by the Depository are a result of any insurance carried by
        Landlord or Section 21.5 hereof, such funds shall be delivered to
        Landlord. The Depository may retain free of trust its reasonable fees
        and expenses for acting as such. In the event there are not sufficient
        funds held by the Depository to pay its fees and expenses, Landlord and
        Tenant shall share equally the fees and expenses of the Depository.

No Termination or Rental Abatement. No destruction of or damage to the
        Property or any part thereof, whether such destruction or damage be
        partial or total or whether such destruction or damage shall have been
        covered by insurance or not, shall entitle or permit Tenant to surrender
        or terminate this Lease (except as provided in Section 21.1(ii) hereof)
        or relieve Tenant from liability to pay in full the rents and other sums
        and charges payable by Tenant hereunder (except as provided in Section
        21.4 hereof), or from any of its obligations under this Lease. Tenant
        hereby waives any rights now or hereafter conferred upon it by statute
        or other law to surrender this Lease or to quit or surrender the
        Property or any part thereof, or to receive any suspension, diminution,
        abatement or reduction of the rent or other sums and charges payable by
        Tenant hereunder on account of any such destruction or damage, except as
        otherwise expressly provided in this Lease.

Limited Rental Abatement. Notwithstanding anything to the contrary contained
        herein, in the event that the Improvements shall be damaged by peril
        which is not covered by insurance required to be maintained hereunder
        (or which is otherwise maintained), then, to the extent not covered by
        the rent abatement insurance or business interruption insurance required
        to be carried by Tenant pursuant to Section 20.1 (iv) hereof (whether by
        self insuring or otherwise), Tenant shall be entitled to abate its
        obligations to pay Monthly Base Rent and, as applicable, Common Area
        Expenses or Operating Expenses, for the period from the date of such
        peril until the earlier of (i) the date upon which Tenant opens for
        operation of its business, or (ii) the date which is twelve (12) months
        after the date of such peril, provided that such twelve (12) month
        period shall be reduced to the extent that Tenant does not diligently
        seek to repair the damage caused as a result of such peril and/or
        re-open the Premises for the operation of its business. From and after
        the expiration of such rental abatement, Tenant's obligation to pay
        Monthly Base Rent and, as applicable, Common Area Expenses or Operating
        Expenses shall once again commence.



                                      -40-
<PAGE>   46

Lender's Prior Rights to Insurance Proceeds. Notwithstanding anything to the
        contrary herein, Tenant acknowledges that the rights of any lender
        holding a mortgage or deed of trust against the Premises ("SECURED
        LENDER") to any insurance proceeds applicable to the Improvements,
        except for Tenant's Insurance Share (as defined herein), shall be
        superior to the rights of Landlord and Tenant to such proceeds.
        "TENANT'S INSURANCE SHARE" is equal to Tenant's "pro rata share" (as
        determined in accordance with Section 22.1 hereof) of the insurance
        proceeds payable for the damaged Improvements. Landlord agrees to use
        commercially reasonable efforts to cause the Secured Lender to make the
        insurance proceeds in which the Secured Lender has a prior interest
        available to Tenant for reconstruction as contemplated in this Lease.
        If, within two hundred seventy (270) days following a casualty, a
        Secured Lender has not made such proceeds available for reconstruction,
        then at Tenant's election this Lease shall terminate as of said 270th
        day, unless Landlord gives notice to Tenant on or before said 270th day
        that Landlord is willing to provide the sums necessary for
        reconstruction in excess of any deductibles and Tenant's Insurance
        Share, in which case this Lease shall not terminate and Landlord shall
        deposit such sums with the Depository and Tenant shall reconstruct the
        Premises in accordance with the provisions of this Article 21 hereof.
        The disbursement of any insurance proceeds applicable to the
        Improvements shall be subject to the control of the Secured Lender
        notwithstanding anything to the contrary in Section 21.2 hereof.



                                      -41-
<PAGE>   47

22.     Eminent Domain.

Permanent Taking. In case all of the Property (a "TOTAL TAKING"), or such part
        thereof as shall substantially interfere with Tenant's use and occupancy
        thereof to the extent Tenant cannot operate the Club (a "SUBSTANTIAL
        TAKING"), shall be taken for any public or quasi-public purpose by any
        lawful power or authority by exercise of the right of appropriation,
        condemnation or eminent domain, or sold to prevent, or in lieu of, such
        taking, this Lease shall automatically terminate effective as of the
        date possession is required to be surrendered to said authority. In the
        event the amount of property or the type of estate taken shall not
        substantially interfere with the conduct of Tenant's business (a
        "PARTIAL TAKING"), Tenant shall restore the Property to substantially
        its same condition prior to such Partial Taking and a fair and equitable
        allowance shall be made to Tenant for the rent corresponding to the time
        during which, and to the part of the Property of which, Tenant shall be
        so deprived on account of such taking. Tenant shall not assert any claim
        against Landlord for any compensation because of such taking. In the
        event of a Total Taking, Substantial Taking or Partial Taking, any award
        shall belong to and be paid to Landlord subject to the rights of any
        mortgagee of Landlord's interest in the Premises or the beneficiary of
        any deed of trust which constitutes an encumbrance thereon, except that
        Tenant shall be entitled to any portion of such award related to (i)
        Trade Fixtures or Tenant's other equipment and/or personal property
        which is taken, (ii) Tenant's moving expenses and loss of goodwill,
        (iii) Tenant's "pro-rata share" of the straight-line (on a 20-year
        basis) unamortized costs of the Improvements taken, and (iv) in the case
        of a Partial Taking only, the amount required to restore the Property to
        substantially its same condition prior to such Partial Taking which
        shall be held by the Depository for Landlord and shall be disbursed to
        Tenant for the purposes of such restoration upon the same terms and
        conditions as if they were insurance proceeds under Article 21 hereof.
        For the purposes of this Section 22.1, "pro-rata share" shall be
        determined by the proportion that the cost paid by Tenant for the taken
        Improvements bears to the total of those costs paid therefor by Landlord
        and Tenant. Nothing contained in this Section 22.1 shall be deemed to
        give Landlord any interest in any award made to Tenant for the taking of
        Trade Fixtures or Tenant's other personal property, fixtures and
        goodwill and for relocation expenses. Landlord agrees not to interfere
        with Tenant's right to participate in any condemnation proceedings. The
        provisions of this Section 22.1 shall survive the termination of this
        Lease.

Temporary Taking. In the event of taking of the Property or any part thereof for
        temporary use, (i) this Lease shall be and remain unaffected thereby and
        rent shall not abate, and (ii) Tenant shall be entitled to receive for
        itself such portion or portions of any award made for such use with
        respect to the period of the taking which is within the Term provided
        that if such taking shall remain in force at the expiration or earlier
        termination of this Lease, Tenant shall then pay to Landlord a sum equal
        to the reasonable cost of performing Tenant's obligations under Article
        15 hereof with respect to the surrender of the Property and upon such
        payment shall be excused from such obligations. For purpose



                                      -42-
<PAGE>   48

        of this Section 22.2, a temporary taking shall be defined as a taking
        for a period of ninety (90) days or less.

Waiver. Landlord and Tenant each hereby waive any statutory rights of
        termination which may arise by reason of a taking.

23.     Defaults and Remedies.

Defaults. The occurrence of any one or more of the following events shall
        constitute a default hereunder by Tenant ("DEFAULT"):

                The vacation or abandonment of the Premises by Tenant or failure
        to continuously operate the Club in accordance with Article 8 hereof
        where Tenant has failed to cure such vacation, abandonment or failure to
        operate within thirty (30) days following notice from Landlord to Tenant
        of the need for such cure (the parties agree, however, that cessation of
        operations of business from the Premises from time to time for the
        purpose of remodeling the Premises or making alterations, additions or
        improvements to the Property (collectively "TEMPORARY CLOSURES") shall
        not be considered vacation or abandonment of the Premises provided and
        on condition that; Tenant shall use commercially reasonable efforts to
        complete any and all such work, from time to time, in an expeditious and
        non-disruptive manner.

                The failure by Tenant to make any payment of Rent or any other
        payment required to be made by Tenant hereunder (including the Work
        Letter), where such failure shall continue for a period of ten (10)
        business days following notice from Landlord to Tenant that such payment
        is due; provided, however, Tenant shall be entitled to such notice and
        opportunity to cure on only two (2) occasions during any Lease Year;

                The failure by Tenant to observe or perform any of the covenants
        or provisions of this Lease (including the Work Letter) to be observed
        or performed by Tenant, other than as specified in Sections 23.1(i) or
        (ii) hereof, where such failure shall continue for a period of thirty
        (30) days after notice thereof from Landlord to Tenant. If the nature of
        the Default is such that more than thirty (30) days are reasonably
        required for its cure, then Tenant shall not be deemed to be in Default
        if Tenant shall commence such cure within said thirty-day period and
        thereafter diligently prosecutes such cure to completion, which
        completion shall occur not later than one hundred twenty (120) days from
        the date of such notice from Landlord;

                (a) The making by Tenant of any general assignment for the
        benefit of creditors; (b) the filing by or against Tenant of a petition
        to have Tenant adjudged a bankrupt or a petition for reorganization or
        arrangement under any law relating to bankruptcy unless, in the case of
        a petition filed against Tenant, the same is dismissed within one
        hundred twenty (120) days; (c) the appointment of a trustee or receiver
        to take possession of substantially all of Tenant's assets located at
        the Premises or of Tenant's interest in this



                                      -43-
<PAGE>   49

        Lease, where possession is not restored to Tenant within one hundred
        twenty (120) days; or (d) the attachment, execution or other judicial
        seizure of substantially all of Tenant's assets located at the Premises
        or of Tenant's interest in this Lease, where such seizure is not
        discharged within 120 days; or

                The failure by Tenant to open for business to the general public
        within twelve (12) months following Substantial Completion of the
        Premises, subject to Force Majeure, within thirty (30) days following
        notice from Landlord to Tenant of the need for such cure.

                Any notice provided for in this Section 23.1 shall be in
addition to, and not in lieu of, any statutorily required notice regarding
unlawful detainer actions.

Remedies. In the event of any Default, in addition to any other remedies
        available to Landlord at law or in equity, Landlord shall have the
        immediate option to terminate this Lease and all rights of Tenant
        hereunder. In the event that Landlord shall elect to so terminate this
        Lease then Landlord may recover from Tenant:

                the worth at the time of award of any unpaid Rent which had been
        earned at the time of such termination; plus

                the worth at the time of award of the amount by which the unpaid
        Rent which would have been earned after termination until the time of
        award exceeds the amount of such rental loss that Tenant proves could
        have been reasonably avoided; plus

                the worth at the time of award of the amount by which the unpaid
        Monthly Base Rent for the balance of the Term after the time of award
        exceeds the amount of such rental loss that Tenant proves could be
        reasonably avoided.

                As used in Section 23.2(i) and (ii) hereof, the "worth at the
time of award" is computed by allowing interest at the prime, base or reference
rate of The Chase Manhattan Bank of New York, or its successors, from time to
time, charged to its most favored customers on commercial loans having a 90-day
duration (the "PRIME RATE") plus two percent (2%). As used in Section 23.2(iii)
hereof, the "worth at the time of award" is computed by discounting such amount
by the Prime Rate at the time of award. Notwithstanding anything to the contrary
contained in this Lease, neither Landlord nor Tenant shall be liable for
consequential or punitive damages which may be suffered by the other as a result
of a default by Landlord or default by Tenant under this Lease.

Re-entry. In the event of any Default, Landlord shall also have the right,
        without terminating this Lease, to re-enter the Premises and remove all
        persons and property from the Premises; such property may be removed and
        stored in a public warehouse or elsewhere at the cost of and for the
        account of Tenant. No re-entry or taking possession of the Premises by
        Landlord pursuant to this Section 23.3 shall be construed as an election
        to



                                      -44-
<PAGE>   50

        terminate this Lease unless a notice of such intention is given to
        Tenant or unless the termination thereof is decreed by a court of
        competent jurisdiction.

Cumulative Rights. Except as otherwise expressly provided in this Lease, all
        rights, options and remedies of Landlord contained in this Lease shall
        be construed and held to be cumulative, and no one of them shall be
        exclusive of the others, and Landlord shall have the right to pursue any
        one or all of such remedies or any other remedy or relief which may be
        provided by law, whether or not stated in this Lease. No waiver of any
        Default shall be implied from any acceptance by Landlord of any rent or
        other payments due hereunder or any omission by Landlord to take any
        action on account of such Default if such Default persists or is
        repeated, and no express waiver shall affect Defaults other than as
        specified in said waiver.

24.     Assignment and Subletting.

Landlord's Consent. Except as otherwise expressly provided in the last sentence
        of Section 8.1 hereof and in Section 24.3 hereof, Tenant shall not,
        either voluntarily or by operation of law, assign, sublet, pledge,
        encumber, hypothecate or otherwise transfer this Lease, without the
        prior consent of Landlord, which consent may be granted or withheld in
        Landlord's sole and absolute discretion. Without limiting the foregoing,
        it shall be a condition to Landlord's consent hereunder that the
        assignee execute, acknowledge and deliver to Landlord an agreement
        whereby such assignee agrees to be bound by all of the covenants and
        agreements in this Lease which Tenant has agreed to keep, observe or
        perform.

Notice. Subject to the provisions of Article 46 hereof, in the event Tenant
        desires to assign, sublet, pledge, encumber, hypothecate or otherwise
        transfer this Lease, then at least thirty (30) days prior to the date
        when Tenant desires the transaction to be effective (the "ASSIGNMENT
        DATE"), Tenant shall give Landlord a notice (the "ASSIGNMENT NOTICE"),
        which shall set forth the name, address and business of the proposed
        assignee or sublessee, information (including references) concerning the
        character, ownership, and financial condition of the proposed assignee
        or sublessee, the Assignment Date, and any ownership or commercial
        relationship between Tenant and the proposed assignee or sublessee. If
        Landlord requests additional detail within ten (10) days after Tenant's
        initial submission, the Assignment Notice shall not be deemed to have
        been received until Landlord receives such additional detail, and
        without otherwise limiting the provisions of Section 24.1 hereof,
        Landlord may withhold consent to any assignment or sublease until such
        information is provided to it.

Ownership Transfers. Except as otherwise expressly provided in this Section
        24.3, any dissolution, merger, consolidation, or other reorganization of
        the corporation which constitutes Tenant, or the sale or other transfer
        of fifty percent (50%) or more of the corporate stock of the
        corporation, or the sale of fifty percent (50%) or more of the value of
        the assets of the corporation, shall be deemed an assignment prohibited
        by this Article



                                      -45-
<PAGE>   51

        24 unless Landlord's prior written consent is obtained, which consent
        shall not be unreasonably withheld or delayed provided and on condition
        that: (i) the principal purpose for such assignment is not the
        circumventing of the restrictions and limitations contained in this
        Article 24; (ii) Tenant shall notify Landlord, in writing, of any such
        proposed assignment not less than twenty (20) days prior to the date on
        which Tenant proposes to assign its interest in this Lease; (iii) the
        assignee shall be reputable and shall have in the reasonable judgment of
        Landlord, sufficient financial worth to perform the obligations of
        Tenant under this Lease (after consideration of the then net worth of
        each Person providing a guaranty or surety of this Lease to Landlord) as
        evidenced by the submission to Landlord of financial and other
        information regarding the proposed assignee, including, without
        limitation, its business experience, a current financial statement and
        such other information as Landlord may reasonably request; (iv) Tenant
        shall within ten (10) days after an assignment is executed deliver to
        Landlord a copy of such assignment; (v) such assignee shall execute,
        acknowledge and deliver to Landlord an agreement, in form and substance
        reasonably satisfactory to Landlord, whereby such assignee shall assume
        the obligations and performance of this Lease and agree to be personally
        bound by and upon all of the terms and conditions of this Lease on the
        part of Tenant to be performed or observed; (vi) each Person providing a
        guaranty or surety of this Lease to Landlord shall deliver an agreement
        in form and substance reasonably satisfactory to Landlord reaffirming
        such Person's obligations and liabilities under its respective
        agreement, guaranty or surety to Landlord and that such agreement,
        guaranty or surety remains binding and enforceable against such Person
        in accordance with its terms; (vii) the assignee shall use and occupy
        the Premises only for the purposes set forth in this Lease, and for no
        other purposes, in compliance with the terms and conditions of this
        Lease; (viii) neither such assignment nor the acceptance of rent by
        Landlord from such assignee shall, in any way, release, relieve or in
        any manner affect the liability of Tenant under this Lease, it being the
        agreement and understanding of the parties that assignor shall be and
        remain liable under all of the terms and conditions of this Lease; and
        (ix) neither such assignment nor the acceptance of rent by Landlord from
        such assignee shall, in any way, release, relieve or in any manner
        affect the liability of any Person providing a guaranty or surety of
        this Lease to Landlord.

        Notwithstanding anything to the contrary contained herein, the transfer
of shares of Tenant (if Tenant is a corporation) for purposes of this Section 24
shall not include the sale of shares by persons other than those deemed
"insiders" within the meaning of the Securities Exchange Act of 1934, as
amended, which sale is effected through the "over-the-counter market" or through
any recognized stock exchange.

        The term "PERSON" as used in this Lease shall mean any individual,
corporation, partnership, joint venture, limited liability company, limited
liability partnership, association, joint stock company, trust, unincorporated
organization or government or any agency or political subdivision thereof or any
other form of business or legal association or entity, and the term "CONTROL" as
used in this Section 24.3 shall mean the direction of the management and
policies of a person or entity, whether through the ownership of voting
securities, by contract or by law.



                                      -46-
<PAGE>   52

No Release. Any sale, assignment, subletting, hypothecation or transfer of
        this Lease that is not in compliance with the provisions of this Article
        24 shall, at Landlord's option, be void. The consent by Landlord to any
        assignment or sublease shall not be construed as relieving Tenant or any
        assignee of this Lease from any liability or obligation hereunder
        whether or not then accrued. This Article 24 shall be fully applicable
        to all further sales, hypothecations, transfers, assignments and
        sublettings of any portion of the Premises by any successor or assignee
        of Tenant.

25.     Subordination.

        Without the necessity of any additional document being executed by
Tenant for the purpose of effecting a subordination, and at the election of
Landlord or any mortgagee with a lien on the Premises or the Development, or any
portion thereof or any ground lessor with respect to the Premises, this Lease
shall be subject and subordinate at all times to: (i) all ground leases or
underlying leases which may now exist or hereafter be executed affecting the
Premises, (ii) the lien of any mortgage or deed of trust which may now exist or
hereafter be executed in any amount for which the Premises is specified as
security, and (iii) the Condominium Documents (as same may now or hereafter
exist) and (iv) any CC&R (as may now or hereafter exist) that do not materially
increase Tenant's obligations hereunder nor materially decrease Tenant's rights
hereunder nor materially interfere with the conduct of Tenant's normal business
operations (all of the foregoing, collectively the "SENIOR INTERESTS" and the
holders of the Senior Interests shall be referred to as "SENIOR INTEREST
HOLDERS"). Notwithstanding the foregoing, Landlord shall have the right to
subordinate or cause to be subordinated any such ground leases or underlying
leases or any such liens to this Lease. In the event that any ground lease or
underlying lease terminates for any reason or any mortgage or deed of trust is
foreclosed or a conveyance in lieu of foreclosure is made for any reason, Tenant
shall, notwithstanding any subordination, attorn to and become the tenant of the
successor in interest to Landlord. Tenant covenants and agrees to execute and
deliver within fifteen (15) business days after demand by Landlord and in the
form requested by Landlord, any additional documents evidencing the
subordination of this Lease with respect to any such ground leases or underlying
leases, the lien of any such mortgage or deed of trust, the Condominium
Documents or the CC&R, and, effective upon a failure to do so, Tenant hereby
irrevocably appoints Landlord as attorney-in-fact of Tenant to execute, deliver
and record any such document in the name and on behalf of Tenant. In
consideration of, and as a condition precedent to, Tenant's agreement to be
bound by the subordination provisions of this Article 25, Landlord shall provide
to Tenant for Tenant's execution, a commercially reasonable subordination,
attornment and nondisturbance agreement ("NON-DISTURBANCE AGREEMENT"), in
recordable form, that in any event shall not provide for any material increase
in Tenant's obligations nor any material decrease in Tenant's rights under this
Lease and shall be executed by all future ground lessors, mortgage holders and
deed of trust beneficiaries of any of Landlord's interest in the Premises
desiring to subordinate this Lease to the ground lease, mortgage or deed of
trust, as applicable. In the event Landlord fails to obtain any Non-Disturbance
Agreement, then, as to the mortgage, deed of trust or ground lease which would
have been the subject thereof, this Article 25 shall be void and of no force or
effect.



                                      -47-
<PAGE>   53

        Landlord shall deliver contemporaneously with the execution of this
Lease by Landlord the form of non-disturbance agreement annexed hereto as
Exhibit H from Fleet Bank, National Association (the "MORTGAGEE NON-DISTURBANCE
AGREEMENT") and such Mortgagee Non-Disturbance shall be deemed to satisfy the
requirements described in this Article 25. Tenant agrees to execute the
Mortgagee Non-Disturbance Agreement, provided the agreement conforms
substantially to the agreement attached hereto as Exhibit H.

26.     Estoppel Certificate.

Delivery. Within fifteen (15) business days following any request which Landlord
        or Tenant may make from time to time, the other party shall execute and
        deliver to the requesting party a statement certifying: (i) the
        Commencement Date; (ii) the fact that this Lease is unmodified and in
        full force and effect (or, if there has been modification hereto, that
        this Lease is in full force and effect, and stating the date and nature
        of such modification); (iii) the date to which the rental and other sums
        payable under this Lease have been paid; (iv) that to the best of the
        certifying party's knowledge, there is no current default under this
        Lease by either Landlord or Tenant except as specified in the statement;
        and (v) such other matters reasonably requested by the requesting party.
        Landlord and Tenant intend that any statement delivered pursuant to this
        Section 26.1 may be relied upon by any mortgagee, beneficiary, purchaser
        or prospective purchaser of the Premises, the Club or any interest in
        either, and said statement shall so state.

Failure to Deliver. Landlord's or Tenant's failure to deliver any statement
        required pursuant to Section 26.1 hereof within such time shall be
        conclusive upon such failing party (i) that this Lease is in full force
        and effect, without modification except as may be reasonably represented
        in good faith by Landlord or Tenant, (ii) that there is no uncured
        default in Landlord's or Tenant's performance, and (iii) that not more
        than one month's rental has been paid in advance.

Financial Statements. Within thirty (30) days after Landlord's written request,
        Tenant shall furnish to Landlord (i) no more often than once per
        calendar-quarter, the most current existing audited financial statements
        of Tenant (which shall, at a minimum, include a balance sheet and income
        statement), and (ii) if at any time Tenant is not a publicly-traded
        entity or an Affiliate thereof which files consolidated financial
        statements, such other information relating to Tenant's financial
        condition as may be reasonably required by Landlord. Landlord shall at
        all times maintain the confidentiality of the aforementioned financial
        statements which are not available to the general public, except to the
        extent reasonably necessary to (a) comply with applicable laws,
        regulations, court or administrative orders, or to prosecute or defend
        any claim or suit by litigation or otherwise under this Lease and (b)
        provided that the recipients of such information agree in writing to
        hold the same in confidence, (1) carry out the obligations set forth in
        this Lease or documents evidencing and/or securing any Senior Interest,
        (2) obtain legal, financial and/or tax advice from Landlord's attorneys,
        accountants and financial advisors,



                                      -48-
<PAGE>   54

        (3) negotiate or complete a transaction with a lender to Landlord
        secured by Landlord's interest in the Development, the Building or this
        Lease (including, without limitation, a pledge of rents payable
        hereunder) or purchaser of the Building or the Development or (4)
        negotiate or complete a public or private syndication or similar
        offering with respect to this Lease, Landlord, the interests of any of
        the members of Landlord, the Development and/or the Building.

27.     Construction.

        This Lease is to be governed by and construed in accordance with the
internal laws of the State of California. Whenever the context so requires
herein, the neuter gender shall include the masculine and feminine, and the
singular number shall include the plural, and vice versa. This Lease shall be
construed as having been drafted by both parties, jointly, and not in favor of
or against one party or the other. When used herein, the terms "including,"
"include," "including, without limitation," and similar terms shall be construed
as prefacing examples, components or illustrations rather than exhaustive
definitions, unless a contrary intent is specifically stated, such as "including
and expressly limited to," or in similarly unambiguous terms.

28.     Successors and Assigns.

        Except as otherwise provided in this Lease, all of the covenants,
conditions and provisions of this Lease shall be binding upon and shall inure to
the benefit of the parties hereto and their respective successors and assigns.

29.     Surrender of Premises.

        The voluntary or other surrender of this Lease by Tenant, or a mutual
cancellation hereof, shall not work a merger, and shall, at the option of
Landlord, operate as an assignment to it of any or all subleases or
subtenancies. Upon the expiration or earlier termination of this Lease, Tenant
shall surrender the Premises and, subject to the provisions of Article 14
hereof, all alterations and additions thereto, in good order, repair and
condition, reasonable wear and tear excepted.

30.     Attorneys' Fees.

        If Landlord should bring suit for possession of the Premises, or if
Landlord or Tenant should bring suit for the recovery of any sum due under this
Lease or because of the breach of any provisions of this Lease, or for any other
relief against the other hereunder, or in the event of any other litigation
between the parties with respect to this Lease, including any action for
declaratory relief filed by Landlord or Tenant, then the prevailing party shall
be entitled to an award of all costs and expenses, including reasonable
attorneys' fees, in addition to all other relief awarded.

31.     Performance by Landlord.



                                      -49-
<PAGE>   55

        If Tenant shall fail to pay any sum of money owed hereunder, or if
Tenant shall fail to perform any other act on its part to be performed
hereunder, and (except in the event of an emergency) such failure shall continue
beyond the cure periods set forth in Section 23. 1 hereof, Landlord may, without
waiving or releasing Tenant from the obligations of Tenant, but shall not be
obligated to, make any such payment or perform any such other act to be made or
performed by Tenant. All sums so paid by Landlord and all necessary incidental
costs together with interest thereon at the rate of twelve percent (12%) per
annum, from the date of such payment by Landlord, shall be payable to Landlord
upon demand as Additional Rent.

32.     Late Charge and Interest.

        Tenant acknowledges that the late payment by Tenant to Landlord of any
sums due under this Lease will cause Landlord to incur costs not contemplated by
this Lease, the exact amount of such costs being extremely difficult and
impractical to fix. Such costs include processing and accounting charges, and
late charges that may be imposed on Landlord by the terms of any encumbrance or
note secured by any encumbrance covering the Premises. Therefore, if any
installment of Monthly Base Rent or any other sum of money due hereunder is not
timely paid by Tenant and such failure continues for ten (10) days after notice
thereof from Landlord, Tenant shall pay to Landlord, as Additional Rent, the sum
of four percent (4%) of the overdue amount as a late charge; provided, however,
Tenant shall be entitled to such ten (10) day notice and opportunity to cure on
only two (2) occasions during any twelve (12) month period. To the extent
permitted by applicable law, such overdue amount shall also bear interest
commencing upon the due date, as Additional Rent, at the lesser of the maximum
rate than permitted by law and twelve percent (12%) per annum. Landlord's
acceptance of any late charge or interest shall not constitute a waiver of
Tenant's default with respect to the overdue amount or prevent Landlord from
exercising any of the other rights and remedies available to Landlord under this
Lease or any law now or hereafter in effect. Notwithstanding anything to the
contrary contained herein, in no event shall Tenant be required to pay any
amounts that would be characterized as interest under applicable law in excess
of the amounts that could be lawfully charged, collected and received by
Landlord under applicable law. Landlord and Tenant intend to comply with all
usury laws with respect to this Lease.

33.     Mortgagee Protection.

        In the event of any default on the part of Landlord, Tenant will give
notice by registered or certified mail to any beneficiary of a deed of trust or
mortgage given by Landlord covering the Premises whose address shall have been
furnished to Tenant, and shall offer such beneficiary or mortgagee the same
opportunity to cure Landlord's default as provided to Landlord under Article 49
hereof plus an additional period of sixty (60) days. In addition, in those
instances which reasonably require such beneficiary or mortgagee to be in
possession of, or have title to, the Development (or any portion thereof) to
cure any such default, the time herein allowed to such beneficiary or mortgagee
to cure such default shall be deemed extended to include the period of time
reasonably necessary to obtain such possession or title with due diligence, and
in those



                                      -50-
<PAGE>   56

instances in which such beneficiary or mortgagee is prohibited by any process or
injunction issued by any court or by reason of any action by any court having
jurisdiction of any bankruptcy or insolvency proceeding involving Landlord from
commencing or prosecuting foreclosure or other appropriate proceedings in the
nature thereof, the time herein allowed such beneficiary or mortgagee to
prosecute such foreclosure or other proceeding shall be extended for the period
of such prohibition.

34.     Definition of Landlord.

        The term "Landlord," as used in this Lease, so far as covenants or
obligations on the part of Landlord are concerned, shall be limited to mean and
include only the owner or owners, at the time in question, of Landlord's
interest under this Lease. In the event of any transfer, assignment or other
conveyance or transfer of such title, Landlord herein named (and in case of any
subsequent transfer or conveyance, the then grantor) shall (in absence of a
writing hereafter described) be automatically freed and relieved from and after
the date of such transfer, assignment or conveyance of all liability with
respect to the performance of any covenants or obligations on the part of
Landlord contained in this Lease thereafter to be performed, and in absence of
any writing to the contrary, the transferee shall be deemed to have assumed
same. Landlord may transfer its interest in the Premises or this Lease without
the consent of Tenant and such transfer or subsequent transfer shall not be
deemed a violation on Landlord's part of any of the terms or conditions of this
Lease.

35.     Waiver.

        A waiver of any breach of any term, covenant or condition herein
contained shall not be deemed to be a waiver of any subsequent breach of the
same or any other term, covenant or condition herein contained, nor shall any
custom or practice which may grow up between the parties in the administration
of the terms hereof be deemed a waiver of or in any way affect the right of
Landlord or Tenant to insist upon the performance by Tenant or Landlord,
respectively, in strict accordance with said terms. The subsequent acceptance of
rent hereunder by Landlord shall not be deemed to be a waiver of any preceding
breach by Tenant of any term, covenant or condition of this Lease, other than
the failure of Tenant to pay the particular rent so accepted, regardless of
Landlord's knowledge of such preceding breach at the time of acceptance of such
rent. No acceptance by Landlord of a lesser sum than the Monthly Base Rent and
Additional Rent then due shall be deemed to be other than on account of the
earliest installment of such rent, and Landlord may accept such check or payment
without prejudice to Landlord's right to recover the balance of such installment
or other amount or pursue any other remedy provided in this Lease.

36.     Parking.

        So long as this Lease remains in full force and effect and Tenant is
operating a Club and facilities related to the operation of such Club in at
least seventy-five percent (75%) of the Premises, Landlord shall make up to one
hundred fifty (150) parking spaces available on a non-



                                      -51-
<PAGE>   57

exclusive basis, with such spaces to be located at the Development or on
adjacent property, in Landlord's discretion, for daily use between 6:00 a.m. (or
such earlier time that the parking garage shall open) and 6:00 p.m. (or such
later time that the parking garage shall close), by Tenant and Tenant's members.
Landlord shall charge Tenant an amount equal to either (i) seventy-five percent
(75%) of the then market rate for such spaces, with the market rate for such
spaces to be based on the market rate for similarly located parking spaces in
the vicinity of the Building (as reasonably determined by Landlord) or (ii) one
hundred fifty dollars ($150) per month per space, at Tenant's option, which
option shall apply to all such parking spaces and shall be made within fifteen
(15) days after request by Landlord and shall be irrevocable. If Tenant elects
option (ii) in the preceding sentence, the one hundred fifty dollars ($150) per
month per space shall be increased each Lease Year by the CPI Increase (as
defined herein); provided, however, that notwithstanding the foregoing, the
maximum CPI Increase for any Lease Year shall be four percent (4%).

        In addition to the foregoing, Tenant and Tenant's members may use in
connection with the Club the parking spaces located at the Development which are
designated as general public parking spaces if and to the extent available on a
"first come, first come" basis. The foregoing shall not be deemed to be a
representation that the aforementioned general public parking spaces shall be
available for use by Tenant and Tenant's members. Landlord shall charge Tenant
an amount equal to the then market rate for such spaces, with the market rate
for such spaces to be based on the market rate for similarly located parking
spaces in the vicinity of the Building (as reasonably determined by Landlord).

        Tenant has advised Landlord that Tenant requires an additional 200
parking spaces on a non-exclusive basis in connection with the operation of the
Club and so long as this Lease remains in full force effect and Tenant is
operating a Club and facilities related to the operation of such Club in at
least seventy-five percent (75%) of the Premises, Landlord shall use
commercially reasonable efforts to secure such additional parking spaces on
adjacent property or on properties in the general vicinity of the Building. The
foregoing shall not be deemed to be a representation that such additional
parking spaces shall be available for use by Tenant and Tenant's members. In the
event Landlord shall obtain any or all of such additional parking spaces,
Landlord shall charge Tenant an amount equal to the market rate in effect for
such spaces, from time to time, (the "FAIR MARKET PARKING RATE"); provided,
however, that with respect to any such parking spaces which are located in a
property controlled by Landlord or an Affiliate of Landlord, Landlord shall
charge Tenant an amount equal to ninety percent (90%) of the Fair Market Parking
Rate for such spaces; and provided, further, that if Landlord shall charge any
other occupant of the Development a rate for any such spaces, whether or not in
a property controlled by Landlord or an Affiliate of Landlord, from time to
time, that shall be less than the rate charged Tenant for such spaces, then the
rate to Tenant shall be equitably adjusted in light of such difference.

        The term "CPI" shall mean the Consumer Price Index for all Urban
Consumers published by the Bureau of Labor Statistics of the United States
Department of Labor for San Francisco - Oakland - San Jose, CA. All Items
(1982-84=100), or a successor or substitute index reasonably



                                      -52-
<PAGE>   58

selected by Landlord appropriately adjusted to reflect a constant base year. In
the event that the CPI ceases to use 1982-84=100 as the basis of calculation, or
if a substantial change is made in the terms or number of items contained in the
CPI, then the CPI shall be adjusted to the figure that would have been arrived
at had the manner of computing the CPI not been altered. In the event such CPI
(or a successor or substitute index) is no longer published, a reliable
governmental or other non-partisan publication evaluating the information
theretofore used in determining the CPI shall be used. No adjustments or
recomputations, retroactive or otherwise, shall be made due to a revision which
may later be made in the first published figure of the CPI for any month.
Whenever any provision hereof provides that an amount shall be adjusted by the
CPI Increase, then such amount shall be multiplied by a fraction, the numerator
of which shall be the CPI for the calendar month immediately preceding the Lease
Year for which the amount is to be determined and the denominator of which shall
be the CPI for the calendar month during which the Commencement Date has
occurred.

37.     CC&R.

        Tenant shall faithfully observe and comply with the Condominium
Documents, and all reasonable and nondiscriminatory rules and regulations
Landlord shall adopt for the Development (as the same may be changed from time
to time) and the CC&R. Landlord shall not be responsible to Tenant for the
violation or nonperformance by any other tenant or occupant of the Development
of the Condominium Documents (if applicable), any of said rules and regulations
or the CC&R. Landlord agrees that future amendments to the CC&R and any such
rules and regulations shall not materially interfere with or interrupt Tenant's
ability to operate a first-class Club in accordance with the terms and
provisions of this Lease and shall not materially increase Tenant's obligations
hereunder nor materially decrease Tenant's rights hereunder, nor be enforced as
to Tenant discriminatorily.

38.     Headings.

        The Article and Section headings of this Lease are not a part of this
Lease and shall have no effect upon the construction or interpretation of any
part hereof.

39.     Examination of Lease.

        Submission of this instrument for examination or signature by Landlord
or Tenant does not constitute a reservation of or option for lease, and it is
not effective as a lease or otherwise until execution by and delivery to both
Landlord and Tenant.

40.     Agency Requirements.

        Landlord has submitted to the Redevelopment Agency of the City and
County of San Francisco (the "AGENCY") in accordance with that certain
Disposition and Development Agreement dated as of July 1,1997, as amended,
between the Agency and Landlord (the "DDA"), (i) the Equal Opportunity Program
(Attachment No. 13 of the DDA) attached hereto as



                                      -53-
<PAGE>   59

Exhibit D and (ii) that certain Jobs Memorandum of Understanding between the
Agency and Landlord attached hereto as Exhibit E (collectively, the
"REQUIREMENTS"). In addition, the DDA requires Landlord to undertake a certain
jobs program with respect to the Development as more particularly described in
Exhibit F attached hereto (the "JOBS PROGRAM," the Jobs Program and the
Requirements are collectively hereinafter referred to as the "AGENCY
REQUIREMENTS"). Tenant covenants and agrees to observe and perform all of the
terms, covenants, conditions, provisions and agreements in the Agency
Requirements (exclusive of item (2) of Section 3 of the DDA) in connection with
the performance of all of Tenant's obligations hereunder, including, without
limitation, the operation of the Premises, and further covenants and agrees not
to do or suffer or permit anything to be done which would result in a breach
under the Agency Requirements.

41.     Prior Agreement; Amendments.

        This Lease, together with the addenda and exhibits attached hereto,
contains all of the agreements of the parties hereto with respect to any matter
covered or mentioned in this Lease, and no prior agreement or understanding
pertaining to any such matter shall be effective for any purpose. No provision
of this Lease may be amended or added to except by an agreement in writing
signed by the parties hereto or their respective successors in interest (subject
to the consent requirement in Article 24 hereof). The parties acknowledge that
all prior agreements, representations and negotiations are deemed superseded by
this Lease to the extent they are not incorporated herein.

42.     Severability.

        Any provision of this Lease which shall prove to be invalid, void or
illegal in no way affects, impairs or invalidates any other provision hereof,
and such other provisions shall remain in full force and effect.

43.     Limitation on Liability.

        It is expressly understood and agreed that any money judgment against
Landlord resulting from any default or other claim arising under this Lease
shall be satisfied only out of Landlord's interest in (i) the Premises, if the
Premises shall then be subject to a condominium form of ownership or (ii) the
Development, if the Premises shall not then be subject to a condominium form of
ownership. No other real, personal or mixed property of Landlord, wherever
situated, shall be subject to levy on any such judgment obtained against
Landlord. If Landlord's interest in the Premises or Development, as applicable,
is insufficient for the payment of such judgment, Tenant shall not institute any
further action, suit, claim or demand, in law or in equity, against Landlord for
or on the account of such deficiency. Tenant hereby waives, to the fullest
extent waivable under law, any right to satisfy said money judgment against
Landlord except from Landlord's interest in the Development or Premises, as
applicable, and except as otherwise provided above.



                                      -54-
<PAGE>   60

44.     Riders.

        Clauses, plats, exhibits, addenda and riders, if any, affixed to this
Lease are a part hereof.

45.     Modification for Lender.

        If, in connection with obtaining construction, interim or permanent
financing for the Premises or the Development, or any part thereof, or consent
of Landlord's existing or potential lenders to the terms of the transactions
contemplated pursuant to this Lease, a lender shall request reasonable
modifications in this Lease as a condition to such financing or the granting of
its consent, Tenant will not unreasonably withhold, delay or defer its consent
thereto, provided that such modifications do not materially increase the
obligations of Tenant hereunder, materially decrease Tenant's rights hereunder
or materially adversely affect the leasehold interest hereby created. If, in
connection with obtaining financing for Tenant's Trade Fixtures subject to and
in accordance with Section 1.2 hereof, tenant's lender shall request reasonable
modifications to this Lease, Landlord agrees to make reasonable nonmaterial
modifications to this Lease and further agrees not to unreasonably withhold,
delay or defer its consent with respect to such modifications provided such
modifications do not decrease the monetary obligations of Tenant hereunder or
materially affect Landlord's rights hereunder; provided, however, that Landlord
shall have no obligation to agree to any such modifications unless such
modifications are approved by the Senior Interest Holders.

46.     Security Agreements/Leasehold Mortgages.

Tenant  covenants and agrees that Tenant shall not encumber or place or permit
        to be placed any mortgages or other encumbrances on the leasehold
        interest granted hereunder and that no security agreement, whether by
        way of conditional bill of sale, chattel mortgage or instrument of
        similar import, shall be placed upon any improvement made by Tenant
        which is affixed to the realty.

In the event that any of the machinery, fixtures, furniture and equipment
        installed by Tenant in the Premises are purchased or acquired by Tenant
        subject to a chattel mortgage, conditional sale agreement or other title
        retention or security agreement, Tenant undertakes and agrees that no
        such chattel mortgage, conditional sale agreement or other title
        retention or security agreement or Uniform Commercial Code ("UCC")
        filing statement shall be permitted to be filed as a lien against the
        Building and real property of which the Premises form a part and to
        cause to be inserted in any of the above described title retention,
        chattel mortgage, security agreements, conditional sale agreement or UCC
        filing statement the following provision:

           "NOTWITHSTANDING ANYTHING TO THE CONTRARY HEREIN, THIS CHATTEL
           MORTGAGE, CONDITIONAL SALE AGREEMENT, TITLE RETENTION AGREEMENT,
           SECURITY AGREEMENT OR UCC FILING STATEMENT SHALL NOT CREATE OR BE
           FILED AS A LIEN AGAINST THE LAND, BUILDING AND



                                      -55-
<PAGE>   61

           IMPROVEMENTS COMPRISING THE REAL PROPERTY IN WHICH THE GOODS,
           MACHINERY, EQUIPMENT, APPLIANCES OR OTHER PERSONAL PROPERTY
           COVERED HEREBY ARE TO BE LOCATED OR INSTALLED."

In addition to any other rights that Landlord may have by reason of
        Tenant's failure to comply herewith, if any such leasehold mortgage or
        other encumbrance, lien or UCC filing statement, based on an agreement
        as above described, is filed as an encumbrance, as applicable, against
        the Building or improvements of which the Premises form a part, the
        Premises and/or any interest thereon, Tenant shall, within thirty (30)
        days following written notice thereof from Landlord, cause such
        leasehold mortgage or other encumbrance, lien or filing statement to be
        removed or discharged at Tenant's own cost and expense, and Tenant's
        failure to do so shall constitute a breach of a material provision of
        this Lease.

47.     Authorizations.

        Each individual executing this Lease on behalf of Landlord or Tenant
represents and warrants that he or she is duly authorized to execute and deliver
this Lease on behalf of Landlord or Tenant, respectively, in accordance with the
provisions of duly adopted corporate resolutions, and that this Lease has been
duly and properly executed and delivered by Landlord or Tenant, respectively.

48.     Signage.

        Tenant agrees that any and all exterior building signs on the Premises
shall be subject to the approval of Landlord (and if applicable the Condominium
Association) with respect to the graphics, materials, color, design, lettering,
language, lighting, specifications and exact location ("SIGNAGE APPROVAL
FACTORS"). All signage shall be of a size not in excess of that permitted by
applicable law and shall otherwise comply with applicable laws, regulations,
permits, approvals, ordinances, the Condominium Documents and CC&R; provided,
however, that no change in the CC&R shall require Tenant to modify its original
(or, if theretofore modified, its then-existing,) exterior signs. At the
expiration or earlier termination of this Lease, Tenant shall, at Tenant's sole
cost and expense, cause all such signage to be removed from the exterior of the
Improvements and shall cause the exterior of the Improvements to be restored to
the condition existing prior to the placement of such signage. If Tenant fails
to remove such signs and restore the exterior of the Improvements by the
expiration or earlier termination of this Lease, then Landlord may perform such
work, and all costs and expenses incurred by Landlord in so performing shall be
reimbursed by Tenant to Landlord within ten (10) days after Tenant's receipt of
an invoice therefor. In addition to the foregoing, at all times Tenant shall be
entitled to erect and maintain, as needed in Tenant's judgment but subject to
Landlord's approval, throughout the Development, appropriate directional signage
with respect to Tenant's parking.

49.     Default by Landlord.



                                      -56-
<PAGE>   62

        Landlord shall not be in default hereunder unless Landlord fails to
perform the obligations required of Landlord within a reasonable time, but in no
event later than thirty (30) days after notice by Tenant to Landlord and to the
holder of any first mortgage or deed of trust covering the Premises whose name
and address have been furnished in writing to Tenant ("NOTICED Lender"),
specifying wherein Landlord has failed to perform such obligation; provided,
however, that if the nature of Landlord's obligation is such that more than
thirty (30) days are required for performance, then Landlord shall not be in
default if Landlord commences performance within such thirty (30) day period and
thereafter diligently prosecutes the same to completion (the "CURE PERIOD"). In
addition, the Noticed Lender shall be entitled to such additional period of time
to cure any such default as is set forth in Section 33 hereof. Notwithstanding
anything in this Lease to the contrary, if access to the Premises is unavailable
as a result of any blockage occurring in the Common Areas that is caused by
Landlord or its agents, Tenant shall have the right to give Landlord and any
Noticed Lender notice of such events (an "ABATEMENT NOTICE"). If the blockage in
the Common Areas which denies access to the Premises has not been repaired
within the Cure Period or such additional period of time for the Noticed Lender
to cure any such default as is set forth in Section 33 hereof (not to exceed
thirty (30) days after the Cure Period), Tenant's obligations to pay Monthly
Base Rent and Common Area Expenses (or if applicable, Operating Expenses) shall
be abated for the period after the Abatement Notice until the cure of the
condition giving rise to such notice for the entire amount of Monthly Base Rent
and Common Area Expenses (or if applicable, Operating Expenses), provided (i)
the condition giving rise to such abatement right is a denial of access to the
Premises due to a blockage of the Common Areas that is caused by Landlord or its
agents and (ii) Tenant is actually unable to and actually does not use any of
the Premises for the conduct of its business. In the event that for a period of
ninety (90) consecutive days following the Abatement Notice, the condition
giving rise to such notice has not been cured and Tenant has not conducted its
business from the Premises during such ninety ( 90) day period, Tenant shall
have the right to deliver an additional notice (a "TERMINATION NOTICE") to
Landlord and the Noticed Lender specifying that such item has not been cured
within such period and if such condition is not then cured within thirty (30)
business days after the Termination Notice, Tenant may terminate this Lease by
giving notice thereof to Landlord and the Noticed Lender prior to the date upon
which such condition is cured. The foregoing rights and remedies are in addition
to all other rights and remedies available to Tenant at law or in equity. Except
as provided in this Article 49, Tenant shall not have the right to terminate
this Lease as a result of Landlord's default hereunder. Landlord's liability
hereunder in the event of a default shall be limited as set forth in Article 43
hereof. Notwithstanding anything to the contrary contained herein, if the
blockage occurring in the Common Areas is the result of a fire or other casualty
or a taking in eminent domain, then this Article 49 shall be inapplicable and
Articles 21 and 22 hereof shall govern the rights of the parties.

50.     Reasonable Consents.

        Except for any matter which has a material impact on the exterior
appearance of the Improvements or except as otherwise provided herein, any time
the consent, approval, determination, designation, or other discretionary
judgment is required of Landlord or Tenant



                                      -57-
<PAGE>   63

under this Lease, such consent, approval, determination, designation, or other
discretionary judgment shall not be unreasonably delayed, withheld, conditioned,
exercised or decided, notwithstanding the presence in some instances of words to
that effect and their absence in other instances.


51.     No Recording.

        It is expressly agreed that Tenant may not and shall not record this
Lease or any memorandum hereof, except as otherwise expressly provided in this
Lease. Tenant and Landlord shall execute and deliver a statutory form of
memorandum of this Lease for the purpose of recording, but said memorandum of
this Lease shall not in any circumstances be deemed to modify or to change any
of the provisions of this Lease. Upon the expiration or sooner termination of
this Lease, Tenant covenants that it will, at the request of Landlord, execute,
acknowledge and deliver an instrument canceling any memorandum of lease which is
recorded and all other documentation to record same.

52.     Force Majeure.

        The occurrence of any of the following events shall be referred to
herein as "FORCE MAJEURE" and shall excuse such obligations of Landlord or
Tenant as are thereby rendered impossible or reasonably impracticable for so
long as such event continues: strikes; lockouts; labor disputes; acts of God;
inability to obtain labor, materials or reasonable substitutes therefor;
governmental restrictions, regulations or controls; judicial orders; enemy or
hostile governmental action; civil commotion; fire or other casualty; and other
causes beyond the reasonable control of the party obligated to perform
(excluding financial inability). Notwithstanding the foregoing, the occurrence
of such events shall not excuse Tenant's obligations to pay Monthly Base Rent,
Common Area Expenses or any other sums hereunder (but may delay the commencement
of such obligations to the limited extent expressly provided for in Section 2.1
hereof) or excuse such obligations as this Lease may otherwise impose on the
party to obey, remedy or avoid such event.

53.     Guaranty.

        Currently with the execution hereof by Tenant and as a condition to the
effectiveness of this Lease, Tenant shall cause The Sports Club Company to
execute and deliver to Landlord a guaranty of this Lease in the form and
substance set forth in Exhibit G attached hereto which is acceptable to
Landlord.



                                      -58-
<PAGE>   64

54.     Condition Precedent.

        Landlord and Tenant shall each have the right to terminate this Lease on
thirty (30) days' written notice to the other party (without penalty) if
Landlord shall not have closed upon additional financing for the construction of
the Improvements and other portions of the Development (all such approvals and
terms to be acceptable to Landlord in its sole and absolute discretion) not
later than December 31, 1998 ("DEADLINE DATE"). In the event that Tenant shall
serve a termination notice pursuant to this Article 54 and Landlord shall secure
the necessary financing within the aforesaid thirty (30) day period or Landlord
shall fund the Improvements and construction without the required financing (it
being expressly agreed that Landlord shall have no obligation whatsoever to do
so), then Tenant's termination notice shall be of no force and effect. In the
event Landlord or Tenant shall terminate this Lease, as aforesaid, neither party
shall have any further rights or obligations hereunder.

55.     Communication Equipment and Antenna.

        In the event Landlord shall make a communications antenna or satellite
dish located on the roof of the Building (generically, the "ANTENNA") available
for the non-exclusive and general use of the tenants and occupants of the
Building, then, in such event, Tenant may use the antenna in connection with the
conduct of Tenant's normal business operations in the Premises provided and on
condition that: (a) Tenant's use of the antenna shall be subject to Landlord's
reasonable approval, (b) Tenant shall pay to Landlord the monthly Building
charge for the use of the antenna as established by Landlord from time to time
within thirty (30) days after receipt of an invoice with respect thereto, (c)
Tenant shall, at its sole cost and expense, install all necessary lines, risers,
conduits and cables from the antenna to the Premises required for Tenant's use
thereof (collectively, the "TENANT INSTALLATION"), (d) the Tenant Installation
is performed in accordance with all legal requirements and in compliance with
the terms and conditions of this Lease; (e) Tenant shall indemnify and hold
Landlord harmless from any liability, cost or expense (including reasonable
attorneys' fees and disbursements) connected with or arising from the Tenant
Installation of any nature whatsoever, unless such liability, cost or expense
results solely from the acts or omissions of Landlord, or its agents, servants
or employees; (f) Tenant shall promptly repair any damage caused to the roof of
the Building or any other portion of the Building by reason of the Tenant
Installation including, without limitation, any repairs, restorations,
maintenance, renewals or replacement of the roof of the Building necessitated by
or in any way caused by or relating to the Tenant Installation; and (g) Tenant
shall remove the Tenant Installation and repair any resulting damage to the
Building and restore the portion of the roof of the Building and the Building
affected by the Tenant Installation to the condition which existed prior to the
Tenant Installation, reasonable wear and tear and damage by casualty excepted,
all at or prior to the expiration of the term of this Lease, at Tenant's sole
cost and expense.

        The antenna is for the sole use of Tenant in the conduct of Tenant's
business and for no other purpose or by any other parties. Tenant shall not
resell in any form the use, or rights to the use, of the antenna including the
granting of any license or other rights. The rights granted in this Article 55
are given in connection with, and as part of the rights created under, this
Lease



                                      -59-
<PAGE>   65

and are not separately transferable or assignable other than in connection with
an assignment or subletting permitted by this Lease.



                                      -60-
<PAGE>   66

        IN WITNESS WHEREOF, the parties have executed this Lease as of the date
first above written.

LANDLORD:      CB-1 ENTERTAINMENT PARTNERS LP,
                    a California limited partnership

                    By: CB-1 Office Partners LP, a California limited
                        partnership, its general partner

                        By: Millennium/WDG Office Partners LLC,
                            a California limited liability company,
                            its general partner

                            By: Millennium Partners LLC,
                                a New York limited liability company,
                                its managing member

                                By: Millennium Partners Management LLC,
                                    a New York limited liability company,
                                    its managing member

                                    By: Millennium Manger I, Inc.,
                                        a New York corporation,
                                        its managing member


                                        By: /s/ Brian Collins
                                            -------------------------------
                                            Name:   Brian Collins
                                            Title: Vice President



TENANT: S.F. SPORTS CLUB, INC.

        By: /s/ John M. Gibbons
            ---------------------------------------------------------------
            Name:   John M. Gibbons
            Title:  President



                                      -61-