Document:

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                                                                   EXHIBIT 10.71

          Separation From Employment Agreement dated as of February 11,
               2000 by and between Registrant and John M. Gibbons.

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                      SEPARATION FROM EMPLOYMENT AGREEMENT

        THIS SEPARATION FROM EMPLOYMENT AGREEMENT is made and entered into as of
February 11, 2000 (the "AGREEMENT"), by and between The Sports Club Company,
Inc., a Delaware corporation (the "COMPANY") and John M. Gibbons (the
"EXECUTIVE").

                                 R E C I T A L S

        A. Executive serves as President and Chief Executive Officer of Company
pursuant to an Employment Contract dated October 16, 1998, as amended to date
(the "Employment Agreement").

        B. Executive and Company have agreed to terminate Executive's employment
with Company on the terms and conditions set forth herein.

                                A G R E E M E N T

        NOW, THEREFORE, based on the preceding facts and in consideration of the
agreements of the parties set forth below, and for other good and valuable
consideration, the receipt and adequacy of which are hereby acknowledged, the
parties hereto agree as follows:

        1. TERMINATION OF EMPLOYMENT. Company and Executive hereby terminate the
Employment Agreement and the employment relationship between them as of February
11, 2000 (the "Termination Date"). Executive hereby resigns from the Board of
Directors effective as of the Termination Date.

        2. CONSULTING RELATIONSHIP. Executive shall serve as a consultant to the
Company as requested by the Chief Executive Officer of Company on terms mutually
acceptable to Company and Executive. Company shall pay to Executive all
reasonable expenses incurred by Executive in rendering services requested by
Company, and Executive shall provide documentation of such expenses in
accordance with Company policies.

        3. SEVERANCE PAYMENTS. Executive shall be entitled to the following
payments:

                (a) Executive shall be entitled to receive (i) payments at the
rate of $250,000 per year (the "Current Rate") as set forth in Section 4(f) of
the Employment Agreement for a period of twelve months following the Termination
Date (paid in the manner the Company pays salary to its executive employees),
provided that if Executive engages in any Designated Activity (as defined
below), then the Company's obligation to make payments pursuant to this Section
3(a) (i) shall terminate; and (ii) a payout of unused vacation pay in the amount
of $22,160.91, representing 184.38 hours of unused vacation time which Executive
agrees and acknowledges constitutes payment in full for all of Executive's
unused vacation time at the Current Rate. As used herein, Executive shall be
deemed to be engaged in a Designated Activity if Executive shall knowingly,
directly or indirectly, and whether as a principal, agent, employee or
otherwise, or alone or in association with any individual or other entity, carry
on, be engaged or employed by or take part in, consult, or advise for personal
gain, or own, share in the earnings of, or finance, whether as a lender,
investor or otherwise, Brentwood Associates, Racquetball and Fitness Clubs, Inc.
or any of their affiliates (the "Spectrum Operators") in connection with (a) the
acquisition, management or operation of health and fitness clubs, or (b) the
performance of obligations under the Transition Services Agreement entered into
in connection with the sale of the Spectrum Clubs to the Spectrum Operators.
Executive agrees that the foregoing restrictions are reasonable in light of (x)
the nature and extent of the Company's proprietary information provided to the
Spectrum Operators in connection with the sale of the Spectrum Clubs, and (y)
the Company's legitimate interest in preventing the Spectrum Operators from
acquiring additional information regarding the operation of the Company.

                (b) Executive shall be entitled to a bonus payment of $70,000
with respect to services rendered in 1999, payable at the same time bonuses are
paid to other executive officers of the Company with respect to 1999.

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Except as set forth above or as required by the U.S. Comprehensive Omnibus
Budget Reconciliation Act of 1985 ("COBRA") or other applicable law, Executive
shall have no right to additional compensation or benefits from the Company
following the Termination Date.

        4. INDEMNIFICATION AGREEMENT; STOCK OPTIONS. The Indemnification
Agreement dated October 7, 1994, and all stock options previously granted to
Executive shall remain in effect in accordance with their terms, provided that
all such stock options shall terminate 90 days following the Termination Date.

        5. REPRESENTATIONS AND WARRANTIES OF COMPANY. Company hereby makes the
following representations and warranties:

                (a) Company is a corporation duly organized, validly existing
and in good standing under the laws of the State of Delaware.

                (b) All corporate and other actions required to be taken by or
on the part of Company to authorize Company to execute and deliver this
Agreement and to perform its obligations hereunder have been duly and validly
taken.

                (c) The execution and the delivery by Company of this Agreement
does not and will not (i) conflict with or result in a breach of the terms,
conditions or provisions of, (ii) constitute a default under, (iii) result in a
violation of, or (iv) require any authorization, consent or approval not
heretofore obtained pursuant to, any binding written or oral agreement or
instrument, charter document, trust instrument, indenture or evidence of
indebtedness, lease, contract or other obligation or commitment (each, a
"CONTRACTUAL OBLIGATION") binding upon Company or any of its properties or
assets, or any law, rule, regulation, restriction, order, writ, judgment, award,
determination, injunction or decree of any court or government, or any decision
or ruling of any arbitrator (each, a "REQUIREMENT OF LAW") binding upon or
applicable to Company or any of its properties or assets.

                (d) This Agreement constitutes the legal, valid and binding
obligation of Company and is enforceable against Company in accordance with its
terms, subject to applicable bankruptcy, insolvency or other similar laws or
proceedings limiting creditors' rights generally and to general equitable
principles.

        6. REPRESENTATIONS AND WARRANTIES OF EXECUTIVE. Executive hereby makes
the following representations and warranties:

                (a) The execution and the delivery by Executive of this
Agreement does not and will not (i) conflict with or result in a breach of the
terms, conditions or provisions of, (ii) constitute a default under, (iii)
result in a violation of, or (iv) require any authorization, consent or approval
not heretofore obtained pursuant to, any Contractual Obligation or Requirement
of Law to which Executive is a party or is otherwise subject.

                (b) This Agreement constitutes the legal, valid and binding
obligation of Executive and is enforceable against Executive in accordance with
its terms, subject to applicable bankruptcy, insolvency or other similar laws or
proceedings affecting creditors rights generally and to general equitable
principles.

        7. RELEASE OF CLAIMS.

                (a) RELEASED MATTERS. Except for obligations set forth in this
Agreement (including the Company's obligations under COBRA, the Indemnification
Agreement, and the stock options referred to in sections 3 and 4), each of
Company and Executive releases and discharges the other and the other's
shareholders, agents and sureties, both in individual and corporate capacities,
from any and all claims, demands, promises, controversies, actions, differences,
disputes, causes of action, suits, debts, liabilities, obligations, rights,
allegations of misconduct and complaints of whatever character, nature or kind,
in law or equity, known or unknown, suspected or unsuspected

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(collectively, the "CLAIMS") that may exist between them, relating to or arising
out of any matter, cause or thing whatsoever, including, without limitation, any
Claims in any way relating to or arising out of Executive's employment by
Company (collectively, the "RELEASED MATTERS").

                (b) UNKNOWN CLAIMS. Company and Executive recognize and
acknowledge that they may discover facts other than, different from or in
addition to the facts now known or believed by them to be true, and on the basis
of which they have executed and delivered this Agreement and given and granted
the waivers and releases provided for herein, which Company and Executive may
not have given or granted had such other, different or additional facts been
known by such party. Notwithstanding such possibility, each of Company and
Executive nevertheless intends that this Agreement, and the waivers and releases
provided for herein, shall remain effective in all respects and particulars and
for all purposes notwithstanding any such other, different or additional facts
and shall constitute an absolute bar to each and every obligation, liability,
claim, demand or cause of action with respect to which the waivers and releases
provided for herein are given. Without limiting the generality of the foregoing,
and in furtherance of the intention of the parties as set forth above, the
parties hereby irrevocably and forever relinquish all rights and benefits under
Section 1542 of the California Civil Code, which provides as follows:

        "A general release does not extend to claims which the creditor does not
        know or suspect to exist in his favor at the time of executing the
        release, which if known by him must have materially affected his
        settlement with the debtor."

Each party acknowledges that the foregoing waiver of the provisions of Section
1542 of the California Civil Code was separately bargained for. Each party
expressly consents that this Agreement shall be given full force and effect in
accordance with each and all of its express terms and provisions to the same
effect as those terms and provisions relating to any other claims, demands and
causes of action hereinabove specified. Each party is aware that he or its
attorney may hereafter discover facts different from or in addition to the facts
which he or its attorney now believes to be true with respect to the subject
matter of this Agreement, but that it is such party's intention hereby to settle
fully, finally, absolutely and forever any and all Claims relating to the
Released Matters which now or in the future may exist, or which heretofore have
existed.

                (c) Without limiting the generality of the foregoing, the Claims
shall include any Claims arising out of or in any manner related to Executive's
hiring by, employment with, or termination from employment with Company,
including but not limited to any lawsuit, complaint, claim, petition or cause of
action of any kind whatsoever under common law or under any federal or state law
or regulation alleging breach of contract, express or implied, quasi-contract,
promissory estoppel, wrongful termination, constructive discharge, breach of
implied covenant of good faith and fair dealing, intentional or negligent
infliction of emotional distress, defamation, fraud, deceit, violation of any
statute or public policy, intentional or negligent misrepresentation, any other
intentional or negligent act or omission, or any discrimination or harassment on
the basis of race, color, religion, age, sex, pregnancy, sexual preference,
national origin or ancestry, immigration status, union status, disability,
physical handicap, medical condition, or marital status, including, but not
limited to, any alleged violation of the U.S. Fair Labor Standards Act of 1938,
as amended, 29 U.S.C. Section 201, et seq.; the U.S. Equal Pay Act, as amended,
29 U.S.C. Section 206(d); the U.S. Rehabilitation Acts, as amended, 29 U.S.C.
Section 701, et seq.; the U.S. Americans With Disabilities Act ("ADA"), as
amended, 42 U.S.C. Section 12,101; the U.S. Executive Retirement Income Security
Act of 1974 ("ERISA"), as amended, 29 U.S.C. Section 1001, et seq.; the U.S.
Comprehensive Omnibus Budget Reconciliation Act of 1985 ("COBRA"), as amended,
originally enacted as P.L. 99-272, signed into law on April 7, 1986; the U.S.
Age Discrimination in Employment Act of 1967, as amended, 29 U.S.C. Section 621,
et seq.; Title VII of the U.S. Civil Rights Act of 1964 ("TITLE VII"), as
amended, 42 U.S.C. Section 2000e, et seq.; the U.S. Reconstruction Era Civil
Rights Acts, as amended, 42 U.S.C. Sections 1981-1988, inclusive; regulations of
the U.S. Office of Federal Contract Compliance Programs, as amended, 41 C.F.R.
Section 60, et seq.; the California Workers' Compensation Act, as amended, Labor
Code Section 3600, et seq.; the California Fair Employment and Housing Act
("FEHA"), as amended, Government Code Section 12,900 et seq.; the California
Unruh Civil Rights Act, as amended, Civil Code Section 51, et seq.; the
California Labor Code, Sections 132(a), 970-973, 976-977, 1020-1054, 1101-1105,
and 1197.5-1199.5, inclusive; the wage and hour orders of the California
Industrial Welfare Commission, enforced by the Division of Labor Standards
Enforcement; the respective Constitutions of the United States of America and
the State of California; and any claim for any attorney's or attorneys' fees,
costs or expenses

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of any kind or nature whatsoever, whether now known or unknown, fixed or
contingent, of as well as any now known or unknown personal injuries or damages
of every kind and nature whatsoever resulting, or that may result, therefrom.

                (d) Each of the parties represents and warrants that (i) in
executing this Agreement, such party has sought legal advice from California
legal counsel of his or its choice; (ii) such party has read the contents of
this Agreement; (iii) the terms of this Agreement and its consequences have been
completely read by, and satisfactorily explained to such party by such party's
counsel; (iv) such party fully understands the terms and consequences of this
Agreement and voluntarily accepts the terms and consequences of this Agreement;
and (v) hereafter such party shall not deny the validity of this Agreement on
the ground that he or it did not fully understand the legal consequences of this
Agreement or was not fully apprised of such legal consequences by such party's
counsel.

        8. DISCLAIMER OF LIABILITY. Each of Company and Executive acknowledges
that (a) Section 7 of this Agreement reflects a release and waiver of all Claims
relating to the Released Matters; (b) neither the matters contained in this
Agreement, nor the negotiation of this Agreement, should be considered
admissions of any liability whatsoever by any party to this Agreement; and (c)
no past or present wrongdoing on the part of any party shall be implied from the
negotiation or execution of this Agreement.

        9. NON-INTERFERENCE. For a period of one (1) year from the date of this
Agreement, Executive agrees that he will not directly or indirectly, as an
Executive, employer, agent, principal, proprietor, general partner, ten percent
(10%) or more stockholder or owner, consultant, director, corporate officer,
whether alone or in association with others:

                (a) Induce or influence (or seek to induce or influence) any
person who is engaged (as an Executive, agent, independent contractor, or
otherwise) by Company to terminate his or her employment or engagement.

                (b) Induce or influence (or seek to induce or influence) any
customer or patron of Company to terminate his or her relationship with Company;
provided that, the foregoing shall not prevent Executive from working with
competitors of Company.

                (c) Induce (or attempt to induce) any of Company's suppliers,
vendors or contractors to cease doing business with Company; provided that, the
foregoing shall not prevent Executive from working with competitors of Company.

                (d) Otherwise disparage the Company, its officers, directors,
shareholders or other agents.

Executive acknowledges that his breach of any of the terms of this Section 9
would cause Company irreparable harm and injury that could not be compensated
adequately by an award of monetary damages. Accordingly, if any such breach
should occur, Executive acknowledges that Company shall be entitled to equitable
relief (including temporary restraining orders, preliminary and permanent
injunction and specific performance) in addition to any other remedies available
to it at law.

        10. RETURN OF CORPORATE PROPERTY. Upon the Termination Date, Executive
shall (except as otherwise required in connection with consulting services
requested by Company) turn over to Company all property, writings or documents
then in his possession or under his control, belonging to or relating to the
affairs of Company or comprising or relating to Company's proprietary
information, provided, that Executive shall be entitled to copies of his
personal correspondence.

        11. COMPLETE RELEASE; INDEMNITY. Executive warrants and represents to
Company that he has not heretofore assigned, transferred, or purported to assign
or transfer, to any person or entity, any claim, or any portion thereof, or any
interest therein arising from, based upon or relating to the Released Claims, to
any other person or

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entity, and agrees to indemnify, defend and hold harmless each and all of the
Released Parties from and against any and all claims based on or arising out of
any such assignment, transfer or purported assignment or transfer of the claims
arising from, based upon or relating to the Released Claims. Executive further
agrees that this Agreement may be pleaded as a full and complete defense to, and
Executive hereby consents that it may be used as the basis for an injunction
against any action, suit or other proceeding based upon any claims, demands,
liabilities, suits, debts, liens, contracts, agreements, promises, damages,
obligations, losses, costs, expenses or actions and causes of action of every
kind, released by this Agreement.

        12. MISCELLANEOUS.

                (a) SEVERABILITY. If any paragraph, or part of any paragraph, of
this Agreement is rendered void, invalid or unenforceable by any court of law
for any reason, such invalidity or unenforceability shall not void or render
invalid or unenforceable any other paragraph (or part of any paragraph) of this
Agreement.

                (b) WAIVER AND AMENDMENT. Any of the terms or provisions of this
Agreement may be waived at any time by the party which is entitled to the
benefit thereof, but only by a written instrument executed by such party. This
Agreement may be amended, supplemented or modified only by an agreement in
writing executed by Company and Executive.

                (c) NOTICES. All notices, requests, demands, deliveries and
other communications required or permitted hereunder shall be in writing and,
except as otherwise specifically provided in this Agreement, shall be deemed to
have been duly given, upon receipt, if delivered personally or via fax, or three
(3) business days after deposit in the U.S. mail, if mailed, first class with
postage prepaid to the parties at the following addresses:

                           If to Company:

                           The Sports Club Company, Inc.
                           11100 Santa Monica Blvd., Suite 300
                           Los Angeles, California 90025
                           Attn:  Chief Executive Officer
                           Fax:  310-479-8879

                           with a copy to:

                           Kinsella, Boesch, Fujikawa & Towle, LLP
                           1901 Avenue of the Stars, Seventh Floor
                           Los Angeles, California  90067-6009
                           Attn:  Ronald K. Fujikawa, Esq.
                           Fax:  310-284-6018

                           If to Executive to:

                           John M. Gibbons
                           1455 East Mountain Drive
                           Montecito, CA 93108
                           Fax: (805) 969-1359

                           with a copy to:

                           Terry Connery
                           Price Postel & Parma
                           P.O. Box 99
                           Santa Barbara, CA 93102-0099

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                           Fax: (805) 965-3978

Any party hereto may, from time to time, change its address for receiving
notices by giving written notice thereof to the other(s) in accordance with the
terms hereof.

                (d) COUNTERPARTS. This Agreement may be executed in any number
of counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.

                (e) ENTIRE AGREEMENT. This Agreement constitutes the entire
agreement between the parties hereto with respect to the subject matter hereof
and supersedes all prior and contemporaneous written and oral negotiations,
discussions and agreements between the parties with respect to such subject
matter.

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                (f) SUCCESSORS. This Agreement shall be binding on, and shall
inure to the benefit of and be enforceable by, the parties hereto and their
respective successors and permitted assigns.

                (g) HEADINGS. The section headings contained in this Agreement
are for convenience only and shall not control or affect the meaning or
construction of any of the provisions of this Agreement.

                (h) GOVERNING LAW. This Agreement shall be governed by, and
construed and enforced in accordance with, the laws of the State of California
applicable to agreements to be entered into and entirely performed within such
State.

                (i) DELAY, ETC. No delay or omission to exercise any right,
power or remedy accruing to any party hereto shall impair any such right, power
or remedy of such party nor be construed to be a waiver of any such right, power
or remedy nor constitute any course of dealing or performance hereunder.

                (j) COSTS AND ATTORNEYS' FEES. If any action, suit, arbitration
proceeding or other proceeding is instituted arising out of this Agreement, the
prevailing party shall recover all of such party's costs, including, without
limitation, the court costs and attorneys' fees incurred therein, including any
and all appeals or petitions therefrom. As used herein, "attorneys' fees" shall
mean the full and actual costs of any legal services actually rendered in
connection with the matters involved, calculated on the basis of the usual fee
charged by the attorneys performing such services.

                (k) ASSIGNMENT. Neither this Agreement nor any right pursuant
hereto or interest herein shall be assignable by either of the parties hereto
without the prior written consent of the other party hereto, except as expressly
permitted herein.

        IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first set forth above.

THE SPORTS CLUB COMPANY, INC.               EXECUTIVE

By: /s/ D. Michael Talla                    /s/ John M. Gibbons
    --------------------------------------  ------------------------------------
    Chairman of the Board of Directors and  John M. Gibbons
    Co-Chief Executive Officer<PAGE>   1

                                                                   EXHIBIT 10.72

            Amendment to Option on Future Clubs Agreement dated as of
                March 11, 1999 by and between the Registrant and
                            Millennium Partners, LLC

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                          THE SPORTS CLUB COMPANY, INC.
                     11100 Santa Monica Boulevard, Suite 300
                          Los Angeles, California 90025

                                 March 11, 1999

Millennium Partners LLC
1995 Broadway, 3rd Floor
New York, New York 10023-5882

        Re:     Amendment to Option on Future Clubs Agreement

Gentlemen:

        This letter agreement will amend that certain letter agreement regarding
the option on future clubs dated October 27, 1998 previously entered into by and
between you, Millennium Partners LLC ("Millennium"), and us, The Sports Club
Company, Inc. ("SCC") (the "Prior Letter Agreement") as follows:

        Any capitalized term otherwise not defined in this letter agreement
shall have the meaning given such term in the Prior Letter Agreement.

        Clause A of paragraph 1 of the Prior Letter Agreement shall be deemed
modified and restated in its entirety as follows:

        "A. Subject to any adjustment required pursuant to clauses B, D and E
        below (except with respect to items (i) and (ii) of this clause A) and
        notwithstanding anything to the contrary in the health club lease for
        the SF Project (the "SF Lease")), the annual rent under the lease for a
        health club in (i) Washington, D.C. (the "Washington, D.C. Lease") shall
        be $3 million, (ii) Boston (the "Boston Lease") shall be $2.75 million,
        (iii) the third City (the "Third City Lease") with respect to which SCC
        shall have exercised an option to lease subject to and in accordance
        with this letter agreement shall be $2.5 million, (iv) the fourth City
        (the "Fourth City Lease") with respect to which SCC shall have exercised
        an option to lease subject to and in accordance with this letter
        agreement shall be $2.5 million and (v) the fifth City (the "Fifth City
        Lease") with respect to which SCC shall have exercised an option to
        lease subject to and in accordance with this letter agreement shall be
        $2.75 million."

        (a) Provided that (i) neither SCC nor any affiliate of SCC then remains
in monetary default under any lease or other written agreement (including,
without limitation, that certain participation agreement between Millennium and
SCC dated as of October 27, 1998 (the "Participation Agreement")) with
Millennium or any affiliate of Millennium after the expiration of any applicable
notice, grace and/or cure periods and (ii) any such lease(s) has not been
terminated as a result of any default thereunder by SCC or any affiliate of SCC,
then, if and to the extent the aggregate amount of fixed annual rent actually
paid by SCC or any affiliates of SCC under the leases with Millennium or any
affiliates of Millennium for a Lease Year (as defined in the San Francisco
health club lease) after December 31, 2005 exceeds the Average Leased Premises
Rent (as defined in the Participation Agreement), then, in such event,
Millennium shall pay to SCC, within thirty (30) days after Millennium's receipt
of a NDC Statement (as defined in the Participation Agreement) for any such
Lease Year, the Excess Average Rent (as defined in the Participation Agreement)
which has not been

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theretofore refunded to SCC or credited against NDC Rent (as defined in the
Participation Agreement), together with interest thereon at the rate of 11% per
annum (the "Interest Rate") from the date any such outstanding Excess Average
Rent was received by Millennium to the date paid to SCC. SCC and Millennium
agree and acknowledge that notwithstanding anything to the contrary contained in
Section 3.2 of the Participation Agreement that for the purpose of determining
Excess Average Rent, the amount paid to SCC subject to and in accordance with
this paragraph 3(a) shall be deducted when so paid to SCC from the aggregate
amount of fixed annual rent under the Agreements of Lease (as defined in the
Participation Agreement).

                (b) (i) Provided that (1) neither SCC nor any affiliate of SCC
then remains in monetary default under any lease or other written agreement
(including, without limitation, the Participation Agreement) with Millennium or
any affiliate of Millennium after the expiration of any applicable notice, grace
and/or cure periods, (2) any such lease(s) has not been terminated as a result
of any default thereunder by SCC or any affiliate or SCC and (3) the rent
commencement date has occurred under the Boston Lease (the "Boston Lease
Commencement Date"), then, until the aggregate amount of fixed annual rent
actually paid by SCC or any affiliate of SCC under the leases with Millennium or
any affiliates of Millennium for a Lease Year is less than or equal to the
Average Leased Premises Rent (without regard to the Refund Rent (as hereinafter
defined) or any rent abatement under any lease with Millennium or any affiliate
of Millennium), Millennium shall refund $250,000 to SCC (the "Refund Rent") each
Lease Year in twelve (12) equal monthly installments on the tenth (10th) day of
each calendar month commencing on the tenth (10th) day of the calendar month
immediately following the calendar month in which the Boston Lease Commencement
Date occurs and ending on the date on which the entire Refund Rent for any such
Lease Year is refunded to SCC.

                        (ii) SCC and Millennium agree and acknowledge that in
the event Millennium shall fail to pay SCC Refund Rent subject to and in
accordance with paragraph 3(b)(i) hereof, then, in such event, any such amount
of unpaid Refund Rent, together with interest thereon at the Interest Rate from
the date such amount was due to the date such amount is refunded to SCC or
credited against NDC Rent, shall be credited against the next installment of NDC
Rent payable under the Participation Agreement.

                        (iii) SCC and Millennium agree and acknowledge that
notwithstanding anything to the contrary contained in Section 3.2 of the
Participation Agreement, that for the purpose of determining the Excess Average
Rent and/or the Average Leased Premises Rent for a particular Lease Year the
amount of fixed annual rent under the Boston Lease shall be deemed to be $2.5
million, rather than $2.75 million.

        (a) (i) Provided that neither SCC nor any affiliate of SCC then remains
in monetary default under any lease or other written agreement (including,
without limitation, the Participation Agreement) with Millennium or any
affiliate of Millennium after the expiration of any applicable notice, grace
and/or cure periods, then, in the event (1) of the transfer by Millennium or any
affiliate of Millennium of the entire fee title to the SF Project to a third
party (other than to an Affiliate (as hereinafter defined) of Millennium
(provided that the

<PAGE>   4

principal purpose of any such transfer is not the circumventing of the
obligation of Millennium contained in this paragraph 4(a)(i)) or any transferee
who acquires any such fee title under any mortgage or building loan agreement,
whether now or hereafter in effect, or any renewal, addition, modification,
consolidation, replacement or extension of any such mortgage or loan agreement
through foreclosure proceeding or an assignment or deed in lieu of foreclosure)
and (2) as of the date of such transfer the unexpired portion of the term of the
SF Lease is at least five (5) years or the tenant thereunder exercises an
extension option under the SF Lease, regardless of whether the tenant thereunder
then would otherwise have the right to exercise same, by delivering to
Millennium notice thereof within ten (10) days following written notice from
Millennium of any such anticipated transfer (which exercise notice from the
tenant thereunder may be conditioned upon the actual consummation of such
transfer) , then, in such event, Millennium shall pay to SCC simultaneously with
any such transfer of fee title to the SF Project the sum of (aa) $2.5 million
plus (bb) any Excess Average Rent which has not been theretofore refunded to SCC
or credited against NDC Rent, together with interest thereon at the Interest
Rate from the date any such outstanding Excess Average Rent was received by
Millennium to the date paid to SCC. SCC and Millennium agree and acknowledge
that notwithstanding anything to the contrary contained in Section 3.2 of the
Participation Agreement that for the purpose of determining Excess Average Rent,
the amount described in clause (bb) of this paragraph 4(a)(i) paid to SCC
subject to and in accordance with this paragraph 4(a)(i) shall be deducted from
the aggregate amount of fixed annual rent under the Agreements of Lease. For
purposes of this letter agreement, (x) "Affiliate" shall mean any natural person
or persons, a partnership, a corporation or any other form of business or legal
association or entity (generically and collectively, "Person") which shall (xx)
Control (as hereinafter defined), (yy) be under the Control of, or (zz) be under
common Control with the Person in question and (y) "Control" or "control" shall
mean ownership of fifty percent (50%) or more of the outstanding voting stock of
a corporation or other majority equity and control interest if not a corporation
and the possession of power to direct or cause the direction of the management
and policy of such corporation or other entity, whether through the ownership of
voting securities, by statute or according to the provisions of a contract.

                        (ii) Provided that neither SCC nor any affiliate of SCC
then remains in monetary default under any lease or other written agreement
(including, without limitation, the Participation Agreement) with Millennium or
any affiliate of Millennium after the expiration of any applicable notice, grace
and/or cure periods, then, in the event (1) of the transfer by Millennium or any
affiliate of Millennium of the entire fee title to the project in which the
leased premises under the Washington, D.C. Lease is situated (the "Washington,
D.C. Project") to a third party (other than to an Affiliate of Millennium
(provided that the principal purpose of any such transfer is not the
circumventing of the obligation of Millennium contained in this paragraph
4(a)(ii)) or any transferee who acquires any such fee title under any mortgage
or building loan agreement, whether now or hereafter in effect, or any renewal,
addition, modification, consolidation, replacement or extension of any such
mortgage or loan agreement through foreclosure proceeding or an assignment or
deed in lieu of foreclosure) and (2) as of the date of such transfer the
unexpired portion of the term of the Washington, D.C. Lease is at least

<PAGE>   5

five (5) years or the tenant thereunder exercises an extension option under the
Washington, D.C. Lease, regardless of whether the tenant thereunder then would
otherwise have the right to exercise same, by delivering to Millennium notice
thereof within ten (10) days following written notice from Millennium of any
such anticipated transfer (which exercise notice from the tenant thereunder may
be conditioned upon the actual consummation of such transfer), then, in such
event, Millennium shall pay to SCC simultaneously with any such transfer of fee
title to the Washington, D.C. Project the sum of (aa) $2.5 million plus (bb) any
Excess Average Rent which has not been theretofore refunded to SCC or credited
against NDC Rent, together with interest thereon at the Interest Rate from the
date any such outstanding Excess Average Rent was received by Millennium to the
date paid to SCC. SCC and Millennium agree and acknowledge that notwithstanding
anything to the contrary in Section 3.2 of the Participation Agreement that for
the purpose of determining Excess Average Rent, the amount described in clause
(bb) of this paragraph 4(a)(ii) paid to SCC subject to and in accordance with
this paragraph 4(a)(ii) shall be deducted from the aggregate amount of fixed
annual rent under the Agreements of Lease.

                SCC and Millennium agree and acknowledge that notwithstanding
anything to the contrary contained in clause A of paragraph 1 of the Prior
Letter Agreement, as modified and restated by this letter agreement, in the
event SCC shall continue to have an option under the Prior Letter Agreement to
enter into a lease for a health club with Millennium or an affiliate of
Millennium and the SF Project and/or the Washington, D.C. Project is transferred
as described in paragraph 4(a) hereof, then, the annual rent under the
immediately following health club lease which SCC elects to enter into under the
Prior Letter Agreement (exclusive of the Boston Lease) shall be adjusted so that
the average fixed annual rent under (i) such lease, (ii) the leases already
entered into under the Prior Letter Agreement (exclusive of the Washington, D.C.
Lease if the Washington, D.C. Project is transferred as described in paragraph
4(a) hereof), (iii) the SF Lease (unless the SF Project is transferred as
described in paragraph 4(a) hereof) and (iv) the remaining leases with respect
to which SCC has a continued option to lease under the Prior Letter Agreement as
described in clause A of paragraph 1 thereof, shall be $2.75 million (subject to
any adjustment required pursuant to clauses B, D and E of clause A of paragraph
1 of the Prior Letter Agreement).

                (b) SCC and Millennium agree and acknowledge that
notwithstanding anything to the contrary contained in Section 3.2 of the
Participation Agreement, in the event of any transfer of the SF Project and/or
the Washington, D.C. Project as described in paragraph 4(a) hereof, then, in
each such event, the aggregate amount of fixed annual rent under the Agreement
of Lease (as defined in the Participation Agreement) at the SF Project and/or
the Washington, D.C. Project, as applicable, and the total number of rentable
square feet of the leased premises under the Agreement of Lease at the SF
Project and/or the Washington, D.C. Project, as applicable, shall not be taken
into account in connection with the determination of the Excess Average Rent and
Average Leased Premises Rent.

        5. Anything herein to the contrary notwithstanding, this letter
agreement and all of the terms and provisions hereof shall be deemed effective
as of the date hereof.

<PAGE>   6

        6. Except as otherwise expressly stated in this letter agreement, the
terms and conditions of the Prior Letter Agreement and the Participation
Agreement have not been modified or amended in any respect, and the Prior Letter
Agreement and the Participation Agreement remain in full force and effect.

                                            Sincerely,
                                            THE SPORTS CLUB COMPANY, INC.
                                            a Delaware corporation

                                            By: /s/ David M. Talla
                                               ---------------------------------
                                            Its: CEO
                                                --------------------------------

Acknowledged and agreed to as of the date first set forth above:

MILLENNIUM PARTNERS LLC,
a New York limited liability company

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

    By: Millennium Manager I, Inc.
        a New York corporation,
        Its manager
        By: /s/ Brian J. Collins
            ----------------------------------
        Its:
            -----------------------------------

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