<PAGE>

                                                                   EXHIBIT 10.40

                                LEASE AGREEMENT
                                ---------------

      This Lease Agreement ("Lease") is between HOB Marina City Partners, L.P.,
                                                -------------------------------
a Delaware limited partnership ("Landlord") and HOB Chicago, Inc. a Delaware
------------------------------                 ----------------------------
corporation ("Tenant").  For valuable consideration the parties agree and act as
-----------
follows:

      1.    Definitions.  The following terms have the meanings set forth below:
            -----------

            a.     Affiliate.  The Affiliate of any person shall mean any person
                   ---------
directly or indirectly controlling, controlled by or under common control with
such other person, and shall mean any family member of a person.  A person shall
be deemed to control a corporation if such person possesses, directly or
indirectly, the power to direct or cause the direction of the management and
policies of such corporation, whether through the ownership of voting
securities, by contract or otherwise.

            b.     Common Areas. All portions of the Project (as hereinafter
                   ------------
defined) described as Common Areas in the Reciprocal Development, Operating and
Easement Agreement (as hereinafter defined).

            c.     Delivery Date.  March 11, 1996 (plus the Extension, as
                   -------------
hereinafter defined); provided that the Delivery Date is subject to extension as
provided in the RDOEA.

            d.     Developer. Niki Development Corp., an Illinois corporation,
                   ---------
and American National Bank and Trust Company of Chicago, as Trustee under Trust
Agreement dated October 11, 1994, and known as Trust No. 118880-05.

            e.     Effective Date.  January 29, 1996.
                   --------------   ----------------

            f.     Fiscal Year.  For the purposes of this Lease, the term
                   -----------
"fiscal year" shall mean the calendar year.

            g.     Landlord's Contribution.  The sum of Thirteen Million Dollars
                   -----------------------
($13,000,000.00), or such lesser amount as provided in subparagraph 2.i. below,
                                                       -----------------
to be disbursed to Tenant by Landlord in partial payment of the cost of Tenant's
Work in accordance with Exhibit F attached hereto.

            h.     Lease Year.  Each twelve (12) month period commencing on the
                   ----------
first day of the first full month of the Primary Term of this Lease (as defined
in paragraph 2.b. below), or anniversary of such date.
   --------------

            i.     Leased Premises.  That portion of the Theatre Building (as
                   ---------------
hereinafter defined) described as follows (the "Leased Premises"):
<PAGE>

               Area B, Area C, Area D and Area E, together with easements in and
to the Mechanical and Loading Level situated below and serving such Areas, such
portions of the Theatre Building being shown on the Site Plan attached hereto
as Exhibit A-2 and such premises are designated and outlined in red on said
   ------------
Exhibit A-2, together with any and all improvements and fixtures now or
-----------
hereafter situated on the Leased Premises and all appurtenances, easements and
privileges pertaining thereto, and the personal property, if any, described on
Exhibit A-3; and together with the rights and interests of Landlord and Tenant
-----------
in and to the use and enjoyment of the Common Areas, as such easements and
rights are more particularly described in the Reciprocal Development, Operating
and Easement Agreement.

     The foregoing notwithstanding, Tenant has determined that its planned roof
modification is not feasible and that an elevator will need to be installed
extending from the Marina Level through the Theatre Building to serve the Leased
Premises.  Accordingly, Landlord agrees that the legal description of the Leased
Premises shall be revised to include fee title in and to an area comprising a
part of the Common Area and the Theatre Building sufficient in size to
accommodate the elevator shaft and access thereto.  Tenant shall bear the cost
of revising the survey and plat of subdivision of the Leased Premises to include
this additional area.  The parties agree in good faith to determine such
addition to the Leased Premises as soon as possible.  The Extension is defined
as zero days.

         j.    Limited Partnership Agreement. The Agreement of Limited
               -----------------------------
Partnership of HOB Marina City Partners, L.P. by and between HOB Marina City,
Inc., as General Partner, and Niki Development Corp., Platinum Blues Chicago,
L.L.C. and HOB-Chicago, Inc., as Limited Partners.

         k.     Permittees.  All partners, officer, director, employees, agents,
                ----------
contractors, customers, visitors and invitees of a party to this Lease.

         l.     Project.  That portion of the real property and improvements
                -------
known as Marina City, Chicago, Illinois, which portion is depicted on the Site
Plan attached as Exhibit A-2 hereto, and which portion includes the Theatre
                 -----------
Building, the parking area portion of the two residential condominium towers,
the building anticipated to be redeveloped as a hotel, and the Common Areas as
depicted thereon and further defined in the RDOEA.

         m.     Project Architect.  Elias Pappageorge and Betrand Goldberg, or
                -----------------
another architect reasonably acceptable to Tenant.

         n.     Reciprocal Development, Operating and Easement Agreement or
                -----------------------------------------------------------
"RDOEA".  The Reciprocal Development, Operating and Easement Agreement described
------
in paragraph 2.g. below, to be entered
   --------------

                                      -2-
<PAGE>


into among Developer, Landlord and Tenant.  The RDOEA is attached hereto as
Exhibit G and incorporated herein.
---------

          o.    Rental Commencement Date.  That date which is the earlier to
                ------------------------
occur of (i) the first day of the month following the expiration of three
hundred (300) days after the Delivery Date; or (ii) the date the Tenant opens
the Leased Premises for business to the public.

          p.    Tenant's Work.  All improvements to be performed by Tenant to
                -------------
the Leased Premises pursuant to the Work Letter attached as Exhibit F hereto.
                                                            ---------

          q.    Theatre Building.  The real property and improvements depicted
                ----------------
on the Site Plan attached hereto as Exhibit A-2.
                                    -----------

     2.   Demise, Term.
          ------------

          a.  Demise.  Landlord hereby leases to Tenant and Tenant accepts from
              ------
Landlord the Leased Premises under the provisions of this Lease.  Landlord and
Tenant acknowledge that Landlord is in the process of acquiring title to the
Leases Premises and that this Lease is conditioned upon Landlord acquiring title
to the Leased Premises in accordance with Section 14.2(d) of the RDOEA.

          b.  Term.  The Preliminary Term of this Lease will commence on the
              ----
Effective Date of this Lease and expire on the Rental Commencement Date.  The
original term of this Lease ("Primary Term") shall commence as of the Rental
Commencement Date and shall expire on the last day of the two hundred fortieth
(240th) month following the Rental Commencement Date.  The Preliminary Term, the
Primary Term and any extensions thereof exercised pursuant to subparagraph 2.c.
                                                              ----------------
below are hereinafter referred to as the "Term."

          c.  Options.  Tenant shall have the right to extend the Term
              -------
("Extension Option(s)") for three (3) consecutive ten (10) year periods
("Renewal Terms") upon the same terms, conditions and provisions set out herein
for the Primary Term.  There shall be no obligation of Landlord to perform or
pay for any improvements or to grant any rent concessions to Tenant at the
beginning of the Renewal Term and Tenant shall have no further options to renew
or extend the Lease Term following the expiration of the third Renewal Term.
The first Renewal Term shall commence on the expiration of the Primary Term and
the second Renewal Term and the third Renewal Term shall commence upon the
expiration of the immediately preceding Renewal Term.  Each option to renew
shall be exercised by Tenant by written notice to Landlord at least two hundred
seventy (270) days prior to the expiration of the Primary Term with respect to
the first Renewal Term and two hundred seventy (270) days prior to the
expiration of the existing Renewal Term with respect to the second Renewal Term
and

                                      -3-
<PAGE>

the third Renewal Term.  Notwithstanding the foregoing, in each case, the
exercise of the Extension Option for each Renewal Term shall be effective, at
Landlord's option, only if no Event of Default by Tenant has occurred and is
continuing beyond the expiration of any applicable cure period and this Lease is
in effect at the time of the exercise of the Extension Option and at the time of
the commencement of the Renewal Term in question.  Once given by Tenant, a
notice of the exercise of an Extension Option shall be irrevocable.  Further,
neither Landlord nor Tenant desire an automatic termination of the Extension
Options in the event Tenant fails to provide written notice of its election to
extend the Term as set forth above. Consequently, it is agreed that prior to the
cancellation of any such Extension Option, Landlord shall deliver written notice
to Tenant that Tenant has failed to provide the written notice to extend the
Term, whereupon Tenant shall have thirty (30) days following its receipt of such
notice in which to notify Landlord that Tenant elects to exercise the Extension
Option to extend the Term as provided herein. Failure by Tenant to so notify
Landlord shall constitute Tenant's election not to extend the Term.

       d.     Quiet Enjoyment.  Upon Tenant's payment of all rent hereunder and
              ---------------
observance and performance of all of the covenants, terms and conditions to be
observed and performed by Tenant pursuant to this Lease, Tenant shall have
throughout the Term the peaceful, quiet and undisturbed use and possession of
the Leased Premises and all rights and privileges appertaining thereto, subject
to the terms, conditions and provisions of this Lease.

       e.     Landlord's Title, Subordination, Nondisturbance. Landlord
              -----------------------------------------------
covenants as follows:

              i    Title. Each party hereby represents and warrants to the other
                   -----
that it has full right and authority to make this Lease. This Lease shall not be
recorded; however, to establish the status of Landlord's title and to establish
the priority of Tenant's Lease as a condition of title, Landlord and
Tenant shall execute a Memorandum of this Lease in the form attached hereto as
Exhibit C which may be recorded by Tenant in Tenant's sole discretion.  Landlord
---------
shall, at its expense and as a condition to Tenant's obligations hereunder,
provide Tenant with an Owner Policy of Title Insurance (with Leasehold
Endorsement) in the amount of the cost of Tenant's Work (as certified to by
Tenant) covering the Leased Premises and reflecting no exceptions other than
those approved by Tenant pursuant to subparagraph f.v. below or liens securing
                                     ----------------
payment of the Construction Loan as described in the Limited Partnership
Agreement and any renewal, replacement or refinancing thereof or of any other
Mortgage or Ground Lease permitted hereby.

              ii.   Subordination, Nondisturbance. The Leased Premises is at
                    -----------------------------
this time and will at the time of the recording of the

                                      -4-
<PAGE>

Memorandum of Lease (provided the same is promptly recorded after the Delivery
Date) be free from liens except those approved in writing by Tenant and
otherwise permitted hereby.  Within twenty (20) days following the Effective
Date, Landlord will furnish Tenant evidence reasonably satisfactory to Tenant
that any permitted mortgagee or any other party with priority liens in and to
the Leased Premises as of the date thereof (which shall not be removed as
provided below) has either subordinated its liens to this Lease or has entered
                --------------------------------------------------------------
into a Subordination, Attornment and Nondisturbance Agreement in substantially
------------------------------------------------------------------------------
the form attached hereto as Exhibit D or another form reasonably acceptable to
-------------------------------------
Tenant.  Landlord agrees to use reasonable efforts to obtain such lenders' full
execution of such a Subordination, Attornment and Nondisturbance Agreement at
Landlord's sole cost and expense; provided that if Landlord fails to obtain such
full execution thereof, Tenant's sole recourse shall be to terminate this Lease,
whereupon neither party shall have any further rights or liability hereunder.


            iii.   Permits.  Landlord shall provide full support and cooperation
                   -------
to Tenant, and assist Tenant in causing the Developer to provide full support
and cooperation to assist Tenant, at Tenant's expense, in attempting to obtain
all governmental permits, licenses and/or approvals as may be necessary to
permit Tenant's operation at the Leased Premises of a "House of Blues" full
service live entertainment facility.


     f.   Documents Related to Leased Premises and Review.  Landlord and Tenant
          -----------------------------------------------
agree as follows:


          i.   Title Commitment. Within thirty (30) days after the Effective
Date, Landlord, at Landlord's sole cost and expense, shall cause the Chicago
Title Insurance Company ("Title Company") to issue and deliver to Tenant (i) a
                                                                         -----
title commitment for Leasehold Title Policy (the "Title Commitment") setting
-------------------------------------------
forth the status of title of the Leased Premises, and showing all liens, claims,
encumbrances, conditions, restrictions, easements, rights of way, encroachments
and all other matters of record affecting the Leased Premises (including the
Common Areas under the RDOEA), accompanied by two copies of all documents
referred to in the Title Commitment, and (ii) reports from Lexis Document
Services or, at Landlord's option, another qualified company of searches made of
the Uniform Commercial Code Records of Cook County, Illinois, and those
maintained in the office of the Secretary of State of the State of Illinois (the
"UCC Reports") setting forth the status of title to the fixtures, personal
property and, to the extent Lexis Document Services or such other company issues
such a report, intangible property, if any, situated in the Leased Premises
which are revealed by such searches.

          ii.  Survey. Within thirty (30) days after the Effective Date,
Landlord, at Landlord's sole cost and expense, shall

                                      -5-
<PAGE>

also cause to be delivered to Tenant a current survey (the "Survey") of the
Leased Premises prepared by a duly licensed land surveyor reasonably acceptable
to Tenant. The Survey shall:

                (a)   Set forth an accurate metes and bounds or other
     description of the Leased Premises which shall contain the gross square
     footage of the Leased Premises;

                (b)   Locate all existing easements and rights-of-way (setting
     forth the recording number of all recorded instruments creating the same),
     alleys, streets, and roads;

                (c)   Show all existing improvements;

                (d)   Show all dedicated public streets providing access to the
     Leased Premises and whether such access is paved to the property line of
     the Leased Premises; and

                (e)  Contain the Surveyor's certification in a form which would
     be reasonably acceptable to an institutional lender.

             iii. Environmental Report. By February 16, 1996, Tenant will
                  --------------------
obtain, at its expense, a current environmental study of the Leased Premises
("Environmental Report") prepared by such qualified engineering firm as may be
acceptable to Tenant and reasonably acceptable to Landlord, which shall detail
such matters as Tenant may reasonably desire, including but not limited to the
existence, if any, on, or in, the Leased Premises of asbestos, PCB's (including
those existing in adjacent power transformers) radon, underground storage tanks
or other hazardous substances. The expense of such report shall be borne by
Tenant. Landlord agrees to disclose to Tenant promptly upon execution hereof all
information which Landlord has regarding the presence and location on the Leased
Premises of asbestos, PCB transformers, or other toxic, hazardous or
contaminated substances, and underground storage tanks in, on or about the
Leased Premises.

              iv.   Structural Assessment.  By February 16, 1996, Tenant may
                    ---------------------
obtain a structural assessment of the building situated on the Leased Premises
("Structural Assessment") prepared by such qualified engineering or
architectural firm as may be acceptable to Tenant and reasonably acceptable to
Landlord.  The expense of the Structural Assessment shall be borne by Tenant.

               v.   Approval.  Tenant shall have until February 16, 1996
                    --------
("Approval Period"), to review and approve the matters contained in the Title
Commitment, U.C.C. Report, Survey, Environmental Report and Structural
Assessment, except that the Approval Period with respect to the Title Commitment
and Survey is extended to the and


                                -6-
<PAGE>

including the later of February 16, 1996 and twenty (20) days after the date on
which the Title Commitment and Survey revised to incorporate any changes caused
by the addition to the Leased Premises as provided above are delivered to
Tenant).  If Tenant objects to any such matter, Tenant shall notify Landlord of
such objection prior to the expiration of the Approval Period and Landlord shall
thereupon have until March 7, 1996 ("Cure Period") to cure Tenant's objections;
provided, however, that Landlord is not obligated to cure any such objections,
and provided further that the Cure Period with respect to the Title Commitment
and the Survey is extended to and including the later of March 7, 1996 and
twenty (20) days after the date on which Tenant raises any objections to the
Title Commitment and/or Survey permitted hereby during the Approval Period as
the Approval Period may be extended with respect to the Title Commitment and
Survey as hereinabove provided.  Tenant may only object to such matters for the
following reasons.

          A.  With respect to the Title Commitment or the UCC Reports, if they
     disclose any recorded documents or other exceptions to title that would
     have a material, adverse affect on Tenant's permitted use and enjoyment of
     the Leased Premises hereunder, other than liens and encumbrances of a
     definite or ascertainable amount which may be removed by the payment of
     money and which Developer agrees in writing to remove promptly after the
     time Tenant has waived all of its remaining contingencies contained in this
     subparagraph 2.f. (any such unpermitted exceptions being hereinafter
     -----------------
     referred to as "Unpermitted Exceptions");

          B.   With respect to the Survey, if it discloses any survey defects
     which render the title to the Leased Premises unmarketable or which in
     Tenant's reasonable determination would have a material adverse impact on
     Tenant's permitted use and enjoyment of the Leased Premises hereunder (a
     "Survey Defect");

          C.   With respect to the Structural Assessment, if it discloses any
     structural or other material defect in the Leased Premises that would, in
     Tenant's reasonable determination, have a material adverse impact on
     Tenant's permitted use and enjoyment of the Leased Premises hereunder; and

          D.   With respect to the Environmental Report, if it discloses any
     environmental contamination other than the asbestos which is to be removed
     or remediated by Developer pursuant to the RDOEA, which would, in Tenant's
     reasonable determination, have a material adverse impact on Tenant's
     permitted use and enjoyment of the Leased Premises hereunder.

     With regard to any Unpermitted Exception or Survey Defect, Landlord may
cure the same by causing the same to be removed from the

                                      -7-
<PAGE>

Title Commitment or UCC Reports or to otherwise correct such Survey Defects or
to have the Title Company commit to insure against loss or damage that may be
occasioned by such Unpermitted Exceptions or Survey Defects. In the event
Landlord fails or is unable or unwilling to cure such objections within the Cure
Period as provided herein (or, if not specifically provided, then to the
reasonable satisfaction of Tenant) then Tenant may terminate this Lease by
written notice to Landlord within five (5) days after the expiration of
Landlord's Cure Period, whereupon this Lease shall be terminated and neither
party shall have any further rights or liabilities hereunder. Failure by Tenant
to terminate this Lease within the time period specified herein shall constitute
Tenant's waiver of any objection to the matters reflected in the Title
Commitment, UCC Report, Survey, Environmental Report, and Structural Assessment
(which waiver, anything contained herein to the contrary contained herein
notwithstanding, with respect to the Title Commitment, UCC Report and Survey
shall also be for the benefit of Developer under the RDOEA). Anything to the
contrary contained in this Lease notwithstanding, any notice by Tenant to
Landlord to terminate or cancel this Lease under subparagraph 2.f. or
                                                 -----------------
subparagraph 2.g. below shall be by delivery or facsimile.
-----------------

                vi.  Tenant's Due Diligence, Insurance and Repairs Relating to
                     ---------------------------------------------------------
Inspections.  Tenant agrees as follows:
-----------

                     (a) Throughout the period of time that Tenant has to
satisfy the contingencies set forth in this subparagraph 2.f. and subparagraph
                                            ----------------      ------------
2.g. below, Tenant shall make good faith reasonable and diligent efforts to
---
satisfy such contingencies by such dates. Tenant shall notify Landlord as soon
as reasonably possible if it discovers a matter to which it intends to object as
provided in subparagraph 2.f. above. From and after the Effective Date, upon
            ----------------
reasonable advance notice to Landlord, which notice, anything to the contrary
contained herein notwithstanding, only need be telephonic notice to John Marks
or Marc Munaretto at the telephone number provided in Section 11(a) for John
Marks, Tenant, its employees, agents and designated representatives (the persons
or entities performing the environmental audit and structural assessment as
herein contemplated being included within "designated representatives" under
this subparagraph 2.f.6.), shall have the right to enter upon the Leased
     -------------------
Premises, at times reasonably acceptable to Developer during normal business
hours, for the purpose of making the Environmental Report and Structural
Assessement, both of which shall be performed in a professional manner, provided
that:

                (I)  none of Tenant or its employees, agents and designated
        representatives shall unreasonably interfere with the present use of the
        Project; and

                                      -8-
<PAGE>

           (II) Tenant hereby agrees to indemnify, defend (with counsel
    reasonably acceptable to Landlord and Developer) and hold harmless Landlord
    and the Landlord Related Parties (as hereinafter defined) and their
    respective agents, liability, cost, or expense (including reasonable
    attorneys' fees) arising out of the Tenant or its employees, agents and
    designated representatives being on the Project, or the acts or omissions of
    Tenant or its employees, agents and designated representatives with respect
    to the performance of the Environmental Report and Structural Assessment;

                 (b)  Tenant shall, prior to it or its employees, agents or
designated representatives going upon the Project, provide Landlord with a
certificate of insurance and at all pertinent times maintain in full force and
effect a good and sufficient policy or policies of insurance reasonably
acceptable to Landlord insuring Landlord, Developer and the National Bank of
Greece against any loss arising out of injury to persons or damage to property
resulting from Tenant or its employees', agents' or designated representatives'
being on the Project or their acts or omissions with respect to the
Environmental Report and Structural Assessment, in the  amount of not less than
One Million Dollars ($1,000,000.00) per occurrence, naming Landlord, Developer
and National Bank of Greece as additional insureds on said certificates and
showing same to be prepaid for at least the period of time during which Tenant
is allowed to obtain the Structural Assessment and Environmental Report
hereunder and providing that the same shall not be cancelled or changed upon
less than thirty (30) days prior notice to Landlord, Developer and National Bank
of Greece; and

                 (c)  Tenant shall repair any damage caused by Tenant or its
agents, employees and its designated representatives to the Leased Premises
or the Project so as to restore the same to substantially its condition prior to
such damage; and

                 (d) To hold the non-public information gained from its
investigations pursuant to subparagraphs 3.f.iii. and iv. above in confidence,
                           ------------------------------
except as may be disclosed (A) to Tenant or its Affiliates, or any of their
agents, engineers, architects or attorneys, (B) to any mortgagee of Tenant as
permitted hereby, (C) as required by law, (D) to any bona fide third party
potential purchaser of Tenant or any interest therin or assignee or subleasee of
the Lease or the Leased Premises or part thereof, or (E) as necessary or
appropriate in any litigation between the parties, and to deliver a copy of the
Environmental Report and Structural Assessment to Landlord

                                      -9-
<PAGE>

promptly after its receipt by Tenant.  The provisions of this subparagraph
                                                              ------------
2.f.6.d. shall survive the termination of this Lease.
-------

           g.   Reciprocal Development, Operating and Easement Agreement.
                --------------------------------------------------------
Contemporaneously with the execution hereof, Landlord, Tenant and Niki
Development Corp. shall enter into the Reciprocal Development, Operating and
Easement Agreement in the form attached hereto as Exhibit G, which RDOEA shall
                                                  ---------
specify the terms, conditions and provisions applicable to Tenant's use of the
Common Areas and other rights and obligations of the parties with respect to
the Project. The RDOEA shall impose restrictions against the use or occupancy of
any portion of the Project (other than the Leased Premises) for any use which
would compete with Tenant's use and occupancy of the Leased Premises,
substantially in the same form as is set forth in paragraph 6.d. below. The
                                                  -------------
RDOEA shall also set forth the scheme for the vertical subdivision and ownership
of the Theatre Building and the various easements or licenses, restrictions and
obligations regarding the use, maintenance, operation and development of the
Project and shall be binding upon, and inure to the benefit of, Developer,
Landlord and Tenant, as well as the owner(s) of the other portions of the
Project, and their tenants, licensees, successors and assigns. It is
contemplated that the Leased Premises will be conveyed to Landlord upon the
vertical subdivision of the Leased Premises from the remainder of the Theatre
Building as provided in the RDOEA and the Limited Partnership Agreement of
Landlord, provided the other conditions to such conveyance therein provided have
been satisfied as provided in the RDOEA.  The RDOEA shall also impose
development and leasing obligations on Developer with respect to the Common Area
and the Project as provided in subparagraphs g.iii. below. Pursuant to the
                               -------------------
RDOEA, Tenant acknowledges that Landlord shall provide the necessary easements,
licenses and access over and upon portions of the Leased Premises for the
benefit of the owner(s), tenants and invitees of the remainder of the Project
outside the Leased Premises as currently utilized or as reasonably necessary or
appropriate given the modifications to the Project contemplated by this Lease or
reasonably necessary or appropriate for the development or improvement of the
remainder of the Project outside the Leased Premises. The RDOEA shall provide
the following rights and/or interests that the Developer grants to Tenant on the
terms, conditions and consideration applicable to Tenant's use in connection
therewith as specified in the RDOEA: (i) the right to use that portion of that
one (1) certain boat docking area (the "Docking Area") situated perpendicular to
the existing boat slips as designated and outlined in yellow on Exhibit A-4
                                                                -----------
attached hereto, for periods not to exceed thirty (30) minutes each occurring no
more often than once every one and one-half hours throughout the Term of this
Lease, for purposes of loading and unloading passengers from one or more boats
operated by or for the benefit of Tenant and its Permittees; and (ii) the right
of first refusal throughout the Term

                                     -10-
<PAGE>

of this Lease to match the terms of any bona fide, arms-length offer received by
the Developer from a third party for the use of the Docking Area for a boat or
boats to be used for entertainment purposes. The RDOEA shall also include the
following obligations of Developer, the satisfaction of which shall be
conditions to Tenant's obligations hereunder:

             i.  Vertical Subdivision, Zoning and Governmental Permits.  It is
                 -----------------------------------------------------
acknowledged that Developer is the current owner of the Project, including the
Leased Premises. The RDOEA shall provide that Developer shall have until the
Delivery Date, as such date may be extended as therein and in the Limited
Partnership Agreement of Landlord provided, to cause the Leased Premises to be
vertically subdivided so as to be a separate parcel from the balance of the
Theatre Building without the imposition of any conditions, restrictions or
easements that would materially impair Tenant's use and occupancy of the Leased
Premises as a House of Blues. If Developer is not prepared to so convey the
Leased Premises by such date as provided in the RDOEA and the Limited
Partnership Agreement, without Developer defaulting under the RDOEA or the
Limited Partnership Agreement, then this Lease shall terminate and neither
Landlord nor Tenant shall have any further rights or liabilities hereunder;
provided that Developer shall not thereby be relieved of its obligation to
reimburse Tenant for its out-of-pocket expenses as provided in the RDOEA to the
extent, if any, therein provided. Tenant shall have until March 10, 1996 to
obtain (i) a building permit for Tenant's Work and any other necessary permits,
licenses or approvals to commencing construction of Tenant's Work, and (ii) any
other governmental permit which is not conditioned upon substantial completion
or occupancy (the "Governmental Approvals"). Landlord agrees to cooperate with
Tenant in Tenant's efforts to obtain the Governmental Approvals and to submit
such documents and file and process such applications at Tenant's expense as may
be reasonably requested in connection therewith. In the event all Governmental
Approvals are not obtained by March 10, 1996, at Tenant's option, this Lease
shall be canceled and neither party shall have any further rights or liability
hereunder, provided that Developer shall not thereby be relieved of its
obligation to reimburse Tenant for its out-of-pocket expenses as provided in the
RDOEA to the extent, if any, therein provided.

             ii. Common Area Plans.  Landlord and Tenant agree that the Common
                 -----------------
Areas shall be constructed and maintained in a first-class condition
substantially in compliance with the standards shown on the Common Area plans
and specifications attached hereto as Exhibit H, provided that Developer may
                                      ---------
change such Common Area Plans without Landlord's or Tenant's consent as long as
such standards are maintained.

                                     -11-
<PAGE>

              iii. Development and Leasing Obligations. The RDOEA shall impose
                   -----------------------------------
on Developer the obligation, by the Delivery Date, to (i) enter into two (2)
restaurant leases, (ii) obtain and accept a loan commitment for an amount not
less than Twenty-Five Million Dollars ($25,000,000.00) for certain Common Area
and Commercial/Retail Improvements, (iii) remove or remediate all asbestos and
other hazardous materials from the Leased Premises, all as provided in the
RDOEA, (iv) cause the Leased Premises to be vertically subdivided into a
separate parcel from the balance of the Theatre Building, and (v) deliver the
Leased Premises free and clear of any and all liens, encumbrances, restrictions
or easements, other than (a) this Lease, (b) the RDOEA and (c) such other
restrictions or easements as are approved by Tenant pursuant to this Lease.

          h. Conditions Subsequent. Tenant's obligations under this Lease are
             ---------------------
expressly contingent upon satisfaction (or waiver by Tenant) of the conditions
stated in subparagraphs 2.g.i. and g.iii. above.
          --------------------     ------


          i.  Landlord's Contribution. Anything to the contrary contained herein
              -----------------------
notwithstanding:

              i. Landlord's Contribution shall be equal to the amount of all
     monetary contributions by the General Partner and Limited Partners pursuant
     to the Limited Partnership Agreement, plus the proceeds of the Construction
     Loan, as therein defined, less the actual out-of-pocket costs and expenses
     of Landlord incurred during the period between the Delivery Date and Rent
     Commencement Date in connection with the ownership of the Leased Premises
     including all loan fees, construction period interest and other costs paid
     in connection with such Construction Loan, but only to the extent such
     costs and expenses are not covered by net cash flow pursuant to the Limited
     Partnership Agreement or funds otherwise available to Landlord.

              ii. Landlord shall own any tangible real property or fixtures
     (including trade fixtures but excluding any trade fixtures, trademarks,
     and/or trade dress unique to the House of Blues concept) that is purchased
     with or the cost of the purchase of which is reimbursed to Tenant by
     Landlord's Contribution, including those items shown on the Draw Requests
     provided pursuant to Exhibit F attached hereto ("Landlord's Fixtures").
                          ---------
     This Lease shall constitute a bill of sale from Tenant to Landlord for such
     Landlord's Fixtures, but Tenant agrees to execute any additional
     documentation and take such additional actions reasonably requested by
     Landlord to evidence such ownership interest in Landlord, including the
     execution of and filing with the appropriate authorities informational
     U.C.C. financing statements with respect thereto.  Landlord does not

                                     -12-
<PAGE>

     waive or subordinate any of its ownership interest or rights thereto and
     will not be required to for any Tenant mortgagee and Tenant may not assign
     or mortgage any interest in Landlord's Fixtures.

     3.   Rent.    Tenant shall pay Landlord the following amounts as rent
          ----
("Rent"):

          a.    Minimum Rent.  Commencing on the Rental Commencement Date as
                ------------
defined in paragraph 1.o. above and continuing throughout the Primary Term,
           --------------
Tenant shall pay to Landlord the minimum rent ("Minimum Rent"), which shall be
an amount equal to the monthly payments which are necessary to amortize Six
Million Dollars ($6,000,000.00) over twenty (20) years in monthly installments
of principal and interest at an interest rate equal to one percent (1%) per
annum above the Prime Rate, as hereinafter defined.  The term "Prime Rate" shall
mean that rate of interest per annum published, quoted and defined from time to
time in the Wall Street Journal in its Money Rate Section as the Prime Rate and
            -------------------
which is currently defined as the base rate on corporate loans posted by
seventy-five percent (75%) of the nation's thirty (30) largest banks.  In the
event the Wall Street Journal should cease to publish a definition of Prime
          -------------------
Rate, then the rate announced from time to time by Chase Manhattan Bank as its
prime lending rate shall be the Prime Rate hereunder. The interest is calculated
on a 360-day factor applied on a 365-day year, or a 366-day year, in the event
that the year is a leap year, on the unpaid principal to the date of each
installment paid and the payment made credited first to the discharge of the
interest accrued and the balance to the reduction of the principal. Provided,
however, that in the event the interest rate reaches the maximum rate allowed by
applicable law, said maximum legal rate shall be computed on a full calendar
year 365/365 days basis or on a 366/366 days basis, in the event that the year
is a leap year. Such monthly installments shall be adjusted as and when such
Prime Rate fluctuates. The Minimum Rent shall be paid in equal monthly
installments in advance on the first day of each calendar month during the
Primary Term and any Renewal Terms at the address set forth below, or to such
other parties as Landlord may from time to time designate, without any set-off,
deduction, demand or billing whatsoever, except as may be specifically otherwise
provided in this Lease.

          b.    Increases in Minimum Rent.  The Minimum Rent shall increase
                -------------------------
during the Renewal Terms to equal the amounts set forth below:

                i.    Commencing on the first day of the first Renewal
          Term and continuing throughout the first Renewal Term, the yearly
          Minimum Rent shall be equal to eighty five percent (85%) of the yearly
          average of the total of Minimum Rent and Percentage Rent for the
          immediately preceding three

                                     -13-
<PAGE>

Lease Years, but in no event less than the Minimum Rent in the last Lease Year
of the Primary Term, payable in equal monthly installments;

          ii.      Commencing on the first day of the second Renewal Term and
continuing throughout such second Renewal Term, the Minimum Rent shall be equal
to eighty five percent (85%) of the yearly average of the total of Minimum Rent
and Percentage Rent for the immediately preceding three Lease Years, but in no
event less than the Minimum Rent in the last Lease Year of the Primary Term,
payable in equal monthly installments;

          iii.     Commencing on the first day of the third Renewal Term and
continuing throughout such third Renewal Term, the Minimum Rent shall be equal
to eighty five percent (85%) of the yearly average of the total of Minimum Rent
and Percentage Rent for the Immediately preceding three Lease Years, but in no
event less than the Minimum Rent in the last Lease Year of the Primary Term,
payable in equal monthly installments.

If the monthly Minimum Rent for a Renewal Term cannot be determined as of the
beginning of such Term, because the actual amount of Percentage Rent for the
last Lease Year before the commencement of such Renewal Term has not been
finally determined pursuant to subparagraph 3.c. below, Tenant shall pay the
                               -----------------
monthly Minimum Rent as reasonably estimated by Landlord until such time as the
actual Minimum Rent for such Renewal Term can be determined, at which time the
parties shall make an adjustment in the same manner as provided in subparagraph
                                                                   ------------
3.e.ii. below.  If there is an adjustment in the amount of Percentage Rent due
-------
for a Lease Year comprising one of the Lease Years used in the calculation of
Minimum Rent for a Renewal Term after the Minimum Rent for such Renewal Term has
been adjusted as provided in the immediately preceding sentence, the Minimum
Rent for such Renewal Term shall be readjusted in the same manner as provided in
subparaghraph 3.f. below.
------------------
     c.   Percentage Rent.
          ---------------

          i.    In addition to Minimum Rent, Tenant shall pay Landlord
percentage rent ("Percentage Rent") for each Lease Year following the Rental
Commencement Date (and for any partial month between the Rental Commencement
Date and the First Lease Year ("Partial Lease Year;) equal to the amount by
which the sum of the following percentages of the components of Gross Sales as
described below, if any, during any Lease Year or Partial Lease Year during the
Term exceeds the Minimum Rent for such Lease Year or Partial Lease Year:

                                     -14-
<PAGE>

                   (a)  Fifteen percent (15%) of that portion of Gross Sales
     derived from the sale of retail merchandise from the Leased Premises or the
     Blues Brothers Boat or other vessel using the Docking Area pursuant to the
     RDOEA (after deduction of all royalties or similar payments payable
     pursuant to a license agreement or similar agreements between Tenant or its
     Affiliates and any third party);

                   (b)  Ten percent (10%) of that portion of Gross Sales derived
     from the sale of alcoholic beverages from the Leased Premises or the Blues
     Brothers Boat or other vessel using the Docking Area pursuant to the RDOEA;

                   (c)  Five percent (5%) of that portion of Gross Sales derived
     from the sale of food from the Leased Premises or the Blues Brothers Boat
     or other vessel using the Docking Area pursuant to the RDOEA;

                   (d)  Fifteen percent (15%) of that portion of Gross Sales
     received by Tenant from computer networks such as the Internet, Microsoft,
     America On-Line, CompuServe or similar or succeeding networks for the live
     broadcast of any show from the Leased Premises or the broadcast of any show
     from the Leased Premises within six (6) hours after such show has
     concluded, after deduction of any and all costs and expenses paid by Tenant
     to third parties related to or arising out of the broadcast of such show,
     including, without limitation, the cost of performers, technical staff,
     staging and production costs and equipment costs; and

                   (e)  Five percent (5%) of that portion of Gross Sales
     received by Tenant from parking proceeds paid by Tenant's customers.

         ii.    Provided, however, and notwithstanding the foregoing, in the
     event the Minimum Rent is increased during any Renewal Term pursuant to
     subparagraph 3.b. above, the calculation of "Gross Sales" pursuant to
     -----------------
     subparagraph 3.d. below for such Renewal Term shall be limited to eighty-
     -----------------
     five percent (85%) of the total of such Gross Sales.

The percentages in subparagraphs 3.c.i.(a) through 3.c.i(e) above, both
                   -----------------------         --------
inclusive, are hereinafter referred to as the "Applicable Percentage(s)".

              (d.)  Gross Sales. The term "Gross Sales," as used herein, shall
                    -----------
include the actual sales prices of all goods, services, wares and merchandise,
if any, sold, leased or delivered and the actual charges for all services
performed by Tenant, subtenant, licensee or concessionaire in, at from or
arising out of the use of the Leased

                                     -15-
<PAGE>

Premises, the Blues Brothers Boat or other vessel using the Docking Area
pursuant to the RDOEA or the seating area or another portion of the Project
pursuant to the RDOEA; whether delivery or performance is made therefrom or some
other place and including all sales which Tenant or any subtenant, licensee,
concessionaire or other person in the normal and customary course of its
business, would credit or attribute to its operations therefrom; whether for
wholesale, retail, cash or credit, whether made or performed by mail, delivery
service, telephone or made or performed via the Internet, Microsoft, America On-
Line or similar or succeeding networks as provided above; and whether made or
performed by means of mechanical or other vending devices, without reserve or
deduction for inability or failure to collect except to the extent of bad debt
written off as hereinafter provided, with the exception of all of the following:

          i.     proceeds from the sale of tickets or other admission charges in
     connection with entertainment events at the Leased Premises or elsewhere
     (provided that the same will not be construed to negate or limit Landlord's
     rights to receive the Applicable Percentage of Gross Sales under
     subparagraph 3.c.i.(d) above);
     ----------------------

          ii.    credits or refunds to customers for merchandise returned or
     exchanged in an amount not to exceed the amount originally included in
     Gross Sales;

          iii.   transfers of merchandise from the Leased Premises to other
     stores or warehouse of Tenant or its Affiliates where such exchange is made
     solely for the convenient operation of Tenant's business and not for the
     purpose of depriving Landlord of the benefit of a sale which would
     otherwise be made in or at the Leased Premises;

          iv.    any sales taxes or other taxes imposed under any laws,
     ordinances, orders or regulations, whether now or hereafter in force, upon
     or based upon the gross receipts of Tenant or the sale or sale price of
     food, liquor or merchandise and which must be paid by Tenant;

          v.     returns of merchandise to shippers or manufacturers;

          vi.    merchandise or other things of value issued in redemption of
     proofs of purchase coupons or other evidences of value, or issued in
     connection with any sales promotion program of Tenant;

          viii.  fees received for check cashing, extension of credit, deferred
     payment, or financial processing;

                                     -16-
<PAGE>

           viii. income from minor non-entertainment vending machines,
     telephones or postage stamp dispensers (but Gross Sales shall include
     pinball, pool, video games and other entertainment machines or devices);

           ix.  the actual amount of bad debt written off by Tenant with respect
     to sales from the Premises; and

           x.  the amount derived from catalogue sales, except to the extent the
     items of merchandise sold contain the logo of House of Blues-Chicago or
     other similar specific reference exclusively to the Leased Premises.

Landlord agrees to hold in confidence all non-public sales and related
information furnished by Tenant pursuant to subparagraph 3.f. below except as
                                            ----------------
may be disclosed (A) to Landlord or its partners, or any of their agents,
accountants or attorneys, (B) to Mortgagees and Ground Lessors (as those terms
are hereinafter defined) or bona fide potential Mortgagees or Ground Lessors,
(C) as required by law, (D) to any bona fide arms-length potential purchaser of
Landlord or any interest therein or part thereof, or (E) as necessary or
appropriate in any litigation between the parties. Any deposit not refunded
shall be included in Gross Sales. No franchise or capital stock tax and no
income or similar tax based on income or profits shall be deducted from Gross
Sales. Tenant neither makes any express or implied covenant to operate in the
Leased Premises, nor does it make any representation or warranty as to the sales
which it expects to make therein; provided, however, that this sentence shall
not be construed to abate Tenant's obligation to open the Leased Premises
pursuant to subparagraph 6.c.i. below.
            ------------------
     e.    Quarterly and Annual Statement, Payment.
           ---------------------------------------

     i.    Tenant shall deliver to Landlord within 15 days after the end of each
quarter or part thereof during any Fiscal Year or part thereof occurring during
the Term a written report, certified to be correct by Tenant or an authorized
officer or agent of Tenant, showing Gross Sales for the preceding Fiscal quarter
or part thereof.

   ii.     Tenant shall pay to Landlord within fifteen days after the end of
each quarter or part thereof during each Fiscal Year or part thereof during the
Term hereof, the quarterly installment of Percentage Rent due for the quarter or
part thereof in question, which installment shall be calculated by multiplying
the applicable portion of Gross Sales for the quarter or part thereof in
question by the Applicable Percentage.

  iii.  Within 60 days after the end of each Fiscal Year or part thereof during
the Lease Term, Tenant shall deliver to Landlord

                                     -17-
<PAGE>

a statement of Gross Sales for such Fiscal Year or part thereof certified to be
correct by Tenant or an authorized officer or agent of Tenant which shall
conform to and be in accordance with generally accepted accounting principles.
Concurrently, Tenant shall pay to Landlord the balance, if any, of Percentage
Rent due for such Fiscal Year or part thereof.  If the installments of
Percentage Rent paid by Tenant during any Fiscal Year or part thereof exceed the
Percentage Rent due for such Fiscal Year or part thereof, the excess shall, at
Landlord's option, be credited against the next monthly installments for
Percentage Rent which are due or refunded promptly to Tenant.

          f.  Records.  Tenant shall keep and maintain at the Leased Premises or
              -------
at Tenant's corporate headquarters a complete and accurate set of books,
records, documents, sales tax returns, income tax returns, papers, files, cash
register receipts and other supporting evidence which shall conform to and be in
accordance with the standard accounting methods used and adopted by House of
Blues Entertainment, Inc. and its Affiliates ("Records") from which Gross Sales
and all revenue derived from the conduct of business upon or from the Leased
Premises and the Blues Brothers Boat or other vessel using the Docking Area
pursuant to the RDOEA may be determined.  The Records shall be kept for at least
twenty-four (24) months after the expiration of the Fiscal Year to which they
pertain.  Landlord and its agents and accountants may at its expense at any
reasonable time during normal business hours within twenty-four (24) months
after the expiration of the Fiscal Year inspect and/or audit any or all of the
Records for the Fiscal Year; provided that Landlord notified Tenant of any such
inspection or audit not less than five (5) business days prior to the date
thereof.  If Landlord inspects and/or audits Tenant's statement for such Fiscal
Year, the Records shall be kept until such inspection and/or audit shall have
been concluded.  At Landlord's request, Tenant shall make all Records available
for Landlord's inspection either at the Leased Premises or at Tenant's
headquarters offices during normal business hours.  If Landlord makes an audit
for any Fiscal Year, and if the Gross Sales shown by Tenant's annual statement
for the Fiscal Year are found to be  understated by three percent (3%) or
more, Tenant shall pay to Landlord the reasonable cost of such audit.  If it is
determined by such audit that any statement previously delivered to Landlord by
Tenant was not accurate, an adjustment shall be made and the owing party shall
pay to the other party upon demand such sums as may be necessary so that the
correct amount of Percentage Rent shall have been paid by Tenant to Landlord,
and any amounts due to Landlord or Tenant, as the case may be, shall bear
interest at the corporate base rate of interest announced from time to time by
The First National Bank of Chicago or its successor, such rate to change when
and as such corporate base rate changes.  Should any such liability for
Percentage Rent equal or exceed three percent (3%) of the Percentage Rent
previously paid for such Fiscal Year on three or more occasions and such excess
is the result of a misstatement in the same category

                                     -18-
<PAGE>

of Gross Sales on such occasions, then Tenant shall pay Landlord upon demand One
Hundred Fifty percent (150%) of the shortfall due to Landlord on any succeeding
occasion after the third occasion, plus interest as aforesaid.

          g.  Tax Cost. Commencing on the Delivery Date, Tenant shall pay
              --------
Landlord (or directly to the applicable taxing entity if the Leased Premises are
separately assessed as hereinafter provided) as tax cost ("Tax Cost") during the
Term: (i) the real property taxes and assessments, both general and special,
assessed or imposed against the Leased Premises for each tax year or part
thereof during the Term; (ii) transit taxes; (iii) taxes based upon leases or
the receipt of rent which are in substitution for and in lieu of any item or
portion thereof described in (i) and (ii) above, and (iv) reasonable fees and
expenses incurred by Landlord with Tenant's prior written consent, which consent
shall not be unreasonably withheld or delayed, to obtain a reduction of or a
limit on the increase in any of items (i) through (iii) above, but not to exceed
the amount of savings actually derived therefrom and the reasonable cost of any
appraisal performed in connection with a tax protest (all of the amounts
described in (i) through (iv), both inclusive, being included in the definition
of "Tax Cost"). However, the Tax Cost shall not include any penalties or fees
charged for late payment of taxes provided that Tenant pays its share of the Tax
Cost in accordance with the terms of this subparagraph 3.g. Tax
                                          ----------------
Cost shall be paid by Tenant when due, unless the Leased Premises are not
separately assessed, then as provided below. Tax Cost for any partial tax year
during which the Delivery Date occurs or the Term ends shall be prorated.
Landlord will send Tenant copies of assessed values and statements promptly
after receipt by Landlord and, provided no Event of Default by Tenant exists
hereunder, Tenant shall have the right, at its own expense, in good faith, after
notifying Landlord, to contest any such values, taxes or payments in lieu of
taxes by appropriate proceedings and with reasonable diligence and to take such
action as may be permitted by applicable law to defer or pay under protest the
taxes as are contested in order to preserve Tenant's right to an abatement or
reduction during the period of contest and any appeal therefrom, provided that
if such tax or payments in lieu of taxes are not paid when initially due:

          A.  such contest or appeal shall have the effect of preventing the
collection of the tax or payments in lieu of taxes so contested and the sale or
forfeiture of the Leased Premises or any part thereof or interest therein to
satisfy the same; and

          B.  Tenant has notified Landlord of the intention of Tenant to contest
or appeal the same before any taxes or payments in lieu of taxes have been
increased by any interest, penalties or costs.

                                     -19-
<PAGE>

     In the event Tenant fails to prosecute such contest or appeal in good faith
and with reasonable diligence or fails to pay the taxes or payments in lieu of
taxes plus any interest and penalties finally determined to be due upon the
conclusion of such contest or appeal, Landlord, after at least ten (10) days
prior written notice to Tenant, may, at its option, pay the same, together with
all penalties and interest thereon, and Tenant shall reimburse Landlord for such
amount on demand.  Tenant shall indemnify, defend and hold harmless Landlord
from any losses as the result of the contest or appeal.  If Landlord defaults in
the timely payment of taxes on the Leased Premises it is obligated to pay
hereunder, Tenant, in addition to its other rights, may pay the taxes and deem
the payment in excess of Tax Cost, together with interest thereon at the Default
Rate (as hereinafter defined), to be prepaid Percentage Rent and designate the
portion of the Percentage Rent which is prepaid.  Landlord shall be responsible
for payment of any and all taxes attributable to the rent to be paid by Tenant
or otherwise based on Landlord's income derived therefrom, and such amounts
shall under no circumstances constitute part of the Tax Cost, unless the same
are in lieu of taxes as provided above, and Landlord shall indemnify and hold
harmless Tenant from and against the payment of any such taxes.

     As of the Effective Date, the Leased Premises and the remainder of the
Project (the Leased Premises and the remainder of the Project being hereinafter
referred to as the "Combined Parcel") are assessed, for real estate tax
purposes, as two tax parcels which have not been divided between the Leased
Premises and the remainder of the Project.  Landlord and Tenant will cooperate
with Developer pursuant to the RDOEA to cause the Leased Premises to be assessed
separately for real estate tax purposes.  Until such time, Tenant shall pay
twenty-five percent (25%) of such taxes.  However, in the event the Leased
Premises are not separately assessed for real estate tax purposes within
eighteen (18) months after the Effective Date, Tenant shall thereafter have the
right to contest the designation of twenty-five percent (25%) as Tenant's
equitable portion of the taxes by means of obtaining an appraisal performed by
an MAI appraiser reflecting the appraised value of the Leased Premises in
comparison to the appraised value of the entire Project.  Until such time as the
Leased Premises are separately assessed for real estate tax purposes, Landlord
shall promptly after receipt thereof by Landlord deliver to Tenant a copy of the
tax bill for the Combined Parcel together with Landlord's computation of the
amount of tax due from Tenant for the Leased Premises (the "Tenant's Tax
Share").  No later than fifteen (15) days after the receipt of such statement
and bill from Landlord, Tenant shall pay a sum equal to the Tenant's Tax Share,
it being understood and agreed that (a) provided that Tenant shall pay to
Landlord a sum equal to the Tenant's Tax Share as aforesaid, Landlord shall pay
or cause to be paid by Developer pursuant to the RDOEA all taxes due and payable
for the Leased Premises on or before the same shall be due and payable and,
anything to the contrary contained herein, Landlord

                                     -20-
<PAGE>

shall have the right, but not the obligation, to pay or cause to be paid such
taxes under protest and/or proceed to contest or appeal the same as herein
provided or cause the Developer to contest or appeal the same pursuant to the
RDOEA. In the event that Landlord or Developer shall succeed in any contest or
appeal of the real estate tax assessment of the Combined Parcel, or any portion
thereof including the Leased Premises, the amount of any tax reduction shall be
allocated by re-computing the amount of real estate taxes due as provided above
and each party shall pay its pro rata share of the costs and expenses incurred
in achieving such reduction based on its proportionate share of such reduction.
If Tenant disputes the amount of Tenant's Tax Share, in good faith, it shall
promptly notify Landlord. In any event, Tenant shall timely pay the undisputed
portion and the parties shall promptly and in good faith resolve any such
dispute.

     All amounts due from Tenant hereunder are included in the definition of
Rent as used in this Lease, unless the context requires otherwise. Landlord
makes no representation whatsoever to Tenant as to the amount of Tax Cost or
Insurance Charges or the amount of any item comprising Common Area Charges.
Taxes "for" a year shall mean Taxes payable during that year. Delay in computing
any item of Tax Cost or Common Area Charges shall neither be deemed a default by
Landlord or a waiver of the right to collect the item of Tax Cost or Common Area
Charges in question.

        h. Insurance Charge. Tenant shall pay as an insurance charge ("Insurance
           ----------------
Charge") each Lease Year during the Term following the Delivery Date (and the
time between the Delivery Date and the beginning of the first Lease Year) an
amount equal to the cost of maintaining casualty and liability insurance
coverage on the Leased Premises as required by paragraph 7.b. of this Lease.
                                               -------------

        i. Common Area Charge. Tenant shall pay as common area charge ("Common
           ------------------
Area Charge") each Lease Year and the Partial Lease Year during the Term
following the Rental Commencement Date an amount equal to Landlord's share of
annual costs payable under the RDOEA for Common Area expenses.

     4. Improvements, Signs, Additions and Repairs.
        ------------------------------------------
        a. Delivery of Possession for Tenant's Work. Landlord covenants that
           ----------------------------------------
actual possession of the Leased Premises shall be delivered to Tenant ready for
Tenant's Work as defined in Exhibit F attached hereto on the Delivery Date. To
                            ---------
the extent Developer makes the Leased Premises available for Tenant's Work prior
to the Delivery Date, Tenant shall comply with all of the terms of the Work
Letter, as though the Delivery Date had occurred, and pay all utilities consumed
in the performance of such Tenant's Work (subject to reimbursement as part of
Landlord's Contribution to the extent

                                     -21-
<PAGE>

otherwise included therein), provided, however, that Landlord shall not have the
obligation to make any payments of Landlord's Contribution or to pay for
Tenant's Owner Policy of Title Insurance (with Leasehold Endorsement) in the
amount of the cost of Tenant's Work until the Delivery Date, if at all.

     b.  No Alterations or Additions.  Except to the extent otherwise
         ---------------------------
specifically herein provided, Landlord shall not, without Tenant's prior written
consent, make alterations or additions to the Leased Premises, build additional
stories on the Leased Premises or construct any new structures thereon.
Furthermore, Landlord shall not consent to any additions or alteration of the
Common Area under the RDOEA, except as provided in the RDOEA, without the prior
written consent of Tenant.

     c.  Tenant's Work.  Tenant shall, at its expense except for Landlord's
         -------------
Contribution, perform repairs and improvements to the Leased Premises following
the Delivery Date as provided in the Work Letter attached hereto as Exhibit F
                                                                    ---------
and made a part hereof for all purposes.

     d. Signs.
        -----

        i.  Pylon Sign.  Tenant shall have the exclusive right in accordance
            ----------
     with the RDOEA to use the space at the top of the two (2) pylon signs
     situated in the Common Area at the locations on Dearborn and State Street
     depicted on the Site Plan attached hereto as Exhibit A-2, for its signage,
                                                  -----------
     provided the same is professionally produced, subject to all applicable
     City of Chicago ordinances and any other applicable laws, and to place
     such other signage and promotional material in the Common Area as may be
     permitted by the RDOEA, if any. Tenant's portion of the pylon signs shall
     be the most prominent portion of such signs and shall constitute not less
     than forty percent (40%) of the total space of such pylon signs. The use of
     the pylon signs by other tenants shall be limited to no more than three (3)
     other retail tenants and such other tenants' portions shall not interfere
     with the Tenant's portion. In addition, Tenant shall have the exclusive use
     of the marquee portions of all pylon signs. Tenant shall pay for the
     fabrication and installation of its portion of the pylon signage and
     shall use Developer's contractor for the installation. In addition,
     Landlord agrees to cooperate with Tenant in accordance with the RDOEA in
     causing Developer to permit Tenant (i) to erect a theme sign at the
     marina level of the Project, (ii) to install directional signage within the
     Common Area, and (iii) to use the top space on any future pylon signs as
     may be erected on the Project, and to cause Developer to maintain the pylon
     signs as part of the Common Area Charge. Landlord agrees to cooperate with
     Tenant in causing the Developer to cooperate with Tenant to assist Tenant

                                     -22-
<PAGE>

in attempting to obtain all necessary consents and permits required for the
placing of Tenant's professionally produced signage on such pylon signs, as well
as Tenant's placement of other signage and promotional materials in the Common
Area as permitted by the RDOEA.

                        ii.     Tenant Signs. Tenant may place its signage,
                                ------------
            logos and promotional materials on the exterior of the Leased
            Premises to the maximum extent allowed by the City of Chicago and
            any other applicable laws and the RDOEA, and Landlord agrees to
            cooperate with Tenant in assisting Tenant in attempting to obtain
            all governmental approvals required in connection therewith. To the
            extent allowed by the RDOEA to the extent the same are located on
            the exterior of the Leased Premises or are visible from the Common
            Area, Tenant may also install, at its expense, signs on the interior
            or exterior of any display windows of the Leased Premises, as well
            as easel, placard, or illuminated frame signs within the entrance or
            on sidewalks immediately in front of the Leased Premises. Tenant
            shall be entitled to use in or on the Leased Premises the grand
            opening banners or other similar items to facilitate and recognize
            the grand opening of its business in the Leased Premises.

                        iii.    Interior Signs. Tenant shall have the right to
                                --------------
            install and maintain such signs as it may desire on the interior of
            the Leased Premises to the extent allowed by City of Chicago
            ordinance and other applicable law, and nothing in this paragraph
            shall restrict Tenant's rights to maintain signs on the interior of
            the Leased Premises.


                e.    Alterations.  In addition to Tenant's Work, provided no
                      -----------
Event of Default by Tenant has occurred and is continuing, Tenant may from
time-to-time make such alterations, additions or changes to the interior or
exterior of the building or other portions of the Leased Premises
("Alterations") as Tenant may deem necessary or suitable in Tenant's sole
discretion; provided, however, that any such Alterations shall be subject to
the following:


                      i.   Such Alterations shall not structurally weaken the
            building;

                      ii.  Tenant's right to make such Alterations shall not be
            construed to permit Tenant to build additional stories on the Leased
            Premises or construct any new buildings or structures outside of the
            Leased Premises on the Leased Premises without the prior written
            consent of Landlord;

                      iii.  All such work shall be performed in a good and
            workmanlike manner using good grades of materials and shall be
            performed only by bondable licensed contractors, covered by a

                                     -23-
<PAGE>

     collective bargaining agreement with the appropriate trade union(s);
     provided, however, that Tenant shall have the right to use non-union labor
     provided that such use does not result in any type of labor problems or
     unrest in connection with the Project;

         iv.   Such Alterations shall not violate any Permitted Exceptions
     applicable to the Leased Premises, and shall be in compliance with the
     RDOEA and all applicable building codes, rules, regulations and ordinances
     affecting construction of such alterations, additions and changes;

         v.    Tenant shall be responsible for the payment when due of all costs
     attributable to the Alterations made by Tenant, and shall indemnify, defend
     and hold harmless Landlord, the Landlord Related Parties, and their
     respective agents and the Project from and against any mechanic's or
     materialmen's liens attributable thereto and all other costs, damages,
     liens and expenses related thereto;

         vi.   Tenant shall, prior to commencing any Alterations, furnish
     Landlord with (A) insurance against liabilities which may arise out of the
     Alterations, and (B) copies of the plans and specifications and permits
     necessary for the Alterations; and

         vii.   All Alterations visible from the Common Areas or other portions
     of the Project shall be architecturally compatible in color, materials and
     design with the other buildings in the Project.

Any Alterations, whether prior to or subsequent to the Delivery Date (other than
Tenant's Work as described in Exhibit F, which shall be governed thereby), shall
                              ---------
be completed at Tenant's expense by contractors reasonably satisfactory to
Landlord which are employed by Tenant.  From time to time during and upon
completion of such Alterations, Tenant shall deliver to Landlord evidence of
payment, contractors' affidavits and partial and full and final waivers of all
liens for labor, services or materials and such other supporting documentation
as Landlord may reasonably require, all in form reasonably satisfactory to
Landlord.  At all times, Tenant shall cause contractors and other performing
Alterations for Tenant to work in harmony with the contractors, agents and
employees performing work in the Project, for Landlord or others.  Anything to
the contrary contained in this Lease notwithstanding, any Alterations to or
visible from the exterior of the Leased Premises (other than signage) shall be
subject to the provisions of the RDOEA.

    f.   Repairs.  Prior to the Delivery Date, Tenant shall have no obligations
         -------
with respect to the repair or maintenance of the

                                     -24-
<PAGE>

 Leased Premises except as otherwise expressly provided in this Lease; it being
 understood between Landlord and Tenant that except for those obligations
 expressly imposed on Tenant pursuant to this Lease, the Developer shall be
 obligated pursuant to the RDOEA to repair and maintain the Leased Premises in
 substantially its present condition prior to the Delivery Date, and Developer's
 environmental remediation work to the Leased Premises pursuant thereto.
 Landlord shall not be responsible for any maintenance, repairs or replacements
 of the Leased Premises or any part thereof, other than the payment of
 Landlord's Contribution in connection with Tenant's Work as provided in Exhibit
                                                                         ------
 F. Following the Delivery Date and without limiting Tenant's right to perform
 --
 Tenant's work, Tenant shall, at its cost, and with reasonable diligence,
 perform all ordinary and extraordinary maintenance, repairs and replacements
 necessary to keep the Leased Premises in a good condition and in compliance
 with all laws at all times, reasonable wear and tear and damage by casualty or
 condemnation (to the extent Tenant is not obligated to restore the same as
 provided in paragraph 8 below) and Developer's obligation to perform the
             -----------
 removal and remediation of hazardous materials as provided in the RDOEA
 excepted, including maintenance, repair and replacement of the structural
 elements of the Leased Premises, the roof, foundation (if part of the Leased
 Premises), walls, floors, parking area and utility facilities situated in the
 Leased Premises, as well as all broken glass, doors, windows, moldings, the
 interior of the Leased Premises, plumbing pipes within the Leased Premises,
 plumbing fixtures, water heaters, HVAC systems, and light and electric fixtures
 situated within the Leased Premises. If the Tenant does not do so, or if Tenant
 shall fail to pay taxes, Insurance Charge, utilities or any other amount due
 hereunder in a timely manner, Landlord may, but need not, perform or make any
 maintenance, repairs, replacements, installations, alterations, improvements
 and additions which the Tenant is obligated to make, or pay such amounts, and
 Tenant shall pay to Landlord the cost thereof, and shall also pay to Landlord
 an amount reasonably sufficient to reimburse Landlord for all overhead, general
 conditions, fees and other costs or expenses arising from the involvement of
 Landlord with such repairs and replacements, the foregoing payments to be made
 by Tenant forthwith upon Tenant being billed for same. If Tenant fails to
 perform its repair obligations pursuant hereto, Landlord and Landlord's agents,
 may, but shall not be required to, enter the Leased Premises at all reasonable
 times following reasonable notice to Tenant to perform or make such
 maintenance, repairs, replacements, installations, alterations, improvements
 and additions to the Leased Premises as Landlord shall reasonably deem
 necessary for the safety or preservation thereof. Tenant has no authority or
 power to cause or permit any lien or encumbrance of any kind whatsoever,
 whether created by act of Tenant, operation of law or otherwise, to attach to
 or be placed upon Landlord's or any other party's title or interest in the
 Project or the Leased Premises, except to the extent otherwise herein

                                     -25-
<PAGE>

specifically provided, and any and all liens and encumbrances created by Tenant
shall attach to Tenant's interest only.  Tenant covenants and agrees not to
suffer or permit any lien of mechanics or materialmen or others to be placed
against the Project or the Leased Premises or Tenant's interest in the Leased
Premises with respect to work or services claimed to have been performed for or
materials claimed to have been furnished to Tenant or the Leased Premises, and,
in case any such lien attaches, or claim of lien is asserted, Tenant covenants
and agrees to cause such lien or claim of lien to be immediately released and
removed of record.  In the event such lien or claim of lien is not immediately
released and removed, and Tenant does not otherwise provide security reasonably
acceptable to Landlord and contest the same in good faith and with due
diligence, causing the lien or claim therefor to be promptly released at the end
of such contest, either by payment, settlement or adjudication, Landlord, at its
sole option and in addition to any other available rights or remedies, may take
all action necessary to release and remove such lien or claim of lien (it being
agreed by Tenant that Landlord shall have no duty to investigate the validity
thereof) and Tenant shall promptly upon notice reimburse Landlord for all sums,
costs and expenses (including reasonable attorney's fees) incurred by Landlord
in connection with such lien or claim for lien. Any work performed by Tenant
pursuant to this subparagraph 4.f. shall be subject to the provisions of
                 -----------------
subparagraph 4.e. above as if such work constituted Alterations.
-----------------

           g.   Parking.  Tenant shall have non-exclusive parking rights for the
                -------
benefit of itself and its Permittees in and to all parking facilities situated
on the Project, to the extent such rights are granted to Landlord pursuant to
the RDOEA.  In addition, should Tenant determine at any time that the parking
facilities within the Project are insufficient or unsatisfactory for Tenant's
operations, Tenant may, at its expense, contract for parking outside the Project
subject to the conditions imposed by the RDOEA.

   5.      Utilities.
           ---------
           a.   Service. To the extent provided in the RDOEA, Tenant shall have
                -------
the right to provide to the Leased Premises such utility facilities as are
necessary for water, gas, electricity, telephone and sewage service to be
furnished for Tenant's intended use. Other than as may be provided in the RDOEA,
if at all, Landlord shall have no obligation to furnish utility services to the
Leased Premises. Other than as may be provided in the RDOEA, if at all, Tenant
agrees that Landlord shall not be liable in damages, by abatement of Rent or
otherwise, for failure to furnish or delay in furnishing any service, or for any
diminution in the quality or quantity thereof, when such failure or delay or
diminution is occasioned, in whole or in part, by failure or delay or diminution
is occasioned, in whole or in part, by governmental rule, regulation or
guideline (whether or not having the force of law), by repairs, renewals,
or improvements, by any strike,

                                     -26-
<PAGE>

lockout or other labor trouble, by inability to secure electricity, gas, water,
or other fuel at the Building after reasonable effort so to do, by any accident
or casualty whatsoever, by at or default of Tenant or other parties, or by any
other cause; and no such failure or delay or diminution shall be deemed to
constitute an eviction of Tenant or disturbance of the Tenant's use and
possession of the Leased Premises nor shall any such failure or delay relieve
the Tenant from the obligation to pay Rent or perform any of its obligations
under this Lease. Landlord agrees to use reasonable efforts to assist in the
restoration of services in the event of any failure, delay or diminution
described in this subparagraph 5.a.
                  ----------------

         b.  Utility Charges.  Commencing on the Delivery Date, Tenant shall
             ---------------
arrange with the appropriate utility suppliers for services to the Leased
Premises, pay all connection, meter and service charges and deposits required to
connect utilities to the Leased Premises, and pay such utility suppliers
directly for such services. If for some reason the Leased Premises cannot be
separately metered, Tenant shall pay Developer's cost of any such utilities
which are not metered to the Leased Premises by the provider of such service
within ten (10) days after demand for payment by Developer.

    6.  Use, Transfers or Assignments.
        -----------------------------

        a. Tenant's Use. Tenant may use the Leased Premises as a House of Blues
           ------------
or other entertainment, restaurant and/or bar facility and for related uses
including, without limitation, recording, retail, broadcast, on-line network and
similar uses, and for no other use unless Tenant obtains Landlord's prior
written consent, such consent not to be unreasonably withheld. Tenant further
agrees:

           i.  To occupy the Leased Premises in a safe and careful manner and in
compliance with all laws, ordinances, rules, regulations and orders of any
governmental bodies having jurisdiction over the Leased Premises and the
requirements of insurance rating agencies with respect to the Leased Premises,
and without committing or permitting waste;

           ii.  Maintain in good repair and promptly remove and repair any
damage caused by any permitted signs, subject to the other provisions of this
Lease regarding Alterations;

           iii.  To place no merchandise, sign or other thing of any kind in the
vestibule or entry of the Leased Premises or on the sidewalks or other areas
adjacent thereto or elsewhere on the exterior of the Leased Premises except to
the extent otherwise specifically provided in this Lease or the RDOEA;

                                     -27-
<PAGE>

               iv.    To (aa) keep any refuse in proper containers in the
interior of the Leased Premises or elsewhere at the locations designated in the
RDOEA until the same is removed, (bb) permit no refuse to accumulate around the
exterior of the Leased Premises, and (cc) keep the Leased Premises in a clean,
orderly, and sanitary condition and free of insects, rodents, vermin and other
pests;

               v.     To neither load, unload nor permit the loading or
unloading of merchandise, equipment or property except during hours permitted by
the RDOEA, and to use its reasonable efforts to prevent the parking or standing
of vehicles and equipment within the loading areas serving the Project except
when actually engaged in loading or unloading unless deliveries are made through
service corridors abutting the Leased Premises;

               vi.    To conduct no auction, fire or going out-of-business sale
without the prior written consent of Landlord;

               vii.   To permit Landlord free access to the Leased Premises at
all reasonable times and upon reasonable notice for the purpose of examining the
same or making such alterations or repairs to the Leased Premises as Landlord
may deem necessary for the safety or preservation thereof;

               viii.  To solicit no business in the areas of the Project outside
the Leased Premises, nor distribute handbills or other advertising matter in
such areas, except as permitted by the RDOEA, if at all; and

               ix.    To at all times comply with the terms and provisions of
the RDOEA as the same are applicable to the Leased Premises.

          b.   Use of Docking Area.  To the extent provided in the RDOEA, Tenant
               -------------------
may use the Docking Area for the temporary docking, loading and unloading of
"House of Blues" entertainment boat(s), and for such other purposes, if any, as
may be permitted by the RDOEA.  However, such use shall be subject to all
applicable size restrictions are required governmental permits.

          c.   Duty to Open; Right to Close.
               ----------------------------

               i.   Duty to Open.  Tenant covenants and agrees that within three
hundred sixty-five (365) days after the Delivery Date, Tenant will open or will
cause to open a House of Blues for business in the entirety of the Leased
Premises (open for business as used in this subparagraph 6.c. meaning fully
                                            -----------------
fixtured, stocked and staffed as a House of Blues and open during its normal
business hours).

                                     -28-
<PAGE>

          ii.    Right to Close. After opening a House of Blues for business in
     the Leased Premises pursuant to the provisions of subparagraph c.i. above,
                                                       -----------------
     Tenant shall have the right, after no less than sixty (60) days prior
     written notice to Landlord at any time and from time to time, to cease
     operations and to discontinue the conducting of business in the Leased
     Premises; provided that Tenant shall nevertheless remain obligated to
     perform all covenants and agreements under this Lease including payment of
     Rent. The written notice required in this subparagraph shall be given as
     promptly as is practicable following the date Tenant actually determines
     that it will cease operations. If (other than in the case of "Expected
     Discontinuances" as herein defined) Tenant ceases operations in the Leased
     Premises, Landlord shall have the right to terminate this Lease in
     accordance with the provisions of subparagraph c.iii. below. In the event
                                       ------------------
     Tenant ceases operation of a House of Blues in the Leased Premises prior to
     the expiration of the Term or upon other termination of this Lease for
     cause, Tenant shall not open another House of Blues within a twenty (20)
     mile radius of the Leased Premises for a period of twenty (20) years
     following the date of such cessation.

          iii.  Right to Terminate.

               (a)  If at any time during the term of this Lease, Tenant (or any
          subtenant or assignee of Tenant, as the case may be) shall cease
          operating a business permitted hereunder in the entirety of the Leased
          Premises (other than in the case of "Expected Discontinuances") for a
          period of one hundred eighty (180) consecutive days, from the one
          hundred eighty-first (181st) day following such cessation and
          continuing thereafter until Tenant shall have given Landlord a "Notice
          of Reopening" (as defined below in subparagraph iii.b. below),
                                             ------------------
          Landlord shall have the right, upon thirty (30) days written notice
          ("Notice of Termination"), to terminate this Lease. If Landlord elects
          to terminate, within ten (10) days after the effective date of
          termination, Landlord shall pay Tenant an amount equal to the
          Unamortized Value of the Leasehold Improvements (but not including
          any soft costs or the trade fixtures and trade dress removed by Tenant
          from the Leased Premises), provided no Event of Default by Tenant has
          occurred and is continuing in which event any damages incurred by
          Landlord as a result of such Event of Default shall first be deducted
          from such amount.

               (b)  Notwithstanding any term or provision contained to the
          contrary in subparagraph iii(a) above, and subject to the provisions
                      -------------------
          of this paragraph governing use of the Leased Premises, Tenant shall
          have the right, at any

                                     -29-
<PAGE>

time prior to the date Landlord gives Tenant a Notice of Termination, to reopen
in the entirety of the Leased Premises or, alternatively, to give Landlord
written notice to the effect that Tenant (or Tenant's sublessee or assignee, as
the case may be) will reopen in the entirety of the Leased Premises within
ninety (90) days of such written notice ("Notice of Reopening"). Time is of the
essence, and in the event that Tenant fails to give Landlord a Notice of
Reopening prior to the date Landlord gives a Termination Notice, Tenant shall
not have any further right to operate in the Leased Premises. In the event that
Tenant timely gives Landlord a Notice of Reopening but thereafter (other than in
the case of "Excepted Discontinuances") Tenant (or Tenant's assignee or
sublessee, as the case may be) either fails to open within ninety (90) days from
the date of the Notice of Reopening or, having opened within such ninety (90)
day period, fails to remain open for at least one hundred eighty (180)
consecutive days, subparagraph iii (d) shall control.
                  --------------------

           (c)  It is agreed and understood that (other than in the case of
 "Excepted Discontinuances"), Landlord may give Tenant a Notice of Termination
 pursuant to this subparagraph iii. only at a time during which a business
                  ----------------
 permitted hereunder is not being operated in the entirety of the Leased
 Premises. In the event that Tenant (or Tenant's assignee or sublessee, as the
 case may be) reopens prior to Landlord's giving a Notice of Termination, then
 except as provided to the contrary in subparagraph iii(d) below, Landlord shall
                                       -------------------
 not have any termination right pursuant to this subparagraph iii. unless and
                                                 -----------------
 until operations in the entirety of the Leased Premises shall again cease for a
 period of at least one hundred eighty (180) consecutive days, in which case the
 rights of the parties with respect to any such subsequent cessation shall be
 determined as though it were the initial cessation.

           (d)   In the event that Tenant timely gives Landlord Notice of
Reopening in accordance with the terms of subparagraph iii(b) above and
                                          -------------------
thereafter, other than in the case of "Excepted Discontinuances", Tenant (or its
assignee or sublessee, as the case may be) subsequently either (a) fails to open
for business in the entirety of the Lease Premises within ninety (90) days of
the date of the Notice of Reopening, or (b) does open within such ninety (90)
day period but thereafter fails to remain open for at least one hundred eighty
(180) consecutive days, then in either such event, and until a business
permitted hereunder shall actually open for business in the entirety of the
Leased Premises, Landlord shall have the continuing

                                     -30-
<PAGE>

     right to terminate this Lease by giving written notice to Tenant, in which
     event this Lease shall terminate thirty (30) days from the date of
     Landlord's notice. In such event, and within ten (10) days of the effective
     date of termination, Landlord shall pay Tenant an amount equal to the
     Unamortized Value of the Leasehold Improvements (but not including any soft
     costs or the trade fixtures and trade dress removed by Tenant from the
     Leased Premises), provided no Event of Default by Tenant has occurred and
     is continuing, in which event any damages incurred by Landlord as a result
     of such Event of Default by Tenant shall first be deducted from such
     amount.

               Notwithstanding the foregoing, Landlord shall not have the right
     to terminate the Lease if the cessation of operations or discontinuance of
     business: (i) results from Force Majeure as herein defined; or (ii) is a
     temporary cessation of discontinuance (not exceeding sixty (60) days in
     duration) occurring in connection with an assignment or sublease as
     permitted hereunder and by the expiration of such sixty (60) days, such
     assignee or sublessee commences business operations in the Leased Premises;
     or (iii) is a temporary cessation or discontinuance for civil or religious
     holidays, or death of personnel; or (iv) is a temporary cessation of
     discontinuance made in order to permit repair, maintenance or renovation of
     work and does not exceed the time reasonably required to complete such work
     in the exercise of due diligence; all of which are referred to herein as
     "Expected Discontinuances."

     d.   Landlord's Use.
          ---------------

          i.   Exclusives.  Landlord has not and, so long as this Lease shall
                ----------
be in effect, will not directly or indirectly lease, rent, occupy or permit to
be occupied or used any part of the Project, or any other property owned or
controlled by Landlord or its Affiliates within a one (1) mile radius of the
Leased Premises (other than the Leased Premises) for the purpose of providing
merchandise, food, drink, multi-media and/or live or pre-recorded entertainment
in connection with a "theme oriented" venue such as "Hard Rock Cafe", "Planet
Hollywood", "Harley-Davidson Cafe", "Mo Town Cafe", "Billboard Cafe", and
similar operations. This exclusive shall not prohibit the operation of
restaurants, retail shops and/or music stores that are not a "theme-oriented"
venue similar to the types of operations listed in the immediately preceding
sentence, nor shall it prohibit live or recorded incidental or background music
in conjunction with the operation of a full service sitdown restaurant not
prohibited hereby. In addition, Tenant hereby agrees that the list of proposed
uses attached hereto as

                                     -31-
<PAGE>

Exhibit I are not prohibited by the terms of this subparagraph d.i. Tenant
---------                                         -----------------
further agrees that during the Term it shall not make changes to its menu that
would (a) violate any exclusive use existing in favor of any other tenant in the
Project at that time or (b) result in the Leased Premises being operated
primarily as an ethnic restaurant.

           ii.   Covenants Run With Land, Enforcement. The aforesaid exclusive
                 ------------------------------------
use covenants shall run with the land hereby restricted for the Term of this
Lease, and Landlord shall furnish to Tenant an appropriate recorded instrument
or instruments to evidence compliance with the covenants during the Term when
requested to do so by Tenant.  Tenant or its successors and assigns shall  have
the sole right to release or waive such covenant so long as this Lease is in
effect.  In the event of the breach of these covenants, Tenant shall be entitled
to cancel this Lease or to obtain relief by injunction or any other modes
provided by law, at Tenant's option, and Tenant's remedies shall be cumulative
rather than exclusive.

           iii.  Exclusive in RDOEA.  Landlord and Tenant acknowledge and agree
                 -------------------
that provisions substantially the same as those set forth in subparagraphs d.i.
                                                             -----------------
and d.ii will be included in the RDOEA and impose the same obligations on
--------
Developer with respect to the Project as are imposed on Landlord with respect to
the Leased Premises, and Landlord agrees to cooperate with Tenant in causing
Developer to comply with its obligations under the RDOEA with respect thereto.

     e.    Assignment, Subletting.  Subject to the provisions of subparagraph
           ----------------------                                ------------
6.f. below, and provided no Event of Default by Tenant has occurred and is
----
continuing, Tenant may voluntarily assign all or any part of this Lease or
sublet all or any part of the Leased Premises without Landlord's consent;
provided, however, that such right to assign or sublet shall not apply to any
involuntary transfer or assignment and Tenant shall not be released from
liability hereunder upon any such assignment or sublease.  In the event of any
such assignment or sublease of the Leased Premises, Tenant shall provide prior
written notice to Landlord of such assignment or sublease, which notice shall
include the name, address and telephone number of the assignee or subtenant.

      f.   Right of Termination.  In the event that Tenant voluntarily elects to
           --------------------
assign this Lease or sublease the Leased Premises or any part thereof or
interest therein to an entity which is not an Affiliate of Tenant (unless a
transfer in control, as hereinafter defined, in Tenant occurs) (and is not
prohibited from doing so because of an existing Event of Default by Tenant):

                                     -32-

<PAGE>

           i.    Not less than forty five (45) days prior to the proposed
effective date of the contemplated transaction, Tenant will give Landlord
written notice ("Tenant's Notice"), setting forth the name, address and
telephone number of the proposed assignee or sublessee (if applicable), the date
of the proposed assignment or sublease, together with a statement of the
Unamortized Value of the Leasehold Improvements (as defined in paragraph g.
                                                               -----------
below) of the Leased Premises or portion thereof being subleased, the proposed
use intended to be made of the Leased Premises, and including a true and
complete copy of the proposed sublease or assignment. Tenant shall also promptly
deliver any other information reasonably requested by Landlord with respect
thereto. If Landlord in good faith disputes the amount of the Unamortized Value
of the Leasehold Improvements, then the parties shall use the undisputed amount
for purposes of the calculations hereof if such dispute is not resolved by the
time any payment is due and promptly thereafter in good faith resolve any
dispute with regard to the remainder.

          ii.  Landlord shall have the right and option to (a) terminate the
Lease with respect to space proposed to be assigned or sublet; or (b) permit
Tenant to assign or sublet such space. Landlord shall give Tenant written notice
of Landlord's election within thirty (30) days of Tenant's notice described in
subparagraph f.i. above. Failure of Landlord to give written notice of
-----------------
Landlord's election within such thirty (30) day period shall constitute
Landlord's consent to the proposed transaction. If Landlord elects to terminate,
within ten (10) days of the effective date of termination, Landlord shall pay
Tenant an amount equal to the Unamortized Value of the Leasehold Improvements.
If Landlord shall elect to give the aforesaid notice of termination with respect
to the entire Leased Premises, then the Lease Term shall expire and end on the
date stated in Tenant's Notice as fully and completely as if the date had been
herein definitely fixed for the expiration of the Lease Term. If, however, this
Lease is terminated pursuant to the foregoing with respect to less than the
entire Leased Premises, the Rent then in effect shall be prorated on the basis
of the number of rentable square feet retained by Tenant in proportion to the
original rentable area of the Leased Premises, and this Lease as so amended
shall continue thereafter in full force and effect. In such event, Tenant shall
perform the Alterations necessary and pay the cost of erecting demising walls
and making other required modifications to physically separate the portion of
the Leased Premises remaining subject to the Lease from the rest of the Leased
Premises promptly. Anything to the contrary contained in this Lease
notwithstanding, Tenant's right to assign the Lease shall not apply to any
assignment by operation of law or any general assignment for the benefit of
creditors. In the case of any

                                     -33-
<PAGE>

    assignment or sublease permitted hereunder or approved by Landlord, the
    provisions of subparagraphs iii., and v. of this paragraph shall apply.

           iii.  Notwithstanding any assignment or sublease hereunder, Tenant
   shall remain primarily and directly liable for payment of rent and
   performance of all the covenants and obligations to be performed by Tenant
   under this Lease.

           iv.  Any such assignment hereunder shall be made by a written
   instrument in recordable form executed by the assignor and by the assignee;
   such instrument to provide that the assignor shall remain primarily and
   directly liable in accordance with the foregoing provisions and that the
   assignee expressly assumes the obligations of Tenant hereunder and agrees to
   attorn to Landlord; and a counterpart original of such instrument shall be
   furnished to Landlord.

            v.   Any such sublease hereunder shall be consistent with and
   subject to all terms and provisions of this Lease and shall be made in the
   form of a written instrument executed by Tenant (or its assignee) as
   sublessor and by the sublessee, and a counterpart original of such instrument
   shall be furnished to Landlord.

   In the event of any assignment of the Lease or subleasing of the Leased
Premises, 100% of all profit received by Tenant from time to time from such
assignment or subletting after a return to Tenant of the Unamortized Value of
the Leasehold Improvements (not excluding the contribution by Tenant's Affiliate
in the amount of $2,000,000.00) with respect to any space so subleased or
assigned, shall be payable to Landlord, such profit to be computed in accordance
with generally accepted accounting principles consistently applied. Tenant shall
furnish Landlord with a sworn statement, certified by Tenant or an authorized
officer or agent of Tenant, setting forth in detail the computation of profit,
and Landlord or its representatives shall have access to the books, records and
papers of Tenant in relation thereto, and the right to make copies thereof. If a
part of the consideration for such assignment or subletting shall be payable
other than in cash, the payment to Landlord shall be payable in accordance with
the foregoing percentage of the cash and other non-cash considerations in such
form as is reasonably satisfactory to Landlord. Such percentage of Tenant's
profits shall be paid to Landlord promptly by Tenant upon Tenant's receipt from
time to time of periodic payments from such assignee or subtenant or at such
other time as Tenant shall realize Tenant's profits from such assignment or
sublease.

     Anything to the contrary contained herein notwithstanding, if Tenant is a
corporation, any transaction or series of transactions

                                     -34-

<PAGE>

(including, without limitation, any dissolution, merger, consolidation or other
reorganization of Tenant, or any issuance, sale, gift, transfer or redemption of
any capital stock of Tenant, whether voluntary, involuntary or by operation of
law, or any combination of any of the foregoing transactions) resulting in the
transfer of control of Tenant, other than by reason of death or to an Affiliate
of Tenant (which Affiliate was an Affiliate prior to such transfer of control),
shall be deemed to be a voluntary assignment of this Lease by Tenant subject to
the provisions of this subparagraph 6.f.  If Tenant is a partnership, any
                       -----------------
transaction or series of transactions (including without limitation any
withdrawal or admittance of a partner or any change in any partner's interest in
Tenant, whether voluntary, involuntary or by operation of law, or any
combination of any of the foregoing transactions) resulting in the transfer of
control of Tenant, other than by reason of death or to an Affiliate of Tenant
(which was an Affiliate prior to such transfer of control), shall be deemed to
be a voluntary assignment of this Lease by Tenant subject to the provisions of
this subparagraph 6.f. The term "control" as used in this subparagraph 6.f.
     -----------------                                    -----------------
means the power to directly or indirectly direct or cause the direction of the
management or policies of Tenant.

          g.    Reimbursement of Unamortized Value of Leasehold Improvements.
                ------------------------------------------------------------

For purposes hereof, the "Unamortized Value of the Leasehold Improvements" shall
mean the value, at the time the payment will be due as provided in
subparagraphs 6.c.iii. and 6.f.i. above or otherwise as provided herein, of (i)
----------------------     ------
such improvements to the Leased Premises and any non-removable fixtures and
equipment (which are not Landlord's property as provided in subparagraph 2.i.)
                                                            -----------------
carried on Tenant's books for federal income taxes, (ii) the property purchased
with Landlord's Contribution which is considered Landlord's property as provided
in subparagraph 2.i. above carried on Landlord's books for federal income taxes,
   -----------------
exclusive of (x) all amounts actually paid by Landlord to or for the benefit of
Tenant as the Landlord's Contribution (including the Construction Loan or any
refinancing thereof to the extent of the outstanding principal balance thereof),
and (y) any improvements and non-removable fixtures and equipment, which are not
Landlord's property as aforesaid, which Landlord requests that Tenant remove and
Tenant does not so remove; provided, however, that any portion of Landlord's
Contribution that was paid by Landlord out of funds contributed (but not loaned)
by Tenant or an Affiliate of Tenant to Landlord pursuant to the Limited
Partnership Agreement of Landlord (provided Tenant's and/or its Affiliates'
equity interest in Landlord has been terminated without payment) shall not be
considered as a part of Landlord's Contribution for the purposes of this
subparagraph 6.g. pursuant hereto. In case of termination of this Lease as to
-----------------
less than the entire Leased Premises, the amount payable by Landlord shall be
reduced by the amount the Unamortized Value of the Leasehold Improvements for
improvements and fixtures not located in that portion of the Leased Premises as
to
                                     -35-
<PAGE>

which the Lease is terminated or, if such improvements and fixtures are located
in or serve both the portion of the Leased Premises as to which the Lease is
being terminated and the remainder of the Leased Premises, proportionately
reduced. Upon written request from Landlord, Tenant will provide Landlord with
such reasonable information as Landlord may require to evidence the current
Unamortized Value of the Leasehold Improvements. In no event will Landlord be
required to reimburse Tenant for any sums attributable to Tenant's removable
trade dress, trade fixtures, and equipment (not owned by Landlord as herein
provided) or any other item(s) that Tenant removes from the Leased Premises upon
or prior to the expiration of the Term of this Lease pursuant to paragraph 11.e.
                                                                 ---------------
below.
           h.  Transfer, Mortgage by Landlord.  If Landlord or Tenant should
               -------------------------------
convey or mortgage, or propose to convey or mortgage, all or part of any
interest in the Leased Premises or Landlord or Tenant, to the extent the same is
not prohibited hereby, Landlord and Tenant shall execute the following:


           i. Attornment. Tenant shall execute an agreement in recordable form
              ----------
to attorn to any successor or assignee of Landlord so long as such successor or
assignee agrees to perform the obligations of Landlord hereunder and executes a
Subordination, Attornment and Nondisturbance Agreement in favor of Tenant in the
form attached hereto as Exhibit D or another form reasonably acceptable to
                        ---------
Tenant.

          ii.  Estoppel Certificate.  Each party shall, from time-to-time within
               --------------------
two (2) weeks after notice, execute and deliver to the other party and/or to the
other party's lender or other interested party a certificate in recordable form
stating (i) whether this Lease is in full force and effect and, if modified, the
substance of such modification, (ii) the dates to which the Rent has been paid,
(iii) whether, to such party's knowledge, either party is in default in
performance of any provision of this Lease, and if there is a default, the
reason therefor, (iv) as to the existence of any offsets, counterclaims or
defenses hereto on the part of Tenant, to the best of Tenant's knowledge and (v)
any other matters reasonably requested and within the other party's knowledge.
It is intended that any such statements and certificates may be relied upon by
any interested party to whom it is addressed.

            i.  Prohibited Uses.  Anything to the contrary contained in this
                ---------------
Lease notwithstanding, neither Landlord nor Tenant shall use or permit the use
of any portion of the Leased Premises for any of the Prohibited Uses specified
in the RDOEA.

                                     -36-
<PAGE>

7.   Indemnification, Insurance.
     --------------------------

     a.   Indemnification.
          ---------------

          i. By Tenant. Tenant shall indemnify, defend and hold harmless
Landlord and the Landlord Related Parties and their respective agents,
successors and assigns, from and against all injury, loss, claims or damage,
including reasonable attorneys' fees, and disbursements to any person or
property arising from, related to, or in connection with, Tenant's use,
occupancy, construction or repair of the Leased Premises or the negligent or
willful misconduct of Tenant (whether or not such misconduct constitutes a
violation of applicable law or of this Lease) and its servants, agent,
employees, contractors, suppliers, workers and invitees; except to the extent
such injury., loss, claims or damage is caused by the negligence or willful
misconduct of Landlord.

         ii.  By Landlord. Landlord shall indemnify, defend and hold harmless
              -----------
Tenant and its agents, successors and assigns, from and against all injury,
loss, claims or damage, including reasonable attorney's fees, and disbursements
to any person or property arising from, related to, or in connection with the
negligent or willful misconduct of Landlord (whether or not such misconduct
constitutes a violation of applicable law or of this Lease) and its servants,
agents, employees, contractors, suppliers, workers and invitees; except to the
extent such injury, loss, claims or damage is caused by the negligence or
willful misconduct of Tenant.

        iii.   Environmental Indemnities. Landlord shall indemnify, defend and
               -------------------------
hold harmless Tenant from and against any cost, liability or expense arising out
of or attributable to any claims, demands, causes of action, fines, penalties,
liability or expenses (including reasonable attorney's fees and court costs) for
any remediation, clean-up or removal of any asbestos, PCBs, underground storage
tanks, or other toxic or hazardous substances or materials situated on the
Leased Premises as of the Effective Date which exists to the actual knowledge of
Landlord or thereafter caused by Landlord, its agents or representatives. Tenant
shall indemnify, defend and hold harmless Landlord from and against any cost,
liability or expense arising out of or attributable to any claims, causes of
action, fines, penalties, liability or expense (including reasonable attorneys'
fees and court costs) for any remediation, clean-up or removal of any asbestos,
PCB's underground storage tanks or other toxic or hazardous substances or
materials placed or permitted to be placed on the Leased Premises by Tenant, its
agents, employees or contractors following the Effective Date (or during any
entry by Tenant, its agents, employees or


                                     -37-
<PAGE>

     contractors prior to the Effective Date). For purposes hereof, the phrase
     "toxic or hazardous substances or materials" shall include items covered by
     the Comprehensive Environmental Response, Compensation and Liability Act of
     1980, 42 U.S.C.(s)(s)9601-75(1986), as amended by the Superfund Amendment
     and Reauthorization Act, Pub. L. No. 99-499, 100 Stat. 1613 (1986)
     ("CERCLA"), The Toxic Substances Control Act, 15 U.S.C. (s)2601 et seq.,
                                                                     -- ---
     The Clean Water Act, 33 U.S.C. (s)1251 et seq., The Safe Drinking Water
                                            -- ---
     Act, 42 U.S.C. (s)(s)300(f)-300(j), and other federal, state and local laws
     governing the existence, removal or disposal of toxic or hazardous
     substances or materials.

          b.    Tenant's Insurance.  Tenant shall maintain in effect insurance
                ------------------
policies covering the Leased Premises, with companies licensed to do business in
the State or Illinois, which insurance companies and insurance policy forms
shall be reasonably acceptable to Landlord, described as follows:

                  Type                                    Amount

     (1)    Comprehensive General                     Combined single
            Public Liability insurance to             limit of not less
            include all endorsement custo-            than $1,000,000.00
            mary for improvements and uses of
            the type found on the
            Leased Premises, including
            broad form property damage and
            contractual liability coverage.

     (2)    Comprehensive automobile                  Combined single limit
            liability insurance covering all          of not less than
            owned, non-owned and hired                $1,000,000.00
            automobiles of Tenant including
            loading and unloading of any
            automobile.

     (3)    Property Insurance ("all risk")           Coverage for full
            coverage for the Leased                   replacement cost,
            Premises with appropriate                 without depreciation,
            coverage for the cost of clearing         of the improvements
            all damaged improvements from             situated on the
            the Leased Premises, including            Leased Premises.
            comprehensive boiler and
            machinery coverage (including
            indirect loss) and rent loss or
            business interruption insurance
            in an amount necessary to pay
            Rent for at least 180 consecutive
            days and a joint loss clause.


                                     -38-
<PAGE>

(4)  Builders Risk Insurance for          Coverage for the full
     all risk of physical loss            insurable value of
     during the term of a                 improvements constructed
     construction contract related        and materials stored at
     to improvements to the Leased        the Leased Premises
     Premises to be constructed by        by Tenant.
     Tenant until work is complete,
     and with appropriate coverage for
     the cost of clearing all damaged
     improvements from the Leased
     Premises, on a completed value,
     non-reporting replacement cost,
     without depreciation, basis.

All policies of insurance to be maintained by Tenant hereunder may be maintained
by way of "blanket policies" insuring the Leased Premises and other premises
and/or property owned or operated by Tenant or its Affiliates, provided that a
Priority Claim Endorsement for the Leased Premises is included in such policy.
All liability insurance shall include $5,000,000,.00 of additional umbrella
coverage and be subject to increase from time to time as Landlord may reasonably
request.  All physical damage insurance shall not be subject to the application
of any coinsurance clauses or requirements, and, with respect to any
improvements which are or are to become the property of Landlord at the end of
the Lease Term, shall include a loss payable clause in favor of and reasonably
acceptable to Landlord, providing that the insurance shall not be invalidated by
any act or neglect of Tenant.  All insurance carried by Tenant shall have
deductibles reasonably acceptable to Landlord and all liability insurance shall
be on an "occurrence" basis.  Prior to engaging in the sale of alcoholic liquor,
and prior to keeping such liquor on the Leased Premises, and at all times that
alcoholic liquors are sold or given away on the Leased Premises, Tenant shall
maintain a policy or policies of dram shop insurance in the same amounts as the
comprehensive general liability insurance referenced above.  Tenant shall
purchase and maintain insurance during the entire Term for physical damage
insurance comparable to that required to be carried by Tenant with regard to the
Leased Premises for all Alterations and other improvements to the Leased
Premises and all furniture, trade fixtures, equipment, merchandise and all other
items of Tenant's property on the Leased Premises. The "Landlord Related
Parties" shall mean: (i) Landlord and the partners in Landlord, (ii) Developer
(for purposes of insurance only) and any other owner or owners of the Project if
such are other than Developer or Landlord and Tenant is given notice of such
fact, (iii) the beneficiary or beneficiaries of Landlord, if Landlord is a land
trust and (iv) upon notice from Landlord, any Mortgagee or Ground Lessor of
Landlord. Anything to the contrary contained herein notwithstanding, (A)
property insurance proceeds with regard to the Leased Premises shall be payable
to Landlord or Tenant, as their interests appear herein;

                                     -39-
<PAGE>

(B) each party may assign that right to a mortgagee of Tenant's leasehold
interest, in the case of Tenant, and a Mortgagee or Ground Lessor, in the case
of Landlord, but Tenant shall be entitled to receive only proceeds for property
it owns (not including any property which is owned by Landlord as herein
provided) and any other Unamortized Value of the Leasehold Improvements; (C)
insurance proceeds which are payable to a party as aforesaid shall be settled,
adjusted or compromised by that party; and (D) if repair or replacement of the
Leased Premises is to be made hereunder, then any such proceeds shall be used
for such purpose.

          c.  Scope.  Each policy to be provided by Tenant hereunder
              -----
shall name Landlord and the Landlord Related Parties as additional insured and
shall also contain a provision whereby the insurer agrees that such policy shall
not be changed or canceled except after thirty (30) days' written notice to
Landlord or its designee.  The insurance policies or duly executed certificates
thereof reasonably acceptable to Landlord, together with satisfactory evidence
that the premium has been paid at least one (1) year in advance, shall be
delivered to Landlord on the date hereof; and, thereafter, evidence of
continuing insurance and premium payment shall be delivered to Landlord not
less than thirty (30) days following Landlord's request therefor.

          d.  Waiver of Subrogation. Neither Landlord nor Tenant shall be liable
              ---------------------
by way of subrogation or otherwise to the other party or to any insurance
company insuring the other party for any loss or damage to any of the property
of the Landlord or Tenant covered by insurance even though such loss or damage
might have been occasioned by the negligence of the Landlord or Tenant or their
respective Permittees. This release shall be in effect only so long as the
applicable insurance policies shall contain a clause or endorsement to the
effect that the waiver shall not affect the right of the insured to recover
under such policies. Each party shall use its best efforts, including payment of
any additional premium, to have its insurance policies contain the standard
waiver of subrogation clause. In the event Landlord's or Tenant's insurance
carrier declines to include in such carrier's policies a standard waiver of
subrogation clause, Landlord or Tenant shall promptly notify the other party.

     8.   Destruction, Condemnation.
          -------------------------

          a.  Destruction.
              -----------

              i.  Cancellation.  In the event twenty-five percent (25%) or more
                  ------------
of the Leased Premises has been damaged or destroyed and the Leased Premises
cannot be completely restored within two hundred seventy (270) days after the
date of destruction, Tenant or Landlord may, by notifying the other party within
thirty (30) days after such date of damage or

                                     -40-
<PAGE>

destruction, terminate this Lease.  If, during the last two (2) Lease Years the
Leased Premises shall be damaged so that it is reasonable determined that the
cost would make restoration infeasible, Tenant or Landlord may terminate this
Lease within thirty (30) days after the damage.

             ii.  Restoration.  In the event less than twenty-five percent (25%)
                  -----------
of the Leased Premises has been damaged or destroyed, or this Lease is not
terminated as provided in sub-paragraph 8.a.i., Tenant shall, at its expense to
                          -------------------
the extent of available insurance proceeds and any deductibles, proceed with the
repair or restoration of the Leased Premises within thirty (30) days following
such damage or destruction or such later date as the insurance proceeds are
available therefor, and once commenced shall be diligently prosecuted to
completion.  Landlord agrees to make available to Tenant any insurance proceeds
(subject to the rights of any Mortgagee or Ground Lessor) payable to Landlord
attributable and to be used for to the restoration and repair of the Leased
Premises as herein provided.  All work of restoration by Tenant shall restore
the Leased Premises to as good a condition as existed prior to the casualty.
Landlord shall have no liability to Tenant, and Tenant shall not be entitled to
terminate this Lease by virtue of any delays in completion of repairs and
restoration, except to the extent caused by Landlord.

             iii. Abatement of Rent.  If the casualty or reconstruction
                  -----------------
necessitated thereby shall render the Leased Premises untenantable in whole or
in part, to the extent Landlord receives proceeds of rent loss or business
interruption insurance:  (i) Minimum Rent shall be paid pro rata for the part of
the Lease Year in which the Leased Premises are tenantable, and (ii) during the
part of the Lease Year the Leased Premises and untenantable, Rent shall be
equitably abated.

             iv.  Insurance Proceeds.  All insurance proceeds payable as a
                  ------------------
result of any damage or destruction which are to be used by Tenant for such
repairs and restoration shall be payable to Tenant and used by Tenant for
payment of the cost of repairs and restoration required hereby.  Payments by
Landlord under its insurance shall be payable as provided in Section 2 of
Exhibit F as if the same constituted part of Landlord's Contribution and any
---------
work performed by Tenant is effecting such repairs and restoration shall be
considered Alterations.

         b.  Condemnation.
             ------------

             i.   Taking of Leased Premises.  In the event of a taking by the
                  -------------------------
power of eminent domain or conveyance in lieu thereof ("Taking") of the whole or
any material part of the

                                     -41-
<PAGE>

     Leased Premises, either party shall have the right to terminate this Lease
     upon notice to the other within thirty (30) days after receiving notice of
     the intended Taking. If either party elects to terminate this Lease, the
     Term shall cease as of the day the public authority takes physical
     possession. If following a Taking this Lease shall continue in effect as to
     any portion of the Leased Premises, all Rent shall be reduced by the
     proportion which the portion of the Leased Premises taken bears the total
     area of the Leased Premises prior to the Taking.

               ii.  Awards.  All compensation awarded for any Taking shall be
                    ------
     apportioned equitably between Landlord and Tenant. Landlord shall be
     entitled to that portion of the award attributable to the land and
     improvements (except the Unamortized Value of the Leasehold Improvements),
     and Tenant shall be entitled to claim, prove and receive in the Taking
     proceedings such awards as may be allowed for the then present worth of the
     excess, if any, of the fair market rental value of the leasehold estate
     over the value of the Rent and other consideration required to be paid
     under this Lease, the Unamortized Value of the Leasehold Improvements,
     trade fixtures or for loss of business, goodwill, depreciation or injury to
     and cost of removal of stock-in-trade.

               iii.  Restoration.  If there is a Taking of part of the Leased
                     -----------
     Premises and the Lease is not terminated, Landlord, at its sole expense, to
     the extent Taking awards are made available to Landlord for such purpose,
     shall restore and rebuild the Leased Premises with due diligence, so far as
     practicable, so that it is a complete and useful space comparable in
     quality and character to the space immediately prior to the Taking. All
     amounts awarded to Landload by the condemning authority for the Taking
     attributable to the restoration of the Leased Premises shall be applied to
     the restoration if such application is otherwise herein stipulated, and
     Tenant shall provide to Landlord any amounts awarded to Tenant with respect
     to its interest in the Leased Premises, to the extent such funds are
     required by Landlord to restore and rebuild the Leased Premises.

     9.   Default.
          -------

          a.   Events of Default.  The following are events of default ("Events
               -----------------
of Default"):

               i.    Rent.  Tenant fails to pay when due any installment of Rent
                     ----
and such failure continues for ten (10) days after Tenant's receipt of written
notice from Landlord (provided, in no event, however, shall Landlord be
obligated to give notice in excess of two times during any consecutive twelve
month period which is attributable to the nonpayment of Rent).


                                     -42-
<PAGE>

           ii.  Other Obligations.  Either party fails to perform any
                -----------------
   obligation, covenant or condition or to comply with any provisions of the
   Lease (other than the payment of Rent by Tenant) and such failure continues
   for thirty (30) days after written notice from the nondefaulting party,
   unless said default requires more than thirty (30) days to cure and the
   defaulting party commences a cure within thirty (30) days after written
   notice and thereafter maintains a diligent effort to complete the cure.

           iii. Bankruptcy.  Either party files in any court pursuant to any
                ----------
   statute a petition in bankruptcy or insolvency or for reorganization or
   arrangement or makes an assignment for the benefit of creditors or any such
   petition is filed against a party and a receiver or trustee of all or any
   portion of that party's property is appointed and such proceeding is not
   dismissed or the trusteeship discontinued within thirty (30) days after such
   appointment (provided that a bankruptcy by Landlord or Tenant shall not be an
   Event of Default so long as, in the case of Tenant, Tenant continues to
   timely pay Rent and perform its other obligations as required by this Lease
   and, in the case of Landlord, Landlord continues to timely perform its other
   obligations as required by this Lease), if the interest of Tenant in this
   Lease shall be levied on under execution or other legal process or Tenant
   admits in writing its inability to pay its debts generally as they become due
   or if Tenant abandons the Leased Premises. This is a "shopping center" lease
   as contemplated by Section 365(f)(2) of the U.S. Bankruptcy Code, as the same
   may be amended from time to time, and such provisions thereof as are
   applicable to shopping center leases are applicable to this Lease.

       b.  Landlord's Remedies.  Upon the occurrence of an Event of Default by
           -------------------
Tenant, Landlord shall have one or more of the following remedies:

           i.   Termination.  Landlord may terminate this Lease by written
                -----------
   notice to Tenant, in which event the Term and all right, title and interest
   of Tenant hereunder shall end on the date stated in such notice. No re-entry
   or other act performed or omitted by Landlord shall be deemed to have
   terminated this Lease or any obligation of Tenant for payment of money or
   otherwise unless Landlord shall expressly notify Tenant in writing that
   Landlord has elected to terminate this Lease.

           ii.  Terminate Right to Possession.  Landlord may terminate the
                -----------------------------
   right of Tenant to possession of the Leased Premises without terminating this
   Lease, by giving written notice to Tenant that Tenant's right of possession
   shall end on the date stated in such notice, whereupon the right of Tenant to


                                     -43-
<PAGE>

possession of the Leased Premises or any part thereof shall cease on the date
stated in such notice.

            iii.    Other Remedies.    Landlord may enforce the provisions of
                    --------------
this Lease and may enforce and protect the rights of Landlord hereunder by a
suit or suits in equity or at law for the specific performance of any covenant
or agreement contained herein, and for the enforcement of any other appropriate
legal or equitable remedy, including without limitation (aa) injunctive relief,
(bb) recovery of all moneys due or to become due from Tenant under any of the
provisions of this Lease, and (cc) any other damages incurred by Landlord by
reason of Tenant's default under this Lease.

            iv.     Re-Entry.   If Landlord exercises any of the remedies
                    --------
provided for in subparagraphs i. or ii. above, Tenant shall surrender possession
                -----------------------
of and vacate the Leased Premises and immediately deliver possession thereof to
Landlord, and Landlord may re-enter the Leased Premises and take complete and
peaceful possession of the Leased Premises, and cause Tenant to be removed with
legal process.

            v.      Tenant's Obligations; Reletting.  If Landlord terminates the
                    -------------------------------
right of Tenant to possession of the Leased Premises without terminating this
Lease, such termination of possession shall not release Tenant, in whole or in
part, from Tenant's obligation to pay the Rent hereunder for the full Term to
the extent the same is due and is not received from third parties.  Landlord
shall have the right from time to time, to recover from Tenant, and Tenant shall
remain liable for, all Rent not theretofore paid pursuant to the foregoing
sentence and any other sums thereafter accruing as they become due under this
Lease during the period from the date of such notice of termination of
possession to the end of the Term, to the extent the same is due and is not
received from third parties.  Landlord shall exercise reasonable efforts to
mitigate Tenant's liability by attempting in good faith to relet the Leased
Premises or any part thereof in the name of the Landlord or the Tenant for a
term or terms which may, at Landlord's option, be less than the period which
would otherwise have constituted the balance of the Term, and Landlord may
charge such rent and grant such concessions as are reasonable.

            vi.  Damages.  In the event of the termination of this Lease by
                 -------
Landlord as provided for above in subparagraph b.i., Landlord shall be entitled
to recover from Tenant all damages and other sums which Landlord is entitled to
recover under any provision of this Lease or at law or equity, including but not
limited to, all the fixed dollar amounts of Rent accrued and unpaid for the
period up to and including such termination date,
<PAGE>

     as well as all other additional sums payable by Tenant, including without
     limitation, Percentage Rent, or for which Tenant is liable or in respect of
     which Tenant has agreed to indemnify Landlord under any of the provisions
     of this Lease, which may be then owing and unpaid, and all costs and
     expenses, including, without limitation, court costs and reasonable
     attorney's fees incurred by Landlord in the enforcement of its rights and
     remedies hereunder and, in addition, any damages provable by Landlord as a
     matter of law, including, without limitation, an amount equal to the
     present value (calculated at a discount rate equal to the prime rate in
     effect on the date of termination of this Lease as quoted by the Wall
                                                                      ----
     Street Journal) of the excess of the Rent (exclusive of Percentage Rent)
     --------------
     provided to be paid for the remainder of the Term over the fair market
     rental value of the Leased Premises (determined at the date of termination
     of this Lease) after deduction of all anticipated expenses of reletting.

           vii.  Bankruptcy.  In the event that Tenant shall file for protection
                 ----------
     under the Bankruptcy Code now or hereafter in effect, or a trustee in
     bankruptcy shall be appointed for Tenant, Landlord and Tenant agree, to the
     extent permitted by law, to request that the debtor-in-possession or
     trustee-in-bankruptcy, if one shall have been appointed, either assume or
     reject this Lease within sixty (60) days after such appointment.

           viii.  Expenses.  Landlord may recover from Tenant all reasonable
                  --------
     expenses incurred by Landlord in re-entering and reletting of the Leased
     Premises, including reasonable attorney's fees, together with interest on
     all delinquent unpaid amounts at the Default Rate from the date accrued.

             ix.  Waiver of Landlord's Lien.  It is expressly understood and
                  -------------------------
     agreed that Landlord shall have no contractual or statutory landlord's lien
     or security interest of any kind applicable to Tenant's furniture,
     fixtures, equipment, inventory, or other personal property located within
     the Leased Premises, and Landlord hereby waives and relinquishes any such
     contractual or statutory landlord's lien applicable to Tenant's personal
     property located within the Leased Premises.

     c.    Tenant's Remedies.  Upon the occurrence of the Event of Default by
           -----------------
Landlord, Tenant shall have the right to perform the applicable obligations not
performed by Landlord on behalf of and at the expense of Landlord, and seek
reimbursement from Landlord for all such reasonable expenses incurred in
connection therewith, together with interest thereon at the Default Rate from
the date such expenses are incurred, and Landlord agrees to reimburse Tenant for
such expenses, with interest, on or before thirty (30) days from Tenant's
written demand therefor, accompanied by reasonable supporting

                                     -45-
<PAGE>

documentation evidencing such expenditures (with a copy of such demand being
also sent to Landlord's Mortgagee and/or Ground Lessor). In the event Landlord
fails to timely pay Tenant for the amounts properly demanded, Tenant shall, then
and only then, have the right to offset the delinquent amount properly due
Tenant from Tenant's next installment or installments of Percentage Rent.

            d.  Remedies Cumulative.  No remedy herein conferred upon or
                -------------------
reserved to Landlord or Tenant shall exclude any other remedy herein or by law
provided, unless the same is expressly exclusive pursuant to the terms hereof,
but each shall be cumulative and in addition to every other remedy given
hereunder or now or hereafter existing at law or in equity or by statute.

    10.     Tenant's Mortgagee Requirements.
            -------------------------------

            a. Tenant's Property. All furniture, trade dress, trade fixtures,
               -----------------
inventory, stock-in-trade and related equipment installed by Tenant in the
Leased Premises (which is not the property of Landlord as herein provided) shall
be and remain the property of Tenant throughout and upon termination of this
Lease. At Tenant's request, Landlord shall execute such reasonable documents as
Tenant and/or any mortgagee having an interest in Tenant's property may request
waiving any rights or claims of Landlord to such property of Tenant throughout
the Term and thereafter.

            b.  Right to Encumber.  In addition to the other rights and
                -----------------
obligations set forth in this paragraph 10, notwithstanding any other provision
                              ------------
of this Lease to the contrary, provided Tenant is not in default hereunder,
Tenant shall have the right, at any time and from time to time, to encumber the
leasehold estate created by this Lease and/or any of its fixtures, furniture of
equipment (which is not the property of Landlord as herein provided) to any
bank, thrift institution, insurance company, or other institutional lender or
institutional third party without the consent of Landlord, but, in the case of
an encumbrance of the leasehold interest, with prior notice to Landlord,
provided that Tenant is not at that time in default under the provisions of this
Lease. Notwithstanding any other provisions of the Lease to the contrary, any
Landlord's statutory lien for rent or any security interest granted to Landlord
in Tenant's furniture, fixtures or equipment (which is not owned by Landlord as
herein required) is hereby waived in its entirety. With resect to any such
mortgagee of Tenant's leasehold interest and/or personal property (which is not
owned by Landlord as herein provided) and notwithstanding any other provisions
of this Lease to the contrary, to the extent Landlord has been provided with
notice of the existence of such mortgagee and its address, Landlord agrees to
give such mortgagee written notice of any default by Tenant and grants to such
mortgagee an opportunity to cure any such default within the same time periods
specified in this Lease for Tenant to cure any such

                                     -46-
<PAGE>

default.  Any such notice shall be sent to Tenant's mortgagee at the most recent
address as to which Tenant or Tenant's mortgagee shall have notified Landlord in
writing, and such notices shall be deemed given to such mortgagee if given to
such mortgagee at such address in the manner described in subparagraph 11.a.
                                                          ------------------
below.  In the event of any assignment of such a leasehold mortgage or in the
event of a change of address of such mortgagee, notice of the new name and
address shall be provided promptly to Landlord.  Any such mortgagee of Tenant
shall sign a reasonable and recordable form of agreement recognizing that it has
no interest in Landlord's fee interest in the Leased Premises or the other
property of Landlord as herein provided in recordable form, if requested by
Landlord.

          11.  General Provisions.
               ------------------

               a.  Notice.  "Notice" shall mean any notice, notification,
                   ------
consent, approval, request, designation, submission, specification, election or
other communication required or permitted under this Lease.  All notices shall
be in writing and shall be deemed to have been given and received the earlier of
(1) the date the notice is delivered by one party to the other party personally
or delivered to the party's address by a party or by a delivery service which
records delivery dates, (2) three (3) days after the notice is placed in the
mail addressed to the other party at the party's address, properly stamped,
certified or registered mail, return receipt requested, or (3) the date the
notice is faxed as provided below and confirmed and followed by a mailing of
such notice by regular mail on the same day.  Nothwithstanding anything to the
contrary contained herein, a notice to Tenant from Developer pursuant to Section
14.3 (a) of the RDOEA shall be sent by facsimile to Nathaniel J. Lipman or his
designated substitute at facsimile number (213) 650-0482 (and if he is out of
the country then Developer shall make reasonably diligent efforts to
communicate with him by telephone).  A party's address shall be as follows or as
set forth in a notice to the other party:

          Landlord:          HOB Marina City Partners, L.P.
          --------           8439 Sunset Boulevard, Suite 107
                             West Hollywood, California 90069
                             ATTN: Chief Executive Officer

          With copy to:      McBride Baker & Coles
          ------------       500 West Madison Street, 40th Floor
                             Chicago, Illinois 60601
                             Attn: Elias N. Matsakis, Esq.
                             Telephone No. (312) 715-5700
                             Facsimile No. (312) 993-9350

                                     -47-
<PAGE>

          With copy to:          Mark IV Realty Group, Inc.
          ------------           400 North Franklin Street
                                 Chicago, Illinois  60610
                                 Attn:  John Marks
                                 Telephone No. (312) 923-9000
                                 Facsimile No. (312) 923-1930

          Tenant:                c/o HOB Entertainment, Inc.
          ------                 8439 Sunset Blvd.,
                                 Suite 102
                                 W. Hollywood, California  90069
                                 Attn:  Chief Executive Officer
                                 Facsimile No. (213) 650-0482

          With copy to:          Akin, Gump, Strauss, Hauer &
          ------------           Feld, L.L.P.
                                 1500 NationsBank Plaza, 300 Convent
                                 San Antonio, Texas 78205
                                 Attn:  Cecil Schenker, Esq.
                                 Facsimile No. (210) 224-2035

          With copy to:          Mr. Nathaniel J. Lipman
          ------------           c/o HOB Entertainment, Inc.
                                 8439 Sunset Blvd.,
                                 Suite 102
                                 W. Hollywood, California 90069
                                 Facsimile No. (213) 650-0482

          b.  Entire Agreement.  Tenant acknowledges that neither Landlord nor
              ----------------
any one on Landlord's behalf has made any representation, warranty or promise
with respect to the Leased Premises except as expressly set forth in this Lease.
This Lease together with the RDOEA, Limited partnership Agreement and the
documents contemplated hereby and thereby, embody the entire agreement and
understanding between the parties as to the Leased Premises and supersedes all
prior negotiations, agreements and understandings.

          c.  Brokerage Commission.  Landlord and Tenant acknowledge and agree
              --------------------
that neither party has engaged the services of any real estate broker in
connection with this Lease.  Tenant and Landlord shall indemnify and hold the
other harmless against any other commission, payment, interest or participation
claimed on account of this Lease under any alleged agreement or understanding
entered into between or on that party's behalf with the person or entity
claiming the commission, payment, interest or participation.

          d.  Force Majeure.  Each party shall be excused from performing an
              -------------
obligation or undertaking provided for in this Lease for so long as such
performance is prevented, delayed, retarded or hindered by an Act of God, fire,
earthquake, flood, explosion, action of the elements, war, invasion,
insurrection, riot, mob violence, sabotage, strike, lockout, action of labor
unions, requisitions,

                                     -48-





<PAGE>

laws, or orders of government or civil or military authorities, provided that
none of the foregoing may be used to delay or excuse the timely payment of money
under this Lease, including but not limited to the payment of Rent.

          e.  Surrender.  Upon the expiration of the Term or earlier termination
              ---------
of this Lease, Tenant shall surrender the Leased Premises to Landlord.  Tenant
may remove all trade dress, trade fixtures, inventory, stock-in-trade, furniture
and other personal property ("Tenant's Property") installed by Tenant, and not
the property of Landlord as otherwise herein provided, and shall remove the same
at the expiration or earlier termination of the Lease Term.  Provided that no
Event of Default by Tenant has occurred and is continuing, in addition, Tenant
may remove any and all installments, improvements and/or alterations made by
Tenant on the Leased Premises, not the property of Landlord as herein provided,
and if an Event of Default by Tenant has occurred and is continuing, or Landlord
requires Tenant to remove the same pursuant to paragraph 6.f. above, if Landlord
                                               --------------
so elects, Tenant shall or, at Landlord's option, Landlord, at Tenant's expense,
shall remove such installments, improvements and/or alterations, provided that,
in any instance that Tenant removes the same, Tenant shall restore the Leased
Premises to the condition the Leased Premises were in as of the time of
completion of Tenant's Work (not including any property which is not Landlord's
property as herein provided), reasonable wear and tear and damage by casualty or
condemnation (to the extent Tenant is not obligated to restore the same as
provided in paragraph 8 above) excepted.  Any property which Tenant is obligated
            -----------
to remove under this subparagraph not promptly removed by Tenant under the
provisions of this subparagraph may, at Landlord's option, be deemed to have
been abandoned by Tenant and may be retained by Landlord without any claim by
Tenant.  With regard to any personal property not so promptly removed by Tenant,
Landlord may at its option accept the title to such property or at Tenant's
expense may (i) remove the same or any part in any manner that Landlord shall
choose, repairing any damage to the Leased Premises caused by such removal, and
(ii) store, destroy or otherwise dispose of the same without incurring liability
to Tenant or any other person.  In the event Landlord incurs any storage or
other costs by reason of Tenant's failure to remove any property which Tenant
is obligated to remove under this paragraph 11.e., Tenant upon demand shall pay
                                  ---------------
to Landlord the amount of reasonable costs so incurred.  Tenant shall in any
event repair any damage to the Leased Premises caused by the removal of Tenant's
Property or other property removed by Tenant.  Upon the expiration of the Term
or Tenant's right to possession, Tenant shall return all keys to Landlord and
shall disclose to Landlord the combination of any safes, cabinets or vaults
left in the Leased Premises.

          f.  Holding Over.  If Tenant does not surrender possession of the
              ------------
entire Leased Premises upon the expiration of the Term or

                                     -49-
<PAGE>

earlier termination of this Lease, Tenant, at the option of the Landlord, shall
thereafter either become a tenant at sufferance or, if expressed in a written
notice from Landlord, become a Tenant from month-to-month, in either case at a
monthly rental equal to one hundred fifty percent (150%) of the sum of the
monthly Rent, subject to all other conditions, provisions and obligations of
this Lease insofar as they are applicable to a month-to-month tenancy or tenancy
at sufferance, as the case may be, provided that Landlord shall not have any
obligations hereunder. In absence of such a written notice, Tenant shall be
deemed to be a tenant at sufferance as aforesaid. Tenant also shall pay all
damages sustained by Landlord, whether direct or consequential, on account of
Tenant's holding over. The provisions of this subparagraph 11.f. shall not be
                                              ------------------
deemed to limit or constitute a waiver of any other rights or remedies of
Landlord provided herein or at law.

        g.  Applicable Law, Construction.  The laws of the State of Illinois
            ----------------------------
shall govern the validity, performance and enforcement of this Lease, without
reference to any choice or conflict of law provisions.  The invalidity of
unenforceablity of any provision of this Lease shall not affect or impair any
other provison.  If any provision of this Lease is capable of two constructions,
one of which would render the provision invalid and the other of which would
make the provision valid,  the provision shall have the meaning which renders it
valid.  The submission of this document for examination does not constitute an
offer to lease, this document being effective only upon execution and delivery
by Landlord, Tenant and any guarantors.

        h.  Time of the Essence.  Time is of the essence with respect to each
            -------------------
provison, term and covenant of this Lease.

        i.  Captions.  The captions are for convenience and do not limit or
            --------
define the provisions of this Lease.

        j.  Gender, Number.  Whenever the sense of this Lease requires it, the
            --------------
use of (1) the singular number shall be deemed to include the plural, (2) the
masculine gender shall be deemed to include the feminine or neuter gender, and
(3) the neuter gender shall be deemed to include the masculine and feminine
gender.

        k.  Binding Effect.  All provisions of the Lease shall be binding upon
            --------------
and inure to the benefit of the parties and their respective personal
representatives, heirs, successors and assigns.

        l.  Interpretation.  Neither this Lease nor any uncertainty or ambiguity
            --------------
herein shall be construed or resolved against Landlord or Tenant, whether under
any rule of construction or otherwise, due to the fact that one or the other has
drafted the document.  On the contrary, each party has had independent counsel


                                     -50-
<PAGE>

prepare and review this Lease and, accordingly, this Lease shall be construed
and interpreted according to the ordinary meaning of the words used so as to
fairly accomplish the purpose and intentions of all parties hereto.

           m.  Counterparts.  This Lease may be executed in any number of
               ------------
counterparts and by different parties on separate counterparts each of which,
when executed and delivered, shall be deemed to be an original and all of which,
when taken together, shall constitute but one and the same agreement.

           n.  Further Assurances.  Landlord and Tenant agree to take any and
               ------------------
all actions and to execute and deliver any and all documents that may be
necessary to fairly accomplish the purposes and intentions of all parties
hereto.

           o.  Modifications.  Neither this Lease nor any provision hereof may
               -------------
be waived, modified, amended, discharged or terminated except by an instrument
in writing signed by the party against whom the enforcement of such waiver,
modification, amendment, discharge, or termination is sought, and then only to
the extent set forth in such instrument.

           p.  Indemnification.  Any provisions of this Lease to the contrary
               ---------------
notwithstanding, any provision by which a party agrees to indemnify, defend
and/or hold harmless the other and/or the Landlord Related Parties and their
respective agents, employees and/or contractors shall include reasonable
attorneys' fees and court costs, survive the termination of this Lease and if a
party agrees to defend the other and/or the Landlord Related Parties, the same
shall be by counsel reasonably acceptable to the party being indemnified.

           q.  Attorneys' Fees and Costs.  If either party brings any suit or
               -------------------------
other proceedings with respect to the subject matter or the enforcement of this
Lease, or if either party becomes involved in any litigation in which the other
party causes such party, without such party's fault, to become involved, the
prevailing party (as determined by the court, agency or other authority before
which such suit or proceeding is commenced), in addition to such other relief
as may be awarded, shall be entitled to recover reasonable attorneys' fees,
expenses and costs of suit actually incurred.  If a party partially so prevails
in any such suit or other proceedings, in addition to such other relief as may
be awarded, it shall be entitled to recover an equitable portion of reasonable
attorneys' fees, expenses and costs of suit actually incurred.

           r.  Nonwaiver.  No waiver of any provision of this Lease shall be
               ---------
implied by any failure of either party to enforce any remedy on account of the
violation of such provision, even if such violation be continued or repeated
subsequently, and no express waiver shall

                                     -51-
<PAGE>

affect any provision other than the one specified in such waiver and that one
only for the time and in the manner specifically stated. No receipt of monies by
one party from another after the termination of this Lease shall in any way
alter the length of the Term or of Tenant's right of possession hereunder or
after the giving of any notice shall reinstate, continue or extend the Term or
affect any notice given to either party prior to the receipt of such moneys, it
being agreed that after the service of notice or the commencement of a suit or
after final judgment for possession of the Leased Premises, Landlord may
receive and collect any Rent or other sum due, and the payment of said Rent or
other sum shall not constitute a waiver of or affect said notice, suit or
judgment.

             s. Rights of Mortgagees and Ground Lessors. Landlord may have
                ---------------------------------------
heretofore encumbered the Leased Premises with a Mortgage and may hereafter
encumber the Leased Premises, or any interest therein with additional mortgages,
may sell and lease back the Leased Premises, or any part thereof, and may
encumber the leasehold estate under such a sale and leaseback arrangement with
one or more mortgages. (Any such mortgage is herein called a "Mortgage" and the
holder of any such mortgage is herein called a "Mortgagee". Any such lease of
the Leased Premises is herein called a "Ground Lease" and the lessor under any
such lease is herein called a "Ground Lessor".) To the extent Landlord complies
with subparagraph 2.e.ii. above, this Lease and the rights of Tenant hereunder
     -------------------
shall be and are hereby expressly made subject to and subordinate at all times
to each Mortgage and to any Ground Lease (it being agreed by Tenant that in the
case of a Ground Lease Tenant's right to possession shall be as a subtenant) now
or hereafter existing, and to all amendments, modifications, renewals,
extensions, consolidations and replacements of each of the foregoing, and to all
advances made or hereafter to be made upon the security thereof. The
subordination expressed in the preceding sentence shall be automatic and shall
require no further action by Landlord or Tenant for its effectiveness. However,
Tenant agrees to execute and deliver to Landlord such further instruments
consenting to or confirming the subordination of this Lease to any Mortgage
referred to and to any Ground Lease and containing such other provisions which
may be requested in writing by Landlord within two weeks after Tenant's receipt
of such written request.

     Tenant agrees to give any Mortgagee or Ground Lessor written notice of any
default by Landlord and grants to such Mortgagee or Ground Lessor an opportunity
to cure any such default within the same time periods specified in this Lease
for Landlord to cure any such default or such additional reasonable period of
time as may be requested by the Mortgagee or Ground Lessor.  Tenant shall accept
such performance by or at the instigation of such Mortgagee or Ground Lessor as
if the same had been done by Landlord.  Any such notice shall be sent to the
Mortgagees and Ground Lessor at the most recent address as to which Landlord or
such Mortgagees or Ground Lessor

                                     -52-
<PAGE>

shall have notified Tenant in writing, and such notices shall be given in the
manner described in subparagraph 11.a. above.
                    ------------------

     If any Mortgage is foreclosed, or Landlord's interest under this Lease is
conveyed or transferred in lieu of foreclosure, or if any Ground Lease is
terminated:

          i.   No person or entity which as the result of any of the foregoing
     has succeeded to the interest of Landlord in this Lease (any such person or
     entity being hereafter called a "Successor") shall be liable for any
     default by Landlord or any other matter which occurred prior to the date
     such Successor succeeded to Landlord's interest in this Lease nor shall
     such Successor be bound by or subject to any offsets or defenses which
     Tenant may have against Landlord or any other predecessor in interest to
     such Successor and shall be liable under the Lease, to the extent so
     liable, if at all, only for so long as such Successor is the owner of the
     leasehold estate;

          ii.  Upon request of any Successor, Tenant will attorn, as Tenant
     under this Lease, subject to the provisions of this Lease, to such
     Successor and will execute and deliver such instruments as may be
     reasonably necessary or appropriate to evidence such attornment within two
     weeks after receipt of a written request to do so; and

          iii. No Successor shall be bound to recognize any prepayment by more
     than 30 days of Rent or Additional Charges.

     Notwithstanding anything to the contrary contained herein, any Mortgagee or
Ground Lessor may subordinate, in whole or in part, its Mortgage or Ground Lease
(as the case may be) to this Lease by sending Tenant notice in writing
subordinating such Mortgage or Ground Lease to this Lease, and Tenant agrees to
execute and deliver to such Mortgagee or Ground Lessor such further instruments
consenting to or confirming the subordination of such Mortgage or Ground Lease
to this Lease and containing such other provisions which may be requested in
writing by such Mortgagee or Ground Lessor within two weeks after notice to
Tenant of such request.

     Whether or not any Mortgage is foreclosed or any Ground Lease is
terminated, or any Successor succeeds to any interest of Landlord under this
Lease, no Mortgagee or Ground Lessor or Successor shall have any liability to
Tenant for any security deposit paid to Landlord by Tenant hereunder, unless
such security deposit has actually been received by such Mortgagee or Ground
Lessor or Successor.

     Should any prospective Mortgagee or Ground Lessor require execution of a
short form of lease for recording (containing, among


                                     -53-
<PAGE>

other customary provisions, the names of the parties, a description of the
Leased Premises and the term of this Lease), Tenant agrees to execute such short
form of Lease and deliver the same to Landlord within two weeks following the
request therefor.

          t.  Certain Rights Reserved by Landlord.  Landlord and its Affiliates
              -----------------------------------
shall have the following rights, each of which may be exercised by Landlord only
with reasonable advance notice to Tenant, except in the event of emergency, and
the exercise of any such rights shall not be deemed to constitute an eviction or
disturbance of Tenant's use or possession of the Leased Premises nor shall such
exercise give rise to any claim for set-off or abatement of rent or any other
claim provided Landlord shall cause the least interference that is practical to
Tenant's business:

          i.  To show the Leased Premises to prospective tenants and purchasers
     at reasonable times, and if vacated or abandoned, to show the Leased
     Premises at any time and to prepare the Leased Premises for re-occupancy or
     sale.

          ii. To enter the Leased Premises at reasonable times to inspect the
     Leased Premises and to make repairs, alterations, improvements and
     additions either required or permitted to be made by Landlord under this
     Lease or advisable to preserve the integrity, safety, and good order of
     part or all of the Leased Premises.

          u.  Late Payments.
              -------------

          i.  All payments becoming due under this Lease and remaining unpaid
     when due shall bear interest until paid at a rate per annum equal to the
     greater of (A) twelve percent (12%) per annum, and (B) 3% per annum plus
     the corporate base rate of interest announced from time to time by The
     First National Bank of Chicago or its successor, such rate to change when
     and as such corporate base rate changes, (but in no event at a rate which
     is more than the highest rate which is at the time lawful in the State of
     Illinois) (the "Default Rate").

          ii. Tenant recognizes that late payment of Rent or any other sum due
     hereunder will result in administrative expenses to Landlord, the extent of
     which additional expenses are extremely difficult and economically
     impractical to ascertain. Tenant therefore agrees that when Rent or any
     other sum is due and payable from Tenant to Landlord pursuant to the terms
     of this Lease, and such amount remains unpaid fifteen (15) days after such
     amount is due, the amount of such unpaid Rent or other sum shall be
     increased by a late charge to be paid to Landlord by Tenant equal to the
     greater of (a) $100.00 and (b) five percent (5%) of the unpaid Rent or
     other sum.

                                     -54-
<PAGE>

          iii.  The provisions of this subparagraph 11.v. shall in no way
                                       ------------------
     relieve Tenant of the obligation to pay Rent or other payments on or before
     the date on which they are due, nor shall the collection by Landlord of any
     amount under either subparagraph hereof impair (a) the ability of Landlord
     to collect the amount charged under the other subparagraph hereof or (b)
     Landlord's remedies set forth in subparagraph 9.b. of this Lease.
                                      -----------------

          v.  No Air Rights.  No rights to any view or to light or air over any
              -------------
property, whether belonging to Landlord or any other person, are granted to
Tenant by this Lease, to the extent not contained in the RDOEA, if at all.

          w.  Only Landlord/Tenant Relationship.  Nothing contained in this
              ---------------------------------
Lease shall be deemed or construed by the parties hereto or by any third party
to create the relationship or principal and agent, partnership, joint venturer
or any association between Landlord and Tenant, it being expressly understood
and agreed that neither the method of computation of Rent nor any act of the
parties hereto shall be deemed to create any relationship between Landlord and
Tenant other than the relationship of landlord and tenant.

          x.  Application of Payments. Landlord shall have the right to apply
              -----------------------
payments received from Tenant pursuant to this Lease after an Event of Default
(regardless of Tenant's designation of such payments) to satisfy any obligations
of Tenant hereunder, in such order and amounts, as Landlord in its sole
discretion, may elect.

          y.  Partial Invalidity.  If any term, provision or condition contained
              ------------------
in this Lease shall, to any extent, be invalid or unenforceable, the remainder
of this Lease (or the application of such term, provision or condition to
persons or circumstances other than those in respect of which it is invalid or
unenforceable) shall not be affected thereby, and each and every other term,
provision and condition of this Lease shall be valid and enforceable to the
fullest extent possible permitted by law.

          z.  Certain Words and Phrases.  Unless the context indicates
              -------------------------
otherwise, (i) when the words "including," "included" or "includes" are used in
this Lease, they will be interpreted in a non-exclusive manner as though the
words "without limitation," immediately followed the same; (ii) "herein" and
similar terms shall mean this Lease as a whole, (iii) a "party" shall mean
either Landlord or Tenant, and the "parties" shall mean Landlord and Tenant, and
(iv) "paragraph" or "subparagraph" shall mean the entire section referred to and
not just a grammatical paragraph or other portion thereof.  The Exhibits
attached hereto are made a part hereof.

                                     -55-
<PAGE>

          aa.  No Third Party Beneficiary.  Nothing in this Lease, express or
               --------------------------
implied, is intended to confer any rights or remedies upon any person or entity
other than the parties hereto, and the Developer to the extent herein
specifically provided, and, subject to any restrictions on assignment herein
contained, the parties' respective successors and assigns.

          bb.  No Merger.  The estate of Landlord and Tenant hereunder shall not
               ---------
be deemed merged because of the fact that Tenant is or may be a partner or an
Affiliate of a partner in Landlord.

          cc.  Guaranty.  A Guaranty is attached hereto and made a part hereof.
               --------

     EXECUTED as of this 29th day of January, 1996.

TENANT:                               LANDLORD:
------                                --------

HOB-CHICAGO, INC.,                    HOB MARINA CITY PARTNERS, L.P., a
a Delaware corporation                a Delaware limited partnership


BY:      /s/ Nathaniel Lipman         BY:  /s/ Nathaniel Lipman
   --------------------------------      -------------------------------
NAME:  Nathaniel Lipman               NAME:
     ------------------------------        -----------------------------
TITLE:    S.V.P.                      TITLE:
      -----------------------------         ----------------------------

                                     -56-
<PAGE>

EXHIBITS:
--------

      Exhibit A-1   -   Intentionally Omitted
      Exhibit A-2   -   Site Plan
      Exhibit A-3   -   Personal Property
      Exhibit A-4   -   Docking Area
      Exhibit B     -   Permitted Exceptions
      Exhibit C     -   Memorandum of Lease - to be agreed upon in
                        good faith by the parties
      Exhibit D     -   Subordination, Attornment, Nondisturbance
                        Agreement
      Exhibit E     -   Intentionally Omitted
      Exhibit F     -   Tenant's Work
      Exhibit G     -   Form of RDOEA
      Exhibit H     -   Common Area Plans
      Exhibit I     -   Tenant's list of proposed uses not
                        prohibited by Paragraph 6.d.i.