<PAGE>   1
                                                                   EXHIBIT 10.32

                                                                    Four Seasons
                                                                  Houston, Texas


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                                LEASE AGREEMENT



                                    BETWEEN



               CRESCENT REAL ESTATE EQUITIES LIMITED PARTNERSHIP,
                         a Delaware limited partnership


                                      AND



                             COI HOTEL GROUP, INC.,
                              a Texas corporation





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<PAGE>   2
                               TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                            Page
<S>           <C>                                                             <C>
ARTICLE I . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    1
       1.1    Demise.   . . . . . . . . . . . . . . . . . . . . . . . . . .    1
       1.2    Definitions.  . . . . . . . . . . . . . . . . . . . . . . . .    1
              (a)    Affiliate.   . . . . . . . . . . . . . . . . . . . . .    1
              (b)    Base Rate.   . . . . . . . . . . . . . . . . . . . . .    2
              (c)    Beverage Sales.  . . . . . . . . . . . . . . . . . . .    2
              (d)    Consolidated Financials.   . . . . . . . . . . . . . .    2
              (e)    Consumable Supplies.   . . . . . . . . . . . . . . . .    3
              (f)    Emergency Situations.  . . . . . . . . . . . . . . . .    3
              (g)    Food Sales.  . . . . . . . . . . . . . . . . . . . . .    3
              (h)    Gross Receipts.  . . . . . . . . . . . . . . . . . . .    3
              (i)    Guarantor.   . . . . . . . . . . . . . . . . . . . . .    3
              (j)    Guaranty.  . . . . . . . . . . . . . . . . . . . . . .    3
              (k)    Holder.  . . . . . . . . . . . . . . . . . . . . . . .    3
              (l)    Indemnified Party.   . . . . . . . . . . . . . . . . .    3
              (m)    Indemnifying Party.  . . . . . . . . . . . . . . . . .    4
              (n)    Inventory.   . . . . . . . . . . . . . . . . . . . . .    4
              (o)    Lease Year.  . . . . . . . . . . . . . . . . . . . . .    4
              (p)    Legal Requirements.  . . . . . . . . . . . . . . . . .    4
              (q)    Lessee Indemnified Party.  . . . . . . . . . . . . . .    4
              (r)    Lessor Indemnified Party.  . . . . . . . . . . . . . .    4
              (s)    Lessor's Audit.  . . . . . . . . . . . . . . . . . . .    4
              (t)    Nonconsumable Inventory.   . . . . . . . . . . . . . .    5
              (u)    Other Income.  . . . . . . . . . . . . . . . . . . . .    5
              (v)    Overdue Rate.  . . . . . . . . . . . . . . . . . . . .    5
              (w)    Proceeding.  . . . . . . . . . . . . . . . . . . . . .    5
              (x)    Room Revenues.   . . . . . . . . . . . . . . . . . . .    5
              (y)    Subsidiaries.  . . . . . . . . . . . . . . . . . . . .    5
              (z)    Unavoidable Delay.   . . . . . . . . . . . . . . . . .    5
              (aa)   Uneconomic for its Primary Intended Use.   . . . . . .    5
              (ab)   Unsuitable for its Primary Intended Use.   . . . . . .    6

ARTICLE II    . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    6
       2.1    Leased Property   . . . . . . . . . . . . . . . . . . . . . .    6

ARTICLE III   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    7
       3.1    Term.   . . . . . . . . . . . . . . . . . . . . . . . . . . .    7

ARTICLE IV    . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    7
       4.1    Base Rent.  . . . . . . . . . . . . . . . . . . . . . . . . .    8
       4.2    Percentage Rent.  . . . . . . . . . . . . . . . . . . . . . .    8
       4.3    Additional Charges  . . . . . . . . . . . . . . . . . . . . .   10
</TABLE>





                                      -i-
<PAGE>   3
<TABLE>
<S>           <C>                                                             <C>
       4.4    Net Lease Provisions.   . . . . . . . . . . . . . . . . . . .   10
       4.5    Place and Manner of Payment.  . . . . . . . . . . . . . . . .   10
       4.6    Late Charge.  . . . . . . . . . . . . . . . . . . . . . . . .   10

ARTICLE V     . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   11
       5.1    Quiet Enjoyment.  . . . . . . . . . . . . . . . . . . . . . .   11

ARTICLE VI    . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   11
       6.1    Payment of Impositions.   . . . . . . . . . . . . . . . . . .   11
       6.2    Notice of Impositions.  . . . . . . . . . . . . . . . . . . .   12
       6.3    Adjustment of Imposition.   . . . . . . . . . . . . . . . . .   12
       6.4    Utility Charges.  . . . . . . . . . . . . . . . . . . . . . .   12
       6.5    Insurance Premiums.   . . . . . . . . . . . . . . . . . . . .   12
       6.6    Definition of Impositions.  . . . . . . . . . . . . . . . . .   12

ARTICLE VII   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   13
       7.1    Condition of the Leased Property.   . . . . . . . . . . . . .   13
       7.2    Use of the Leased Property.   . . . . . . . . . . . . . . . .   13
       7.3    Lessor to Grant Easements, Etc.   . . . . . . . . . . . . . .   14
       7.4    Inventory; Supplies; Lessee's Personal Property.  . . . . . .   15
       7.5    Reserves; Capital Expenditures.   . . . . . . . . . . . . . .   15
       7.6    Lessee's Obligation to Manage.  . . . . . . . . . . . . . . .   16
       7.7    Cash Accounts.    . . . . . . . . . . . . . . . . . . . . . .   16
       7.8    Use of Facilities by Lessor.  . . . . . . . . . . . . . . . .   16
       7.9    Guaranty.   . . . . . . . . . . . . . . . . . . . . . . . . .   16

ARTICLE VIII  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   16
       8.1    Compliance with Legal and Insurance Requirements. Etc   . . .   16
       8.2    Legal Requirement Covenants.  . . . . . . . . . . . . . . . .   17
       8.3    Environmental Matters and Indemnities.  . . . . . . . . . . .   17

ARTICLE IX    . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   19
       9.1    Maintenance and Repair.   . . . . . . . . . . . . . . . . . .   19
       9.2    Encroachments, Restrictions, Etc.   . . . . . . . . . . . . .   20

ARTICLE X     . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   21
       10.1   Alterations.  . . . . . . . . . . . . . . . . . . . . . . . .   21
       10.2   Lessor Alterations.   . . . . . . . . . . . . . . . . . . . .   21

ARTICLE XI    . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   21
       11.1   Liens   . . . . . . . . . . . . . . . . . . . . . . . . . . .   21

ARTICLE XII   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   22
       12.1   Permitted Contests.   . . . . . . . . . . . . . . . . . . . .   22
</TABLE>





                                      -ii-
<PAGE>   4
<TABLE>
<S>          <C>                                                             <C>
ARTICLE XIII  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   23
       13.1   General Insurance Requirements.   . . . . . . . . . . . . . .   23
       13.2   Replacement Cost.   . . . . . . . . . . . . . . . . . . . . .   24
       13.3   Worker's Compensation.  . . . . . . . . . . . . . . . . . . .   24
       13.4   Waiver of Subrogation.  . . . . . . . . . . . . . . . . . . .   24
       13.5   Form Satisfactory, Etc.   . . . . . . . . . . . . . . . . . .   24
       13.6   Increase in Limits.   . . . . . . . . . . . . . . . . . . . .   25
       13.7   Reports On Insurance Claims.  . . . . . . . . . . . . . . . .   25

ARTICLE XIV   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   25
       14.1   Insurance Proceeds  . . . . . . . . . . . . . . . . . . . . .   25
       14.2   No Abatement of Rent.   . . . . . . . . . . . . . . . . . . .   25
       14.3   Damage During Term.   . . . . . . . . . . . . . . . . . . . .   25

ARTICLE XV    . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   26
       15.1   Definitions.  . . . . . . . . . . . . . . . . . . . . . . . .   26
       15.2   Parties' Rights and Obligations.  . . . . . . . . . . . . . .   26
       15.3   Total Taking.   . . . . . . . . . . . . . . . . . . . . . . .   26
       15.4   Allocation of Award.  . . . . . . . . . . . . . . . . . . . .   26
       15.5   Partial Taking.   . . . . . . . . . . . . . . . . . . . . . .   27
       15.6   Temporary Taking.   . . . . . . . . . . . . . . . . . . . . .   27

ARTICLE XVI   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   27
       16.1   Events of Default.  . . . . . . . . . . . . . . . . . . . . .   27
       16.2   Surrender   . . . . . . . . . . . . . . . . . . . . . . . . .   29
       16.3   Damages   . . . . . . . . . . . . . . . . . . . . . . . . . .   29
       16.4   Application of Funds  . . . . . . . . . . . . . . . . . . . .   30

ARTICLE XVII  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   30
       17.1   Lessor's Right to Cure Lessee's Default   . . . . . . . . . .   30

ARTICLE XVIII . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   31
       18.1   Holding Over  . . . . . . . . . . . . . . . . . . . . . . . .   31

ARTICLE XIX   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   31
       19.1   Risk of Loss  . . . . . . . . . . . . . . . . . . . . . . . .   31

ARTICLE XX    . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   31
       20.1   Indemnification   . . . . . . . . . . . . . . . . . . . . . .   31

ARTICLE XXI   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   33
       21.1   Subletting and Assignment   . . . . . . . . . . . . . . . . .   33

ARTICLE XXII  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   34
       22.1   Officer's Certificates; Financial Statements; Lessor's 
              Estoppel Certificates and Covenants . . . . . . . . . . . . .   34
</TABLE>





                                     -iii-
<PAGE>   5
<TABLE>
<S>                                                                           <C>
ARTICLE XXIII . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   35
       23.1   Lessor's Right to Inspect   . . . . . . . . . . . . . . . . .   35

ARTICLE XXIV  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   35
       24.1   No Waiver   . . . . . . . . . . . . . . . . . . . . . . . . .   35

ARTICLE XXV   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   35
       25.1   Remedies Cumulative   . . . . . . . . . . . . . . . . . . . .   35

ARTICLE XXVI  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   36
       26.1   Acceptance of Surrender   . . . . . . . . . . . . . . . . . .   36

ARTICLE XXVII . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   36
       27.1   No Merger of Title  . . . . . . . . . . . . . . . . . . . . .   36

ARTICLE XXVIII  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   36
       28.1   Conveyance by Lessor  . . . . . . . . . . . . . . . . . . . .   36

ARTICLE XXIX  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   36
       29.1   Notices   . . . . . . . . . . . . . . . . . . . . . . . . . .   36

ARTICLE XXX   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   37
       30.1   Appraisers  . . . . . . . . . . . . . . . . . . . . . . . . .   37

ARTICLE XXXI  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   38
       31.1   Lessor May Grant Liens  . . . . . . . . . . . . . . . . . . .   38
       31.2   Breach by Lessor  . . . . . . . . . . . . . . . . . . . . . .   38

ARTICLE XXXII . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   38
       32.1   Miscellaneous   . . . . . . . . . . . . . . . . . . . . . . .   38
       32.2   Transfer of Licenses  . . . . . . . . . . . . . . . . . . . .   39
       32.3   Waiver of Presentment, Etc  . . . . . . . . . . . . . . . . .   39

ARTICLE XXXIII  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   39
       33.1   Memorandum of Lease   . . . . . . . . . . . . . . . . . . . .   39

ARTICLE XXXIV . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   39
       34.1   Management Agreement  . . . . . . . . . . . . . . . . . . . .   39

ARTICLE XXXV  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   39
       35.1   Consolidated Financials   . . . . . . . . . . . . . . . . . .   39

ARTICLE XXXVI . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   40
       36.1   REIT Compliance   . . . . . . . . . . . . . . . . . . . . . .   40
       36.2   Personal Property Limitation  . . . . . . . . . . . . . . . .   40
       36.3   Sublease Rent Limitation  . . . . . . . . . . . . . . . . . .   40
</TABLE>





                                      -iv-
<PAGE>   6
<TABLE>
<S>                                                                           <C>
       36.4   Sublease Tenant Limitation  . . . . . . . . . . . . . . . . .   40
       36.5   Lessee Ownership Limitation   . . . . . . . . . . . . . . . .   41

ARTICLE XXXVII  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   41
       37.1   Lessor's Option to Terminate Lease.   . . . . . . . . . . . .   41

ARTICLE XXXVIII . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   41
       38.1   Transition Procedures   . . . . . . . . . . . . . . . . . . .   41
</TABLE>





                                      -v-
<PAGE>   7
                                LEASE AGREEMENT

       THIS LEASE AGREEMENT (this "Lease") is made and entered into to be
effective as of the 22nd day of September, 1997, by and between CRESCENT REAL
ESTATE EQUITIES LIMITED PARTNERSHIP, a Delaware limited partnership ("Lessor"),
and COI HOTEL GROUP, INC., a Texas corporation ("Lessee").

                              W I T N E S S E T H:

       WHEREAS, Lessor is the owner of certain "Leased Property" (as
hereinafter defined); and

       WHEREAS, Lessee desires to lease the Leased Property for a term of one
hundred twenty (120) months; and

       WHEREAS, Lessee has committed its capital and credit to the extent
described herein to allow Lessee to operate the Leased Property pursuant to the
terms of this Lease and to comply with all the provisions of the Management
Agreement (as defined herein).


                                   ARTICLE I

       1.1    Demise.  In consideration of the obligation of Lessee to pay rent
as herein provided and in consideration of the other terms, covenants, and
conditions of this Lease, Lessor does hereby LEASE, DEMISE, and LET unto
Lessee, and Lessee does hereby take and lease from Lessor, the Leased Property,
TO HAVE AND TO HOLD the Leased Property, together with all rights, privileges,
easements and appurtenances belonging to or in any way appertaining to the
Leased Property, for the term hereinafter provided, upon and subject to the
terms, conditions and agreements hereinafter contained.

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

              (a)    Affiliate.  As used in this Lease the term "Affiliate" of
a person shall mean (a) any person that, directly or indirectly, controls or is
controlled by or is under common control with such person, (b) any other person
that owns, beneficially, directly or indirectly, ten percent or more of the
outstanding capital stock, shares or equity interests of such person, or (c)
any officer, director, employee, partner or trustee of such person, or (d) any
person controlling, controlled by or under common control with such person
(excluding trustees and persons serving in similar capacities who are not
otherwise an Affiliate of such person).  The





                                      -1-
<PAGE>   8
term "person" means and includes individuals, corporations, general and limited
partnerships, limited liability companies, stock companies or associations,
joint ventures, associations, companies, trusts, banks, trust companies, land
trusts, business trusts, or other entities and governments and agencies and
political subdivisions thereof.  For the purposes of this definition, "control"
(including the correlative meanings of the terms "controlled by" and "under
common control with"), as used with respect to any person, shall mean the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of such person, through the ownership
of voting securities, partnership interests or other equity interests, by
contract or otherwise.

              (b)    Base Rate.  The prime rate (or base rate) reported in the
Money Rates column or comparable section of The Wall Street Journal as the rate
then in effect for corporate loans at large U.S. money center commercial banks,
whether or not such rate has actually been charged by any such bank.  If no
such rate is reported in The Wall Street Journal or if such rate is
discontinued, then Base Rate shall mean such other successor or comparable rate
as Lessor may reasonably designate.

              (c)    Beverage Sales.  Shall mean gross revenue from the sale of
(i) wine, beer, liquor or other alcoholic beverages, whether sold in a bar or
lounge, delivered to or available in a guest room, sold at meetings or banquets
or at any other location at the Leased Property and (ii) nonalcoholic beverages
sold in a bar or lounge.  Such gross revenue constituting Beverage Sales shall
include sales by Lessee and its permitted subtenants, licensees and
concessionaires.  Such revenue shall be determined in a manner consistent with
the Uniform System and shall not include the following:

                     (i)    Any gratuity or service charge added to a
customer's bill or statement in lieu of a gratuity which is paid directly to an
employee;

                     (ii)   Credits, rebates or refunds; and

                     (iii)  Sales taxes or taxes of any other kind imposed on
the sale of alcoholic or other beverages.

              (d)    Consolidated Financials.  For any fiscal year or quarterly
accounting period for Lessee and its consolidated Subsidiaries, statements of
operations, partners' capital and cash flow (or, in the case of a corporation,
statements of operations, retained earnings and cash flow) for such period and
for the period from the beginning of the respective fiscal year to the end of
such period and the related balance sheet as at the end of such period,
together with the notes to any such yearly statement, all in such detail as may
be required by the SEC with respect to filings made by Lessor and its
Affiliates, and setting forth in comparative form the corresponding figures for
the corresponding period in the preceding fiscal year, and prepared in
accordance with GAAP and audited annually (and quarterly if required by the
SEC) by a "Big Six" firm of independent certified public accountants approved
by Lessor.  Consolidated Financials shall be prepared on the basis of a
December 31 fiscal year of Lessee, or on such other basis as Lessor shall
designate.  Any cost for such audit shall be borne by Lessor.





                                      -2-
<PAGE>   9
              (e)    Consumable Supplies.  Office supplies, cleaning supplies,
uniforms, laundry and valet supplies, engineering supplies, fuel, stationery,
soap, matches, toilet and facial tissues, and such other supplies as are
consumed customarily on a recurring basis in the operation of the Project,
together with food and beverages that are to be offered for sale to guests and
to the public.

              (f)    Emergency Situations.  Fire, any other casualty, or any
other events, circumstances or conditions which threaten the safety or physical
well-being of the Project's guests or employees or which involve the risk of
material property damage or material loss to the Project.

              (g)    Food Sales.  Shall mean (i) gross revenue from the sale of
food and non-alcoholic beverages that are prepared at the Project and sold or
delivered on or off the Project by Lessee, its permitted subtenants, licensees,
or concessionaires whether for cash or for credit, including in respect of
guest rooms, banquet rooms, meeting rooms and other similar rooms, and (ii)
gross revenue from the rental of banquet, meeting and other similar rooms.
Such gross revenue constituting Food Sales shall include sales by Lessee and
its permitted subtenants, licensees and concessionaires.  Such revenue shall be
determined in a manner consistent with the Uniform System and shall not include
the following:

                     (i)    Vending machine sales;

                     (ii)   Any gratuities or service charges added to a
customer's bill or statement in lieu of a gratuity which is paid directly to an
employee;

                     (iii)  Non-alcoholic beverages sold from a bar or lounge;

                     (iv)   Credits, rebates or refunds; and

                     (v)    Sales taxes or taxes of any other kind imposed on
the sale of food or nonalcoholic beverages.

              (h)    Gross Receipts.  All items defined as "Gross Receipts of
the Project" in the Management Agreement.

              (i)    Guarantor.  Crescent Operating, Inc., a Delaware
corporation.

              (j)    Guaranty.  That certain guaranty of lease executed by
Guarantor and guaranteeing the performance of Lessee's obligations under this
Lease.

              (k)    Holder.  Any holder of any indebtedness of the Lessor or
any of its Affiliates, any holder of a mortgage, any purchaser of the Leased
Property or any portion thereof at a foreclosure sale or any sale in lieu
thereof, or any designee of any of the foregoing.

              (l)    Indemnified Party.  Either of a Lessee Indemnified Party
or a Lessor Indemnified Party.





                                      -3-
<PAGE>   10
              (m)    Indemnifying Party.  Any party obligated to indemnify an
Indemnified Party pursuant to any provision of this Lease.

              (n)    Inventory.  All "Inventory" as defined in the Uniform
System, including, but not limited to, linens, china, silver, glassware and
other non-depreciable personal property, and any property of the type described
in Section 1221(l) of the Tax Code.

              (o)    Lease Year.  Any twelve-month period from January 1 to
December 31 during the Term; provided that the initial Lease Year shall be the
period beginning on the Commencement Date and ending on December 31, 1997, and
the last Lease Year shall be the period beginning on January 1 of the calendar
year in which the Term expires (to the extent any computation or other
provision hereof provides for an action to be taken on a Lease Year basis, an
appropriate proration or other adjustment shall be made in respect of the
initial and final Lease Years to reflect that such periods are less than full
calendar year periods).

              (p)    Legal Requirements.  All federal, state, county, municipal
and other governmental statutes, laws, rules, orders, regulations, ordinances,
judgments, decrees and injunctions affecting either the Leased Property or the
maintenance, construction, use, operation or alteration thereof (whether by
Lessee or otherwise), now existing or hereafter enacted and in force, including
all laws, rules or regulations pertaining to the environment, occupational
health and safety and public health, safety or welfare at the Leased Property;
and all permits, licenses and authorizations necessary or appropriate to
operate the Leased Property for its Primary Intended Use; and all covenants,
agreements, restrictions and encumbrances contained in any instruments, either
of record or known to Lessee (other than encumbrances hereafter created by
Lessor without the consent of Lessee), at any time in force affecting the
Leased Property.

              (q)    Lessee Indemnified Party.  Lessee, any Affiliate of
Lessee, Manager, any other Person against whom any claim for indemnification
may be asserted hereunder as a result of a direct or indirect ownership
interest in Lessee, the officers, directors, stockholders, partners, members,
employees, agents and representatives of any of the foregoing Persons and any
corporate stockholder, agent, or representative of any of the foregoing
Persons, and the respective heirs, personal representatives, successors and
assigns of any such officer, director, stockholder, employee, agent or
representative.

              (r)    Lessor Indemnified Party.  Lessor, any Affiliate of
Lessor, any other Person against whom any claim for indemnification may be
asserted hereunder as a result of a direct or indirect ownership interest in
Lessor, the officers, directors, stockholders, partners, members, employees,
agents and representatives of any of the foregoing Persons and of any
stockholder, partner, member, agent, or representative of any of the foregoing
Persons, and the respective heirs, personal representatives, successors and
assigns of any such officer, director, partner, stockholder, employee, agent or
representative.

              (s)    Lessor's Audit.  An audit by Lessor's independent
certified public accountants of the operation of the Leased Property during any
Lease Year, which audit may, at Lessor's election, be either a complete audit
of the Leased Property's operations or an audit





                                      -4-
<PAGE>   11
of Room Revenues, Food Sales, Beverage Sales and Other Income realized from the
operation of the Leased Property during such Lease Year.

              (t)    Nonconsumable Inventory.  Inventory exclusive of
Consumable Supplies.

              (u)    Other Income.  All revenues, receipts, and income of any
kind derived directly or indirectly from or in connection with the Project and
included in Gross Receipts other than Room Revenues, Food Sales or Beverage
Sales.

              (v)    Overdue Rate.  On any date, a rate equal to the Base Rate
plus 5% per annum, but in no event greater than the maximum rate then permitted
under applicable law.

              (w)    Proceeding.  Any judicial action, suit or proceeding
(whether civil or criminal), any administrative proceeding (whether formal or
informal), any investigation by a governmental authority or entity (including a
grand jury), and any arbitration, mediation or other non-judicial process for
dispute resolution.

              (x)    Room Revenues.  Gross revenue from the rental of guest
rooms, whether to individuals, groups or transients, at the Project, determined
in a manner consistent with the Uniform System, excluding the following:

                     (i)    The amount of all credits, rebates or refunds to
customers, guests or patrons;

                     (ii)   All sales taxes or any other taxes imposed on the
rental of such guest rooms; and

                     (iii)  any fees collected for amenities including, but not
limited to, telephone, laundry, movies or concessions.

              (y)    Subsidiaries.  Corporations or other entities in which
Lessee owns, directly or indirectly, 50% or more of the voting rights or
control, as applicable (individually, a "SUBSIDIARY").

              (z)    Unavoidable Delay.  Delay due to strikes, lock-outs, labor
unrest, inability to procure materials, power failure, acts of God,
governmental restrictions, enemy action, civil commotion, fire, unavoidable
casualty, condemnation or other similar causes beyond the reasonable control of
the party responsible for performing an obligation hereunder, provided that
lack of funds shall not be deemed a cause beyond the reasonable control of
either party hereto unless such lack of funds is caused by the breach of the
other party's obligation to perform any obligations of such other party under
this Lease.

              (aa)   Uneconomic for its Primary Intended Use.  A state or
condition of the Project such that in the judgment of Lessor the Project cannot
be operated on a commercially practicable basis for its Primary Intended Use,
such that Lessor intends to, and shall, cease operations from the Project.





                                      -5-
<PAGE>   12
              (ab)   Unsuitable for its Primary Intended Use.  A state or
condition of the Project such that in the judgment of Lessor the Project cannot
function as an integrated hotel facility consistent with standards applicable
to a well maintained and operated hotel comparable in quality and function to
that of the Project prior to the damage or loss.

                                   ARTICLE II

       2.1    Leased Property.  The Leased Property is comprised of those
certain tracts or parcels of land situated in Harris County, Texas, which are
more particularly described in Exhibit "A" attached hereto and made a part
hereof for all purposes, together with all and singular the rights and
appurtenances pertaining to such tracts and parcels, including any right, title
and interest of Lessor in and to adjacent strips or gores, streets, alleys or
rights-of-way and all rights of ingress and egress thereto (the foregoing
properties are hereinafter referred to collectively as the "Land").  The Leased
Property shall also include all buildings, fixtures and other improvements on
the Land, including specifically, without limitation, all luxury apartments,
the automobile parking garage, all swimming pools, restaurants, hotel rooms,
lounges, and various other guest and spa facilities, and all other buildings
and improvements as are located thereon, all being commonly known as The Four
Seasons Hotel and Four Seasons Place Apartments.  The Land, together with the
foregoing improvements, is hereinafter referred to as the "Project".  The
Leased Property shall also include all personal property, tangible or
intangible, of any kind whatsoever owned by Lessor and used in connection with
the operation of the Project, including, but not limited to the following
items:

              (a)    All names, logos and designs used in the ownership or
       operation of the Project, including, without limitation, the names,
       logos and designs now used in connection with the restaurants, cocktail
       lounges, night clubs, banquet rooms and meeting rooms in and/or about
       the Project, together with the goodwill appurtenant to each of such
       names, logos and designs; and

              (b)    All machinery, apparatus, vehicles, equipment, artwork,
       furniture, fittings, fixtures and articles of personal property of every
       kind and nature whatsoever, including reserve stock and spare parts
       therefor, owned by Lessor which are located in the Project or stored
       offsite and are used or usable in connection with any present or future
       occupation or operation of the Project, including, by way of
       illustration and not limitation, all furnishings, pictures, chinaware,
       glassware, silverware, ornaments, uniforms, kitchen appliances and
       utensils, radios, television sets, mirrors, linens, towels, sheets,
       blankets, telephones, and all similar and related articles owned by
       Lessor and located in or upon or used in connection with the operation
       or maintenance of the Project.

       For and during the Term of this Lease, but not thereafter, Lessor also
assigns unto Lessee all of Lessor's interest and estate in and to the following
items:

              (aa)   All contracts for the use or occupancy of guest rooms and
       apartment units and/or the meeting, dining, banquet, spa and health
       facilities of the Project;





                                      -6-
<PAGE>   13
              (bb)   All service, maintenance, purchase orders and other
       contracts pertaining to the ownership, maintenance, operation,
       provisioning or equipping of the Project, including warranties and
       guaranties relating thereto;

              (cc)   All licenses, franchises and permits used in or relating
       to the ownership, occupancy or operation of any part of the Project;

              (dd)   All software programs for accounting functions for the
       general ledger, accounts payable, accounts receivable, and payroll for
       the Project;

              (ee)   Lessor's interest as "owner" under that certain Amended
       and Restated Hotel and Residential Management Agreement effective as of
       September 22, 1997, executed by and between Lessor, as owner, and Four
       Seasons Hotels Limited, a corporation incorporated under the laws of the
       Province of Ontario, as operator (the "Manager") (the "Management
       Agreement");

              (ff)   All oral or written agreements or leases pursuant to which
       any portion of the Land or Project is used or occupied by anyone other
       than Lessor;

              (gg)   Any developer's, declarant's, or owner's interests under
       any operating agreements or reciprocal easement agreements or other
       similar agreements affecting and/or benefiting the Project; and

              (hh)   All customer lists.

       This Lease is executed by Lessor and accepted by Lessee on the
understanding that Lessee will and does hereby assume and agree to perform all
of Lessor's obligations under all agreements, contracts and undertakings
assigned by Lessor to Lessee hereunder.


                                  ARTICLE III

       3.1    Term.  The term (hereinafter called the "Term") of this Lease
shall commence on the effective date of execution of this Lease (the
"Commencement Date") and shall end on the last day of the one hundred twentieth
(120th) month following the month in which this Lease commences, unless sooner
terminated in accordance with the provisions hereof.

                                   ARTICLE IV

       So long as this Lease remains in force and effect, Lessee promises to
pay rents to Lessor, in lawful money of the United States of America which
shall be legal tender for the payment of public and private debts, in
immediately available funds, in the manner, at the time, and in the amounts
specified below:





                                      -7-
<PAGE>   14
       4.1    Base Rent.  The annual base rent (the "Base Rent") payable during
the term of the Lease shall be as follows:

<TABLE>
<CAPTION>
              Year                                         Amount
              ----                                         ------
              <S>                                        <C>
              1997                                       $3,975,250
              1998                                       $5,000,000
              1999                                       $5,131,620
              2000                                       $5,463,200
              2001                                       $5,563,200
              2002                                       $5,663,200
              2003                                       $5,863,200
              2004                                       $5,963,200
              2005                                       $6,263,200
              2006                                       $6,463,200
              2007                                       $6,463,200
</TABLE>

Base Rent shall be payable in equal monthly installments with the first monthly
installment due and payable on or before the last day of October, 1997, and a
monthly installment to be due and payable on the last day of each and every
month thereafter through and including October, 2007.  Base Rent for any period
during the term of this Lease which is less than one (1) month shall be a pro-
rata portion of the applicable monthly installment.

       4.2    Percentage Rent.

              (a)    Pursuant to the terms and conditions of this Section 4.2,
       Lessee shall also pay Lessor Percentage Rent for each Lease Year.  The
       term "Percentage Rent," as used herein, shall mean and be determined by
       multiplying (i) the amount, if any, by which the aggregate amount of
       Hotel Receipts for the calendar month to which such Percentage Rent is
       attributable exceeds the Hotel Floor for the applicable month by (ii)
       19%, and adding thereto the product of (iii) the amount, if any, by
       which the aggregate amount of Food & Beverage Receipts for the calendar
       month to which such Percentage Rent is attributable exceeds the Food &
       Beverage Floor for the applicable month, times (iv) 3%.

              (b)    Percentage Rent shall be paid by Lessee on a quarterly
       basis on the last day of the month immediately following the end of any
       quarter with the first such quarterly installment being due and payable
       on or before the last day of January, 1998.  The final payment of
       Percentage Rent for September, 2007 shall be due and payable on October
       31, 2007.

              (c)    (i)    The term "Food & Beverage Floor" shall mean Five
              Million and No/100 Dollars ($5,000,000) per Lease Year.

                     (ii)   The term "Food & Beverage Receipts" shall mean
              Beverage Sales and Food Sales.





                                      -8-
<PAGE>   15
                     (iii)  The term "Hotel Floor" shall mean Thirteen Million
              Five Hundred Thousand and No/100 Dollars ($13,500,000) per Lease
              Year.

                     (iv)   The term "Hotel Receipts" shall mean Gross Receipts
              less Food & Beverage Receipts.

              (d)    Lessee shall submit to Lessor by the last day of each
       month a written statement signed and certified by Lessee to be correct,
       showing Gross Receipts during the preceding month and specifically
       allocating the amounts attributable to Hotel Receipts and Food &
       Beverage Receipts.  Lessee shall submit to Lessor by the sixtieth (60th)
       day after the end of each calendar year a written statement signed and
       certified by Lessee to be correct, showing Gross Receipts during the
       preceding calendar year (the "Annual Gross Receipts Report").  Lessee's
       monthly and annual written statement of Gross Receipts shall contain
       such detail and breakdown as Lessor may reasonably require.  If, after
       notice from Lessor and the expiration of the cure period provided for
       herein, Lessee fails to submit the aforesaid statements to Lessor when
       due, Lessor, in addition to any other remedies Lessor has, shall have
       the right to retain a certified public accountant, at Lessee's sole
       expense, to prepare such statements and to perform all inspections and
       audits related thereto.  In the event the Annual Gross Receipts Report
       discloses that the actual Percentage Rent exceeds the advance payments
       of Percentage Rent to Lessor with respect to such year, Lessee shall
       within fifteen (15) days of notice from Lessor remit the difference to
       Lessor.  In the event the advance payments of Percentage Rent paid to
       Lessor with respect to a calendar year exceed the actual Percentage Rent
       based upon the Annual Gross Receipts Report, Lessor shall within fifteen
       (15) days of notice from Lessee remit the difference to Lessee.  The
       adjustments set forth in the preceding two grammatical sentences shall
       be subject to any further adjustments that may be made pursuant to the
       provisions of Section 4.2(f) below.

              (e)    Lessee shall maintain in a manner and form satisfactory to
       Lessor, during the term of this Lease, and for a period of three (3)
       consecutive years thereafter, complete and accurate general books of
       account, which shall reflect Gross Receipts, and which shall include, if
       used by Lessee, without limitation, original invoices, sales records,
       sales slips, sales checks, sales reports, cash register tapes, records
       of bank deposits, inventory records prepared as of the close of the
       Lessee's accounting period, sales and occupation tax returns and all
       other original records and other pertinent papers which will enable
       Lessor to determine the Gross Receipts derived by Lessee during the term
       of this Lease.  Such records for the three (3) most recent years shall
       be maintained at the Leased Property or Lessee's corporate headquarters.
       The provisions hereof shall survive the termination of this Lease.

              (f)    The acceptance by Lessor of the advance payments of
       Percentage Rent or any additional payment of Percentage Rent (pursuant
       to paragraph (d) above) shall not prejudice Lessor's right to an
       examination of Lessee's records of Gross Receipts for any period for
       which Lessee is required to maintain records to verify Gross Receipts.
       Lessor shall have the right to examine Lessee's records during all
       regular business hours upon reasonable prior notice.  Lessee, upon
       reasonable prior notice, shall make available to





                                      -9-
<PAGE>   16
       Lessor for examination any other records required to be maintained
       hereunder.  If the audit of the books and records by Lessor discloses
       that Gross Receipts were underreported by Lessee by two and one-half
       percent (2.5%) or more for any period covered by the audit, Lessee shall
       promptly pay to Lessor, as Additional Rent, the cost of the audit, in
       addition to any deficiency in Percentage Rent that may be due.  If the
       audit discloses that Gross Receipts were underreported by Lessee by less
       than two and one-half percent (2.5%) for such period, Lessee shall
       promptly pay to Lessor the deficiency, and Lessor shall pay the cost of
       the audit.  If the audit discloses that Gross Receipts were
       underreported by Lessee by five percent (5%) or more for such period,
       Lessor shall have the option, exercisable within sixty (60) days of its
       discovery of the discrepancy, to consider such event as an Event of
       Default.  The provisions of this Section shall survive the expiration of
       the term of this Lease or the earlier termination hereof for a period of
       one (1) year thereafter.

       4.3    Additional Charges.  In addition to the Base Rent and the
Percentage Rent, (a) Lessee also will pay and discharge as and when due and
payable all other amounts, liabilities, obligations and Impositions (as defined
hereinbelow) that Lessee assumes or agrees to pay under this Lease, and (b) in
the event of any failure on the part of Lessee to pay any of those items
referred to in clause (a) of this Section 4.3, Lessee also will promptly pay
and discharge every fine, penalty, interest and cost that may be added for non-
payment or late payment of such items (the items referred to in clauses (a) and
(b) of this Section 4.3 being additional rent hereunder and being referred to
herein collectively as the "Additional Charges") and Lessor shall have all
legal, equitable and contractual rights, powers and remedies provided either in
this Lease or by statute or otherwise in the case of non-payment of the
Additional Charges as are available in the case of non-payment of the Base Rent
or the Percentage Rent.  To the extent that Lessee pays any Additional Charges
to Lessor pursuant to any requirement of this Lease, Lessee shall be relieved
of its obligation to pay such Additional Charges to the entity to which they
would otherwise be due and Lessor shall pay same from monies received from
Lessee.

       4.4    Net Lease Provisions.  The rent shall be paid absolutely net to
Lessor so that this Lease shall yield to Lessor the full amount of the
installments of Base Rent, Percentage Rent, and all Additional Charges
throughout the term of this Lease, all as more fully set forth herein, but
subject to any other provisions of this Lease that expressly provide for
adjustment or abatement of rent or other charges or expressly provide that
certain expenses or maintenance shall be paid or performed by Lessor.

       4.5    Place and Manner of Payment.  Subject to the further provisions
hereof, the rent hereunder shall be payable to Lessor at the original or
changed address of Lessor set forth in Article XXIX hereof or to such other
address or to such other person at such address as Lessor may designate from
time to time in writing.

       4.6    Late Charge.  If Lessor fails to pay any regular monthly
installment of Base Rent, Percentage Rent, or any Additional Charges within
fifteen (15) days after Lessor has notified Lessee in writing that such
installment or charge is overdue, then in addition to the past due amount
Lessee shall pay to Lessor a late charge of five percent (5%) of the
installment or amount due in order to compensate Lessor for the extra
administrative expenses incurred.





                                      -10-
<PAGE>   17
                                   ARTICLE V

       5.1    Quiet Enjoyment.  Lessor has full right to make this Lease and,
subject to the terms and provisions of this Lease, Lessee shall have quiet and
peaceable enjoyment of the Leased Property during the term hereof.  Except as
otherwise specifically provided in this Lease, Lessee, to the maximum extent
permitted by law, shall remain bound by this Lease in accordance with its terms
and shall neither take any action without the written consent of Lessor to
modify, surrender or terminate the same, nor seek nor be entitled to any
abatement, deduction, deferment or reduction of the rent, or setoff against the
rent, nor shall the obligations of Lessee be otherwise affected by reason of
(a) any damage to or destruction of the Leased Property or any portion thereof
from whatever cause, (b) the lawful or unlawful prohibition of, or restriction
upon Lessee's use of the Leased Property, or any portion thereof, or the
interference with such use by any person, corporation, partnership or other
entity or by reason of eviction by paramount title, (c) any claim which Lessee
has or might have against Lessor by reason of any default or breach of any
warranty by Lessor under this Lease or any other agreement between Lessor and
Lessee, or to which Lessor and Lessee are parties, (d) any bankruptcy,
insolvency, reorganization, composition, readjustment, liquidation,
dissolution, winding up or other proceedings affecting Lessor or any assignee
of or transferee of Lessor, or (e) for any other cause whether similar or
dissimilar to any of the foregoing other than a discharge of Lessee from any
such obligations as a matter of law.  Lessee hereby specifically waives all
rights, arising from any occurrence whatsoever, which may now or hereafter be
conferred upon it by law to (i) modify, surrender or terminate this Lease or
quit or surrender the Leased Property or any portion thereof, or (ii) entitle
Lessee to any abatement, reduction, suspension or deferment of the rent or
other sums payable by Lessee hereunder, except as otherwise specifically
provided in this Lease.  The obligations of Lessee hereunder shall be separate
and independent covenants and agreements and the rent and all other sums
payable by Lessee hereunder shall continue to be payable in all events unless
all the obligations to pay the same shall be terminated pursuant to the express
provisions of this Lease or by termination of this Lease other than by reason
of an Event of Default.


                                   ARTICLE VI

       6.1    Payment of Impositions. Subject to Article XII relating to
permitted contests,Lessee will pay, or cause to be paid, all Impositions (as
defined hereinbelow) before any fine, penalty, interest or cost may be added
for non-payment, such payments to be made directly to the taxing or other
authorities where feasible, and will promptly furnish to Lessor copies of
official receipts or other satisfactory proof evidencing such payments.  If any
such Imposition may, at the option of the obligor, lawfully be paid in
installments (whether or not interest shall accrue on the unpaid balance of
such Imposition), Lessee may exercise the option to pay the same (and any
accrued interest on the unpaid balance of such Imposition) in installments and
in such event, shall pay such installments during the term hereof (subject to
Lessee's right of contest pursuant to the provisions of Article XII) as the
same respectively become due and before any fine, penalty, premium, further
interest or cost may be added thereto.  If any refund shall be due in respect
of any Imposition paid by Lessee, the same shall





                                      -11-
<PAGE>   18
be paid over to or retained by Lessee if no Event of Default shall have
occurred hereunder and be continuing.  If an Event of Default shall have
occurred and be continuing, any such refund shall be paid over to or retained
by Lessor.  Any such funds retained by Lessor due to an Event of Default shall
be applied as provided in Article XVI.  Lessor and Lessee shall, upon request
of the other, provide such data as is maintained by the party to whom the
request is made with respect to the Leased Property as may be necessary to
prepare any required returns and reports.

       6.2    Notice of Impositions.  Lessor shall give prompt notice to Lessee
of all Impositions payable by Lessee hereunder of which Lessor at any time has
knowledge, provided that Lessor's failure to give any such notice shall in no
way diminish Lessee's obligations hereunder to pay such Impositions, but such
failure shall obviate any default hereunder for a reasonable time after Lessee
receives notice of any Imposition which it is obligated to pay.

       6.3    Adjustment of Imposition.  Impositions imposed in respect of the
tax-fiscal period during which the term of this Lease terminates shall be
adjusted and prorated between Lessor and Lessee, whether or not such Imposition
is imposed before or after such termination, and Lessee's obligation to pay its
prorated share thereof after termination shall survive such termination.

       6.4    Utility Charges.  Lessee will be solely responsible for obtaining
and maintaining utility services to the Leased Property and will pay or cause
to be paid all charges for electricity, gas, oil, water, sewer and other
utilities used in the Leased Property during the term of this Lease.

       6.5    Insurance Premiums.  Lessee will pay or cause to be paid all
premiums for the insurance coverages required to be maintained by it under
Article XIII.

       6.6    Definition of Impositions.  The term "Impositions," as used
herein, means, collectively, all taxes (including, without limitation, all ad
valorem, personal property, sales and use, single business, gross receipts,
transaction privilege, rent or similar taxes as the same relate to or are
imposed upon Lessee or its business conducted upon the Leased Property),
assessments (including, without limitation, all assessments for public
improvements or benefit, whether or not commenced or completed prior to the
date hereof and whether or not to be completed within the term and also any
assessments imposed on the Leased Property by any property owners' association,
condominium association or other such private association, or otherwise as a
result of private deed restrictions affecting the Leased Property), ground
rents, water, sewer or other rents and charges, excises, tax inspection,
authorization and similar fees and all other such charges, in each case whether
general or special, ordinary or extraordinary, or foreseen or unforeseen, of
every character in respect of the Leased Property or the business conducted
thereon by Lessee (including all interest and penalties thereon caused by any
failure in payment by Lessee), which at any time prior to, during or with
respect to the term hereof may be assessed or imposed on the Leased Property,
or any part thereof or any rent therefrom or any estate, right, title or
interests therein, or any occupancy, operation, use or possession of, or sales
from, or activity conducted on or in connection with the Leased Property, or
the leasing or use of the Leased Property or any part thereof by Lessee.
Nothing contained in this definition of Impositions shall be construed to
require Lessee to pay (1) any tax based on net income (whether





                                      -12-
<PAGE>   19
denominated as a franchise or capital stock or other tax) imposed on Lessor or
any other person, or (2) any net revenue tax of Lessor or any other person, or
(3) any tax imposed with respect to the sale, exchange or other disposition by
Lessor of any Leased Property or the proceeds thereof, or (4) any single
business, gross receipts (other than tax on any rent received by Lessor from
Lessee), transaction, privilege or similar taxes as the same relate to or are
imposed upon Lessor, except to the extent that any tax, assessment, tax levy or
charge that Lessee is obligated to pay pursuant to the first sentence of the
definition and that is in effect at any time during the term hereof is totally
or partially repealed, and a tax, assessment, tax levy or charge set forth in
clause (1) or (2) is levied, assessed or imposed expressly in lieu thereof.


                                  ARTICLE VII

       7.1    Condition of the Leased Property.  Lessee acknowledges receipt
and delivery of possession of the Leased Property.  Lessee has examined and
otherwise has knowledge of the condition of the Leased Property and has found
the same to be satisfactory for its purposes hereunder.  Lessee is leasing the
Leased Property "as is" in its present condition.  Lessee waives any claim or
action against Lessor in respect of the condition of or claims against the
Leased Property.  LESSOR MAKES NO WARRANTY OR REPRESENTATION, EXPRESS OR
IMPLIED, IN RESPECT OF THE LEASED PROPERTY, OR ANY PART THEREOF, EITHER AS TO
ITS FITNESS FOR USE, DESIGN OR CONDITION FOR ANY PARTICULAR USE OR PURPOSE OR
OTHERWISE, AS TO THE QUALITY OF THE MATERIAL OR WORKMANSHIP THEREIN, LATENT OR
PATENT, IT BEING AGREED THAT ALL SUCH RISKS ARE TO BE BORNE BY LESSEE.  LESSEE
ACKNOWLEDGES THAT THE LEASED PROPERTY HAS BEEN INSPECTED BY LESSEE AND IS
SATISFACTORY TO IT; provided, however, to the extent permitted by law, Lessor
hereby assigns to Lessee all of Lessor's rights to proceed against any
predecessor-in-title, contractor, subcontractor or supplier for breaches of
warranties or representations or for latent defects in the Leased Property.
Lessor shall fully cooperate with Lessee in the prosecution of any such claim,
in Lessor's or Lessee's name, all at Lessee's sole cost and expense.  Lessee
hereby agrees to indemnify, defend and hold harmless Lessor from and against
any claims, obligation and liabilities against or incurred by Lessor in
connection with such cooperation.

       7.2    Use of the Leased Property.

              (a)    Lessee covenants that it will proceed with all due
       diligence and will exercise its best efforts to obtain and to maintain
       all approvals needed to use and operate the Leased Property in the
       manner required under this Lease and under applicable local, state and
       federal law.

              (b)    Lessee shall use or cause to be used the Leased Property
       only for its current uses as a hotel and luxury apartment complex, and
       for such other uses as may be necessary or incidental to such use or
       such other use as otherwise approved by Lessor (the "Primary Intended
       Use").  Lessee shall not use the Leased Property or any portion thereof
       for any other use, nor change any names under which the Leased Property
       is operated, without the prior written consent of Lessor, which consent
       may be granted,





                                      -13-
<PAGE>   20
       denied or conditioned in Lessor's sole discretion.  No use shall be made
       or permitted to be made of the Leased Property, and no acts shall be
       done, which will cause the cancellation or increase the premium of any
       insurance policy covering the Leased Property or any part thereof
       (unless another adequate policy satisfactory to Lessor is available and
       Lessee pays any premium increase), nor shall Lessee sell or permit to be
       kept, used or sold in or about the Leased Property any article which may
       be prohibited by law or fire underwriter's regulations.  Lessee shall,
       at its sole cost, comply with all of the requirements pertaining to the
       Leased Property of any insurance board, association, organization or
       company necessary for the maintenance of insurance, as herein provided,
       covering the Leased Property.

              (c)    Subject to the provisions of Articles XIV, XV, and XXI,
       Lessee covenants and agrees that during the term of this Lease it will
       (1) operate continuously the Leased Property in accordance with the
       Primary Intended Use, (2) keep in full force and effect and comply with
       all the provisions of all agreements assigned to Lessee as part of the
       Leased Property, (3) not terminate or amend any agreements constituting
       part of the Leased Property without the consent of Lessor, and (4)
       maintain appropriate certifications and licenses for such use.

              (d)    Lessee shall not commit or suffer to be committed any
       waste on the Leased Property (normal wear and tear excepted), nor shall
       Lessee cause or permit any nuisance thereon.

              (e)    Lessee shall neither suffer nor permit the Leased Property
       or any portion thereof to be used in such a manner as (1) might
       reasonably tend to impair Lessor's (or Lessee's, as the case may be)
       title thereto or to any portion thereof, or (2) may reasonably make
       possible a claim or claims of adverse usage or adverse possession by the
       public, as such, or of implied dedication of the Leased Property or any
       portion thereof, except as necessary in the ordinary and prudent
       operation of the Project on the Leased Property.

       7.3    Lessor to Grant Easements, Etc.  Lessor will, from time to time,
so long as no Event of Default has occurred and is continuing, at the request
of Lessee and at Lessee's cost and expense (but subject to the approval of
Lessor, which approval shall not be unreasonably withheld or delayed), (a)
grant easements and other rights in the nature of easements with respect to the
Leased Property to third parties, (b) release existing easements or other
rights in the nature of easements which are for the benefit of the Leased
Property, (c) dedicate or transfer unimproved portions of the Leased Property
for road, highway or other public purposes, (d) execute petitions to have the
Leased Property annexed to any municipal corporation or utility district, (e)
execute amendments to any covenants and restrictions affecting the Leased
Property and (f) execute and deliver to any person any instrument appropriate
to confirm or effect such grants, releases, dedications, transfers, petitions
and amendments (to the extent of its interests in the Leased Property), but
only upon delivery to Lessor of a certificate from Lessee stating that such
grant, release, dedication, transfer, petition or amendment is not detrimental
to the proper conduct of the business of Lessee on the Leased Property and does
not materially reduce the value of the Leased Property.





                                      -14-
<PAGE>   21
       7.4    Inventory; Supplies; Lessee's Personal Property.

              (a)    Upon commencement of the Term, Lessor shall transfer to
Lessee all Nonconsumable Inventory and Consumable Supplies located at the
Project on the Commencement Date and transferred to Lessor by Seller (the
"INITIAL INVENTORY").  On the Commencement Date, Lessee shall be required to
ensure that the Leased Property contains (i) a sufficient amount of Consumable
Supplies and Non-Consumable Inventory and (ii) a reasonably adequate amount of
kitchen equipment, bar equipment, refrigeration equipment, furniture,
furnishings, color television sets, carpets, drapes, rugs, floor coverings,
mattresses, pillows, bedspreads and the like, in each case, to furnish each
guest room substantially consistent with Four Seasons standards and is
otherwise reasonably required to operate the Leased Property in the manner
contemplated by this Lease and in compliance with the Management Agreement and
all Legal Requirements.  Throughout the Term, Lessee shall be required, or
shall cause Manager, to maintain Inventory consistent with Four Seasons
standards and is otherwise required to operate the Leased Property in the
manner contemplated by this Lease and in compliance with the Management
Agreement and all Legal Requirements.  All Inventory shall be the property of
Lessee, subject to Lessee's obligations under SECTION 7.4(b).  Lessee may (and
shall as provided hereinbelow), at its expense, install, affix or assemble or
place on any parcels of the Land or in any of the Leased Property, any items of
personal property (including Inventory) owned by Lessee (collectively, the
"LESSEE'S PERSONAL PROPERTY").  Lessee may, subject to the second sentence of
this SECTION 7.4(a) and the conditions set forth in SECTION 7.4(b) below,
remove any of Lessee's Personal Property at any time during the Term or upon
the expiration or any prior termination of the Term.  All of Lessee's Personal
Property, other than Inventory, not removed by Lessee within thirty (30) days
following the expiration or earlier termination of the Term shall be considered
abandoned by Lessee and may be appropriated, sold, destroyed or otherwise
disposed of by Lessor without first giving notice thereof to Lessee, without
any payment to Lessee and without any obligation to account therefor.  Lessee
will, at its expense, restore the Leased Property to the condition required by
Section 9.1(d), including repair of all damage to the Leased Property caused by
the removal of Lessee's Personal Property.

              (b)    Upon the expiration or earlier termination of the Term for
any reason, Lessee shall surrender the Leased Property to Lessor with an amount
and quality of Nonconsumable Inventory and Consumable Supplies equal to the
Initial Inventory.

       7.5    Reserves; Capital Expenditures.  In addition to the amounts
deposited by Manager in the "Capital Reserve" account in accordance with
paragraph 7.5 of the Management Agreement, Lessor shall establish and maintain
a reserve account (the "FFE Reserve") and shall deposit into such account
during each Lease Year monies equal to the difference between five percent (5%)
of Gross Receipts and the amounts deposited into the "Capital Reserve" account
by Manager during such Lease Year.  If at any time during the Term of the
Lease, any item of FFE (defined below) requires replacement, upon a written
request therefor from Lessee, Lessor shall, after the use of all of the funds
in the "Capital Reserve" account, promptly advance sufficient funds from the
FFE Reserve to enable Lessee to purchase the required replacements.  Lessee
shall make no expenditure for replacement of FFE in excess of the amounts in
the FFE Reserve without first obtaining the approval of Lessor.  Any additions
to or replacements of furniture, fixtures, and equipment located at the Leased
Property shall become part of the FFE,





                                      -15-
<PAGE>   22
which is owned by Lessor.  Throughout the Term of this Lease, Lessee shall, at
its sole cost and expense and in accordance with the terms of the Management
Agreement, cause all of the items of FFE to be in proper working order and in
good condition (ordinary wear and tear excepted).  The term "FFE" shall mean
all vehicles, furniture and furnishings, hotel, and apartment equipment
(including office equipment, exercise equipment, medical and/or health
equipment, and property management equipment as necessary).  In addition,
Lessor agrees to fund up to $627,000 for capital expenditures to be made in
accordance with the approved 1997 operating budget for the Project, which
amount shall include approximately $500,000 for recarpeting the guest floor
corridors.  Further, Lessor acknowledges that Lessee desires to make certain
capital improvements to the Project and intends to request that, in connection
with such capital improvements and in addition to any expenditures out of the
"Capital Reserve" account, Lessor make capital expenditures of approximately
$5,000,000 in order for Lessee to maintain its competitive position in the
greater Houston area.  Such expenditures include approximately $4,000,000 for
replacement of the furniture in the guest rooms and approximately $1,000,000 to
fund other capital improvements (including renovation of the ballroom).  Lessor
agrees to consider proposals made by Lessee in connection with such capital
improvements.

       7.6    Lessee's Obligation to Manage.  At all times during the Term
hereof, Lessee shall be responsible for the management and operation of the
Leased Property through its agent, Manager, and in no event shall Lessor have
any obligation with respect to the management or operation of the Leased
Property.

       7.7    Cash Accounts.  On the Commencement Date, Lessor shall transfer
to Lessee cash and funds deposited in banks ("Cash") in the amount of Forty
Thousand and no/100 Dollars ($40,000.00).  Upon the expiration or early
termination of this Lease, Lessee shall pay over to Lessor the same amount of
Cash that existed on the Commencement Date.

       7.8    Use of Facilities by Lessor.  Subject to any restrictions in the
Management Agreement, Lessee covenants and agrees that Lessor shall have the
right to use guest rooms, facilities, and services at the Leased Property on a
space available basis, provided,however, Lessor shall be obligated to pay
Lessee for Lessee's direct operating cost for such rooms and services.

       7.9    Guaranty.  Crescent Operating, Inc. shall execute a guarantee in
favor of Lessor of all obligations of Lessee hereunder.


                                  ARTICLE VIII

       8.1    Compliance with Legal and Insurance Requirements. Etc.  Subject
to Article XII relating to permitted contests, Lessee, at its expense, will
promptly (a) comply with all applicable legal requirements and insurance
requirements in respect to the use, operation, maintenance, repair and
restoration of the Leased Property, and (b) procure, maintain and comply with
all appropriate licenses and other authorizations required for any use of the
Leased Property then being made, and for the proper erection, installation,
operation and maintenance of the Leased Property or any part thereof.





                                      -16-
<PAGE>   23
       8.2    Legal Requirement Covenants.  Lessee covenants and agrees that
the Leased Property shall not be used for any unlawful purpose, and that Lessee
shall not permit or suffer to exist any unlawful use of the Leased Property by
others.  Lessee shall acquire and maintain all appropriate licenses,
certifications, permits and other authorizations and approvals needed to
operate the Leased Property in its customary manner for the Primary Intended
Use, and any other lawful use conducted on the Leased Property as may be
permitted from time to time hereunder.  Lessee further covenants and agrees
that Lessee's use of the Leased Property and maintenance, alteration, and
operation of the same, and all parts thereof, shall at all times conform to all
legal requirements, unless the same are finally determined by a court of
competent jurisdiction to be unlawful (and Lessee shall cause all sub-tenants,
invitees or others to so comply with all legal requirements).  Lessee may,
however, upon prior notice to Lessor, contest the legality or applicability of
any such legal requirement or any licensure or certification decision if Lessee
maintains such action in good faith, with due diligence, without prejudice to
Lessor's rights hereunder, and at Lessee's sole expense.  If by the terms of
any such legal requirement compliance therewith pending the prosecution of any
such proceeding may legally be delayed without the incurrence of any lien,
charge or liability of any kind against the Leased Property or Lessee's
leasehold interest therein and without subjecting Lessee or Lessor to any
liability, civil or criminal, for failure so to comply therewith, Lessee may
delay compliance therewith until the final determination of such proceeding.
If any lien, charge or civil or criminal liability would be incurred by reason
of any such delay, Lessee, on the prior written consent of Lessor, which
consent shall not be unreasonably withheld, may nonetheless contest as
aforesaid and delay as aforesaid provided that such delay would not subject
Lessor to criminal liability and Lessee both (a) furnishes to Lessor security
reasonably satisfactory to Lessor against any loss or injury by reason of such
contest or delay and (b) prosecutes the contest with due diligence and in good
faith.

       8.3    Environmental Matters and Indemnities.

       (a)    Lessee must, at its sole cost and expense, keep and maintain the
Leased Property in compliance with, and must not cause the Leased Property to
be in violation of, any federal, state, and local laws, regulations, rules, and
orders including without limitation those relating to zoning, health, safety,
noise, environmental protection, water quality, air quality, or the generation,
processing, storage, or disposal of any Hazardous Materials (as hereinafter
defined) excluding any conditions existing on or prior to the Commencement Date
of this Lease or violations caused by Lessor.  Moreover, Lessee will not
intentionally cause or permit the storage, use, disposal, manufacture,
discharge, leakage, spillage or emission of any Hazardous Materials on, in, or
about the Leased Property.  Lessee must immediately notify Lessor in writing of
its actual knowledge of (a) any enforcement, cleanup, removal or other
governmental or regulatory actions instituted, completed or threatened in
connection with the Leased Property and any Hazardous Materials; or (b) any
claim made or threatened by any third party against Lessee or the Leased
Property relating to damage, contribution, cost recovery, compensation, loss or
injury resulting from any Hazardous Materials that could cause all or any
portion of the Leased Property to be subject to any restrictions on the
ownership, occupancy, transferability or use of the Leased Property under
Hazardous Materials Law (as hereinafter defined).  Notwithstanding the
foregoing, Lessee is not required by Lessor to remove any Hazardous Materials
located on, in, under or about the Leased Premises on or prior to the
Commencement





                                      -17-
<PAGE>   24
Date of this Lease.  Without Lessor's prior written consent, which consent must
not be unreasonably withheld or delayed, Lessee will not take any remedial
action in response to the presence of any Hazardous Materials on, in, or under
or about the Leased Property, nor enter into any settlement agreement, consent
decree or other compromise in respect to any Hazardous Materials except as may
be necessary to comply with all laws, rules, regulations or orders of any
applicable governmental authorities.

       (b)  Lessee indemnifies and holds Lessor, its employees, agents,
officers and directors, harmless from and against any claim, action, suit,
proceeding, loss, cost, damage, liability, deficiency, fine, penalty, punitive
damage or expense (including, without limitation, attorneys' and consultant
fees), directly or indirectly resulting from, arising out of, or based upon (a)
the presence, release, use, manufacture, generation, discharge, storage or
disposal by Lessee (or its sublessee, contractors, licensees, concessionaires,
guests, invitees, employees, agents or representatives) of any Hazardous
Material on, under, in or about, or the transportation of any such materials to
or from the Leased Property occurring after the Commencement Date, or (b) the
violation, or alleged violation by Lessee (or its sublessee, contractors,
licensees, concessionaires, guests, invitees, employees, agents or
representatives) of any Hazardous Materials Law affecting the Leased Property,
or the transportation by Lessee (or its sublessees, contractors, licensees,
concessionaires, guests, invitees, employees, agents or representatives) of
Hazardous Materials to or from the Leased Property, save and except to the
extent that such violations, alleged violations or transportation of Hazardous
Materials occurred on or prior to the Commencement Date of this Lease, or were
not caused by Lessee (or its sublessees, contractors, licensees,
concessionaires, guests, invitees, employees, agents or representatives).

       (c)    "Hazardous Materials Law", for purposes of this Lease, means any
federal, state, or local law, ordinance or regulation or any court judgment
applicable to Lessee or to the Leased Property relating to industrial hygiene
or to environmental conditions including, but not limited to, those relating to
the release, emission or discharge of Hazardous Materials, those in connection
with the construction, fuel supply, power generation and transmission, waste
disposal or any other operations or processes relating to the Leased Property.
"Hazardous Materials Law" includes, but is not limited to, the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, the Hazardous
Materials Transportation Act, the Resources Conservation and Recovery Act, the
Solid Waste Disposal Act, the Clean Water Act, the Clean Air Act, and any
amendments to these laws or enactments of other laws occurring after the date
hereof.

       (d)    "Hazardous Materials," for purposes of this Lease Agreement,
includes flammable explosives, radioactive materials, polychlorinated
biphenyls, asbestos in any form which is or could become friable, hazardous
wastes, toxic substances or other related material whether in the form of a
chemical, element, compound, solution, mixture or otherwise including, but not
limited to, those materials defined as "hazardous substances," "hazardous
materials," "toxic substances," "air pollutants," "toxic pollutants,"
"hazardous wastes," "extremely hazardous wastes" or "restricted hazardous
wastes" by Hazardous Materials Law, other than common cleaning compounds,
solvents and other materials incidental to the use and operation of the Leased
Property and in compliance with Hazardous Materials Law.





                                      -18-
<PAGE>   25
                                   ARTICLE IX

       9.1    Maintenance and Repair.

              (a)    Lessee, at its sole expense, will keep the Leased Property
       in good order and repair, except for ordinary wear and tear (whether or
       not the need for such repairs occurred as a result of Lessee's use, any
       prior use, the elements or the age of the Leased Property, or any
       portion thereof), and, except as otherwise provided in Article XIV or
       Article XV, with reasonable promptness, make all necessary and
       appropriate repairs, replacements, and improvements thereto of every
       kind and nature, whether interior or exterior, ordinary or
       extraordinary, foreseen or unforeseen or arising by reason of a
       condition existing on or prior to the commencement of the term of this
       Lease (concealed or otherwise), or required by any governmental agency
       having jurisdiction over the Leased Property.  Lessee, however, shall be
       permitted to prosecute claims against Lessor's predecessors-in-title,
       contractors, subcontractors and suppliers for breach of any
       representation or warranty or for any latent defects in the Leased
       Property to be maintained by Lessee unless Lessor is already diligently
       pursuing such a claim.  All repairs shall, to the extent reasonably
       achievable, be at least equivalent in quality to the original work.
       Lessee will not take or omit to take any action, the taking or omission
       of which might materially impair the value or the usefulness of the
       Leased Property or any part thereof for its Primary Intended Use.

              (b)    Notwithstanding Lessee's obligations under Section 9.1(a)
       hereinabove, in the event that (i) repairs, replacements and/or
       improvements of the Leased Property become necessary in order to
       maintain the Project in the same quality and condition as it currently
       exists, (ii) such repairs, replacements and/or improvements are under
       generally accepted accounting principles considered to be capital in
       nature, (iii) the funds then available to Lessee in the FFE Reserve or
       at the Leased Property, either in the form of reserves, insurance
       proceeds, or other income generated by the Leased Property and available
       to Lessee are insufficient to enable Lessee to pay the costs of making
       any such repairs, replacements and/or improvements, and (iv) Lessor
       consents to the repairs, replacements, and/or improvements, then Lessor
       shall be required to bear the cost of making such repairs, replacements
       and/or improvements.  Except as set forth in the foregoing sentence,
       Lessor shall not under any circumstances be required to build or rebuild
       any improvements on the Leased Property, to make any repairs,
       replacements, alterations, restorations or renewals of any nature or
       description to the Leased Property, whether ordinary or extraordinary,
       foreseen or unforeseen, or to make any expenditure whatsoever with
       respect thereto, in connection with this Lease, or to maintain the
       Leased Property in any way.  Lessee hereby waives, to the extent
       permitted by law, the right to make repairs at the expense of Lessor
       pursuant to any law in effect at the time of the execution of this Lease
       or hereafter enacted.  Lessor shall have the right to give, record and
       post, as appropriate, notices of nonresponsibility under any mechanic's
       lien laws now or hereafter existing.

              (c)    Nothing contained in this Lease and no action or inaction
       by Lessor shall be construed as (1) constituting the request of Lessor,
       expressed or implied, to any





                                      -19-
<PAGE>   26
       contractor, subcontractor, laborer, materialman or vendor to or for the
       performance of any labor or services or the furnishing of any materials
       or other property for the construction, alteration, addition, repair or
       demolition of or to the Leased Property or any part thereof, or (2)
       giving Lessee any right, power or permission to contract for or permit
       the performance of any labor or services or the furnishing of any
       materials or other property in such fashion as would permit the making
       of any claim against Lessor in respect thereof or to make any agreement
       that may create, or in any way be the basis of any right, title,
       interest, lien, claim or other encumbrance upon the estate of Lessor in
       the Leased Property, or any portion thereof.

              (d)    Lessee will, upon the expiration or prior termination of
       the Term of this Lease, vacate and surrender the Leased Property to
       Lessor in the condition in which the Leased Property was originally
       received from Lessor, except as repaired, rebuilt, restored, altered or
       added to as permitted or required by the provisions of this Lease and
       except for ordinary wear and tear (subject to the obligation of Lessee
       to maintain the Leased Property in good order and repair, as would a
       prudent owner, during the entire term of the Lease), or damage by
       casualty or condemnation (subject to the obligations of Lessee to
       restore or repair as set forth in the Lease).

       9.2    Encroachments, Restrictions, Etc.  If any of the improvements on
the Leased Property, at any time, materially encroach upon any property, street
or right-of-way adjacent to the Leased Property, or violate the agreements or
conditions contained in any restrictive covenant or other agreement affecting
the Leased Property, or any part thereof, or impair the rights of others under
any easement or right-of-way to which the Leased Property is subject, then
promptly upon the request of Lessor or at the behest of any person affected by
any such encroachment, violation or impairment, Lessee shall, at its expense,
subject to its right to contest the existence of any encroachment, violation or
impairment and in such case, in the event of an adverse final determination,
either (a) obtain valid and effective waivers or settlements of all claims,
liabilities and damages resulting from each such encroachment, violation or
impairment, whether the same shall affect Lessor or Lessee or (b) make such
changes in the improvements on the Leased Property and take such other actions,
as Lessee in the good faith exercise of its judgment deems reasonably
practicable to remove such encroachment, and to end such violation or
impairment, including, if necessary, the alteration of any such improvements,
and in any event take all such actions as may be necessary in order to be able
to continue the operation of the Leased Property for the Primary Intended Use
substantially in the manner and to the extent the Leased Property was operated
prior to the assertion of such violation, impairment and encroachment.  Any
such alteration shall be made in conformity with the applicable requirements of
Article X.  Lessee's obligations under this Section 9.2 shall be in addition to
and shall in no way discharge or diminish any obligation of any insurer under
any policy of title or other insurance held by Lessor.  Notwithstanding
anything to the contrary contained in this Section 9.2, so long as any
encroachment, violation or impairment described above does not materially
interfere with the operation of the Project, Lessor shall not require Lessee to
remedy or otherwise address the same.





                                      -20-
<PAGE>   27
                                   ARTICLE X

       10.1   Alterations.  Subject to obtaining Lessor's prior written
approval, Lessee shall have the right to make additions, modifications or
improvements to the Leased Property from time to time as Lessee, in its
discretion, may deem to be desirable for its permitted uses and purposes,
provided that such action will not significantly alter the character or
purposes or significantly detract from the value or operating efficiency
thereof and will not significantly impair the revenue-producing capability of
the Leased Property or adversely affect the ability of the Lessee to comply
with the provisions of this Lease.  The cost of such additions, modifications
or improvements to the Leased Property shall be paid by Lessee, and all such
additions, modifications or improvements shall, without payment by Lessor at
any time, be included under the terms of this Lease and upon expiration or
earlier termination of this Lease shall pass to and become the property of
Lessor.  In no event shall any alterations, additions or other improvements
made by Lessee be removed from the Leased Property unless request is made by
Lessor to Lessee to remove such alterations, additions and other improvements
which were made without Lessor's approval where such approval was required
under this Lease.

       10.2   Lessor Alterations.  Lessor shall have the right, without
Lessee's consent, to make or cause to be made alterations to the Leased
Property required in connection with (i) Emergency Situations, (ii) Legal
Requirements, (iii) maintenance of any Management Agreement, and (iv) the
performance by Lessor of its obligations under this Lease so long as such
alterations do not materially and adversely impair the operating efficiency or
revenue producing capability of the Leased Property or the ability of Lessee to
comply with the provisions of this Lease during the remainder of the Term.
Without Lessee's consent, Lessor shall further have the right, but not the
obligation, to make such other additions to the Leased Property as it may
reasonably deem appropriate during the Term of this Lease.  All such work
unless necessitated by Lessee's negligent acts or omissions or unless otherwise
required to be performed by Lessee under this Lease (subject to the notice and
cure provisions herein) (in which event work shall be paid for by Lessee) shall
be performed at Lessor's expense and shall be done after reasonable notice to
and coordination with Lessee, so as to minimize any disruptions or interference
with the operation of the Project.

                                   ARTICLE XI

       11.1   Liens.  Subject to the provision of Article XII relating to
permitted contests, Lessee will not directly or indirectly create or allow to
remain and will promptly discharge at its expense any lien, encumbrance,
attachment, title retention agreement or claim upon the Leased Property or any
attachment, levy, claim or encumbrance in respect of the rent payable
hereunder, not including, however, (a) this Lease, (b) the matters, if any,
included as exceptions in the title policy insuring Lessor's interest in the
Leased Property to be issued on or about the Commencement Date, (c)
restrictions, liens and other encumbrances which are consented to in writing by
Lessor or any easements granted pursuant to the provisions of Section 7.3 of
this Lease, (d) liens for those taxes upon Lessor which Lessee is not required
to pay hereunder, (e) subleases permitted by Article XXI hereof, (f) liens for
Impositions or for sums resulting from noncompliance with legal requirements so
long as (1) the same are not yet payable or are payable without the addition of
any fine or penalty or (2) such liens are in the process of being





                                      -21-
<PAGE>   28
contested as permitted by Article XII, (g) liens of mechanics, laborers,
materialmen, suppliers or vendors for sums either disputed or not yet due
provided that (1) the payment of such sums shall not be postponed under any
related contract for more than 60 days after the completion of the action
giving rise to such lien and such reserve or other appropriate provisions as
shall be required by law or generally accepted accounting principles shall have
been made therefor or (2) any such liens are in the process of being contested
as permitted by Article XII hereof, and (h) any liens which are the
responsibility of Lessor pursuant to the provisions of Article XXXI of this
Lease.

                                  ARTICLE XII

       12.1   Permitted Contests.  Lessee shall have the right to contest the
amount or validity of any Imposition to be paid by Lessee or any legal
requirement or insurance requirement or any lien, attachment, levy,
encumbrance, charge or claim ("Claims") not otherwise permitted by Article XI,
by appropriate legal proceedings in good faith and with due diligence (but this
shall not be deemed or construed in any way to relieve, modify or extend
Lessee's covenants to pay or its covenants to cause to be paid any such charges
at the time and in the manner as in this Article provided), on condition,
however, that such legal proceedings shall not operate to relieve Lessee from
its obligations hereunder and shall not cause the sale or risk the loss of the
Leased Property, or any part thereof, or cause Lessor or Lessee to be in
default under any mortgage, deed of trust or security deed encumbering the
Leased Property or any interest therein.  Upon the request of Lessor, Lessee
shall either (a) provide a bond or other assurance reasonably satisfactory to
Lessor that all Claims which may be assessed against the Leased Property
together with interest and penalties, if any, thereon will be paid, or (b)
deposit within the time otherwise required for payment with a bank or trust
company as trustee upon terms reasonably satisfactory to Lessor, as security
for the payment of such Claims, money in an amount sufficient to pay the same,
together with interest and penalties in connection therewith, as to all Claims
which may be assessed against or become a Claim on the Leased Property, or any
part thereof, in said legal proceedings.  Lessee shall furnish Lessor and any
lender of Lessor with reasonable evidence of such deposit within five days of
the same.  Lessor agrees to join in any such proceedings if the same be
required to legally prosecute such contest of the validity of such Claims;
provided, however, that Lessor shall not thereby be subjected to any liability
for the payment of any costs or expenses in connection with any proceedings
brought by Lessee; and Lessee covenants to indemnify and save harmless Lessor
from any such costs or expenses.  Lessee shall be entitled to any refund of any
Claims and such charges and penalties or interest thereon which have been paid
by Lessee or paid by Lessor and for which Lessor has been fully reimbursed.  In
the event that Lessee fails to pay any Claims when due or to provide the
security therefor as provided in this paragraph and to diligently prosecute any
contest of the same, Lessor may, upon ten days advance written notice to
Lessee, pay such charges together with any interest and penalties and the same
shall be repayable by Lessee to Lessor at the next rent payment date provided
for in this Lease.  Provided, however, that should Lessor reasonably determine
that the giving of such notice would risk loss to the Leased Property or cause
damage to Lessor, then Lessor shall give such notice as is practical under the
circumstances.  Lessor reserves the right to contest at its expense any of the
Claims not pursued by Lessee.  Lessor and Lessee agree to cooperate in
coordinating the contest of any Claims.





                                      -22-
<PAGE>   29
                                  ARTICLE XIII

       13.1   General Insurance Requirements.  During the term of this Lease,
Lessee shall at all times keep the Leased Property insured with the kinds and
amounts of insurance described below.  This insurance shall be written by
companies authorized to issue insurance in the State of Texas.  The policies
must name Lessor as the insured or as an additional named insured, as the case
may be.  Losses shall be payable to Lessor or Lessee as provided in this Lease.
Any loss adjustment shall require the written consent of Lessor and Lessee,
each acting reasonably, promptly and in good faith.  Evidence of insurance
shall be deposited with Lessor.  The policies on the Leased Property shall
include:

              (a)    Loss of income insurance on an "All Risk" form, in the
       amount of one year of the greater of (a) Base Rent, as applicable, or
       (b) Percentage Rent (based on the last Lease Year of operation or, to
       the extent the Leased Property has not been operated for an entire 12-
       month Lease Year, based on prorated Percentage Rent) for the benefit of
       Lessor, and business interruption insurance on an "All Risk" form in the
       amount of one year of gross profit, for the benefit of Lessee;

              (b)    Commercial general liability insurance, with contractual
       indemnity endorsement, with amounts not less than $1,000,000 combined
       single limit for each occurrence and $2,000,000 for the aggregate of all
       occurrences within each policy year, as well as excess liability
       (umbrella) insurance with limits of at least $50,000,000 per occurrence,
       covering each of the following: bodily injury, death, or property damage
       liability per occurrence, personal injury, general aggregate, products
       and completed operations, with respect to Lessee, and "all risk legal
       liability" (including liquor law or "dram shop" liability, if liquor or
       alcoholic beverages are served on the Leased Property) with respect to
       Lessor and Lessee;

              (c)    Fidelity bonds or blanket crime policies with limits and
       deductibles as may be reasonably determined by Lessee and approved by
       Lessor (such approval not to be unreasonably withheld), covering
       Lessee's employees in job classifications normally bonded under prudent
       hotel management practices in the United States or otherwise required by
       law;

              (d)    Comprehensive form automobile liability insurance for
       owned, non-owned and hired vehicles, in the amount of $1,000,000;

              (e)    Garagekeeper's legal liability insurance covering both
       comprehensive and collision-type losses with a limit of liability of
       $2,000,000 for any one occurrence, of which coverage in excess of
       $2,000,000 may be provided by way of an excess liability policy;

              (f)    Innkeeper's legal liability insurance covering property of
       guests while on the Leased Property for which Lessor is legally
       responsible with a limit of not less than $5,000 in any one occurrence
       or $25,000 annual aggregate;





                                      -23-
<PAGE>   30
              (g)    Safe deposit box legal liability insurance covering
       property of guests while in a safe deposit box on the Leased Property
       for which Lessor is legally responsible with a limit of not less than
       $100,000 in any one occurrence;

              (h)    Employers liability insurance with limits of not less than
       $500,000 per occurrence; and

              (i)    Insurance covering such other hazards (such as plate glass
       or other common risks) and in such amounts as may be (A) required by a
       holder of a lien on the Leased Property, or (B) customary for comparable
       properties in the area of the Leased Property and is available from
       insurance companies, insurance pools or other appropriate companies
       authorized to do business in the State of Texas at rates which are
       economically practicable in relation to the risks covered as may be
       reasonably determined by Lessor or Lessee.

       Lessee shall keep in force the foregoing insurance coverages at its
       expense.

       13.2   Replacement Cost.  The term "full replacement cost" as used
herein shall mean the actual replacement cost of the Leased Property requiring
replacement from time to time.  In the event either party believes that full
replacement cost (the then-replacement cost less such exclusions) has increased
or decreased at any time during the term of this Lease, it shall have the right
to have such full replacement cost re-determined.

       13.3   Worker's Compensation.  Lessee, at its sole cost, shall at all
times maintain adequate worker's compensation insurance coverage for all
persons employed by Lessee on the Leased Property.  Such worker's compensation
insurance shall be in accordance with the requirements of applicable local,
state and federal law.

       13.4   Waiver of Subrogation.  All insurance policies carried by Lessor
or Lessee covering the Leased Property including, without limitation, contents,
fire and casualty insurance, shall expressly waive any right of subrogation on
the part of the insurer against the other party.  The parties hereto agree that
their policies will include such waiver clause or endorsement so long as the
same are obtainable without extra cost, and in the event of such an extra
charge the other party, at its election, may pay the same, but shall not be
obligated to do so.

       13.5   Form Satisfactory, Etc.  All of the policies of insurance
referred to in this Article XIII shall be written in a form, with deductibles
and by insurance companies reasonably satisfactory to Lessor.  Lessee shall pay
all of the premiums therefor, and deliver such policies or certificates thereof
to Lessor prior to their effective date (and, with respect to any renewal
policy, 30 days prior to the expiration of the existing policy), and in the
event of the failure of Lessee either to effect such insurance as herein called
for or to pay the premiums therefor, or to deliver such policies or
certificates thereof to Lessor at the times required, Lessor shall be entitled,
but shall have no obligation, to effect such insurance and pay the premiums
therefor, and Lessee shall reimburse Lessor for any premium or premiums paid by
Lessor for the coverages required under Section 13.1 upon written demand
therefor, and Lessee's failure to repay the same within 30 days after notice of
such failure from Lessor shall constitute an Event





                                      -24-
<PAGE>   31
of Default within the meaning of Section 16.1(b).  Each insurer mentioned in
this Article XIII shall agree, by endorsement to the policy or policies issued
by it, or by independent instrument furnished to Lessor, that it will give to
Lessor 30 days written notice before the policy or policies in question shall
be materially altered, allowed to expire or canceled.

       13.6   Increase in Limits.  If either Lessor or Lessee at any time deems
the limits of the personal injury or property damage under the comprehensive
public liability insurance then carried to be either excessive or insufficient,
Lessor or Lessee shall endeavor in good faith to agree on the proper and
reasonable limits for such insurance to be carried and such insurance shall
thereafter be carried with the limits thus agreed on until further change
pursuant to the provisions of this Article.

       13.7   Reports On Insurance Claims.  Lessee shall promptly investigate
and make a complete and timely written report to the appropriate insurance
company as to all accidents, all claims for damage relating to the ownership,
operation, and maintenance of the Project, and any damage or destruction to the
Project and the estimated cost of repair thereof and shall prepare any and all
reports required by any insurance company in connection therewith.  All such
reports shall be timely filed with the insurance company as required under the
terms of the insurance policy involved, and a copy of all such reports shall be
furnished to Lessor.


                                  ARTICLE XIV

       14.1   Insurance Proceeds.  If during the Term the Leased Property is
partially destroyed by a risk covered by the insurance described in ARTICLE
XIII, but the Project is not thereby rendered Unsuitable for its Primary
Intended Use or Uneconomic for its Primary Intended Use, Lessor or, at the
election of Lessor, Lessee shall, if insurance proceeds are made available by
the first lienholder, if any, of the Leased Property, restore the Project at
Lessor's cost to substantially the same condition as existed immediately before
the damage or destruction and otherwise in accordance with the terms of the
Lease, and this Lease shall not terminate as a result of such damage or
destruction.  If Lessee restores the Project, the insurance proceeds shall be
paid out by Lessor from time to time for the reasonable costs of such
restoration upon satisfaction of terms and conditions specified by Lessor, and
any excess proceeds remaining after such restoration shall be paid to Lessor
except for any amount thereof paid with respect to Lessee's Personal Property.
If the insurance proceeds are not adequate to complete such restoration, Lessor
shall fund all such excess costs.

       14.2   No Abatement of Rent.  Any damage or destruction due to casualty
notwithstanding, this Lease shall remain in full force and effect, and Lessee's
obligation to make rental payments and to pay all other charges required by
this Lease shall remain unabated.

       14.3   Damage During Term.  Notwithstanding any provisions of Section
14.1 appearing to the contrary, if damage to or destruction of the Leased
Property occurring during the Term of this Lease renders the Leased Property
Unsuitable for its Primary Intended Use, then either Lessor or Lessee (but in
Lessee's case only if the Leased Property is rendered Unsuitable for its
Primary Intended Use for a period in excess of one (1) year), shall have the
right to terminate





                                      -25-
<PAGE>   32
this Lease by giving written notice to the other party, in Lessor's case at any
time after the occurrence of such damage or destruction, or in Lessee's case
within thirty (30) days after the expiration of such period, whereupon all
accrued rent shall be paid immediately, and this Lease shall automatically
terminate.


                                   ARTICLE XV

       15.1   Definitions.

              (a)    "Condemnation" means a transfer of and/or compensation for
       the diminished value of all or portion of the Leased Property resulting
       from (1) the exercise of any governmental power, whether by legal
       proceedings or otherwise, by a Condemnor, and (2) a voluntary sale or
       transfer by Lessor to any Condemnor, either under threat of condemnation
       or while legal proceedings for condemnation are pending.

              (b)    "Date of Taking" means the date the Condemnor has the
       right to possession of the property being condemned.

              (c)    "Award" means all compensation, sums or anything of value
       awarded, paid or received on a total or partial Condemnation.

              (d)    "Condemnor" means any public or quasi-public authority, or
       private corporation or individual, having the power of Condemnation.

       15.2   Parties' Rights and Obligations.  If during the term there is any
Condemnation of all or any part of the Leased Property or any interest in this
Lease, the rights and obligations of Lessor and Lessee shall be determined by
this Article XV.

       15.3   Total Taking.  If title to the fee of the whole of the Leased
Property is condemned by any Condemnor, this Lease shall cease and terminate as
of the Date of Taking by the Condemnor.  If title to the fee of less than the
whole of or substantially all of the Leased Property is so taken or condemned,
which nevertheless renders the Leased Property Unsuitable for its Primary
Intended Use or Uneconomic for its Primary Intended Use, Lessee and Lessor
shall each have the option, by notice to the other, at any time prior to the
Date of Taking, to terminate this Lease as of the Date of Taking.  Upon such
date, if such notice has been given, this Lease shall thereupon cease and
terminate.  All Base Rent, Percentage Rent and Additional Charges paid or
payable by Lessee hereunder shall be apportioned as of the Date of Taking, and
Lessee shall promptly pay Lessor such amounts.

       15.4   Allocation of Award.  The total Award made with respect to the
Leased Property or for loss of rent, or for Lessor's loss of business beyond
the term, shall be solely the property of and payable to Lessor.  Any Award
made for loss of business during the remaining term, if any, or for removal and
relocation expenses of Lessee in any such proceedings shall be the sole
property of and payable to Lessee.  In any Condemnation proceedings Lessor and
Lessee shall each seek its Award in conformity herewith, at its respective
expense; provided, however,





                                      -26-
<PAGE>   33
Lessee shall not initiate, prosecute or acquiesce in any proceedings that may
result in a diminution of any Award payable to Lessor.

       15.5   Partial Taking.  If title to less than the whole of or
substantially all of the Leased Property is condemned, and the Leased Property
is still Suitable for its Primary Intended Use, and not Uneconomic for its
Primary Intended Use, or if Lessee or Lessor is entitled but neither elects to
terminate this Lease as provided in Section 15.3, Lessee at its cost shall with
all reasonable dispatch restore the untaken portion of the Leased Property so
that such Leased Property contains the same architectural units of the same
general character and condition (as nearly as may be possible under the
circumstances) as the Leased Property existing immediately prior to the
Condemnation.  Lessor, if permitted by any Holder, shall contribute to the cost
of restoration that part of its Award specifically allocated to such
restoration, if any, together with severance and other damages awarded for the
taken Leased Property; provided, however, that the amount of such contributions
shall not exceed such cost.

       15.6   Temporary Taking.  If the whole or any part of the Leased
Property or of Lessee's interest under this Lease is condemned by any Condemnor
for its temporary use or occupancy, this Lease shall not terminate by reason
thereof, and Lessee shall continue to pay, in the manner and at the terms
herein specified, the full amount of all Base Rent, Percentage Rent, and
Additional Charges.  Except only to the extent that Lessee may be prevented
from so doing pursuant to the terms of the order of the Condemnor, Lessee shall
continue to perform and observe all of the other terms, covenants, conditions
and obligations hereof on the part of the Lessee to be performed and observed,
as though such Condemnation had not occurred.  In the event of any Condemnation
as is in this Section 15.6 described, the entire amount of any Award made for
such Condemnation allocable to the term of this Lease, whether paid by way of
damages, rent or otherwise, shall be paid to Lessee if permitted by any Holder.
Lessee covenants that upon the termination of any such period of temporary use
or occupancy it will, at its sole cost and expense (subject to Lessor's
contribution as set forth below), restore the Leased Property as nearly as may
be reasonably possible to the condition in which the same was immediately prior
to such Condemnation, unless such period of temporary use or occupancy extends
beyond the expiration of the term, in which case Lessee shall not be required
to make such restoration.  If restoration is required hereunder, Lessor shall
contribute to the cost of such restoration that portion of its entire Award
that is specifically allocated to such restoration in the judgment or order of
the court, if any, and Lessee shall fund the balance of such costs in advance
of restoration in a manner reasonably satisfactory to Lessor.


                                  ARTICLE XVI

       16.1   Events of Default.  If any one or more of the following events
(individually, an "Event of Default") occurs:

              (a)    if Lessee fails to pay any Base Rent, Percentage Rent,
       Impositions or any other monies required to be paid by Lessee under this
       Lease, and such failure  continues for a period of fifteen (15) days
       after written notice specifying such failure has been provided Lessee by
       Lessor; or





                                      -27-
<PAGE>   34
              (b)    if Lessee fails to observe or perform any other term,
       covenant or condition of this Lease and such failure is not cured by
       Lessee within a period of 30 days after receipt by the Lessee of notice
       thereof from Lessor, unless such failure cannot with due diligence be
       cured within a period of 30 days, in which case it shall not be deemed
       an Event of Default if Lessee proceeds promptly and with due diligence
       to cure the failure and diligently completes the curing thereof;
       provided, however, in no event shall such cure period extend beyond 90
       days after notice of such failure has been provided to Lessee by Lessor;
       or

              (c)    if an event of default has occurred under the Management
       Agreement with respect to the Project or the Leased Property and such
       default has not been cured by Lessee within a period of fifteen (15)
       days after receipt by Lessee of notice of such default from either
       Manager or Lessor; or

              (d)    if Lessee or the Guarantor shall (i) be generally not
       paying its debts as they become due, (ii) file, or consent by answer or
       otherwise to the filing against it of, a petition for relief or
       reorganization or arrangement or any other petition in bankruptcy, for
       liquidation or to take advantage of any bankruptcy or insolvency law of
       any jurisdiction, (iii) make an assignment for the benefit of its
       creditors, (iv) consent to the appointment of a custodian, receiver,
       trustee or other officer with similar powers with respect to it or with
       respect to any substantial part of its assets, (v) be adjudicated
       insolvent, or (vi) take corporate action for the purpose of any of the
       foregoing; or if a court or governmental authority of competent
       jurisdiction shall enter an order appointing, without consent by Lessee,
       a custodian, receiver, trustee or other officer with similar powers with
       respect to it or with respect to any substantial part of its assets (the
       events described in (i) through (vi) and the immediately preceding
       clause herein called a "Bankruptcy Event"), or if an order for relief
       shall be entered in any case or proceeding for liquidation or
       reorganization or otherwise to take advantage of any bankruptcy or
       insolvency law of any jurisdiction, or ordering the dissolution,
       winding-up or liquidation of Lessee, or if any petition for any such
       relief shall be filed against Lessee and such petition shall not be
       dismissed within ninety (90) days; or

              (e)    if Lessee or the Guarantor is liquidated or dissolved, or
       begins proceedings toward such liquidation or dissolution, or, in any
       manner, ceases to do business or permits the sale or divestiture of
       substantially all of its assets (a "DISSOLUTION EVENT"); or

              (f)    if Guarantor fails to perform any of its obligations or
       breaches any of its covenants under the Guaranty, and such failure is
       not cured within thirty (30) days after notice to Guarantor, unless such
       failure cannot with due diligence be cured within a period of 30 days,
       in which case it shall not be deemed an Event of Default if Guarantor
       proceeds promptly and with due diligence to cure the failure and
       diligently completes the curing thereof; provided, however, in no event
       shall such cure period extend beyond 90 days after notice of such
       failure has been provided to Guarantor,





                                      -28-
<PAGE>   35
then, and in any such event, Lessor may exercise one or more remedies available
to it herein or at law or in equity, including but not limited to its right to
terminate this Lease by giving Lessee not less than ten days notice of such
termination.

       If litigation is commenced with respect to any alleged default under
this Lease, the prevailing party in such litigation shall receive, in addition
to its damages incurred, such sum as the court shall determine as its
reasonable attorneys' fees, and all costs and expenses incurred in connection
therewith.

       16.2   Surrender.  If an Event of Default occurs (and the event giving
rise to such Event of Default has not been cured within the curative period
relating thereto as set forth in Section 16.1) and is continuing, whether or
not this Lease has been terminated pursuant to Section 16.1, Lessee shall, if
requested by Lessor so to do, immediately surrender to Lessor the Leased
Property including, without limitation, any and all books, records, files,
licenses, permits and keys relating thereto, and quit the same and Lessor may
enter upon and repossess the Leased Property by reasonable force, summary
proceedings, ejectment or otherwise, and may remove Lessee and all other
persons and any and all personal property from the Leased Property, subject to
the rights of any Project guests and tenants or subtenants and to any
requirement of law.  Lessee hereby waives any and all requirements of
applicable laws for service of notice to re-enter the Leased Property.  Lessor
shall be under no obligation to, but may if it so chooses, relet the Leased
Property or otherwise mitigate Lessor's damages.

       16.3   Damages.  Neither (a) the termination of this Lease, (b) the
repossession of the Leased Property, (c) the failure of Lessor to relet the
Leased Property, nor (d) the reletting of all or any portion thereof, shall
relieve Lessee of its liability and obligations hereunder, all of which shall
survive any such termination, repossession or reletting.  In the event of any
such termination, Lessee shall forthwith pay to Lessor all rent due and payable
with respect to the Leased Property to and including the date of such
termination.

       Lessee shall forthwith pay to Lessor, at Lessor's option, as and for
liquidated and agreed current damages for Lessee's default, either:

              (1)    Without termination of Lessee's right to possession of the
Leased Property, each installment of rent and other sums payable by Lessee to
Lessor under the Lease as the same becomes due and payable, which rent and
other sums shall bear interest at the rate of 12% per annum until paid, and
Lessor may enforce, by action or otherwise, any other term or covenant of this
Lease; or

              (2)    the sum of:

                            (A)    the unpaid rent which had been earned at the
                     time of termination, repossession or reletting, and

                            (B)    the worth at the time of termination,
                     repossession or reletting of the amount by which the
                     unpaid rent for the balance of the term of this Lease
                     after the time of termination, repossession or reletting,





                                      -29-
<PAGE>   36
                     exceeds the amount of such rental loss that Lessee proves
                     could be reasonably avoided, and

                            (C)    any other amount necessary to compensate
                     Lessor for all the detriment proximately caused by
                     Lessee's failure to perform its obligations under this
                     Lease or which in the ordinary course of things would be
                     likely to result therefrom.  The worth at the time of
                     termination, repossession or reletting of the amount
                     referred to in subparagraph (B) 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%.

Percentage Rent for the purposes of this Section 16.3 shall be a sum equal to
(i) the average of the annual amounts of Percentage Rent for the three calendar
years immediately preceding the calendar year in which the termination, re-
entry or repossession takes place, or (ii) if three calendar years shall not
have elapsed, the Percentage Rent during the preceding calendar year during
which this Lease was in effect, or (iii) if one calendar year has not elapsed,
the amount derived by annualizing the Percentage Rent from the effective date
of this Lease.

       16.4   Application of Funds.  Any payments received by Lessor under any
of the provisions of this Lease during the existence or continuance of any
Event of Default shall be applied to Lessee's obligations in the order that
Lessor may determine or as may be prescribed by the laws of the State of Texas.


                                  ARTICLE XVII

       17.1   Lessor's Right to Cure Lessee's Default.  If Lessee fails to make
any payment or to perform any act required to be made or performed under this
Lease including, without limitation, Lessee's failure to comply with the terms
of the Management Agreement, and fails to cure the same within the relevant
time periods provided in Section 16.1, Lessor, without waiving or releasing any
obligation of Lessee, and without waiving or releasing any obligation or
default, may (but shall be under no obligation to) at any time thereafter make
such payment or perform such act for the account and at the expense of Lessee,
and may, to the extent permitted by law, enter upon the Leased Property for
such purpose and take all such action thereon as, in Lessor's opinion, may be
necessary or appropriate therefor.  No such entry shall be deemed an eviction
of Lessee.  All sums so paid by Lessor and all costs and expenses (including,
without limitation, reasonable attorneys' fees and expenses, in each case to
the extent permitted by law) so incurred, together with a late charge thereon
(to the extent permitted by law) at the Overdue Rate from the date on which
such sums or expenses are paid or incurred by Lessor, shall be paid by Lessee
to Lessor on demand.  The obligations of Lessee and rights of Lessor contained
in this Article shall survive the expiration or earlier termination of this
Lease.





                                      -30-
<PAGE>   37
                                 ARTICLE XVIII

       18.1   Holding Over.  If Lessee for any reason remains in possession of
the Leased Property after the expiration or earlier termination of the term of
this Lease, such possession shall be as a tenant at sufferance during which
time Lessee shall pay as rental each month two times the aggregate of (a) one-
twelfth of the aggregate Base Rent and Percentage Rent payable with respect to
the last year of the term of this Lease, (b) all additional charges accruing
during the applicable month and (c) all other sums, if any, payable by Lessee
under this Lease with respect to the Leased Property.  During such period,
Lessee shall be obligated to perform and observe all of the terms, covenants
and conditions of this Lease, but shall have no rights hereunder other than the
right, to the extent given by law to tenancies at sufferance, to continue its
occupancy and use of the Leased Property.  Nothing contained herein shall
constitute the consent, express or implied, of Lessor to the holding over of
Lessee after the expiration or earlier termination of this Lease.


                                  ARTICLE XIX

       19.1   Risk of Loss.  During the term of this Lease, the risk of loss or
of decrease in the enjoyment and beneficial use of the Leased Property in
consequence of the damage or destruction thereof by fire, the elements,
casualties, thefts, riots, wars or otherwise, or in consequence of
foreclosures, attachments, levies or executions (other than those caused by
Lessor and those claiming from, through or under Lessor) is assumed by Lessee,
and, in the absence of gross negligence, willful misconduct or breach of this
Lease by Lessor pursuant to Section 31.2, Lessor shall in no event be
answerable or accountable therefor, nor shall any of the events mentioned in
this Section entitle Lessee to any abatement of rent except as specifically
provided in this Lease.


                                   ARTICLE XX

       20.1   Indemnification.

       (a)    Notwithstanding the existence of any insurance, and without
regard to the policy limits of any such insurance or self-insurance, Lessee
will protect, indemnify, hold harmless, and defend Lessor from and against all
liabilities, obligations, claims, damages, penalties, causes of action, costs
and expenses (including, without limitation, reasonable attorneys' fees and
expenses), to the extent permitted by law, imposed upon or incurred by or
asserted against Lessor by reason of (a) any accident, injury to or death of
persons or loss of or damage to property occurring on or about the Leased
Property or adjoining sidewalks during the term of this Lease, including
without limitation any claims under liquor liability, "dram shop" or similar
laws, (b) any past, present or future use, misuse, non-use, condition,
management, maintenance or repair by Lessee or any of its agents, employees or
invitees of the Leased Property or any litigation, proceeding or claim by
governmental entities or other third parties to which Lessor is made a party or
participant related to such use, misuse, non-use, condition, management,
maintenance, or repair thereof by Lessee or any of its agents, employees or
invitees, including





                                      -31-
<PAGE>   38
any failure of Lessee or any of its agents, employees or invitees to perform
any obligations under this Lease or imposed by applicable law (other than
arising out of condemnation proceedings), (c) any Impositions that are the
obligations of Lessee pursuant to the applicable provisions of this Lease, (d)
any failure on the part of Lessee to perform or comply with any of the terms of
this Lease, and (e) the non-performance of any of the terms and provisions of
any and all existing and future subleases of the Leased Property to be
performed by the landlord thereunder.

       (b)    Lessor shall indemnify, save harmless and defend Lessee from and
against all liabilities, obligations, claims, damages, penalties, causes of
action, costs and expenses imposed upon or incurred by or asserted against
Lessee as a result of (a) the gross negligence or willful misconduct of Lessor
arising in connection with this Lease or (b) any failure on the part of Lessor
to perform or comply with any of the terms of this Lease.

       (c)    Any amounts that become payable by an indemnifying party under
this Section shall be paid within ten days after liability therefor on the part
of the indemnifying party is determined by litigation or otherwise, and if not
timely paid, shall bear a late charge (to the extent permitted by law) at the
rate of 12% per annum from the date of such determination to the date of
payment.  An indemnifying party, at its expense, shall contest, resist and
defend any such claim, action or proceeding asserted or instituted against the
indemnified party.  The indemnified party, at its expense, shall be entitled to
participate in any such claim, action, or proceeding, and the indemnifying
party may not compromise or otherwise dispose of the same without the consent
of the indemnified party, which may not be unreasonably withheld.  Nothing
herein shall be construed as indemnifying Lessor against its own grossly
negligent acts or omissions or willful misconduct.

       (d)    Lessee's or Lessor's liability for a breach of the provisions of
this Article shall survive any termination of this Lease.

       (e)    Any amounts that become payable by an Indemnifying Party under
this ARTICLE XX shall be paid within ten (10) days after liability therefor on
the part of the Indemnifying Party is determined by litigation or otherwise,
and if not timely paid, shall bear a late charge (to the extent permitted by
law) at the Overdue Rate from the date of such determination to the date of
payment.  Any such amounts shall be reduced by insurance proceeds received and
any other recovery (net of costs) obtained by the Indemnified Party.  An
Indemnifying Party, upon request, shall at its sole expense resist and defend
any Proceeding, claim or action, or cause the same to be resisted and defended
by counsel designated by the Indemnified Party and approved by the Indemnifying
Party, which approval shall not be unreasonably withheld; provided, however,
that such approval shall not be required in the case of defense by counsel
designated by any insurance company undertaking such defense pursuant to any
applicable policy of insurance.  Each Indemnified Party shall have the right to
employ separate counsel in any such Proceeding, claim or action and to
participate in the defense thereof, but the fees and expenses of such counsel
will be at the sole expense of such Indemnified Party unless a conflict of
interest prevents representation of such Indemnified Party by the counsel
selected by the Indemnified Party and such separate counsel has been approved
by the Indemnifying Party, which approval shall not be unreasonably withheld.
The Indemnifying Party shall not be liable for any





                                      -32-
<PAGE>   39
settlement of any such Proceeding, claim or action made without its consent,
which consent shall not be unreasonably withheld, but if settled with the
consent of the Indemnifying Party, or if settled without its consent (if its
consent shall be unreasonably withheld), or if there be a final, non-appealable
judgment for an adversary party in any such Proceeding, claim or action, the
Indemnifying Party shall indemnify and hold harmless the Indemnified Party from
and against any liabilities incurred by such Indemnified Party by reason of
such settlement or judgment.  Nothing herein shall be construed as indemnifying
a Lessor Indemnified Party against its own grossly negligent acts or omissions
or willful misconduct.


                                  ARTICLE XXI

       21.1   Subletting and Assignment.

       (a)    Except for subleases to concessionaires made in the ordinary
course of operating the Project, Lessee shall not sell, assign or transfer all
or any portion of its leasehold estate or sublet all or any portion of the
Leased Property without first obtaining the prior written consent of Lessor.
In the event of an assignment or subletting by Lessee which is approved by
Lessor, Lessee shall nevertheless remain fully liable for the due performance
of all obligations on Lessee's part to be performed under this Lease.  No
permitted assignment, sale or transfer shall be effective until there shall
have been delivered to Lessor an undertaking in recordable form, executed by
the proposed assignee or sublessee, wherein such assignee or sublessee assumes
the due performance of all obligations on Lessee's part to be performed under
this Lease.

       (b)    Lessee, as the debtor in possession, or the trustee for Lessee
(collectively "THE TRUSTEE") in any proceeding under Title 11 of the United
States Bankruptcy Code relating to Bankruptcy, as amended (the "BANKRUPTCY
CODE"), shall not have the right to assign this Lease or sublet the Leased
Property to an assignee or sublessee that (i) is a competitor of Lessor or (ii)
is not a capable, reliable, qualified Person of good reputation and character
with the financial capacity to satisfy Lessee's obligations under this Lease.
The Trustee shall not have the right to assign this Lease or sublet the Leased
Property to a real estate investment trust that is, or intends to be, publicly
traded.

       (c)    The Trustee shall have the right to assume Lessee's rights and
obligations under this Lease only if the Trustee: (a) promptly cures or
provides adequate assurance that the Trustee will promptly cure any default
under this Lease; (b) compensates or provides adequate assurance that the
Trustee will promptly compensate Lessor for any actual pecuniary loss incurred
by Lessor as a result of Lessee's default under this Lease; and (c) provides
adequate assurance of future performance under this Lease.  Adequate assurance
of future performance by the proposed assignee shall include, as a minimum,
that: (i) any proposed assignee of this Lease shall provide to Lessor an
audited financial statement, dated no later than six (6) months prior to the
effective date of such proposed assignment or sublease with no material change
therein as of the effective date, which financial statement shall show the
proposed assignee has sufficient financial capacity to fulfill its obligations
under this Lease, or, in the alternative, the proposed assignee shall provide a
guarantor of such proposed assignee's obligations under this Lease, which
guarantor shall provide an audited financial statement meeting the requirements
of (i) above and shall





                                      -33-
<PAGE>   40
execute and deliver to Lessor a guaranty agreement in form and substance
acceptable to Lessor; and (ii) any proposed assignee shall grant to Lessor a
security interest in favor of Lessor in all furniture, fixtures, and other
personal property to be used by such proposed assignee in the Leased Property.
All payments required of Lessee under this Lease, whether or not expressly
denominated as such in this Lease, shall constitute rent for the purposes of
Title 11 of the Bankruptcy Code.

       (d)    The parties agree that for the purposes of the Bankruptcy Code
relating to (a) the obligation of the Trustee to provide adequate assurance
that the Trustee will "promptly" cure defaults and compensate Lessor for actual
pecuniary loss, the word "promptly" shall mean that cure of defaults and
compensation will occur no later than sixty (60) days following the filing of
any motion or application to assume this Lease; and (b) the obligation of the
Trustee to compensate or to provide adequate assurance that the Trustee will
promptly compensate Lessor for "actual pecuniary loss".  The term "ACTUAL
PECUNIARY LOSS" shall mean, in addition to any other provisions contained
herein relating to Lessor's damages upon default, the obligations of Lessee to
pay money under this Lease and all attorneys' fees and related costs of Lessor
incurred in connection with any default of Lessee in connection with Lessee's
bankruptcy proceedings).

       (e)    Any person or entity to which this Lease is assigned pursuant to
the provisions of the Bankruptcy Code shall be deemed, without further act or
deed, to have assumed all of the obligations arising under this Lease and each
of the conditions and provisions hereof on and after the date of such
assignment.  Any such assignee shall, upon the request of Lessor, forthwith
execute and deliver to Lessor an instrument, in form and substance acceptable
to Lessor, confirming such assumption.


                                  ARTICLE XXII

       22.1   Officer's Certificates; Financial Statements; Lessor's Estoppel
Certificates and Covenants.

       (a)    At any time and from time to time upon not less than 20 days
notice by Lessor, Lessee will furnish to Lessor a statement certifying that
this Lease is unmodified and in full force and effect (or that this Lease is in
full force and effect as modified and setting forth the modifications), the
date to which the rent has been paid, whether to the knowledge of Lessee there
is any existing default or Event of Default exists thereunder by Lessor or
Lessee, and such other information as may be reasonably requested by Lessor.
Any such certificate furnished pursuant to this Section may be relied upon by
Lessor, any lender and any prospective purchaser of the Leased Property.

       (b)    Lessee will furnish to Lessor a copy of all financial reports and
statements provided by Manager under the Management Agreement within ten (10)
days after Lessee receives same from Manager.

       (c)    Lessee covenants to cause its officers and employees, its Manager
and its auditors to cooperate fully and promptly with Lessor and with the
auditors for Lessor in connection with





                                      -34-
<PAGE>   41
the timely preparation and filing of Lessor's filings, reports and returns
under applicable federal, state and other governmental securities, blue sky and
tax laws and regulations.  Lessor covenants to cause its officers and employees
and auditors to cooperate fully with Lessee and Lessee's auditors in connection
with the timely preparation and filing of Lessee's filings, reports and returns
under applicable federal, state and other governmental securities, blue sky and
tax laws and regulations.

       (d)    At any time and from time to time upon not less than 30 days
notice by Lessee, Lessor will furnish to Lessee or to any person designated by
Lessee an estoppel certificate certifying that this Lease is unmodified and in
full force and effect (or that this Lease is in full force and effect as
modified and setting forth the modifications), the date to which rent has been
paid, whether to the knowledge of Lessor there is any existing default or Event
of Default on Lessee's part hereunder, and such other information as may be
reasonably requested by Lessee.


                                 ARTICLE XXIII

       23.1   Lessor's Right to Inspect.  Lessee shall permit Lessor and its
authorized representatives as frequently as reasonably requested by Lessor to
inspect the Leased Property and Lessee's accounts and records pertaining
thereto and make copies thereof, during usual business hours upon reasonable
advance notice, subject only to any business confidentiality requirements
reasonably requested by Lessee.


                                  ARTICLE XXIV

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


                                  ARTICLE XXV

       25.1   Remedies Cumulative.  To the extent permitted by law, each legal,
equitable or contractual right, power and remedy of Lessor or Lessee now or
hereafter provided either in this Lease or by statute or otherwise shall be
cumulative and concurrent and shall be in addition to every other right, power
and remedy and the exercise or beginning of the exercise by Lessor or Lessee of
any one or more of such rights, powers and remedies shall not preclude the
simultaneous or subsequent exercise by Lessor or Lessee of any or all of such
other rights, powers and remedies.





                                      -35-
<PAGE>   42
                                  ARTICLE XXVI

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


                                 ARTICLE XXVII

       27.1   No Merger of Title.  There shall be no merger of this Lease or of
the leasehold estate created hereby by reason of the fact that the same person
or entity may acquire, own or hold, directly or indirectly: (a) this Lease or
the leasehold estate created hereby or any interest in this Lease or such
leasehold estate and (b) the fee estate in the Leased Property.


                                 ARTICLE XXVIII

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


                                  ARTICLE XXIX

       29.1   Notices.  All notices, demands, or other communications of any
type given by the Lessor to the Lessee, or by the Lessee to the Lessor, whether
required by this Lease or in any way related to the transaction contracted for
herein, shall be void and of no effect unless given in accordance with the
provisions of this paragraph.  All notices shall be in writing and delivered to
the person to whom the notice is directed, either in person, by facsimile
transmission, or by United States Mail, as a registered or certified item,
return receipt requested.  Notices delivered by mail shall be deemed given when
deposited in a post office or other depository under the care or custody of the
United States Postal Service, enclosed in a wrapper with proper postage
affixed, addressed as follows:





                                      -36-
<PAGE>   43
       Lessor:                             Crescent Real Estate Equities Limited
                                             Partnership
                                           777 Main Street, Suite 2100
                                           Fort Worth, Texas  76102
                                           Attn:  Gerald W. Haddock,
                                                  President
                                           Facsimile:   (817) 878-0429

       with a copy to:                     Keith W. McGlamery, Esq.
                                           Fulbright & Jaworski L.L.P.
                                           2200 Ross Avenue
                                           Suite 2800
                                           Dallas, Texas  75201
                                           Facsimile:  (214) 855-8200

       Lessee:                             COI Hotel Group, Inc.
                                           306 West 7th Street, Suite 1025
                                           Fort Worth, Texas  76102
                                           Attn:  Jeffrey L. Stevens, President
                                           Facsimile:  (817) 339-1001


                                  ARTICLE XXX

30.1   Appraisers.  If it becomes necessary to determine the fair market value
of the Leased Property for any purpose of this Lease, the party required or
permitted to give notice of such required determination shall include in the
notice the name of a person selected to act as appraiser on its behalf.  Within
10 days after notice, Lessor (or Lessee, as the case may be) shall by notice to
Lessee (or Lessor, as the case may be) appoint a second person as appraiser on
its behalf.  The appraisers thus appointed, each of whom must be a member of the
American Institute of Real Estate Appraisers (or any successor organization
thereto) with at least five years experience in the State of Texas appraising
property similar to the Leased Property, shall, within 45 days after the date of
the notice appointing the first appraiser, proceed to appraise the Leased
Property to determine the fair market value thereof as of the relevant date
(giving effect to the impact, if any, of inflation from the date of their
decision to the relevant date); provided, however, that if only one appraiser
shall have been so appointed, then the determination of such appraiser shall be
final and binding upon the parties.  If two appraisers are appointed and if the
difference between the amounts so determined does not exceed 5% of the lesser of
such amounts, then the fair market value shall be an amount equal to 50% of the
sum of the amounts so determined.  If the difference between the amounts so
determined exceeds 5% of the lesser of such amounts, then such two appraisers
shall have 20 days to appoint a third appraiser.  If no such appraiser shall
have been appointed within such 20 days or within 90 days of the original
request for a determination of fair market value, whichever is earlier, either
Lessor or Lessee may apply to any court having jurisdiction to have such
appointment made by such court.  Any appraiser appointed by the original
appraisers or by such court shall be instructed to determine the fair market
value or fair market rental within 45 days after appointment of such





                                      -37-
<PAGE>   44
appraiser.  The determination of the appraiser which differs most in the terms
of dollar amount from the determinations of the other two appraisers shall be
excluded, and 50% of the sum of the remaining two determinations shall be final
and binding upon Lessor and Lessee as the fair market value or fair market
rental of the Leased Property, as the case may be. This provision for
determining by appraisal shall be specifically enforceable to the extent such
remedy is available under applicable law, and any determination hereunder shall
be final and binding upon the parties except as otherwise provided by applicable
law.  Lessor and Lessee shall each pay the fees and expenses of the appraiser
appointed by it and each shall pay one-half of the fees and expenses of the
third appraiser and one-half of all other costs and expenses incurred in
connection with each appraisal.


                                  ARTICLE XXXI

       31.1   Lessor May Grant Liens.  Upon notice to but without the consent
of Lessee, Lessor may, from time to time, directly or indirectly, create or
otherwise cause to exist any lien, encumbrance or title retention agreement
("Encumbrance") upon the Leased Property, or any portion thereon or interest
therein, whether to secure any borrowing or other means of financing or
refinancing.  This Lease shall be subject and subordinate to the lien of any
Encumbrance that Lessor, its successors or assigns, has placed or may hereafter
place on or against all or any part of the Leased Property, and Lessee hereby
agrees to attorn to any such lienholder and any other purchaser at the
foreclosure of such lien (including obtaining of title by lender by deed in
lieu of foreclosure), upon demand.  It is expressly provided and agreed that
any such lienholder shall not be required to agree not to disturb Lessee in the
event of a foreclosure or deed in lieu thereof and that, at the option of any
such lienholder or any other purchaser at foreclosure of such lien, this Lease
may be terminated and, upon such termination, Lessee shall have no further
rights hereunder.

       31.2   Breach by Lessor.  It shall be a breach of this Lease if Lessor
fails to observe or perform any term, covenant or condition of this Lease on
its part to be performed and such failure continues for a period of 30 days
after notice thereof from Lessee, unless such failure cannot with due diligence
be cured within a period of 30 days, in which case such failure shall not be
deemed to continue if Lessor, within such 30-day period, proceeds promptly and
with due diligence to cure the failure and diligently completes the curing
thereof.

                                 ARTICLE XXXII

       32.1   Miscellaneous.  Anything contained in this Lease to the contrary
notwithstanding, all claims against, and liabilities of, Lessee or Lessor
arising prior to any date of termination of this Lease shall survive such
termination.  If any term or provision of this Lease or any application thereof
is invalid or unenforceable, the remainder of this Lease and any other
application of such term or provisions shall not be affected thereby.  If any
late charges or any interest rate provided for in any provision of this Lease
are based upon a rate in excess of the maximum rate permitted by applicable
law, the parties agree that such charges shall be fixed at the maximum
permissible rate.  Neither this Lease nor any provision hereof may be changed,





                                      -38-
<PAGE>   45
waived, discharged or terminated except by a written instrument in recordable
form signed by Lessor and Lessee.  All the terms and provisions of this Lease
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns.  The headings in this Lease are for
convenience of reference only and shall not limit or otherwise affect the
meaning hereof.  This Lease shall be governed by and construed in accordance
with the laws of the State of Texas, but not including its conflicts of laws
rules.

       32.2   Transfer of Licenses.  Upon the expiration or earlier termination
of the term of this Lease, Lessee shall use its best efforts (i) to transfer to
Lessor or Lessor's nominee all licenses, operating permits and other
governmental authorizations and all contracts, including contracts with
governmental or quasi-governmental entities, that may be necessary for the
operation of the Project (collectively, "Licenses"), or (ii) if such transfer
is prohibited by law or Lessor otherwise elects, to cooperate with Lessor or
Lessor's nominee in connection with the processing by Lessor or Lessor's
nominee of any applications for, all Licenses; provided, in either case, that
the costs and expenses of any such transfer or the processing of any such
application shall be paid by Lessor or Lessor's nominee.

       32.3   Waiver of Presentment, Etc.  Lessee waives all presentments,
demands for payment and for performance, notices of nonperformance, protests,
notices of protest, notices of dishonor, and notices of acceptance and waives
all notices of the existence, creation, or incurring of new or additional
obligations, except as expressly granted herein.


                                 ARTICLE XXXIII

       33.1   Memorandum of Lease.  Lessor and Lessee shall promptly upon the
request of either party enter into a short form memorandum of this Lease, in
form suitable for recording under the laws of the State of Texas in which
reference to this Lease shall be made.  Lessee shall pay all costs and expenses
of recording such memorandum of this Lease.


                                 ARTICLE XXXIV

       34.1   Management Agreement.  To the extent any provisions of the
Management Agreement impose a greater obligation on Lessee than the
corresponding provisions of the Lease, then Lessee shall be obligated to comply
with the provisions of the Management Agreement, it being the intent of the
parties hereof that Lessee comply with the provisions of the Management
Agreement so as to avoid any default thereunder.  Lessee may not amend the
Management Agreement in any way without obtaining Lessor's prior written
consent to any such amendment.


                                  ARTICLE XXXV

       35.1   Consolidated Financials.  Lessee shall deliver to Lessor (a)
within 90 days after the end of each calendar year Consolidated Financials, (b)
within 30 days after the end of each month





                                      -39-
<PAGE>   46
monthly operating statements for Lessee's business at the Leased Property and a
copy of the balance sheet of Lessee as of the end of such month, and (c) such
other information as Lessor may from time to time reasonably request.  The
foregoing financial statements shall be certified by a member or an authorized
officer (as the case may be) of Lessee.  All financial statements of Lessee
delivered to Lessor shall be true and correct in all respects, shall be
prepared in accordance with generally accepted accounting principles,
consistently applied, and fairly present the financial condition of the subject
thereof as of the dates thereof.  Any materially adverse change that occurs in
the financial condition reflected therein after the date thereof shall be
reported to Lessor promptly.  None of the aforesaid financial statements, or
any certificate or statement furnished to Lessor by or on behalf of Lessee in
connection with the transactions contemplated hereby, shall contain any untrue
statement of a material fact or omit to state a material fact necessary in
order to make the statements contained therein or herein not misleading.


                                 ARTICLE XXXVI

       36.1   REIT Compliance.  Lessee acknowledges that Lessor intends to
qualify as a real estate investment trust under the Internal Revenue Code of
1986, as amended (the "Tax Code").  Lessee agrees that it will not knowingly or
intentionally take or omit any action, or permit any status to exist at the
Leased Property, which Lessee knows would or could result in Lessor being
disqualified from treatment as a real estate investment trust under the Tax
Code as the provisions exist on the date hereof.

       36.2   Personal Property Limitation.  Anything contained in this Lease
to the contrary notwithstanding, the average of the adjusted tax bases of the
items of personal property that are leased to the Lessee under this Lease at
the beginning and at the end of any calendar year shall not exceed fifteen
percent (15%) of the average of the aggregate adjusted tax bases of the Leased
Property at the beginning and at the end of each such calendar year.  This
Section 36.2 is intended to insure that the rent payable hereunder qualifies as
"rents from real property," within the meaning of Section 856(d) of the Tax
Code, or any similar or successor provisions thereto, and shall be interpreted
in a manner consistent with such intent.

       36.3   Sublease Rent Limitation.  Anything contained in this Lease to
the contrary notwithstanding, Lessee shall not sublet the Leased Property on
any basis such that the rental to be paid by the sublessee thereunder would be
based, in whole or in part, on either (a) the income or profits derived by the
business activities of the sublessee, or (b) any other formula such that any
portion of the rent payable hereunder would fail to qualify as "rents from real
property" within the meaning of Section 856(d) of the Tax Code, or any similar
or successor provisions thereto.

       36.4   Sublease Tenant Limitation.  Anything contained in this Lease to
the contrary notwithstanding, Lessee shall not sublease the Leased Property to
any person or entity in which Lessor owns, directly or indirectly, a ten
percent (10%) or more interest, within the meaning of Section 856(d)(2)(B) of
the Tax Code, or any similar or successor provisions thereto.





                                      -40-
<PAGE>   47
       36.5   Lessee Ownership Limitation.  Anything contained in this Lease to
the contrary notwithstanding, neither Lessee nor any affiliate of the Lessee
shall acquire, directly or indirectly, a ten percent (10%) or more interest in
Lessor, within the meaning of Section 856(d)(2)(B) of the Internal Revenue Code
of 1986, or any similar or successor provisions thereto.

                                 ARTICLE XXXVII

       37.1   Lessor's Option to Terminate Lease.

              (a)    In the event Lessor consummates a bona fide contract to
sell the Leased Property, then Lessor may terminate the Lease by giving not
less than thirty (30) days prior notice to Lessee of Lessor's election to
terminate the Lease upon the closing under such contract.  Effective upon such
date, this Lease shall terminate and be of no further force and effect except
as to any obligations of the parties existing as of such date that survive
termination of this Lease and all Base Rent and Percentage Rent shall be
adjusted as of the termination date.

              (b)    As compensation for the early termination of its leasehold
estate under this ARTICLE XXXVII because of a sale of the Leased Property,
Lessor shall, within ninety (90) days after the closing of such sale, pay to
Lessee the fair market value of Lessee's leasehold estate hereunder as of the
closing of the sale of the Leased Property.  In the event Lessor and Lessee are
unable to agree upon the fair market value of an original or replacement
leasehold estate, it shall be determined by appraisal using the appraisal
procedure set forth in ARTICLE XXX.

              (c)    For the purposes of this Section, fair market value of the
leasehold estate (or portion thereof) means an amount equal to the present
value of the net revenues to be derived from this Lease during the remaining
term of this Lease based on current projections made by Lessee and Manager with
respect to future occupancy of, and future revenues to be generated by, the
Leased Property, as the case may be.


                                ARTICLE XXXVIII

       38.1   Transition Procedures.  Lessee and Manager shall cooperate in
good faith to provide access and information to any prospective purchaser or
lessee of the Leased Property which may acquire the Leased Property or lease it
upon the expiration or termination of the Term.  Upon any expiration or
termination of the Term, Lessor and Lessee shall do the following and, in
general, shall cooperate in good faith to effect an orderly transition of the
management or lease of the Project.  The provisions of this Article 38 shall
survive the expiration or termination of this Lease until they have been fully
performed.  Nothing contained herein shall limit Lessor's rights and remedies
under this Lease if such termination occurs as the result of an Event of
Default.

              (a)    Upon the expiration or earlier termination of the Term,
Lessee shall use its best efforts (i) to transfer to Lessor or Lessor's
designee all licenses, operating permits and





                                      -41-
<PAGE>   48
other governmental authorizations and all contracts with governmental or quasi-
governmental entities, that may be necessary for the operation of the Project
(collectively, "Licenses"), or (ii) if such transfer is prohibited by law or
Lessor otherwise elects, to cooperate with Lessor or Lessor's designee in
connection with the processing by Lessor or Lessor's designee of any
applications for all Licenses, including Lessee continuing to operate the
liquor operations under its licenses with Lessor or its designee agreeing to
indemnify and hold Lessee harmless as a result thereof except for the gross
negligence or willful misconduct of Lessee; provided, in either case, that the
costs and expenses of any such transfer or the processing of any such
application shall be paid by Lessor or Lessor's designee.

              (b)    Lessee shall assign or cause to be assigned to Lessor or
Lessor's designee simultaneously with the termination of this Agreement, and
the assignee shall assume all leases, contracts, concession agreements and
agreements in effect with respect to the Project then in Lessee's name;
provided, however, Lessor shall not be obligated to assume and may reject (i)
any operating or service agreements entered into subsequent to the date hereof
which have a term in excess of one year or termination rights that must be
exercised more than sixty (60) days prior to the end of the annual term, and
(ii) equipment leases which were entered into subsequent to the date hereof and
were not previously approved by Lessor (which approval shall not be
unreasonably withheld), in which event the agreement or agreements and/or
leases so rejected shall not be assigned or shall be deemed reassigned and
shall remain the property and responsibility of Lessee.

              (c)    To the extent that Lessor has not already received copies
thereof, copies of all books and records (including computer records) for the
Project kept by Lessee shall be promptly delivered to Lessor or Lessor's
designee.

              (d)    Lessee shall be entitled to retain all cash, bank accounts
and house banks, and to collect all Gross Receipts and accounts receivable
accrued through the termination date.  Lessee shall be responsible for the
payment of rent, all operating expenses of the Project and all other
obligations of Lessee accrued under this Lease as of the termination date, and
Lessor shall be responsible for all operating expenses of the Project accruing
after the termination date.  Lessee shall surrender the Leased Property with an
amount and quality of Nonconsumable Inventory and Consumable Supplies equal to
the Initial Inventory, and Lessor shall have no obligation to purchase such
Nonconsumable Inventory or any other items of Lessee's Personal Property.





                                      -42-
<PAGE>   49
       IN WITNESS WHEREOF, the parties have executed this Lease by their duly
authorized officers as of the date first above written.



LESSOR:                      CRESCENT REAL ESTATE
                             EQUITIES LIMITED PARTNERSHIP,
                             a Delaware limited partnership
                             
                             By:  Crescent Real Estate Equities, Ltd., a
                                  Delaware corporation, its sole general
                                  partner
                             
                             
                             
                                  By:  /S/ WILLIAM D. MILLER
                                     ------------------------------------------
                                  Title:  Senior Vice President, Administration
                                  Printed Name:  William D. Miller
                             
                             
LESSEE:                      COI HOTEL GROUP, INC.
                             
                             
                             
                             By:    /S/ JEFFERY L. STEVENS 
                                  ---------------------------------------------
                             Name:  Jeffrey L. Stevens
                             Title: President
                             
                             
                             


                                      -43-
<PAGE>   50
                                  EXHIBIT "A"

                                 "HOTEL TRACT"

       BLOCK 252

       Item One:

       All of Block 252, S.S.B.B., City of Houston, Harris County, Texas, being
that property bounded by the center lines of Caroline and Austin Streets and
Lamar and Dallas Avenues in the City of Houston, Harris County, Texas, together
with all improvements thereon, including (a) the Four Seasons Hotel - Houston
Center, (b) the skyway connecting Blocks 252 and 131 to the center line of
Lamar Avenue and (c) the skyway connecting Blocks 252 and 253 to the center
line of Caroline Street.

       Item Two:

       All those air rights, as hereinafter defined, in the property described
in Item One, being a portion of those rights conveyed by the City of Houston to
Houston Center Corporation by one or both of the following two Quitclaim Deeds,
the first dated August 26, 1971, recorded under Harris County Clerk's File No.
D-404337 and Film Code No. 133-27-0968; and the second dated December 18, 1973,
recorded under Harris County Clerk's File No. E-118604 and Film Code No.
###-##-####, both such deeds being authorized by City of Houston Ordinance No.
70-1881 passed on October 28, 1970, the air rights conveyed by said Quitclaim
Deeds being the City of Houston easement rights between a plane 20 feet above
the crowns of the existing streets and a plane 500 feet above such street
crowns, including those surrounding Item One, there, however, being excepted
from this Item Two such air rights to the extent that the same relate to the
northerly half of Dallas Avenue from the center line of Caroline Street to the
center line of Austin Street.

       Item Three:

       The City of Houston easement rights and interests described in and
conveyed by that certain Quitclaim Deed dated August 27, 1956, from the City of
Houston, Texas, to M.J. Salley, recorded in Volume  3216, Page 2, of the Deed
Records of Harris County, Texas.

       Item Four:

       City of Houston Ordinance No. 2984, passed as of August 22, 1956,
recorded in Volume 3216, Page 5, of the Deed Records of Harris County, Texas,
establishing a building line 4.98 feet east of the original building line along
Austin Street.





                               EXHIBIT A - Page 1