<PAGE>   1


                                                                  EXHIBIT 10.75



                                LEASE AGREEMENT



                                    BETWEEN



                    CRESCENT REAL ESTATE FUNDING III, L.P.,
                         a Delaware limited partnership


                                      AND



                             COI HOTEL GROUP, INC.,
                              a Texas corporation



<PAGE>   2


                               TABLE OF CONTENTS

<TABLE>
<CAPTION>

                                                               Page
<S>      <C>      <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............................................4
         (k)      Holder..............................................4
         (l)      Indemnified Party...................................4
         (m)      Indemnifying Party..................................4
         (n)      Inventory...........................................4
         (o)      Lease Year..........................................4
         (p)      Legal Requirements..................................4
         (q)      Lessee Indemnified Party............................4
         (r)      Lessor Indemnified Party............................5
         (s)      Nonconsumable Inventory.............................5
         (t)      Overdue Rate........................................5
         (u)      Proceeding..........................................5
         (v)      Subsidiaries........................................5
         (w)      Unavoidable Delay...................................5
         (x)      Uneconomic for its Primary Intended Use.............5
         (y)      Unsuitable for its Primary Intended Use.............5


ARTICLE II............................................................6
         2.1      Leased Property.....................................6
         2.2      Assignment and Assumption of
                  Contracts; Initial Transaction......................6


ARTICLE III...........................................................8
         3.1      Term................................................8
</TABLE>


                                       i

<PAGE>   3

<TABLE>

<S>      <C>      <C>                                                       <C>
ARTICLE IV....................................................................9
         4.1      Base Rent...................................................9
         4.2      Percentage Rent.............................................9
         4.3      Additional Charges.........................................12
         4.4      Net Lease Provisions.......................................12
         4.5      Place and Manner of Payment................................12
         4.6      Late Charge................................................12


ARTICLE V....................................................................13
         5.1      Quiet Enjoyment............................................13


ARTICLE VI...................................................................13
         6.1      Payment of Impositions.....................................13
         6.2      Notice of Impositions......................................14
         6.3      Adjustment of Imposition...................................14
         6.4      Utility Charges............................................14
         6.5      Insurance Premiums.........................................14
         6.6      Definition of Impositions..................................14


ARTICLE VII..................................................................15
         7.1      Condition of the Leased Property...........................15
         7.2      Use of the Leased Property.................................16
         7.3      Lessor to Grant Easements, Etc.............................16
         7.4      Inventory; Supplies; Lessee's Personal Property............17
         7.5      Reserves; Capital Expenditures.............................18
         7.6      Lessee's Obligation to Manage..............................18
         7.7      Working Capital............................................18
         7.8      Use of Facilities by Lessor................................18
         7.9      Guaranty...................................................19
         7.10     Initial Renovation Program.................................19


ARTICLE VIII.................................................................21
         8.1      Compliance with Legal and Insurance Requirements. Etc......21
         8.2      Legal Requirement Covenants................................21
         8.3      Environmental Matters and Indemnities......................21


ARTICLE IX...................................................................23
         9.1      Maintenance and Repair.....................................23
         9.2      Encroachments, Restrictions, Etc...........................24
</TABLE>




                                       ii

<PAGE>   4

<TABLE>

<S>      <C>      <C>                                               <C>
ARTICLE X..................................................................25
         10.1     Alterations..............................................25
         10.2     Lessor Alterations.......................................25


ARTICLE XI.................................................................26
         11.1     Liens....................................................26


ARTICLE XII................................................................26
         12.1     Permitted Contests.......................................26


ARTICLE XIII...............................................................27
         13.1     General Insurance Requirements...........................27
         13.2     Waiver of Subrogation....................................29
         13.3     Form of Satisfactory.....................................29
         13.4     Increase in Limits ......................................29
         13.5     Reports on Insurance Claims..............................30


ARTICLE XIV................................................................30
         14.1     Insurance Proceeds.......................................30
         14.2     No Abatement of Rent.....................................30
         14.3     Damage During Term.......................................30


ARTICLE XV.................................................................31
         15.1     Definitions..............................................31
         15.2     Parties' Rights and Obligations..........................31
         15.3     Total Taking.............................................31
         15.4     Allocation of Award......................................32
         15.5     Partial Taking...........................................32
         15.6     Temporary Taking.........................................32


ARTICLE XVI................................................................33
         16.1     Events of Default........................................33
         16.2     Surrender................................................34
         16.3     Damages..................................................34
         16.4     Application of Funds.....................................35
</TABLE>

                                      iii

<PAGE>   5


<TABLE>

<S>      <C>      <C>                                                       <C>
ARTICLE XVII................................................................35
         17.1     Lessor's Right to Cure Lessee's Default...................35


ARTICLE XVIII...............................................................36
         18.1     Holding Over..............................................36


ARTICLE XIX.................................................................36
         19.1     Risk of Loss..............................................36


ARTICLE XX..................................................................36
         20.1     Indemnification...........................................36


ARTICLE XXI.................................................................38
         21.1     Subletting and Assignment.................................38


ARTICLE XXII................................................................39
         22.1     Officer's Certificates; Financial Statements; Lessor's
                  Estoppel Certificates and Covenants.......................39


ARTICLE XXIII...............................................................40
         23.1     Lessor's Right to Inspect.................................40


ARTICLE XXIV................................................................40
         24.1     No Waiver.................................................40


ARTICLE XXV.................................................................41
         25.1     Remedies Cumulative.......................................41


ARTICLE XXVI................................................................41
         26.1     Acceptance of Surrender...................................41


ARTICLE XXVII...............................................................41
         27.1     No Merger of Title........................................41
</TABLE>



                                       iv

<PAGE>   6


<TABLE>

<S>      <C>      <C>                                                     <C>
ARTICLE XXVIII............................................................41
         28.1     Conveyance by Lessor....................................41


ARTICLE XXIX..............................................................42
         29.1     Notices.................................................42


ARTICLE XXX...............................................................43
         30.1     Appraisers..............................................43


ARTICLE XXXI..............................................................44
         31.1     Lessor May Grant Liens..................................44
         31.2     Breach by Lessor........................................44

ARTICLE XXXII.............................................................44
         32.1     Miscellaneous...........................................44
         32.2     Transfer of Licenses....................................44
         32.3     Waiver of Presentment, Etc..............................45


ARTICLE XXXIII............................................................45
         33.1     Memorandum of Lease.....................................45


ARTICLE XXXIV.............................................................45
         34.1     Management Agreement....................................45


ARTICLE XXXV..............................................................46
         35.1     Consolidated Financials.................................46


ARTICLE XXXVI.............................................................46
         36.1     REIT Compliance.........................................46
         36.2     Personal Property Limitation............................46
         36.3     Sublease Rent Limitation................................46
         36.4     Sublease Tenant Limitation..............................47
         36.5     Lessee Ownership Limitation.............................47
</TABLE>



                                       v

<PAGE>   7


<TABLE>

<S>      <C>      <C>                                                    <C>
ARTICLE XXXVII...........................................................47
         37.1     Lessor's Option to Terminate Lease.....................47
         37.2     Lessor's Additional Option to Terminate Lease..........47


ARTICLE XXXVIII..........................................................48
         38.1     Transition Procedures..................................48
</TABLE>

                                       vi

<PAGE>   8



                                LEASE AGREEMENT

         This LEASE AGREEMENT (this "Lease") is made and entered into to be
effective as of the 15th day of June, 1999, by and between CRESCENT REAL ESTATE
FUNDING III, L.P., a Delaware limited partnership ("Lessor"), and COI HOTEL
GROUP, INC., a Texas corporation ("Lessee").

                               W I T N E 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
approximately 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
generally accepted accounting principles, (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 (i) any person that, directly or indirectly, controls or is
controlled by or is under common control with such person, (ii) any other
person that owns, beneficially, directly or indirectly, ten percent



                                       1
<PAGE>   9



(10%) or more of the outstanding capital stock, shares or equity interests of
such person, (iii) any officer, director, employee, partner or trustee of such
person, or (iv) 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 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




                                       2
<PAGE>   10


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 generally accepted accounting principles
and audited annually (and quarterly if required by the SEC) by a "Big Five"
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 Lessee.

             (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
(hereinafter defined), 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 nonalcoholic 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 Revenues" in the
Management Agreement.

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



                                       3
<PAGE>   11


             (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.

             (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, 1999, 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



                                       4
<PAGE>   12


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) Nonconsumable Inventory. Inventory exclusive of Consumable
Supplies.

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

             (u) 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.

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

             (w) 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.

             (x) 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.

             (y) 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




                                       5
<PAGE>   13



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, 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 Renaissance Houston Hotel. 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.

         2.2 Assignment and Assumption of Contracts; Initial Transaction.

             (a) Effective upon the Commencement Date, Lessor hereby transfers
and assigns to Lessee, and Lessee assumes and covenants to perform all of
Lessor's obligations under, the following agreements and contracts to which the
Leased Property remains subject on the Commencement Date (the "Assigned
Agreements"):



                                       6
<PAGE>   14



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

                 (ii) 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;

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

                 (iv) All software programs (to the extent assignable) for
accounting functions for the general ledger, accounts payable, accounts
receivable, and payroll for the Project;

                 (v) Lessor's interest as "owner" under that certain Management
Agreement executed as of June 3, 1999, executed by and between Lessor, as
owner, and Renaissance Hotel Operating Company, a Delaware corporation, as
operator (the "Manager") (the "Management Agreement");

                 (vi) 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;

                 (vii) 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

                 (viii) All customer lists.

             (b) 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 the Assigned Agreements. Notwithstanding the
assignment of the Management Agreement by Lessor to Lessee pursuant to Section
2.2(a)(v) above and Lessee's assumption of obligations thereunder in the
preceding sentence, as between Lessor and Lessee, Lessor shall remain
responsible for the payment of funds necessary to perform the following
obligations of "Owner" under the Management Agreement; provided however,
Lessor's funding obligations are subject to indicated qualifications:

                 (i) completion of the Initial Renovation Program (as defined
in Section 1.01 of the Management Agreement), subject to the provisions of
Section 7.10 of this Lease, and further provided that neither the Technical
Services Agreement between Marriott International Design & Construction
Services, Inc. and Lessor regarding the renovation of the Leased Property (the
"Technical Services Agreement") nor the Master Renovation Budget (as defined in
Section 1.01


                                       7
<PAGE>   15



of the Management Agreement) shall be amended by Lessor or Lessee without the
prior written approval of the other party;

                 (ii) cost of replacements, renewals and additions to the Hotel
FF&E and Special Capital Expenditures in accordance with the FF&E Budget, as
specified in Section 5.02(B) of the Management Agreement;

                 (iii) additional funding to the FF&E Reserve pursuant to
either of the alternatives set forth in Sections 5.02(F)(1) or 5.02(F)(2) of
the Management Agreement; provided however, Lessee shall not make a funding
election thereunder without the prior written approval of Lessor;

                 (iv) cost of Capital Expenditures under Section 5.03(C) of the
Management Agreement, subject to Lessor's prior written approval;

                 (v) costs and expenses for the repair and/or replacement of
damaged portions of the Hotel to pre-casualty conditions as set forth in
Section 6.02(C) of the Management Agreement;

                 (vi) payments due under any Mortgage that Owner has entered
into with respect to the Hotel as provided for under Section 8.01(B) of the
Management Agreement;

                 (vii) financial obligations imposed on Owner or on the Hotel
pursuant to any CC&Rs as provided for under Section 8.04(B) of the Management
Agreement; and

                 (viii) the Termination Fee provided for in Section 11.11(I) of
the Management Agreement, subject to Lessor's prior written consent to the
termination of the Management Agreement.

             (c) As between Lessor and Lessee, Lessor shall be entitled to all
income and shall be responsible for the payment or settlement of all expenses
of the Leased Property accruing prior to the Commencement Date. Lessee shall
act as Lessor's agent for the collection of all such income and shall remit the
same to Lessor promptly upon Lessee's receipt thereof. Lessee shall notify
Lessor of all such expenses and shall act as Lessor's payment agent for such
expenses using funds provided by Lessor from time to time.

                                  ARTICLE III

         3.1 Term. The term (hereinafter called the "Term") of this Lease shall
commence on June 19, 1999 (the "Commencement Date") and shall end on June 30,
2009 unless sooner terminated in accordance with the provisions hereof.



                                       8
<PAGE>   16


                                   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:

         4.1 Base Rent. The annual base rent (the "Base Rent") payable during
the Term of this Lease shall be as follows:

<TABLE>
<CAPTION>

                                Annual                          Base Rent
        Lease                  Base Rent                        Calculated
        Year                    Amount                           Monthly
        -----                  ----------                       -----------
<S>                            <C>                              <C>
           1                   $700,000                          $109,375
           2                   $3,275,000                        $272,917
           3                   $4,900,000                        $408,333
           4                   $5,400,000                        $450,000
         5-6                   $5,500,000                        $458,333
           7                   $5,800,000                        $483,333
        8-10                   $6,000,000                        $500,000
          11                   $3,000,000                        $500,000
</TABLE>

Base Rent shall be payable in equal monthly installments with the first monthly
installment due and payable on or before August 31, 1999 (which first monthly
installment shall include prorated Base Rent for June, 1999 in the amount of
$43,750, plus Base Rent for July, 1999), and a monthly installment to be due
and payable on the last day of each and every month thereafter through and
including July 31, 2009. 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) the Hotel Receipts Percent, 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) ten percent (10%).



                                       9
<PAGE>   17



             (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 October, 1999. The final payment of Percentage Rent for June, 2009
shall be due and payable on July 31, 2009.

             (c) (i) The term "Food & Beverage Floor" shall mean: (i) Four
Million Six Hundred Fifty Thousand and No/100 Dollars ($4,650,000) for each of
Lease Years 1 and 2; (ii) Four Million and No/100 Dollars ($4,000,000) for
Lease Year 3; and (iii) Four Million Four Hundred Thousand and No/100 Dollars
($4,400,000) for each of Lease Years 4 through 11.

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

                 (iii) The term "Hotel Floor" shall be as follows for each of
the indicated Lease Years:

<TABLE>
<CAPTION>

                             Lease                        Hotel
                             Year                         Floor
                             -----                        -----
                             <S>                       <C>
                              1-2                      $11,000,000
                               3                       $13,500,000
                               4                       $13,750,000
                               5                       $14,250,000
                               6                       $14,750,000
                               7                       $15,250,000
                             8-11                      $16,000,000
</TABLE>

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

                 (v) Hotel Receipts Percent shall mean (i) fifty percent (50%)
for each of Lease Years 1 through 4, and (ii) fifty-five percent (55%) for each
of Lease Years 5 through 11.

             (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 Lease Year a
written statement signed and certified by Lessee to be correct, showing Gross
Receipts during the preceding Lease Year (the "Annual Gross Receipts Report").
In addition, within ninety (90) days after the end of each Lease Year, Lessee
shall provide to Lessor, at Lessee's expense, a Statement of Gross Receipts for
the preceding Lease Year (the "Annual



                                      10
<PAGE>   18


Audited Gross Receipts Statement") prepared in accordance with generally
accepted accounting principles and audited by a nationally recognized public
accounting firm of independent certified public accountants approved by Lessor.
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 report and statement 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 Audited Gross Receipts Statement discloses that the actual
Percentage Rent exceeds the payments of Percentage Rent to Lessor with respect
to such Lease Year, Lessee shall within fifteen (15) days of notice from Lessor
remit the difference to Lessor. In the event the payments of Percentage Rent
paid to Lessor with respect to a Lease Year exceed the actual Percentage Rent
based upon the Annual Audited Gross Receipts Statement, 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. Notwithstanding anything in this Lease to the
contrary, the following amount, for any particular quarter, shall be called
"Guaranteed Percentage Rent" and shall not be subject to adjustment under this
Section 4.2(d): eighty-five percent (85%) of the Percentage Rent payable with
respect to any calendar quarter of any Lease Year.

             (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 payments of Percentage Rent
(pursuant to paragraph (b) above) 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 Lessor for examination any other records required to be maintained
hereunder. If the audit of the books and records by Lessor (the "Lessor's Gross
Receipts Audit") discloses that Gross Receipts were underreported by Lessee for
any period covered by such Audit, Lessee shall promptly pay to Lessor the cost
of the Lessor's Gross Receipts Audit, as Additional Charges, in addition to any
deficiency in Percentage Rent that may be due. If the audit discloses that
Gross Receipts were underreported by



                                      11
<PAGE>   19


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 Lessor's Gross Receipts 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 of this Lease 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
(hereinafter defined) 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 Lessee 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.



                                      12
<PAGE>   20



                                   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,



                                      13
<PAGE>   21


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 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 Commencement Date
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



                                      14
<PAGE>   22


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
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.



                                      15
<PAGE>   23



         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 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, 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




                                      16
<PAGE>   24


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.

         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 first-class 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 first-class 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
portion 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 Nonconsumable
Inventory and



                                      17
<PAGE>   25



Consumable Supplies in an aggregate amount and of substantially similar quality
equal to the Initial Inventory.

        7.5 Reserves; Capital Expenditures. Lessee shall make no expenditure
for replacement of FFE in excess of the amounts in the FFE Reserve (as defined
in the Management Agreement) maintained pursuant to the Management Agreement.
Any additions to or replacements of furniture, fixtures, and equipment located
at the Leased Property shall become part of the FFE, 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 and hotel equipment (including office equipment, exercise
equipment, medical and/or health equipment, and property management equipment
as necessary).

        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 Working Capital. On the Commencement Date, there existed working
capital pertaining to the Leased Property ("Working Capital") in the initial
aggregate positive amount ("Initial Working Capital Balance") set forth in the
Preliminary Statement of Working Capital (the "Preliminary Statement") to be
initialed by Lessor and Lessee and attached to this Lease as Exhibit "B".
Within thirty (30) days following the date of expiration or early termination
of this Lease, Lessor and Lessee will work together in good faith to determine
the balance of Working Capital as of such date ("Ending Working Capital
Balance"). If the Ending Working Capital Balance is less than the Initial
Working Capital Balance Lessee shall pay over to Lessor cash in the amount of
such deficiency, within thirty (30) days of such determination. If the Ending
Working Capital Balance exceeds the Initial Working Capital Balance, Lessor
shall pay over to Lessee cash in the amount of such excess within thirty (30)
days of such determination. Additionally, both the Initial Working Capital
Balance and the Ending Working Capital Balance shall be calculated without the
inclusion of any "in circulation" operating or consumable supplies
("In-Circulation Supplies"). Both Lessee and Lessor agree that the
In-Circulation Supplies represent items in use which Lessee does not include on
its balance sheet as of 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.



                                      18
<PAGE>   26


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

        7.10 Initial Renovation Program.

             (a) Lessor intends to complete the Initial Renovation Program (as
defined in the Management Agreement) in accordance with the schedules provided
in the Management Agreement, as such schedules may be amended or supplemented
from time to time or as such may be amended or supplemented by the Technical
Services Agreement (as so amended and supplemented, the "Schedules"), and
Lessee agrees to cooperate with Lessor with regard to Lessor's efforts to
timely complete the Initial Renovation Program. In the event Lessor fails,
through no fault of Lessee, to complete any phase of the Initial Renovation
Program in accordance with the Schedules, Lessee shall provide written notice
to Lessor that such schedule has not been timely adhered to with respect to a
specified phase (the "Failure to Complete Notice") and the provisions of
Section 7.10(c) shall apply.

             (b) In the event (i) Lessor fails, through no fault of Lessee, to
complete any phase of the Initial Renovation Program in accordance with the
Schedules and the trade area restrictions of Section 11.13 of the Management
Agreement are thereby released, and (ii) Manager thereafter engages in any
action or activity that would have been prohibited by Section 11.13(A) of the
Management Agreement but for Lessor's failure to complete the Initial
Renovation Program in accordance with the Schedules, Lessee shall provide
written notice to Lessor of the Manager's action or activity (a "Notice of
Competition") and the provisions of Section 7.10(c) shall apply.

             (c) During the sixty (60) day period (the "Negotiation Period")
following Lessor's receipt of the Failure to Complete Notice or a Notice of
Competition, Lessor and Lessee will attempt to negotiate a reduction in the
Base Rent mutually acceptable to both parties to reflect the economic
consequences directly related to Lessor's failure to timely complete the
subject phase of the Initial Renovation Program. Any such agreed upon reduction
in Base Rent shall be effective as of (i) in the case of a Failure to Complete
Notice, the scheduled completion date, as set forth in the Schedules, of the
subject phase of the Initial Renovation Program, and (ii) in the case of a
Notice of Competition, the date of commencement of operations of any
Renaissance Hotel, the management and operation of which would have otherwise
been prohibited by Section 11.13 of the Management Agreement. If, during the
Negotiation Period, Lessor and Lessee are unable reach an agreement regarding
an acceptable reduction in Base Rent, then Lessee shall have thirty (30) days
following expiration of the Negotiation Period to deliver to Lessor written
notice ("Termination Notice") that Lessee elects to terminate this Lease (which
termination shall be effective ninety (90) days after Lessor's receipt of the
Termination Notice). In the event Lessee does not timely deliver a Termination
Notice, this Lease shall continue in effect without modification to the Base
Rent. Notwithstanding the continuation of this Lease in accordance with the
preceding sentence, Lessee shall be entitled to reimbursement and contribution
from Lessor of the amount of profit that Lessee can substantiate as having been
lost as a consequence of



                                      19
<PAGE>   27


Lessor's failure to timely complete the phase of the Initial Renovation Program
that was the subject of the Failure to Complete Notice or the Notice of
Competition, as the case may be; provided, however, such reimbursement and
contribution shall be Lessee's sole and exclusive remedy for Lessor's failure
to complete the Initial Renovation Program. Except as set forth in this Section
7.10, Lessee shall have no right, claim or other cause of action against Lessor
for rent abatement, lost profit or other damages related to or arising from
Lessor's performance of or failure to perform its obligations related to the
Initial Renovation Program.

             (d) Notwithstanding the assignment of the Management Agreement to
Lessee pursuant to Section 2.2(a)(v) of this Lease, Lessor shall remain
responsible for the payment of funds necessary to complete the Initial
Renovation Program. Lessor shall indemnify and hold harmless Lessee from and
against all liabilities, claims, damages, causes of action, costs and expenses
(including reasonable attorneys' fees and expenses) incurred by or asserted
against Lessee and arising out of claims asserted by the Manager by reason of
Lessor's failure to satisfy its obligations to fund the Initial Renovation
Program.

             (e) Notwithstanding anything herein to the contrary, the
provisions of this Section 7.10 shall survive the termination of this Lease.



                                      20
<PAGE>   28


                                  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.

         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


                                      21
<PAGE>   29


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 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) (collectively, the "Environmental Claims"), 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 such Environmental
Claims result directly or indirectly from, arise out of, or are based upon
violations, alleged violations or transportation of Hazardous Materials that
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



                                      22
<PAGE>   30




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 Commencement Date.

             (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.

                                   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 and replacements 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.



                                      23
<PAGE>   31



             (b) Notwithstanding Lessee's obligations under Section 9.1(a)
hereinabove, in the event that (i) repairs and/or replacements 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 and/or replacements are
under generally accepted accounting principles considered to be capital in
nature, (iii) the funds then available to Lessee in the FFE Reserve (as defined
in the Management Agreement) 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 and/or replacements and (iv) Lessor consents to the
repairs and/or replacements, then Lessor shall be required to bear the cost of
making such repairs and/or replacements. 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 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



                                      24
<PAGE>   32


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.

                                   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



                                      25
<PAGE>   33


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, (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 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 sixty (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



                                      26
<PAGE>   34


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 (5) 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 (10) 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.

                                  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 an additional named insured or an additional 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



                                      27
<PAGE>   35


on the Leased Property shall at all times satisfy the terms of any ground
lease, mortgage and/or franchise agreement and include the following:

              (a) Personal property insurance on the "Special Form" (formerly
"All Risk" form) in the full replacement cost of the Project;

              (b) Loss of income insurance on an "All Risk" form, in the amount
of one year of (i) Base Rent, plus (ii) 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 Base Rent plus Percentage Rent, for the
benefit of Lessee;

              (c) 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 and
advertising injury, 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;

              (d) 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;

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

              (f) 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;

              (g) 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;

              (h) 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;



                                      28
<PAGE>   36



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

              (j) Worker's compensation insurance to the extent necessary to
protect Lessor, Lessee and the Leased Property against Lessee's worker's
compensation claims to the extent required by applicable state laws; and

              (k) Insurance covering such other hazards (such as plate glass or
other common risks) and in such amounts as may be (i) required by a holder of a
lien on the Leased Property, or (ii) 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 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.

         13.3 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,
thirty (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 thirty (30) days after
notice of such failure from Lessor shall constitute an Event 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 thirty
(30) days written notice before the policy or policies in question shall be
materially altered, allowed to expire or canceled.

         13.4 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



                                      29
<PAGE>   37



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.

         13.5 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. Lessee shall cause its insurance company or insurance
broker to provide to Lessor, on or before the first day of each calendar
quarter, a claims summary reflecting all claims filed or otherwise made against
any and all insurance coverage that Lessee is required to maintain under this
Lease ("Claims Summary"); provided, however, a Claims Summary shall be provided
more frequently at Lessor's request, but not more frequently than once per
month.

                                  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 Leased Property 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 Leased
Property 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 Leased Property, 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



                                      30
<PAGE>   38



Intended Use for a period in excess of twelve (12) months), shall have the
right to terminate 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 Base Rent, Percentage Rent and Additional Charges
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.



                                      31
<PAGE>   39


         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, 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.



                                      32
<PAGE>   40


                                  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,
Additional Charges 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

              (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 thirty (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 thirty (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 ninety (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



                                      33
<PAGE>   41



              (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 thirty (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
ninety (90) days after notice of such failure has been provided to Guarantor,
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 (10) 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


                                       34
<PAGE>   42


becomes due and payable, which rent and other sums shall bear interest at the
rate of twelve percent (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, 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 one percent (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 Commencement
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 or any Assigned 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



                                      35
<PAGE>   43



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.

                                 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 (2) 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.



                                      36
<PAGE>   44



              (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 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 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



                                      37
<PAGE>   45


unreasonably withheld. The Indemnifying Party may not compromise or otherwise
dispose of any such Proceeding, claim or action without the consent of the
Indemnified Party, which consent may not be unreasonably withheld. The
Indemnifying Party shall not be liable for any settlement of any such
Proceeding, claim or action made without its consent, 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
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.

                                  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, nor license the use of the Marks, 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



                                      38
<PAGE>   46



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 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 twenty
(20) days notice by Lessor, Lessee will furnish to Lessor a statement
certifying that this Lease is unmodified and



                                      39
<PAGE>   47



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 the Business Plan (as
defined in the Management Agreement) and 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 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 thirty
(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,



                                      40
<PAGE>   48


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.

                                  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



                                      41
<PAGE>   49



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:


         Lessor:                       Crescent Real Estate Funding III, L.P.
                                       777 Main Street, Suite 2100
                                       Fort Worth, Texas  76102
                                       Attn:    David M. Dean
                                       Facsimile:   (817) 321-2000

         with a copy to:               Robert W. Dupuy
                                       Brown McCarroll & Oaks Hartline, L.L.P.
                                       300 Crescent Court, Suite 1400
                                       Dallas, Texas  75201
                                       Facsimile:  (214) 999-6170



                                      42
<PAGE>   50




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

         with a copy to:               Robinson & Bowden, LLP
                                       512 Main Street, Suite 901
                                       Fort Worth, Texas 76102
                                       Attn: Steve Robinson
                                       Facsimile: (817) 332-3381

                                  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
ten (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 forty-five
(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 five percent (5%) of the lesser of such amounts, then the fair market
value shall be an amount equal to fifty percent (50%) of the sum of the amounts
so determined. If the difference between the amounts so determined exceeds five
percent (5%) of the lesser of such amounts, then such two appraisers shall have
twenty (20) days to appoint a third appraiser. If no such appraiser shall have
been appointed within such twenty (20) days or within ninety (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 forty-five (45) days after
appointment of such 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 fifty percent (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



                                      43
<PAGE>   51



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 thirty (30)
days after notice thereof from Lessee, unless such failure cannot with due
diligence be cured within a period of thirty (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,
waived, discharged or terminated except by a written instrument in recordable
form signed by Lessor and Lessee. All



                                      44
<PAGE>   52


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.



                                      45
<PAGE>   53


                                  ARTICLE XXXV

         35.1 Consolidated Financials. Lessee shall deliver to Lessor (a)
within sixty (60) days after the end of each calendar year Consolidated
Financials, (b) within thirty (30) days after the end of each month 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.



                                      46
<PAGE>   54



         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.

         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 to a party that is not an Affiliate of Lessor, 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.

         37.2 Lessor's Additional Option to Terminate Lease.

              (a) Notwithstanding anything to the contrary in this Lease,
Lessor shall have the option to terminate this Lease during the twelve (12)
month period after the Commencement Date in accordance with this Section 37.2.
In order to exercise its option to terminate the Lease under this Section 37.2,
Lessor shall provide written notice thereof to Lessee within such twelve (12)
month



                                      47
<PAGE>   55



period and no less than ninety (90) days prior to the effective date of such
termination (such effective date hereinafter referred to as the "Voluntary
Termination Date"). Within fifteen (15) days following Lessor's receipt of the
Statement of Operating Results (defined below), Lessor shall pay Lessee the
amount specified in Section 37.2(b), based upon the Operating Results (defined
below) for the Effective Term (defined below).

              (b) Within forty-five (45) days following the Voluntary
Termination Date, Lessee shall provide to Lessor a "Statement of Operating
Results" (which statement shall include supporting documentation reasonably
requested by Lessor) for the period during which this Lease was effective
("Effective Term") reflecting in reasonable and accurate detail the operating
revenue generated and operating expenses incurred by Lessee in operating the
Leased Property during the Effective Term, with the result of revenue minus
expenses being referred to as the "Operating Results".

                  (i) In the event the amount of the Operating Results is a
loss, Lessor shall pay to Lessee: (A) the amount of such loss, plus (B)
$25,000.00.

                  (ii) In the event the amount of the Operating Results is
break-even or a profit, Lessor shall pay to Lessee $50,000.00.

              (c) Effective upon the Voluntary Termination 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 (including the obligations of this Section 37.2).

                                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 other governmental authorizations
and all contracts with governmental or quasi-governmental entities, that may be
necessary for the operation of the Project (collectively, "Operating Permits"),
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



                                      48
<PAGE>   56


applications for all Operating Permits, 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
Nonconsumable Inventory and Consumable Supplies in an aggregate amount and of
substantially similar quality 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.

                 [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.]



                                      49
<PAGE>   57


         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
                                  FUNDING III, L.P.,
                                  a Delaware limited partnership

                                  By:  CRE Management III Corp., a Delaware
                                       corporation, its sole general partner



                                       By:
                                          -------------------------------------
                                       Printed Name:
                                                    ---------------------------
                                       Title:
                                             ----------------------------------


LESSEE:                           COI HOTEL GROUP, INC.



                                  By:
                                     ------------------------------------------
                                  Printed Name:
                                               --------------------------------
                                  Title:
                                        ---------------------------------------




                                      50
<PAGE>   58



                                  EXHIBIT "A"

         The property which constitutes the "Leased Property" or "Land" under
the attached and foregoing Lease consists of the following:

         (1)   A certain portion of the Plaza Level as shown on the Map or Plat
               of Greenway Plaza East, recorded in Volume 183, Page 1, of the
               Map Records of Harris County, Texas, which portion is more
               particularly described by metes and bounds below.

         (2)   The Hotel Building and related improvements contemplated to be
               constructed on said portion of the Plaza Level and above such
               Level as referred to in Paragraph 1 of the attached and
               foregoing Lease.

         (3)   A certain portion of the Concourse Level of Greenway Plaza East
               as shown on the aforesaid Map or Plat thereof, which portion of
               the Concourse Level is described by metes and bounds below.

         (4)   The improvements contemplated to be constructed on the said
               portion of the Concourse Level, extending vertically from the
               top of the Concourse Level upward to the bottom of the Plaza
               Level, as more particularly described in Paragraph 1 of the
               attached and foregoing Lease.

         The portion of the Plaza Level which constitutes a part of the leased
premises and referred to in Paragraph (1) above is more particularly described
as follows:

Being a tract or parcel of land containing 73,058 square feet (1.6772 acres)
out of the A. C. Reynolds Survey, Abstract 61, City of Houston, Harris County,
Texas, and being partially out of Greenway Plaza, Section 1, a subdivision of
record at Volume 127, Page 71, Harris County Map Records, and being more
particularly described by metes and bounds as follows:

COMMENCING for reference at the southwest corner of Lot 1, Block 1 of said
Greenway Plaza, Section 1;

THENCE N 00(degree)02'00" E, 137.87 feet along the westerly line of said Lot 1,
Block 1, and the easterly line of Edloe Street to a point on said line;

THENCE S 89(degree)58'00" E, 83.08 feet to a point in the westerly line of the
herein described tract and the POINT OF BEGINNING;

THENCE N 00(degree)02'00" E, 20.30 feet to a point for corner;

THENCE N 80(degree)07'00" E, 59.45 feet to a point for corner;



                                       1
<PAGE>   59


THENCE S 09(degree)53'00" E, 20.00 feet to a point for corner;

THENCE N 80(degree)07'00" E, 100.00 feet to a point for corner;

THENCE S 09(degree)53'00" E, 34.60 feet to a point for corner;

THENCE N 80(degree)07'00" E, 20.00 feet to a point for corner;

THENCE S 09(degree)53'00" E, 81.00 feet to a point for corner;

THENCE S 80(degree)07'00" W, 20.00 feet to a point for corner;

THENCE S 09(degree)53'00" E, 245.40 feet to a point for corner;

THENCE S 80(degree)07'00" W, 226.05 feet to a point for corner;

THENCE N 00(degree)02'00" E, 366.48 feet to the POINT OF BEGINNING and
containing 73,058 square feet (1.6772 acres) of land.

         The portion of the Concourse Level which constitutes a part of the
leased premises and referred to in Paragraph (3) above is more particularly
described as follows:

Being a tract or parcel of land containing 79,574 square feet (1.8268 acres)
out of the A. C Reynolds Survey, Abstract 61, City of Houston, Harris County,
Texas, and being partially out of Greenway Plaza, Section 1, a subdivision of
record at Volume 127, Page 71, Harris County Map Records, and being more
particularly described by metes and bounds as follows:

COMMENCING for reference at the southwest corner of Lot 1, Block 1 of said
Greenway Plaza, Section 1;

THENCE N 00(degree)02'00" E, 187.91 feet along the westerly line of said Lot 1,
Block 1, and the easterly line of Edloe Street to a point on said line;

THENCE S 89(degree)58'00" E, 80.42 feet to a point for corner of the herein
described tract and the POINT OF BEGINNING;

THENCE N 80(degree)07'00" E, 158.45 feet to a point for corner;

THENCE S 09(degree)53'00" E, 239.25 feet to a point for corner;

THENCE S 80(degree)07'00" W, 1.50 feet to a point for corner;



                                       2
<PAGE>   60



THENCE S 09(degree)53'00" E, 171.50 feet to a point for corner;

THENCE S 80(degree)07'00" W, 228.76 feet to a point for corner;

THENCE N 00(degree)02'00" E, 416.98 feet to the POINT OF BEGINNING and
containing 79,574 square feet (1.8268 acres) of land.

         References in the foregoing lease to "Greenway Plaza East" and
"Greenway Plaza Phase I" mean and refer to one and the same parcel of land, as
shown on the aforesaid map or plat; and such terms are used herein
interchangeably.





                                       3