Document:

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                                      10.70

             ASSET PURCHASE AGREEMENT DATED AS OF JANUARY 25, 2002,
              BY AND BETWEEN SCC NEVEADA, INC. AND LSI-NEVADA, LLC

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                            ASSET PURCHASE AGREEMENT

                                   dated as of

                                January 25, 2002,

                                 by and between

                                SCC NEVADA, INC.

                                       and

                                 LSI-NEVADA, LLC

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                            ASSET PURCHASE AGREEMENT

        THIS ASSET PURCHASE AGREEMENT (this "AGREEMENT") is dated as of January
25, 2002, by and between LSI-Nevada, LLC., a California Limited Liability
Company ("BUYER"), and SCC Nevada, Inc., a Nevada corporation formerly known as
The Green Valley Spectrum Club, Inc. ("SELLER"). Capitalized terms used without
definition are defined in Article 11. The parties agree as follows:

                                   BACKGROUND

        A.   Seller owns the assets described in this Agreement; and

        B.   Seller desires to sell, and Buyer desires to buy, those assets,
             on the terms and conditions described below.

                                   ARTICLE 1.
                           PURCHASE AND SALE OF ASSETS

        1.1 TRANSFER OF ASSETS. Subject to the terms and conditions of this
Agreement, on the Closing Date, Seller will sell, transfer, assign and deliver
to Buyer, and Buyer will purchase from Seller, all of Seller's right, title and
interest in and to all of Seller's assets and rights, whether tangible or
intangible, used in or related to the operation of the health and fitness club
commonly known as The Sports Club/LA - Las Vegas and located at 2100 Olympic
Boulevard, Henderson, Nevada (the "LAS VEGAS CLUB") or necessary for such
operations as presently conducted, except the Excluded Assets (the "ASSETS").
The Assets include the following:

               1.1.1 PERSONAL PROPERTY.

               (a) All furniture, fixtures, equipment and other personal
property not included in Inventory (the "EQUIPMENT"), including those items of
furniture, fixtures and equipment located at the Las Vegas Club as of December
31, 2001 and listed on SCHEDULE 1.1.1(a);

               (b) All inventory, including those items of inventory located at
the Las Vegas Club as of December 31, 2001 and listed on SCHEDULE 1.1.1(b)
(collectively, the "INVENTORY").

               1.1.2 PREPAID DUES. All prepaid dues paid by any Member to Seller
before the Closing Date if and to the extent that the same relate to any period
after the Closing Date.

               1.1.3 PRESALES. All of the funds received by Seller for any
pre-sold services or merchandise, including personal training services, massage
therapy services and any similar services (other than any initiation fees and
any prepaid dues paid by any Member to Seller before the Closing Date if and to
the extent such dues relate to any period on or before the Closing Date) that
have not been provided by Seller to the purchasing parties as of the Closing
Date. A list of such presold services and merchandise, and the prices prepaid
for the same, as of December 31, 2001 is set forth on SCHEDULE 1.1.3.

               1.1.4 PROSPECT MATERIALS. All of Seller's sales data and
information, customer lists, supplier lists, mailing lists, all past membership
agreements in Seller's possession, Membership Agreements, sales leads, and other
prospect material.

               1.1.5 BOOKS AND RECORDS. All books and records, files, membership
lists, documents, papers and agreements (including those contained in
computerized storage media) pertaining to the Assets or the Assumed Liabilities.

               1.1.6 MISCELLANEOUS CONTRACTS. All rights of Seller under any
construction warranties and those service contracts and other contracts listed
on SCHEDULE 1.1.6.

               1.1.7 MEMBERSHIP AGREEMENTS. All rights of Seller under all
Membership Agreements, including renewals, monthly membership fees, receivables
and other rights relating to the Membership Agreements.

               1.1.8 TELEPHONE NUMBERS. All local telephone numbers associated
with the Las Vegas Club.

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               1.1.9 INSURANCE. All insurance proceeds from any insurance
provider for any Asset that is destroyed or damaged after the date of this
Agreement and before the Closing, or any replacement property or asset acquired
for such destroyed or damaged Asset.

               1.1.10 PERMITS. All transferable Permits and equivalent
documents.

               1.1.11 REAL PROPERTY. All real property, improvements thereon,
appurtenances thereto, rights in connection therewith and interest therein owned
by Seller described in the PTR (the "REAL PROPERTY").

               1.1.12 All real property leases, concession agreements or other
occupancy agreements of Seller described in SCHEDULE 1.1.12 (the "REAL PROPERTY
LEASES"), if any.

               1.1.13 FUTURE ASSETS. All Assets, rights and properties of the
type described in this Section 1.1 that Seller acquires between the date of this
Agreement and the Closing Date, but excluding merchandise held for resale that
is sold after the date of this Agreement in the ordinary course of business.

               1.1.14 INTANGIBLE ASSETS. Any other intangible property now owned
by Seller or acquired by Seller between the date hereof and Closing Date, and
used at the Las Vegas Club in the use or operation of the Las Vegas Club
(including, without limitation, all databases containing membership lists of the
Business, client customers and supplier lists, telephone numbers, and those
records, plans, specifications, building permits, certificates of occupancy,
guarantees, indemnities and warranties used at the Las Vegas Club together with
all transferable consents, authorizations, variances, waivers, licenses but
excluding the "Excluded Assets.") All such items are collectively referenced as
the "Intangible Property." Purchaser acknowledges that Seller's proprietary
software is not included in the sale; however, Purchaser shall be allowed to use
at the Business Seller's proprietary software for billing and administration for
a period of 60 days.

        1.2 ASSETS NOT TRANSFERRED. The following assets, rights and properties
of Seller will be retained by Seller (the "EXCLUDED ASSETS").

               1.2.1 REFUND CLAIMS. Rights to or claims for refunds of taxes and
other governmental charges for periods ending before the Closing Date and the
benefit of net operating loss carry-forwards or other tax credits of Seller. Any
refunds or other tax credit for periods beginning before the Closing Date and
ending after the Closing date will be allocated to Seller and Buyer pro-rata.

               1.2.2 CASH AND CASH EQUIVALENTS. All cash on hand and cash
equivalents as of the Closing Date (including bank accounts and temporary cash
investments but excluding from the Excluded Assets any prepaid membership dues
or funds received by Seller or any pre-sold services or merchandise if and to
the extent that such dues or funds relate to, respectively, any period from and
after the Closing Date or to any services or merchandise that have not yet been
provided by Seller to the purchasing parties as of the Closing Date).

               1.2.3 INITIATION FEES AND PREPAID DUES. All initiation fees and
prepaid dues paid by any Member to Seller before the Closing Date but, in the
case of prepaid dues, only if and to the extent that the same relate to any
period before the Closing Date.

               1.2.4 ACCOUNTS RECEIVABLE. All accounts receivable, notes
receivable, balances due, including balances due under Membership Agreements and
other contracts, a list of which as of December 31, 2001 is set forth in
SCHEDULE 1.2.4.

               1.2.5 SELLER'S INTELLECTUAL PROPERTY. Except as set forth in
Section 6.4, all of Seller's intellectual property, including, without
limitation, any and all trademarks or service marks, trade names, slogans or
other like property that includes the name "Sports Club/Las Vegas".

               1.2.6 DEPOSITS. All deposits, including those utility and
security deposits set forth on SCHEDULE 1.2.6.

               1.2.7 EXCLUDED CONTRACTS. The obligations of Seller under and
pursuant to those contracts set forth on SCHEDULE 1.2.7.

               1.2.8 MISCELLANEOUS ASSETS. Assets used by Seller or its
Affiliates in whole or in part in businesses of Seller or its Affiliates other
than the Las Vegas Club (including, without limitation, all training material
and operations protocols), all nontransferable Permits and assets

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relating to Seller's corporate functions (including the corporate charter,
taxpayer and other identification numbers, income tax records, seals, minute
books and stock transfer books), proprietary computer software, the Inventory of
Seller's proprietary vitamins and nutritional products or supplements and any
related display cabinets specially designed for such products or supplements,
and any Inventory bearing any trademark or tradename of Seller.

        1.3 ASSUMPTION OF CERTAIN LIABILITIES. On the Closing Date, Buyer will
assume the following, and only the following, liabilities and obligations of
Seller (the "ASSUMED LIABILITIES"):

               1.3.1 MEMBERSHIP AGREEMENTS. Seller's obligation to honor and
service the Membership Agreements, including, without limitation, any obligation
to pay a refund to any Member after the Closing Date; provided, however, that
Seller hereby represents and warrants that, to Seller's Knowledge, it is not
obligated to pay any Member refunds as of the Closing Date other than those set
forth on SCHEDULE 1.3.1.

               1.3.2 LIABILITIES UNDER REAL PROPERTY LEASES, PERMITS AND
LICENSES. Seller's obligations under the Real Property Leases and any of the
permits or licenses assigned to Buyer at the Closing.

               1.3.3 ASSUMED CONTRACTS . Seller's obligations under those
contracts listed in SCHEDULE 1.3.3 (the "Assumed Contracts").

               1.3.4 BARTER, RECIPROCITY OR TRADE OUT AGREEMENTS. Seller's
obligations under those barter arrangements, reciprocity agreements and trade
out agreements, listed on SCHEDULE 1.3.4.

        1.4 NON-ASSUMPTION OF LIABILITIES. Buyer is not assuming any liability
or obligation of Seller or any Affiliate of Seller, of any kind, whether
absolute, contingent, accrued or otherwise, known or unknown, and whether
arising before or after the Closing Date that is not expressly set forth in this
Agreement, including: (a) liabilities for Taxes for any period or portion
thereof ending before the Closing Date; (b) liabilities (including any
liabilities resulting from unfunded contributions under any employee benefit
plan subject to ERISA) for any pension, profit-sharing or welfare benefit plans
or arrangement, oral or written, maintained by Seller or its Affiliates; (c)
liabilities with respect to any Actions for which Buyer is indemnified pursuant
to Section 9.1; or (d) liabilities of Seller to any of its Affiliates.

                                   ARTICLE 2.
                             PURCHASE PRICE/CLOSING

        2.1 PURCHASE PRICE. Subject to the terms and conditions of this
Agreement, Buyer agrees to acquire the Assets from Seller, to assume the Assumed
Liabilities from Seller and to pay $6,325,000 (the "PURCHASE PRICE") to Seller,
all at the Closing.

        2.2 DEPOSIT. Upon execution hereof, Buyer shall pay, or cause to be
paid, a total of $250,000 to Seller (the "DEPOSIT"). The Deposit shall not earn
interest, except as set forth herein, and shall be credited against the Purchase
Price. If the Closing shall fail to occur because of the breach of Buyer under
this Agreement, then Seller shall be entitled to retain the Deposit, as
liquidated damages and not as a penalty and as Seller's sole remedy; provided,
however, that (a) if Seller shall be the prevailing party in any litigation
brought by Buyer regarding Seller's retention of the Deposit as liquidated
damages, then Seller shall further be entitled to its reasonable attorneys fees
and costs, including costs of collection and appeal, and (b) this Section 2.2
shall not limit Buyer's obligations under Section 9.2(b). However, if Closing
shall fail to occur for any reason other than Buyer's breach, then Seller shall
return the Deposit promptly to Buyer upon Buyer's request therefor at any time
after the scheduled date for Closing, or on such sooner date as this transaction
is cancelled by Buyer and Seller. If the Deposit is required to be returned to
Buyer in accordance with the terms of this Agreement, and is not returned within
five business days of the date requested, then Seller shall pay interest on the
Deposit at the rate of Ten Percent per annum, compounded monthly. THE PARTIES
AGREE THAT THEY HAVE NEGOTIATED WITH REGARD TO THE DETERMINATION OF DAMAGES AND
HAVE CONCLUDED THAT, IF CLOSING FAILS TO OCCUR BECAUSE OF THE BREACH OF BUYER
UNDER THIS AGREEMENT, THEN IT WOULD BE IMPRACTICABLE OR EXTREMELY DIFFICULT TO
DETERMINE THE SELLER'S DAMAGES, THAT THE AMOUNT OF THE DEPOSIT IS A REASONABLE
ESTIMATE OF THE DAMAGES IN SUCH EVENT, AND THAT THE SELLER, AS ITS SOLE REMEDY
AND NOT AS A PENALTY, SHALL BE ENTITLED TO RETAIN THE DEPOSIT AS LIQUIDATED
DAMAGES. THE PARTIES HEREBY ACKNOWLEDGE THAT THEY ARE IN EQUAL BARGAINING
POSITIONS, ARE SOPHISTICATED IN BUSINESS MATTERS AND WERE

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REPRESENTED BY COUNSEL AT ALL TIMES DURING THE NEGOTIATION OF THIS LIQUIDATED
DAMAGES PROVISION.

     /s/ Patrick J. O'Brien                   /s/ Rex A. Licklider
---------------------------------        -------------------------------
             Buyer                                   Seller

        2.3    DELIVERIES INTO ESCROW.

               2.3.1 On or before the Closing Date, Seller, shall deposit the
following items (collectively, the "SELLER DELIVERY ITEMS") into the Escrow:

               (a) An executed and notarized original of the Deed (sent by
Seller directly to Lawyer's Title Company in Nevada for recording upon Closing).

               (b) A certificate of Seller, dated the Closing Date and sworn to
under penalty of perjury, setting forth the name, address and federal tax
identification number of Seller and stating that Seller is not a "foreign
person" within the meaning of Section 1445 of the Code, such certificate to be
in the form set forth in the Treasury Regulations; provided, however, that the
timely deposit of such FIRPTA certificate into the Escrow shall not be a
condition precedent to Closing but instead shall only result in the Deposit
Holder making such withholding and payment from the Purchase Price otherwise
payable at Closing to Seller as may be required by law for such failure (sent by
Seller directly to Lawyer's Title Company in Nevada).

               2.3.2 On or before the Closing Date, Buyer shall deposit the
following items (collectively, the "BUYER DELIVERY ITEMS") into Escrow:

               (a) The Purchase Price (less the Deposit) plus such other monies
as may be required to pay Buyer's costs to be paid through the Escrow, including
the payment referenced in Section 2.6.2(f).

               2.3.3 On or before the Closing Date, Seller and Buyer shall
deposit the following items (collectively, the "JOINT DELIVERY ITEMS") into the
Escrow:

               (a) Four fully executed originals of the Contract Assignment.

               (b) Four fully executed originals of the Lease Assignment.

               (c) Four fully executed originals of the Bill of Sale.

The Seller Delivery Items, the Buyer Delivery Items and the Joint Delivery Items
are referred to, collectively, as the "DELIVERY ITEMS".

        2.4 HANDLING OF FUNDS. Purchaser and Seller agree that all sums
deposited by Buyer pursuant hereto into the Escrow shall be invested in treasury
bills, certificates of deposit, short term money market instruments or bank
repurchase contracts in such manner as to make all such sums (and the interest
earned thereon) available on the date for Closing. Buyer and Seller hereby
instruct Deposit Holder to so invest such sums and to return to Buyer, upon
Closing, all sums in excess of those needed to satisfy Buyer's obligations
hereunder to Seller. Interest earned thereon shall be for the account of Buyer,
and Buyer shall provide Deposit Holder with Buyer's taxpayer identification
number for use in opening the Escrow. Any funds to be delivered hereunder shall
be immediately available federal funds wire transferred. It shall be Buyer's
responsibility to obtain adequate wiring instructions for the Escrow.

        2.5 THE CLOSING. The Closing will take place at the offices of Deposit
Holder on January 31, 2002 or on any earlier date designated by Buyer upon no
less than five days prior notice (the "CLOSING DATE"); it being agreed that
Buyer and Seller shall each use all commercially reasonable efforts to close
escrow before January 31, 2002. When all conditions precedent to Closing set
forth in Article 7 shall have been satisfied, or Deposit Holder shall have
received written instruction from the party or parties, or their respective
counsel, for whose benefit any such unsatisfied conditions precedent exist
waiving the satisfaction of such conditions precedent, and when each of the
parties hereto shall have otherwise instructed Deposit Holder to proceed with
the Closing, then Deposit Holder shall take the following actions in the
following order:

               2.5.1 Disburse the Purchase Price, net of all proration debits
and credits, but subject to Sections 2.7.7 and 2.7.8 and after crediting the
Deposit thereto, to Seller in accordance with Seller's instructions.

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               2.5.2 Deliver two fully executed original copies of each of the
Contract Assignment, Lease Assignment and Bill of Sale to Seller.

               2.5.3 Deliver two fully executed original copies of each of the
Contract Assignment and Bill of Sale and one fully executed original of the
Lease Assignment to Buyer.

               2.5.4 Record the Lease Assignment and the Deed, and deliver
conformed copies of the duly recorded Lease Assignment and the Deed to each of
Seller and Buyer.

        2.6    COSTS.

               2.6.1  SELLER COSTS. Seller shall pay the following:

               (a) Costs of obtaining the Title Policy (but without regard to
the incremental premium costs of obtaining an ALTA policy of title insurance,
rather than a CLTA policy, and the costs of all endorsements thereto).

               (b) One-half of all fees and costs of Deposit Holder.

               (c) Subject to Section 2.6.2(c), all recording fees and charges,
intangible taxes and similar costs, relating to the transfer of the Assets
pursuant hereto.

               (d) All documentary transfer taxes and fees, real property
transfer or gains taxes and governmental transfer fees, if any, payable in
connection with the Transaction.

               (e) Subject to the provisions of Section 2.6.2(f), Article 9 and
Section 10.7, Seller's own Transaction Costs and all Transaction Costs
(including all legal fees and expenses payable to Seller's counsel) that have
been incurred or that are in the future incurred by, on behalf of or for the
benefit of, the Seller (the "SELLER TRANSACTION COSTS").

               2.6.2  BUYER COSTS. Buyer shall pay the following:

               (a) With respect to the Title Policy, the incremental costs of
obtaining an ALTA policy of title insurance, rather than a CLTA policy, and the
incremental costs of obtaining all endorsements thereto. Buyer shall also pay
any costs associated with any lender's policy and the costs of any survey
obtained by or on behalf of Buyer.

               (b) One-half of all fees and costs of Deposit Holder.

               (c) All recording fees for the Deed and the Assignment of Leases.

               (d) All sales, use and similar taxes, if any, payable in
connection with the Transaction.

               (e) Subject to the provisions of Article 9 and Section 10.7,
Buyer's own Transaction Costs and all Transaction Costs (including all legal
fees and expenses payable to Buyer's counsel) that have been incurred or that
are in the future incurred by, or on behalf of or for the benefit of, Buyer (the
"BUYER TRANSACTION COSTS").

               (f) Two Hundred Fifty Thousand Dollars ($250,000) to Seller's
legal counsel, Resch Polster Alpert & Berger LLP ("RPAB"), 10390 Santa Monica
Blvd., 4th Floor, Los Angeles, CA 90025, to be disbursed by the Deposit Holder
to RPAB at Closing in accordance with such instructions as RPAB shall give to
the Deposit Holder at such time.

               2.6.3 PURCHASE PRICE ALLOCATION. On or prior to the Closing Date,
Buyer and Seller shall agree on an allocation of the Purchase Price and Assumed
Liabilities (which liabilities shall be treated as an additional amount paid by
Purchaser to Seller) among the Assets (the "ALLOCATION STATEMENT"). The
allocation set forth in the Allocation Statement will conform to the
requirements of the Treasury Regulations under Section 1060 of the Code. The
parties agree to report (on Form 8594 and otherwise) the allocation of the
Purchase Price and Seller liabilities in a manner consistent with the Allocation
Statement. The allocation prescribed by the Allocation Statement shall be
conclusive and binding upon each party for all purposes. No party shall file any
tax return or other document with, or make any statement or declaration to, any
governmental body if such document, statement or declaration is inconsistent
with the allocation prescribed by the Allocation Statement

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        2.7    PRORATIONS.

               2.7.1 Seller will be responsible for preparing and filing sales
and use tax returns, and Buyer will pay all sales and use tax due, relating to
or regarding the transfer of the Assets.

               2.7.2 Except as otherwise hereinafter provided, at and as of
Closing, Buyer and Seller shall prorate in cash (i) real property taxes and
assessments for the Assets on the basis of the current fiscal year if and to the
extent that Seller shall be liable for real property taxes and assessments under
the Real Property Leases, (ii) if and to the extent actually paid, rents under
the Real Property Leases, (iii) utility and sewer charges, (iv) payments under
the Assumed Contracts, (v) operating expenses, and (vi) other items customarily
prorated in transactions of this sort. Seller shall give Buyer a credit at
Closing in the amount of any deposits under any of the Real Property Leases and
shall maintain in place all utilities and other deposits for the benefit of the
Buyer; provided that Buyer shall reimburse Seller for any such deposits by means
of a credit to Seller, with an offsetting debit to Buyer, in the calculation of
the closing prorations. Rents under the Real Property Leases paid after Closing
shall be prorated as of Closing.

               2.7.3 No pro ration shall be made for insurance premiums on
insurance policies of Seller (none of which Buyer elects to accept and none of
which Seller elects to assign), for management fees or for employee salaries,
vacations, benefits, bonuses, payroll taxes or other employee costs.

               2.7.4 At and as of the Closing Date, Buyer and the Seller shall
proportionately allocate, if and to the extent actually paid, all prepaid items
of income, including without limitation monthly dues, dues that have been paid
more than one month in advance and gift certificates. Notwithstanding anything
to the contrary contained herein, there shall be no proportionate allocation of
initiation fees paid and collected in the ordinary course of business or
accounts receivable. Membership dues and prepayments collected by Buyer or
Seller, as applicable, following the Closing Date from any Member as to whom
Seller has an account receivable shall be applied (i) first to such accounts
receivable due Seller as of the Closing Date for any periods prior the Closing
Date, and (ii) next to Buyer. Any membership dues collected by Buyer from and
after the Closing shall be held in trust for the account of Seller and shall be
remitted to Seller promptly following 90 days after the Closing Date minus any
amounts owed to the Buyer as set forth herein together with an accounting of
such membership dues in reasonable detail satisfactory to Buyer. Any membership
dues collected by Seller from and after the Closing that are owed to Buyer as
set forth herein shall be held in trust for the account of Buyer and shall be
promptly remitted to Buyer promptly following 90 days after the Closing Date
together with an accounting of such membership dues in reasonable detail
satisfactory to Buyer.

               2.7.5 For a period of ninety (90) days following the Closing,
Buyer agrees that Buyer shall, in accordance with Buyer's standard practice in
conducting and operating clubs such as the Club and on behalf of Seller, attempt
to collect any monthly dues under the Member Agreements which are attributable
to the period prior to the Closing; provided, however, Buyer shall have no
obligation to commence any actions or proceedings or take any further action to
collect any such compensation, fees, revenues or income due to Seller hereunder.
After the expiration of such 90 day period, Buyer shall return all accounts to
Seller, which shall be entitled to take any and all lawfully permitted actions
to collect any accounts receivable with respect to any period of time prior to
the Closing, provided that it shall not make any statement or take any action
which implies that Buyer is undertaking said collection activities.

               2.7.6 If real estate taxes and/or assessments, utility charges or
any other item is prorated as of Closing on any basis other than actual amounts
charged for the current period, such item or items shall be re-prorated upon
determination of such actual amounts, and the party owing funds to the other
shall promptly remit such funds to the other; provided, however, that in no
event shall Seller be liable for payment of any increase in real estate taxes if
and to the extent occasioned by any reassessment of the Real Property as a
result of the Transaction. If either party owing funds hereunder to the other
does not remit them within 30 days after demand therefor, such funds shall
thereafter bear interest at the lesser of 10% per annum and the maximum lawful
rate. In all events, the amount of any refund or credit shall be the amount the
refund or credit would have been without giving effect to the Transaction.

               2.7.7 The parties shall cooperate so as to reach a reasonable
determination of the net pro ration amount to be paid to Seller or Buyer, as the
case may be, prior to the Closing; it being agreed, however, that the final
calculation of such net pro ration amount shall, in all likelihood, not be
capable of being concluded until after Closing, in which case Closing shall
occur based on the parties' best estimate of such amount at such time.

<PAGE>

               2.7.8 The parties shall further cooperate so as to calculate such
net final pro ration amount within 75 days of the Closing. Any disagreement with
respect to such final calculation shall be resolved pursuant to binding
arbitration in Los Angeles County, California before an independent accountant
that shall be mutually agreed upon by the parties. Each party shall bear its own
cost and expenses in connection with such arbitration and one-half of the fees
and expenses of the arbitrator. Each party shall be entitled to provide the
arbitrator with such information as each party shall deem appropriate with
respect to the matters to be determined by such arbitrator.

               2.7.9 Final proration of percentage rents, operating expense
reimbursements from tenants under Real Property Leases, and similar
apportionable items which are dependent for their calculation upon the economic
performance of any Person over a specified interval of time shall be
accomplished as follows: The parties shall await the expiration of the specified
interval to determine the gross rents, gross receipts and other economic
performance over the entire interval and then prorate the item by allocating to
Seller the product of the rents or other similar apportionable item for the
entire interval multiplied by a fraction, the numerator of which is the number
of days within the specified interval which occur before Closing and the
denominator of which is the number of days in the entire specified interval.

               2.7.10 Operating expenses which are payable (or reimbursable) but
not yet paid (or reimbursed) by any tenant under any Real Property Lease shall
not be prorated hereunder (except to the extent that Seller is due a credit for
having already paid such expense). Buyer shall send customary statements for
reimbursement of operating expenses and taxes to said tenants after consulting
with Seller with respect to appropriate amounts due therefor, and shall remit to
Seller, upon receipt, Seller's prorated share thereof, determined as provided
above.

                                   ARTICLE 3.
                    REPRESENTATIONS AND WARRANTIES OF SELLER

        Seller represents, warrants and agrees that except as set forth on
Seller's Disclosure Schedule attached as Exhibit A:

        3.1 ORGANIZATION, CORPORATE POWER AND AUTHORITY. Seller is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Nevada. Seller has all requisite corporate power and authority to own,
operate and lease the Assets, to operate the Las Vegas Club, to execute and
deliver the Transaction Documents and to perform its obligations under those
agreements.

        3.2 AUTHORIZATION OF AGREEMENTS. The execution, delivery and performance
by Seller of the Transaction Documents, and the consummation by Seller of the
Transaction, have been duly authorized by all necessary corporate action by
Seller. This Agreement has been, and each other Transaction Document will be at
the Closing, duly executed and delivered by Seller and constitute, or will, when
delivered, constitute, the legal, valid and binding obligations of Seller,
enforceable against Seller in accordance with their respective terms, except as
may be limited by bankruptcy, insolvency, reorganization, moratorium, and other
similar laws and equitable principles relating to or limiting creditors' rights
generally.

        3.3 EFFECT OF AGREEMENT. The execution, delivery and performance by
Seller of the Transaction Documents, and the consummation by Seller of the
Transaction, will not violate the charter documents or bylaws of Seller or, to
Seller's knowledge, (i) violate any Law or Order to which Seller is subject, or
(ii) violate any Material Contract to which Seller is a party or by which Seller
or the Assets are bound, or (iii) conflict with, result in a breach of or
constitute (with due notice or lapse of time or both) a default under any
Material Contract, or (iv) result in the creation or imposition of any Lien upon
any of the Assets.

        3.4 GOVERNMENTAL APPROVALS/PERMITS. To Seller's Knowledge, Seller does
not need any Approval or Order or action of or filing with any Governmental
Entity for the execution and delivery by Seller of the Transaction Documents or
the consummation by Seller of the Transaction; provided, however, that Seller
makes no such representation or warranty with respect to any conditional use
permit or other entitlement for the Las Vegas Club. To Seller's Knowledge,
Seller has received no written notice of any threatened suspension, cancellation
or termination of any Permits required by any Governmental Entity to permit the
Las Vegas Club to be operated the suspension, cancellation or termination of
which could reasonably be expected to have a material adverse effect on the
operations of the Las Vegas Club.

        3.5 MATERIAL CHANGES. To Seller's Knowledge, since September 30, 2001,
whether or not in the ordinary course of business, there has not been, occurred
or arisen any agreement,

<PAGE>

condition, action or omission that would be proscribed by (or require consent
under) Section 5.2 had it existed, occurred or arisen after the date of this
Agreement.

        3.6 CONDITION OF ASSETS. SCHEDULES 1.1.1(a) and 1.1.1(b) each sets forth
a true and complete list, in all material respects, of substantially all of,
respectively, the Equipment and the Inventory. Seller has good and marketable
title to all of the Assets. At Closing, all of the Assets will be free of all
Liens, except for Permitted Exceptions.

        3.7 REAL PROPERTY. To Seller's Knowledge, Seller has received no written
notice of any violation of any Law or Order with respect to the Real Property or
any thereof.

        3.8 REAL PROPERTY LEASES/ASSUMED CONTRACTS. To Seller's Knowledge, no
material uncured default (after the expiration of any applicable notice or cure
period) exists under any of the Real Property Leases or Assumed Contracts the
effect of which could reasonably be expected to have a material adverse effect
upon the operations of the Las Vegas Club.

        3.9 REPORT. SCHEDULE 3.9 sets forth a true and complete copy of the
Report together with a list of Members whose monthly dues are manually billed
and not drafted on EFT and addresses for all Members. Buyer acknowledges that
Seller is only obligated to provide a copy of Schedule 3.9 containing Member
names, addresses and other contact information on the Closing Date.

        3.10 DUE DILIGENCE MATERIALS. To Seller's Knowledge, the copies of the
materials set forth on the attached SCHEDULE 3.10, which copies Seller has
previously provided to Buyer and the receipt of which copies Buyer hereby
acknowledges, are complete and, in the case of copies of contracts between
Seller and any other party, current versions of such contracts. To the actual
knowledge of Timothy O'Brien, the chief financial officer of the parent of
Seller, all financial information of Seller provided to Buyer are, in all
material respects, true and correct as of the date(s) referenced therein.

        3.11 LITIGATION. To Seller's Knowledge, there is no litigation pending,
or threatened in writing, against Seller the effect of which could reasonably be
expected to have a material adverse effect upon the operations of the Las Vegas
Club, as operated on what would otherwise be the Closing Date, if finally
determined adversely to Seller. Seller has listed on the attached SCHEDULE 3.11
all pending or threatened litigation which arises out of the operations of the
Las Vegas Club.

Seller shall have the right to modify, update and supplement all
representations, warranties, exhibits and schedules attached to or delivered in
connection with this Agreement through the Closing Date (any such modification,
update or supplement, a "MODIFICATION"). Notwithstanding the foregoing, if
Seller makes any Modification and if such Modification would be likely to have a
material adverse effect upon the Las Vegas Club and/or its operations, then
Buyer shall have the right to terminate this Agreement by giving a notice to
Seller terminating this Agreement within 5 days of Buyer's receipt of the
Modification. If such 5-day period would expire after the date otherwise
scheduled for Closing, then the scheduled date for Closing shall be extended
accordingly. In the event of any such termination, the Deposit shall be returned
promptly to Buyer, and the parties will have no further obligations to each
other hereunder, except for Buyer's obligation under Section 9.2(b). Buyer's
failure to give any such termination notice to Seller within such 5-day period
shall conclusively be deemed to be Buyer's approval of any such Modification.
From the date hereof until Closing, if Seller learns of any fact or circumstance
which causes, or has a reasonable likelihood of causing, a representation or
warranty of Seller's hereunder to be untrue or misleading, Seller shall notify
Buyer within five days after Seller learns thereof (but in no event later than
Closing).

                                   ARTICLE 4.
                     REPRESENTATIONS AND WARRANTIES OF BUYER

        Buyer represents, warrants and agrees that except as set forth on
Buyer's Disclosure Schedule attached as Exhibit B:

        4.1 ORGANIZATION, CORPORATE POWER AND AUTHORITY. Buyer is a California
Limited Liability Company duly organized, validly existing and in good standing
under the laws of the state in which it is formed and is duly qualified to do
business as a foreign company in the jurisdictions in which Buyer conducts its
business, except where the failure so to qualify will not have a material
adverse effect on Buyer's ability to perform its obligations under the
Transaction Documents. Buyer has all requisite power and authority to acquire,
own, lease and operate the Assets, to operate the Las Vegas Club after the
Closing, to execute and deliver the Transaction

<PAGE>

Documents to which it is a party and to perform its obligations under the
Transaction Documents.

        4.2 AUTHORIZATION OF AGREEMENT. The execution, delivery and performance
by Buyer of the Transaction Documents to which it is a party, and the
consummation by it of the Transactions, have been duly authorized by all
necessary action by Buyer. This Agreement has been, and each other Transaction
Document to which Buyer is a party will be at the Closing, duly executed and
delivered by Buyer and constitute, or will, when delivered, constitute, the
legal, valid and binding obligations of Buyer, enforceable against Buyer in
accordance with their respective terms, except as may be limited by bankruptcy,
insolvency, reorganization, moratorium and other similar laws and equitable
principles relating to or limiting creditors' rights generally.

        4.3 EFFECT OF AGREEMENT. The execution, delivery and performance by
Buyer of the Transaction Documents to which it is a party, and the consummation
by it of the Transactions, will not violate the charter documents of Buyer or,
to Buyer's Knowledge, (i) violate any Law or Order to which Buyer is subject,
(ii) violate any material contract to which Buyer is a party or by which Buyer
or its properties or assets are bound, or (iii) conflict with, result in a
breach of or constitute (with due notice or lapse of time or both) a default
under any material contract, or (iv) result in the creation or imposition of any
Lien upon any of the properties or assets of Buyer, in each instance, except to
the extent the effect thereof will not be materially adverse to Buyer's ability
to fulfill its obligations under the Transaction Documents to which it is a
party.

        4.4 GOVERNMENTAL APPROVALS. To Buyer's Knowledge, no Approval or Order
or action of or filing with any Governmental Entity is required to be obtained
by Buyer for the execution and delivery by Buyer of the Transaction Documents to
which it is a party or the consummation by it of the Transaction.

        4.5 AS IS. All of the Assets are being purchased, and all of the Assumed
Liabilities are being assumed, by Buyer on an "AS IS, WHERE IS" basis with all
faults and without any representation or warranty, express or implied,
whatsoever, other than for those representations and warranties expressly set
forth in this Agreement. Buyer is a sophisticated party experienced in
acquisitions such as the Transaction and in evaluating assets and liabilities
such as the Assets and the Assumed Liabilities. Buyer has conducted, or had the
opportunity to conduct, such due diligence regarding the Transaction and the
Assets (including, without limitation, regarding the entitlements, title,
physical condition, financial results and business prospects for the Las Vegas
Club) as Buyer has deemed appropriate and is satisfied with the results of the
same. Without limiting the generality of the foregoing, Buyer acknowledges and
agrees that the Purchase Price has been reduced, after negotiation between Buyer
and Seller, as a result of Buyer's due diligence.

                                   ARTICLE 5.
                            COVENANTS WITH RESPECT TO
                        CONDUCT OF SELLER BEFORE CLOSING

        5.1 ACCESS. Subject to applicable Law and fiduciary and privacy
obligations and Section 6.2, Seller will authorize and permit Buyer and its
representatives (including its independent accountants, appraisers and counsel)
to have reasonable access during normal business hours, upon reasonable notice
and in such manner as will not unreasonably interfere with the operation of the
Las Vegas Club, to all of Seller's properties, books, records, permits, plans,
membership files, operating instructions and procedures, Tax Returns and all
other information with respect to the Las Vegas Club as Buyer may from time to
time reasonably request, without any representation or warranty as to, subject
to Section 3.10 with respect to financial statements, the accuracy or, subject
to Section 3.10 regarding the materials listed on Schedule 3.10, completeness of
such information, and to make copies of such documents and to discuss the
ownership and operation of the Las Vegas Club with any corporate officer whose
principal office is at Seller's corporate headquarters. Notwithstanding the
provisions of this Section 5.1 but subject to Section 6.2, upon the execution of
this Agreement and payment of the Deposit to Seller, Seller will give Buyer
complete names, addresses, phone numbers, position titles, base compensation,
bonus, commission and any other incentive compensation plans for all employees
and independent contractors at the Las Vegas Club and allow Seller access to
such employees and independent contractors and the Las Vegas Club for the
purpose of interviewing such employees and independent contractors for future
employment with Buyer.

        5.2 CONDUCT OF BUSINESS. Between the date of this Agreement and the
Closing Date, Seller covenants and agrees that it will not, without Buyer's
prior written consent, which may not be unreasonably withheld: (a) operate the
Las Vegas Club in any manner except in the ordinary course (including, without
limitation, not make any non-ordinary wage or salary

<PAGE>

increases or severance packages); or (b) enter into any new Material Contract or
take any action that would jeopardize the continuance of its customer
relationships; or (c) terminate, amend or fail to renew any existing insurance
coverage relating to the Las Vegas Club; or (d) terminate or fail to renew or
preserve any Permits or telephone numbers relating to the Las Vegas Club; or (e)
make any loan, guaranty or other extension of credit, or enter into any
commitment to make any loan, guaranty or other extension of credit, relating to
the Las Vegas Club, to or for the benefit of any director, officer, employee,
stockholder or any of their respective Associates or Affiliates; or (f) sell,
transfer, mortgage, encumber or otherwise dispose of any material portion of its
Assets or liabilities, except (i) for dispositions of merchandise held for
resale not material in amount, (ii) in the ordinary course of business or (iii)
where such Assets are replaced with Assets of like utility.

        5.3 PERMITS AND APPROVALS. Seller agrees to cooperate and assist Buyer,
at no cost to Seller, in Buyer's obtaining, prior to the Closing Date, all
Approvals and Permits that may be reasonably requested by Buyer to consummate
the Transaction. Buyer will promptly prepare all registrations, filings and
applications, requests and notices preliminary to such Approvals and Permits.
Seller will use commercially reasonable efforts to enter into a management
agreement with Buyer for those activities for which a liquor license would be
required, the term of which shall be no longer than 120 days after Closing. The
object of the agreement is to allow the Las Vegas Club after the Closing to
continue to provide liquor to the patrons in a manner not substantially
different from what was offered prior to the Closing Buyer agrees that any such
agreement would reimburse Seller for all its costs, include an indemnity
agreement by Buyer to fully protect Seller from any of Buyer's activities, and
contain other terms reasonable under the circumstances.

        5.4 PRESERVATION OF BUSINESS BEFORE THE CLOSING DATE. From November 12,
2001 through the Closing Date with respect to the Las Vegas Club: (a) Seller
will use commercially reasonable efforts to preserve the goodwill of customers,
suppliers and others having business relations with Seller; (b) subject to
Buyer's prior reasonable written approval, Seller will not make any material
changes, when considered in the aggregate, in its billing practices, initiation
fees or member dues; and (c) Seller will not accept annual renewals from any
existing Member unless that Member's membership expires within 30 days of the
renewal payment.

                                   ARTICLE 6.
                         ADDITIONAL CONTINUING COVENANTS

        6.1 NONDISCLOSURE OF PROPRIETARY DATA. If the Closing occurs, neither
Seller nor any of its representatives or Affiliates will, at any time, make use
of, divulge or otherwise disclose, directly or indirectly, any trade secret or
other proprietary data (including any customer list, record or financial
information) used exclusively in the operation of the Las Vegas Club. In
addition, if Closing occurs, then neither Seller nor any of its representatives
or Affiliates will make use of, divulge or otherwise disclose, directly or
indirectly, to Persons other than Buyer, any confidential information concerning
the Assets or the Las Vegas Club.

        6.2 CONFIDENTIALITY. If and to the extent such non-public information is
not previously lawfully known by the other party or lawfully obtained from
independent sources, all non-public information disclosed by any party (or its
representatives), whether before or after the date of this Agreement, in
connection with the transactions contemplated by, or the discussions and
negotiations preceding, this Agreement to any other party (or its
representatives) will be kept confidential by such other party and its
representatives and will not be used by any such Persons other than: (a) as
contemplated by this Agreement; (b) as discussed with and among such party's
board of directors, senior executive personnel whose principal offices are in
the applicable executive office or who are employed by such party at a level of
vice president or above or such party's attorneys, accountants, appraisers or
other professional advisers; (c) as discussed with and among such party's
lender(s), financing source(s), potential lender(s) or potential financing
source(s); (d) to the extent that disclosure may otherwise be required by Law or
the rules and regulations applicable to companies the shares of whose common
stock are listed in the American Stock Exchange; or (e) to the extent such duty
as to confidentiality is waived in writing by the other party. If this Agreement
is terminated, each party will use all reasonable efforts to return upon written
request from the other party all documents (and reproductions thereof) received
by it or its representatives from such other party (and, in the case of
reproductions, all such reproductions made by the receiving party) that include
information not within the exceptions contained at the beginning of the first
sentence of this Section 6.2, unless the recipients provide assurances
reasonably satisfactory to the requesting party that such documents have been
destroyed. Without limiting the generality of the foregoing, no such non-public
information shall be used by the non-disclosing party or any other party for
their own benefit, other than in connection with the proposed Transaction, so
that, without limitation, neither Buyer nor any such other party shall use any
of such confidential information

<PAGE>

to solicit any of the Members or employees of the Las Vegas Club or otherwise to
interfere with the operations of the Las Vegas Club (including, without
limitation, to tell any of such Members or employees, except for any employees
the early telling of which may be in accordance with Section 5.1, that Buyer
will be purchasing the Las Vegas Club). Subject to the immediately preceding
sentence and to Seller's prior written approval, not to be unreasonably
withheld, of any such communication, Buyer may, from time to time, communicate,
but in writing only, with the Members prior to the Closing Date; it being
further agreed, however, that Seller shall be solely responsible for
transmitting any such written communication to the Members, so as to preserve
the confidentiality of the names and addresses of the Members until Closing, and
that Buyer shall reimburse Seller (or pay Seller in advance, as Seller may
require) for Seller's actual out-of-pocket costs incurred in distributing any
such written communications.

        6.3 PUBLIC ANNOUNCEMENTS. Subject to Section 6.2(d), without prior
written consent of the other party, neither Seller nor Buyer will make any
public announcement regarding the terms of this Agreement or the Transaction
prior to the Closing Date.

        6.4 USE OF BUSINESS NAMES BY THE BUYER. Notwithstanding Section 1.2.5,
to the extent the trademarks, service marks, brand names or trade, corporate or
business names of Seller or of any of its Affiliates are used by the Las Vegas
Club on signage, stationery or like materials ("MARKED MATERIALS") at the
Closing, Buyer may use or sell such Marked Materials after the Closing for a
period of 60 days without altering or modifying such Marked Materials, or
removing such trademarks, service marks, brand names, or trade, corporate or
business names, but Buyer will not use such trademarks, service marks, brand
names or trade, corporate or business names in any other manner.

        6.5 EXCLUDED ASSETS. If, after the Closing Date, Excluded Assets remain
on the premises transferred to Buyer, then Buyer shall take commercially
reasonable efforts to deliver such Excluded Assets to Seller at the expense of
Seller and, so long as such Excluded Assets remain on the premises, Buyer must
exercise the same degree of care as it does with its own property.

        6.6 MEMBERSHIP DATABASE TRANSITION. Upon the Closing and if required by
Buyer, Seller and Buyer will, and will cause their respective Affiliates to,
cooperate fully in the transition of Seller's Membership database to Buyer's
internal database, with a view towards completing such transition within 60 days
after the Closing Date, and will provide, or cause to be provided to each other
any records and other information requested by such parties in connection
therewith as well as access to, and the cooperation of, their respective
employees; it being further agreed that Seller should not be required to so
cooperate after the date occurring 120 days after the Closing Date.

        6.7 EMPLOYEES; INDEPENDENT CONTRACTORS. Buyer will make an effort to
interview for employment those employees employed exclusively in the operation
of the Las Vegas Club seeking employment with Buyer. At Closing, Seller will
terminate or cause to be terminated all employees and independent contractors
employed exclusively in the operation of the Las Vegas Club, and Buyer will
offer employment to all but 20 or fewer of such employees on an "at will" basis
and otherwise at such wage and salary levels as Buyer deems appropriate. Those
employees who accept the offers of employment from Buyer are referred to as
"EMPLOYEES". From and after the Closing Date, Seller will remain solely
responsible for all monies owed any employees or independent contractors if and
to the extent relating solely to services provided by such employees or
independent contractors in connection with the operation of the Las Vegas Club
before the Closing Date, including accrued but unpaid salaries, wages, bonuses,
incentive compensation, vacation or sick pay or compensation accrued under any
"employee benefit plan" (as defined in ERISA) of Seller or any of its
Affiliates.

        6.8 SELLER'S COVENANT NOT TO COMPETE. In consideration of the Purchase
Price paid to Seller, Seller agrees as follows:

               6.8.1 RESTRICTIONS ON COMPETITION. Until January 1, 2007, neither
Seller nor any of Seller's Affiliates (other than Millennium Partners or its
Affiliates if they are or become an Affiliate of Seller) will, directly or
indirectly, within either (a) a 10-mile radius of the Las Vegas Club or (b) any
location within the greater area of the master planned community of Summerlin,
compete with, assist any Person in competing with or acquire an interest in any
Person competing with, such club as operated at Closing, whether as an owner,
shareholder, member, joint venture, principal, partner, officer, employee,
manager, consultant, agent or otherwise; provided, however, that this
restriction will not apply to: (a) any physical therapy operation; (b) any
retail or consumer product sales; (c) any such interest in a health club
facility acquired as part of a purchase and/or development by Millennium
Partners of a mixed use project containing either a hotel or for sale
residential property; (d) any transaction involving the acquisition of

<PAGE>

more than just that health club facility, provided that, upon written notice
from Buyer, Seller cease operations at that location within sixty (60) days from
the date of said notice; (e) any management contract for any health club
facility in a hotel or for any health club facility already existing as of the
date hereof; (f) any licensing of any intellectual property, and (g) the
ownership, use and operation of the real property and business currently known
as "The Sporting House Athletic Club" located at 3025 Industrial Road, Las
Vegas, Nevada 89109, which is not currently in operation but is intended to be
reopened under the name "The Sporting House," as a cocktail lounge/cabaret/adult
entertainment/gentlemen's club, provided that said facility is not operated as a
health club

               6.8.2 RESTRICTIONS ON SOLICITING MEMBERS. Until January 1, 2007,
neither Seller nor any of its Affiliates will directly or indirectly contact any
Members of the Las Vegas Club, knowing them to be Members of such club, for the
purpose of soliciting or inducing any Member to join any health club facility,
provided that this restriction shall not apply to mailing lists purchased by
Seller on which Members comprise less than forty percent.

               6.8.3 RESTRICTIONS ON SOLICITING EMPLOYEES. For a period of 180
days following the Closing Date neither Seller nor any of its Affiliates will
directly or indirectly induce any Employee to leave such employment or to accept
any other employment or position or assist any other Person in hiring any such
Employee; provided, however, that Seller and its Affiliates may rehire any
Employee if such Employee is the one to approach any of Seller or its
Affiliates.

               6.8.4 SEVERABILITY. If this Section 6.8 is more restrictive than
permitted by the Laws of any jurisdiction in which Buyer seeks enforcement of
this Agreement, this Section 6.8 will be limited to the extent required to
permit enforcement under those Laws. If, in any Action, a court or arbitrator
refuses to enforce any of the separate covenants, then such unenforceable
covenant will be deemed eliminated from this Section 6.8 for the purpose of
those Actions to the extent necessary to permit the remaining separate covenants
to be enforced. If the provisions of this Section 6.8 are ever deemed to exceed
the duration or geographic limitations or scope permitted by applicable law,
then such provisions will be reformed to the maximum time or geographic
limitations in scope, as the case may be, permitted by applicable Law.

        6.9 FURTHER ASSURANCE. Each party must use commercially reasonable
efforts to cause all conditions to its obligations to be timely satisfied and to
perform and fulfill all obligations on its part (including Seller's transfer of
all telephone numbers) to be performed and fulfilled under this Agreement, so
that the transactions contemplated by this Agreement are effected substantially
in accordance with its terms as soon as reasonably practicable. Each party must
execute, acknowledge and deliver both before and after the Closing such further
certificates, agreements and other documents and take such other actions as the
other party reasonably requests to consummate or implement the transactions
contemplated hereby or to evidence such events or matters. Without limiting the
generality of the foregoing, Seller shall cooperate with the reasonable due
diligence requests of any potential lender to Buyer the proceeds of whose loan
are to be used, in whole or in part, to fund a portion of the Purchase Price;
provided, however, that (i) doing so shall not require Seller to incur any
potential liability to such lender, to incur any out-of-pocket expenses it would
not otherwise have incurred or to expend anything other than a minimum amount of
its managerial time and (ii) the closing of any such Loan shall not be a
condition to Buyer's obligations hereunder.

        6.10 REMOVAL OF SIGNAGE. Seller shall not be required to remove any of
Seller's internal or external signs from the Las Vegas Club. Buyer shall have
until the date occurring 60 days after the Closing Date to remove all of
Seller's trademarks and tradenames from all such signage.

        6.11 ELECTRONIC FUNDS TRANSFER TRANSITION. Upon the Closing Date, Seller
and Buyer will, and will cause their respective Affiliates to, cooperate fully
in the transition of Seller's EFT's as indicated in the Report and check
processing activities currently provided by CheckFree to Buyer's internal check
processing operations and will provide, or cause to be provided to each other,
any records and other information requested by such parties in connection
therewith as well as access to, and the cooperation of, their respective
employees.

                                   ARTICLE 7.
                             CONDITIONS OF PURCHASE

        7.1 GENERAL CONDITIONS. The obligations of the parties to effect the
Closing will be subject, at the option of each of the parties, to the following
conditions:

<PAGE>

               7.1.1 NO ORDERS; LEGAL ACTIONS. No Law or Order will have been
enacted, entered, issued, promulgated or enforced by any Governmental Entity,
nor will any Action have been instituted and remain pending or have been
threatened and remain so at what would otherwise be the Closing Date, (a) which
prohibits or restricts the Transaction or (b) the effect of which, if and to the
extent not covered by insurance, could reasonably be expected to have a material
adverse effect the operations of the Las Vegas Club, as operated on what would
otherwise be the Closing Date, if finally determined adversely to Seller.

               7.1.2 CONSENTS. All necessary Approvals to the Transaction have
been obtained, including, without limitation, the Trustee's Consent and the
Comerica Consent, but not including (i) any Approval of Seller's board of
directors , (ii) any approval of Buyer's board of directors or (iii) Buyer's
having obtained an alcoholic beverage license; it being expressly agreed that
the obtaining of any of items (i), (ii) or (iii) shall not be a condition to the
Closing.

               7.1.3 DELIVERY ITEMS. All Joint Delivery Items shall have been
deposited into the Escrow.

        7.2 CONDITIONS TO OBLIGATIONS OF BUYER. The obligations of Buyer to
effect the Closing are subject, at the option of Buyer, to the satisfaction or
written waiver of each of the following conditions:

               7.2.1 REPRESENTATIONS AND COVENANTS OF SELLER. The
representations and warranties of Seller contained in this Agreement must be
true in all material respects at the Closing Date with the same effect as though
made at the Closing Date (except where such representation and warranty is made
as of a date specifically set forth therein); Seller must have (a) in all
material respects performed all obligations and complied with all covenants and
conditions required by this Agreement to be performed or complied with by it at
or before the Closing Date and (b) provided Buyer with an accurate update to the
Disclosure Schedules as of the Closing Date.

               7.2.2 NO DAMAGE OR DESTRUCTION. There shall have been no damage
to the Assets caused by fire or other casualty that would cost One Hundred
Thousand Dollars ($100,000) or more to repair. If such damage shall occur, then
Buyer may elect to terminate this Agreement as set forth in Sections 8.1.2; it
being agreed that the occurrence of any such damage shall require Seller to
issue a Modification to Buyer, as set forth at the end of Section 3. If Buyer
does not so elect to terminate its obligations under this Agreement within 5
days of Buyer's receipt of such Modification, or if the loss or casualty would
cost less than One Hundred Thousand Dollars ($100,000) to repair, the Closing
shall take place as provided herein, and Buyer shall receive an assignment of
Seller's rights to insurance proceeds with respect to any unrepaired damage
(including any rental loss proceeds for periods after the Closing), loss or
casualty in question, but subject to the rights of existing lienholders. Subject
to such rights, Buyer shall be entitled to settle the loss with Seller's
insurers. Seller shall retain all interest in and to the insurance proceeds that
may be payable to Seller on account of damage repaired and completed by Seller
before Closing, but Seller shall have no obligation of repair or replacement.

               7.2.3 MEMBERSHIP LIST/MEMBERSHIP AGREEMENTS. Buyer will have
received from Seller true and correct copies of the form of Membership
Agreements that are in the possession of Seller as of Closing.

               7.2.4 ACCOUNTS RECEIVABLE. Buyer will have received from Seller a
true and correct summary of all accounts receivable as of the Closing Date,
including a list of all Members and any outstanding invoices grouped by aging.
Such accounts receivable summary shall be as of the date not more than 10
business days prior to the scheduled Closing Date. It shall be updated by
Seller, and such update provided to Buyer, as soon as such update is available
after the Closing Date but, in any event, no later than thirty (30) days after
the Closing Date.

               7.2.5 PRESALES. Buyer will have received from Seller a copy of
Schedule 1.1.3 updated as of the date not more than 10 business days prior to
the scheduled Closing Date. Schedule 1.1.3 shall be updated by Seller, and such
update provided to Buyer, as soon as such update is available after the Closing
Date, but in any event, no later than thirty (30) days after the Closing Date.

               7.2.6 OPINION LETTER. Buyer will have received from Seller's
legal counsel an opinion letter addressed to Buyer confirming that (a) Seller is
validly formed and in good standing, (b) Seller has been duly authorized to
execute and deliver the Transaction Documents to which Seller is a party, and
(c) such other matters as are reasonably requested and set forth in the form of
Opinion Letter provided Buyer.

<PAGE>

               7.2.7 TITLE POLICY. Buyer shall have received from Seller an ALTA
or extended coverage owner's title insurance policy, dated as of the Closing
Date, issued by Title Company insuring Buyer's fee title in the Real Property
subject only to Permitted Exceptions and containing such endorsements as Buyer
shall reasonably require (collectively, the "TITLE POLICY") ; provided, however,
that this condition shall be deemed satisfied by the Title Company's issuance of
a CLTA owner's title insurance policy without any endorsements if the Title
Company on the date otherwise scheduled for Closing is prepared to issue such a
CLTA owner's policy without any endorsements but not, for whatever reason, such
an ALTA owner's policy or any such endorsements. Liability coverage under the
Title Policy shall be at least equal to $6,575,000.

               7.2.8 SELLER DELIVERY ITEMS. All Seller Delivery items shall have
been deposited into the Escrow.

        7.3 CONDITIONS TO OBLIGATIONS OF SELLER. The obligations of Seller to
effect the Closing are subject, at the option of Seller, to the satisfaction or
written waiver of the following conditions:

               7.3.1 REPRESENTATIONS AND WARRANTIES AND COVENANTS OF BUYER. The
representations and warranties of Buyer in this Agreement contained must be true
in all material respects at the Closing Date with the same effect as though made
at the Closing Date (except where such representation and warranty is made as of
a date specifically set forth therein); Buyer must have in all material respects
performed all obligations and complied with all covenants and conditions
required by this Agreement to be performed or complied with by it at or before
the Closing Date.

               7.3.2 OPINION LETTER. Seller will have received from Buyer's
legal counsel an opinion letter addressed to Seller confirming that (a) Buyer is
validly formed and in good standing, (b) Buyer has been duly authorized to
execute and deliver the Transaction Documents to which Buyer is a party; and (c)
such other matters as are reasonably requested and set forth in the form of
Opinion Letter provided Seller.

               7.3.3 BUYER DELIVERY ITEMS. All Buyer Delivery Items shall have
been deposited into the Escrow.

                                   ARTICLE 8.
                      TERMINATION OF OBLIGATIONS; SURVIVAL

        8.1 TERMINATION OF AGREEMENT. This Agreement and the transactions
contemplated by this Agreement will terminate if the Closing does not occur on
or before the close of business on January 31, 2001, unless extended by mutual
consent in writing of Buyer and Seller and otherwise may be terminated at any
time before the Closing as follows:

               8.1.1 MUTUAL CONSENT. By mutual consent in writing of Buyer and
Seller.

               8.1.2 CONDITIONS TO BUYER'S PERFORMANCE NOT MET.

               (a) By Buyer by written notice to Seller if any event occurs or
condition exists which would render impossible the satisfaction of one or more
conditions to the obligations of Buyer to consummate the transactions
contemplated by this Agreement as set forth in Section 7.1 or 7.2.

               (b) If any of such conditions have not been satisfied by the date
otherwise scheduled for Closing, then Buyer's sole remedy shall either be (i) to
terminate this Agreement by written notice to Seller and have Seller return the
Deposit (without interest) and instruct Deposit Holder to release any other
funds of Buyer in the Escrow to Buyer; provided that if the failure of such
condition relates to a material breach by Seller in its representations,
warranties or covenants set forth herein and if such breach is susceptible to
cure, then Seller will have five business days in which to cure such breach
after receipt of notice from Buyer of its intention to terminate this Agreement
if such breach continues, or (ii) to consummate the Transaction, unless such
condition is also for the benefit of Seller, in which event the consent of
Seller, in Seller's sole discretion, shall also be required to so consummate the
Transaction. In either such case, Buyer shall have no right to any additional
damages or remedies; provided, however, that if Buyer shall be the prevailing
party in any litigation brought by Buyer to recover the Deposit, then Buyer
shall further be entitled to its reasonable attorneys' fees and costs, including
costs of collection, enforcement and appeal.

               8.1.2  CONDITIONS TO SELLER'S PERFORMANCE NOT MET.

<PAGE>

               (a) By Seller by written notice to Buyer if any event occurs or
condition exists which would render impossible the satisfaction of one or more
conditions to the obligations of Seller to consummate the transactions
contemplated by this Agreement as set forth in Section 7.1 or 7.3.

               (b) By Seller by written notice to Buyer if any of such
conditions have not been satisfied by the date otherwise scheduled for Closing;
provided that if the failure of such condition relates to a material breach by
Buyer in its representations, warranties or covenants set forth herein and if
such breach is susceptible to cure, then Buyer will have five business days in
which to cure such breach after receipt of notice from Seller of its intention
to terminate this Agreement if such breach continues. Alternatively, Seller, in
its sole discretion and without limitation, may elect to consummate the
Transaction on such basis, unless such condition is also for the benefit of
Buyer, in which event the consent of Buyer, in Buyer's sole discretion, shall
also be required to so consummate the Transaction.

        8.2    EFFECT OF TERMINATION OR CLOSING.

               8.2.1 Subject to the immediately following sentence, if this
Agreement is terminated pursuant to Section 8.1, all further obligations of the
parties under this Agreement will terminate without further liability of any
party to another, except that (i) Seller shall be entitled to retain the Deposit
as liquidated damages if permitted in accordance with Section 2.2, (ii) Buyer
shall be entitled to the return of the Deposit, but without interest thereon,
plus any costs of appeal, collection and enforcement incurred by Buyer to obtain
the return of the Deposit, if Seller is not entitled to retain the Deposit as
liquidated damages in accordance with Section 2.2, and (iii) the obligations of
the parties contained in Sections 6.2, 9.2(b), and 10.8 will survive any such
termination. A termination under Section 8.1 will relieve the parties of
liability for a breach of, or for any misrepresentation under, this Agreement
and will constitute a waiver of any available remedy (including specific
performance if available) for any such breach or misrepresentation.
Notwithstanding the foregoing, however, if Seller shall have failed timely to
deposit into the Escrow executed and, as applicable, notarized copies of all
Transaction Documents to be delivered by Seller or if Seller shall otherwise
have prevented the Escrow from closing, then Buyer shall be entitled to seek
specific performance, in which event Seller shall waive the defense that there
is an adequate remedy in money damages.

               8.2.2 If Buyer elects to close with knowledge of any such breach
or misrepresentation by Seller, then Buyer thereafter may sue Seller for its
actual (but not special, punitive or consequential) monetary damages directly
and proximately caused by such a breach or misrepresentation if and to the
extent permitted under Article 9.

                                   ARTICLE 9.
                                 INDEMNIFICATION

        9.1 OBLIGATIONS OF SELLER. Seller agrees to indemnify, defend and hold
harmless Buyer and its directors, officers, employees, Affiliates, agents and
assigns from and against any and all Losses (including costs of appeal,
enforcement and collection) as a result of, or based upon or in any way arising
from (a) any breach of any representation, warranty or covenant of Seller made
in this Agreement, (b) any Action that is commenced before or after the Closing
Date and that arises out of the operation of the Las Vegas Club before the
Closing Date, other than the Assumed Liabilities and any such Action that is
otherwise covered by insurance, and (c) any failure by Seller to have complied
with the "bulk sales" law of the State of Nevada regarding the Transaction;
provided further that Seller shall have no obligation or liability for (i) any
Action that may be brought by any Governmental Entity or the resolution of which
shall require any change to the physical layout or construction of any of the
Real Property or (ii) any Loss if and to the extent Buyer shall receive a
proration credit for the same.

        9.2 OBLIGATIONS OF BUYER. Subject to Seller's obligations under Section
9.1, Buyer agrees to indemnify, defend and hold harmless Seller and its
directors, officers, employees, Affiliates, agents and permitted assigns from
and against any and all Losses (including costs of appeal, enforcement and
collection) as a result of, or based upon or in any way arising from (a) any
breach of any representation, warranty or covenant of Buyer made in this
Agreement, (b) the acts or omissions of Buyer, its employees, agents or
representatives with respect to its or their due diligence activities regarding
the Las Vegas Club or (c) arising out of any of the Assets, the Las Vegas Club
or its operations, whether before or after the Closing Date. In addition, Seller
shall immediately repair, to Buyer's reasonable satisfaction, any damage caused
by Buyer, its employees, agents or representatives to the Las Vegas Club in
connection with any such due diligence activities.

<PAGE>

        9.3    PROCEDURE.

               9.3.1 NOTICE. Any party seeking indemnification for any Loss will
give notice to the Indemnifying Party.

               9.3.2 DEFENSE. If a claim by a third party is made against any
party entitled to indemnification under this Agreement, such Indemnified Party
shall promptly (i.e., within five (5) business days of the Indemnified Party
having actual knowledge of such claim) notify the indemnifying party of such
claim. The indemnifying party shall have ten (10) business days after receipt of
the above-referenced notice to undertake, through counsel of its choosing
(subject to the reasonable consent of the Indemnified Party) and at the expense
of the indemnifying party, the settlement or defense thereof; provided, however,
that any such settlement shall be subject to the written consent of the
Indemnified Party, which consent shall not be unreasonably withheld, conditioned
or delayed. If approval of the monetary terms of any such proposed settlement is
not given, then the Indemnifying Party's maximum monetary obligation for any
future settlement or judgment shall be the amount of the settlement that was not
so approved. If the indemnifying party does not notify the Indemnified Party
within ten (10) business days after receipt of the Indemnified Party's notice of
a claim of indemnity hereunder that the indemnifying party elects to undertake
the defense thereof, or the indemnifying party ceases to reasonably contest such
claim in good faith, the Indemnified Party shall have the right to contest,
settle or compromise the claim at the expense of the indemnifying party and
subject to the written consent of the indemnifying party, which shall not be
unreasonably withheld, conditioned or delayed. In connection with the defense of
any claim, each party will make available to the party controlling such defense,
any books, records or other documents within its control that are reasonably
requested in the course of such defense. Nothing contained in this Section 9.3.2
shall be construed as a limitation on the right of any party to indemnification
under this Agreement.

               9.3.3 ADJUSTMENTS FOR INSURANCE PROCEEDS. The amount of any Loss
entitling a party to indemnification under this Article 9 will be reduced by the
amount of any insurance proceeds recovered by the Indemnified Party for such
Loss, net of all costs and expenses incurred in collecting such insurance
proceeds (including reasonable attorneys' fees). Nothing in this Section 9.3
will be deemed to obligate any person to maintain any insurance or to pursue any
claim against any insurer or third party.

        9.4 LIMITATIONS ON INDEMNIFICATION. Notwithstanding anything to the
contrary contained herein, but subject to Section 8.2, the Indemnifying Party
will not be liable to indemnify any Person pursuant to Sections 9.1 or 9.2, as
applicable, until the total amount of all Indemnifiable Claims, in the
aggregate, pursuant to Sections 9.1 and 9.2 exceeds $250,000 and then only for
such excess, except for Indemnifiable Claims relating to breach of covenants in
Sections 6.2 and 6.8; and provided further, that the Indemnifying Party will not
be liable to indemnify any Person pursuant to Section 9.1(a) or 9.2(a) for
claims made more than 12 months after the Closing Date.

        9.5 NOTICE OF CLAIMS. Seller and Buyer agree to notify the other party
of any liabilities, claims or misrepresentations, breaches or other matters
covered by this Article 9 promptly upon discovery or receipt of notice (other
than from the Indemnified Party), whether before or after Closing.

                                   ARTICLE 10.
                                     GENERAL

        10.1 SURVIVAL. The representations and warranties in this Agreement will
survive for 12 months after the Closing, except for Buyer's representations and
warranties set forth in Section 4.5 to which no such time limit to their
survival shall apply.

        10.2 BINDING EFFECT; PARTIES IN INTEREST. This Agreement is binding on
and benefits only the parties and their respective permitted successors and
assigns; it being agreed that Buyer may not assign its rights and obligations in
and to this Agreement except to a single asset limited liability company of
which Buyer shall be the managing member and hold a majority of the interest in
profits, losses and distributions. Nothing in this Agreement gives any rights or
remedies to any Person other than the parties and their respective permitted
successors and assigns, nor does anything in this Agreement relieve or discharge
any obligation or liability of any third Person to any party. No provision of
this Agreement gives any third person any right of subrogation or action over or
against any party to this Agreement.

        10.3 COMPLETE AGREEMENT. This Agreement is the complete and exclusive
statement of agreement of the parties as to matters covered by it. It replaces
and supersedes all prior

<PAGE>

written or oral agreements or statements by and among the parties with respect
to the matters covered by it. No representation, statement, condition or
warranty not contained in this Agreement is binding on the parties.

        10.4 AMENDMENTS; WAIVERS. Any amendment to this Agreement requires the
approval of all parties. Any waiver of any right or remedy requires the consent
of the party waiving it. Every amendment or waiver must be in writing and
designated as an amendment or waiver, as appropriate. No failure by any party to
insist on the strict performance of any provision of this Agreement, or to
exercise any right or remedy, will be deemed a waiver of such performance, right
or remedy, or of any other provision of this Agreement.

               10.4.1 CERTAIN RULES OF CONSTRUCTION. AMBIGUITIES. Any
ambiguities will be resolved without reference to which party drafted this
Agreement. The parties waive any statute or rule of law to the contrary.

               10.4.2 INTERPRETATION. Unless the context otherwise requires: (a)
a term has the meaning assigned to it; (b) "or" is not exclusive; (c) words in
the singular include the plural, and words in the plural include the singular;
(d) "amended," with reference to a law, statute, rule or regulation, is deemed
to be followed by "from time to time"; (e) "herein," hereof" and other words of
similar import refer to this Agreement as a whole and not to any particular
Section, Subsection, paragraph, clause, or other subdivision; (f) all references
to "Section" or Exhibit, refer to the particular Section in or Exhibit attached
to this Agreement; (g) "desirable" includes "necessary," "convenient" and
"incidental"; and (h) "including" and "includes," when following any general
provision, sentence, clause, statement, term or matter, will be deemed to be
followed by", but not limited to," and ", but is not limited to," respectively.

               10.4.3 NO ORAL INFORMATION. No oral explanation of oral
information relating to this Agreement offered by either party can alter the
meaning or interpretation of this Agreement.

               10.4.4 UNENFORCEABILITY OF PROVISIONS. If any provision of this
Agreement, or any portion thereof, is held to be invalid or unenforceable, the
remainder of this Agreement will nevertheless remain in full force and effect.

               10.4.5 TIME OF ESSENCE. Time is of the essence in this Agreement.

        10.5 GOVERNING LAW; JURISDICTION AND VENUE. This Agreement is to be
construed and enforced in accordance with the internal laws of the State of
California applicable to contracts made and to be performed entirely in the
State of California. The parties consent to the exclusive jurisdiction of all
federal and state courts located in Los Angeles County, California and hereby
waive any objection to such exclusive jurisdiction, including any based on the
doctrine of forum non conveniens or any similar doctrine.

        10.6 FEES AND COSTS; DAMAGES. If any Action is brought to enforce or
interpret this Agreement or matters relating to it, the prevailing party will be
entitled to recover from the other party reasonable attorneys' fees and other
costs incurred in such Action, and any subsequent appeal, collection or
enforcement, in addition to any other relief to which the prevailing party is
entitled. In no event shall any party hereto be entitled to consequential,
special or punitive damages.

        10.7 NOTICES. All notices (including other communications required or
permitted) under this Agreement must be in writing and must be delivered: (a) in
person; (b) by registered, express, certified mail, postage prepaid, return
receipt requested; (c) by a generally recognized courier or messenger service
that provides written acknowledgement of receipt by the addressee; or (d) by
facsimile or other generally accepted means of electronic transmission with a
verification of delivery and a copy delivered concurrently by other approved
means. Notices are deemed delivered when actually delivered to the address for
notices. Notices shall be delivered to the addresses listed on the signature
page of this Agreement. In addition, a copy of any notice to Seller shall also
be sent to Resch Polster Alpert & Berger LLP, 10390 Santa Monica Blvd., Fourth
Floor, Los Angeles, California 90025-5058 (Fax: (310) 552-3209), attention: Real
Estate Notices (RMR), and a copy of any notice to Buyer shall also be sent to
McQuaid, Metzler, Bedford & Van Zandt, , 221 Main Street, 16th Floor, San
Francisco, California 94105(fax: (415) 905-0202), attention: J. Dennis McQuaid,
Esq. Any party can furnish, from time to time, other addresses for notices to
it.

        10.8 SPECIFIC PERFORMANCE. It might be impossible to measure in money
the damage to a party if another party breaches Section 6.2 or 6.8 of this
Agreement. If any such failure occurs, the party damaged might not have an
adequate remedy at law or in damages. Therefore, each party consents to the
issuance of an injunction or other appropriate interim

<PAGE>

relief, and the enforcement of other equitable remedies, against it to compel
performance of Sections 6.2 and 6.8 of this Agreement.

        10.9 COUNTERPARTS; FACSIMILE EXECUTION. The Transaction Documents may be
signed in several counterparts. Each of them is an original and all of them
together constitute one agreement. Excluding the Deed, the Transaction Documents
and the opinion letters may be signed by facsimile, and a facsimile signature
shall be equally as binding as an original ink signature; provided, however,
that original signatures on each such document shall be provided to the other
party within 5 business days from and after the Closing Date.

        10.10 HEADINGS; EXHIBITS. The headings in this Agreement are only for
convenience and ease of reference and are not to be considered in construction
or interpretation. All exhibits, schedules and appendices attached to this
Agreement are incorporated herein.

        10.11 BROKERS. Buyer and Seller each represent and warrant to the other
that it has not dealt with any broker or finder in connection with the proposed
Transaction.

                                   ARTICLE 11.
                                   DEFINITIONS

        As used in this Agreement and the Exhibits and Schedules to this
Agreement, the following definitions apply:

        "ACTION" means any action, complaint, petition, investigation, suit or
other proceeding, whether civil or criminal, in law or in equity, or before any
arbitrator or Governmental Entity.

        "AFFILIATE" means a Person that directly or indirectly through one or
more intermediaries, controls, or is controlled by, or is under common control
with, a specified Person.

        "APPROVAL" means any approval, authorization, consent, qualification or
registration, or any waiver of any of the foregoing, required to be obtained
from, or any notice, statement or other communication required to be filed with
or delivered to, any Governmental Entity or any other Person.

        "ASSOCIATE" of a Person means (a) a corporation or organization (other
than a party to this Agreement) of which such Person is an officer or partner or
is, directly or indirectly, the beneficial owner of 10% or more of any class of
equity securities;

               (b) any trust or other estate in which such Person has a
substantial beneficial interest or as to which such Person serves as trustee or
in a similar capacity; and

               (c) any relative or spouse of such person or any relative of such
spouse.

        "BILL OF SALE" means a bill of sale in the form of Exhibit E.

        "CLOSING" means the consummation of the Transaction.

        "CLOSING DATE" means the date of the Closing.

        "CODE" means the Internal Revenue Code of 1986, as amended.

        "COMERICA CONSENT" means the Consent to the Transaction of Comerica Bank
- California.

        "CONTRACT" means any written contract, agreement, lease, sublease,
license, sublicense, sales order, purchase order, covenant not to compete, or
other legally binding commitment or instrument (other than Membership
Agreements).

        "CONTRACT ASSIGNMENT" means an assignment of contracts in the form of
Exhibit C.

        "DEED" means a grant deed or special warranty deed, as applicable, for
the Real Property from Seller to Buyer.

        "DEPOSIT HOLDER" means Commonwealth Land Title Company, 888 West 6th
Street, 4th Floor, Los Angeles, California 90017, attention: Eva Horton, fax:
(213) 627-8722, phone (213) 627-7070, x 124.

        "DISCLOSURE SCHEDULE" means a disclosure schedule delivered by one party
to the other party and attached to this Agreement.

<PAGE>

        "EFT" means electronic funds transfers from Members.

        "ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, and the related regulations and published interpretations.

        "ESCROW" means escrow number 21787EH at Deposit Holder.

        "GOVERNMENTAL ENTITY" means any government or any agency, district,
bureau, board, commission, court, department, official, political subdivision,
tribunal or other instrumentality of any government.

        "INDEMNIFIABLE CLAIM" means any Loss for or against which any party is
entitled to indemnification under this Agreement; "INDEMNIFIED PARTY" means the
party entitled to indemnity hereunder; and "INDEMNIFYING PARTY" means the party
obligated to provide indemnification hereunder.

        "KNOWLEDGE" (whether or not capitalized) means, with respect to Seller,
the actual knowledge of any of David Michael Talla, Phil Swain, Mark Spino, or
Timothy O'Brien, with no duty of investigation and with respect to Buyer, the
actual knowledge of any of Patrick O'Brien, Scott Pickert or Laurie Smith , with
no duty of investigation.

        "LAW" means any constitutional provision, statute or other law, rule,
regulation, or interpretation of any Governmental Entity and any Order.

        "LEASE ASSIGNMENT" means an assignment of leases in the form attached as
Exhibit D.

        "LIEN" means any mortgage, pledge, hypothecation, right of others,
claim, security interest, encumbrance, lease, sublease, license, occupancy
agreement, adverse claim or interest, burden, option, lien, right of first
refusal, charge or other restrictions or limitations; provided, however, that
the Permitted Exceptions shall not be considered Liens.

        "LOSS" means any action, claim, cost, damage, disbursement, expense,
liability, loss, deficiency, obligation, penalty or settlement of any kind or
nature, including but not limited to, interest or other carrying costs,
penalties, legal, accounting and other professional fees and expenses incurred
in the investigation, collection, prosecution and defense of claims and amounts
paid in settlement, and excluding special, punitive or consequential damages.

        "MATERIAL CONTRACT" means any Contract affecting the Las Vegas Club to
which Seller is a party or to which Seller or the Assets is subject or by which
Seller or the Assets is bound that: (a) obligates Seller to pay an amount of
$20,000 or more in any one year; (b) has an unexpired term as of the Closing
Date in excess of one year and is not terminable on 30 days notice or less; (c)
the Las Vegas Club is substantially dependent upon or is otherwise material to
such club; (d) provides for an extension of credit other than credit agreements
with banks having normal credit terms; (e) limits or restricts Seller to compete
or operate the Las Vegas Club in any manner or place; (f) provides for a
guaranty or indemnity by Seller; (g) grants a power of attorney, agency or
similar authority to another Person; (h) grants a right to, or obligation of,
any Affiliate, officer or director or any Associate of Seller; (i) requires
Seller to buy or sell goods or services that will result in material Losses or
costs and expenses materially in excess of expected receipts; or (j) was not
made in the ordinary course of business.

        "MEMBER" means any Person who as of the Closing Date is a member of the
Las Vegas Club under the terms of a valid Membership Agreement executed at the
Las Vegas Club.

        "MEMBERSHIP AGREEMENT" means any written agreement entered into at the
Las Vegas Club between a Member and Seller or the predecessor to Seller,
pursuant to which such Member is entitled to use of the facilities and services
at the Las Vegas Club. A full copy of every version of the Membership Agreement
used by Seller or its affiliates at the Las Vegas Club from the date of its
acquisition until the present is attached hereto as Exhibit G-1 through G-__.

        "ORDER" means any decree, injunction, judgment, order, ruling,
assessment or writ.

        "PERMIT" means any license, permit (including conditional use permit and
health permit), franchise, certificate of authority, or order, or any waiver of
the foregoing, required to be issued by any Governmental Entity.

        "PERMITTED EXCEPTIONS" means (i) the lien of any real estate taxes or
assessments not yet due and payable, (ii) any exceptions to title to the Real
Property set forth in the PTR (except for items 14, 16 and 18 of Schedule B -
Section 2 of the PTR, which are not Permitted

<PAGE>

Exceptions), (iii) any matter that is of public record, (iv) the Membership
Agreements, (v) the Assumed Contracts, (vi) the Real Estate Leases, and (vii)
any matter that a survey or physical inspection of the Real Property would
reveal.

        "PERSON" means an association, a corporation, an individual, a
partnership, a trust or any other entity or organization, including a
Governmental Entity.

        "PTR" means that certain Commitment for Title Insurance, dated December
28, 2001, issued by Title Company under its title order number 01010514RM with
respect to the Real Property, a copy of which Buyer acknowledges having
received.

        "REPORT" means the current CheckFree Corporation Draft Register report
as of the date of this Agreement and summary of supporting detail for the Las
Vegas Club.

        "TAX" means any foreign, federal, state, county or local income, sales,
use, excise, franchise, ad valorem, real and personal property, transfer, gross
receipt, stamp, premium, profits, customs, duties, windfall profits, capital
stock, production, business and occupation, disability, employment, payroll,
severance or withholding taxes, fees, assessments or charges of any kind
whatever imposed by any Governmental Entity, any interest and penalties (civil
or criminal), additions to tax, payments in lieu of taxes or additional amounts
related thereto or to the nonpayment thereof, and any Loss in connection with
the determination, settlement or litigation of any Tax liability.

        "TAX RETURN" means a declaration, statement, report, return or other
document or information required to be filed or supplied with respect to Taxes.

        "TITLE COMPANY" means Lawyer's Title of Nevada, 1210 South Valley View,
Las Vegas, Nevada, 89102, attention: Randy Martorano, fax: (702) 369-6662;
phone: (702) 385-4141. The title coordinator is Valerie Currie, Land America
Financial Group, Inc., 888 W. Sixth Street, 4th Floor, Los Angeles, CA 90017,
fax: (213) 627-8722, phone: (213) 627-7070, x102 re NCS No. 01-2639VC.

        "TRANSACTION" means the transaction contemplated by the Transaction
Documents.

        "TRANSACTION COSTS" means all fees, costs and expenses (including all
legal, auditing, accounting, financing and investment banking expenses) that
have been incurred or that are in the future incurred by, on behalf of or for
the benefit of any party hereto in connection with (a) the negotiation,
preparation and review of any letter of intent or similar document relating to
the Transaction, (b) the investigation and review conducted by Buyer or its
representatives with respect to the Las Vegas Club and the Transaction, (c) the
negotiation, preparation and review of the Transaction Documents and all
certificates, opinions and other instruments and documents delivered or to be
delivered in connection with the Transaction, (d) the preparation and submission
of any filing or notice required to be made or given in connection with the
Transaction, and the obtaining of any Consent required to be obtained in
connection with the Transaction, and (e) the consummation and performance of the
Transaction.

        "TRUSTEE'S CONSENT" means the Consent to the Transaction of U.S. Bank
Trust National Association, as trustee, under that certain indenture, dated as
of April 1, 1999, between Seller, as issuer, the Subsidiary Guarantors (as
defined therein) and Trustee.

        "TRANSACTION DOCUMENTS" means this Agreement, the Deed, the Contract
Assignment, the Lease Assignment and the Bill of Sale.

        IN WITNESS WHEREOF, each of the parties has caused this Agreement to be
executed by its duly authorized officers as of the date on the first page.

                                     LSI-NEVADA, LLC

                                     By /s/ Patrick J. O'Brien
                                       -----------------------------------------
                                     Name  Patrick J. O'Brien
                                          --------------------------------------
                                     Title CFO, Secretary
                                           -------------------------------------

                                     Address for Buyer:

                                     7077 Koll Center Parkway, Suite 110

<PAGE>

                                     SCC NEVADA, INC.

                                     By       /s/ Rex A. Licklider
                                       -----------------------------------------
                                     Name Rex A. Licklider
                                          --------------------------------------
                                     Title   Co-CEO
                                          --------------------------------------

                                     Address for Seller:

                                     11100 Santa Monica Boulevard, Suite 300
                                     Los Angeles, CA 90025
                                     Fax: (310) 479-4350 and (310) 479-8879
                                     ATTENTION: CO-CHIEF EXECUTIVE OFFICERS AND
                                                REAL ESTATE NOTICES<PAGE>
                                      10.71

                 STANDARD FORM LEASE BETWEEN REGISTRANT AND CLUB
                     AT 60TH STREET, INC. DATED MAY 4, 2001

<PAGE>

                                1. STANDARD FORM LEASE

                      LANDLORD:     THE SPORTS CLUB COMPANY, INC.,
                                    a Delaware corporation

                      TENANT:       CLUB AT 60TH ST., INC.,
                                    a New York corporation

<PAGE>

                               STANDARD FORM LEASE

1. DEFINITIONS; FUNDAMENTAL PROVISIONS.

          1.1 "BUILDING:" 330 East 61st Street and 333 East 60th Street, New
York, New York

          1.2 "CLUB" or "CLUB FACILITY:" The Sports Club/L.A.-Upper East Side,
constituting a part of the Building and designated 330 East 61ST Street, New
York, New York

          1.3 "COMMENCEMENT DATE:" on delivery of possession to Tenant,
estimated to be October 1, 2001

          1.4 "INITIAL TERM:" 10 years (subject to Paragraph 3.2)

          1.5 "LANDLORD:" The Sports Club Company, Inc., a Delaware corporation

          1.6 "LEASE DATE:" May 4, 2001

          1.7 "MASTER LEASE:" That certain Amended and Restated Net Operating
Lease, dated as of March 26, 1985, by and between Hirschfeld Realty Club
Corporation and 328 E. 61 Corp. (collectively, "MASTER LESSOR"), and Landlord's
predecessor in interest, Vertical Fitness and Racquet Club, Ltd., as tenant
under the Master Lease, as now or hereafter amended. The Master Lease is for the
Building.

          1.8 "MINIMUM RENT:" $125,000

          1.9 "OPTION TERMS:" Two 5-year options; provided, however, that Tenant
acknowledges and agrees that the term of the Master Lease currently terminates
as of December 31, 2020, and therefore, in no event shall the second Option Term
extend beyond the expiration of the term of the Master Lease, including any
extension thereof (subject to Paragraph 3.3)

          1.10 "PERMITTED USE(s):" Any lawful use, including, but not limited
to, a nightclub, cabaret, adult entertainment facility and restaurant (a
"SPECIFIC USE"); provided the use (other than a Specific Use) is commensurate
with, at least comparable in quality to, and harmonious with the uses made of
buildings and improvements in the vicinity of the Building

          1.11 "PREMISES:" The ground floor space in the Building designated as
333 East 60th Street, New York, New York, which is approximately shown on
Exhibit A

          1.12 "RENT ADJUSTMENT:" See Exhibit B

          1.13 "SECURITY DEPOSIT:" $500,000, payable as provided in Article 5

          1.14 "TENANT:" Club at 60TH St., Inc., a New York corporation

          1.15 ADVANCE RENT: None

          1.16 TENANT'S ADDRESS:    1058 South Alfred Street
                                    Los Angeles, California 90035
                                    Tel: (310) 651-0804

          1.17 LANDLORD'S ADDRESS:  11100 Santa Monica Boulevard, Suite 300
                                    Los Angeles, California 90025
                                    Tel:  (310) 479-5200
                                    Fax:  (310) 479-8879 and (310) 479-4350
                                    Attn: Real Estate Department and Co-Chief
                                          Executive Officers

          1.18 SQUARE FOOTAGE: Approximately __________________

          1.19 EXHIBITS:       Exhibit A    -    Premises
                               Exhibit B    -    Rent Adjustment Provisions
                               Exhibit C    -    Rules and Regulations
                               Exhibit D    -    Alterations and Improvements

          1.20 ADDITIONAL PROVISIONS: See attached addendum for additional
Paragraphs 24 through 28, which are incorporated into and made a part of this
Lease by this reference.

                                       -1-

<PAGE>

        1.21 STANDARD PROVISIONS. The foregoing provisions, on page 1 of this
Lease, are incorporated into and are considered part of this Lease. This Lease
is subject to the terms, covenants and conditions herein set forth on pages 2
through 12, inclusive, and on the Exhibits attached hereto, and Tenant
covenants, as a material part of the consideration for this Lease, to keep and
perform each and all of said terms, covenants and conditions.

    2. PREMISES. Landlord does hereby lease to Tenant and Tenant hereby leases
from Landlord the Premises. Tenant agrees to accept the Premises in their
"AS-IS/WHERE IS" condition as of the date hereof. Tenant shall repair any damage
to the Premises caused by the existing tenant after the date hereof; provided,
however, if such damage is covered by insurance, Landlord shall provide Tenant
with the insurance proceeds and Tenant shall make such repairs in accordance
with Paragraph 8 hereof. If there shall be any shortage in proceeds as and when
required to complete such repairs, and Landlord fails to provide Tenant with
adequate assurance that payment will be made by Landlord upon terms reasonably
satisfactory to Tenant, within ten (10) days following receipt of written notice
of such shortage and request therefor, then Tenant may elect to terminate this
Lease within thirty (30) days thereafter. Neither Landlord nor any agent of
Landlord has made any representation or warranty with respect to the suitability
of the Premises for the conduct of Tenant's business therein. The taking of
possession of the Premises by Tenant shall conclusively establish that the
Premises were at such time in satisfactory condition to Tenant.

    3. LEASE TERM.

        3.1 TERM. The Initial Term shall commence on the Commencement Date and
shall terminate on the tenth anniversary of the last day of the calendar month
after the Commencement Date (the "EXPIRATION DATE"), or on such earlier date
upon which this Lease shall be terminated pursuant to any of the provisions of
this Lease, and subject to Tenant's right to extend the Initial Term as
described in Paragraph 3.3. The Initial Term, together will all exercised Option
Terms, are hereinafter referred to as the "TERM."

        3.2 DELIVERY OF POSSESSION. Landlord and Tenant shall confirm the
Commencement Date by executing a lease confirmation notice, but Landlord's or
Tenant's failure to do so shall not affect the commencement of the Term except
as otherwise provided in the Lease. If Landlord is unable to deliver possession
of the Premises to Tenant by October 1, 2001, Landlord shall not be liable to
Tenant for damages of any kind. Any such delay in delivery shall not affect
Tenant's obligations hereunder; provided, however, the Commencement Date and
Tenant's obligation to pay rent shall not commence until possession is tendered
to Tenant. If Landlord has not tendered possession of the Premises to Tenant by
March 31, 2002, Tenant may terminate this Lease by giving Landlord ten (10)
days' prior written notice of such election to terminate by April 30, 2002. If
this Lease is terminated in accordance with this Paragraph 3.2, the Security
Deposit, shall be returned to Tenant and both parties shall be released from all
obligations under this Lease.

        3.3 OPTIONS.

        (a) Landlord hereby grants to Tenant two (2) consecutive Options of five
(5) years each (collectively, the "OPTIONS" and individually, an "OPTION") to
extend the Term (each such extension term, an "OPTION TERM") as set forth in
this Paragraph 3.3, on the same terms and conditions as set forth in this Lease.
The first Option Term shall commence (if at all) immediately following the tenth
(10th) anniversary of the Term Commencement Date, and the second Option Term
shall commence (if at all) immediately following the end of the first Option
Term.

        (b) Notwithstanding the foregoing, in no event shall the second Option
Term extend beyond the expiration of the term of the Master Lease, including any
extension thereof.

        (c) Each Option may be exercised only by notice delivered to Landlord at
least two hundred seventy (270) days but not more than three hundred sixty (360)
days prior to the date that the Term would otherwise expire; provided, however,
that if Tenant fails to exercise within such period, Landlord shall be required
to give Tenant written notice of the lapse of such option exercise period and
Tenant shall thereafter have a ten (10) day period following receipt of such
written notice from Landlord within which to so exercise an Option. If Tenant
fails to deliver to Landlord notice of the exercise of an Option within the
prescribed periods of time described in the preceding sentence, then such Option
and all succeeding Options shall immediately lapse, and there shall be no
further right to extend the Term. No consent given by Landlord to an assignment
or other transfer of this Lease shall be deemed to be consent or acquiescence to
an assignment or other transfer of an Option nor shall it be deemed to be a
waiver hereof. Each Option shall be exercisable by Tenant on the express
condition that, at the time of exercise, Tenant shall not be in default under
any of the provisions of this Lease and no condition which with the giving of
notice or passage of time or both would constitute such a default shall have
occurred. Further, if Tenant defaults in the performance of any of the terms,
covenants or conditions of this Lease during the period from the timely and
proper exercise of an Option to the date upon which said Option period would
commence, and such default shall be continuing after notice and expiration of
any applicable cure period, then Landlord shall have the option,

                                       -2-

<PAGE>

without limitation, of declaring Tenant's exercise of said Option null and void,
and this Lease (and all Options) shall then terminate upon the date that the
Term would have expired had Tenant never exercised said Option (subject to such
earlier termination as may be effected by Landlord's pursuit of any remedy
available to it for said breach of lease by Tenant).

        3.4 OBLIGATIONS AND DUTIES. Tenant and Landlord shall be bound, as of
the Commencement Date, by all obligations and duties under this Lease, except as
otherwise specifically provided herein.

    4.  RENT.

        4.1 MINIMUM RENT. Commencing as of the Commencement Date, Tenant shall
pay Landlord the Minimum Rent, as set forth in Paragraphs 1.8 and 4.2, in
advance and without notice or demand except as may be otherwise provided herein,
on or before the first day of each and every calendar month and continuing
throughout the Term. If the Commencement Date is other than the first day of a
calendar month, then Minimum Rent shall be prorated for such partial month.

        4.2 RENT ADJUSTMENT. The Minimum Rent shall be subject to the Rent
Adjustments set forth in Exhibit B.

        4.3 PAYMENT. Tenant shall pay the Minimum Rent when due, without notice
or demand, and without any abatement, deduction or setoff, except as expressly
provided for in this Lease. Tenant shall pay the Minimum Rent, and all other
amounts owed by Tenant under this Lease, in lawful money of the United States,
to Landlord or to such other person or place as Landlord may designate from time
to time. If Tenant pays the Minimum Rent or any other amount owed pursuant to
the terms of this Lease, by check, the check must clear within five (5) business
days. The Minimum Rent, any additional rent and all other amounts due under this
Lease are sometimes hereinafter collectively described as the "RENTS," "RENT" or
"RENT."

        4.4 PARTIAL PAYMENT. No payment by Tenant or receipt or acceptance by
Landlord of a lesser amount than the correct Rent due shall be deemed to be
other than a payment on account, nor shall any endorsement or statement on any
check or any letter accompanying any check or payment be deemed an accord and
satisfaction, and Landlord may accept such check or payment, irrespective of any
such endorsement or statement, without prejudice to Landlord's right to recover
the balance, and treat such partial payment as a default or pursue any other
remedy provided in this Lease or at law.

        4.5 DEFAULT INTEREST AND LATE CHARGE. Tenant hereby acknowledges that
the late payment of Rents will cause Landlord to incur damages, including
administrative costs, loss of use of the overdue funds and other costs, the
exact amount of which would be impractical and extremely difficult to ascertain.
Landlord and Tenant therefore agree that if Landlord does not receive a payment
of Rents within five (5) days after such payment is due, Tenant shall pay to
Landlord, as additional rent, a late charge of $0.05 for each $1.00 so overdue.
In addition to the late charge, Rents, additional rent or any other amount due
from Tenant to Landlord under any provision of this Lease which is not paid when
due shall bear interest at the maximum rate permitted by law but in no event
greater than 18% per annum (the "INTEREST RATE"). Acceptance of any late charge
or default interest by Landlord shall not cure or waive Tenant's default, nor
prevent Landlord from exercising, before or after such acceptance, any of the
rights and remedies for a default provided by this Lease or at law. Payment of
any late charge or default interest is not an alternative means of performance
of Tenant's obligation to pay Rents at the times specified in this Lease.

    5.  SECURITY DEPOSIT.

        5.1 PAYMENT PROVISIONS. The Security Deposit shall be payable (a)
$250,000 upon the execution of this Lease and (b) the remaining balance of
$250,000 upon Tenant's occupancy and opening for business.

        5.2 TENANT DEFAULT. If Tenant defaults in the payment or performance of
any of Tenant's covenants and obligations under this Lease, then Landlord may
apply all or part of the Security Deposit to the payment of any sum which
Landlord may reasonably expend or may be required to expend by reason of
Tenant's default, and to otherwise compensate Landlord for any other loss or
damage to Landlord occasioned by Tenant's default, including, but not limited
to, any damage or deficiency in the reletting of the Premises, whether such
damages or deficiency accrues before or after summary proceedings or other
re-entry by Landlord.

        5.3 ADDITIONAL DEPOSIT. If Landlord so uses all or part of the Security
Deposit, Tenant shall upon demand immediately deposit with Landlord the sum
necessary to replace the amount used.

        5.4 RELEASE OF SECURITY DEPOSIT.

        (a) If Tenant shall fully and faithfully comply with all of Tenant's
covenants and obligations under this Lease, the Security Deposit, or any balance
thereof, shall be returned to Tenant no later than sixty (60) days after
expiration of the Term or earlier termination of this Lease, and delivery to
Landlord of possession of the Premises. In the event of any assignment of this
Lease, Landlord shall either return the Security Deposit, or remaining balance
thereof, to Tenant, or deliver the Security Deposit or balance thereof, to the
assignee no later than sixty (60) days after expiration of the Term or

                                       -3-

<PAGE>

earlier termination of this Lease and delivery to the Landlord of possession of
the Premises, and any such delivery shall release Landlord from all liability to
Tenant for the return of the Security Deposit. Tenant thereafter shall look
solely to such assignee for the return or payment of the Security Deposit.

        5.5 TENANT ASSIGNMENT OF SECURITY DEPOSIT. Tenant shall not assign or
encumber or attempt to assign or encumber the Security Deposit or any interest
in it, and Landlord shall not be bound by any such assignment, encumbrance,
attempted assignment or attempted encumbrance.

        5.6 GENERAL PROVISIONS REGARDING THE SECURITY DEPOSIT. Unless required
by law, Landlord shall not be required to keep the Security Deposit separate
from its general funds, and shall not have any fiduciary or other duties
concerning the Security Deposit except as set forth in this Article 5. Unless
required by law, Tenant shall not be entitled to any interest on the Security
Deposit. Tenant hereby waives all provisions of law, now or hereafter in force,
regarding security deposits, which provide that Landlord may claim from a
security deposit only those sums reasonably necessary to remedy defaults in the
payment of Rents, to repair damage caused by Tenant or to clean the Premises, it
being agreed that Landlord may in addition claim those sums reasonably necessary
to compensate Landlord for any other loss or damage, foreseeable or
unforeseeable, caused by the act or omission of Tenant or any officer, employee,
agent or invitee of Tenant.

    6.  USE AND COMPLIANCE WITH LAW.

        6.1 USE. Tenant shall use and occupy the Premises for the Permitted
Use(s) and for no other purpose whatsoever, except as permitted by Landlord's
prior written consent, which consent shall be at Landlord's sole and absolute
discretion. In addition, Tenant shall not be entitled to use of the Common Areas
(as defined below). Tenant shall not interfere with any other tenant's or
occupant's right to peacefully have, hold and enjoy their respective premises
and the Common Areas. 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 Building. Tenant's use of the Premises
shall be subject to and consistent with the Rules and Regulations attached as
Exhibit C hereto and incorporated herein by this reference and shall further be
subject to such other conditions and limitations as are set forth elsewhere in
this Lease (including, without limitation, in Article 15). Tenant shall be
entitled to sell or offer for sale in the Premises only services, goods or
merchandise directly related to the Permitted Uses, unless otherwise agreed to
by Landlord in writing.

        6.2 USE OF CLUB. Tenant, its employees and customers, shall not be
entitled to use any of the Club Facilities except if and to the extent any of
the same may become a member of the Club.

        6.3 ZONING, LICENSES AND PERMITS.

        (a) The Tenant shall have satisfied itself that the Premises is properly
zoned to allow the Permitted Use(s) in the Premises on or before the execution
hereof. If Landlord is unable to deliver the Premises to Tenant with either the
current zoning or entitlements or other zoning or entitlements which will allow
the Specific Uses, the Security Deposit, or any balance thereof, shall be
returned to Tenant and this Lease shall terminate.

        (b) Tenant, at its sole cost and expense, shall duly procure and
thereafter maintain all other governmental licenses and permits, including full
bar liquor licensing, that are required for the proper and lawful conduct of
Tenant's business or the Permitted Use(s), and make the same available to
Landlord for inspection. Tenant at its sole cost and expense shall at all times
comply with the terms and conditions of each such license or permit. Tenant's
current President, Sheldon Andrens, will maintain operational control of the
Premises for the Permitted Use(s) and at such time that he relinquishes such
operational responsibilities to a general manager, such person shall (i) have
operational experience in the food and beverage industry, (ii) submit to a
thorough criminal background investigation which results in a favorable
determination to the reasonable satisfaction of Landlord, and (iii) receive the
approval of Landlord, which consent shall not be unreasonably withheld,
conditioned or delayed.

        (c) If, as a result of any governmental authority disallowing or
materially affecting the Tenant's business or the Permitted Use(s) or Tenant's
manner of operation, for any reason including the re-zoning of the Premises,
except for any reason arising from or related to Tenant's acts or omissions
under this Lease, Tenant shall be released from its obligations hereunder, this
Lease shall terminate and the Security Deposit, or remaining balance thereof,
shall be returned to Tenant.

        6.4 PROHIBITED USES. Tenant shall not at any time use or occupy or allow
any person to use or occupy the Premises, or do or permit anything to be done or
kept in the Premises, in any manner which (a) violates any certificate of
occupancy in force for the Premises; (b) causes or is likely to cause damage, to
the Premises or any equipment, facilities or other systems therein; (c)
constitutes a violation of law; (d) violates a requirement or condition of the
fire insurance policy issued for the Building; (e) constitutes a nuisance,
annoyance or inconvenience to other tenants or occupants of the Building, or
interferes with or disrupts the use or occupancy of any area of the Building

                                       -4-

<PAGE>

(other than the Premises) by other lessees or occupants; or (f) constitutes an
unlawful, immoral, indecent or objectionable occurrence or condition; it being
agreed, however, that the immediately preceding clause (f) shall not prohibit
Tenant's lawful operation within the Premises of a so-called "strip club" or
other adult entertainment facility.

        6.5 COMPLIANCE BY TENANT. Each party shall promptly forward to the other
party any notice it receives of the violation of any law involving the Premises
or the use and occupancy by Tenant. Tenant shall, at Tenant's expense, comply
with all laws that impose any obligation, order or duty on Landlord, except for
any matters which are the responsibility of Landlord pursuant to Paragraph 7.3,
or Tenant, arising from or related to (a) the Premises, Tenant's use of the
Premises, or anything done in or about the Premises; (b) the manner of conduct
of Tenant's business or operation of its installations, equipment or other
property therein; (c) any cause or condition created by or at the instance of
Tenant; or (d) breach of any of Tenant's obligations hereunder. Tenant shall pay
all the reasonable costs, expenses, fines, penalties and damages, including
reasonable attorneys' fees and costs, and court costs, which may be imposed upon
Landlord by reason of or arising out of Tenant's failure to fully and promptly
comply with and observe the provisions of this paragraph. Where Tenant's
compliance as required by this paragraph necessitates actions by Tenant for
which another provision of this Lease requires Landlord's consent, Tenant shall
obtain Landlord's consent pursuant to such other provision before taking such
actions. Any delay by Landlord in granting such consent shall extend Tenant's
time to comply. Any repairs or alterations of the Premises by Tenant pursuant to
this paragraph shall be subject to the provisions of Article 8.

        6.6 LOADING AND DELIVERY. The delivery and shipping of merchandise,
supplies, fixtures and other materials or goods of whatsoever nature to or from
the Premises and all loading, unloading and handling thereof shall be done only
at such times, in such areas, by such means, and through such elevators,
entrances, lobbies and corridors, as are designated by Landlord, in its sole and
absolute discretion. Landlord accepts no liability and is hereby relieved and
released by Tenant in respect to any such loading and delivery, or of the acts
or omissions of any person or persons engaged in any loading and delivery.

        7. MAINTENANCE AND REPAIRS.

        7.1 TENANT'S OBLIGATIONS. Except for Landlord's obligations set forth in
Paragraph 7.3, Tenant shall be solely responsible for all repair and maintenance
of the Premises. Without limiting the generality of the foregoing, at Tenant's
sole cost and expense, Tenant shall (i) maintain the Premises and the sidewalks
in front of the Premises in good condition, (ii) regularly clean the Premises
and clean, sweep and keep clear of ice and snow the sidewalks in front of the
Premises and deposit all waste and trash from the Premises and the sidewalks in
front of the Premises into trash containers or a trash area designated by
Landlord, and (iii) maintain and repair the Premises and the sidewalks in front
of the Premises, including, but not limited to, the interior walls of the
Premises, Tenant's personal property, fixtures, signs, windows, mirrors, doors,
the interior ceiling, the floor coverings and all lighting, electrical, plumbing
and heating, ventilation and air-conditioning systems in or exclusively serving
the Premises. Pursuant and subject to Paragraph 7.2, Landlord may, at Landlord's
option, perform the work of maintenance and repair constituting Tenant's
obligations hereunder, at Tenant's sole cost and expense. Any work of repair and
maintenance performed for Tenant by persons other than Landlord shall be
performed by contractors approved in writing by Landlord, in accordance with a
repair and maintenance plan approved by Landlord and in compliance with all
federal, state and local laws and regulations having jurisdiction thereof and
shall comply with the standards of quality at least equal to those immediately
prior thereto.

        7.2 DEFAULT BY TENANT. In the event Landlord reasonably determines, at
any time during the Term, that Tenant's repair and maintenance of the Premises
is not meeting the standards established by Landlord pursuant to the express
provisions of this Lease, then, after (i) giving Tenant no less than ten (10)
business days' notice specifying in detail the basis and (ii) thereafter,
Tenant's failure to commence and diligently pursue the remedying of the same,
Landlord may, but shall not be obligated to, undertake Tenant's repair and
maintenance obligations on behalf of Tenant, with an overhead surcharge of 15%
of such cost, together with interest at the Interest Rate calculated from the
date such costs and expenses are initially incurred by Landlord, and all
reasonable costs and expenses incurred by Landlord in the performance of
Tenant's repair and maintenance obligations shall constitute additional rent
under this Lease, and shall be payable by Tenant to Landlord within ten (10)
days after Tenant's receipt of Landlord's written demand therefor accompanied by
itemized receipts.

        7.3 LANDLORD'S OBLIGATIONS. Landlord shall maintain in good condition
and repair only the foundation, exterior walls, roof and structural columns of
the Building. Landlord shall not be liable for any damages to person or
property, nor shall Landlord be deemed to have evicted Tenant, nor shall there
be any abatement of rent under this Lease by reason of the breakdown of
equipment or machinery, utilities, or other services to the Premises, or the
cessation of utilities or services due to causes beyond the reasonable control
of Landlord or by

                                       -5-

<PAGE>

the making of repairs or improvements to the Premises or the Building, except if
and to the extent abatement is required pursuant to Paragraph 13.6. Tenant
expressly waives the benefit of any statute now or hereafter in effect which
would otherwise afford Tenant the right to make repairs at Landlord's expense,
or to terminate this Lease because of Landlord's failure to keep the Premises in
good order, condition and repair. Tenant waives the provisions of any statute
with respect to Landlord's obligations for tenantability of the Premises, and
Tenant's right to make repairs and deduct the expenses of such repairs from the
rent.

    8. ALTERATIONS AND IMPROVEMENTS. Tenant shall not make any structural
alterations, additions or improvements to the Premises or the Building systems
(collectively, "ALTERATIONS") without Landlord's consent, which shall not be
unreasonably withheld, conditioned or delayed. Any such Alterations shall also
be subject to the general terms and conditions set forth on Exhibit D. Within
twenty-four (24) months of the Commencement Date, Tenant shall incur expenses in
an amount not less than Fifty Thousand Dollars ($50,000) to upgrade the exterior
of the Premises and the Building, adjacent sidewalk and outside landscaping,
subject to the general terms and conditions set forth on Exhibit D.

    9. UTILITIES. Tenant shall timely pay for all water, sewer, gas, heat,
light, power, steam, telephone and other utilities and services supplied to the
Premises, together with any taxes thereon. Landlord reserves the right to
require Tenant to separately meter utilities usage, at Tenant's cost and
expense. Under no circumstances shall Landlord have any liability for, nor shall
Tenant be entitled to any abatement, reduction, or deferral of payment of Rents
whatsoever as a result of, any interruption, cessation, or interference with any
such utility service.

    10. TAXES.

        10.1 REAL PROPERTY TAXES. Landlord shall be obligated to pay for all
"REAL PROPERTY TAXES" (as defined herein) assessed against the land and the
Building during the Term. The term "REAL PROPERTY TAXES" shall include all real
estate taxes, assessment districts, taxing districts, housing fund assessments,
open space charges, and general and special assessments, levies, fees or charges
which are assessed, levied, charged, confirmed, or imposed by any public
authority upon the land and the Building, or its operation. Real Property Taxes
shall further be calculated as if the Building is the sole property of Landlord.

        10.2 PERSONAL PROPERTY AND BUSINESS TAXES. Tenant shall pay, at least
thirty (30) days prior to delinquency, all taxes, if any, assessed against and
levied upon trade fixtures, furnishings, equipment and all other personal
property of Tenant contained in the Premises. When possible, Tenant shall use
best efforts to cause said trade fixtures, furnishings, equipment and all other
personal property to be assessed and billed separately from the real property of
Landlord. If any of Tenant's said personal property shall be assessed with
Landlord's real property, Landlord shall reasonably allocate such taxes between
Landlord and Tenant, and Tenant shall pay the taxes attributable to Tenant's
personal property at least thirty (30) days prior to the delinquency date for
such payment of taxes. Tenant shall pay, no less than five (5) days prior to
delinquency, all special taxes and assessments and license fees levied, assessed
or imposed by any governmental agency, by reason of Tenant's use of the Premises
including, without limitation, business or licensing taxes, local or municipal
business taxes and surcharges (including, by way of example and not limitation,
any city or other local taxes based on the Rent), service payments in lieu of
such taxes, annual or periodic license or use fees, transportation, transit or
plan charges, or other similar charges, and excluding Landlord's income,
transfer and franchise taxes.

    11. INSURANCE.

        11.1 LIABILITY INSURANCE. Tenant shall, at Tenant's expense, obtain and
keep in force, during the Term, a policy of combined single limit, bodily injury
and property damage insurance, insuring as additional insureds Landlord, and its
partners (either general or limited), if any, and their respective agents,
servants, employees, shareholders, officers, directors, and attorneys
(collectively, the "AFFILIATES"), its property manager, the Master Lessor, or
any of Landlord's senior or ground lessee or mortgagee whose name and address is
given to Tenant (collectively, with the Affiliates, the "INSURED LANDLORD
PARTIES") to the extent ordinarily permitted by recognized insurance carriers,
and Tenant, against liability arising out of the use, occupancy or maintenance
of the Premises and all areas appurtenant thereto which areas are, if
applicable, more specifically delineated on the site plan attached to this Lease
as Exhibit A. Such insurance shall be in an amount not less than $2,000,000.
Such policy shall contain a cross liability clause and shall, to the extent not
specifically excluded by the standard form policy, insure performance by Tenant
of the indemnity provisions of Article 12. The limits of said insurance shall
not, however, limit the liability of Tenant hereunder. If Tenant shall fail to
procure and maintain said insurance, Landlord may, but shall not be required to,
upon not less than ten (10) days prior written notice to Tenant, procure and
maintain the same, but at the expense of Tenant. Not more frequently than once
each two (2) years, if, in the reasonable opinion of Landlord, the amount of
liability insurance required hereunder is not adequate in comparison to that

                                       -6-

<PAGE>

carried for comparable properties of similar usage as Tenant in the community in
which the Premises are located, Tenant shall increase said insurance coverage as
reasonably required by Landlord.

        11.2 CASUALTY INSURANCE. During the Term, Tenant shall maintain, at
Tenant's expense, All Risk Coverage insurance covering all of Tenant's personal
property and fixtures, and insuring same in the amount of its full replacement
value.

        11.3 RENTAL INTERRUPTION INSURANCE. During the Term of this Lease,
Tenant shall keep and maintain a policy of rental interruption insurance with
the Landlord as the insured, which policy shall provide for payment to Landlord
of a sum equal to 1.25 times the Minimum Rent, as described in Paragraphs 1.8,
4.1 and 4.2, for a term of not less than twelve (12) months after any casualty
or destruction which results in interference with Tenant's business operations.

        11.4 OTHER INSURANCE. In addition to the policies of insurance required
to be obtained and maintained by Tenant, Tenant agrees to maintain in full force
and effect at all times during the Term, at Tenant's sole cost and expense, for
the protection of Tenant and Landlord as their respective interests may appear,
policies of insurance which afford the following coverages: (a) Worker's
Compensation: statutory limits; (b) Employer's Liability: not less than
$2,000,000 and (c) such other insurance as may reasonably be required by
Landlord or the Master Lessor, from time to time,

        11.5 WAIVER OF SUBROGATION. Landlord and Tenant shall each secure an
appropriate clause in, or an endorsement upon, each insurance policy required by
the Master Lease and this Article 11, pursuant to which the insurance company
waives subrogation or permits the insured, prior to any loss, to agree with a
third party to waive any claim it might have against said third party without
invalidating the coverage under the insurance policy. On Tenant's policies, the
waiver of subrogation or permission for waiver of any claim shall extend to all
Insured Landlord Parties. Each party hereby releases the above-named persons
with respect to any claim (including a claim for negligence) which it might
otherwise have against them for injury, loss, damage or destruction occurring
during the Term and covered by the policies required of Tenant under this
Article 11 and by Landlord's policies. In the event that either party fails to
obtain and maintain the insurance required under this Article 11 (or elsewhere
in this Lease) for any reason whatsoever, such failures shall constitute
defaults under this Lease and such party shall be conclusively deemed to have
self-insured such insurance obligations with the full waiver of subrogation set
forth herein.

        11.6 POLICY REQUIREMENTS. Tenant shall deliver to Landlord fully
paid-for policies or certificates of insurance for the insurance coverage
required by the Master Lease and/or this Article, in form reasonably
satisfactory to Landlord, issued by the insurance company or its authorized
agent, upon mutual execution and delivery of this Lease. Tenant shall procure
and pay for renewals of such insurance from time to time before the expiration
thereof, and Tenant shall deliver to Landlord such renewal policy or
certificates at least thirty (30) days before the expiration of any existing
policy. At Landlord's request, Tenant shall deliver certificates of insurance
with any additional required endorsements to additional insured parties. All
policies shall be primary and shall be issued by companies of recognized
responsibility, maintaining a rating of A-X or better in Best's Insurance
Reports - Property - Casualty (or an equivalent rating on any successor index
adopted by Best's), and licensed to do business in New York. All policies shall
provide that they cannot be canceled or modified unless Landlord, and any other
additional insured party, are given at least thirty (30) days' prior written
notice of such cancellation or modification.

        11.7 PREMIUM INCREASE. If, by reason of any action or omission by Tenant
in default of any of its obligations under this Lease, including but not limited
to the provisions of Article 6, the premiums on Landlord's insurance on the Club
Facility are higher than they otherwise would be, Tenant shall reimburse
Landlord, on demand, as additional rent, for that part of the premiums
attributable to the default by Tenant provided a detailed bill and specification
is provided to Tenant.

    12. INDEMNITY.

        12.1 INDEMNITY OF LANDLORD. Except for the negligence or willful
misconduct of Landlord, or its Affiliates, Tenant shall indemnify and hold
harmless Landlord and its Affiliates, the Premises and/or the Club Facility,
from and against any and all claims arising from Tenant's use of the Premises,
or from the conduct of Tenant's business, or from any activity, work or things
done, permitted or suffered by Tenant in or about the Premises, and shall
further indemnify and hold Landlord and its Affiliates, the Premises and/or the
Club Facility, harmless from and against any and all claims arising from any
breach or default in the performance of any obligation on Tenant's part to be
performed under the terms of this Lease, or arising from any act or negligence
of Tenant, or any of Tenant's agents, contractors, customers, licensees, or
employees, and from and against all reasonable costs, reasonable attorney's fees
and costs, and court costs, reasonable expenses and liabilities incurred in the
defense of any such claim or any action or proceeding brought thereon; and in
case any action or proceeding be brought against Landlord by reason of any such
claim, Tenant, upon written notice from

                                       -7-

<PAGE>

Landlord, shall defend the same, at Tenant's expense, by counsel selected by
Tenant and approved by Landlord. Tenant, as a material part of the consideration
to Landlord, hereby assumes all risk to property or injury to persons in, upon
or about the Premises, arising from any cause and Tenant hereby waives all
claims, in respect thereof against Landlord and its Affiliates. Counsel selected
or designated by an insurance carrier is deemed approved.

        12.2 EXCULPATION OF LANDLORD. Except for the negligence or willful
misconduct of Landlord or its Affiliates, Tenant hereby agrees that neither
Landlord, nor its Affiliates, shall be liable for injury to Tenant's business,
or any loss of income therefrom, or for damage to the goods, wares, merchandise
or other property of Tenant, Tenant's employees, invitees, customers, or any
other person in or about the Premises and/or the Club Facility or any other
consequential damage, nor shall Landlord, or its Affiliates, be liable for
injury to the person of Tenant, Tenant's employees, agents or contractors,
whether the said damage or injury results from conditions arising upon the
Premises or upon other portions of the building of which the Premises are a
part, or from other sources or places where the resulting damage or injury
occurs on or about the Premises, or any part of the Club Facility and regardless
of whether the cause of such damage or injury, or the means of repairing the
same, is inaccessible to Tenant. Tenant agrees to give Landlord prompt notice of
any such damage or injury, including to the actual knowledge of Tenant,
reasonable details as to the persons involved, the nature and extent of any such
damage or injury, a statement of existing or potential claims relating thereto,
and other relevant information concerning any such damage or injury. Neither
Landlord, nor its Affiliates, shall be liable for any damages arising from any
act or neglect of any other tenant, if any, of the Club Facility, and Tenant
agrees to promptly report any such damages to Landlord; nor shall Landlord, or
its Affiliates, be liable for any damage to property entrusted to employees of
the Club Facility, nor for the loss of, or damage to, any property, by theft or
otherwise, nor for any injury or damage to person, property or Tenant's
business, resulting from construction, repair or alteration of the Premises,
improvements adjoining the Premises or any other portion of the Club Facility.
Neither Landlord, nor its Affiliates, shall be liable for any damage caused by
acts or omissions of other tenants, occupants, or visitors of the Club Facility.

        12.3 LIMITATION ON LANDLORD'S LIABILITY. The obligations of Landlord,
and its Affiliates under this Lease do not constitute personal obligations.
Tenant, and Tenant's successors and assigns, hereby agree not to seek recourse
against the personal assets of Landlord, and its Affiliates, for satisfaction of
any actual or alleged liability of Landlord to Tenant under this Lease, but
Tenant shall look only to Landlord's interest in the Club Facility for the
satisfaction of any liability of Landlord to Tenant hereunder. If this Lease is
assigned by Landlord, Landlord shall be released from all obligations under this
Lease accruing from and after the date of such assignment.

    13. DAMAGE OR DESTRUCTION.

        13.1 DEFINITIONS.

        (a) "PREMISES PARTIAL DAMAGE" shall mean damage or destruction to the
improvements on the Premises, other than Tenant's Owned Alterations and Utility
Installations, which can reasonably be repaired in three (3) months or less from
the date of the damage or destruction, and the cost thereof does not exceed a
sum equal to six (6) months' Minimum Rent subject to the Rent Adjustments set
forth in Exhibit B. Landlord shall notify Tenant in writing within thirty (30)
days from the date of the damage or destruction as to whether or not the damage
is Partial or Total.

        (b) "PREMISES TOTAL DESTRUCTION" shall mean damage or destruction to the
improvements on the Premises, other than Tenant's Owned Alterations and Utility
Installations and Trade Fixtures, which cannot reasonably be repaired in three
(3) months or less from the date of the damage or destruction, and/or the cost
thereof exceeds a sum equal to six (6) months' Minimum Rent, subject to the Rent
Adjustments set forth in Exhibit B. Landlord shall notify Tenant in writing
within thirty (30) days from the date of the damage or destruction as to whether
or not the damage is Partial or Total.

        (c) "INSURED LOSS" shall mean damage or destruction to improvements on
the Premises, other than Tenant Owned Alterations and Utility Installations and
Trade Fixtures, which was caused by an event required to be covered by the
insurance described in Article 11, irrespective of any deductible amounts or
coverage limits involved.

       (d) "REPLACEMENT COST" shall mean the cost to repair or rebuild the
improvements owned by Landlord at the time of the occurrence to their condition
existing immediately prior thereto, including demolition, debris removal and
upgrading required by the operation of Applicable Requirements, and without
deduction for depreciation.

       (e) "TENANT'S OWNED ALTERATIONS AND/OR UTILITY INSTALLATIONS" shall mean
Alterations and/or Utility Installations made by Tenant that are not yet owned
by Landlord pursuant to this Lease.

        (f) "UTILITY INSTALLATIONS" shall mean all floor and window coverings,
air lines, power panels, electrical distribution, security and fire protection
systems, communication systems,

                                       -8-

<PAGE>

lighting fixtures, HVAC equipment, plumbing, and fencing in or on the Premises.

        (g) "TRADE FIXTURES" shall mean Tenant's machinery and equipment that
can be removed without doing material damage to the Premises.

        (h) "APPLICABLE REQUIREMENTS" shall mean all applicable laws, covenants
or restrictions of record, regulations, and ordinances in effect on the
Commencement Date.

        13.2 PARTIAL DAMAGE - INSURED LOSS. If a Premises Partial Damage that is
an Insured Loss occurs, then Landlord shall, at Landlord's expense, repair such
damage (but not Tenant's Trade Fixtures or Tenant Owned Alterations and Utility
Installations) as soon as reasonably possible and this Lease shall continue in
full force and effect; provided, however, that Tenant shall, at Landlord's
election, make the repair of any damage or destruction the total cost to repair
of which is $5,000 or less, and, in such event, Landlord shall make any
applicable insurance proceeds available to Tenant on a reasonable basis for that
purpose. Notwithstanding the foregoing, if the required insurance was not in
force or the insurance proceeds are not sufficient to effect such repair, the
insuring party shall promptly contribute the shortage in proceeds as and when
required to complete said repairs. In the event, however, such shortage was due
to the fact that, by reason of the unique nature of the improvements, full
replacement cost insurance coverage was not commercially reasonable and
available, Landlord shall have no obligation to pay for the shortage in
insurance proceeds or to fully restore the unique aspects of the Premises unless
Tenant provides Landlord with the funds to cover same, or adequate assurance
thereof, within ten (10) days following receipt of written notice of such
shortage and request therefor. If Landlord receives said funds or adequate
assurance thereof within said ten (10) day period, the party responsible for
making the repairs shall complete them as soon as reasonably possible and this
Lease shall remain in full force and effect. If such funds or assurance are not
received, Landlord may nevertheless elect by written notice to Tenant within ten
(10) days thereafter to: (i) make such restoration and repair as is commercially
reasonable with Landlord paying any shortage in proceeds, in which case this
Lease shall remain in full force and effect, or (ii) have this Lease terminate
thirty (30) days thereafter. Tenant shall not be entitled to reimbursement of
any funds contributed by Tenant to repair any such damage or destruction.
Premises Partial Damage due to flood or earthquake shall be subject to Paragraph
13.3 notwithstanding that there may be some insurance coverage, but the net
proceeds of any such insurance shall be made available for the repairs if made
by either party.

        13.3 PARTIAL DAMAGE - UNINSURED LOSS. If a Premises Partial Damage that
is not an Insured Loss occurs, unless caused by a negligent or willful act of
Tenant (in which event Tenant shall make the repairs at Tenant's expense),
Landlord may either: (i) repair such damage as soon as reasonably possible at
Landlord's expense, in which event this Lease shall continue in full force and
effect, or (ii) terminate this Lease by giving written notice to Tenant within
thirty (30) days after receipt by Landlord of knowledge of the occurrence of
such damage. Such termination shall be effective sixty (60) days following the
date of such notice. In the event Landlord elects to terminate this Lease,
Tenant shall have the right within ten (10) days after receipt of the
termination notice to give written notice to Landlord of Tenant's commitment to
pay for the repair of such damage without reimbursement from Landlord. Tenant
shall provide Landlord with said funds or satisfactory assurance thereof within
thirty (30) days after making such commitment. In such event this Lease shall
continue in full force and effect, and Landlord shall proceed to make such
repairs as soon as reasonably possible after the required funds are available.
If Tenant does not make the required commitment, this Lease shall terminate as
of the date specified in the termination notice.

        13.4 TOTAL DESTRUCTION. Notwithstanding any other provision hereof, if a
Premises Total Destruction occurs, this Lease shall terminate sixty (60) days
following such Destruction. If the damage or destruction was caused by the gross
negligence or willful misconduct of Tenant, Landlord shall have the right to
recover Landlord's damages from Tenant, except as provided in this Lease.

        13.5 DAMAGE NEAR END OF TERM. If at any time during the last two (2)
years of this Lease there is damage for which the cost to repair exceeds one
month's Minimum Rent, whether or not an Insured Loss, Landlord may terminate
this Lease effective sixty (60) days following the date of occurrence of such
damage by giving a written termination notice to Tenant within thirty (30) days
after the date of occurrence of such damage. Notwithstanding the foregoing, if
Tenant at that time has an exercisable Option to extend this Lease or to
purchase the Premises, then Tenant may preserve this Lease by, (a) exercising
such Option and (b) providing Landlord with any shortage in insurance proceeds
(or adequate assurance thereof) needed to make the repairs on or before the
earlier of (i) the date which is ten (10) days after Tenant's receipt of
Landlord's written notice purporting to terminate this Lease, or (ii) the day
prior to the date upon which such Option expires. If Tenant duly exercises such
Option during such period and provides Landlord with funds (or adequate
assurance thereof) to cover any shortage in insurance proceeds, Landlord shall,
at Landlord's commercially reasonable expense, repair such

                                       -9-

<PAGE>

damage as soon as reasonably possible and this Lease shall continue in full
force and effect. If Tenant fails to exercise such Option and provide such funds
or assurance during such period, then this Lease shall terminate on the date
specified in the termination notice and Tenant's Options shall be extinguished.

       13.6 ABATEMENT OF RENT; LANDLORD'S REMEDIES.

        (a) ABATEMENT. In the event of Premises Partial Damage or Premises Total
Destruction for which Tenant is not responsible under this Lease, the Rent
payable by Tenant for the period required for the repair, remediation or
restoration of such damage shall be abated in proportion to the degree to which
Tenant's use of the Premises is impaired, but not to exceed the proceeds
received from any rental interruption insurance maintained by Landlord. All
other obligations of Tenant hereunder shall be performed by Tenant, and Landlord
shall have no liability for any such damage, destruction, remediation, repair or
restoration except as provided herein.

        (b) REMEDIES. If Landlord shall be obligated to repair or restore the
Premises and does not commence, in a substantial and meaningful way, such repair
or restoration within ninety (90) days after such obligation shall accrue,
Tenant may, at the time prior to the commencement of such repair or restoration,
give written notice to Landlord and to any lenders of which Tenant has actual
notice, of Tenant's election to terminate this Lease on a date not less than
sixty (60) days following the giving of such notice. If Tenant gives such notice
and such repair or restoration is not commenced within thirty (30) days
thereafter, this Lease shall terminate as of the date specified in said notice.
If the repair or restoration is commenced within such thirty (30) days, this
Lease shall continue in full force and effect. "Commence" shall mean either the
unconditional authorization of the preparation of the required plans, or the
beginning of the actual work on the Premises, whichever first occurs.

        13.7 TERMINATION; ADVANCE PAYMENTS. Upon termination of this Lease
pursuant to Paragraph 13, an equitable adjustment shall be made concerning
advance Rent and any other advance payments made by Tenant to Landlord. Landlord
shall, in addition, return to Tenant so much of Tenant's Security Deposit as has
not been, or is not then required to be, used by Landlord.

        13.8 WAIVE STATUTES. Landlord and Tenant agree that the terms of this
Lease shall govern the effect of any damage to or destruction of the Premises
with respect to the termination of this Lease and hereby waive the provisions of
any present or future statute to the extent inconsistent herewith.

        13.9 ENVIRONMENTAL HAZARDS AND TOXIC MATERIALS. Tenant hereby agrees to
use the Premises in accordance with the following:

        (a) "HAZARDOUS MATERIALS" shall mean any substance, material, waste, gas
or particulate matter which is regulated by any local, state or federal
authority including, but not limited to, petroleum; radioactive, nuclear or
toxic wastes or materials; asbestos; polychlorinated biphenyls (PCB's); urea
formaldehyde foam insulation; freon or freon-containing equipment, which is or
becomes regulated; any material or substance declared to be hazardous or toxic
by any law related to environmental conditions on, under, or about the Building
or the Premises, or arising from Tenant's use or occupancy of the Premises,
including soil, air and ground water conditions, or governing the use,
generation, storage transportation, or disposal of Hazardous Materials in, on,
at, to or from the Premises (hereinafter collectively referred to as the
"REGULATIONS"). "HAZARDOUS MATERIALS ACTIVITIES" shall mean the use, generation,
storage, disposal and/or transportation of Hazardous Materials by Tenant or
Tenant's employees, agents, contractors, licensees and/or invitees.

        (b) Tenant shall not conduct or cause to be conducted any Hazardous
Materials Activities on, under or about the Premises, without receiving
Landlord's prior written consent (which consent Landlord may withhold in
Landlord's sole and absolute discretion or revoke at any time); provided,
however, and notwithstanding the foregoing prohibition, Tenant may, subject to
Tenant's compliance with all Regulations, store and use in, on, and about the
Premises, general business and office supplies, solvents, lubricants and
cleaning fluids (in normal and ordinary quantities and types). Tenant shall
conduct all Hazardous Materials Activities in strict compliance (at Tenant's
sole cost and expense) with all applicable Regulations using all necessary and
appropriate precautions.

        (c) Tenant shall indemnify, protect, defend (with counsel reasonably
acceptable to Landlord) and hold harmless Landlord, and its Affiliates, any
senior lessor, the Premises and/or the Club Facility, from and against any and
all claims, damages, costs and liabilities (including actual attorneys' fees and
costs, and court costs) arising out of any Hazardous Materials Activities.
Landlord, and Landlord's representatives and employees, may enter during
daylight hours the Premises, at any time during the Term upon reasonable prior
notice to Tenant, in order to inspect Tenant's compliance herewith. The
indemnification of Landlord by Tenant set forth in this Article 13 shall survive
the expiration or any earlier termination of this Lease.

                                      -10-

<PAGE>

    14. ASSIGNMENT AND SUBLETTING.

        14.1 NO ASSIGNMENT OR SUBLETTING. Without the prior written consent of
the Landlord, Tenant shall not, either voluntarily or by operation of law and
directly or indirectly, assign, sell, encumber, pledge or otherwise transfer all
or any part of Tenant's leasehold interest hereunder, or any interest herein,
and shall not sublet the Premises or any part thereof, nor permit any other
person or entity (the customers, contractors, invitees, agents, servants,
independent contractors and performers of Tenant excepted) to occupy or use the
Premises, or any portion thereof (a "TRANSFER"). Any Transfer shall be void and
of no force and effect without the prior written consent of the Landlord. For
purposes of this Article 14, a "TRANSFER" shall include (i) a transfer by any
means of legal or beneficial interests representing 49% or more of the interests
in either voting power, capital or profits in Tenant or in any corporation,
partnership, joint venture or other entity directly or indirectly comprising
Tenant or which "controls" Tenant (as defined below in this Article 14), or (ii)
the sale, mortgage, hypothecation or pledge of more than an aggregate of 49% of
Tenant's assets.

        14.2 TERMINATION OF LEASE. Notwithstanding any other provision hereof,
in lieu of giving consent to a Transfer, Landlord may, at its election, elect to
(a) construe such proposed transfer as an offer to transfer the leasehold estate
created hereby to Landlord which may be accepted at any time within sixty (60)
days after receipt thereof, and if so accepted, such transfer to Landlord shall
automatically be deemed consummated on all the terms and provisions set forth in
such proposed transfer (except that Landlord may further assign or otherwise
transfer such interest without Tenant's review or consent) or (b) terminate this
Lease upon thirty (30) days advance written notice and release Tenant from any
liability under this Lease (as to that portion of the Premises involved)
accruing after the effective date of such termination (except as otherwise
provided in this Lease). In the event Landlord makes an election pursuant to
clause (a) or (b) of this Paragraph, Tenant may withdraw its request for
Landlord's consent to a Transfer, in which case such request and Landlord's
election shall each be null and void.

    15. COMMON AREAS.

        15.1 DEFINITION. All areas within the interior boundaries of the
Building, which are not now or hereafter held for use by Landlord or used by
other persons entitled to exclusively occupy floor space in the Building,
including, without limiting the generality of the foregoing, parking areas and
structures, driveways, truckways, delivery passages, elevators and escalators,
loading docks, sidewalks, ramps, open and enclosed courts and malls, landscaped
and planted areas, exterior stairways, bus stops, retaining walls, restrooms not
located within the premises of any tenant, and other areas and improvements
provided by Landlord for the common use of Landlord and tenants of the Building
and their respective employees and invitees, shall be deemed "COMMON AREAS."

        15.2 USE. Tenant and its employees and invitees shall not be entitled to
the use of the Common Areas during the Term, except for those areas designated
by Landlord, in its sole and absolute discretion for the purposes set forth in
Paragraph 6.6.

    16. HOLDING OVER. Should Tenant, with Landlord's written consent, which
Landlord may withhold or revoke in its sole and absolute discretion, hold over
after the termination of this Lease, Tenant shall become a Tenant from month to
month, only upon each and all of the terms herein provided as may be applicable
to such month to month tenancy and any such holding over shall not constitute an
extension of this Lease. During such holding over, Tenant's Minimum Rent as set
forth in Paragraphs 1.8 and 4.1 of this Lease shall be 125% of the sum of the
Minimum Rent then being paid for the first sixty (60) days of any such holding
over and thereafter 200% thereof. The foregoing provisions are in addition to
and do not affect Landlord's right of re-entry or any other rights or remedies
of Landlord hereunder or as otherwise provided at law or in equity, or both.
Tenant shall indemnify, defend and hold Landlord harmless from and against any
and all losses, costs, damages and liabilities (including attorneys' fees and
costs, and court costs) which Landlord may suffer as a result of Tenant's
failure to surrender the Premises.

    17. DEFAULT BY TENANT.

        17.1 DEFAULT. The occurrence of any of the following shall constitute a
material default and breach of this Lease by Tenant:

       (a) Any failure by Tenant to pay any Rent for a period of five (5) days
after such payment is due;

       (b) The failure of Tenant to take possession of the Premises within
fifteen (15) days after tendered by Landlord, or the abandonment or vacation of
the Premises by Tenant for fifteen (15) consecutive days or thirty (30) days or
more in the aggregate in any consecutive three hundred sixty-five (365) days
period;

       (c) The failure by Tenant to observe and perform any other provision of
this Lease to be observed or performed by Tenant, where such failure continues
for thirty (30) days after written notice thereof by Landlord to Tenant;
provided, however, if the nature of such default is such that it cannot
reasonably be cured within such thirty-day period, Tenant shall not be deemed to
be in default under this Paragraph

                                      -11-

<PAGE>

17.1(c) if Tenant within that period commences to cure the default and
thereafter diligently proceeds to completion within a reasonable period of time;
provided, however, Tenant shall not have more time than permitted by the
provisions of the Master Lease or any mortgage debt on the Building or
Landlord's interest in the Master Lease or this Lease;

        (d) The making by Tenant or any guarantor of Tenant of any general
assignment for the benefit of creditors; the filing by or against Tenant or any
guarantor of Tenant of a petition to have Tenant or any guarantor of Tenant
adjudged a bankrupt or of a petition for reorganization or arrangement under any
law relating to bankruptcy which is not discharged within one hundred twenty
(120) days; 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 Lease, where possession is not restored to Tenant within ninety
(90) days; or 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 ninety (90)
days;

       (e) The failure by Tenant to deliver an estoppel certificate or
subordination document or any other documentation required under this Lease upon
five (5) business days' notice that the same has not reasonably been timely
delivered as required by, as applicable, Paragraphs 27 and 28 or any other
provision of this Lease;

       (f) The committing of waste on the Premises; or

       (g) The hypothecation or assignment of this Lease or subletting of the
Premises, or attempt at such action, in violation of Article 14.

        17.2 TERMINATION OF LEASE. In the event of any such default after
required notice and expiration of any applicable cure period by Tenant, then 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 by giving Tenant a notice of termination. In the event that
Landlord so terminates this Lease, then Landlord may recover from Tenant:

        (a) The worth at the time of award of any unpaid rent which had been
earned at the time of such termination; plus

        (b) 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 Tenant proves could have been reasonably
avoided; plus

        (c) The worth at the time of award of the amount by which the unpaid
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; plus

        (d) Any other amount necessary to compensate Landlord for the detriment
proximately caused by Tenant's failure to perform its obligations under this
Lease or which in the ordinary course of things would be likely to result
therefrom; plus

        (e) Such other amounts in addition to or in lieu of the foregoing as may
be permitted from time to time by applicable New York law.

As used in subparagraphs (a) and (b) above, the "worth at the time of award" is
computed by allowing interest from the date of termination until the time of
award at the maximum rate allowable under state or federal law, or, if no such
maximum rate applies, at the rate of 15% per annum. As used in subparagraph (c)
above, the "worth at the time of award" is computed by discounting such amount
at the discount rate of the Federal Reserve Bank of New York at the time of
award plus 1%.

        17.3 REENTRY BY LANDLORD. In the event of any such default by Tenant,
Landlord shall also have the right, with or without terminating this Lease, to
reenter the Premises and remove all persons and property; the removed property
may be stored in a public warehouse or elsewhere at the cost of and for the
account of Tenant.

        17.4 ELECTION TO TERMINATE. No reentry or taking possession of the
Premises by Landlord pursuant to Paragraph 17.3 shall be construed as an
election to terminate this Lease unless a written notice of such intention be
given to Tenant or unless the termination thereof be decreed by a court of
competent jurisdiction.

        17.5 REDEMPTION RIGHTS. Tenant, on behalf of itself and any and all
persons claiming through or under Tenant, hereby waives and surrenders all right
and privilege which it might have, under any law, to redeem the Premises or to
have a continuance of this Lease after being dispossessed or ejected from the
Premises by process of law or under the terms of this Lease or after the
termination of this Lease.

        17.6 APPLICATION OF RENT PAYMENTS. Tenant waives all rights that it may
have under present or future law to designate the items to which any payments
made by Tenant are to be credited. Tenant agrees that Landlord may apply any
payments made by Tenant to such items then due and payable under this Lease as
Landlord sees fit, irrespective of any designation or request by Tenant as to
the items to which such payments should be credited.

                                      -12-

<PAGE>

        17.7 COUNTERCLAIMS. Tenant shall not interpose any counterclaim of any
kind in any action or proceeding commenced by Landlord to recover possession of
the Premises except those that would be waived by law due to Tenant's failure to
so interpose. Tenant may assert any counterclaim in a separate action or
proceeding.

        17.8 PERFORMANCE BY LANDLORD. If Tenant shall default in the performance
of any of Tenant's obligations under this Lease, and the default continues for
thirty (30) days after Landlord gives Tenant notice of the default, and Tenant
has not commenced diligently to cure such default, such that it could reasonably
be completed within the time period required hereunder, Landlord, without
thereby waiving or curing such default, may (but shall not be obligated to)
perform the defaulted obligation for the account and at the expense of Tenant.
Landlord may perform Tenant's defaulted obligation without prior notice in a
case of emergency, also at Tenant's sole but reasonable cost and expense,
provided Landlord gives Tenant notice as soon as reasonably possible.

        17.9 PAYMENT OF LANDLORD'S EXPENSE. Any reasonable expenses incurred by
Landlord in connection with any performance by it for the account of Tenant
under Paragraph 17.8, and, subject to Paragraph 21, all reasonable costs and
expenses, including reasonable attorneys' fees and costs, and court costs
(whether or not legal proceedings are instituted), involved in collecting Rents
or enforcing the obligations of Tenant under this Lease, including the
reasonable cost and expense of instituting and prosecuting legal proceedings
after default by Landlord or upon expiration or sooner termination of this Lease
plus all interest at the Interest Rate and all late charges, shall be due and
payable by Tenant, on demand.

        17.10 POST-JUDGMENT INTEREST. The amount of any judgment obtained by
Landlord against Tenant in any legal proceeding arising out of a default by
Tenant under this Lease shall bear interest until paid at the maximum rate
allowed by law, or, if no such maximum rate prevails, at the rate of 15% per
annum. Notwithstanding anything to the contrary contained in any applicable
statute, in the case of any damages that were certain or ascertainable by
calculation, such interest shall accrue from the day that the right to such
damages vested in Landlord and in the case of any unliquidated claim, such
interest shall accrue from the day such claim arose.

        17.11 NO WAIVERS. The failure of either party to insist, in any one or
more instances, upon the strict performance by the other of any of the other's
obligations under this Lease, or to exercise any right or remedy given by either
party upon a default by the other, shall not be construed as a waiver or
relinquishment for the future, and the obligations and rights and remedies upon
a default shall continue and remain in full force and effect with respect to any
subsequent breach, act or omission. The receipt by Landlord of Rents or payment
by Tenant with knowledge of a breach by the other party of any obligation of
this Lease shall not be deemed a waiver of such breach, and Landlord may treat
such payment as a partial payment under Paragraph 4.4.

        17.12 REMEDIES NOT EXCLUSIVE. The rights and remedies of either party
provided in this Lease for a default by either party are not exclusive, and
either party may exercise any other right or remedy it may have pursuant to this
Lease, at law or in equity.

    18. DEFAULT BY LANDLORD. Landlord shall not be in default unless Landlord
fails to perform obligations required of Landlord within a reasonable time, but
in no event later than thirty (30) days after written notice by Tenant to
Landlord and to Landlord's ground or senior lessor, including the Master Lessor,
or lessee or mortgagee whose name and address is given to Tenant shall have at
any time been furnished to Tenant in writing, specifying therein such
obligations Landlord has failed to perform; 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-day period and thereafter diligently
prosecutes same to completion.

    19. CONDEMNATION.

        19.1 ELECTION TO TERMINATE. If there is any taking of all or part of the
Premises, or any interest therein in excess of 10% because of the exercise of
the power of eminent domain or inverse condemnation, whether by condemnation
proceedings, or otherwise, or any transfer or any part thereof or any interest
therein made in avoidance thereof (all of the foregoing being hereinafter
referred to as "taking") before or during the Term, Landlord or Tenant shall be
entitled to elect to terminate this Lease; Landlord shall give Tenant written
notice of such election not later than thirty (30) days after the date Landlord
delivers notice to Tenant that possession or title to the portion of the
Premises taken has vested in the condemnor.

        19.2 AWARD. The total and entire award or compensation in such
proceedings, whether for a total or partial taking, or for diminution in the
value of the leasehold or for the fee or for any other reason shall belong to,
and be the property of, Landlord, provided, however, Tenant shall be entitled to
claim Tenant's relocation and other moving expenses.

    20. NOTICES. Any notice required or permitted to be given hereunder must be
in writing and may be given by personal delivery (including without limitation
by Federal Express or other recognized overnight courier or delivery

                                      -13-

<PAGE>

service), facsimile transmission followed by mail, or by mail, and if given by
mail shall be deemed sufficiently given if sent by registered or certified mail
return receipt requested to the address of the party to receive such notice.
Notices shall be deemed received upon actual receipt for notices given by
personal delivery and upon the date occurring three days after deposit of any
notice in the United States mail for addresses located in the greater Los
Angeles area or five business days after the date of such deposit in the United
States mail for notices to addresses outside of the greater Los Angeles area.
Either party, by notice to the other, may specify a different address for notice
purposes than those set forth in Paragraphs 1.16 or 1.17.

    21. ATTORNEYS' FEES. If Landlord or Tenant brings an action to enforce the
terms hereof or declare rights hereunder, the prevailing party in any such
action, on trial or appeal, shall be entitled to its reasonable attorneys' fees
and costs to be paid by the losing party.

    22. BROKERS. Tenant covenants, warrants and represents that no broker was
instrumental in bringing about OR consummating this Lease and that Tenant has
had no conversations or negotiations with any broker concerning the leasing of
the Premises or this Lease. Tenant agrees to indemnify, defend and hold Landlord
harmless against and from any claims based on the acts of Tenant for any
brokerage commissions or finder's fees by any parties making claims through
Tenant, and all costs, expenses and liabilities incurred in connection with such
claims, including all reasonable attorneys' fees and costs, and court costs.

    23. MISCELLANEOUS.

        23.1 MEMORANDUM OF LEASE. Tenant shall not record this Lease; however,
at the request of Landlord, Tenant shall promptly execute, acknowledge and
deliver to Landlord a memorandum of lease with respect to this Lease sufficient
for recording.

        23.2 ENTIRE AGREEMENT. This Lease contains all of the agreements and
understandings related to the leasing of the Premises and the respective
obligations of Landlord and Tenant in connection therewith. Landlord has not
made and is not making, and Tenant, in executing and delivering this Lease, is
not relying upon, any warranties, representations, promises or statements,
except those that are expressly set forth in this Lease, including any riders
and all exhibits hereto. All prior agreements and understandings between the
parties have merged into this Lease, which alone fully and completely expresses
the agreement of the parties.

        23.3 AMENDMENTS. No agreement shall be effective to amend, change,
modify, waive, release, discharge, terminate or effect an abandonment of this
Lease, in whole or in part, unless such agreement is in writing, refers
expressly to this Lease and is signed by Landlord and Tenant. Modifications to
this Lease must also be approved by any mortgagee or lender of Landlord who has
such right under its mortgage, deed of trust or other encumbrance.

        23.4 SUCCESSORS AND ASSIGNS. Except as otherwise expressly provided
herein, the obligations of this Lease shall bind and benefit the successors and
assigns of the parties hereto; provided, however, that no assignment, sublease
or other transfer in violation of the provisions of Article 14 shall operate to
vest any rights in any putative assignee, sublessee or transferee of Tenant.

        23.5 FORCE MAJEURE. Neither Landlord nor Tenant shall have any liability
whatsoever to the other on account of (a) the inability to fulfill, or delay in
fulfilling, any of its obligations under this Lease by reason of war, civil
disobedience, strike, other labor trouble, governmental preemption of priorities
or other controls in connection with a national or other public emergency, or
shortages of fuel, supplies or labor resulting therefrom, or any other cause,
whether similar or dissimilar to the above, beyond its reasonable control; or
(b) any failure or defect in the supply, quantity or character of electricity or
water furnished to the Premises, by reason of any requirement, act or omission
of the public utility or others furnishing the Building with electricity or
water, or for any other reason, whether similar or dissimilar to the above,
beyond Landlord's or Tenant's reasonable control. If this Lease specifies a time
period for performance of an obligation, that time period shall be extended by
the period of any delay in such performance caused by any of the events of force
majeure described above. Notwithstanding the foregoing, the occurrence of the
events set forth in clauses (a) and (b) of this paragraph shall not diminish
Tenant's obligation to timely pay Rents without abatement, reduction or set-off
except as may be set forth in this Lease.

        23.6 POST-TERMINATION OBLIGATIONS. Upon the expiration of the Term or
earlier termination of this Lease, neither party shall have any further
obligation or liability to the other except as otherwise expressly provided in
this Lease, and except for such obligations as by their nature or under the
circumstances can only be, or by the provisions of this Lease, may be, performed
after such expiration or earlier termination. However, any liability for a
payment or repayment of Rents shall survive the expiration of the Term or
earlier termination of this Lease.

        23.7 GOVERNING LAW. Irrespective of the place of execution or
performance, this Lease shall be governed by and construed in accordance with
the laws of the state of New York.

                                      -14-

<PAGE>

        23.8 INVALIDITY. If any provision of this Lease or the application
thereof to any person or circumstance shall, for any reason and to any extent,
be invalid or unenforceable, the remainder of this Lease and the application of
that provision to other persons or circumstances shall not be affected but
rather shall be enforced to the fullest extent permitted by law.

        23.9 CAPTIONS. The captions, headings and title of this Lease, along
with tables of contents or indexes of defined terms, if any, are solely for
convenience of reference and shall not affect the interpretation of this Lease.

        23.10 PRESUMPTIONS. This Lease shall be construed without regard to any
presumption or other rule requiring construction against the party drafting a
document. It shall be construed neither for nor against Landlord or Tenant, but
shall be given a reasonable interpretation in accordance with the plain meaning
of its terms and the intent of the parties.

        23.11 INDEPENDENT COVENANTS. Each covenant, agreement, obligation or
other provision of this Lease on either party's part to be performed shall be
deemed and construed as a separate and independent covenant of such party, not
dependent on any other provision of this Lease.

        23.12 NUMBER AND GENDER. All terms and words used in this Lease,
regardless of the number or gender in which they are used, shall be deemed to
include any other number and any other gender as the context may require.

        23.13 TIME IS OF THE ESSENCE. Time is of the essence of this Lease and
of each provision hereof in which a time of performance is established.

        23.14 JOINT AND SEVERAL LIABILITY. If, at any time during the Term,
Tenant comprises more than one person, all such persons shall be jointly and
severally liable for payment of Rents, additional rent and all other amounts,
and for the performance of every obligation of Tenant under this Lease.

        23.15 EXHIBITS. All exhibits and any riders attached to this Lease are
incorporated herein and by this reference made a part hereof.

        23.16 SUBMISSION OF LEASE. The submission of this Lease to Tenant or its
broker, agent or attorney for review or signature does not constitute an offer
to Tenant to lease or purchase the Premises or the granting of an option to do
so. This Lease shall have no binding force or effect until its execution and
delivery by both Landlord and Tenant.

        23.17 RULES AND REGULATIONS. Tenant shall observe and comply with the
Rules and Regulations for the Building set forth in Exhibit C hereto, and any
reasonable amendments and additions thereto as Landlord may reasonably adopt
from time to time for the management, care, cleanliness and good order of the
Building written notice of which are given to Tenant (the "RULES AND
REGULATIONS"). Landlord shall not be responsible or liable to Tenant for
violations of the Rules and Regulations by other tenants and occupants of the
Building other than Landlord and its Affiliates. No rule or regulation will
mutually detract or mutually reduce Tenant's rights or materially increase
Tenant's obligations under this Lease and the provisions of this Lease will
supercede any rule or regulation.

        23.18 AUTHORITY OF TENANT. If any Tenant is a corporation, each
individual executing this Lease, on behalf of said corporation, represents and
warrants that he is duly authorized to execute and deliver this Lease on behalf
of said corporation, in accordance with the articles, bylaws and resolution of
the Board of Directors of said corporation that this Lease is binding and
obligatory upon said corporate tenant, and shall deliver to Landlord,
concurrently with Tenant's execution hereof, a corporate resolution and other
necessary documentation authorizing the execution of this Lease. Tenant hereby
warrants and represents that, as a corporate tenant, if applicable, it is now,
and will continue during the Term hereof to be, a corporation in good standing
under the laws of the state of incorporation of Tenant, qualified to do business
in the state in which the Premises are located. If Tenant is a partnership, each
individual executing this Lease on behalf of said partnership represents and
warrants that he, she or it is duly authorized to execute and deliver this Lease
on behalf of said partnership in accordance with the terms and conditions of the
partnership agreement.

        23.19 WAIVER. Tenant expressly acknowledges that in the event of a
default by Landlord under this Lease, a monetary award shall fully compensate
Tenant for any damages incurred by Tenant as a result thereof (subject to
Paragraph 12.3), and Tenant waives the right to seek specific performance of the
terms of this Lease, and, without limiting the generality of the foregoing,
Tenant shall not record a lis pendens against all or any part of the Premises,
the Club Facility or the Building or otherwise encumber Landlord's title
thereto.

        23.20 SUBLEASE. This Lease is a sublease and is subject to the terms of
the Master Lease.

        (a) Each of the terms and conditions of the Master Lease are
incorporated herein by this reference, and the terms, conditions and respective
obligations of Landlord and Tenant to each other under this Lease shall be the
terms and conditions of the Master Lease, except for those provisions that are
directly contradicted by this Lease, in which event the terms of this Lease
shall control over the Master Lease. Except as may be otherwise provided in this

                                      -15-

<PAGE>

Lease Tenant shall and hereby agrees to be subject to and bound by and to
conform to the Master Lease with respect to the Premises and to satisfy all
applicable terms and conditions of the Master Lease with respect to the Premises
for the benefit of the Master Lessor, and that upon the breach of any of such
terms, covenants or conditions of the Master Lease by Tenant or upon the failure
of Tenant to pay rent or to comply with any provisions of this Lease, Landlord
may exercise any and all rights and remedies granted to Master Lessor by the
Master Lease, as well as any and all rights granted to Landlord by this Lease.
It is further understood that Landlord shall not have any duty or obligations to
Tenant under the Master Lease other than to maintain the Master Lease in full
force and effect during the term of this Lease; provided, however, that Landlord
shall not be liable to Tenant for any earlier termination of the Master Lease
which is not due to Landlord's default, and Tenant agrees that any termination
of the Master Lease shall likewise terminate this Lease. The parties expressly
agree that Landlord assumes none of the Master Lessor's obligations as provided
in the Master Lease. Tenant agrees to look solely to Master Lessor for
performance of those obligations and to further hold Landlord harmless from any
claim arising from Master Lessor's failure to perform its obligations, unless
its failure is due to Landlord's breach of the Master Lease.

        (b) Except as otherwise expressly provided in this Lease, (i) Tenant
expressly assumes and agrees to conform and comply with all of the terms,
covenants and conditions of the Master Lease that are to be observed and
performed thereunder by Landlord for the benefit of Master Lessor with respect
to the Premises (other than payment of rent and other monetary amounts under the
Master Lease which shall be paid by Landlord), and (ii) Tenant shall indemnify,
defend and save Landlord harmless from and against any loss, damage, cost and
expense (including attorneys' fees) which Landlord may sustain or incur by
reason of any failure on the part of Tenant to so observe and perform the same.

        (c) In the event that during the term of this Lease the Master Lease
shall be terminated or come to an end for any reason, this Lease and any
subleases of all or a part of the Premises, or any assignments of this Lease,
shall terminate and come to an end on the effective date of the termination of
said Master Lease. Except with respect to a termination caused by a default by
Landlord under the Master Lease, Landlord shall not be liable to Tenant in any
respect or to any extent for the cancellation or termination thereof except
that, if Tenant is not then in default in the payment of any sums due under this
Lease, beyond the expiration of any applicable cure period, any sum paid by
Tenant in advance shall be refunded by Landlord; the amount of such refund shall
be computed on a per diem basis as of the date of termination. Notwithstanding
the foregoing provisions of this Paragraph 23.20 if the reason for such
termination of the Master Lease shall be a default on the sole part of Tenant
with respect to any of the terms and conditions of this Lease or the Master
Lease, Landlord shall be entitled to recover from Tenant as liquidated damages
at least an amount equal to the damages which Master Lessor shall be entitled to
recover from Landlord in connection with such termination of the Master Lease.

        23.21 QUIET ENJOYMENT. Except in the event of a termination of the
Master Lease, an event of default under any superior mortgage, and subject to
any matter of public record and all applicable laws, Landlord covenants and
agrees with Tenant that upon Tenant paying the rent and additional rent and
observing and performing all the terms, covenants and conditions on Tenant's
part to be observed and performed, Tenant may peaceably and quietly enjoy the
Premises.

        IN WITNESS WHEREOF, Landlord and Tenant have executed this Lease as of
the dates set forth below.

TENANT:     CLUB AT 60TH ST., INC.,
            a New York corporation

By     /s/ Sheldon Andrens

       ----------------------------------------

 Its    President

        --------------------------------------

DATED:               5-4            ,2001
           ------------------------

LANDLORD:   THE SPORTS CLUB COMPANY, INC.,
            a Delaware corporation

By     /s/ Rex Licklider

       ----------------------------------------

 Its    Co-Ceo

        --------------------------------------

DATED:               5-4            ,2001
           ------------------------

                                      -16-

<PAGE>

                     ADDENDUM TO STANDARD FORM LEASE BETWEEN
            THE SPORTS CLUB COMPANY, INC. AND CLUB AT 60TH ST., INC.

--------------------------------------------------------------------------------

        24. SECURITY MEASURES. Tenant hereby acknowledges that the Rent payable
to Landlord hereunder does not include the cost of guard services or other
security measures, and that Landlord shall have no obligation whatsoever to
provide or cause or permit to be provided same. Tenant shall be obligated to
obtain security for the Premises and all entrances and exits and control access
to the Premises, all at its sole cost and expense, and shall be solely
responsible for, and Landlord shall not be responsible for, the sufficiency or
adequacy of such security measures. Tenant shall employ a security team at the
Premises to be directed by a retired member of the New York Police Department,
with the rank of not less than Captain, a former agent of the Federal Bureau of
Investigation, or any similarly qualified former law enforcement official.
Tenant also assumes all responsibility for the protection of Tenant's property
and property under Tenant's control, and for the protection of Tenant and its
principals, employees, agents, contractors, licensees, invitees and permitted
subtenants (and their respective principals, employees, agents, contractors,
licensees and invitees) from any acts of third parties except for Landlord and
Landlord's principals, employees or agents, regardless of whether Landlord, from
time to time in its sole discretion, may elect to provide or cause or permit to
be provided any guard services or other security measures.

        25. INSURANCE. Notwithstanding anything to the contrary in the Lease and
in addition to the Minimum Rent, Tenant shall pay, throughout the Term and as
additional rent, 13% of the cost of Landlord's casualty insurance for the
Building. Landlord may invoice Tenant monthly and on an estimated basis, which
estimate may change from time to time. If Landlord invoices on an estimated
basis, then Landlord shall provide Tenant with a yearly reconciliation on or
before each April 30 for the preceding calendar year. If such reconciliation
shall show that Tenant overpaid, then such overpayment shall be applied as a
credit against the succeeding months' invoices. If there shall be insufficient
months remaining in the Term against which to make such credit, then such
reconciliation shall be accompanied by Landlord's check to Tenant in the amount
of such overpayment. If such reconciliation shall show that Tenant underpaid,
then such reconciliation shall constitute Landlord's invoice to Tenant for such
underpayment, which Tenant shall pay within five (5) business days of receipt.

        26. SIGNS. Subject to Tenant's compliance with any applicable
governmental requirements, Tenant shall not place any sign upon the Premises
without Landlord's prior written consent, which consent shall not be
unreasonably withheld, delayed or conditioned; it being agreed, without
limitation, that it would be reasonable for Landlord to withhold its consent to
any proposed exterior signage of Tenant that (a) would account for more than 13%
of the total exterior signage allowed by law for the entire Building, (b) would
not be consistent with any already existing exterior signage at the Building or
(c) would be located anywhere other than at street level near the entrance of
the Premises. Notwithstanding the foregoing, Landlord hereby consents to the
placement of Tenant's signage at the location of the existing signage for the
Premises. Tenant shall, at its own expense, maintain, keep in good repair and
pay all charges relating to any such signage permitted under this Lease. In
addition and notwithstanding anything to the contrary contained in this Lease,
Tenant shall, at its sole cost and expense, maintain and repair that portion of
the exterior of the Building where any such signage is attached and any
surrounding area affected by such signage. Tenant's exterior signage shall be
deemed real property once installed. Landlord may require that Tenant remove any
or all of its exterior signage at the expiration of the Term and restore any
damage resulting from such removal.

        27. SUBORDINATION, NONDISTURBANCE AND ATTORNMENT.

               (a) Subject to the provisions of this paragraph, this Lease and
the leasehold estate created hereby shall be, at the option and upon written
declaration of Landlord, subject, subordinate, and inferior to the lien and
estate of any ground lease (including, without limitation, the Master Lease),
mortgage, deed of trust, hypothecation or other lien or security arising upon
such leasehold placed upon the leasehold held by Landlord under the Master Lease
or upon the real property of which the Premises are a part, and to any and all
advances made on the security thereof and to all renewals, extensions, or
replacements thereof, now or hereafter imposed by Landlord upon the Premises.
The Landlord shall use commercial reasonable efforts to obtain an agreement
("NON-DISTURBANCE AGREEMENT"), from the holders of any such ground lease
(including, without limitation, the Master Lease), mortgage, deed of trust,
hypothecation or other lien or security arising upon such leasehold after the
date of this Lease and to any and all advances made on the security thereof or
to any renewal, extension, or replacement thereof, setting forth that, so long
as Tenant is not in default hereunder, Landlord's and Tenant's rights and
obligations hereunder shall remain in force and Tenant's right to possession
shall be upheld. If the holder of any such interest shall elect to subordinate
the lien of its interest to this Lease, and shall give written notice thereof to
Tenant, then this Lease shall be deemed prior to such interest whether this
Lease is dated prior or subsequent to the date of said mortgage, deed of trust
or ground lease or the date of recording thereof. The Non-Disturbance Agreement
may contain such additional provisions regarding nondisturbance, subordination
and attornment as are customarily requested by secured lenders with liens
encumbering real property security similar to such leasehold or the Premises.
Tenant shall, within ten (10)

                                       -1-

<PAGE>

days following a request by Landlord, execute, acknowledge and deliver the
Non-Disturbance Agreement, and any other subordination agreement or other
documents required to establish of record the priority of any such encumbrance
over this Lease. If Tenant fails to execute such documents within ten (10) days
after a written request by Landlord, then, following expiration of any
applicable notice and cure period, (i) such failure shall be a material default
entitling Landlord to exercise its remedies under Article 17, (ii) Tenant shall
be liable to Landlord for all foreseeable and unforeseeable losses, costs and
expenses incurred by Landlord arising from or relating to such failure by
Tenant, including, but not limited to, losses suffered by Landlord due to the
cancellation of any prospective sale, financing, refinancing or master leasing
of all or any part of the Building and (iii) Tenant shall pay, as additional
rent, to Landlord, upon demand and without thereby limiting any other remedies
of Landlord and not as liquidated damages, a charge of $500 per day for each day
after the expiration of such ten-day period that such documents have not been so
executed and delivered. In addition, as long as they do not materially increase
Tenant's monetary obligations or materially diminish Tenant's rights under this
Lease, Tenant agrees that it will make such modifications to this Lease as may
be reasonably required by a lender or an investor not affiliated with Landlord
in connection with the obtaining, from time to time, of any equity, financing or
refinancing of the Building, including, without limitation, the Premises. In
addition, even if any such modification did materially increase Tenant's
monetary obligations or materially diminish Tenant's rights under this Lease,
Tenant and Landlord nonetheless each still shall make any such modification, as
applicable, if (i) it is a reasonable modification for such lender or investor
to require under the circumstances and (ii) Landlord, in its sole discretion,
elects, as between Landlord and Tenant, to bear any increased costs resulting
from such modification that otherwise would be borne by Tenant.

               (b) In the event of foreclosure of any deed of trust or mortgage,
whether superior or subordinate to this Lease, then (i) Tenant shall attorn to
and recognize the beneficiary, mortgagee or purchaser at foreclosure sale
("SUCCESSOR LANDLORD") as Tenant's landlord for the remaining term of this Lease
provided the Successor Landlord assumes the obligations of the Landlord from and
after the taking of possession by Successor Landlord; and (ii) the Successor
Landlord shall not be bound by (a) any payment of rent for more than one month
in advance; (b) any amendment, modification, or ending of this Lease without the
Successor Landlord's consent after the Successor Landlord's name is given to
Tenant pursuant to the notice requirements set forth in Paragraph 20, unless the
amendment, modification, or ending is specifically authorized by the original
Lease and does not require Landlord's prior agreement or consent; (c) any
liability for or obligation to cure any act or omission of a prior Landlord and
regardless of whether in the nature of a continuing default; and (d) any
construction obligation, or related funding obligation, of a prior Landlord.

               (c) If Landlord, or an affiliate of Landlord, shall acquire the
interest of Master Lessor under the Master Lease, then Landlord shall enter
into, or cause such affiliate to enter into, a Non-Disturbance Agreement with
Tenant, the terms and conditions of which shall be as set forth in Paragraph
27(a).

        28. ESTOPPEL CERTIFICATES; FINANCIAL STATEMENTS. Within ten (10) days
after a request therefor by Landlord or Tenant, the other party shall execute an
estoppel certificate, in form reasonably satisfactory to the requesting party,
and shall deliver such certificate to whom the requesting party shall direct,
which (a) certifies that this Lease is unmodified and in full force and effect
(or, if there have been modifications, that the same is in full force and effect
as modified, and stating the modifications); (b) states the expiration date of
the Term and that there are no agreements to extend or renew the Term or to
permit any holding over (or, if there are any such agreements, describes them
and specifies the periods of extension or renewal); (c) certifies the dates
through which rents have been paid, and the then-current amounts of Minimum
Rent; (d) states whether or not, to the actual knowledge and belief of the
certifying party, the requesting party is in default in performance of any of
its obligations under this Lease, and specifies each default of which it has
actual knowledge; (e) states whether or not, to the actual knowledge and belief
of the certifying party, any event has occurred which, with the giving of notice
or passage of time, or both, would constitute a default by the requesting party
and, if such an event has occurred, specifies each such event; and (f) states
whether Tenant is entitled to any credits, offsets, defenses or deductions
against payment of rents, and, if so, describes them. Tenant shall also, upon
request of Landlord, certify and agree for the benefit of any lender against the
Premises, whether in an estoppel certificate or in a Non-Disturbance Agreement,
that Tenant will not look to such lender: as being liable for any act or
omission of Landlord and regardless of whether in the nature of a continuing
default; as being obligated to cure any defaults of Landlord under the Lease
which occurred prior to the time such lender, its successors or assigns,
acquired Landlord's interest in the Premises by foreclosure or otherwise; as
being bound by any payment of rent by Tenant to Landlord for more than one (1)
month in advance; as being bound by Landlord to any amendment or modification of
the Lease without such lender's written consent; or as being bound by any
construction obligation or related funding obligation. An estoppel certificate
issued pursuant hereto shall be a representation and warranty which may be
relied upon by the requesting party and by others with whom the requesting party
may be dealing, regardless of independent investigation. Tenant also shall
include in any estoppel certificate requested by Landlord such other information
concerning this Lease as Landlord and/or an existing or proposed lender of
Landlord may reasonably request. If either party fails to execute and deliver an
estoppel certificate within ten (10) days after a written request by the other
party, then, following expiration of any applicable notice and cure period, such
failure shall be a material default entitling Landlord to exercise its remedies
under Article 17, (i) Tenant shall be liable to Landlord for all foreseeable and
unforeseeable losses, costs and expenses

                                       -2-

<PAGE>

incurred by Landlord arising from or relating to such failure by Tenant,
including, but not limited to, losses suffered by Landlord due to the
cancellation of any prospective sale, financing, refinancing or master leasing
of all or any part of the Building and (ii) Tenant shall pay, as additional
rent, to Landlord, upon demand and without thereby limiting any other remedies
of Landlord and not as liquidated damages, a charge of $500 per day for each day
after the expiration of such ten-day period that such estoppel certificate has
not been so executed and delivered. Also within ten (10) days after a request
therefor by Landlord, Tenant shall deliver a copy of the then-most current
financial statements of Tenant and/or any guarantor of Tenant, either audited or
certified by Tenant or such guarantor, as appropriate, to be true and accurate,
to Landlord or such other person or entity as Landlord shall direct. Except for
disclosing the same to Landlord's professional representatives and any potential
purchaser, lender, ground lessor, equity investor or the like, and their
respective professional representatives, and as may otherwise be required by
law, Landlord shall endeavor to keep confidential any financial information
provided to Landlord by Tenant and cause all of the foregoing parties to agree
to keep the same confidential upon the same terms and conditions and customary
exclusions.

                                       -3-

<PAGE>

                    EXHIBIT A TO STANDARD FORM LEASE BETWEEN
            THE SPORTS CLUB COMPANY, INC. AND CLUB AT 60TH ST., INC.

                              SITE PLAN OF PREMISES

                                       -1-

<PAGE>

                    EXHIBIT B TO STANDARD FORM LEASE BETWEEN
            THE SPORTS CLUB COMPANY, INC. AND CLUB AT 60TH ST., INC.

                                 RENT ADJUSTMENT

        Increases in Minimum Rent shall be payable as follows:

<TABLE>
<CAPTION>

---------------------------------------------------
                                      MINIMUM RENT
     MONTHS OF TERM                    PER MONTH
---------------------------------------------------
<S>                                   <C>
Month 1 through Month 60              $125,000.00
---------------------------------------------------
Month 61 through Month 120            $137,500.00
---------------------------------------------------
Month 121 through Month 180           $151,250.00
---------------------------------------------------
Month 181 through 240                 $166,375.00
---------------------------------------------------
</TABLE>

                                       -2-

<PAGE>

                    EXHIBIT C TO STANDARD FORM LEASE BETWEEN
            THE SPORTS CLUB COMPANY, INC. AND CLUB AT 60TH ST., INC.

                              RULES AND REGULATIONS

        Tenant agrees to conform to the following rules and regulations and all
other reasonable rules and regulations which Landlord may, from time to time,
establish for tenants of the Building without discrimination against Tenant.
Landlord shall not be responsible to Tenant for the violation or nonperformance
by any other tenant or occupant in the Building with regard to such rules and
regulations. Landlord agrees to use reasonable efforts to apply the provisions
of this Exhibit C to other tenants in a non-discriminatory fashion subject to
arbitration if Tenant deems such rules and/or regulations unreasonable.

        A. USE OF THE PREMISES.

               (i) Tenant shall use the Premises solely for the purposes
specified in Article 6. Tenant further covenants and agrees that it will not use
or suffer or permit any person or persons to use the Premises or any part
thereof for conducting therein a second-hand store, auction, distress or fire
sale, or bankruptcy or going-out-of-business sale, or for the sale of
prescription drugs, or for any use or purpose in violation of the laws of the
United States of America, or the laws, ordinances, regulations and requirements
of the state and the county and city where the Club Facility is situated, or of
other lawful authorities, and that during said Term, the Premises, and every
part thereof, shall be kept by Tenant in a clean and wholesome condition, free
from any objectionable noises, odors or nuisances if and to the extent
detectable from outside the Premises, and that all health and police regulations
with respect to the Premises shall, in all respects and at all times, be fully
complied with by Tenant.

        Except as provided in this Lease and the obligations of Landlord, Tenant
shall, at its sole cost and expense, faithfully observe in the use, occupation
and possession of the Premises all municipal and county ordinances, and all
state and federal statutes now in force and which may hereafter be in force, and
shall fully comply at its sole expense with all regulations, orders and other
requirements issued or made pursuant to any such ordinances and statutes.

        Tenant shall not use or occupy the Premises, in any manner which (a)
impairs the proper and economic maintenance, operation and repair of the
Building or its equipment, facilities or systems; (c) unreasonably interferes
with or unreasonably disrupts the use or occupancy of any area of the Building
(other than the Premises) by other lessees or occupants; (d) interferes with the
transmission or reception of microwave, television, radio or other
communications signals by antennae located on the roof of the Building or
elsewhere in the Building; (e) constitutes or promotes "drive-through" uses, or
similar types of operation, or (f) constitutes an unlawful condition; it being
agreed, however, that this paragraph shall not prohibit Tenant's lawful
operation within the Premises of a so-called "strip club" or other adult
entertainment facility.

               (ii) Tenant shall operate a first-class business operation in the
Premises, and protect the rights, health and safety of all persons using the
Premises. Therefore, Tenant, its employees, agents, licensees and customers
shall observe the following rules of conduct when present in or about the
Premises and in connection therewith Tenant and its employees shall:

                      1. Conduct themselves at all times in a professional
manner;

                      2. Not solicit members of the Club Facility as customers
for Tenant's business;

                      3. Not consume or be under the influence of drugs,
narcotics, or controlled substances, except as may be medically prescribed;

                      4. Not willfully take, destroy or damage another person's
property;

                      5. Not post notices or literature in or about the Building
(other than within the Premises) without the prior written consent of Landlord,
and not post any handbills on cars in the Common Areas;

                      6. Not possess or use any kind of weapon in or about the
Building;

                      7. Not gamble in or about the Building;

                      8. Not park improperly or without authorization in or
about the Building; or

                      9. Not engage in horseplay, dangerous practical jokes, or
the throwing of any object in or about the Building.

                                       -3-

<PAGE>

        B. SIGNAGE AND ADVERTISING MEDIA. Tenant shall not affix any signs,
advertising placards, names, insignia, trademarks, descriptive material or any
other such like item or items anywhere outside the Premises, inside the Premises
or to the Premises which would be visible from outside the Premises, except in
compliance with Article 26 of the Lease.

        C. MODIFICATION OF RULES. Landlord may add to or modify any of the
foregoing Rules and Regulations from time to time in accordance with the Lease.

                                       -4-

<PAGE>

                    EXHIBIT D TO STANDARD FORM LEASE BETWEEN
            THE SPORTS CLUB COMPANY, INC. AND CLUB AT 60TH ST., INC.

                          ALTERATIONS AND IMPROVEMENTS

        If Landlord has consented to any alterations, additions or improvements
(collectively, "ALTERATIONS") to be made by Tenant in, on, to or about the
Premises pursuant to Article 8 of the Lease or otherwise pursuant to the Lease,
the following shall apply; it being agreed, however, that carpeting, painting
and any other purely decorative work shall not constitute Alterations:

        1. CONDITIONS. Such Alterations shall be subject to Landlord's prior
written consent, which shall not be unreasonably withheld, conditioned or
delayed, of Tenant's plans, as well as all of the terms, covenants and
conditions of this Lease, provided and upon the conditions that: (a) the
Alterations are not visible from the outside of the Premises; (b) the
Alterations are non-structural and do not impair the strength of the building in
which the Premises are located; (c) before proceeding with any Alterations,
Tenant shall submit to Landlord, for Landlord's approval, plans and
specifications for the work to be done, and Tenant shall not proceed with such
work until it obtains Landlord's approval, which shall not be unreasonably
withheld, conditioned or delayed; (d) Tenant shall pay to Landlord upon demand
the reasonable direct, out-of-pocket costs and expenses actually incurred by
Landlord for independent third parties in reviewing Tenant's plans and
specifications and inspecting the Alterations to determine whether they are
being performed in accordance with the approved plans and specifications and in
compliance with law, including, without limitation, the fees of any architect,
engineer employed by Landlord for such purpose; (e) before proceeding with any
Alterations which are reasonably estimated to cost more than $25,000 Tenant
shall comply with the requirements of Article 6 hereof; (f) not less than
fifteen (15) days, nor more than twenty (20) days prior to commencement of the
Alterations, Tenant shall notify Landlord of the work commencement date, in
order that Landlord may post notices of nonresponsibility about the Premises;
(g) Tenant shall deliver to Landlord one (1) set of "as-built" plans; (h) all
such Alterations shall be compatible with existing structures, including without
limitation, with all lighting, electrical, plumbing, heating and HVAC systems in
the Club Facility; and (i) Tenant shall fully and promptly comply with and
observe the reasonable rules and regulations of Landlord then in force with
respect to the making of Alterations.

        2. PERFORMANCE. Tenant shall obtain all necessary governmental permits
and certificates, at Tenant's sole cost and expense, for the commencement and
prosecution of Alterations and for final approval of the Alterations upon
completion. Tenant shall retain at its sole expense a reputable contractor which
has been approved by Landlord, which approval shall not be unreasonably
withheld, conditioned or delayed, to perform the Alterations in compliance with
the permits and certificates and applicable law. Alterations shall be diligently
performed in a good and workmanlike manner, using new materials and equipment at
least equal in quality and class to those currently in existence at the
Premises. Alterations shall be performed in a manner that does not unreasonably
interfere with, delay, or impose additional expense on Landlord in the
construction, maintenance, repair or operation of the Club Facility; and if any
additional expense is incurred by Landlord as a result of Alterations, Tenant
shall reimburse Landlord for the additional expense fifteen (15) days after
demand, as additional rent. Throughout the performance of the Alterations,
Tenant, at its expense, shall carry, or cause to be carried, workers'
compensation insurance as required by law and general liability insurance, with
completed operations endorsements, for any occurrence in or about the Club
Facility, in such coverage limits as Landlord may reasonably require in
accordance with Article 11 of the Lease. Tenant shall furnish Landlord with
evidence satisfactory to Landlord that such insurance is in effect before the
commencement of Alterations and on request of Landlord during construction,
Tenant shall provide evidence satisfactory to Landlord that the insurance
remains in effect.

        3. LIENS AND VIOLATIONS. Tenant, at its expense, and with diligence and
dispatch, shall procure the cancellation or discharge of all notices of
violation arising from or otherwise connected with the Alterations, or any other
work, labor, services or materials done for or supplied to Tenant in connection
with the Alterations, or any person claiming through or under Tenant, which
shall be issued by any other public authority. Tenant shall not utilize
materials in the Alterations that are subject to security interests or liens.
Tenant shall defend, indemnify and hold Landlord and its Affiliates harmless

                                       -5-

<PAGE>

from and against any and all mechanics' liens, stop notices and other liens and
encumbrances or claims of liens or encumbrances filed in connection with
Alterations, or any other work, labor, services or materials done for or
supplied to Tenant, or any person claiming through or under Tenant in connection
with the Alterations, including, without limitation, security interests in any
materials, fixtures or articles installed in the Premises; and against all
costs, expenses and liabilities incurred in connection with any such lien or
encumbrance, or claim of lien or encumbrance, its removal or any related action
or proceeding (including, but not limited to, reasonable attorneys' fees and
costs and court costs). Tenant, at its expense, shall satisfy or discharge of
record each stop notice, lien or encumbrance within thirty (30) days after it is
filed and notice is given to Tenant but in any event before any enforcement
action is commenced. If Tenant fails to do so, Landlord shall have the right to
satisfy or discharge the stop notice, lien or encumbrance by payment to the
claimant on whose behalf it was filed. Tenant shall reimburse Landlord on demand
for the reasonable costs and expenses so incurred by Landlord, as additional
rent, and without regard for any defense or offset that Tenant may have had
against the claimant, but neither Landlord's curative action nor the
reimbursement of Landlord by Tenant shall cure Tenant's default in failing to
satisfy or discharge of record the stop notice, lien or encumbrance. If Tenant
fails to reimburse Landlord for such expenses within five (5) days, interest at
the Interest Rate (calculated from the date of the filing of such lien) and late
charges shall be added to such delinquent payments.

        4. SECURITY FOR PAYMENT AND PERFORMANCE. If the Alteration costs in
excess of $100,000, Landlord may request and Tenant shall obtain and deliver to
Landlord such security for payment and performance as shall be reasonably
satisfactory to Landlord.

        5. SURRENDER. Any Alterations (including without limitation, all
Tenant's Owned Alterations and Utility Installations) made, and all fixtures and
other equipment attached to the Premises shall, unless Landlord elects
otherwise, remain on, become part of, and be surrendered with the Premises on
the expiration or termination of the Term, except that Landlord can elect within
thirty (30) days before the expiration of the Term, or within thirty (30) days
after termination of the Term, to require Tenant to remove all or some of the
Alterations, fixtures and other equipment that Tenant has made or attached to
the Premises but only if Landlord notified Tenant, when approving such
Alteration(s), fixtures or equipment, that Landlord reserved such right to elect
to have Tenant remove the same. If Landlord so elects, Tenant at its cost, shall
restore the Premises to the condition designated by Landlord in its election
before the last day of the Term, or within thirty (30) days after notice of
election is given, whichever is later. Notwithstanding the foregoing, by the
expiration or sooner termination of the Lease, Tenant shall have the right to
remove any Trade Fixtures or personal property installed by Tenant or any
subtenant which are capable of being removed by Tenant, or any subtenant,
without substantial and unrepairable damage to the Premises, provided that
Tenant or any subtenant promptly repairs (but in no event to take more than
thirty (30) days), at its sole cost and expense, all damage to the remaining
improvements on the Premises caused by such removal, provided further that
Tenant's right to remove such Trade Fixtures and personal property installed by
Tenant shall be suspended at any time Tenant is in default under this Lease.
Upon the expiration or sooner termination of this Lease, if Tenant shall fail to
remove any of Tenant's personal property from the Premises prior to the date of
such termination, Landlord may, at its option, remove the same in any legally
permissible manner that Landlord shall choose, and Landlord may store said
personal property without liability to Tenant for loss thereof. Tenant agrees to
pay Landlord immediately upon demand any and all reasonable expenses incurred by
Landlord in connection with such removal, including court costs, and reasonable
attorney's fees and costs, as well as all storage charges for such personal
property for any length of time that the same shall be so stored whether or not
in Landlord's possession, or alternatively, Landlord may at its option, without
notice, sell such personal property, or any portion thereof, 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 reasonable expenses incident to the removal and sale of such
property. Tenant shall surrender the Premises, by the expiration or sooner
termination of this Lease, clean and free of debris and in good order, condition
and state of repair, ordinary wear and tear excepted.

                                       -6-

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